MVNC 10-Q Quarterly Report Dec. 31, 2011 | Alphaminr
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MVNC 10-Q Quarter ended Dec. 31, 2011

Balance Sheet
Cash Flow
Income Statement
10-Q 1 bonz_10q.htm QUARTERLY REPORT bonz_10q.htm
U.S. Securities and Exchange Commission
Washington, D.C. 20549
____________________
FORM 10-Q
____________________
(Mark One)
þ Quarterly Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
For the quarterly period ended December 31, 2011
o Transition Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act
For the transition period from N/A through N/A
____________________

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

(928) 251-4044
(Issuer’s telephone number)
Securities registered under Section 12(b) of the Exchange Act:
None
Securities registered under Section 12(g) of the Exchange Act:
Common Stock, $0.0001 par value per share
(Title of Class)
Indicate by check mark whether the Registrant (1) has filed all reports required by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days:  Yes ¨ No þ
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes o No þ
Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, or a non–accelerated filer. See definition of “accelerated filer large accelerated filer” and “ Smaller reporting company” in Rule 12b–2 of the Exchange Act. (Check one):

Large accelerated filer ¨ Accelerated filer ¨ Non–Accelerated filer ¨ Smaller reporting company þ
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b–2 of the Exchange Act).  Yes o No þ
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Class
Outstanding February 29, 2012
Common stock, $0.0001 par value
308,457,916
BONANZA GOLDFIELDS CORP.
INDEX TO FORM 10-Q FILING
FOR THE THREE AND SIX MONTHS ENDED DECEMER 31, 2011 AND 2010

TABLE OF CONTENTS

Page
PART I - FINANCIAL INFORMATION
Item 1.
Financial Statements (unaudited)
3
Balance Sheets
4
Statements of Operations
5
Statement of Cash Flows
6
Notes to Financial Statements
7
Item 2.
Management Discussion & Analysis of Financial Condition and Results of Operations
18
Item 3.
Quantitative and Qualitative Disclosures About Market Risk
22
Item 4.
Controls and Procedures
22
PART II - OTHER INFORMATION
Item 1.
Legal Proceedings
25
Item 1A.
Risk Factors
26
Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds
26
Item 3.
Defaults Upon Senior Securities
27
Item 4.
Removed and Reserved
27
Item 5.
Other information
27
Item 6.
Exhibits
27
2


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

General

The accompanying interim financial statements have been prepared in accordance with the instructions to Form 10-Q.  Therefore, they do not include all information and footnotes necessary for a complete presentation of financial position, results of operations, cash flows, and stockholders' equity in conformity with generally accepted accounting principles.  Except as disclosed herein, there has been no material change in the information disclosed in the notes to the financial statements included in the Company's annual report on Form 10-K for the year ended June 30, 2011.  In the opinion of management, all adjustments considered necessary for a fair presentation of the results of operations and financial position have been included and all such adjustments are of a normal recurring nature.  Operating results for the six months ended December 31, 2011 are not necessarily indicative of the results that can be expected for the year ending June 30, 2012.
3
BONANZA GOLDFIELDS CORPORATION
(An Exploration Stage Company)
BALANCE SHEETS
(Unaudited)
December 31,
June 30,
2011
2011
ASSETS:
CURRENT ASSETS
Cash
$ 43,111 $ 23,306
Prepaid interest
3,918 -
Total current assets
47,029 23,306
Property and equipment, net
10,031 7,250
Mining claims
250,000 250,000
TOTAL ASSETS
$ 307,060 $ 280,556
LIABILITIES AND STOCKHOLDERS' DEFICIT:
CURRENT LIABILITIES:
Accounts payable and accrued liabilities
$ 45,162 $ 93,342
Accrued interest
28,206 27,098
Accounts payable and accrued liabilities - related party
18,500 76,316
Deferred liabilities
50,000 50,000
Convertible note payable
- 53,000
Notes payable
589,661 520,269
Refundable subscription
56,000 -
Stock payable
59,000 -
TOTAL LIABILITIES
846,529 820,025
STOCKHOLDERS' DEFICIT:
Series A Preferred stock, $0.0001 par value, 20,000,000 shares authorized;
0 and 3,000,000 issued and outstanding as of
December 31, 2011 and June 30, 2011, respectively
- 300
Common stock, $0.0001 par value, 500,000,000 shares authorized;
302,457,916 and 278,507,916 issued and outstanding as of
December 31, 2011 and June 30, 2011, respectively
30,246 27,851
Additional paid-in capital
5,346,849 4,947,879
Deficit accumulated during exploration stage
(5,916,564 ) (5,515,499 )
TOTAL STOCKHOLDERS' DEFICIT
(539,469 ) (539,469 )
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT
$ 307,060 $ 280,556
The accompanying notes are an integral part of these financial statements.
4
BONANZA GOLDFIELDS CORPORATION
(An Exploration Stage Company)
STATEMENTS OF OPERATIONS
(Unaudited)
For the Three Months Ended
For the Six Months Ended
For the Period from March 6, 2008
(inception) through
December 31,
December 31,
December 31,
2011
2010
2011
2010
2011
(Restated)
(Restated)
REVENUE
$ - $ - $ - $ - $ -
OPERATING EXPENSES:
General and administrative
163,974 286,166 229,035 295,537 1,971,158
Exploration expense
29,279 - 56,980 - 240,018
Depreciation expense
121 - 242 - 242
Impairment of mining claims
- - - 565,700 714,700
Impairment of other assets
- - - - 32,122
Total operating expenses
193,374 286,166 286,257 861,237 2,958,240
OTHER EXPENSES:
Interest expense
23,324 3,867 55,808 7,711 2,750,040
Loss on conversion of accounts payable
- - - - 27,514
Loss on debt conversion
- - - 73,000 121,770
Loss on settlement of litigation
59,000 - 59,000 - 59,000
Total other expense
82,324 3,867 114,808 80,711 2,958,324
NET LOSS
$ (275,698 ) $ (290,033 ) $ (401,065 ) $ (941,948 ) $ (5,916,564 )
NET LOSS PER SHARE:
Basic and diluted
$ (0.00 ) $ (0.00 ) $ (0.00 ) $ (0.01 )
Weighted average of common shares
outstanding, basic and diluted
296,739,636 133,930,138 289,310,889 121,357,856
The accompanying notes are an integral part of these financial statements.
5
BONANZA GOLDFIELDS CORPORATION
(An Exploration Stage Company)

STATEMENTS OF CASH FLOWS
(Unaudited)
For the Six Months Ended
For the Period
from March 6, 2008
(inception) through
December 31,
December 31,
2011
2010
2011
(Restated)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss
$ (401,065 ) $ (941,948 ) $ (5,916,564 )
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation and amortization
242 - 242
Impairment of mining claims
- 565,700 714,700
Impairment of other assets
- - 32,122
Options issued
- - 2,500
Common stock issued for compensation
59,300 240,000 1,203,619
Beneficial conversion feature
- - 2,074,827
Option issued for services
72,414 - 174,412
Loss on debt conversion
- 73,000 121,770
Loss on accounts payable conversion
- - 27,514
Amortization of debt discount
24,392 - 93,349
Stock issued for interest expense
82 - 496,842
Loss on settlement of litigation
59,000 - 59,000
Changes in assets and liabilities:
Accounts payable and accrued expenses
(47,072 ) 9,691 81,198
Accrued expenses - related party
(38,488 ) 30,000 42,772
Other payables
- - (9,944 )
Net cash used in operating activities
(271,195 ) (23,557 ) (801,641 )
CASH FLOWS FROM INVESTING ACTIVITIES:
Investment in mining property
- - (50,000 )
Purchase of intangible asset
- - (99,000 )
Net cash used in investing activities
- - (149,000 )
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from investment
- - 50,000
Repayment of notes payable
(58,000 ) - (115,500 )
Proceeds from notes payable
50,000 23,300 408,800
Conversion of notes payable
- - 60,452
Proceeds from convertible note payable
- - 31,000
Proceeds from the issuance of common stock
243,000 - 503,000
Proceeds from refundable subscription
56,000 - 56,000
Net cash provided by financing activities
291,000 23,300 993,752
INCREASE (DECREASE) IN CASH
19,805 (257 ) 43,111
CASH, BEGINNING OF PERIOD
23,306 261 -
CASH, END OF PERIOD
$ 43,111 $ 4 $ 43,111
SUPPLEMENTAL CASH FLOW INFORMATION:
Interest paid
$ 30,225 $ 3,867 $ 501,400
Income taxes paid
$ - $ - $ -
NONCASH INVESTING AND FINANCING TRANSACTIONS
Common stock issued to acquire mining claim
$ - $ 458,700 $ 458,700
Common stock issued for fixed assets
$ 3,023 $ - $ 39,395
Common stock issued for accounts payable and accrued liabilities
$ 19,328 $ - $ 33,878
Common stock issued for conversion of debt
$ - $ 83,000 $ 126,267
Common stock issued for prepaid interest
$ 3,918 $ - $ 3,918
Preferred stock issued for accrued compensation
$ - $ - $ 300
The accompanying notes are an integral part of these financial statements.
6
BONANZA GOLDFIELDS CORP.
(An Exploration Stage Company)
NOTES TO FINANCIAL STATEMENTS
(Unaudited)

NOTE 1 - DESCRIPTION OF BUSINESS

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

The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America which contemplate continuation of the Company as a going concern. However, the Company has a working deficit and has not generated revenues since inception. During the six months ended December 31, 2011, the Company incurred a net loss of $401,065.  For the period from inception through December 31, 2011, the Company has an accumulated deficit of $5,916,564.  Further, the Company has inadequate working capital to maintain or develop its operations, and is dependent upon funds from private investors and the support of certain stockholders.  These factors raise substantial doubt about the ability of the Company to continue as a going concern.  The financial statements do not include any adjustments that might result from the outcome of these uncertainties.  In this regard, Management is planning to raise any necessary additional funds through loans and additional sales of its common stock. There is no assurance that the Company will be successful in raising additional capital.
The Company's ability to meet its obligations and continue as a going concern is dependent upon its ability to obtain additional financing, achievement of profitable operations and/or the discovery, exploration, development and sale of mining reserves. The Company cannot reasonably be expected to earn revenue in the exploration stage of operations. Although the Company plans to pursue additional financing, there can be no assurance that the Company will be able to secure financing when needed or to obtain such financing on terms satisfactory to the Company, if at all.
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation

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

Use of Estimates

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

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

Exploration Stage Company

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

Mineral property rights

All direct costs related to the acquisition of mineral property rights are capitalized. Exploration costs are charged to operations in the period incurred until such time as it has been determined that a property has economically recoverable reserves, at which time subsequent exploration costs and the costs incurred to develop a property are capitalized. The Company reviews the carrying values of its mineral property rights whenever events or changes in circumstances indicate that their carrying values may exceed their estimated net recoverable amounts. An impairment loss is recognized when the carrying value of those assets is not recoverable and exceeds its fair value. As of December 31, 2011, management has determined that there was no impairment loss required for the six months then ended.
At such time as commercial production may commence, depletion of each mining property will be provided on a unit-of-production basis using estimated proven and probable recoverable reserves as the depletion base. In cases where there are no proven or probable reserves, depletion will be provided on the straight-line basis over the expected economic life of the mine.
Impairment of Long-Lived Assets

Long-lived assets, such as property, plant, and equipment, and purchased intangibles, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Goodwill and other intangible assets are tested for impairment.  Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the fair value of the asset. Management has determined that there is no impairment loss required for the six months ended December 31, 2011.
8
Basic and Diluted Net Loss Per Share

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

At December 31, 2011 and 2010, common stock equivalents consisted of warrants to purchase 15 million and 0 shares of common stock, respectively.

Reclassifications

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

Recent Accounting Pronouncements

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

NOTE 3 – MINING CLAIMS

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

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

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

NOTE 4 – NOTES PAYABLE
The Company had the following notes payable outstanding  as of December 31, 2011 and June 30, 2011:
December 31,
2011
June 30,
2011
Gold Exploration LLC (a)
Dated - June 1, 2008
$ 52,699 $ 52,699
Venture Capital International (b)
Dated – March 30, 2009
12,000 12,000
Venture Capital International (c)
Dated - May 7, 2009
17,000 17,000
Advantage Systems Enterprises Limited (d)
Dated – July 3, 2009
17,000 17,000
Advantage Systems Enterprises Limited (e)
Dated – August 7, 2009
10,000 10,000
Venture Capital International (f)
Dated – October 15, 2009
10,000 10,000
Venture Capital International (g)
Dated – October 27,2009
7,000 7,000
Advantage Systems Enterprises Limited (h)
Dated – November 9, 2009
25,000 25,000
Venture Capital International (i)
Dated – November 23, 2009
5,000 5,000
Strategic Relations Consulting, Inc. (j)
Dated – March 31, 2010
15,000 15,000
Gold Exploration LLC (l)
Dated July 29, 2010
97,000 97,000
Summit Technology Corporation, Inc. (k)
Dated November 22, 2010
2,000 7,000
Freedom Boat, LLC (before unamortized discount) (m)
Dated February 7, 2011
250,000 250,000
Asher Enterprises, Inc. Convertible Note (n)
Dated – April 6, 2011
- 53,000
Dr. Linh B. Nguyen (o)
Dated May 23, 2011
25,000 25,000
Mr. Charles Chapman (p)
Dated December 27, 2011
50,000 -
Total Notes and convertible note payable
594,699 602,699
Less current portion of long term debt
(589,661 ) (573,269 )
Less discount applicable to Freedom Boat, LLC Note
(5,038 ) (29,430 )
Long term debt
$ - $ -
10
(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 of $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 December 31, 2011 and June 30, 2011, principal and accrued interest payable to Gold Exploration LLC for this note is $62,210 and $59,022, respectively.  This note is presently in default.

(b) On March 30, 2009, the Company issued a $12,000 demand promissory note to Venture Capital International, Inc. The note is due on demand with an interest rate of 5%.  As of December 31, 2011 and June 30, 2011, principal and accrued interest payable to Venture Capital International, Inc. related to this note is $13,634 and $13,332, respectively.

(c) On May 7, 2009, the Company issued a $17,000 demand promissory note to Venture Capital International, Inc.   The note is due on demand and has an interest rate of 5%.  As of December 31, 2011 and June 30, 2011, principal and accrued interest payable to Venture Capital International, Inc. related to this note is $19,226 and $18,798, respectively.

(d) On July 3, 2009, the Company issued a $17,000 demand promissory note to Advantage Systems Enterprise Limited.  The note is due on demand with an interest rate of 5%.  As of December 31, 2011 and June 30, 2011, principal and accrued interest payable to Advantage Systems Enterprise Limited under this note is $19,128 and $18,700 respectively.

(e) On August 7, 2009, the Company issued a $10,000 demand promissory note to Advantage Systems Enterprises Limited.  The note is due on demand with an interest rate of 5%. As of December 31, 2011 and June 30, 2011, principal and accrued interest payable to Advantage Systems Enterprise Limited, Inc. related to this is $11,200 and $10,948, respectively.

(f) On October 15, 2009, the Company issued a $10,000 demand promissory note to Venture Capital International.  The note is due on demand with an interest rate of 5%.  As of December 31, 2011 and June 30, 2011, principal and accrued interest payable to Venture Capital International related to this note is $11,105 and $10,853, respectively.

(g) On October 27, 2009, the Company issued a $7,000 demand promissory note to Venture Capital.  The note is due on demand with an interest rate of 5%.  As of December 31, 2011 and June 30, 2011, principal and accrued interest payable to with Venture Capital International related to this note is $7,762 and $7,586, respectively.

(h) On November 9, 2009, the Company issued a $25,000 demand promissory note to Advantage Systems Enterprise Limited.  The note is due on demand with an interest rate of 5%.  As of December 31, 2011 and June 30, 2011, principal and accrued interest payable to Advantage Systems Enterprise Limited related to this is $27,702 and $27,072, respectively.

(i) On November 23, 2009, the Company issued a $5,000 demand promissory note to Venture Capital International.  The note is due on demand with an interest rate of 5%. As of December 31, 2011 and June 30, 2011, principal and accrued interest payable to Venture Capital International related to this note is $5,526 and $5,400, respectively.

(j) On March 31, 2010, the Company issued a $15,000 demand promissory note to Strategic Relations Consulting, Inc.  The note is due on demand with an interest rate of 5%.  As of December 31, 2011 and June 30, 2011 principal and accrued interest payable to Strategic Relations Consulting, Inc. related to this note is $16,317 and $15,939, respectively.

(k) On November 22, 2010, the Company issued a $7,000 demand promissory note to Summit Technologies Corporation, Inc.  The note is due on demand with an interest rate of 5%.  As of December 31, 2011 and June 30, 2011, principal and accrued interest payable to Strategic Relations Consulting, Inc. related to this note is $2,261 and $7,211, respectively.

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

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

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

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

(o) The Company entered into a demand promissory note with Linh B. Ngnyen on May 23, 2011 in the amount of $25,000.  The note is due on demand with an interest rate of 5%.  As of December 31, 2011 and June 30, 2011, the Company had a balance due including principal and accrued interest to Linh B. Ngnyen related to this promissory note in the amount of $25,757 and $25,127, respectively.

(p) On December 27, 2011, the Company issued a $50,000 promissory note to Mr. Charles Chapman .  The note was due on February 15, 2012 with an interest rate of 12%.  Pursuant to the agreement, Mr. Chapman has the right to receive 500,000 shares of the Company’s common stock in lieu of interest payment. On December 28, 2011, the Company issued the 500,000 shares and recorded prepaid interest of $4,000. As of December 28, 2011, unamortized prepaid interest was $3,918. This note was amended on March 19, 2012 to extend the due date to May 15, 2012.
11

NOTE 5 - EQUITY

During the six months ended December 31, 2011, the Company issued 30,000,000 shares of common stock for $243,000 in cash.

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

On October 12, 2011, the Company issued 7,000,000 shares of common stock to an investor for $56,000 cash. Pursuant to subscription agreement, the investor has a right to sell the 7 million shares back to the Company at an interest rate of 12% after April 11, 2012. Proceed of $56,000 from this issuance has been recorded as refundable subscription.

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

During the  six months ended Decembers 31, 2011 the Company issued 5,700,000 shares of common stock to its director, officer and consultants for services valued at $59,300.

On December 28, 2011, the Company issued 500,000 shares to prepay the interest of a note held by Mr. Charles Chapman .

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

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

A summary of warrant activity for the six months ended December 31, 2011 is presented below:
Outstanding Warrants
Shares
Available for
Grant
Number of
Shares Granted
Weighted
Average
Exercise Price
Weighted Average
Remaining
Contractual Life
(years)
Aggregate
Intrinsic Value
June 30, 2011
19,000,000
6,000,000
$
0.01
3.73
$
-
Grants
(9,000,000)
9,000,000
$
0.01
4.65
-
Cancellations
-
-
-
December 31, 2011
10,000,000
15,000,000
$
0.01
4.02
-
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.
12

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

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

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

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

NOTE 7 – RELATED PARTY TRANSACTIONS

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

NOTE 8 – COMMITMENT AND CONTINGENCIES

The Company entered into a purchase agreement to purchase mining claims with Gold Exploration LLC in the amount of $99,000 on June 1, 2008. The agreement requires the Company to make royalty payments equal to 2% of the Net Smelter Returns (NSR) per year. The Company had no Smelter Returns for the six months ended December 31, 2011 and no royalties have been paid.  The agreement does not have any commitment dates of when production is to begin.

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

On February 7, 2011, the Company entered into a $250,000 promissory note agreement with Freedom Boat which bears interest rate at 12%.  The agreement includes a royalty payment which includes 5% in royalty of its gross profits from gold extraction from the Tarantula Placer Mine and 5% royalty payment from the Hull Placer Mine.  The Company intends to re-negotiate the terms which would not include any royalty payments.
13

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

On October 25, 2011, David Janney resigned from all positions he held at the Company, including but not limited to, Chief Executive Officer, Chief Financial Officer, Chairman and member of the Board of Directors, and Secretary.  Scott Geisler was appointed Chief Executive Officer, President and Secretary of the Company.  Pen-Mun Foo was appointed Chief Financial Officer of the Company.
In October 2011, new management learned that the prior CEO/CFO failed to have entity level controls, lacked segregation of duties, among many other internal control deficiencies.  The Company believes that the prior CEO/CFO concealed these matters from the professional advisors until those advisors requested David Janney for additional documentation in which Mr. Janney acknowledged the following to new management and independent legal counsel:
1.
The Company was informed that the prior CEO/CFO, created a series of promissory notes, such form of notes being provided by a lawyer named John Thomas, Esq.  These promissory notes and documentation provided a signed assignment of two promissory notes with Venture Capital, Inc. a group from Switzerland.  Over time, including discussions with the prior CEO/CFO, new management was able to directly contact a representative of Venture Capital who claims that its signatures on the notes and the later conversions to equity were forged. The alleged improper assignment orchestrated the issuance of converted  allegedly improperly transferred debt for the following numbers of shares:

a)
December 9, 2010: Tucker Financial Services, Inc. received 12,000,000 common shares alleged to be exempt from registration under Rule 144 of the Securities Act of 1933 (although new management believes that such exemption was not available) for the conversion of $2,900 of debt.
b)
January 24, 2011; Tucker Financial Services, Inc. received 12,000,000 common shares alleged to be exempt from registration under Rule 144 of the Securities Act of 1933 (although new management believes that such exemption was not available) for the conversion of $2,900 of debt.
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.
14
e)
April 18, 2011: Euroline Clearing Corporation received 7,000,000 common shares alleged to be exempt from registration under Rule 144 of the Securities Act of 1933 (although new management believes that such exemption was not available) for the conversion of $2,900 of debt.
f)
April 18, 2011:   Enavest International S.A., received 7,000,000 common shares alleged to be exempt from registration under Rule 144 of the Securities Act of 1933 (although new management believes that such exemption was not available) for the conversion of $2,900 of debt.
g)
April 18, 2011: Vanilla Sky, S.A. received 7,000,000 common shares alleged to be exempt from registration under Rule 144 of the Securities Act of 1933 (although new management believes that such exemption was not available) for the conversion of $2,900 of debt.
h)
June 28, 2011: Scott Geisler received 17,000,000 common shares alleged to be exempt from registration under Rule 144 of the Securities Act of 1933 (although Mr. Geisler had no knowledge of the documentation provided by John Thomas was false and this was transacted through a Broker, Scottsdale Capital) for the conversion of $2,900 of debt.

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

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

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

Legal counsel has demanded the return of all of David Janney common stock of 20,000,000 shares related to the material deficiencies and potential breach of fiduciary duty while holding the positions of Chief Executive Officer and Chief Financial Officer of the Company from November 2010 through his resignation.  The Company has sought the advice of legal counsel to determine the appropriate course of action.

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

On December 14, 2011, the Company entered into a consulting agreement for advisory services which would provide for a monthly advisory fee of $3,000 starting January 25, 2012 and issuance of 500,000 common shares.  This agreement will commence for one year. These shares have not been issued.
15

NOTE 9– LOSS ON SETTLEMENT OF LITIGATION

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

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

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

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

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

NOTE 10 – RESTATEMENT

The financial statements for the six months ended December 31, 2010 have been restated mainly to correct the misstatements resulting from the fradulent conversion of two notes issued to Venture Capital International (See Note 10).

Six Months Ended December 31, 2010
(Originally Reported)
Restatement
Six Months Ended December 31, 2010(Restated)
Statement of Operations
General and administrative
$ 22,842 $ 30,000
(a)
$ 295,537
240,000
(b)
2,695
(c)
Impairment of mining claims
207,080 358,620
(d)
565,700
Interest expense
251,388 (73,000 )
(e)
7,711
(170,677 )
(f)
Loss on  debt conversion
- 73,000
(e)
73,000
Net Loss
(481,310 ) (460,638 ) (941,948 )
Loss per share
(0.00 ) (0.01 ) (0.01 )

16

Six Months Ended December 31, 2010
(Originally Reported)
Restatement
Six Months Ended December 31, 2010 (Restated)
Statements of Cash flows
Net loss
$ (481,310 ) $ (460,638 ) $ (941,948 )
Adjustments to reconcile net loss to net cash used in operating activities:
Impairment of mining claims
207,080 358,620
(d)
565,700
Common stock issued for compensation
- 240,000
(b)
240,000
Beneficial conversion feature
243,677 (73,000 )
(e)
-
(170,677 )
(f)
Loss on debt conversion
- 73,000
(e)
73,000
Changes in assets and liabilities:
Accounts payable and accrued expenses
6,996 2,695
(c)
9,691
Accrued expenses - related party
- 30,000
(a)
30,000
Net cash used in operating activities
$ (23,557 ) $ - $ (23,557 )

(a)
To record accrued compensation to David Janney for the service from October 2010 to December 2010.
(b)
To record shares issued to Tucker Financial Services Inc. on December 9, 2010 as stock compensation.
(c)
To record understated professional fees.
(d)
To correct the value of common stock issued to acquire Midas Placer Mining Claim which was fully impaired.
(e)
To reclassify $73,000 from interest expense related to a note held by Gold Exploration LLC to loss on conversion of debt.
(f)
To adjust interest expense originally reported as the beneficial conversion feature of two notes fraudulently assigned to Gustavo Cifuentes Palma.

NOTE 11– SUBSEQUENT EVENTS

On February 13, 2012, the Company entered into a consulting agreement with Benchmark Advisory Partners, LLC.  Benchmark will provide public relations services for six months.  Benchmark’s compensation for these services is $10,000.  In the September 30, 2011 Form 10-Q, the Company reported that Benchmark compensation would be 10,000,000 common shares, which was reported in error.
On March 12, 2012, the Company issued a $75,000 convertible note to Mr. Leroy Steury. The note is due on June 12, 2012 with an interest rate of 10% and is convertible into 7,500,000 shares of the Company's common stock.
On March 19, 2012, the Company amended the $50,000 promissory note to Mr. Charles Chapman dated December 27, 2011.  Pursuant to the amendment, maturity date of this note was extended from February 5, 2012 to May 15, 2012.  As a consideration for the amendment, the Company agreed to issue 500,000 shares of common stock to Mr. Chapman.

* * * * * * * * * * *
17
In this Quarterly Report on Form 10-Q, “Company,” “our company,” “us,” and “our” refer to Bonanza Goldfields Corporation , unless the context requires otherwise.
ITEM 2         MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

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

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

Overview

We are an exploration stage company engaged in the acquisition and exploration of gold mineral properties, directly or with a joint venture partner in North America.  Our exploration target is to find exploitable minerals on our properties. Our success depends on achieving that target. There is the likelihood of our mineral claims containing little or no economic mineralization or reserves of gold and other minerals. There is the possibility that our claims do not contain any reserves and funds that we spend on exploration will be lost. Even if we complete our current exploration program and are successful in identifying a mineral deposit, we will be required to expend substantial funds to bring our claims to production. We are unable to assure you we will be able to raise the additional funds necessary to implement any future exploration or extraction program even if mineralization is found.
It is our objective to identify mineral prospect properties of merit, conduct preliminary exploration work, and if results are positive, to “prove up” mineral resources ultimately providing a strategic supply line to mid-tier mining companies in a world where we believe capital is transitioning to the safety of gold.  Our management contends that this business model is timely in a world of financial and currency instability with escalating mineral demand.
18
Our areas of exploration are in geopolitically stable North American areas.  Our three exploration stage projects are located in Arizona and Colorado, of which our management believes have near-surface gold mineralization. Although Bonanza has interest in Red Mountain, Colorado and the Black Rock Basin, Arizona projects, management continues to focus all efforts on the flagship Tarantula Project, Congress, Arizona.
Bonanza Goldfields’ flagship Tarantula Project consists of 38 lode claims covering 600 acres of 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 ( although this website is not incorporated by reference).

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

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

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

Prior to commencing the survey, extensive samplings were analyzed locally at multiple depths demonstrating the potential for high grade gold findings throughout the property.  Modern access for heavy equipment is already in place via our privately constructed roads, and rail is localized.  The claims are directly adjacent to the world famous historic Congress Mine, Arizona. The Congress Mine operated between 1887 and 1959 producing, according to managements understanding, about 400,000 ounces of lode gold.  Unique features appear ubiquitous throughout the immediate area, including greenstone dike extensions, placer gravel deposits, and vestiges of numerous pre-historic waterfalls.  Additionally, lode gold possibilities exist due to the extensions of schist and mineralized quartz veins in the immediate area of the Congress Mine. Our management believes the alluvial deposits originate from two ancient rivers that flowed in opposing directions during separate geological periods.
We expanded our flagship Tarantula Project with the acquisition of the Piedmont Mine, gold and silver mine in operation until 1940. The Piedmont Mine has been deemed by our geological team a highly prospective addition to the Tarantula Project. The acquisition expands the Tarantula Project to 38 lode mining claims covering over 600 acres of contiguous property directly adjacent to the historic Congress Mine which produced over 400,000 ounces of lode gold between 1887 and 1959.
19
The Black Rock Basin (BRB) Project claim group is currently comprised of 320 acres on BLM (“Bureau of Land Management”) ground in the southern part of the Vulture Mining District, Maricopa County, Arizona in the northeastern Belmont Mountains. The property is located along a twelve mile northwest mineralized trend where several gold and copper mines previously operated. Bulk sampling during Bonanza's reconnaissance reveals promising higher level gold values over six large target zones. Approximately 400 soil samples were taken on a surveyed grid. These samples were sent to Chemex Labs in Reno, Nevada and analyzed for 32 elements including gold, silver, copper, lead & zinc. The results obtained from this work indicate a minimum of six gold anomalies within the claim boundaries. Over ten bulk samples returned gold values in excess of 3400 ppb (0.10+ oz/ton), including 2% copper, 20% lead, 15% zinc and up to 7 ounces of silver per ton. Property within the BRB Project experienced minor prospecting during the early 1900's through numerous small prospect pits, shallow shafts, adits, and small tunnels. There is no formal record of production on the BRB property. The property is located approximately 80 miles west of Phoenix and 25 miles southwest of Wickenburg, Arizona, and is accessible year round. The BRB Project is situated within the lower hills and flats of the northern Belmont Mountain Range with elevations from 1900 feet to 2500 feet.
RESULTS OF OPERATIONS

Three and Six Months Ended December 31, 2011 Compared to Three and Six Months Ended December 31, 2010

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

For the three and six months ended December 31, 2011, we generated no revenue. Our future revenue plan is uncertain and is dependent on our ability to effectively mine our products, generate sales, and obtain contract mining opportunities. There are no assurances of our ability to begin to mine our claim. The expenditures for mining are cost intensive so it is critical for us to raise appropriate capital to implement our business plan.  We incurred losses of $275,698 for the three months ended December 31, 2011, compared to $290,033 for the three months ended December 31, 2010. We incurred losses of $401,065 for the six months ended December 31, 2011, compared to $941,948 for the six months ended December 31, 2010. Our losses since our inception through December 31, 2011 amount to $5,916,564.

Our operating expenses for exploration activities for the three months ended December 31, 2011 and 2010 were $29,279 and $0, respectively. The costs associated with exploration activities included trenching, testing, hauling, and labor costs associated with the exploration of our gold mines claims. For the six months ended December 31, 2011 and 2010, exploration expenses were $56,980 and $0, respectively.

Our general and administrative expenses for the three months ended December 31, 2011 and 2010 were $163,974 and $286,166, respectively. For the six months ended December 31, 2011 and 2010, general and administrative expenses were $229,035 and $295,537, respectively.  The decrease was primarily related to the issuance of shares for notes fraudulently converted by prior management during the six months ended December 31, 2010. The value of the shares issued was recorded in consulting expense.
20

During the six months ended December 31, 2010, we recorded $565,700 of impairment on mining claims.  Impairments were taken for mining claims that their carrying values exceeded their estimated net recoverable amounts.  No such impairment was recorded for the six months ended December 31, 2011.

Our interest expense for the three months ended December 31, 2011 and 2010 was $23,324 and $3,867, respectively. For the six months ended December 31, 2011 and 2010, interest expense was $55,808 and $7,711, respectively.  The increase is primarily attributable to the increase in debt outstanding.

During the six months ended December 31, 2010, we recorded $73,000 for loss on debt conversion.  On July 29, 2010, the Company issued 8,300,000 common shares valued at $83,000 to Gold Exploration LLC towards a $10,000 payment on the promissory note and we recognized a loss on debt conversion of $73,000.  No such loss was recorded for the three months ended December 31, 2011.

Net loss decreased by $14,335 and $540,883, respectively, from $290,033 and $941,948 for the three and six months ended December 31, 2010, respectively, to $275,698 and $401,065 for the three and six months ended December 31, 2011, respectively, as a result of the items discussed above.

Liquidity and Capital Resources

Our cash used in operating activities for the six months ended December 31, 2011 was $271,195 compared to $23,557 for the six months ended December 31, 2010.   The increase in cash used in operations was primarily attributable to payment made to vendors and related parties during the six months ended December 31, 2011.

Our cash provided by financing activities for the six months ended December 31, 2011 was $291,000,  compared to $23,300 for the six months ended December 31, 2010. The increase is mainly due to the issuance of common stock for $299,000 cash during the six months ended December 31, 2011.

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

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

We have no off-balance sheet arrangements including arrangements that would affect the liquidity, capital resources, market risk support and credit risk support or other benefits.
21

Additional Information

Bonanza files reports and other materials with the Securities and Exchange Commission.  These documents may be inspected and copied at the Securities and Exchange Commission, Judiciary Plaza, 100 F Street, N.E., Room 1580, Washington, D.C. 20549.  You can obtain information on the operation of the Public Reference Room by calling the Commission at 1-800-SEC-0330.  You can also get copies of documents that the Company files with the Commission through the Commission’s Internet site at www.sec.gov .
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We do not hold any derivative instruments and do not engage in any hedging activities. Most of our activity is the development and mining of our mining claim.

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

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

As of December 31, 2011, we carried out an evaluation, under the supervision and with the participation of our principal executive officer and our principal financial officer of the effectiveness of the design and operation of our disclosure controls and procedures. Based on this evaluation, our principal executive officer and our principal financial officer concluded that our disclosure controls and procedures were not effective as of the end of the period covered by this report.
In October 2011, on the eve of the completion of the audit and the current filing of our Annual Report on Form 10-K new management learned that the prior CEO/CFO failed to have entity level controls, lacked segregation of duties, among many other internal control deficiencies.  The Company believes that the prior CEO/CFO concealed these matters from the professional advisors until those advisors requested David Janney for additional documentation in which Mr. Janney acknowledged the following to new management and independent legal counsel:

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

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

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

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

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

Presently, legal counsel has demanded the return of all of David Janney common stock of 20,000,000 shares related to the material deficiencies and potential breach of fiduciary duty while holding the positions of Chief Executive Officer and Chief Financial Officer of the Company from November 2010 through his resignation.  The Company has sought the advice of legal counsel to determine the appropriate course of action.  (See Note 9 – Loss on Legal Settlement to the financial statements)

Changes in Internal Control Over Financial Reporting

During the fiscal year ended June 30, 2011 and the six months ended December 31, 2011, there were changes in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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Current management has hired independent counsel to investigate these deficiencies, among many other things.  The Company has removed the prior CEO/CFO from all positions in the Company and he has no further affiliation with the company.  The Company is still investigating whether the parties that participate in the forged debt conversions are victims or co-conspirators.

New management has implemented many new controls and procedures as follows:

Currently, as a small exploratory stage company, we maintain our internal controls through a segregation of duties between our principal executive officer and principal financial officer.  For example, all incoming suppliers’ invoices are delivered direct to the principal financial officer for recording in the books, checking and processing.  The principal financial officer must submit all payments request to the principal officer for approval, allocation of cash and presentation of a check for mailing to the payee.  The principal financial officer conduct regular reconciliation for the bank account to make sure that all receipts and disbursements have been identified, supported by appropriate documentation and payment approval, and the transaction are matched to posting in the books.  As a small exploratory stage company, we have very limited financial activity during the year.  Thus, the current check and balance of the financial activity by our principal executive officer and principal financial officer provide sufficient control to ensure fairness, accuracy and properly disclose.  Document related to the Company’s assessment is very limited as there are only a limited number of business transactions.  No testing was performed on limited transactions within the Company by our principal executive officer and principal financial officer since 100% of the transactions were actually performed by our principal execute officer and principal financial officer.  Our principal executive officer and principal financial officer concluded that adequate procedures were in place to approve and monitor all disbursement distributed by the Company and confirm all funds received by the Company.  Our principal execute officer and principal financial officer are responsible for establishing and maintaining adequate internal controls over financial reporting, as such term is defined under the rules promulgate under Securities Exchange act of 1934.  Our principal executive officer and principal accounting officer have conducted an evaluation of the effectiveness of our internal controls over financial reporting based on the frame work in “Internal Control – Integrated Framework” issued by the Committee of Sponsoring Organization of the Treadway Commission.  Based the above evaluation, and in light of the prior deficiencies noted above, our principal executive officer and principal financial officer concluded that our internal control over financial reporting was not effective as of December 31, 2011.

The Company has also engaged the services of a consulting CPA with prior public company experience, and accounting qualification to supervise and manage the Company’s accounting and record keeping.  In connection with the evaluation required by paragraph (d) of Rule 13a-15 under the Exchange Act, there was no substantial changes of internal control over financial reporting during the quarter ended December 31, 2011 except as discussed above, that materially effects our internal controls over financial reporting.
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PART II – OTHER INFORMATION

ITEM 1.        LEGAL PROCEEDINGS

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

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

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

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

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

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

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

Presently, legal counsel has demanded the return of all of David Janney common stock of 20,000,000 shares related to the material deficiencies and potential breach of fiduciary duty while holding the positions of Chief Executive Officer and Chief Financial Officer of the Company from November 2010 through his resignation.   The Company has sought the advice of legal counsel to determine the appropriate course of action. (See Note 9 – Loss on Legal Settlement to the financial statements)
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ITEM 1A.     RISK FACTORS
There have been no material changes to the risk factors previously discussed in Item 1A of the Company's  Form 10-K for the year ended June 30, 2011.
ITEM 2.        UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS SECURITIES

During the six months ended December 31, 2011, the Company issued 30,000,000 shares of common stock for $243,000 in cash.

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

On December 28, 2011, the Company issued 500,000 shares to prepay the interest of a note held by Mr. Charles Chapman .

On October 12, 2011, the Company issued 7,000,000 shares of common stock to an investor for $56,000 cash. Pursuant to subscription agreement, the investor has a right to sell the 7 million shares back to the Company at an interest rate of 12% after April 11, 2012.

The offer and sale of such shares of our common stock were effected in reliance on the exemptions for sales of securities not involving a public offering, as set forth in Rule 506 promulgated under the Securities Act of 1933 (the “Securities Act”) and in Section 4(2) of the Securities Act, based on the following: (a) the investors confirmed to us that they were “accredited investors,” as defined in Rule 501 of Regulation D promulgated under the Securities Act and had such background, education and experience in financial and business matters as to be able to evaluate the merits and risks of an investment in the securities; (b) there was no public offering or general solicitation with respect to the offering; (c) the investors were provided with certain disclosure materials and all other information requested with respect to our company; (d) the investors acknowledged that all securities being purchased were “restricted securities” for purposes of the Securities Act, and agreed to transfer such securities only in a transaction registered under the Securities Act or exempt from registration under the Securities Act; and (e) a legend was placed on the certificates representing each such security stating that it was restricted and could only be transferred if subsequent registered under the Securities Act or transferred in a transaction exempt from registration under the Securities Act.
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ITEM 3.        DEFAULTS UPON SENIOR SECURITIES

There were no defaults upon senior securities during the period ended December 31, 2011.
ITEM 4.        REMOVED AND RESERVED
ITEM 5.        OTHER INFORMATION

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

ITEM 6.        EXHIBITS
3.1 Articles of Incorporation(1)
3.2 Bylaws (1)
31.1 Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act(2)
Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act (2)
Certification of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act(2)
Certification of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act(2)

(1)
Incorporated by reference to the Company’s filing on Form S1/A, as filed with the Securities and Exchange Commission on September 11, 2008.
(2)
Filed herein.
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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934 the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Bonanza Goldfields Corp.
Registrant
Date: March 22, 2012
By:
/s/ Scott Geisler
Scott Geisler
Chairman, Chief Executive Officer (Principal Executive Officer)
Bonanza Goldfields Corp.
Registrant
Date: March 22, 2012 By: /s/ Pen-Mun Foo
Pen-Mun Foo
Chief Financial Officer (Principal Accounting Officer,)
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