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Item 1A. Risk Factors

2013-10-15 compared with 2012-09-28 · 32 added, 15 removed, 143 unchanged (25% of the section changed)

ITEM 1A - RISK FACTORS

An investment in our common stock involves a high degree of risk.

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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.

Additionally, if other risks not presently known to us, or that we do not currently believe to be significant, occur or become significant, our financial condition and results of operations could suffer and the trading price of our common stock could decline.

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.

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

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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.

In all probability, our properties do contain reserves.

As such, any funds spent on exploration will probably be lost, our 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.

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 revenues.

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.

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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 OTC Pinksheets Instead Of An Exchange Or National Quotation System, Our Investors May Have A Tougher Time Selling Their Stock Or Experience Negative Volatility On The Market Price Of Our Stock.

Our common stock is traded on the Pinksheets.

The Pinksheets 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 Pinksheets as compared to a national exchange or quotation system.

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.

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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 are an "emerging growth company" and we cannot be certain if the reduced disclosure requirements applicable to emerging growth companies will make our common stock less attractive to investors.

We are an "emerging growth company," as defined in the Jumpstart our Business Startups Act of 2012 or JOBS Act, and we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not "emerging growth companies" including not being required to comply with the auditor attestation requirements of section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements and exemptions from the requirements of holding a non-binding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved.

We cannot predict if investors will find our common stock less attractive because we may rely on these exemptions.

If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and our stock price may be more volatile.

In addition, Section 107 of the JOBS Act also provides that an "emerging growth company" can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards.

An "emerging growth company" can therefore delay the adoption of certain accounting standards until those standards would otherwise apply to private companies.

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.

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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.

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.

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.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors