MVNC 10-K Annual Report June 30, 2013 | Alphaminr
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MVNC 10-K Fiscal year ended June 30, 2013

Balance Sheet
Cash Flow
Income Statement
10-K 1 bonz_10k.htm ANNUAL REPORT bonz_10k.htm
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-K

þ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

For the Fiscal Year Ended June 30, 2013
OR
o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

For the transition period from N/A to N/A
Commission File Number: 000-53612
Bonanza Goldfields Corporation
(Name of small business issuer as specified in its charter)
Nevada 26-2723015
State of Incorporation IRS Employer Identification No.
736 East Braeburn Drive, Phoenix, Arizona 85022
(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 if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. o Yes þ No

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. o Yes þ No

Indicate by check mark whether the registrant (1) has filed all reports required to be filed 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 þ No o
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 if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer o
Non-accelerated filer o
Accelerated filer o
Smaller reporting company þ
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act. Yes o No þ
The aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant's most recently completed second fiscal quarter was $659,172.

State the number of shares outstanding of each of the issuer’s classes of equity securities, as of the latest practicable date: As of October -14, 2013, there were 411,982,943 shares of Common Stock, $0.0001 par value per share, issued and outstanding.

Documents Incorporated By Reference -None
Bonanza Goldfields Corporation
FORM 10-K ANNUAL REPORT
FOR THE FISCAL YEAR ENDED JUNE 30, 2013
TABLE OF CONTENTS

PART I
ITEM 1.
BUSINESS
4
ITEM 1A.
RISK FACTORS
9
ITEM 1B.
UNRESOLVED STAFF COMMENTS
17
ITEM 2.
PROPERTIES
17
ITEM 3.
LEGAL PROCEEDINGS
19
ITEM 4.
MINE SAFETY DISCLOSURES
24
PART II
ITEM 5.
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
25
ITEM 6.
SELECTED FINANCIAL DATA
28
ITEM 7.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
28
ITEM 7A.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
35
ITEM 8.
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
F-1
ITEM 9.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
36
ITEM 9A.
CONTROLS AND PROCEDURES
36
ITEM 9B.
OTHER INFORMATION
38
PART III
ITEM 10.
DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE
49
ITEM 11.
EXECUTIVE COMPENSATION
42
ITEM 12.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
47
ITEM 13.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
49
ITEM 14.
PRINCIPAL ACCOUNTANT FEES AND SERVICES
49
PART IV
ITEM 15.
EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
50
SIGNATURES
51
2

FORWARD-LOOKING STATEMENTS
This Annual Report contains certain forward-looking statements regarding management’s plans and objectives for future operations including plans and objectives relating to our planned marketing efforts and future economic performance. The forward-looking statements and associated risks set forth in this Annual Report include or relate to, among other things, (a)  our growth strategies, (b) anticipated trends in the mining industry, (c) our ability to obtain and retain sufficient capital for future operations, and (d) our anticipated needs for working capital. These statements may be found under “Management’s Discussion and Analysis or Plan of Operations” and “Business,” as well as in this Annual Report generally. These factors are not intended to represent a complete list of the general or specific factors that may affect us . Actual events or results may differ materially from those discussed in forward-looking statements as a result of various factors, including, without limitation, the risks outlined under “Risk Factors” and matters described in this Annual Report generally. In light of these risks and uncertainties, there can be no assurance that the forward-looking statements contained in this Annual Report will in fact occur.
The forward-looking statements herein are based on current expectations that involve a number of risks and uncertainties. Such forward-looking statements are based on assumptions described herein. The assumptions are based on judgments with respect to, among other things, future economic, competitive and market conditions, and future business decisions, all of which are difficult or impossible to predict accurately and many of which are beyond our control. Accordingly, although we believe that the assumptions underlying the forward-looking statements are reasonable, any such assumption could prove to be inaccurate and therefore there can be no assurance that the results contemplated in forward-looking statements will be realized. In addition, as disclosed elsewhere in the “Risk Factors” section of this annual report, there are a number of other risks inherent in our business and operations which could cause our operating results to vary markedly and adversely from prior results or the results contemplated by the forward-looking statements. Management decisions, including budgeting, are subjective in many respects and periodic revisions must be made to reflect actual conditions and business developments, the impact of which may cause us to alter marketing, capital investment and other expenditures, which may also materially adversely affect our results of operations. In light of significant uncertainties inherent in the forward-looking information included in this annual report, the inclusion of such information should not be regarded as a representation by us or any other person that our objectives or plans will be achieved.
Some of the information in this annual report contains forward-looking statements that involve substantial risks and uncertainties. Any statement in this annual report that is not a statement of an historical fact constitutes a “forward-looking statement”. Further, when we use the words “may”, “expect”, “anticipate”, “plan”, “believe”, “seek”, “estimate”, “internal”, and similar words, we intend to identify statements and expressions that may be forward- looking statements. We believe it is important to communicate certain of our expectations to our investors. Forward-looking statements are not guarantees of future performance. They involve risks, uncertainties and assumptions that could cause our future results to differ materially from those expressed in any forward-looking statements. Many factors are beyond our ability to control or predict. You are accordingly cautioned not to place undue reliance on such forward-looking statements. Important factors that may cause our actual results to differ from such forward-looking statements include, but are not limited to, the risk factors discussed herein.
All forward-looking statements speak only as of the date made. All subsequent written and oral forward-looking statements attributable to us, or persons acting on our behalf, are expressly qualified in their entirety by the cautionary statements above and other cautionary statements included in this report. We undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which it is made or to reflect the occurrence of anticipated or unanticipated events or circumstances.
3

PART I
As used in this annual report, “we”, “us”, “our”, “Bonanza”, “Company” or “our Company” refers to Bonanza Goldfields Corporation.

ITEM 1.  BUSINESS
Overview

We are an exploration stage company and that there is no assurance that a commercially viable mineral deposit exist on any of our properties and that further exploration will be required. Our exploration target is to find exploitable minerals on our properties and to raise adequate funding to begin processing our land. Our success depends on achieving that target and becoming cash flow positive once production begins. 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 in fiscal year 2014 to identify mineral prospect properties of merit, conduct preliminary exploration work, and if results are positive, to process mineral resources through a market 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.
However, as the landscape for gold changed in April of 2013, raising adequate capital became much more difficult to secure at a reasonable rate. To ensure the viability of the Company, management entered into an asset purchase agreement with Gunner Gold LLC, which closed in September 2013. The asset purchase agreement allows the Company to retain critical assets such as our mining claim to the land of Bureau of Land Management (“BLM”) and the patented Hull Lode claim. It also grants a royalty to the Company on revenues produced on the BLM land while giving the Company 3.3 million units of Gunner Gold, LLC.

Our areas of exploration are in geopolitically stable North American areas.
We have acquired 3 sets of mineral properties in the state of Arizona. The first is federal mining claims on BLM land totaling 435 acres. The second was 130.76 acres of patented land we leased for an initial term of two years with an option to buy from Judgetown LLC. This lease option to the Judgetown LLC patented property has been sold to Gunner Gold, LLC in September 2013. This relieved the Company of a large and growing debt to Judgetown LLC. The lease agreement with Judgetown was effective on October 15, 2012 and was sold in September 2013. The third property is referred to as the Hull land and is approximately 20 acres of patented land which we have purchased with funds borrowed from Freedom Boat and remains in Bonanza’s possession but is being leased to Gunner Gold LLC for 2 years commencing in September 2013. The Company also sold its Yukon 25 plant to Gunner Gold, LLC.

Bonanza Goldfields Corp also retired certain debt with proceeds from the asset purchase agreement. This investment into Gunner Gold, LLC and the reduction of debt will allow us to redefine a corporate strategy in light of the underperformance of the gold mining industry in 2013. Management believes that the current structure allows investors to benefit from a rebound in gold but in the event that the gold price remains at current levels the Company now has the flexibility to examine entering other businesses.
4
Historical Background:

The Judgetown lease, with an effective date of October 15, 2012, was executed on or before September 30, 2012 between our Company and Judgetown LLC, an Arizona Limited Liability Company located in Arizona. The leased premises consist of 130.76 acres in the county of Yavapai, Arizona in the Date Creek Mountain range. The lease is exclusive to the Company and our successors and assigns all of Judgetown LLC’s interest in and to all mining rights and minerals beneath the surface of, within, or that may be produced from the premises. The lease granted the following to us for a period of two years unless terminated pursuant to the lease; Mining and Access Rights, Cross Mining, Commingling, Deposit of Waste Materials, Treatment and Water Rights. The lease obligation, as amended, is $320,000 for the period commencing on January 15, 2013. An option to purchase the land was also granted for a price of $1,500,000 less lease payments. The lease with an option to purchase was amended on February 1, 2013 to reflect a new owner and to amend the payment schedule and amount.

As of October 2013,our leased lands consist of 38 lode claims covering about 455 acres of patented, private property claims and BLM claims in the Date Creek Mountains, Arizona consisting of both alluvial and mineralized quartz deposits, as well as the presence of certain rare earth elements. A Preliminary Geological Survey as well as subsequent testing and assays of the leased claims were prepared by Auric Resources International, Inc. of Wickenburg, Arizona. Shareholders can access the report and test results at our website: www.bonanzagoldfields.com (such website and its contents are not to be incorporated by reference to this report).

Highlights from the report include:
●
The large land package with widespread areas of anomalous gold values;
●
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 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 leased claims. These veins ranged up to several feet in width and 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 through Bonanza’s privately constructed roads, and rail is localized. 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. Bonanza management believes the alluvial deposits originate from two ancient rivers that flowed in opposing directions during separate geological periods.
●
Our most recent gold assays occurred during the month of July 2012 and were surface level rock chip assays on the Company's Bureau of Land Management (BLM) claims located near the Piedmont Mine area.
5
●
The assays were completed based on the geological teams' recommendation to study the Piedmont Mine. Bonanza's geological team staked out and acquired the Piedmont in December 2011 as part of the planned leased claims expansion. The assays were completed at a third party globally recognized assayer.
●
Table 1: Surface area rock chip samples on our BLM land claims in the Piedmont Mine area
TARANTULA
Au (Fire)
Au (Fire 2)
Au (Fire 2)
Control #
ppb
Grams/per ton
Ounces/per ton
681
>3000
20.2
0.65
682
>3000
45.5
1.46
683
52
n/a
n/a
684
47
n/a
n/a
685
13
n/a
n/a
*Assays reported in grams and ounces per ton
**Conversion based on 31.1 grams = 1 troy ounce of gold
Rare Earth Metal Tests:
●
The Company also tested for the most prevalent and critical rare earth metals (REM) in the Arizona geographic region, which are Cerium, Lanthanum, Scandium, Yttrium. The tests proved positive for all four rare earth elements. The Company is now planning future tests for the other 13 critical rare earth elements and for estimates of concentration. The plan is to test for the remaining 13 metals in Canadian testing facilities where more advanced analysis can be performed.
●
Major Rare Earth Metals Uses (listed by metal):
●
Cerium is used in auto catalysts, petroleum refining, and in metal alloys.
●
Lanthanum is used in hybrid engines and metal alloys.
●
Scandium is used in sports equipment, the firearms industry and dental applications.
●
Yttrium is used in red color, fluorescent lamps, ceramics, and as an agent in metal alloys with applications to superconductors and medical devices.
We expanded our geological footprint with the acquisition of the Piedmont Mine, gold and silver mine in operation until 1940. The Piedmont Mine has been deemed by the Bonanza geological team a strategic addition to leased claims. The acquisition expands the geological footprint to 38 lode mining claims covering about 600 acres of contiguous property.

There are gold-bearing quartz fissure veins that closely follow “greenstone” (andesite or diabase) dikes that occur along east-west and northwest-southeast trending structures in early Proterozoic granitic rocks. The veins range from a few inches to several feet in width, with up to several hundred feet and unknown depth. The mineralogy of the veins consists of auriferous quartz with silver and varying amounts of sulfides, primarily pyrite with smaller amounts of galena, chalcopyrite, and sphalerite, and locally molybdenite. Hematite is locally prevalent as masses and relic structures formed from oxidation of the pyrite. The highest grade gold is generally associated with the highest concentrations of pyrite.
6

We have not completed a Canadian NI 43-101 report or an American equivalent and do not know what our proven reserves are, but we are in the process of doing an internal resource estimate based on the placer material run to date and the assays we have completed and are in the process of completing on our load material. This will include our rock chip analysis that can be used to estimate load material and is being conducted by our internal geologist and we are using an accredited external assayer in Prescott, Arizona named Copper State Labs.

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. Additional exploration (mapping, sampling, bulk-sampling geophysics, drilling, etc.) must be conducted in order to determine the areal extent, volumes, grades, and values of auriferous quartz veins and gravels within the expanded claim block. The large land package with widespread areas of anomalous gold values; proximity to the Congress Mine; large iron oxide rich quartz veins which exhibit mineralogic and structural similarities to the Congress, Niagra, 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 undoubtedly represents an excellent exploration target with potential for both placer and lode gold production from auriferous placers and veins.

There was some surface disturbance before Bonanza Goldfields acquired the property. There are a few existing adits and test pits, and a network of roads built by the previous owner who was selling boulders to housing developments. There is no known contamination of the area. The mining activity appears to be limited to small adits and test pits. Remediation of the site will be an ongoing process. Excavations will first be filled with the oversize material which has been separated by grizzly from the bank run feed materials from each excavation. Finally, the upper 6” - 12” of soil, which has been stored during initial site preparation, will be placed on top of the oversize materials in order to enhance revegetation of the area. Care will be taken to prevent erosion on slopes, and where necessary runoff will be diverted by water bars and terracing. All improved access roads will be graded to natural contour and water bars will be utilized to prevent erosion. Since some of the area of operations is near a natural drainage, efforts will be taken to ensure the natural flow is restored upon completion of the operation.

A breakdown of the exploration timetable and budget, including estimated amounts that will be required for each exploration activity, such as geophysics, geochemistry, surface sampling, drilling, etc. for each prospect are as follows:

The timetable will depend on the availability of financing. The exploration plan would begin with a surface sampling program estimated to take 3 weeks and to cost approximately $35,000 to complete. Multi-element analyses will be performed on each sample and the geochemical analyses along with the local geology and the visible outcrops of mineralized quartz would be used to determine the best drill targets. The analyses and interpretation of the data will take an estimated 6 weeks to complete at a cost of $25,000. Assuming a cost of $50 per foot of core drilling, 8 drill targets, and an average depth of 500 feet, the drilling program will cost approximately $200,000.

Our first phase is to set up the plant and then run placer material and test the results (including rock chip samples) to obtain an internal resource estimate on our patented properties. Also, we plan to obtain all necessary licenses to operate on the BLM land. Our second phase would be to move as much placer volume through our plant as possible if the placer levels are economical and to expand that plant to have significantly more operating volume. Third, we plan to secure financing for a load operation to add to our placer capacity. If placer material is not economical and load tests to be more economical then we plan to move to load given financing is available.
7

On September 20, 2013, we entered into an Amended and Restated Asset Purchase Agreement with Gunner Gold, LLC. Pursuant to the terms of Amended and Restated Asset Purchase Agreement, Gunner Gold, LLC has agreed to purchase certain assets and assume certain liabilities from us for a purchase price of 3,300,000 units of Gunner Gold, LLC stock.  We also granted Gunner Gold, LLC the right to conduct mining operations on our BLM properties with the option to acquire the mineral rights for 700,000 additional units of Gunner Gold, LLC’s stock. The Company will receive 5% of the net proceeds, after the payment of all maintenance costs, earned by Gunner Gold from the mining operation on BLM properties. The Company received $307,500 at the closing, part of which was used to completely retire the Tonaquint Inc. debt and pay other obligations. Gunner Gold has agreed to pay $339,500 over a period of one year to retire other debts of the Company.

On October 4, 2013, we entered into a Term Sheet with Tonaquint wherein Tonaquint will loan the Company up to $100,000.  The funds will be used to pay the cost related to the Company’s SEC filings. The Company is still finalizing the term with Tonaquint and has not yet signed a final agreement.

Description of work completed on the property and its present condition

There has been significant work completed on the property. First, the roads have been improved to be completely usable for all types of equipment such as loaders, dump truck, back hoes, all types of cars, and even larger scale trucks.  Second, a water retention pond holding just under 1 million gallons of water and currently between 700,000 – 800,000 gallons was created.  Third, a gold processing plant has been installed which is specifically a Goldfield International Yukon 25 plant and finishing table.  Fourth, enhancement to the plant, such as a new sluice system and a staging area for placer material processing was finished. All of this was done on the Hull land which is patented property. Fifth, a slime pond was created along with a sophisticated water retention system connected between the plant and the large retention pond.  Sixth, fencing around the pond for safety purposes was set up.  Seventh, an additional water well to the well already on the land was drilled.  This all occurred between October 2012 and December 2012 using the proceeds from sale of our common stock and proceeds from our issuance of a convertible note..

The details as to modernization and physical condition of the plant and equipment, including subsurface improvements and equipment

The Goldfield International Yukon 25 plant was purchased new in October 2012 along with the finishing table. The plant is therefore considered by us to be in very good condition. There have been no subsurface improvements since we have been pursuing placer material since setting up the plant.

Description of equipment, infrastructure, and other facilities

The infrastructure has been newly established with competent personnel and functional equipment. Additionally, we have a tool shed needed for maintenance. We have two wells (one of which is solar powered) that have the capacity to pump a total of 12 gallons per minute which is adequate for our present operations. Our power supply comes from 2 generators which are on the property.

Description of our sampling procedures

Our geologist, Arne Stenseth, collects and maintains custody of the samples. The rock chip samples are collected as representative samples of the outcrop or vein.  The rock chips are bagged and labeled. The labeled bags are sent to either Copper State Analytical Lab in Prescott, AZ or to Skyline Assayers & Laboratories in Tucson, AZ. The labs perform multi-element analyses by ICP, and gold and silver are determined by fire assay. Concentrates collected from the finishing table are also collected by Mr. Stenseth, who maintains custody of the samples. The concentrates are bagged and labeled and sent to the same laboratories as above for the same analyses.
8

Off-Balance Sheet Arrangements
We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.
Limited Operating History; Need for Additional Capital
There is no historical financial information about us on which to base an evaluation of our performance. We are an exploration stage company and have not generated revenues from operations. We cannot guarantee we will be successful in our business operations. Our business is subject to risks inherent in the establishment of a new business enterprise, including limited capital resources, possible delays in the exploration of our property, and possible cost overruns due to increases in the cost of services. To become profitable and competitive, we must conduct the exploration of our properties before we start into production of any minerals we may find.

Employees

As of June 30, 2013, the Company had 2 employees.

WHERE YOU CAN FIND MORE INFORMATION

You are advised to read this Form 10-K in conjunction with other reports and documents that we file from time to time with the SEC. In particular, please read our Quarterly Reports on Form 10-Q and Current Reports on Form 8-K that we file from time to time. You may obtain copies of these reports directly from us or from the SEC at the SEC’s Public Reference Room at 100 F. Street, N.E. Washington, D.C. 20549, and you may obtain information about obtaining access to the Reference Room by calling the SEC at 1-800-SEC-0330. In addition, the SEC maintains information for electronic filers at its website http://www.sec.gov.

ITEM 1A.  RISK FACTORS
An investment in our common stock involves a high degree of risk. You should carefully consider the following information about these risks, together with the other information contained in this Annual Report on Form 10-K, or the Company’s other filings with the Securities and Exchange Commission (the "SEC"). If any of the events anticipated by the risks described below occur, our results of operations and financial condition could be adversely affected which could result in a decline in the market price of our common stock, causing you to lose all or part of your investment.
Management lacks technical training and experience with exploring for, starting, and/or operating a mine; and that with no direct training or experience in these areas, management may not be fully aware of many of the specific requirements related to working within this industry. We do however, employ a geochemist who is very familiar with exploration and a subcontractor who has experience operating placer plants. This sub-contractor is an Engineer by training and he and his team operate the equipment on the site, which includes bulldozers, front end loaders, a Finley that screens material, and the maintenance of the plant. The sub-contractor has built two placer plants prior to being hired by Bonanza. Additionally, he has 25 years of construction and heavy equipment experience. Our staff retained an expert consultant for the first half of 2012 named Madan Singh to advise the Company on how to effectively begin a placer operation.
9

The Company believes that through a fraudulent scheme by former management, 86,000,000 shares of our common stock were improperly issued. The Company is in the process of seeking a legal remedy to this issue however, if the Company is not successful, the stock value could be seriously impaired because of the serious reduction the value per share.
The Report Of Our Independent Registered Public Accounting Firm Contains Explanatory Language That Substantial Doubt Exists About Our Ability To Continue As A Going Concern
The independent auditor’s report on our financial statements contains explanatory language that substantial doubt exists about our ability to continue as a going concern. If we are unable to obtain sufficient financing in the near term or achieve profitability, then we would, in all likelihood, experience severe liquidity problems and may have to curtail our operations. If we curtail our operations, we may be placed into bankruptcy or undergo liquidation, the result of which will adversely affect the value of our common shares.

Our Chief Executive Officer and Chief Financial Officer concluded that our internal controls over financial disclosure and procedures were not effective.

If the weaknesses in our disclosure controls and procedures are not remedied based on the framework in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission, or COSO the Company may not be able to accurately disclose its financial condition.
Because the probability of an individual prospect ever having reserves economically recoverable is extremely remote, any funds spent on exploration will probably be lost.
The probability of an individual prospect ever having economically recoverable reserves is extremely remote. As such, any funds spent on exploration will probably be lost. Management beleives our properties do contain reserves. If we are not able to find any reserve in our properties, the Company and its business operations could be adversely impacted and there would be a material adverse impact on our Company’s business, results of operations and financial condition.
We lack an operating history and have losses which we expect to continue into the future. As a result, we may have to suspend or cease activities.
We were incorporated on March 6, 2008 and we have not started our proposed business activities or realized any significant revenues. We have no operating history upon which an evaluation of our future success or failure can be made. Our net loss was $8,031,045 from inception to June 30, 2013. Our ability to achieve and maintain profitability and positive cash flow is dependent upon:
●
our ability to locate a profitable mineral property
●
our ability to generate revenues
●
our ability to reduce exploration costs.
Based upon current plans, we expect to incur operating losses in future periods. This will happen because there are expenses associated with the research and exploration of our mineral properties. As a result, we may not generate revenues in the future. Failure to generate revenues will cause us to suspend or cease activities.
10
Because we will have to spend additional funds to determine if we have economically recoverable reserves, if we can't raise sufficient funds, we will have to cease operations.
Even if we complete our current exploration program and it is successful in identifying a mineral deposit, we will have to spend substantial funds on further drilling and engineering studies before we will know if we have a commercially viable mineral deposit, a reserve. If we do not have a commercially viable mineral reserve, it would have a material adverse impact on our Company’s business, results of operations and financial condition.
As we undertake exploration of our claims and interests, we will be subject to compliance of government regulation that may increase the anticipated time and cost of our exploration program.
There are several governmental regulations that materially restrict the exploration of minerals.  We will be subject to the mining laws and regulations in force in the jurisdictions where our claims are located, and these laws and regulations may change over time.  In order to comply with these regulations, we may be required to obtain work permits, post bonds and perform remediation work for any physical disturbance to land.  While our planned budget for exploration programs includes a contingency for regulatory compliance, there is a risk that new regulations could increase our costs of doing business and prevent us from carrying out our exploration program, or that the budgeted amounts are inadequate.
Because of the inherent dangers involved in mineral exploration, there is a risk that we may incur liability or damages, which could hurt our financial position and possibly result in the failure of our business.
The search for valuable minerals involves numerous hazards. As a result, we may become subject to liability for such hazards, including pollution, cave-ins and other hazards against which we cannot insure or against which we may elect not to insure. The payment of such liabilities may have a material adverse effect on our financial position.
We may not have access to all of the supplies and materials we need to begin exploration which could cause us to delay or suspend activities .
Competition and unforeseen limited sources of supplies in the industry could result in occasional spot shortages of supplies, such as dynamite, and certain equipment such as bulldozers and excavators that we might need to conduct exploration. We have not attempted to locate or negotiate with any suppliers of products, equipment or materials. If we cannot find the products and equipment we need, we will have to suspend our exploration plans until we do find the products and equipment we need.
Due to external market factors in the mining business, we may not be able to market any minerals that may be found.
The mining industry, in general, is intensely competitive.  Even if commercial quantities of minerals are discovered, we can provide no assurance to investors that a ready market will exist for the sale of these minerals.  Numerous factors beyond our control may affect the marketability of any substances discovered. These factors include market fluctuations, the proximity and capacity of markets and processing equipment, and government regulations, including regulations relating to prices, taxes, royalties, land tenure, land use, mineral importing and exporting and environmental protection.  The exact effect of these factors cannot be accurately predicted, but any combination of these factors may result in our not receiving an adequate return on invested capital.
11
Our performance may be subject to fluctuations in market prices of gold and other minerals.

The profitability of a mineral exploration project could be significantly affected by changes in the market price of the relevant minerals. The price of gold, while recently reaching record highs in the last 24 months, has been volatile over the past few months. Demand for gold can also be influenced by economic conditions, attractiveness as an investment vehicle and the relative strength of the U.S. dollar and local investment currencies. A number of other factors affect the market prices for other minerals. The aggregate effect of the factors affecting the prices of various minerals is impossible to predict with accuracy. Fluctuations in mineral prices may adversely affect the value of any mineral discoveries made on the properties with which we are involved, which may in turn affect the market price and liquidity of our common shares and our ability to pursue and implement our business plan.
Our operations are subject to strict environmental regulations, which result in added costs of operations and operational delays.
Our operations are subject to environmental regulations, which could result in additional costs and operational delays. All phases of our operations are subject to environmental regulation. Environmental legislation is evolving in some countries and jurisdictions in a manner that may require stricter standards, and enforcement, increased fines and penalties for non-compliance, more stringer environmental assessments of proposed projects, and a heightened degree of responsibility for companies and their officers, directors, and employees. There is no assurance that any future changes in environmental regulation will not negatively affect our projects.
We have no insurance for environmental problems.
Insurance against environmental risks, including potential liability for pollution or other hazards as a result of the disposal of waste products occurring from exploration and production, has not been available generally in the mining industry.  We have no insurance coverage for most environmental risks.  In the event of a problem, the payment of environmental liabilities and costs would reduce the funds available to us for future operations.  If we are unable to fund fully the cost of remedying an environmental problem, we might be required to enter into an interim compliance measure pending completion of the required remedy.
Climate change and related regulatory responses may impact our business.
Climate change as a result of emissions of greenhouse gases is a significant topic of discussion and may generate government regulatory responses in the near future.  It is impracticable to predict with any certainty the impact of climate change on our business or the regulatory responses to it, although we recognize that they could be significant.  However, it is too soon for us to predict with any certainty the ultimate impact, either directionally or quantitatively, of climate change and related regulatory responses.
The current financial environment may have impacts on our business and financial condition that we cannot predict.
The continued instability in the global financial system and related limitation on availability of credit may continue to have an impact on our business and our financial condition, and we may continue to face challenges if conditions in the financial markets do not improve. Our ability to access the capital markets has been restricted as a result of the economic downturn and related financial market conditions and may be restricted in the future when we would like, or need, to raise capital. The difficult financial environment may also limit the number of prospects for potential joint venture, asset monetization or other capital raising transactions that we may pursue in the future or reduce the values we are able to realize in those transactions, making these transactions uneconomic or difficult to consummate.
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Nevada Law And Our Articles Of Incorporation Protect Our Directors From Certain Types Of Lawsuits, Which Could Make It Difficult For Us To Recover Damages From Them In The Event Of A Lawsuit.
Nevada law provides that our directors will not be liable to our Company or to our stockholders for monetary damages for all but certain types of conduct as directors. Our Articles of Incorporation require us to indemnify our directors and officers against all damages incurred in connection with our business to the fullest extent provided or allowed by law. The exculpation provisions may have the effect of preventing stockholders from recovering damages against our directors caused by their negligence, poor judgment or other circumstances. The indemnification provisions may require our company to use our assets to defend our directors and officers against claims, including claims arising out of their negligence, poor judgment, or other circumstances.

Because We Are Quoted On The OTCQB Instead Of An Exchange Or National Quotation System, Our Investors May Have Difficulty Selling Their Stock Or Experience Negative Volatility On The Market Price Of Our Stock.
Our common stock is traded on the OTCQB.  The OTCQB is often highly illiquid, in part because it does not have a national quotation system by which potential investors can follow the market price of shares except through information received and generated by a limited number of broker-dealers that make markets in particular stocks. There is a greater chance of volatility for securities that trade on the OTCQB as compared to a national exchange or quotation system. This volatility may be caused by a variety of factors, including the lack of readily available price quotations, the absence of consistent administrative supervision of bid and ask quotations, lower trading volume, and market conditions. Investors in our common stock may experience high fluctuations in the market price and volume of the trading market for our securities. These fluctuations, when they occur, may have a negative effect on the market price for our securities. Accordingly, our stockholders may not be able to realize a fair price from their shares when they determine to sell them or may have to hold them for a substantial period of time until the market for our common stock improves .
As a public company we are subject to complex legal and accounting requirements that will require us to incur significant expenses and will expose us to risk of non-compliance .
As a public company, we are subject to numerous legal and accounting requirements that do not apply to private companies.  The cost of compliance with many of these requirements is material, not only in absolute terms but, more importantly, in relation to the overall scope of the operations of a small company.  Our relative inexperience with these requirements may increase the cost of compliance and may also increase the risk that we will fail to comply.  Failure to comply with these requirements can have numerous adverse consequences including, but not limited to, our inability to file required periodic reports on a timely basis, loss of market confidence, delisting of our securities and/or governmental or private actions against us.  We cannot assure you that we will be able to comply with all of these requirements or that the cost of such compliance will not prove to be a substantial competitive disadvantage vis-à-vis our privately held and larger public competitors.
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The application of the “penny stock” rules could adversely affect the market price of our common shares and increase your transaction costs to sell those shares. The Securities and Exchange Commission has adopted rule 3a51-1 which establishes the definition of a “penny stock,” for the purposes relevant to us, as any equity security that has a market price of less than $5.00 per share or with an exercise price of less than $5.00 per share, subject to certain exceptions. For any transaction involving a penny stock, unless exempt, rule 15g-9 require:
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that a broker or dealer approve a person’s account for transactions in penny stocks; and
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the broker or dealer receive from the investor a written agreement to the transaction, setting forth the identity and quantity of the penny stock to be purchased
In order to approve a person’s account for transactions in penny stocks, the broker or dealer must:
●
obtain financial information and investment experience objectives of the person; and
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make a reasonable determination that the transactions in penny stocks are suitable for that person and the person has sufficient knowledge and experience in financial matters to be capable of evaluating the risks of transactions in penny stocks.
The broker or dealer must also deliver, prior to any transaction in a penny stock, a disclosure schedule prescribed by the SEC relating to the penny stock market, which, in highlight form:
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sets forth the basis on which the broker or dealer made the suitability determination; and
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that the broker or dealer received a signed, written agreement from the investor prior to the transaction.

●
Generally, brokers may be less willing to execute transactions in securities subject to the “penny stock” rules. This may make it more difficult for investors to dispose of our common stock and cause a decline in the market value of our stock.
FINRA sales practice requirements may also limit a stockholder's ability to buy and sell our stock.

In addition to the “penny stock” rules described above, the Financial Industry Regulatory Authority (FINRA) has adopted rules that require that in recommending an investment to a customer, a broker-dealer must have reasonable grounds for believing that the investment is suitable for that customer. Prior to recommending speculative low priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the customer's financial status, tax status, investment objectives and other information. Under interpretations of these rules, FINRA believes that there is a high probability that speculative low priced securities will not be suitable for at least some customers. FINRA requirements make it more difficult for broker-dealers to recommend that their customers buy our common stock, which may limit your ability to buy and sell our stock and have an adverse effect on the market for our shares.
The market price for our common shares is particularly volatile given our status as a relatively unknown company with a small and thinly traded public float, limited operating history and lack of profits which could lead to wide fluctuations in our share price. The price at which you purchase our common shares may not be indicative of the price that will prevail in the trading market. You may be unable to sell your common shares at or above your purchase price, which may result in substantial losses to you.
The market for our common shares is characterized by significant price volatility when compared to seasoned issuers, and we expect that our share price will continue to be more volatile than a seasoned issuer for the indefinite future. The volatility in our share price is attributable to a number of factors. First, as noted above, our common shares are sporadically and thinly traded. As a consequence of this lack of liquidity, the trading of relatively small quantities of shares by our shareholders may disproportionately influence the price of those shares in either direction. The price for our shares could, for example, decline precipitously in the event that a large number of our common shares are sold on the market without commensurate demand, as compared to a seasoned issuer which could better absorb those sales without adverse impact on its share price. Secondly, we are a speculative or “risky” investment due to our limited operating history and lack of profits to date, and uncertainty of future market acceptance for our potential products. As a consequence of this enhanced risk, more risk-adverse investors may, under the fear of losing all or most of their investment in the event of negative news or lack of progress, be more inclined to sell their shares on the market more quickly and at greater discounts than would be the case with the stock of a seasoned issuer. Many of these factors are beyond our control and may decrease the market price of our common shares, regardless of our operating performance. We cannot make any predictions or projections as to what the prevailing market price for our common shares will be at any time, including as to whether our common shares will sustain their current market prices, or as to what effect that the sale of shares or the availability of common shares for sale at any time will have on the prevailing market price.
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Shareholders should be aware that, according to SEC Release No. 34-29093, the market for penny stocks has suffered in recent years from patterns of fraud and abuse. Such patterns include (1) control of the market for the security by one or a few broker-dealers that are often related to the promoter or issuer; (2) manipulation of prices through prearranged matching of purchases and sales and false and misleading press releases; (3) boiler room practices involving high-pressure sales tactics and unrealistic price projections by inexperienced sales persons; (4) excessive and undisclosed bid-ask differential and markups by selling broker-dealers; and (5) the wholesale dumping of the same securities by promoters and broker-dealers after prices have been manipulated to a desired level, along with the resulting inevitable collapse of those prices and with consequent investor losses. Our management is aware of the abuses that have occurred historically in the penny stock market. Although we do not expect to be in a position to dictate the behavior of the market or of broker-dealers who participate in the market, management will strive within the confines of practical limitations to prevent the described patterns from being established with respect to our securities. The occurrence of these patterns or practices could increase the volatility of our share price.
Volatility in our common share price may subject us to securities litigation, thereby diverting our resources that may have a material effect on our profitability and results of operations.
As discussed in the preceding risk factors, the market for our common shares is characterized by significant price volatility when compared to seasoned issuers, and we expect that our share price will continue to be more volatile than a seasoned issuer for the indefinite future. In the past, plaintiffs have often initiated securities class action litigation against a company following periods of volatility in the market price of its securities. We may in the future be the target of similar litigation. Securities litigation could result in substantial costs and liabilities and could divert management’s attention and resources.
Compliance with changing regulation of corporate governance and public disclosure will result in additional expenses and pose challenges for our management team.
Changing laws, regulations and standards relating to corporate governance and public disclosure, including the Dodd-Frank Wall Street Reform and Consumer Protection Act and the rules and regulations promulgated there under, the Sarbanes-Oxley Act and SEC regulations, have created uncertainty for public companies and significantly increased the costs and risks associated with accessing the U.S. public markets. Our management team will need to devote significant time and financial resources to comply with both existing and evolving standards for public companies, which will lead to increased general and administrative expenses and a diversion of management time and attention from revenue generating activities to compliance activities.

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 have not incurred to date, including increased 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 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.
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The Company believes that through a fraudulent scheme by former management, 86,000,000 shares of our common stock were improperly issued.
The Company is in the process of seeking a legal remedy to this issue however, if the Company is not successful in its efforts to cancel the shares, the stock value could be improperly diminished because of the dilution created by this fraudulent scheme to the detriment of the shareholders. The Company will bring an action in the appropriate court against the original recipients of the shares and the former CEO and to request an order to cancel the shares. Securities issued in violation of section 5 are subject to rescission under section 12(a) (l) of the Act.  Sections 12(a) (1) of the Securities Act and Section 5 allow purchasers to sue sellers for offering or selling a non-exempt security without registering it.  As long as the purchaser can prove a direct link between the purchaser and the seller and the purchaser may obtain rescission with interest or damages if the investor sold his securities for less than he purchased them. The Company did not receive any consideration for the improper sale of the shares and is attempting to contact the recipients of the subject shares and will pursue all legal remedies available to correct this issue including but not limited to bringing an action in federal court to cancel the shares and for damages sustained by the Company. However, if the Company is not successful the stock value could be improperly diminished because of the dilution created by this fraudulent scheme.
The former CEO in concert with associates and acting outside his authority defrauded the Company.  The legitimate purchasers of the shares will have an action against the seller who knew the shares were not registered or exempt from registration.
The Company was not a party to this fraudulent scheme and it therefore feels rescission is not available to it, however it may still be available to the innocent purchasers of the shares of stock. The damage sustained by the Company could be at least $985,100, which is the amount that the Company would have realized if the shares had been sold pursuant to a registration statement or as restricted shares to legitimate buyers at the time of this incident.  If the non-participating owners are unable to recover their losses from the former CEO and those working in concert with him, they will lose their initial investment and any possible appreciation of their investment.
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SHOULD ONE OR MORE OF THE FOREGOING RISKS OR UNCERTAINTIES MATERIALIZE, OR SHOULD THE UNDERLYING ASSUMPTIONS PROVE INCORRECT, ACTUAL RESULTS MAY DIFFER SIGNIFICANTLY FROM THOSE ANTICIPATED, BELIEVED, ESTIMATED, EXPECTED, INTENDED OR PLANNED.

ITEM 1B.  UNRESOLVED STAFF COMMENTS.

Not applicable.

ITEM 2.  PROPERTIES.

We operate our corporate headquarters at 736 East Braeburn Drive, Phoenix, AZ 85022.

On September 20, 2013, the Company transferred its Judgetown lease, granted a 7-year mining right on the BLM properties and a 2-year mining right to Gunner Gold, LLC in an Amended and Restated Asset Purchase Agreement.

The Company had 3 sets of properties. The first are federal mining claims on BLM land totaling 435 acres. The Company pays the BLM maintenance fees annually. The second set of land is a two-year lease with an option to buy from Judgetown LLC. This lease is for 130.76 acres of patented land with lease payments of $200,000 for the calendar year 2013 and $120,000 for the calendar year 2014. In February 2013, Rick Thomas, who was a 50% owner of Judgetown LLC sold his rights to Michael Quigley of Utah. See our previous filing of form 10K/A for fiscal year ended June 30, 2012 dated June 19, 2013 for Judgetown LLC agreement and amendment to reflect the change of ownership and payment schedule and amount. The rights to the Judgetown LLC properties were sold to Gunner Gold LLC in Spetmeber 2013. The last parcel of land is referred to as the Hull Land and is approximately 20 acres of patented land which is owned by us.  We borrowed the money from Freedom Boat Company for the purchase of Hull Land. The original arrangement has expired however, we continue to make the monthly interest payments of $2,500 (or 10% of the value of the note) and we have verbally reached a tentative new agreement with Freedom Boat Company under the same conditions with the added opportunity for Freedom to convert the principal to stock in the Company. Pursuant to the Amended and Restated Asset Purchase Agreement with Gunner Gold LLC, Gunner Gold LLC is making the monthly interest payments to Freedom Boat LLC on behalf of the Company for 24 months in exhcnage for the mining right to the Company’s Hull land.

For the Judgetown LLC land, Bonanza owned all the mineral rights for the time period we were leasing the land. For the BLM land we only had mineral rights and no land rights. For the Hull Land we have mineral rights and ownership of the land recorded with the Yavapai county recorder. In June 2012, a geological report provided enough support in management’s opinion to pursue a small mining operation based on sample assays from all areas and to pursue a lease of the Judgetown LLC claims.
BLM properties are considered lode claim and the Judgetown LLC leased land and the Hull claim are both lode and placer claims.

As of October 2013, our property consists of 1 patented lode mining claims and 30 unpatented lode mining claims which cover approximately 20 acres of private land and 435 acres of BLM land in Sections 9, 10, 15, and 16, Township 10 North, Range 6 West, Gila and Salt River Base Meridian, Yavapai County, West-Central Arizona. Bonanza Goldfields Corporation owns the Hull patented lode mining claim. Until Septmeber 2013, the Company had optioned 7 other patented lode mining claims, the Lincoln, Granite Reef, Granite Reef Extension, Prescott, State, Dakota, and Planet Mier from Judgetown LLC of Wickenburg, Arizona. In addition to holding approximately 20 acres of patented mining claims, Bonanza holds 30 contiguous unpatented lode mining claims (DCM 1-24, DCM 6 Extension, DCM 12 Extension, and Hawk 1-4) which cover approximately 435 acres in Sections 10, 15, and 16, T10N, R6W, G&SRM. The unpatented lode mining claims have been recorded with the Yavapai County Recorder's Office in Prescott, Arizona and the United States Bureau of Land Management in Phoenix, Arizona.
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The claims are more specifically described as follows:
Bonanza Goldfields Corporation (Formerly referred to as the Tarantula Project)
Unpatented Lode Mining Claims
(Approximately 435 Acres)
Claim Name Book/Page
(Yavapai County Recorder's Office)
AMC Number
(BLM Serial Number)
DCM 1 4836 920 411442
DCM 2 4836 921 411443
DCM 3 4836 922 411444
DCM 4 4836 923 411445
DCM 5 4836 924 411446
DCM 6 4836 925 411447
DCM 6 Extension 4845 317 412202
DCM 7 4836 926 411448
DCM 8 4836 927 411449
DCM 9 4836 928 411450
DCM 10 4836 929 411451
DCM 11 4836 930 411452
DCM 12 4836 931 411453
DCM 12 Extension 4845 316 412203
DCM 13 4836 932 411454
DCM 14 4836 933 411455
DCM 15 4836 934 411456
DCM 16 4836 935 411457
DCM 17 4836 936 411458
DCM 18 4836 937 411459
DCM 19 4836 938 411460
DCM 20 4836 939 411461
DCM 21 4836 940 411462
DCM 22 4836 941 411463
DCM 23 4836 942 411464
DCM 24 4836 943 411465
Hawk 1 4836 944 411466
Hawk 2 4836 945 411467
Hawk 3 4836 946 411468
Hawk 4 4836 947 411469
The DCM 1-18 and DCM 6 Extension and DCM 12 Extension lode mining claims are located in Section 10, T10N, R6W; the DCM 19-24 lode mining claims are located in Section 15, T10N, R6W; and the Hawk 1-4 lode mining claims are located in Section 16, T10N, R6W, G&SRM.
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For the BLM Land, maintenance fees are due every August and are approximately $4,200 and taxes to Yavapai County for all of our land were approximately $1,000 for 2012. Additionally, we pay $2,500 interest per month for a note issued to purchase the Hull land. The Judgetown LLC patended claims were leased at $200,000 and $120,000 for calendar year 2013 and 2014, respectively.

The project area is located approximately 4 miles north of Congress, Arizona, along the eastern flank of the Date Creek Mountains, in west-central Arizona. The property is easily accessible from Wickenburg, Arizona via approximately 17 miles of paved roads and 2 miles of graded gravel roads.

Initial exploration such as geological mapping and sampling can be done on BLM land without permits. If more than 5 acres are to be disturbed, a Notice of Intent to Conduct Exploration must be submitted to the BLM. The Notice will include a reclamation bond. The approved Notice will allow bulk sampling of up to 1,000 tons of material.  If the sampling program warrants further exploration with a drilling program, the Arizona Department of Water Resources will require permits for exploration drilling.  To conduct exploration which disturbs more than 5 acres of surface, the BLM requires the filing of a Plan of Operation which must include a reclamation bond. The Plan of Operation must also be sent to other entities including the Arizona Department of Environmental Quality, the US Army Corps of Engineers, the Mine Safety and Health Administration, and the Arizona Department of Water Resources. Each of the entities will review the Plan of Operations and request any necessary changes.
The BLM will require either an Environmental Assessment or an Environmental Impact Statement for mining on BLM claims. Processing of the mined material will be done on patented claims owned by the company, but an Aquifer Protection Permit will still be required. A pollution prevention plan and an air quality permit may also be required by the State and County.
Biological and cultural surveys will also be required and will note any threatened or endangered species of plants and animals and any cultural or historical sites which must be protected.  The permitting process for a mining operation is complex and can take considerable time. The effect of this permitting process and the government regulations are limited to the costs of outside consultants to perform the biological and cultural surveys and to write the Environmental Impact Statement, if required. It is not anticipated that any of these regulations or permits will prevent further development of the patented or BLM land.
ITEM 3.  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 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 of David Janney additional documentation in which Mr. Janney acknowledged the following to new management and independent legal counsel:
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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 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 new management believes that such exemption was not available) 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. from Salt Lake City, Utah.
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 prior CEO/CFO has, to date, refused to provide new management and our auditors’ invoices or evidence of the uses of these funds.
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.  Current management has negotiated the cash payment of this note and has cancelled the 53,000,000 common shares held in escrow.

4.
The prior CEO/CFO entered another problematic agreement with Amazon Holding LLC to pay a finder’s fee for raising $250,000 in the acquisition of mining property. These finder’s fees were 100% of the entire transaction with a 24% interest rate and current management is of the belief that David Janney was to receive 50% of those payments. Management disputes this agreement with Amazon Holdings, LLC.
5.
Timeline of Events:

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a)   David Janney was hired in of November 2010 as CEO. David Janney hired an attorney John Thomas from Utah to represent the Company.

b)   Janney and Thomas began to convert debt held by Venture Capital Inc. who is a note holder of the Company in January and February of 2011.

c)  Thomas wrote 7 opinion letters for Bonanza Goldfields Corporation converting this debt from Bonanza debt holder, Venture Capital Inc. and issuing shares to the following:

Tucker Financial Inc. (36 million shares),
Vanilla Sky (7 million shares),
Stock Loan Solutions LLC (12 million shares),
Euroline Cleaning (7 million shares),
Envest International (7 million shares),
Scott Geisler (17 million shares)

The total number of shares issued to this group was 86,000,000 common shares. This all occurred between December 2010 to June 2011.

The Company believes that the 86,000,000 shares of our common stock were improperly issued.  The Company did not receive any consideration for the improper sale of the shares and is attempting to contact the recipients of the subject shares and will pursue all legal remedies available to correct this issue including but not limited to bringing an action in federal court to cancel the shares and for damages sustained by the Company.
Bonanza as part of their annual audit which began in August 2011 (working with their auditors) began requesting confirmations for these debt conversions.  The due date for the audit was October 15, 2011, which was an extended due date. Bonanza became aware that there was a problem on October 12, 2011 due to an email from a Bonanza debt holder named Venture Capital Inc. in which they stated to the Company’s consulting accountant and auditor that they never assigned debt or received any money from a debt conversion.

Mr. Janney resigned October 24, 2011 and Scott Geisler became CEO October 26, 2011.
Bonanza hired an outside attorney to try to stop the stock issuance and sent a demand letter to Transfer Online, the transfer agent, in November 2011. At that time the Company was advised that all the stock had already been issued and Rule 144 legends removed based on a legal opinion from John Thomas and could not be reversed.

On or about October 12, 2011, prior to becoming CEO and Principal Accounting Officer, Geisler was informed of the fraud.

The Company has treated the shares as issued for accounting purposes. We continue to try to rectify the situation by attempting to rescind any shares that we can.  The Company believes that the exemptions under Rule 144 do not apply because proper due diligence appears to not have been performed by the issuing opinion attorney.
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The stock was issued under a premise of conversion of debt that was two years or older and since there was no debt conversion (based on the email from Venture Capital Inc) there wasn’t proper polling of the debt. We do not believe that a rescission liability would be appropriate because the shares had already been traded in the market, except for the 17 million shares Mr. Geisler received with whom we are currently in discussion to resolve. Also, the Company would have treated the shares as a rescission liability if the legal opinions on the stock issuance had not occurred. The Company is currently treating the former CEO Scott Geisler’s shares as stock payable until a resolution is obtained.

On February 26, 2012, the Company entered into a settlement agreement with David Janney (our former CEO/CFO) for his actions outlined above 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 were to be issued six months from the execution date of the settlement but have not been issued.

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 personal holdings of Bonanza Goldfields common stock in the open market in any thirty-day period.

d.
Mr. Janney agreed 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 a loss of $59,000 on this settlement during the year ended June 30, 2012.

During the year ended June 30, 2012, the Company learned that the title of the Midas Placer Claim which the Company purchased from Global Minerals, Inc., a company controlled by Mr. David Janney, was never transferred to the Company. On February 19, 2013, David Janney surrendered 3,670,000 common shares of the 6,170,000 common shares he held in the Company. David Janney was allowed to retain 2,500,000 as part of a settlement in litigation with the Company. The Company reduced the par value of the 3,670,000 shares against additional paid-in capital. In the settlement agreement dated February 19, 2013, David Janney also agreed to forfeit his right to receive the second 2,500,000 common shares mentioned in the settlement agreement dated February 26, 2012. The Company recorded a gain on the settlement of litigation for the year ended June 30, 2013 of $29,500 and eliminated the corresponding disputed payable previously recorded .

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On October 30, 2012, management learned that former President and CEO, Mr. Scott Geisler, filed suit against the Company on September 20, 2012, in the Circuit Court of the Sixth Judicial District in the State of Florida. The Company has not yet been served with the summons and complaint or filed an answer. We believe the matter has been dismissed for failure to proceed on behalf of the Plaintiff. Mr. Geisler asserts that the Company is in default with respect to payments under a Settlement and Mutual Release Agreement entered into upon his resignation as an officer and director of the Company and effective June 8, 2012, Mr. Geisler claims monetary damages "in excess of $15,000", attorneys' fees, court costs and seeks the issuance of 7,500,000 shares of common stock that is provided for under the Settlement and Mutual Release Agreement. We have engaged legal counsel to represent the Company in this dispute and counsel has identified defenses to the claims and setoffs. We are optimistic that a settlement of the dispute will be reached in the near future without having a materially adverse effect on our financial condition or results of operations.

On July 27, 2012 the Company placed in escrow 7,500,000 common shares to Scott Geisler in accordance with his waiver and settlement agreement with the Company, and is pending an internal investigation.  The shares were valued at $221,250  and expensed as compensation to Mr. Geisler.  Also, the Company has a permanent hold of 12,500,000 common shares issued to Scott Geisler in accordance with the Company internal investigation that discovered that Mr. Geisler received these shares without authorization and these shares were part of the fraudulent shares issued by prior management.

On June 1, 2008, the Company entered into a purchase agreement with Gold Exploration LLC to purchase BRB placer claim #1, BLM serial number 384903 and BRB place claim #2 serial number 384904 from 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 June 30, 2013 and 2012, principal and interest payable to Gold Exploration LLC for this note is $71,670 and $65,346, respectively.  This agreement required that Gold Exploration LLC perfect the transfer and send the documents to the Company.  The transfer was never made and a review of the BLM lists of claims disclosed that Gold Exploration LLC never owned the claims that they attempted to sell to the Company.  On August 27, 2013, The Company has demanded the cancellation of the note agreement and remittance of $15,000.

On July 29, 2010, the Company entered into a promissory note with Gold Exploration LLC for $107,000 for the purchase of the Midas Gold Project unpatented place claims.  In that note agreement, Gold Exploration LLC received 8,300,000 common shares 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.  During fiscal year 2012, the note holder called the balance of the note and demanded payment although the agreement states the note is not due until 2015. The note holder indicated that the note was in default because the Company failed to maintain the Midas Placer Mining Claim, collateral which secured the note.  Pursuant to the note agreement, the note should accrue interest at 12% when due or declared due. The note is classified as a current liability on the balance sheets. As of June 30, 2013 and 2012, principal and interest payable to Gold Exploration LLC related to this note is $120,280 and $108,640, respectively.
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This agreement required that Gold Exploration LLC perfect the transfer and send the documents to the Company.  The transfer was never made and a review of the BLM lists of claims disclosed that Gold Exploration LLC never owned the claims that they attempted to sell to the Company.

On June 2, 2011, Gold Exploration LLC requested to remove the Section 144 restrictive legends without a proper legal opinion and the legends were removed at the direction of David Janney.  On August 27, 2013, the Company demanded the cancellation of the promissory note and the return of the 8,300,000 common shares. The Company has not received any response from Gold Exploration LLC.
ITEM 4.  MINE SAFETY DISCLOSURES

During the year ended June 30, 2013, Bonanza Goldfields Corporation was not issued any Federal Mine Safety and Health Act of 1977 violations.  In addition, there are no legal actions pending before the Federal Mine Safety and Health Review Commission as of June 30, 2013.
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PART II

ITEM 5.  MARKET FOR REGISTANT’S COMMON STOCK, RELATED STOCKHOLDER MATTERS AND ISSUERS PURCHASES OF EQUITY SECURITIES.

Bonanza common stock is traded in the over-the-counter market, and quoted in the National Association of Securities Dealers Inter-dealer Quotation System (“Electronic Bulletin Board) and can be accessed on the Internet at www.sec.gov under the symbol “BONZ”  We commenced trading in April 2009.

At June 30, 2013, there were 376,485,137 shares of common stock of Bonanza were issued and outstanding and there were approximately 47 shareholders of record of the Company’s common stock.

The following table sets forth for the periods indicated the high and low bid quotations for Bonanza’s common stock.  These quotations represent inter-dealer quotations, without adjustment for retail markup, markdown or commission and may not represent actual transactions.

Periods
High
Low
Fiscal Year 2013
First Quarter July – September 2012
$ 0.0562 $ 0.0431
Second Quarter October – December 2012
0.0261 0.02
Third Quarter January – March 2013
0.01 0.0096
Fourth Quarter April – June 2013
0.003 $ 0.0028
Fiscal Year 2012
First Quarter July – September 2011
$ 0.007 $ 0.018
Second Quarter October – December 2011
0.0069 0.018
Third Quarter January – March 2012
0.005 0.021
Fourth Quarter April – June 2012
0.013 $ 0.06

On October 13, 2013, the closing bid price of our common stock was $0.0016 per share.

Dividends

We may never pay any dividends to our shareholders. We did not declare any dividends for the year ended June 30, 2013. Our Board of Directors does not intend to distribute dividends in the near future. The declaration, payment and amount of any future dividends will be made at the discretion of the Board of Directors, and will depend upon, among other things, the results of our operations, cash flows and financial condition, operating and capital requirements, and other factors as the Board of Directors considers relevant. There is no assurance that future dividends will be paid, and if dividends are paid, there is no assurance with respect to the amount of any such dividend.

Transfer Agent

Bonanza’s Transfer Agent and Registrar for the common stock is Transfer Online, Inc. located in Portland, Oregon.
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Recent sales of unregistered securities

Fiscal year ended June 30, 2013

During the year ended June 30, 2013, the Company received cash of $225,003 for the subscription of 13,762,195 common shares, issued 1,000,000 common shares for $10,000 cash received in the year ended June 30, 2012 and issued 2,000,000 shares of common stock for services to a consultant valued at $40,000.

During the year ended June 30, 2013, the Company also granted 1,000,000 shares, valued at $20,000, to one of the directors as a director fee and 10,000,000 shares, valued at $200,000, to its Chief Executive Officer as compensation. These shares have not been issued and the value was recorded as stock payable at June 30, 2013.

On November 27, 2012, Leroy Steury converted a note with unpaid principal and accrued interest of $79,696 to 7,500,000 common shares.

During April, May and June of 2013, the Company issued 34,430,262 shares of common stock to Tonaquint to repay accrued interest and note principal totaling $110,081.

On January 29, 2013, Bud Chapman and Fabio Piras were issued 300,000 common shares each, 600,000 shares in the aggregate, valued at $17,450, for interest expense on a note. Within the 600,000 shares, 500,000 shares were for interest expense incurred in fiscal year 2012 and the value of $15,500 was recorded as stock payable as of June 30, 2012.

On February 19, 2013, David Janney surrendered 3,670,000 common shares of the 6,170,000 common shares he held in the Company as part of the settlement.

Year ended June 30, 2012

During the year ended June 30, 2012, the Company issued 55,904,764 common shares for $559,000 in cash.  Within the 55,904,764 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 7,000,000 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, 2013 and have a fair value of $66,330 on the grant date. Proceeds of $56,000 from this issuance originally recorded as refundable subscriptions has been reclassified to additional paid-in capital.

In June, 2012, the Company received $10,000 for a common stock subscription. Those shares had not been issued as of June 30, 2012 and the cash received was recorded under common stock payable as of June 30, 2012. The 1,000,000 common shares were issued during the year ended June 30, 2013.

On September 23, 2011, the Company issued 750,000 shares of common stock valued at $7,500 to settle a payable to purchase equipment valued at $2,000. The Company recorded a $5,500 loss on conversion of accounts payable related to this transaction.

During September 2011, as a result 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 year ended June 30, 2012, the Company issued 2,200,000 shares of common stock to its director, officer and consultants for services valued at $20,100.
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On December 28, 2011, the Company issued 1,000,000 shares of common stock for an interest payment on a note held by Mr. Charles Chapman. The shares were valued at $15,000.

On February 26, 2012, the Company issued 2,500,000 common shares to David Janney, former officer, pursuant to a settlement agreement. See Note 10 of the Financial Statements in this report.

On March 19, 2012, the Company agreed to issue 500,000 common shares to a note holder pursuant to an amendment to a note agreement. See Note 4 (p) to the Financial Statements. The shares were valued at $15,500 based on the grant date fair value of the stock. Those shares have been issued as of June 30, 2013

On October 25, 2011 and November 4, 2011, the Company granted its interim CFO, Mr. Peng Foo and its consultant, Mr. Jack Chow, 1,000,000 and 3,000,000 common shares, respectively. Those shares, valued at $42,700, have not been issued and are recorded as disputed payable as of June 30, 2012 and 2013.

On May 8, 2012, the Company entered into a consulting agreement with Mr. Michael Stallings where the Company agreed to issue 500,000 shares of common stock.  The 500,000 shares of common stock were valued at $12,500 based on the market price of grant date and were recorded as stock payable as of June 30, 2012 and 2013.

On July 27, 2012, the Company placed in escrow 7,500,000 common shares to Scott Geisler in accordance with his waiver and settlement agreement with the Company, and is pending an internal investigation.  The shares were valued at $0.0195 and expensed as compensation to Mr. Geisler of $146,250.  Also, the Company has a permanent hold of 12,500,000 common shares to Scott Geisler in accordance with the Company internal investigation that discovered that Mr. Geisler received these shares without authorization and was part of the fraudulent shares issued by prior management – See Legal Proceedings.
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ITEM 6.  SELECTED FINANCIAL DATA.

The following information has been summarized from financial information included elsewhere and should be read in conjunction with such financial statements and notes thereto.
Year Ended June 30,
2013
2012
Statements of Operations Data
Revenues
$ 619 $ -
Operating and Other Expenses
(1,424,810 ) (1,091,355 )
Net Loss
$ (1,424,191 ) $ (1,091,355 )
As of June 30,
2013 2012
Balance Sheets Data:
Current Assets
$ 52,327 $ 105,823
Total Assets
737,133 399,590
Current Liabilities
2,151,194 1,166,400
Non Current Liabilities
54,848 -
Total Liabilities
2,206,042 1,166,400
Working Capital (Deficit)
(2,098,867 ) (1,060,577 )
Shareholders' Equity (Deficit)
(2,454,009 ) (1,751,910 )

ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OR PLAN OF OPERATION.

The following is management’s discussion and analysis of certain significant factors that have affected our financial position and operating results during the periods included in the accompanying consolidated financial statements, as well as information relating to the plans of our current management. This report includes forward-looking statements. Generally, the words “believes,” “anticipates,” “may,” “will,” “should,” “expect,” “intend,” “estimate,” “continue,” and similar expressions or the negative thereof or comparable terminology are intended to identify forward-looking statements. Such statements are subject to certain risks and uncertainties, including the matters set forth in this report or other reports or documents we file with the Securities and Exchange Commission from time to time, which could cause actual results or outcomes to differ materially from those projected. Undue reliance should not be placed on these forward-looking statements which speak only as of the date hereof. We undertake no obligation to update these forward-looking statements.

The following discussion and analysis should be read in conjunction with our consolidated financial statements and the related notes thereto and other financial information contained elsewhere in this Form 10-K.

The Company's financial statements have been prepared in accordance with United States generally accepted accounting principles. We urge you to carefully consider the information set forth in this report under the heading "Forward-Looking Statements" and "Risk Factors".
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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 claim 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.

Our Chief Executive Officer and Chief Financial Officer concluded that our internal controls over financial disclosure and procedures were not effective.

If the weaknesses in our disclosure controls and procedures are not remedied based on the framework in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission, or COSO, the Company may not be able to accurately disclose its financial condition.

Going Concern
The report of our independent registered public accounting firm contains explanatory language that substantial doubt exists about our ability to continue as a going concern. This means that there is substantial doubt that we can continue as an on-going business for the next twelve months unless we obtain additional capital to pay our bills.  This is because we have not generated revenues and no revenues are anticipated until we begin removing and selling minerals.  There is no assurance we will ever reach that point.

Critical Accounting Policies
The Company prepares its financial statements in accordance with accounting principles generally accepted in the United States of America. Significant accounting policies are as follows:

Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements. These estimates and assumptions also affect the reported amounts of revenues, costs and expenses during the reporting period. Management evaluates these estimates and assumptions on a regular basis. Actual results could differ from those estimates.
Exploration Stage Enterprise
The Company's financial statements are prepared pursuant to the provisions of ASC Topic 26 “Accounting for Development Stage Enterprises,” 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. Until such interests are engaged in major commercial production, the Company will continue to prepare its financial statements and related disclosures in accordance with entities in the development stage. Mining companies subject to ASC Topic 26 are required to label their financial statements as an “Exploratory Stage Company,” pursuant to guidance provided by SEC Guide 7 for Mining Companies.
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Mineral Properties
Significant payments related to the acquisition of mineral properties, mineral rights, and mineral leases are capitalized. If a commercially mineable ore body is discovered, such costs are amortized when production begins using the units-of-production method based on proven and probable reserves. If no commercially mineable ore body is discovered, or such rights are otherwise determined to have no value, such costs are expensed in the period in which it is determined the property has no future economic value.
Property Evaluations
Management of the Company will periodically review the net carrying value of its properties on a property-by-property basis. These reviews will consider the net realizable value of each property to determine whether a permanent impairment in value has occurred and the need for any asset write-down. An impairment loss will be recognized when the estimated future cash flows (undiscounted and without interest) expected to result from the use of an asset are less than the carrying amount of the asset. Measurement of an impairment loss will be based on the estimated fair value of the asset if the asset is expected to be held and used.
Although management will make its best estimate of the factors that affect net realizable value based on current conditions, it is reasonably possible that changes could occur in the near term which could adversely affect management's estimate of net cash flows expected to be generated from its assets, and necessitate asset impairment write-downs.
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 June 30, 2013, management has determined that there was no impairment loss required.
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

In accordance with ASC Topic 365, 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. There was no impairment loss required for June 30, 2013.
Share-Based Compensation

The measurement of the cost of services received in exchange for an award of an equity instrument is based on the grant-date fair value of the award.  Compensation cost is recognized when the event occurs.  The Black-Scholes option-pricing model is used to estimate the fair value of options granted.
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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.

Off-Balance Sheet Arrangements
We have not entered into any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources and would be considered material to investors. Certain officers and directors of the Company have provided personal guarantees to our various lenders as required for the extension of credit to the Company.
Accounting policies subject to estimation and judgment
Management's Discussion and Analysis of Financial Condition and Results of Operations are based upon our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. When preparing our financial statements, we make estimates and judgments that affect the reported amounts on our balance sheets and income statements, and our related disclosure about contingent assets and liabilities. We continually evaluate our estimates, including those related to revenue, allowance for doubtful accounts, reserves for income taxes, and litigation. We base our estimates on historical experience and on various other assumptions, which we believe to be reasonable in order to form the basis for making judgments about the carrying values of assets and liabilities that are not readily ascertained from other sources. Actual results may deviate from these estimates if alternative assumptions or condition are used.

RECENT DEVELOPMENTS AND OPERATIONS

We are a junior mining and exploration company identifying and acquiring properties integrated with placer ore and hard rock mineralization in geo-politically stable regions, management continues to focus all efforts in Arizona.

Our management’s strategy is to process feasible placer ore, while proving out hard rock structures of the flagship Tarantula Project, Congress, Arizona. Our work effort has focused exclusively on the Tarantula Project.  The project area is comprised of 38 lode claims covering 600 acres, with several low lying basins of what is believed to be ancient river beds.  Furthermore, there are vestiges and hallmarks of major geological upheaval resulting in unique anomalies, such as extensive mineralized quartz veins. Initially, local non-qualified assay results showed high grades of gold, as well as lower grades of silver, platinum, and rare earth metals, convincing management the existence of possible bonanza type resources.

Bonanza Goldfields’ flagship Tarantula Project consists of 38 lode claims covering 600 acres of patented, 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 (such website and its contents are not to be incorporated by reference to this report).
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Additional testing was completed by Auric Resources on our BLM land which tested positive for gold deposits and certain critical rare earth elements. Those results can also be found on our website.
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 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 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 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 Bonanza’s 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 (although past performance provides no assurances regarding future production).  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.

While conducting a survey of the leased claims, explorations of the outlying region lead to the acquisition of additional claims. With the expansion of the land package, management believes an economically feasible resource estimate can be derived and “proved out.” Furthermore, with the added resource, small to medium scale placer production operations can commence. We have further engaged Auric Resources International to source and build its production operation on an economically viable basis. The level of viability is indexed at 1 gram/ton, and management believes these levels can be attained if not exceeded. With placer production commencing of placer material, we intend to move directly into core drilling of the property.

On September 20, 2013, the Company entered into an Amended and Restated Asset Purchase Agreement with Gunner Gold, LLC. Pursuant to the terms of Amended and Restated Asset Purchase Agreement, Gunner Gold, LLC purchased certain assets and assumed certain liabilities from the Company for 3,300,000 units of Gunner Gold, LLC stock.  The Company also granted Gunner Gold, LLC the right to conduct mining operations on the Company’s BLM properties with the option to acquire the mineral rights for 700,000 additional units of Gunner Gold, LLC’s stock. The Company will receive 5% of the net proceeds, after the payment of all maintenance costs, earned by Gunner Gold from the mining operation on BLM properties.
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RESULTS OF OPERATIONS

Fiscal Year Ended June 30, 2013 Compared to Fiscal Year Ended June 30, 2012

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 years ended June 30, 2013 and 2012, we generated minimal or 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 the ability of our Company to begin to mine our claim. The cost of mining is intensive so it is critical for us to raise appropriate capital to implement our business plan. We incurred losses of $1,424,191 and $1,091,355 for the years ended June 30, 2013 and 2012, respectively, and our losses since inception amount to $8,031,045.
Our operating expenses for exploration activities for the years ended June 30, 2013 and 2012 were $207,067 and $66,282, respectively. The costs associated with exploration activities included trenching, testing, hauling, and labor costs associated with the exploration of our gold mine claims.
We acquired several mining claims through the course of our exploration stage and through the course of this process impaired claims.

Our general and administrative expenses for the year ended June 30, 2013 were $775,183 as compared to $768,056 for the year ended June 30, 2012. The increase is primarily attributable to the stock compensation of officers and consultants.

Our interest expense for the year ended June 30, 2013 was $472,060 as compared to $192,517 for the year ended June 30, 2012.  The increase is primarily attributable to the increase in average debt outstanding and the amortization of debt discount of $332,255 for fiscal year 2013 and $119,930 for fiscal year 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.  In a settlement agreement dated February 19, 2013, David Janney agreed to forfeit his right to receive 2,500,000 common shares based on the settlement agreement dated February 26, 2012. The Company recorded a gain on the settlement of litigation for the year ended June 30, 2013 of $29,500 and eliminated the corresponding disputed payable previously recorded.

Liquidity and Capital Resources

Our cash used in operating activities for year ended June 30, 2013 was $455,318 compared to $542,385 for the year ended June 30, 2012. The decrease in cash used in operations was primarily attributable to the decrease of cash payments made to the professionals.
Our cash used in investing activities for the year ended June 30, 2013 was $154,265, compared to $33,173 for fiscal year 2012. Cash used in investing activities mainly included the purchase of equipment for the production site and a mining claim on the Judgetown property during fiscal year 2013 and only included the purchase of equipment during fiscal year 2012.
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We are in default on our note to Freedom Boat, LLC for $250,000 which is secured by 10,000,000 shares of common stock of the Company. We have preliminarily agreed with Freedom Boat to create another 2 year interest only payment structure with the balance due at the end of the 24 month term and which is convertible to stock. The Company is still in discussion with Freedom Boat to amend the original note agreement.

Our cash provided by financing activities for the year ended June 30, 2013 was $532,517, compared to $637,875 for the year ended June 30, 2012. The decrease is mainly due to fewer proceeds from the sale of common stock. The impact was partially offset by the $307,514 of proceeds from the issuance of convertible notes payable to Tonaquint, Inc.

We are in need of approximately $65,000 per month in order to meet our operating expenses. We are currently in discussion with Tonaquint for additional funding.

On October 1, 2012, we entered into a Secured Convertible Promissory Note and Warrant Purchase Agreement with Tonaquint, Inc., a Utah corporation ("Tonaquint"), whereby the Company issued (i) a Secured Convertible Promissory Note of the Company in the principal amount of $1,660,000 and (ii) a warrant to purchase 158,953,080 shares of the Company’s common stock. The warrant has an exercise price of $0.075 per share and can be exercised at any time within five years after October 1, 2012. Tonaquint has the right to convert, subject to restrictions described in the promissory note, all or a portion of the outstanding amount of the promissory note that is eligible for conversion into shares of our common stock. The conversion price of the promissory note is $0.05 per share.

The Secured Convertible Promissory Note is due on April 1, 2015 and the interest rate of 8% payable monthly. In the event the Company elects to prepay all or any portion of the outstanding balance, the Company shall pay Tonaquint 135% of the amount the Company elects to prepay. The total amount to be funded is $1,500,000, representing the principal amount of $1,660,000 less an original issuance discount of $150,000 and the payment of $10,000 to cover Tonaquint’s fees. The shares of common stock underlying the Secured Convertible Promissory Note and Warrant were to be registered by a registration statement pursuant to the terms and conditions of a registration rights agreement. The registration statement has been withdrawn with Tonaquint’s consent. Tonaquint initially funded the Company $150,000 in cash and issued three Buyer Mortgage Notes, in the principal amount of $50,000, $150,000, and $400,000 and a promissory note in the amount of $750,000 to the Company pursuant to the agreement. The Buyer Mortgage Notes are secured by certain real property owned by Tonaquint located in Cook County, Illinois. .

Pursuant to the purchase agreement, we reserved 75,000,000 shares of common stock. We agreed not to enter into any equity line of credit or financing arrangement or other transaction that involves issuing securities that are convertible into common stock (including without limitation selling convertible debt, warrants or convertible preferred stock), or otherwise issue common stock (a) with conversion, exercise or similar mechanics or reset provisions that vary according to the market price of the common stock without a floor at or higher than $0.01 or (b) at a fixed price which is lower than $0.01, without the prior written consent of Tonaquint. We agreed not to declare or make any dividend or other distributions of our assets.

As of June 30, 2013, we have received principal of $307,514 pursuant to the Secured Convertible Promissory Note.
On September 20, 2013, Tonaquint, Inc. was paid in full and there is no longer any further obligations related to this note agreement.
34

Other Considerations

There are numerous factors that affect the business and the results of its operations. Sources of these factors include general economic and business conditions, federal and state regulation of business and mining activities, changes to the tax code during or after the current congressional session, and our ability to continue to improve our infrastructure including personnel and systems to keep pace with the Company’s potential growth.
The Company will be subject to environmental and governmental regulations.  Initial exploration such as geological mapping and sampling can be done on BLM land without permits. If more than 5 acres are to be disturbed, a Notice of Intent to Conduct Exploration must be submitted to the BLM. The Notice will include a reclamation bond. The approved Notice will allow bulk sampling of up to 1,000 tons of material. If the sampling program warrants further exploration with a drilling program, the Arizona Department of Water Resources will require permits for exploration drilling.
To conduct exploration which disturbs more than 5 acres of surface, the BLM requires the filing of a Plan of Operation which must include a reclamation bond. The Plan of Operation must also be sent to other entities including the Arizona Department of Environmental Quality, the US Army Corps of Engineers, the Mine Safety and Health Administration, and the Arizona Department of Water Resources. Each of the entities will review the Plan of Operations and request any necessary changes.
The BLM will require either an Environmental Assessment or an Environmental Impact Statement for mining on BLM claims. Processing of the mined material will be done on patented claims owned by the company, but an Aquifer Protection Permit will still be required.  A pollution prevention plan and an air quality permit may also be required by the State and County. Biological and cultural surveys will also be required and will note any threatened or endangered species of plants and animals and any cultural or historical sites which must be protected.
The permitting process for a mining operation is complex and can take considerable time. The effect of this permitting process and the government regulations are limited to the costs of outside consultants to perform the biological and cultural surveys and to write the Environmental Impact Statement, if required. It is not anticipated that any of these regulations or permits will prevent further development of the patented or BLM land.
ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We do not hold any derivative instruments and do not engage in any hedging activities.
35
ITEM 8.  FINANCIAL STATEMENTS

BONANZA GOLDFIELDS CORPORATION
(An Exploration Stage Company)

TABLE OF CONTENTS Page
Report of Independent Registered Public Accounting Firm F-2
Balance Sheets F-3
Statements of Operations F-4
Statements of Stockholders’ Equity (Deficit) F-5
Statements of Cash Flows F-6
Notes to Financial Statements F-7


F-1
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM



To the Board of Directors
Bonanza Goldfields Corporation
(An Exploration Stage Company)
Phoenix, Arizona

We have audited the accompanying balance sheets of Bonanza Goldfields Corporation (an exploration stage company) as of June 30, 2013 and 2012, and the related statements of operations, stockholders’ equity (deficit) and cash flows for the years then ended and for the period from March 6, 2008 (inception) to June 30, 2013.  These financial statements are the responsibility of the Company’s management.  Our responsibility is to express an opinion on these financial statements based on our audits. The financial statements for the period from March 6, 2008 (inception) through June 30, 2010 were audited by other auditors whose reports expressed unqualified opinions on those financial statements. The financial statements for the period from March 6, 2008 (date of inception) to June 30, 2010 include total revenues and net loss of $0 and $3,105,540, respectively. Our opinion on the statements of operations, stockholders' equity (deficit) and cash flows for the period from March 6, 2008 (date of inception) through June 30, 2010, insofar as it relates to amounts for prior periods through June 30, 2010, is based solely on the reports of other auditors.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States).  Those standards require that we plan and perform an audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.  The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements.  An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.  We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Bonanza Goldfields Corporation as of June 30, 2013 and 2012, and the results of its operations and its cash flows for the years then ended and for the period from March 6, 2008, (inception) to June 30, 2013, in conformity with accounting principles generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern.  As discussed in Note 1 to the financial statements, the Company has suffered recurring losses and has an accumulated deficit at June 30, 2013.  These factors raise substantial doubt about its ability to continue as a going concern.  Management's plans in regard to these matters are also described in Note 1.  The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
As discussed in Note 13 to the financial statements, the Company has restated its financial statements for the years ended June 30, 2012 and 2011 to classify common shares that are subject to rescission or redemption requirements that are outside of the control of the Company outside of permanent equity until they are no longer subject to rescission or redemption.
/s/ GBH CPAs, PC

GBH CPAs, PC
www.gbhcpas.com
Houston, Texas
October 15, 2013
F-2
BONANZA GOLDFIELDS CORPORATION
(An Exploration Stage Company)
BALANCE SHEETS
June 30,
2013
2012
ASSETS:
(Restated)
CURRENT ASSETS
Cash
$ 8,557 $ 85,623
Interest receivable
43,770 -
Prepaid expenses
- 20,200
Total current assets
52,327 105,823
Property and equipment, net
123,938 43,767
Deposit
300 -
Mining claims
560,568 250,000
TOTAL ASSETS
$ 737,133 $ 399,590
LIABILITIES AND STOCKHOLDERS' DEFICIT:
CURRENT LIABILITIES:
Accounts payable and accrued liabilities
$ 199,181 $ 59,967
Accrued interest
71,218 43,409
Lease obligation, current portion
205,720 -
Disputed payable
263,950 293,450
Common stock payable
432,500 38,000
Deferred liabilities
60,000 60,000
Convertible notes payable
323,926 76,875
Notes payable
594,699 594,699
Total current liabilities
2,151,194 1,166,400
Lon-term lease obligation
54,848 -
TOTAL LIABILITIES
2,206,042 1,166,400
CONTINGENCIES AND COMMITMENTS
COMMON STOCK SUBJECT TO RESCISSION
985,100 985,100
STOCKHOLDERS' DEFICIT:
Series A Preferred stock, $0.0001 par value, 20,000,000 shares authorized;
none issued and outstanding
- -
Common stock, $0.0001 par value, 500,000,000 shares authorized;
290,485,137 and 234,862,680 issued and outstanding, respectively
29,048 23,486
Additional paid-in capital
5,547,988 4,831,458
Deficit accumulated during exploration stage
(8,031,045 ) (6,606,854 )
TOTAL STOCKHOLDERS' DEFICIT
(2,454,009 ) (1,751,910 )
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT
$ 737,133 $ 399,590
The accompanying notes are an integral part of these financial statements.
F-3
BONANZA GOLDFIELDS CORPORATION
(An Exploration Stage Company)
STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED JUNE 30, 2013 AND 2012 AND
THE PERIOD FROM MARCH 6, 2008 (INCEPTION) THROUGH JUNE 30, 2013
For the
Period
from
March 6,
2008
(inception)
through
2013
2012
June 30,
2013
REVENUE
$ 619 $ - $ 619
OPERATING EXPENSES:
General and administrative
775,183 768,056 3,285,362
Exploration expense
207,067 66,282 456,387
Impairment of mining claims
- - 714,700
Impairment of other assets
- - 32,122
Total operating expenses
982,250 834,338 4,488,571
OTHER (INCOME) EXPENSES:
Interest expense
472,060 192,517 3,358,809
(Gain) loss on settlement of litigation
(29,500 ) 59,000 29,500
Loss on settlement of accounts payable
- 5,500 33,014
Loss on debt conversion
- - 121,770
Total other (income) expense
442,560 257,017 3,543,093
NET LOSS
$ (1,424,191 ) $ (1,091,355 ) $ (8,031,045 )
NET LOSS PER COMMON SHARE:
Basic and diluted
$ (0.00 ) $ (0.00 )
Weighted average common shares outstanding, basic and diluted
338,235,944 298,840,858
The accompanying notes are an integral part of these financial statements.
F-4
BONANZA GOLDFIELDS CORPORATION
(An Exploration Stage Company)
STATEMENTS OF STOCKHOLDER' EQUITY (DEFICIT)
FOR THE PERIOD FROM MARCH 6, 2008 (INCEPTION) THROUGH JUNE 30, 2013
Additional
Preferred Stock
Common Stock
Paid-in
Accumulated
Shares
Amount
Shares
Amount
Capital
Deficit
Total
BALANCE AT MARCH 6, 2008
- $ - - $ - - $ - $ -
Common stock issued for compensation
- - 6,997,900 700 69,279 - 69,979
Common stock issued for cash
- - 3,302,100 330 84,670 - 85,000
Options issued
- - - - 2,500 - 2,500
Net loss
- - - - - (103,723 ) (103,723 )
BALANCE AT JUNE 18, 2008
- - 10,300,000 1,030 156,449 (103,723 ) 53,756
Forward split
- - 61,800,000 6,180 (6,180 ) - -
Beneficial conversion feature
- - - - 2,108,000 - 2,108,000
Option valuation
- - - - 59,399 - 59,399
Net loss
- - - - - (2,283,997 ) (2,283,997 )
BALANCE AT JUNE 18, 2009
- - 72,100,000 7,210 2,317,668 (2,387,720 ) (62,842 )
Common stock issued for interest expense
- - 11,932,260 1,193 495,567 - 496,760
Common stock issued for debt conversion
- - 1,897,878 190 60,262 - 60,452
Common stock cancelled
- - (14,000,000 ) (1,400 ) 1,400 - -
Beneficial conversion feature
- - - - (33,172 ) - (33,172 )
Net loss
- - - - - (717,820 ) (717,820 )
BALANCE AT JUNE 30, 2010
- - 71,930,138 7,193 2,841,725 (3,105,540 ) (256,622 )
Common stock issued for mining claim
- - 41,700,000 4,170 454,530 - 458,700
Common stock issued for services
- - 10,800,000 1,080 87,860 - 88,940
Common stock issued for accounts payable conversion
- - 4,780,000 478 41,586 - 42,064
Common stock issued for cash
- - 34,000,000 3,400 171,600 - 175,000
Common stock issued for debt conversion
- - 20,520,000 2,052 197,598 - 199,650
Common stock issued with note
- - 5,000,000 500 47,887 - 48,387
Common stock issued for equipment
- - 3,777,778 378 35,994 - 36,372
Series A Preferred stock issued for compensation
3,000,000 300 - - - - 300
Beneficial conversion feature
- - - - 50,000 - 50,000
Warrants
- - - - 42,599 - 42,599
Net loss
- - - - - (2,409,959 ) (2,409,959 )
BALANCE AT JUNE 30, 2011 (Restated)
3,000,000 300 192,507,916 19,251 3,971,379 (5,515,499 ) (1,524,569 )
Common stock issued for cash
- - 55,904,764 5,590 553,410 - 559,000
Common stock issued for account payables conversion
- - 750,000 75 7,425 - 7,500
Stocks cancelled by David Janney, former officer
(3,000,000 ) (300 ) (20,000,000 ) (2,000 ) 2,300 - -
Common stock issued for services
- - 2,200,000 220 19,880 - 20,100
Common stock issued for settlement of litigation
- - 2,500,000 250 29,250 - 29,500
Common stock issued for interest expense
- - 1,000,000 100 14,900 - 15,000
Extinguishment of debt
- - - - 19,327 - 19,327
Warrants and options
- - - - 138,587 - 138,587
Beneficial conversion feature
- - - - 75,000 - 75,000
Net loss
- - - - - (1,091,355 ) (1,091,355 )
BALANCE AT JUNE 30, 2012 (Restated)
- - 234,862,680 23,486 4,831,458 (6,606,854 ) (1,751,910 )
Common stock issued for cash
- - 14,762,195 1,476 233,527 - 235,003
Common stock issued for services
- - 2,000,000 200 39,800 - 40,000
Common stock issued for debt conversion
- - 42,530,262 4,253 202,974 - 207,227
Common stocks cancelled by David Janney, former officer
- - (3,670,000 ) (367 ) 367 - -
Common stock granted to replace option issued in prior year
- - - - (200,000 ) - (200,000 )
Warrants and options
- - - - 132,348 - 132,348
Debt discount, beneficial conversion feature and warrants
- - - - 307,514 - 307,514
Net loss
- - - - - (1,424,191 ) (1,424,191 )
BALANCE AT JUNE 30, 2013
- $ - 290,485,137 $ 29,048 5,547,988 $ (8,031,045 ) $ (2,454,009 )
The accompanying notes are an integral part of these financial statements.
F-5
BONANZA GOLDFIELDS CORPORATION
(An Exploration Stage Company)
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED JUNE 30, 2013 AND 2012
AND FOR THE PERIOD FROM MARCH 6, 2008 (INCEPTION) THROUGH JUNE 30, 2013
For the
Period
from
March 6,
2008
(inception)
through
2013
2012
June 30,
2013
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Loss
$ (1,424,191 ) $ (1,091,355 ) $ (8,031,045 )
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation
23,794 483 24,277
Stock-based compensation
392,348 213,887 1,869,602
Impairment of mining claims
- - 714,700
Impairment of other assets
- - 32,122
Amortization of debt discount
332,255 119,930 2,619,621
Common stock issued for interest expense
106,523 7,300 610,583
Loss on settlement of litigation
(29,500 ) 59,000 29,500
Loss on settlement of accounts payable
- 5,500 33,014
Loss on debt conversion
- - 121,770
Changes in assets and liabilities:
Interest receivable
(43,770 ) - (43,770 )
Prepaid expenses and other current assets
20,200 (12,500 ) 7,700
Accounts payable and accrued expenses
167,023 (75,880 ) 217,279
Disputed payable
- 221,250 293,450
Deferred liabilities
- 10,000 60,000
Net cash used in operating activities
(455,318 ) (542,385 ) (1,441,197 )
CASH FLOWS FROM INVESTING ACTIVITIES:
Investment in mining equipment
(103,965 ) (33,173 ) (140,138 )
Investment in mining property
(50,000 ) - (199,000 )
Deposit paid
(300 ) - (300 )
Net cash used in investing activities
(154,265 ) (33,173 ) (339,438 )
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from notes payable
- 50,000 355,800
Repayment of notes payable
- (58,000 ) (58,000 )
Proceeds from convertible note payable
307,514 76,875 437,389
Proceeds from the sale of common stock
225,003 569,000 1,054,003
Net cash provided by financing activities
532,517 637,875 1,789,192
INCREASE (DECREASE) IN CASH
(77,066 ) 62,317 8,557
CASH, BEGINNING OF YEAR
85,623 23,306 -
CASH, END OF YEAR
$ 8,557 $ 85,623 $ 8,557
SUPPLEMENTAL CASH FLOW INFORMATION:
Interest paid, net interest received
$ 29,040 $ 47,100 $ 667,970
Income taxes paid
$ - $ - $ -
NONCASH INVESTING AND FINANCING TRANSACTIONS
Extinguishment of debt
$ - $ 19,327 $ -
Notes issued to acquire mining claims
$ - $ - $ 357,000
Debt Discount
$ 307,514 $ 7,500 $ 2,507,342
Common stocks issued for note modification
$ - $ - $ 48,387
Common stocks issued to acquire mining claim
$ - $ - $ 458,700
Common stock issued for fixed assets
$ - $ 7,500 $ 43,872
Common stock issued for conversion of debt
$ 202,974 $ 7,700 $ 138,332
Common stock to be issued for settlement of litigation
$ - $ 29,500 $ 29,500
Common stock to be issued for note extension
$ - $ 15,500 $ 15,500
The accompanying notes are an integral part of these financial statements.
F-6
BONANZA GOLDFIELDS CORPORATION
(An Exploration Stage Company)
NOTES TO FINANCIAL STATEMENTS

NOTE 1 - DESCRIPTION OF BUSINESS AND GOING CONCERN

Bonanza Goldfields Corporation (the “Company”) was incorporated under the laws of the State of Nevada on March 6, 2008.  The Company’s fiscal year ends on June 30. The Company’s areas of exploration are in geopolitically stable North American areas. The Company has acquired 3 sets of mineral properties in the state of Arizona. The mineral properties are contiguous, therefore the three sets are considered as one project. The first is federal mining claims on land managed by the Bureau of Land Management totaling 435 acres. The second property is 130.76 acres of patented land the Company leased for an initial term of two years with an option to buy from Judgetown LLC. The lease agreement with Judgetown LLC was effective on October 15, 2012 and ended on September 20, 2013. The third property is referred to as the Hull land and is approximately 20 acres of patented land.

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 significant revenues since inception.  During the year ended June 30, 2013, the Company incurred a net loss of $1,424,191 and as of June 30, 2013 has an accumulated deficit of $8,031,045.  Further, the Company has inadequate working capital to maintain or develop its operations, and is dependent upon funds from lenders and private investors and the support of certain stockholders.  These factors raise substantial doubt about the Company’s ability 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 seeking to raise any necessary additional funds through loans or 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 Company prepares its financial statements in accordance with accounting principles generally accepted in the United States of America (“GAAP”) .

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.
F-7

Exploration Stage Enterprise

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 June 30, 2013, management has determined that there was no impairment loss required for the year 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 was no impairment loss required for the year ended June 30, 2013.

Asset Retirement Obligations

The Company had no operating properties at June 30, 2013, but the Company’s mineral properties will be subject to standards for mine reclamation that are established by various governmental agencies.  For these non-operating properties, the Company accrues costs associated with environmental remediation obligations when it is probable that such costs will be incurred and they are reasonably estimable.  Costs of future expenditures for environmental remediation are not discounted to their present value.  Such costs are based on management's current estimate of amounts that are expected to be incurred when the remediation work is performed within current laws and regulations.

It is reasonably possible that due to uncertainties associated with defining the nature and extent of possible environmental contamination, application of laws and regulations by regulatory authorities, and changes in remediation technology, the ultimate cost of remediation and reclamation could change in the future.  The Company continually reviews its accrued liabilities for such remediation and reclamation costs as evidence becomes available indicating that its remediation and reclamation liability has changed.
F-8
The Company recognizes the fair value of a liability for an asset retirement obligation in the period in which it is incurred, if a reasonable estimate of fair value can be made.  The associated asset retirement costs are capitalized as part of the carrying amount of the associated long-lived assets and depreciated over the lives of the assets on a units-of-production basis.  Reclamation costs are accreted over the life of the related assets and are adjusted for changes resulting from the passage of time and changes to either the timing or amount of the original present value estimate on the underlying obligation.  There has been no asset retirement obligations as of June 30, 2013 as there are presently no underlying obligations.

Property and Equipment

Property and equipment is recorded at cost and depreciated over the estimated useful lives of the assets using principally the straight-line method. When items are retired or otherwise disposed of, income is charged or credited for the difference between net book value and proceeds realized thereon.  Ordinary maintenance and repairs are charged to expense as incurred, and replacements and betterments are capitalized.

The range of estimated useful lives used to calculated depreciation for principal items of property and equipment are as follow:

Asset Category
Depreciation/
Amortization Period
Support equipment
5 Years

Income Taxes

Deferred income taxes are provided to reflect the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income.  Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized.

The Company follows a two-step approach to ultimately recognize and measure uncertain tax positions.  The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates it is more likely than not, that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount, which is more than 50% likely of being realized upon ultimate settlement.  The Company considers many factors when evaluating and estimating the Company's tax positions and tax benefits, which may require periodic adjustments.  At June 30, 2013, the Company did not record any liabilities for uncertain tax positions.
F-9

Share-Based Compensation

The measurement of the cost of services received in exchange for an award of an equity instrument is based on the grant-date fair value of the award.  Compensation cost is recognized when the event occurs.  The Black-Scholes option-pricing model is used to estimate the fair value of options granted.

Basic and Diluted Net Loss Per Common Share

Net loss per common 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 period where a net loss is reported, the inclusion of common stock equivalents would be antidilutive and are therefore excluded from the calculation.

At June 30, 2013 and 2012, common stock equivalents consisted of warrants to purchase 27,606,057 and 25,500,000 shares of common stock, respectively, which have been antidilutive. At June 30, 2013 and 2012, common stock equivalents also consisted of notes convertible to 5,983,693, and 7,500,000 shares of common stock, respectively, which have been antidilutive as well.

Fair Value of Financial Instruments

The fair value of a financial instrument is the amount at which the instrument could be exchanged in a current transaction between willing parties other than in a forced sale or liquidation.

The carrying amounts of the Company’s financial instruments, including cash, accounts payable and accrued liabilities, accrued interest and related party payable, approximate fair value due to their most maturities.

Reclassifications

Certain prior year amounts have been reclassified to conform to the current period presentation for comparative purposes.

Subsequent Events

The Company’s management reviewed all material events through the issuance date of this report for disclosure consideration.

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.
F-10

NOTE 3 – PROPERTY AND EQUIPMENT

Property and equipment consists of the following at June 30, 2013 and 2012:

June 30, 2013
June 30, 2012
Support equipment
$
148,215
$
44,250
Less: accumulated depreciation
(24,277
)
(483
)
Net property and equipment
$
123,938
$
43,767

Depreciation expense was $23,794 and $483 for the years ended June 30, 2013 and 2012, respectively.

NOTE 4 – MINING CLAIMS

The following is a detail of mining claims at June 30, 2013 and 2012:

June 30, 2013 June 30, 2012
Midas Placer Mining Claim (BLM claim, fully impaired)
$
565,700
$
565,700
Hull Lode Mining Claim (Freedom Boat Lease)
250,000
250,000
Osiris Gold Joint Venture (fully impaired)
50,000
50,000
Judgetown Mining Claim
310,568
-
Total mining and equipment activity
1,176,268
865,700
Accumulated impairment of mining claims
(615,700)
(615,700)
Total Mining Claims
$
560,568
$
250,000
The Company has impaired all claims except for the Tarantula (Hull Lode) and Judgetown mining claim. See Note 12 for discussion of assets sold subsequent to year end.

During the year ended June 30, 2013, the Company learned that the title of Midas Placer Claim which the Company purchased from Global Minerals, Inc., was never transferred to the Company. The Company did not record any adjustment during the year ended June 30, 2013 as the Midas Placer Mining Claim was fully impaired during fiscal year 2011.

On September 30, 2012, the Company entered into a lease agreement with Judgetown LLC, an Arizona Limited Liability Company located in Arizona to lease 130.76 acres land in the county of Yavapai, Arizona. The lease is exclusive to the Company and its successors and assigns all of Judgetown LLC’s interest in and to all mining rights and minerals beneath the surface of, within, or that may be produced from the land. The lease is for a period of two years unless terminated pursuant to the lease. The lease obligation, as amended on February 9, 2013, is $200,000 for the first year and $120,000 for the second year.  An option to purchase the land was also granted for a price of $1,190,000 less lease payments before January 15, 2015. At June 30, 2013, $310,568 of the discounted value of the lease payments was recorded as the Judgetown Mining Claim as a component of Mining Claims assets. As of June 30, 2013, the Company had recorded a lease obligation payable related to this agreement of $260,568. The Judgetown lease rights were sold on September 20, 2013.
F-11

NOTE 5 – NOTES PAYABLE

The Company had the following notes payable outstanding as of June 30, 2013 and June 30, 2012:
June 30, 2013
June 30, 2012
Gold Exploration LLC (a)
$ 52,699 $ 52,699
Dated - June 1, 2008
Venture Capital International (b)
12,000 12,000
Dated – March 30, 2009
Venture Capital International (c)
17,000 17,000
Dated - May 7, 2009
Advantage Systems Enterprises Limited (d)
17,000 17,000
Dated – July 3, 2009
Advantage Systems Enterprises Limited (e)
10,000 10,000
Dated – August 7, 2009
Venture Capital International (f)
10,000 10,000
Dated – October 15, 2009
Venture Capital International (g)
7,000 7,000
Dated – October 27,2009
Advantage Systems Enterprises Limited (h)
25,000 25,000
Dated – November 9, 2009
Venture Capital International (i)
5,000 5,000
Dated – November 23, 2009
Strategic Relations Consulting, Inc. (j)
15,000 15,000
Dated – March 31, 2010
Summit Technology Corporation, Inc. (k)
2,000 2,000
Dated November 22, 2010
Gold Exploration LLC (l)
97,000 97,000
Dated – July 29, 2010
Freedom Boat, LLC (m)
250,000 250,000
Dated February 7, 2011
Dr. Linh Nguyen (n)
25,000 25,000
Dated May 23, 2011
Charles Chapman (o)
50,000 50,000
Dated December 27, 2011
Leroy Steury (p)
- 76,875
Dated March 12, 2012
Tonaquint, Inc. (q)
449,185 -
Dated October 1, 2012
Total Notes payable
$ 1,043,884 $ 671,574
Less: current portion of long-term debt
(918,625 ) (671,574 )
Less: debt discount
(125,259 ) -
Long-term debt
$ - $ -
F-12
(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 June 30, 2013 and 2012, the Company principal and interest payable to Gold Exploration LLC for this note is $71,670 and $65,346, respectively.  This agreement required that Gold Exploration LLC perfect the transfer and send the documents to the Company.  The transfer was never made and a review of the BLM lists of claims disclosed that Gold Exploration LLC never owned the claims that they attempted to sell to the Company.  On August 27, 2013, the Company has demanded the cancellation of the note agreement and remittance of $15,000.

(b) On March 30, 2009, the Company issued a $12,000 demand promissory note to Venture Capital International, Inc. (“Venture Capital International”) The note is not secured, due on demand with an interest rate of 5%. As of June 30, 2013 and 2012, principal and interest payable to Venture Capital International related to this note is $14,532 and $13,932, respectively. Venture Capital has not demanded the repayment of the note.
(c) On May 7, 2009, the Company issued a $17,000 demand promissory note to Venture Capital International.   The note is not secured, due on demand and has an interest rate of 5%. As of June 30, 2013 and 2012, principal and interest payable to Venture Capital International related to this note is $20,498 and $19,648, respectively. Venture Capital has not demanded the repayment of the note.

(d) On July 3, 2009, the Company issued a $17,000 demand promissory note to Advantage Systems Enterprise Limited.  The note is not secured, due on demand with an interest rate of 5%. As of June 30, 2013 and 2012, principal and interest payable to Advantage Systems Enterprise Limited related to this note is $20,400 and $19,550, respectively. Advantage Systems Enterprise Limited has not demanded the repayment of the note.

(e) On August 7, 2009, the Company issued a $10,000 demand promissory note to Advantage Systems Enterprises Limited.  The note is not secured, due on demand with an interest rate of 5%. As of June 30, 2013 and 2012, principal and interest payable to Advantage Systems Enterprise Limited related to this note is $11,948 and $11,448, respectively. Advantage Systems Enterprise Limited has not demanded the repayment of the note.

(f) On October 15, 2009, the Company issued a $10,000 demand promissory note to Venture Capital International.  The note is not secured, due on demand with an interest rate of 5%. As of June 30, 2013 and 2012, principal and interest payable to Venture Capital International related to this note is $11,853 and $11,353, respectively. Venture Capital has not demanded the repayment of the note.

(g) On October 27, 2009, the Company issued a $7,000 demand promissory note to Venture Capital International.  The note is not secured, due on demand with an interest rate of 5%. As of June 30, 2013 and 2012, principal and interest payable to Venture Capital International related to this note is $8,286 and $7,936, respectively. Venture Capital has not demanded the repayment of the note.

(h) On November 9, 2009, the Company issued a $25,000 demand promissory note to Advantage Systems Enterprise Limited.  The note is not secured, due on demand with an interest rate of 5%. As of June 30, 2013 and 2012, principal and interest payable to Advantage Systems Enterprise Limited related to this note is $29,572 and $28,322, respectively. Advantage Systems Enterprise Limited has not demanded the repayment of the note.

(i) On November 23, 2009, the Company issued a $5,000 demand promissory note to Venture Capital International.  The note is not secured, due on demand with an interest rate of 5%. As of June 30, 2013 and 2012, principal and interest payable to Venture Capital International related to this note is $5,900 and $5,650, respectively. Venture Capital International has not demanded the repayment of the note.

(j) On March 31, 2010, the Company issued a $15,000 demand promissory note to Strategic Relations Consulting, Inc.  The note is not secured, due on demand with an interest rate of 5%.  As of June 30, 2013 and 2012 principal and interest payable to Strategic Relations Consulting, Inc. related to this note is $17,439 and $16,689, respectively. Subsequent to June 30, 2013, Strategic Relations Consulting, Inc. has agreed to convert the note to units of Gunner Gold’s stock that the Company acquired on September 20, 2013.

(k) On November 22, 2010, the Company issued a $7,000 demand promissory note to Summit Technologies Corporation, Inc.  The note is not secured, due on demand with an interest rate of 5%.  As of June 30, 2013 and 2012, principal and interest payable to Summit Technologies Corporation, Inc. related to this note is $2,411 and $2,311, respectively. Summit Technologies Corporation, Inc. has not demanded the repayment of the note.

(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.  During fiscal year 2012, the note holder called the balance of the note and demanded payment although the agreement states the note is not due until 2015. The note holder indicated that the note was in default because the Company failed to maintain the Midas Placer Mining Claim, collateral which secured the note.  Pursuant to the note agreement, the note should accrue interest at 12% when due or declared due. The note is classified as a current liability on the balance sheets. As of June 30, 2013 and 2012, principal and interest payable to Gold Exploration LLC related to this note is $120,280 and $108,640, respectively. This agreement required that Gold Exploration LLC perfect the transfer and send the documents to the Company.  The transfer was never made and a review of the BLM lists of claims disclosed that Gold Exploration LLC never owned the claims that they attempted to sell to the Company.  On June 2, 2011, Gold Exploration LLC requested to lift the Section 144 restrictive legends without a proper legal opinion and the legends were removed at the direction of David Janney.  On August 27, 2013, the Company demanded the cancellation of the promissory note and the return of the 8,300,000 common shares.
F-13

(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, former officer, 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 June 30, 2013 and 2012, the remaining principal owed was $250,000.   This note is presently in default but the Company is negotiating with the holder for an amendment of this note.

(n) On April 6, 2011, the Company entered into a demand promissory note with Linh B. Nguyen in the amount of $25,000.  The note is not secured, due on demand with an interest rate of 5%.  As of June 30, 2013 and 2012, principal and interest payable to Linh B. Nguyen related to this note is $27,627 and $26,377, respectively. Dr. Nguyen has demanded the repayment of this note during the year ended June 30, 2013. The note is currently in default.

(o) On December 27, 2011, the Company issued a $50,000 unsecured 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 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 agreed to issue an additional 500,000 common shares valued at $15,500 which was recorded as debt discount and fully amortized during fiscal year 2012.  As of June 30, 2012, the 500,000 common shares related to the March 19, 2012 amendment was not issued and is recorded as stock payable of $15,500.  On May 16, 2012, the company entered into a second amendment to extend the loan to November 15, 2012. Pursuant to the second amendment, the Company will issue 100,000 shares of its common stock per month for a period of six months in lieu of interest. As of June 30, 2012, the Company has issued 500,000 common shares valued at $11,000, within which, $7,700 is recorded as prepaid interest.  During the year ended June 30, 2013, the Company issued the 500,000 common shares related to the March 19, 2012 amendment and an additional 100,000 common shares for one month interest which was valued at 1,950.  On October 9, 2013, Mr. Chapman agreed to settle the $50,000 note and any unpaid interest with 55,000 units of Gunner Gold, LLC stock that the Company acquired on September 20, 2013.

(p) On March 12, 2012, the Company issued a $75,000 convertible note to Mr. Leroy Steury. The note was due on June 12, 2012 with an interest rate of 10%. 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 which was fully amortized during fiscal year 2012. On June 13, 2012, the Company amended the agreement to include the accrued interest of $1,875 on the $75,000 in the principal and extended the note to September 13, 2012. On September 17, 2012, the Company entered into the second amendment to extend the note to December 17, 2012. On November 27, 2012, Mr. Steury converted unpaid principal and accrued interest of $79,696 to 7,500,000 shares of the Company’s common stock. As of June 30, 2013 and 2012, principal and interest payable to Mr. Steury related to this note was $0 and $77,780, respectively.

(q) On October 1, 2012, the Company entered into a Secured Convertible Promissory Note and Warrant Purchase Agreement with Tonaquint, Inc., a Utah corporation ("Tonaquint"), whereby the Company issued (i) a Secured Convertible Promissory Note of the Company in the principal amount of $1,660,000 with a conversion price of $0.05 per share and an annual interest rate of 8% and (ii) a warrant to purchase 158,953,080 shares of the Company’s common stock. The warrant has an exercise price of $0.075 per share and can be exercised at any time within five years after October 1, 2012. Tonaquint has the right to convert, subject to restrictions described in the promissory note, all or a portion of the outstanding amount of the promissory note that is eligible for conversion into shares of the Company’s common stock.
Buyer Mortgage Note 1 was due on the earlier of (1) 60 days following March 31, 2015, and (2) upon the Company’s filing of a registration statement pursuant to the Secured Convertible Promissory Note and Warrant Purchase Agreement.  Buyer Mortgage Note 2 was due on the earlier of (1) 60 days following March 31, 2015, and (2) if Tonaquint has been required to repay Buyer Mortgage Note 1, 5 trading date after the initial registration statement is declared effective.  Buyer Mortgage Note 3 was due on the earlier of (1) 60 days following March 31, 2015, and (2) if (i) the shares issued to Tonaquint to repay the Secured Convertible Promissory Note are freely saleable or covered by an effective registration statement (ii) Tonaquint has been required to repay Buyer Mortgage Note 2 and (ii) the Company has produced 200 ounces of gold with an average production of at least 1 gram per ton of processed material within 60 days after Tonaquint was required to pay Buyer Mortgage Note 2; (iii) outstanding balance of the Secured Convertible Promissory Note payable to Tonaquint is less or equal to $1.3 million. The $750,000 promissory note receivable from Tonaquit is due on the earlier of (1) 60 days following March 31, 2015, and (2) if (i) the shares issued to Tonaquint to repay the Secured Convertible Promissory Note are freely saleable or covered by an effective registration statement (ii) Tonaquint has been required to repay Buyer Mortgage Note 3 and (ii) the Company has produced 200 ounces of gold with an average production of at least 1 gram per ton of processed material, within 60 days after Tonaquint was requried to pay Buyer Mortgage Note 3; (iii) outstanding balance of  the Secured Convertible Promissory Note payable to Tonaquint is less or equal to $900,000.
The promissory note is due on April 1, 2015 and the interest is payable monthly. In the event the Company elects to prepay all or any portion of the outstanding balance, the Company shall pay Tonaquint 135% of the amount the Company elects to prepay . The total amount to be funded is $1,500,000, representing the principal amount of $1,660,000 less an original issuance discount of $150,000 and the payment of $10,000 to cover Tonaquint’s fees. The shares of common stock underlying the Secured Convertible Promissory Note and Warrant were to be registered by a registration statement pursuant to the terms and conditions of a registration rights agreement. The registration statement has been withdrawn with Tonaquint’s consent.
Tonaquint initially funded the Company $150,000 in cash and issued three Buyer Mortgage Notes, in the principal amount of $50,000, $150,000, and $400,000 and a promissory note in the amount of $750,000 to the Company pursuant to the agreement.  The Buyer Mortgage Notes are secured by certain real property owned by Tonaquint located in Cook County, Illinois. The Buyer Mortgage Notes and the $750,000 promissory note carry interest of 5% per annum.

Pursuant to the purchase agreement, the Company reserved 75,000,000 shares of common stock. The Company has agreed not to enter into any equity line of credit or financing arrangement or other transaction that involves issuing securities that are convertible into common stock (including without limitation selling convertible debt, warrants or convertible preferred stock), or otherwise issue common stock (a) with conversion, exercise or similar mechanics or reset provisions that vary according to the market price of the common stock without a floor at or higher than $0.01 or (b)at a fixed price which is lower than $0.01, without the prior written consent of Tonaquint. The Company agrees not to declare or make any dividend or other distributions of its assets.
The Company’s default status on the Freedom Boat note existed prior to and during negotiations on the transaction with Tonaquint.

As of June 30, 2013, the Company has received net proceeds of $307,514 from Tonaquint.  Pursuant to the purchase agreement, warrants to purchase 22,106,057 shares of the Company’s common stock were issued. The Company determined the estimated fair value of the warrants was $1,146,845. $1,146,845 of the proceeds were allocated to the warrants. The promissory note included a beneficial conversion feature of $363,155. The total discount of $1,660,000, including the original issuance discount of $150,000, is being amortized over the life of the promissory note commencing upon the receipt of the funding.

Beginning on March 30, 2013, and each month thereafter, the Company shall pay to Tonaquint principal payments of $69,167 plus the sum of any accrued and unpaid interest due on such date by converting such amount at a conversion price equals to the lower of the (i) conversion price in effect ($0.05 per share if no anti-dilution adjustment) (ii) 65% of the arithmetic average of the three lowest volume-weighted average prices of the stock price during the 20 consecutive trading day period immediately preceding the date of the payment date; provided, however, the Company may, at its option as described in the agreement, pay all or any part of such installment amount by redeeming such installment amount in cash or by any combination of a Company conversion and a Company redemption.
F-14

At June 30, 2013, the Company offset the notes receivable from Tonaquint of $1,202,486 with notes payable to Tonaquint of $1,651,671 as permitted under the agreement and had interest receivable from Tonaquint of $43,770. During the year ended June 30, 2013, the Company recorded interest income of $43,770 which was offset with interest expense of $101,752 related to the agreement with Tonaquint.
During the year ended June 30, 2013, the Company issued Tonaquint 34,430,262 common shares to repay interest of $101,752 and principal of $8,329.

On September 20, 2013, the entire Secured Convertible Promissory Note and Warrant Purchase Agreement with Tonaquint, Inc was settled. See note 12.

NOTE 6 - EQUITY

Preferred Stock

On June 14, 2011, the Company authorized 20,000,000 shares of Series A Preferred Stock at $0.0001 par value. The Preferred Stock contains certain rights, preferences, privileges, restrictions and other characteristics. Specifically, the Preferred Stock has 100 votes per share, whereas, each share of Common Stock has 1 vote. Preferred Stock holders may vote with holders of the Company’s Common Stock on all matters which common stockholders may vote.  On June 14, 2011, the Company issued 3,000,000 preferred shares valued at $300 to its former CEO/CFO. In August 2011, the former CEO/CFO returned those shares as a result of his resignation from the Company. The preferred shares were then cancelled.

Year ended June 30, 2013

During the year ended June 30, 2013, the Company received cash of $225,003 for the subscription of 13,762,195 common shares, issued 1,000,000 common shares for $10,000 of cash received in the year ended June 30, 2012 and issued 2,000,000 shares of common stock for services to a consultant valued at $40,000.

During the year ended June 30, 2013, the Company also granted 1,000,000 shares valued at $20,000 to one of the directors as a director fee and 10,000,000 shares valued at $200,000 to its Chief Executive Officer as compensation. These shares have not been issued and the value was recorded as stock payable at June 30, 2013.

On November 27, 2012, Leroy Steury converted a note with unpaid principal of $76,875 and accrued interest of $2,821 to 7,500,000 common shares.

During April, May and June of 2013, the Company issued 34,430,262 shares of common stock to Tonaquint to repay accrued interest and note principal totaling $110,081.

On January 29, 2013, Charles Chapman was issued 300,000 common shares each, 600,000 shares in the aggregate, valued at $17,450, for interest payable on a note. Within the 600,000 shares, 500,000 shares were for interest expense in fiscal year 2012 and the value of $15,500 was recorded as stock payable as of June 30, 2012.

On February 19, 2013, David Janney surrendered 3,670,000 common shares of the 6,170,000 common shares he held in the Company as part of the settlement. See Note 10.
F-15

Year ended June 30, 2012

During the year ended June 30, 2012, the Company issued 55,904,764 common shares for $559,000 in cash.  Within the 55,904,764 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 7,000,000 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, 2013 and have a fair value of $66,330 on the grant date. Proceeds of $56,000 from this issuance originally recorded as refundable subscription has been reclassified to additional paid-in capital.

In June, 2012, the Company received $10,000 for a common stock subscription. Those shares had not been issued as of June 30, 2012 and the cash received was recorded under common stock payable as of June 30, 2012. The 1,000,000 common shares were issued during the year ended June 30, 2013.

On September 23, 2011, the Company issued 750,000 shares of common stock valued at $7,500 to settle payable to purchase equipment valued at $2,000. The Company recorded $5,500 loss on conversion of accounts payable related to this transaction.

During September 2011, as a result 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 year ended June 30, 2012, the Company issued 2,200,000 shares of common stock to its director, officer and consultants for services valued at $20,100.

On December 28, 2011, the Company issued 1,000,000 shares of common stock for interest payment to a note held by Mr. Charles Chapman. The shares were valued at $15,000.

On February 26, 2012, the Company issued 2,500,000 common shares to David Janney, former officer, pursuant to a settlement agreement. See Note 10.

On March 19, 2012, the Company agreed to issue 500,000 common shares to a note holder pursuant to an amendment to a note agreement. See Note 4 (p). The shares were valued at $15,500 based on the grant date market price of the stock. Those shares have been issued as of June 30, 2013

On October 25, 2011 and November 4, 2011, the Company granted its interim CFO, Mr. Peng Foo and its consultant, Mr. Jack Chow, 1,000,000 and 3,000,000 common shares, respectively. Those shares, valued at $42,700, have not been issued and are recorded as disputed payable as of June 30, 2012 and 2013.

On May 8, 2012, the Company entered into a consulting agreement with Mr. Michael Stallings where the Company agreed to issue 500,000 shares of common stock.  The 500,000 shares of common stock were valued at $12,500 based on the market price of grant date and were recorded as stock payable as of June 30, 2012 and 2013.
F-16

NOTE 7 – 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.

On 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.  On August 17, 2012 the Board of Directors of the Company amended the 2008 Plan to increase the authorized shares to be granted from 25,000,000 to 35,000,000.
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 years ended June 30, 2013 and 2012 is presented below:
Outstanding Options
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
3.99
-
Grants
19,500,000
June 30, 2012
9,500,000
25,500,000
$
0.02
3.72
120,000
Forfeitures/Cancellation
(20,000,000
)
June 30, 2013
29,500,000
5,500,000
$
0.01
1.41
-
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.
F-17

On May 8, 2012, the Company granted Mr. Peter Cao, a member of the Company’s Board of Directors, 8,000,000 options to purchase common stock of the Company at a price of $0.025 per share. The options have a five-year expected life, and were valued at $198,519, within which $132,348 was recorded during the year ended June 30, 2013. On October 1, 2012, the Company cancelled the 8,000,000 options and concurrently, agreed to issue 8,000,000 shares of the Company’s common stock to Mr. Cao. No additional compensation expense was recorded because the value of the options cancelled on October 1, 2012 was the same as the value of the common stock granted based on the fair market value on grant date.
The following inputs and assumptions were used in the Black-Scholes option-pricing model:

October 1,
2012
Fiscal year 2012
Stock price on grant date
$
0.025
$0.0071
~$0.03
Expected dividend yield
None
None
Volatility
469.30
%
238.96%
~273.09%
Weighted average risk free interest rate
0.62
%
0.77%
~0.95%
Weighted average expected life (in years)
5.00
4.00~5.00
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, and were valued at $29,814.

On August 23, 2011 and June 24, 2011, the Company granted Mr. Michael Cao, consultant, 6,000,000 and 6,000,000 warrants, respectively, 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, and were valued at $42,600 and $42,599, respectively. On March 26, 2013, Michael Cao forfeited his options to purchase 12,000,000 shares of the Company’s common stock.

NOTE 8 - INCOME TAXES
Deferred tax liabilities and assets are determined based on the difference between financial statements and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Temporary differences between taxable income reported for financial reporting purposes and income tax purposes are insignificant.

At June 30, 2013, the Company’s had net operating losses approximate $5,262,599 which expire, if unused, in various years through 2030. Utilization of the net operation loss carry-forwards could be subject to a substantial annual limitation due to the ownership change limitations provided by the Internal Revenue Code of 1986 of United States, as amended.

The Company fully reserved its deferred tax assets because in the opinion of management, based upon the earning history of the Company; it is more likely than not that the benefits will not be realized. The valuation allowance increased $135,326 for the year ended June 30, 2013.
F-18


The difference between income tax expense computed by applying the federal statutory corporate tax rate and actual income tax expense is as follows:

June 30, 2013
June 30, 2012
Statutory federal income tax rate
34.0 % 34.0 %
State income taxes and other
7.0 % 7.0 %
Valuation allowance
(41.0 %) (41.0 %)
Effective tax rate
- -

Deferred income taxes result from temporary differences in the recognition of income and expenses for the financial reporting purposes and for tax purposes. The tax effect of these temporary differences representing deferred tax asset and liabilities result principally from the following:
June 30, 2013
June 30, 2012
Net operating loss carryforward
$ 1,789,284 $ 1,653,958
Valuation allowance
(1,789,284 ) (1,653,958 )
Deferred income tax asset
$ - $ -

NOTE 9 – RELATED PARTY

As of June 30, 2013 and 2012, the Company has payables to related parties of $0 and $18,000, respectively for services provided .

During the year ended June 30, 2012, the Company incurred fees totaled $37,725 to Auric Resources International, Inc., a company controlled by a former director. The director resigned on June 20, 2012.
F-19

NOTE 10 – COMMITMENT AND CONTINGENCIES

The Company believes that through a fraudulent scheme by former management, 86,000,000 shares of our common stock were improperly issued. The Company is in the process of seeking a legal remedy to this issue however, if the Company is not successful in its efforts to cancel the shares, the stock value could be improperly diminished because of the dilution created by this fraudulent scheme to the detriment of the shareholders. The Company will bring an action in the appropriate court against the original recipients of the shares and the former CEO and to request an order to cancel the shares. Securities issued in violation of section 5 are subject to rescission under section 12(a) (l) of the Act.  Sections 12(a) (1) of the Securities Act and Section 5 allow purchasers to sue sellers for offering or selling a non-exempt security without registering it.  As long as the purchaser can prove a direct link between the purchaser and the seller and the purchaser may obtain rescission with interest or damages if the investor sold his securities for less than he purchased them. The Company did not receive any consideration for the improper sale of the shares and will pursue all legal remedies available to correct this issue including but not limited to bringing an action in federal court to cancel the shares and for damages sustained by the Company. However, if the Company is not successful the stock value could be improperly diminished because of the dilution created by this fraudulent scheme.
The Company believes that the former CEO in concert with associates and acting outside his authority defrauded the Company.  The legitimate purchasers of the shares could have an action against the seller who knew the shares were not registered or exempt from registration.
The Company was not a party to this fraudulent scheme and therefore believes rescission is not available to the Company.  The damage sustained by the Company could be at least $985,100, which is the amount that the Company would have realized if the shares had been sold pursuant to a registration statement or as restricted shares to legitimate buyers at the time of this incident. The Company has classified $985,100 as common stocks subject to rescission.
On May 8, 2012, the Company entered into an employment contract with Mr. Peter Cao, Chief Operating Officer. Pursuant to the agreement, the Company will pay monthly compensation of $1,000. Mr. Cao is also entitled to 2,000,000 common shares for the increase in the Company’s market value for every $15 million up to $100 million. Additionally, Mr. Cao was granted options to purchase a total of 8,000,000 common shares. Options for 4 million common shares are exercisable at $0.025 per share and vested immediately. After six months of Mr. Cao’s employment with the Company (November 8, 2012), additional options to purchase 4,000,000 shares at $0.025 per share have vested. The 8,000,000 options were valued at $198,519, which is expensed over the vesting periods. On October 1, 2012, Mr. Cao entered into a new employment agreement with the Company to replace the agreement dated May 8, 2012. The October 1, 2012 agreement states the following:

(1) Starting October 1, 2012, the Company will compensate Mr. Cao $4,000 monthly;
(2) 8,000,000 shares of common stock were granted immediately and valued at $200,000 based on the market price at October 1, 2012. The stock has not been issued and was recorded as stock payable as of June 30, 2013.
(3) Salary will increase as the Company’s monthly production hits the operational milestones as follows:
i.
Production of 200 ounces: salary of $5,000 per month
ii.
Production of 400 ounces: salary of $6,000 per month
iii.
Production of 600 ounces: salary of $7,000 per month
iv.
Production of 800 ounces: salary of $8,000 per month
v.
Production of 1,000 ounces: salary of $9,000 per month
vi.
Production of 1,200 ounces: salary of $10,000 per month
vii.
At production of 1,200 ounces per month, another 4,000,000 shares will be granted.
(4) Mr. Cao will be eligible for bonuses based on a combination of individual performance and company performance which will be determined by the CEO and Board of Directors.
F-20

On June 19, 2012, the Board of Directors appointed Mr. Michael Stojsavljevich as the new Chief Executive Officer, secretary and a member of the Board of Directors. Mr. Stojsavljevich would receive $5,500 for the first two months and $11,000 per month from the third month of his employment. Mr. Stojsavljevich is entitled to 2,500,000 shares of common stock quarterly from July 1, 2012 and every quarter thereafter to a total of 10,000,000 shares. On August 1, 2012, Mr. Stojsavljevich entered into a new employment agreement with the Company to replace the agreement dated June 19, 2012 as follows:

(1) Starting August 1, 2012, the Company will compensate Mr. Stojsavljevich at $5,500 monthly salary;
(2) 10,000,000 shares of common stock were granted immediately and valued at $200,000 based on the market price at August 1, 2012. On October 30, 2012, Mr. Stojsavljevich entered into an amendment to the employment agreement to say that the term to issue 2,500,000 shares of common stock quarterly from July 1, 2012 and every quarter thereafter to a total of 10,000,000 shares stated in the June 19, 2012 agreement is replaced.
(3) Salary will increase as the Company monthly production achieves operational milestones as described below:
i.
Production of 200 ounces: salary of $6,500 per month
ii.
Production of 400 ounces: salary of 7,500 per month
iii.
Production of 600 ounces: salary of $8,500 per month
iv.
Production of 800 ounces: salary of $9,500 per month
v.
Production of 1,000 ounces: salary of $10,500 per month
vi.
Production of 1,200 ounces: salary of 11,500 per month
vii.
At a monthly production of 1,200 ounces per month, another 4,000,000 shares will be granted.
(4) Mr. Stojsavljevich will be eligible for bonuses based on a combination of individual performance and company performance which will be determined by the Board of Directors.

On May 10, 2012, the Company entered into a two-year employment contract with Mr. Scott Geisler, Chief Executive Officer at that time. The agreement allows the immediate accrual of unpaid salary from August 29, 2011 at $100,000 per year. The Company also issued stock options to purchase a total of 17,000,000 common shares. Options for 8,500,000 common shares at an exercise price of $0.01 per share vested immediately. Additional options to purchase 8,500,000 common shares at an exercise price of $0.01 per share vested in August 2012. The 17,000,000 options are valued at $507,862. These options have a term of 5 years and can be exercised on a cashless basis. On June 8, 2012, the Company entered into a Settlement and Mutual Release Agreement with Mr. Geisler. That Settlement and Mutual Release Agreement superseded the employment agreement dated May 10, 2012. Pursuant to the Settlement and Mutual Release Agreement, Mr. Geisler would receive 7,500,000 shares of the Company’s common stock and $75,000 in the next 25 months commencing July 15, 2012. On June 1, 2012, Mr. Geisler resigned as Chief Executive Officer of the Company.

On October 30, 2012, management learned that former President and CEO, Mr. Scott Geisler, filed suit against the Company on September 20, 2012, in the Circuit Court of the Sixth Judicial District in the State of Florida. The Company has not yet been served with the summons and complaint or filed an answer. Mr. Geisler asserts that the Company is in default with respect to payments under a Settlement and Mutual Release Agreement entered into upon his resignation as an officer and director of the Company and effective June 8, 2012. Mr. Geisler claims monetary damages "in excess of $15,000," attorneys' fees, court costs and seeks the issuance of 7,500,000 shares of common stock that is provided for under the Settlement and Mutual Release Agreement. We have engaged legal counsel to represent the Company in this dispute and counsel has identified defenses to the claims and setoffs. We are optimistic that a settlement of the dispute will be reached in the near future without having a materially adverse effect on our financial condition or results of operations.

Currently, the Company is carrying the amount of $263,950 as disputed payables until resolved, which include other disputed payables.

The Company entered into a purchase agreement to purchase mining claims from 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 NSR for the years ended June 30, 2013 and 2012 and no royalties have been paid. The agreement does not have any commitment dates of when production is to begin.  This agreement is in a legal dispute as the Company believes that Gold Exploration LLC never owned the mining claims that should have been transferred to the Company.

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 Hull Lode Placer Claim and 5% royalty payment from Hull Placer Mine when and if production occurs. There is currently no production.

On February 7, 2011, David Janney, former officer, entered an agreement with Amazon Holding LLC to pay a finder’s fee for raising $250,000 in the acquisition of mining property. On January 19, 2012, Amazon Holding LLC demanded the Company make the payment. The dispute is still pending but the Company believes that it is not likely that Amazon Holding LLC will prevail if a suit is filed against the Company related to this agreement.
F-21

NOTE 11– GAIN (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 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 restricted shares of the Company’s 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 were to be issued six months from the execution date of the settlement but have not been issued.

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 agreed 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 a loss of $59,000 on this settlement during the year ended June 30, 2012.

During the year ended June 30, 2012, the Company learned that the title of the Midas Placer Claim which the Company purchased from Global Minerals, Inc., a company controlled by Mr. David Janney, was never transferred to the Company. On February 19, 2013, David Janney surrendered 3,670,000 common shares of the 6,170,000 common shares that he held in the Company. David Janney was allowed to retain 2,500,000 shares as part of a settlement in litigation with the Company. The Company recorded the par value of the 3,670,000 shares against additional paid-in capital. In the settlement agreement dated February 19, 2013, David Janney also agreed to forfeit his right to receive 2,500,000 common shares based on the settlement agreement dated February 26, 2012. The Company recorded a gain on the settlement of litigation for the year ended June 30, 2013 of $29,500 and eliminated the corresponding disputed payable previously recorded.
F-22

NOTE 12 – SUBEQUENT EVENTS

On July 25, 2013 and August 30, 2013, the Company issued 12,695,369 and 22,802,437 common shares, respectively, to repay accrued interest and principal totaling $40,787 related to the note payable to Tonaquint.

On September 20, 2013, the Company entered into an Amended and Restated Asset Purchase Agreement with Gunner Gold, LLC. Pursuant to the terms of the Amended and Restated Asset Purchase Agreement, Gunner Gold, LLC purchased certain assets and assumed certain liabilities from the Company for 3,300,000 units of Gunner Gold, LLC stock. Assets sold to Gunner Gold LLC includes 1) Mining equipment and materials; 2) Right to conduct mining operations on the Company’s BLM properties for 7 years with the option to acquire the mineral rights for 700,000 additional units of Gunner Gold, LLC’s stock. The Company will receive a 5% of the net proceeds, after the payment of all maintenance costs, earned by Gunner Gold from the mining operation on BLM properties. 3) Right to conduct mining operations on the Company’s Hull Lode Mining Claim with a monthly payment of $2,500. Liabilities assumed by the Company includes 1) lease payments to Judgetown LLC pursuant to a lease agreement dated September 30, 2012 (See Note 4); 2) $275,000 note payable to Tonaquint; 3) $162,000 of accrued liabilities and accounts payable. The Company received $307,500 at the closing, $275,000 of which was used to satisfy the Company’s entire obligation to Tonaquint Inc. under the Secured Convertible Promissory Note and Warrant Purchase Agreement entered o n October 1, 2012 and the remaining $32,500 was used to pay other obligations. The Secured Convertible Promissory Note and Warrant Purchase Agreement was terminated entirely after this payment. The Company is currently evaluating the accounting impact of the agreement with Gunner Gold LLC.

NOTE 13 – RESTATEMENT
During the year ended June 30, 2011, the Company issued 86,000,000 shares to several parties. The Company believes those shares were improperly issued by former management and is subject to rescission.  Shares that are subject to rescission or redemption requirements that are outside of the control of the Company are classified outside of permanent equity until they are no longer subject to rescission or redemption. Accordingly, the Company has reclassified $985,100 as common stock subject to rescission. The $985,100 was calculated at the trading price on the date those shares were issued.


*  *  *  *  *  *
F-23


ITEM 9.                      CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.

We have no changes or disagreements with our auditors.

ITEM 9A. CONTROLS AND PROCEDURES

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 June 30, 2013, 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.

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms and that such information is accumulated and communicated to our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow for timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Our disclosure controls and procedures were designed to provide reasonable assurance that the controls and procedures would meet their objectives. As required by SEC Rule 13a-15(b), our Chief Executive Officer and Chief Financial Officer carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this report. Based on the foregoing, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were not effective for fiscal year ending June 30, 2013.

Management's Report on Internal Control Over Financial Reporting

Our management is also responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rule 13a-15(f) under the Exchange Act.  The Company's internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

As of June 30, 2013, our management conducted an assessment of the effectiveness of the Company's internal control over financial reporting.  In making this assessment, management followed an approach based on the framework in “Internal Control-Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”).  Based on this assessment, management has determined that the Company's internal control over financial reporting was not effective as of June 30, 2013.
36


Our Principal Executive Officer and Principal Financial Officer, currently the same person, conducted an evaluation of the effectiveness of our internal control over financial reporting as of June 30, 2013 based on the framework in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission, or COSO. Based on our evaluation and the material weaknesses described below, management concluded that the Company did not maintain effective internal control over financial reporting as of June 30, 2013, based on the COSO framework criteria. Management has identified control deficiencies regarding the lack of segregation of duties and the need for a stronger internal control environment. Our management believes that these material weaknesses are due to the small size of our accounting staff. The small size of our accounting staff may prevent adequate controls in the future, such as segregation of duties, due to the high cost of such remediation relative the benefit expected to be derived thereby.
We anticipate that when we obtain sufficient funding and have substantial production, we will resolve the segregation of duties issue by naming a CFO or new company officer that will resolve any issues surrounding segregation of duties.
In the interim period, to mitigate the current limited resources and limited employees, we rely heavily on direct management oversight of transactions, along with the use of external legal and accounting professionals. As we grow, we expect to create a new finance and accounting position that will allow for proper segregation of duties consistent with control objectives, and will increase our personnel resources and technical accounting expertise within the accounting function.  As our financing staff grows we will prepare and implement appropriate written policies and checklists which set forth procedures for accounting and financial reporting with respect to the duties within the internal control framework. These current control deficiencies could result in a misstatement of account balances that would result in a reasonable possibility that a material misstatement to our consolidated financial statements may not be prevented or detected on a timely basis. Accordingly, we have determined that these control deficiencies as described above together constitute a material weakness.
(b) Limitations on Effectiveness of Controls and Procedures

Our management, including our chief executive officer, does not expect that our disclosure controls and procedures or our internal controls will prevent all error and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within our company have been detected. These inherent limitations include, but are not limited to, the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the control. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, control may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate.

Changes in Internal Control Over Financial Reporting

During the fiscal year ended June 30, 2013, there were no 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 the control deficiencies, among many other things.  The Company has removed Mr. David Janney, 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.
37
ITEM 9B. OTHER INFORMATION

None.
PART III

ITEM 10.  DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT.

Director and Executive Officer

Set forth below is information regarding the Company’s current and recent directors and executive officers. There are no family relationships between any of our directors or executive officers. The directors are elected annually by stockholders. The executive officers serve at the pleasure of the Board of Directors.

Name
Age
Title
Scott Geisler
50
Chief Executive Officer, Principle Accounting Officer, President Secretary, and Director (1)
David Janney 49 Chief Executive Officer, Principle Accounting Officer, President Secretary, and Director(5)
Pen Foo 51 Chief Financial Officer (2)
William Berridge 59 Director(4)
Peter Cao 50 Director (6)
Michael Stojsavljevich
40
Chief Executive Officer, Principle Accounting Officer, President and Director(3)
Peter Cao Baoky Vu
50
Secretary and DirectorDirector  and Treasurer (4)

1.
Effective June 1, 2012, Scott Geisler resigned as Chief Executive Office, Principal Financial Officer and as a member of the Board of Directors;
2.
Effective May 11, 2012, Pen Foo resigned as Chief Financial Officer and Principle Accounting Officer;
3.
Effective June 20, 2012, Michael Stojsavljevich was appointed Chief Executive Officer, Principle Accounting Officer, President, Secretary and Director;
4.
Effective July 25, 2012, William Berridge resigned as Director and Baoky Vu was appointed new Director of the Company;
5.
Effective October 24, 2011, David Janney resigned as Chief Executive Office, Principal Financial Officer and as a member of the Board of Directors;
6.
Effective April 20, 2012, Peter Cao was appointed as Chief Executive Officer and Director and on June 26, 2012, Mr. Cao resigned as Chief Executive Officer and remained as a Director.

The background and principal occupations of the current officers and directors of the Company is as follows:

Officers and Directors:

Peter Cao

From 2009 to the present, Mr. Cao was an advisor to the Board of Directors of International Gold Mining Reserve Corporation. From 2007 through 2009, Mr. Cao was Vice President of Commercial Lending for United Americas Bank.  From 1989 to 2007, Mr.  Cao was President and CEO of General Contractors, Inc.
Michael Stojsavljevich
From April, 2011 to June 20, 2012, Michael Stojsavljevich was a Managing Partner with Episteme Advisory Group, a Boutique Corporate Strategy and Marketing Advisory Consultancy firm. From February 2007 through February 2011, Mr. Stojsavljevich was Chief Strategy Officer at the United States Mint, an agency of the United States Treasury Department. From 1999 through 2007, Mr. Stojsavljevich was in managing positions in Marketing, Finance and Corporate Affairs departments at Altria Corporate Services, Philip Morris USA, and Miller Brewing Company. Mr. Stojsavljevich earned a Master’s Degree in Business Economics from Western Michigan University and a Bachelor’s Degree in Economics from Indiana University.
38
Baoky Vu
From 2009 to the present, Baoky Vu has been a principal of Silverberry Capital LLC, a strategic advisory firm based in Atlanta.  From 1995 through 2009, Mr. Vu was director of equity research, portfolio manager and equity analyst with A. Montag & Associates. Mr. Vu earned a Masters of Business Administration from Georgetown University and a Bachelor of Science in Management from Georgia Institute of Technology.
Audit Committee Financial Expert

The Company does not have an audit committee or a compensation committee of its board of directors. In addition, the Company’s board of directors has determined that the Company does not have an audit committee financial expert serving on the board. When the Company develops its operations, it will create an audit and a compensation committee and will seek an audit committee financial expert for its board and audit committee.

Conflicts of Interest

Members of our management are associated with other firms involved in a range of business activities.  Consequently, there are potential inherent conflicts of interest in their acting as officers and directors of our company.  Although the officers and directors are engaged in other business activities, we anticipate they will devote an important amount of time to our affairs.

Our officers and directors are now and may in the future become shareholders, officers or directors of other companies, which may be formed for the purpose of engaging in business activities similar to ours.  Accordingly, additional direct conflicts of interest may arise in the future with respect to such individuals acting on behalf of us or other entities.  Moreover, additional conflicts of interest may arise with respect to opportunities which come to the attention of such individuals in the performance of their duties or otherwise.  Currently, we do not have a right of first refusal pertaining to opportunities that come to their attention and may relate to our business operations.

Our officers and directors are, so long as they are our officers or directors, subject to the restriction that all opportunities contemplated by our plan of operation which come to their attention, either in the performance of their duties or in any other manner, will be considered opportunities of, and be made available to us and the companies that they are affiliated with on an equal basis.  A breach of this requirement will be a breach of the fiduciary duties of the officer or director.  If we or the companies with which the officers and directors are affiliated both desire to take advantage of an opportunity, then said officers and directors would abstain from negotiating and voting upon the opportunity.  However, all directors may still individually take advantage of opportunities if we should decline to do so.  Except as set forth above, we have not adopted any other conflict of interest policy with respect to such transactions.
39

Involvement in Certain Legal Proceedings

None of the following events have occurred during the past ten years and are material to an evaluation of the ability or integrity of any current director or officer of the Company:

1.
A petition under the Federal bankruptcy laws or any state insolvency law was filed by or against, or a receiver, fiscal agent or similar officer was appointed by a court for the business or property of such person, or any partnership in which he was a general partner at or within two years before the time of such filing, or any corporation or business association of which he was an executive officer at or within two years before the time of such filing;
2.
Such person was convicted in a criminal proceeding or is a named subject of a pending criminal proceeding (excluding traffic violations and other minor offenses);
3.
Such person was the subject of any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining him from, or otherwise limiting, the following activities:

a.
Acting as a futures commission merchant, introducing broker, commodity trading advisor, commodity pool operator, floor broker, leverage transaction merchant, any other person regulated by the Commodity Futures Trading Commission, or an associated person of any of the foregoing, or as an investment adviser, underwriter, broker or dealer in securities, or as an affiliated person, director or employee of any investment company, bank, savings and loan association or insurance company, or engaging in or continuing any conduct or practice in connection with such activity;
b.
Engaging in any type of business practice; or
c.
Engaging in any activity in connection with the purchase or sale of any security or commodity or in
connection with any violation of Federal or State securities laws or Federal commodities laws;

4.
Such person was the subject of any order, judgment or decree, not subsequently reversed, suspended or vacated, of any Federal or State authority barring, suspending or otherwise limiting for more than 60 days the right of such person to engage in any activity described in paragraph (f)(3)(i) of this section, or to be associated with persons engaged in any such activity;
5.
Such person was found by a court of competent jurisdiction in a civil action or by the Commission to have violated any Federal or State securities law, and the judgment in such civil action or finding by the Commission has not been subsequently reversed, suspended, or vacated;
6.
Such person was found by a court of competent jurisdiction in a civil action or by the Commodity Futures Trading Commission to have violated any Federal commodities law, and the judgment in such civil action or finding by the Commodity Futures Trading Commission has not been subsequently reversed, suspended or vacated;
7.
Such person was the subject of, or a party to, any Federal or State judicial or administrative order, judgment, decree, or finding, not subsequently reversed, suspended or vacated, relating to an alleged violation of:

a.
Any Federal or State securities or commodities law or regulation; or
b.
Any law or regulation respecting financial institutions or insurance companies including, but not limited to, a temporary or permanent injunction, order of disgorgement or restitution, civil money penalty or temporary or permanent cease-and-desist order, or removal or prohibition order; or


c.
Any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or

8.
Such person was the subject of, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization (as defined in Section 3(a)(26) of the Exchange Act (15 U.S.C. 78c(a)(26))), any registered entity (as defined in Section 1(a)(29) of the Commodity Exchange Act (7 U.S.C. 1(a)(29)), or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member.

40
Compliance with Section 16(A) Of The Exchange Act 9.A. Directors And Executive Officers, Promoters, And Control Persons:

The Company is aware that all filings of Form 4 and 5 required of Section 16(a) of the Exchange Act of Directors, Officers or holders of 10% of the Company's shares have not been timely and the Company has instituted procedures to ensure compliance in the future.  Current management and Directors have not filed their Forms 4 for 2011 but will file their forms 5 for the year ended June 30, 2013.
Code of Ethics
We have adopted a code of ethics that applies to all of our executive officers, directors and employees. Code of ethics codifies the business and ethical principles that govern all aspects of our business.  Our Code of Ethics was published as Exhibit 14.1 in the Annual Report on Form 10-K for year ended June 18, 2009.  This document will be made available in print, free of charge, to any shareholder requesting a copy in writing from the Company.

ITEM 11.  EXECUTIVE COMPENSATION

General. From October 26, 2011 , Mr. Scott Geisler, until his resignation on June 1, 2012, served as the Company’s Chief Executive Officer and Principle Accounting Officer. From October 26, 2011until May 11, 2012, Mr. Pen-Mun Foo serviced as our Principal Accounting Officer. Until October 24, 2011, for the fiscal year of June 30, 2011, Mr. David Janney served as Chief Executive Officer and Principle Accounting Officer. Mr. Peter Cao served in that capacity between June 1, 2012 and June 20, 2012. On June 20, 2012, Mr. Michael Stojsavljevich was appointed President, Chief Executive Officer, and Principal Accounting Officer.
41


Summary Compensation Table
The following table sets forth for the years ended June 30, 2013 and 2012 compensation awarded to, paid to, or earned by our (former) Director and Chief Executive Officer , and our other most highly compensated executive officers whose total compensation during the last fiscal year exceeded $100,000, if any.

2013 and 2012 SUMMARY COMPENSATION TABLE
Name and Principal Position
Year
Salary
($)
Bonus
($)
Stock
Awards
($)
Option
Awards
($)
Non-Equity
Incentive Plan
Compensation
($)
Change in
Pension
Value and
Nonqualified
Deferred
Compensation
Earnings
($)
All Other
Compensation($)
Total
($)
Scott Geisler CEO
2013
- - - - - - - -
& CFO, Director 2012 77,222 75,000 146,250 - - - - 298,472
David Janney CEO
2013
- - - - - - - -
& CFO, Director 2012 - - 29,500 - - - - 29,500
Pen-Mun Foo,
2013
- - - - - - - -
CFO, Director 2012 - - 10,300 - - - - 10,300
William Berridge,
2013
- - - - - - - -
Director 2012 37,725 - 11,000 - - - - 48,725
Peter Cao,
2013
25,000 - - 132,348 - - - 157,348
Director and Treasurer 2012 2,500 - - 198,519 - - - 201,019
Michael Stojsavljevich
2013
49,500 - 200,000 - - - - 249,500
CEO & CFO, Director 2012 1,650 - - - - - - 1,650
42

2013 and 2012 OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END TABLE
Option Awards
Stock Awards
Number of
Securities
Underlying
Unexercised
Options
(#)
Number of
Securities
Underlying
Unexercised
Options
(#)
Equity
Incentive
Plan Awards:
Number of
Securities
Underlying
Unexercised
Unearned
Options
(#)
Option
Exercise
Price
($)
Option
Expiration
Date
Number of
Shares or
Units of
Stock That
Have Not
Vested
(#)
Market
Value of
Shares or
Units of
Stock That
Have Not
Vested
($)
Equity Incentive
Plan Awards:
Number of
Unearned
Shares, Units
or Other
Rights That
Have Not
Vested
(#)
Equity
Incentive
Plan Awards:
Market or
Payout Value
of Unearned
Shares, Units
or Other
Rights That
Have Not
Vested
($)
Name
Year
Exercisable
Unexercisable
Scott Geisler
2013
- - - - - - - - -
2012 - - - - - - - - -
David Janney
2013
- - - - - - - - -
2012 - - - - - - - - -
Pen-Mun Foo
2013
- - - - - - - - -
2012 - - - - - - - - -
William Berridge,
2013
- - - - - - - - -
2012 - - - - - - - - -
Peter  Cao
2013
- - - - - - - - -
2012 4,000,000 8,000,000 - 0.025 May 8, 2017 - - - -
Michael Stojsavljevich
2013
- - - - - - -
2012 - - - - - - - - -

Mr. Cao received options valued at $198,519 when joining the company in March of 2012. Mr. Cao's contract with the company was revised by the present Board of Directors in July 2013 replacing the options with a stock grant. The stocks for Mr. Cao, Mr. Stojsavljevich and Mr. Vu have not yet been issued. Mr. Cao has requested that the options remain in effect until the shares of stock are issued.
43

Compensation of Directors

Our current compensation policy for directors is to compensate them through options to purchase common stock or through common stock as consideration for their joining our board and/or providing continued services as a director. We do not currently provide our directors with cash compensation, although we do reimburse their expenses, with exception for a chairman of the board. No additional amounts are payable to the Company’s directors for committee participation or special assignments. There are no other arrangements pursuant to which any directors was compensated during the Company’s last completed fiscal year for any service provided except as follows:

On June 20, 2012 the Board of Directors appointed Michael Stojsavljevich as the new Chief Executive Officer, secretary and member of the Board of Directors.  Mr. Stojsavljevich employment agreement will pay $5,500 for the first two months of his employment and $11,000 per month from the third month and allows for the Board of Directors to increase that monthly salary.  The Company will pay for Mr. Stojsavljevich moving expenses of $5,000 also he will be entitled to 2,500,000 common shares of stock quarterly beginning July 1, 2012 and every quarter thereafter to a total of 10,000,000 shares.  On August 1, 2012, Mr. Stojsavljevich entered into a new employment agreement with the Company to replace the agreement dated June 19, 2012 as follows:

(1) Starting August 1, 2012, the Company will compensate Mr. Stojsavljevich at $5,500 monthly salary;
(2) 10,000,000 shares of common stock were granted immediately and valued at $200,000 based on the market price at August 1, 2012. On October 30, 2012, Mr. Stojsavljevich entered into an amendment to the employment agreement to say that the term to issue 2,500,000 shares of common stock quarterly from July 1, 2012 and every quarter thereafter to a total of 10,000,000 shares stated in the June 19, 2012 agreement is replaced.
(3) Salary will increase as the Company monthly production achieves operational milestones as described below:
i.
Production of 200 ounces: salary of $6,500 per month
ii.
Production of 400 ounces: salary of 7,500 per month
iii.
Production of 600 ounces: salary of $8,500 per month
iv.
Production of 800 ounces: salary of $9,500 per month
v.
Production of 1,000 ounces: salary of $10,500 per month
vi.
Production of 1,200 ounces: salary of 11,500 per month
vii.
At a monthly production of 1,200 ounces per month, another 4,000,000 shares will be granted.
(4) Mr. Stojsavljevich will be eligible for bonuses based on a combination of individual performance and company performance which will be determined by the Board of Directors.

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. On October 1, 2012, Mr. Cao entered into a new employment agreement with the Company to replace the agreement dated May 8, 2012. The October 1, 2012 agreement states the following:

(1) Starting October 1, 2012, the Company will compensate Mr. Cao $4,000 monthly;
(2) 8,000,000 shares of common stock were granted immediately and valued at $200,000 based on the market price at October 1, 2012. The stock has not been issued and was recorded as stock payable as of June 30, 2013.
(3) Salary will increase as the Company’s monthly production hits the operational milestones as follows:
i.
Production of 200 ounces: salary of $5,000 per month
ii.
Production of 400 ounces: salary of $6,000 per month
iii.
Production of 600 ounces: salary of $7,000 per month
iv.
Production of 800 ounces: salary of $8,000 per month
v.
Production of 1,000 ounces: salary of $9,000 per month
vi.
Production of 1,200 ounces: salary of $10,000 per month
vii.
At production of 1,200 ounces per month, another 4,000,000 shares will be granted.
(4) Mr. Cao will be eligible for bonuses based on a combination of individual performance and company performance which will be determined by the CEO and Board of Directors.
44

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table lists stock ownership of our Common Stock as of October 6, 2013, based on 411,982,943 shares of common stock issued and outstanding.  The information includes beneficial ownership by (i) holders of more than 5% of our Common Stock, (ii) each of three directors and executive officers and (iii) all of our directors and executive officers as a group. Except as noted below, to our knowledge, each person named in the table has sole voting and investment power with respect to all shares of our Common Stock beneficially owned by them.
Name and Address of Owner
Title of Class
Number
of Shares
Owned (1)
Percentage
of Class
Michael Stojsavljevich
2415 East Camelback Road, Suite 700, Phoenix, AZ  85016
Common Stock
- -
Peter Cao
2415 East Camelback Road, Suite 700, Phoenix, AZ  85016
Common Stock
- -
Baoky Vu
2415 East Camelback Road, Suite 700, Phoenix, AZ  85016
Common Stock
- -
All Officers and Directors
As a Group (3 persons)
Scott Geisler
19803 Gulf Blvd, #501
Indian Shores, FL  33785
Common Stock
19,500,000 4.73 %
Charles Chapman
206 South Grand Avenue
Santa Ana, CA  92701
Common Stock
21,206,250 5.14 %
Tonaquint, Inc.
Attn:  John M. Fife
303 East Wacker Drive, Suite 1200
Chicago, Illinois 60601
Common Stock
22,802,437 5.53 %

(1) Beneficial ownership is determined in accordance with the rules of the Securities and Exchange Commission and generally includes voting or investment power with respect to securities.

45

DESCRIPTION OF SECURITIES
General
Our authorized capital stock consists of 500,000,000 shares of common stock, par value $ 0.0001.
Our authorized preferred stock consists of 20,000,000 shares of preferred stock, par value $0.0001.

Common Stock
The shares of our common stock presently outstanding, and any shares of our common stock issues upon exercise of stock options and/or warrants, will be fully paid and non-assessable. Each holder of common stock is entitled to one vote for each share owned on all matters voted upon by shareholders, and a majority vote is required for all actions to be taken by shareholders. In the event we liquidate, dissolve or wind-up our operations, the holders of the common stock are entitled to share equally and ratably in our assets, if any, remaining after the payment of all our debts and liabilities and the liquidation preference of any shares of preferred stock that may then be outstanding. The common stock has no preemptive rights, no cumulative voting rights, and no redemption, sinking fund, or conversion provisions. Holders of common stock are entitled to receive dividends, if and when declared by the Board of Directors, out of funds legally available for such purpose, subject to the dividend and liquidation rights of any preferred stock that may then be outstanding.

Preferred Stock
The company authorized 2 0 million shares of Series A Preferred Stock. The Preferred Stock contains certain rights, preferences, privileges, restrictions and other characteristics as further detailed in the Certificate of Designation to the Company’s Articles of Incorporation. Significantly, the Preferred Stock has 100 votes per share, whereas, each share of Common Stock has 1 vote. Preferred Stock holders may vote with holders of the Company’s Common Stock on all matters which common stockholders may vote.  The Preferred shares do not have conversion rights to common shares.
Voting Rights

Each holder of Common Stock is entitled to one vote for each share of Common Stock held on all matters submitted to a vote of stockholders. T he Preferred Stock has 100 votes per share.

Dividends

Subject to preferences that may be applicable to any then-outstanding securities with greater rights, if any, and any other restrictions, holders of Common Stock are entitled to receive ratably those dividends, if any, as may be declared from time to time by the Company’s board of directors out of legally available funds. The Company and its predecessors have not declared any dividends in the past. Further, the Company does not presently contemplate that there will be any future payment of any dividends on Common Stock.

Options and Warrants:

As of June 30, 2013, there were 5,500,000 warrants and options outstanding,  which does not include warrants to purchase 22,106,057 shares of the Company’s common shares issued to Tonaquint, Inc.

Convertible Securities

At June 30, 2013, the Company has one convertible security with Tonaquint, Inc.
Transfer Agent

On June 1, 2008, the Company engaged Transfer Online, Inc. to serve in the capacity of transfer agent. Their mailing address and telephone number Transfer Online, Inc., 317 SW Alder Street, 2 nd Floor, Portland, OR  97201 - Phone is (503) 227-2950.
46

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.

During the year ended June 30, 2012, the Company incurred fees totaling $37,725 to Auric Resources International, Inc., a company controlled by a former director. The director resigned on July 20, 2012.

ITEM 14.  PRINCIPAL ACCOUNTANT FEES AND SERVICES
Audit Fees. The aggregate fees billed by GBH CPAs, PC for professional services rendered for the audit of the Company’s annual financial statements for fiscal year ended June 30, 2013 and 2012 approximated $16,000 and $27,000, respectively.  The aggregate fees billed by GBH CPAs, PC for the review of the financial statements included in the Company’s Forms 10-Q for fiscal year 2013 and 2012 approximated $20,300 and $16,750, respectively.

Audit-Related Fees. The aggregate fees billed by GBH CPAs, PC for assurance and related services that are reasonably related to the performance of the audit or review of the Company’s financial statements for the fiscal years ended June 30, 2013 and 2012, and that are not disclosed in the paragraph captioned “Audit Fees” above, were $3,000 and $0, respectively.

Tax Fees. The aggregate fees billed by GBH CPAs, PC and for professional services rendered for tax compliance, tax advice and tax planning for the fiscal year ended June 30, 2013 and 2012 were $0.

All Other Fees. The aggregate fees billed by GBH CPAs, PC for products and services, other than the services described in the paragraphs “Audit Fees,” “Audit-Related Fees,” and “Tax Fees” above for the fiscal years ended June 30, 2013 and 2012 were $0.

The Board has received and reviewed the written disclosures and the letter from the independent registered public accounting firm required by Independence Standards Board Standard No. 1 (Independence Discussions with Audit Committees), and has discussed with its auditors its independence from the Company.
The Board pre-approved all fees described above.
47

PART IV

ITEM 15.  EXHIBITS AND REPORTS.
Exhibits
3.1
Articles of Incorporation (1)
3.2
Amendments to Articles of Incorporation (1)
3.1
Bylaws of the Corporation (1)
10.1
Agreement with Gold Exploration and Bonanza Goldfield, 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)
10.4
Scott Geisler Waiver and Settlement Agreement (4)
10.5
10.17
10.18
Michael Stojsavljevich employment agreement ()
Amended and Restated Asset Purchase Agreement (5)
Debt Settlement Agreement with Tonaquint (6)
10.19
Tonaquint, Inc Term Sheet (6)
14.1
31.1
Code of Ethics (2)
Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act. (3)
31.2
Certification of Principal Financial and Accounting Officer Pursuant to Section 302 of the Sarbanes-Oxley Act. (3)
32.1
Certification of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act.  (3)
32.2
Certification of Chief Accounting Officer Pursuant to Section 906 of the Sarbanes-Oxley Act.  (3)
__________________________________________________
(1). Incorporated by reference to the same exhibit filed with Amendment No. 3 to the Company’s Registration Statement on Form SB2 (Commission File No. 333-137170).
(2) Filed in the Form 10K for June 18, 2009
(3)            Filed in the Form 10Q for March 31, 2012
(4) Filed in the Form 10-K for June, 2012
(5) Filed in the Form 8-K on September 26, 2013 and incorporated herein
(6) Filed Herein
48
ITEM 15: SIGNATURES

SIGNATURES

In accordance with 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, there unto duly authorized.
Bonanza Goldfields Corporation
Registrant
Date: October 15, 2013
By:
/s/ Michael Stojsavljevich
Michael Stojsavljevich
Chief Executive Officer
Date: October 15, 2013
By:
/s/ Michael Stojsavljevich
Michael Stojsavljevich
Chief Financial Officer  (Principal Accounting Officer)

In accordance with the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Company and in the capacities and on the dates indicated.
Date: October 15, 2013
By:
/s/ Michael Stojsavljevich
Michael Stojsavljevich
Director
Date: October 15, 2013
By:
/s/ Peter Cao
Peter Cao
Director
Date: October 15, 2013
By:
/s/ Baoky Vu
Baoky Vu
Director
49
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