What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2013-10-15 compared with 2012-09-28 · 340 added, 291 removed, 428 unchanged (60% of the section changed)

5 unchanged sentences

Statements of Operations

Statements of Stockholders’ Deficit

Statements of Stockholders’ Equity (Deficit)

Statements of Cash Flows

1 unchanged sentence

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders

To the Board of Directors

Bonanza Goldfields Corporation

1 unchanged sentence

Phoenix, Arizona

We have audited the accompanying balance sheets of Bonanza Goldfields Corporation (an exploration stage company) as of June 30, 2012 and 2011, and the related statements of operations, stockholders’ deficit and cash flows for the years then ended and for the period from March 6, 2008 (inception) to June 30, 2012.

We have audited the accompanying balance sheets of Bonanza Goldfields Corporation (an exploration stage company) as of June 30, 2013 and 2012, and the related statements of operations, stockholders’ equity (deficit) and cash flows for the years then ended and for the period from March 6, 2008 (inception) to June 30, 2013.

These financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on these financial statements based on our audits.

The financial statements for the period from March 6, 2008 (inception) through June 30, 2010 were audited by other auditors whose reports expressed unqualified opinions on those statements.

The financial statements for the period from March 6, 2008 (inception) through June 30, 2010 were audited by other auditors whose reports expressed unqualified opinions on those financial statements.

The financial statements for the period from March 6, 2008 (date of inception) to June 30, 2010 include total revenues and net loss of $0 and $3,105,540, respectively.

Our opinion on the statements of operations, stockholders' deficit and cash flows for the period from March 6, 2008 (date of inception) through June 30, 2010, insofar as it relates to amounts for prior periods through June 30, 2010, is based solely on the reports of other auditors.

Our opinion on the statements of operations, stockholders' equity (deficit) and cash flows for the period from March 6, 2008 (date of inception) through June 30, 2010, insofar as it relates to amounts for prior periods through June 30, 2010, is based solely on the reports of other auditors.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States).

1 unchanged sentence

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.

Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.

Accordingly, we express no such opinion.

8 unchanged sentences

The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

As discussed in Note 13 to the financial statements, the Company has restated its financial statements for the years ended June 30, 2012 and 2011 to classify common shares that are subject to rescission or redemption requirements that are outside of the control of the Company outside of permanent equity until they are no longer subject to rescission or redemption.

/s/ GBH CPAs, PC

1 unchanged sentence

Houston, Texas

September 27, 2012

October 15, 2013

BONANZA GOLDFIELDS CORPORATION

2 unchanged sentences

CURRENT ASSETS

Interest receivable

Prepaid expenses

6 unchanged sentences

Accrued interest

Accounts payable and accrued liabilities - related party

Lease obligation, current portion

Disputed payable

1 unchanged sentence

Deferred liabilities

Convertible note payable

Notes payable, net of discount of $0 and $29,430

Convertible notes payable

Notes payable

Total current liabilities

Lon-term lease obligation

TOTAL LIABILITIES

CONTINGENCIES AND COMMITMENTS

COMMON STOCK SUBJECT TO RESCISSION

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

June 30, 2012 and 2011, respectively

none issued and outstanding

Common stock, $0.0001 par value, 500,000,000 shares authorized;

320,862,680 and 278,507,916 issued and outstanding as of

June 30, 2012 and 2011, respectively

290,485,137 and 234,862,680 issued and outstanding, respectively

Additional paid-in capital

8 unchanged sentences

THE PERIOD FROM MARCH 6, 2008 (INCEPTION) THROUGH JUNE 30, 2013

For the Period

from March 6, 2008

(inception) through

June 30, 2012

OPERATING EXPENSES:

4 unchanged sentences

Total operating expenses

OTHER EXPENSES:

OTHER (INCOME) EXPENSES:

Interest expense

Loss on settlement of litigation

(Gain) loss on settlement of litigation

Loss on settlement of accounts payable

Loss on debt conversion

Total other expense

Total other (income) expense

NET LOSS PER COMMON SHARE:

4 unchanged sentences

(An Exploration Stage Company)

STATEMENT OF STOCKHOLDER' DEFICIT

FOR THE YEAR ENDED JUNE 30, 2012

AND FOR THE PERIOD FROM MARCH 6, 2008 (INCEPTION) THROUGH JUNE 30, 2012

STATEMENTS OF STOCKHOLDER' EQUITY (DEFICIT)

FOR THE PERIOD FROM MARCH 6, 2008 (INCEPTION) THROUGH JUNE 30, 2013

Preferred Stock

15 unchanged sentences

Common stock issued for services

Common stock issued without proper authorization

Common stock issued for accounts payable conversion

5 unchanged sentences

Beneficial conversion feature

BALANCE AT JUNE 30, 2011

BALANCE AT JUNE 30, 2011 (Restated)

Common stock issued for cash

7 unchanged sentences

Beneficial conversion feature

BALANCE AT JUNE 30, 2012 (Restated)

Common stock issued for cash

Common stock issued for services

Common stock issued for debt conversion

Common stocks cancelled by David Janney, former officer

Common stock granted to replace option issued in prior year

Warrants and options

Debt discount, beneficial conversion feature and warrants

BALANCE AT JUNE 30, 2013

5 unchanged sentences

AND FOR THE PERIOD FROM MARCH 6, 2008 (INCEPTION) THROUGH JUNE 30, 2013

For the Period

from March 6, 2008

(inception) through

June 30, 2012

CASH FLOWS FROM OPERATING ACTIVITIES:

1 unchanged sentence

used in operating activities:

Stock-based compensation

Impairment of mining claims

Impairment of other assets

Stock-based compensation

Amortization of debt discount

2 unchanged sentences

Loss on settlement of accounts payable

Loss on conversion of notes payable

Extinguishment of debt

Changes in operating assets and liabilities:

Loss on debt conversion

Changes in assets and liabilities:

Interest receivable

Prepaid expenses and other current assets

Accounts payable and accrued expenses

Accrued expenses - related party

Disputed payable

3 unchanged sentences

Investment in mining equipment

Purchase of intangible asset

Investment in mining property

Net cash used in investing activities

CASH FLOWS FROM FINANCING ACTIVITIES:

Repayment of notes payable

Proceeds from notes payable

Repayment of notes payable

Proceeds from convertible note payable

2 unchanged sentences

INCREASE (DECREASE) IN CASH

CASH, BEGINNING OF PERIOD

CASH, END OF PERIOD

CASH, BEGINNING OF YEAR

CASH, END OF YEAR

SUPPLEMENTAL CASH FLOW INFORMATION:

Interest paid

Interest paid, net interest received

Income taxes paid

2 unchanged sentences

Notes issued to acquire mining claims

Common stocks issued to prepay interest

Debt Discount

Common stocks issued for note modification

3 unchanged sentences

Common stock to be issued for settlement of litigation

Common stock to be issued for note extention

Common stock to be issued for note extension

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

3 unchanged sentences

NOTE 1 - DESCRIPTION OF BUSINESS AND GOING CONCERN

Bonanza Goldfields Corp.

(the “Company”) was incorporated under the laws of the State of Nevada on March 6, 2008.

Bonanza Goldfields Corporation (the “Company”) was incorporated under the laws of the State of Nevada on March 6, 2008.

The Company’s fiscal year ends on June 30.

The Company is in the process of acquiring mineral properties or claims located in the State of Arizona.

The Company’s areas of exploration are in geopolitically stable North American areas.

The Company has acquired 3 sets of mineral properties in the state of Arizona.

The mineral properties are contiguous, therefore the three sets are considered as one project.

The first is federal mining claims on land managed by the Bureau of Land Management totaling 435 acres.

The second property is 130.76 acres of patented land the Company leased for an initial term of two years with an option to buy from Judgetown LLC.

The lease agreement with Judgetown LLC was effective on October 15, 2012 and ended on September 20, 2013.

The third property is referred to as the Hull land and is approximately 20 acres of patented land.

The recoverability of amounts from the properties or claims will be dependent upon the discovery of economically recoverable reserves, confirmation of the Company's interest in the underlying properties and/or claims, the ability of the Company to obtain necessary financing to satisfy the expenditure requirements under the property and/or claim agreements and to complete the development of the properties and/or claims, and upon future profitable production or proceeds for the sale thereof.

The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America which contemplate continuation of the Company as a going concern.

However, the Company has a working deficit and has not generated revenues since inception.

However, the Company has a working deficit and has not generated significant revenues since inception.

During the year ended June 30, 2013, the Company incurred a net loss of $1,424,191 and as of June 30, 2013 has an accumulated deficit of $8,031,045.

Further, the Company has inadequate working capital to maintain or develop its operations, and is dependent upon funds from private investors and the support of certain stockholders.

Further, the Company has inadequate working capital to maintain or develop its operations, and is dependent upon funds from lenders and private investors and the support of certain stockholders.

These factors raise substantial doubt about the Company’s ability to continue as a going concern.

The financial statements do not include any adjustments that might result from the outcome of these uncertainties.

In this regard, Management is planning to raise any necessary additional funds through loans or additional sales of its common stock.

In this regard, management is seeking to raise any necessary additional funds through loans or additional sales of its common stock.

There is no assurance that the Company will be successful in raising additional capital.

19 unchanged sentences

An impairment loss is recognized when the carrying value of those assets is not recoverable and exceeds its fair value.

As of June 30, 2012, management has determined that there was no impairment loss required as compared to impairment loss of $615,700 required on June 30, 2011.

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

At such time as commercial production may commence, depletion of each mining property will be provided on a unit-of-production basis using estimated proven and probable recoverable reserves as the depletion base.

5 unchanged sentences

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.

As of June 30, 2011, management has determined that there was impairment loss required of $647,822.

There was no impairment loss required for June 30, 2012.

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

Asset Retirement Obligations

8 unchanged sentences

Reclamation costs are accreted over the life of the related assets and are adjusted for changes resulting from the passage of time and changes to either the timing or amount of the original present value estimate on the underlying obligation.

There were asset retirement obligations as of June 30, 2012 as there are presently no underlying obligations.

There has been no asset retirement obligations as of June 30, 2013 as there are presently no underlying obligations.

Property and Equipment

6 unchanged sentences

Amortization Period

Furniture and Fixture

Office equipment

Leasehold improvements

Deferred income taxes are provided based on the provisions of ASC Topic 740, Income Taxes , to reflect the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income.

Support equipment

Deferred income taxes are provided to reflect the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income.

Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized.

4 unchanged sentences

At June 30, 2013, the Company did not record any liabilities for uncertain tax positions.

Concentration of Credit Risk

The Company maintains its operating cash balances in banks in Phoenix, Arizona.

The Federal Depository Insurance Corporation (“FDIC”) insures accounts at each institution up to $250,000.

Share-Based Compensation

5 unchanged sentences

The weighted average number of shares was calculated by taking the number of shares outstanding and weighting them by the amount of time that they were outstanding.

Diluted net loss per share for the Company is the same as basic net loss per share, as during period where a net loss is reported, the inclusion of common stock equivalents would be antidilutive.

At June 30, 2012 and 2011, common stock equivalents consisted of warrants to purchase 25,500,000 and 6,000,000 shares of common stock, respectively.

Diluted net loss per share for the Company is the same as basic net loss per share, as during period where a net loss is reported, the inclusion of common stock equivalents would be antidilutive and are therefore excluded from the calculation.

At June 30, 2013 and 2012, common stock equivalents consisted of warrants to purchase 27,606,057 and 25,500,000 shares of common stock, respectively, which have been antidilutive.

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

Fair Value of Financial Instruments

3 unchanged sentences

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

Subsequent Events

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

Recent Accounting Pronouncements

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

NOTE 3 – PROPERTY AND EQUIPMENT

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

June 30, 2013

June 30, 2012

Support equipment

accumulated depreciation

Net property and equipment

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

NOTE 4 – MINING CLAIMS

2 unchanged sentences

June 30, 2012

Midas Placer Mining Claim (fully impaired)

Tarantula Mining Claim

Midas Placer Mining Claim (BLM claim, fully impaired)

Hull Lode Mining Claim (Freedom Boat Lease)

Osiris Gold Joint Venture (fully impaired)

Judgetown Mining Claim

Total mining and equipment activity

1 unchanged sentence

Total Mining Claims

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

The Company has impaired all claims except for the Tarantula (Hull Lode) and Judgetown mining claim.

See Note 12 for discussion of assets sold subsequent to year end.

During the year ended June 30, 2013, the Company learned that the title of Midas Placer Claim which the Company purchased from Global Minerals, Inc., was never transferred to the Company.

The Company did not record any adjustment during the year ended June 30, 2013 as the Midas Placer Mining Claim was fully impaired during fiscal year 2011.

On September 30, 2012, the Company entered into a lease agreement with Judgetown LLC, an Arizona Limited Liability Company located in Arizona to lease 130.76 acres land in the county of Yavapai, Arizona.

The lease is exclusive to the Company and its successors and assigns all of Judgetown LLC’s interest in and to all mining rights and minerals beneath the surface of, within, or that may be produced from the land.

The lease is for a period of two years unless terminated pursuant to the lease.

The lease obligation, as amended on February 9, 2013, is $200,000 for the first year and $120,000 for the second year.

An option to purchase the land was also granted for a price of $1,190,000 less lease payments before January 15, 2015.

At June 30, 2013, $310,568 of the discounted value of the lease payments was recorded as the Judgetown Mining Claim as a component of Mining Claims assets.

As of June 30, 2013, the Company had recorded a lease obligation payable related to this agreement of $260,568.

The Judgetown lease rights were sold on September 20, 2013.

NOTE 5 – NOTES PAYABLE

28 unchanged sentences

Dated February 7, 2011

Asher Enterprises, Inc.

– Convertible Note (n)

Dated April 6, 2011

Linh Nguyen (o)

Linh Nguyen (n)

Dated May 23, 2011

Charles Chapman (p)

Charles Chapman (o)

Dated December 27, 2011

Leroy Steury (q)

Leroy Steury (p)

Dated March 12, 2012

Tonaquint, Inc.

Dated October 1, 2012

Total Notes payable

current portion of long-term debt

discount applicable to Freedom Boat, LLC Note

debt discount

Long-term debt

3 unchanged sentences

As of June 30, 2013 and 2012, the Company principal and interest payable to Gold Exploration LLC for this note is $71,670 and $65,346, respectively.

This note is presently in default.

This agreement required that Gold Exploration LLC perfect the transfer and send the documents to the Company.

The transfer was never made and a review of the BLM lists of claims disclosed that Gold Exploration LLC never owned the claims that they attempted to sell to the Company.

On August 27, 2013, the Company has demanded the cancellation of the note agreement and remittance of $15,000.

(b) On March 30, 2009, the Company issued a $12,000 demand promissory note to Venture Capital International, Inc.

The note is due on demand with an interest rate of 5%.

As of June 30, 2012 and 2011, the Company principal and interest payable to Venture Capital International, Inc.

related to this note is $13,932 and $13,332, respectively.

The note is due on demand and has an interest rate of 5%.

As of June 30, 2012 and 2011, principal and interest payable to Venture Capital International, Inc.

related to this note is $19,648 and $18,798, respectively.

(“Venture Capital International”) The note is not secured, due on demand with an interest rate of 5%.

As of June 30, 2013 and 2012, principal and interest payable to Venture Capital International related to this note is $14,532 and $13,932, respectively.

Venture Capital has not demanded the repayment of the note.

The note is not secured, due on demand and has an interest rate of 5%.

As of June 30, 2013 and 2012, principal and interest payable to Venture Capital International related to this note is $20,498 and $19,648, respectively.

Venture Capital has not demanded the repayment of the note.

(d) On July 3, 2009, the Company issued a $17,000 demand promissory note to Advantage Systems Enterprise Limited.

The note is due on demand with an interest rate of 5%.

The note is not secured, due on demand with an interest rate of 5%.

As of June 30, 2013 and 2012, principal and interest payable to Advantage Systems Enterprise Limited related to this note is $20,400 and $19,550, respectively.

Advantage Systems Enterprise Limited has not demanded the repayment of the note.

(e) On August 7, 2009, the Company issued a $10,000 demand promissory note to Advantage Systems Enterprises Limited.

The note is due on demand with an interest rate of 5%.

As of June 30, 2012 and 2011, principal and interest payable to Advantage Systems Enterprise Limited, Inc.

related to this note is $11,448 and $10,948, respectively.

The note is not secured, due on demand with an interest rate of 5%.

As of June 30, 2013 and 2012, principal and interest payable to Advantage Systems Enterprise Limited related to this note is $11,948 and $11,448, respectively.

Advantage Systems Enterprise Limited has not demanded the repayment of the note.

(f) On October 15, 2009, the Company issued a $10,000 demand promissory note to Venture Capital International.

The note is due on demand with an interest rate of 5%.

The note is not secured, due on demand with an interest rate of 5%.

As of June 30, 2013 and 2012, principal and interest payable to Venture Capital International related to this note is $11,853 and $11,353, respectively.

(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%.

Venture Capital has not demanded the repayment of the note.

(g) On October 27, 2009, the Company issued a $7,000 demand promissory note to Venture Capital International.

The note is not secured, due on demand with an interest rate of 5%.

As of June 30, 2013 and 2012, principal and interest payable to Venture Capital International related to this note is $8,286 and $7,936, respectively.

Venture Capital has not demanded the repayment of the note.

(h) On November 9, 2009, the Company issued a $25,000 demand promissory note to Advantage Systems Enterprise Limited.

The note is due on demand with an interest rate of 5%.

The note is not secured, due on demand with an interest rate of 5%.

As of June 30, 2013 and 2012, principal and interest payable to Advantage Systems Enterprise Limited related to this note is $29,572 and $28,322, respectively.

Advantage Systems Enterprise Limited has not demanded the repayment of the note.

(i) On November 23, 2009, the Company issued a $5,000 demand promissory note to Venture Capital International.

The note is due on demand with an interest rate of 5%.

The note is not secured, due on demand with an interest rate of 5%.

As of June 30, 2013 and 2012, principal and interest payable to Venture Capital International related to this note is $5,900 and $5,650, respectively.

Venture Capital International has not demanded the repayment of the note.

(j) On March 31, 2010, the Company issued a $15,000 demand promissory note to Strategic Relations Consulting, Inc.

The note is due on demand with an interest rate of 5%.

The note is not secured, due on demand with an interest rate of 5%.

As of June 30, 2013 and 2012 principal and interest payable to Strategic Relations Consulting, Inc.

related to this note is $17,439 and $16,689, respectively.

Subsequent to June 30, 2013, Strategic Relations Consulting, Inc.

has agreed to convert the note to units of Gunner Gold’s stock that the Company acquired on September 20, 2013.

(k) On November 22, 2010, the Company issued a $7,000 demand promissory note to Summit Technologies Corporation, Inc.

The note is due on demand with an interest rate of 5%.

As of June 30, 2012 and 2011, principal and interest payable to Strategic Relations Consulting, Inc.

The note is not secured, due on demand with an interest rate of 5%.

As of June 30, 2013 and 2012, principal and interest payable to Summit Technologies Corporation, Inc.

related to this note is $2,411 and $2,311, respectively.

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

Summit Technologies Corporation, Inc.

has not demanded the repayment of the note.

(l) On July 29, 2010, the Company issued 8,300,000 common shares to Gold Exploration LLC, valued at $83,000 (or $0.01 per share) based upon the closing price of the Company’s stock on the date the agreement was executed, to partially repay $10,000 of principal on the promissory note held by Gold Exploration LLC initially issued to Global Mineral Resources Corporation.

6 unchanged sentences

As of June 30, 2013 and 2012, principal and interest payable to Gold Exploration LLC related to this note is $120,280 and $108,640, respectively.

This agreement required that Gold Exploration LLC perfect the transfer and send the documents to the Company.

The transfer was never made and a review of the BLM lists of claims disclosed that Gold Exploration LLC never owned the claims that they attempted to sell to the Company.

On June 2, 2011, Gold Exploration LLC requested to lift the Section 144 restrictive legends without a proper legal opinion and the legends were removed at the direction of David Janney.

On August 27, 2013, the Company demanded the cancellation of the promissory note and the return of the 8,300,000 common shares.

(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”).

2 unchanged sentences

The note is secured by the Hull Lode claim, the West Acre Hull tract, property held by David Janney, former officer, and 10,000,000 of the Company’s common shares currently held in escrow.

Proceeds from the note were used to purchase the Tarantula Mining Claim from Judgetown, LLC.

Proceed from the note was used to purchase Tarantula Mining Claim from Judgetown, LLC.

As of June 30, 2013 and 2012, the remaining principal owed was $250,000.

As of June 30, 2012, the Company has prepaid interest to Freedom Boat LLC of $7,500.

This note is presently in default but the Company is negotiating with the holder for an extension of this note.

(n) The Company entered into a convertible promissory note with Asher Enterprises, Inc.

on April 6, 2011 in the amount of $53,000.

The note was due and payable on January 9, 2012 with an interest rate of 8%.

The note is convertible into 53,127,506 common shares by the holder.

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%.

This note is presently in default but the Company is negotiating with the holder for an amendment of this note.

(n) On April 6, 2011, the Company entered into a demand promissory note with Linh B.

Nguyen in the amount of $25,000.

The note is not secured, due on demand with an interest rate of 5%.

As of June 30, 2013 and 2012, principal and interest payable to Linh B.

Ngnyen related to this note is $26,377 and $25,127, respectively.

(p) On December 27, 2011, the Company issued a $50,000 promissory note to Mr.

Nguyen related to this note is $27,627 and $26,377, respectively.

Nguyen has demanded the repayment of this note during the year ended June 30, 2013.

The note is currently in default.

(o) On December 27, 2011, the Company issued a $50,000 unsecured promissory note to Mr.

Charles Chapman.

1 unchanged sentence

Pursuant to the note agreement, Mr.

Chapman has the right to receive 500,000 shares of the Company’s common stock in lieu of interest payments.

Chapman has the right to receive 500,000 shares of the Company’s common stock in lieu of interest payment.

On December 28, 2011, the Company issued 500,000 shares valued at $4,000 in lieu of the interest.

1 unchanged sentence

Pursuant to the amendment, the Company agreed to issue an additional 500,000 common shares valued at $15,500 which was recorded as debt discount and fully amortized during fiscal year 2012.

As of June 30, 2012, the 500,000 common shares related to the March 19, 2012 amendment have not been issued and is recorded as stock payable of $15,500.

As of June 30, 2012, the 500,000 common shares related to the March 19, 2012 amendment was not issued and is recorded as stock payable of $15,500.

On May 16, 2012, the company entered into a second amendment to extend the loan to November 15, 2012.

1 unchanged sentence

As of June 30, 2012, the Company has issued 500,000 common shares valued at $11,000, within which, $7,700 is recorded as prepaid interest.

(q) On March 12, 2012, the Company issued a $75,000 convertible note to Mr.

During the year ended June 30, 2013, the Company issued the 500,000 common shares related to the March 19, 2012 amendment and an additional 100,000 common shares for one month interest which was valued at 1,950.

On October 9, 2013, Mr.

Chapman agreed to settle the $50,000 note and any unpaid interest with 55,000 units of Gunner Gold, LLC stock that the Company acquired on September 20, 2013.

(p) On March 12, 2012, the Company issued a $75,000 convertible note to Mr.

Leroy Steury.

4 unchanged sentences

On September 17, 2012, the Company entered into the second amendment to extend the note to December 17, 2012.

On November 27, 2012, Mr.

Steury converted unpaid principal and accrued interest of $79,696 to 7,500,000 shares of the Company’s common stock.

As of June 30, 2013 and 2012, principal and interest payable to Mr.

Steury related to this note was $0 and $77,780, respectively.

(q) On October 1, 2012, the Company entered into a Secured Convertible Promissory Note and Warrant Purchase Agreement with Tonaquint, Inc., a Utah corporation ("Tonaquint"), whereby the Company issued (i) a Secured Convertible Promissory Note of the Company in the principal amount of $1,660,000 with a conversion price of $0.05 per share and an annual interest rate of 8% and (ii) a warrant to purchase 158,953,080 shares of the Company’s common stock.

The warrant has an exercise price of $0.075 per share and can be exercised at any time within five years after October 1, 2012.

Tonaquint has the right to convert, subject to restrictions described in the promissory note, all or a portion of the outstanding amount of the promissory note that is eligible for conversion into shares of the Company’s common stock.

Buyer Mortgage Note 1 was due on the earlier of (1) 60 days following March 31, 2015, and (2) upon the Company’s filing of a registration statement pursuant to the Secured Convertible Promissory Note and Warrant Purchase Agreement.

Buyer Mortgage Note 2 was due on the earlier of (1) 60 days following March 31, 2015, and (2) if Tonaquint has been required to repay Buyer Mortgage Note 1, 5 trading date after the initial registration statement is declared effective.

Buyer Mortgage Note 3 was due on the earlier of (1) 60 days following March 31, 2015, and (2) if (i) the shares issued to Tonaquint to repay the Secured Convertible Promissory Note are freely saleable or covered by an effective registration statement (ii) Tonaquint has been required to repay Buyer Mortgage Note 2 and (ii) the Company has produced 200 ounces of gold with an average production of at least 1 gram per ton of processed material within 60 days after Tonaquint was required to pay Buyer Mortgage Note 2;

(iii) outstanding balance of the Secured Convertible Promissory Note payable to Tonaquint is less or equal to $1.3 million.

The $750,000 promissory note receivable from Tonaquit is due on the earlier of (1) 60 days following March 31, 2015, and (2) if (i) the shares issued to Tonaquint to repay the Secured Convertible Promissory Note are freely saleable or covered by an effective registration statement (ii) Tonaquint has been required to repay Buyer Mortgage Note 3 and (ii) the Company has produced 200 ounces of gold with an average production of at least 1 gram per ton of processed material, within 60 days after Tonaquint was requried to pay Buyer Mortgage Note 3;

(iii) outstanding balance of the Secured Convertible Promissory Note payable to Tonaquint is less or equal to $900,000.

The promissory note is due on April 1, 2015 and the interest is payable monthly.

In the event the Company elects to prepay all or any portion of the outstanding balance, the Company shall pay Tonaquint 135% of the amount the Company elects to prepay .

The total amount to be funded is $1,500,000, representing the principal amount of $1,660,000 less an original issuance discount of $150,000 and the payment of $10,000 to cover Tonaquint’s fees.

The shares of common stock underlying the Secured Convertible Promissory Note and Warrant were to be registered by a registration statement pursuant to the terms and conditions of a registration rights agreement.

The registration statement has been withdrawn with Tonaquint’s consent.

Tonaquint initially funded the Company $150,000 in cash and issued three Buyer Mortgage Notes, in the principal amount of $50,000, $150,000, and $400,000 and a promissory note in the amount of $750,000 to the Company pursuant to the agreement.

The Buyer Mortgage Notes are secured by certain real property owned by Tonaquint located in Cook County, Illinois.

The Buyer Mortgage Notes and the $750,000 promissory note carry interest of 5% per annum.

Pursuant to the purchase agreement, the Company reserved 75,000,000 shares of common stock.

The Company has agreed not to enter into any equity line of credit or financing arrangement or other transaction that involves issuing securities that are convertible into common stock (including without limitation selling convertible debt, warrants or convertible preferred stock), or otherwise issue common stock (a) with conversion, exercise or similar mechanics or reset provisions that vary according to the market price of the common stock without a floor at or higher than $0.01 or (b)at a fixed price which is lower than $0.01, without the prior written consent of Tonaquint.

The Company agrees not to declare or make any dividend or other distributions of its assets.

The Company’s default status on the Freedom Boat note existed prior to and during negotiations on the transaction with Tonaquint.

As of June 30, 2013, the Company has received net proceeds of $307,514 from Tonaquint.

Pursuant to the purchase agreement, warrants to purchase 22,106,057 shares of the Company’s common stock were issued.

The Company determined the estimated fair value of the warrants was $1,146,845.

$1,146,845 of the proceeds were allocated to the warrants.

The promissory note included a beneficial conversion feature of $363,155.

The total discount of $1,660,000, including the original issuance discount of $150,000, is being amortized over the life of the promissory note commencing upon the receipt of the funding.

Beginning on March 30, 2013, and each month thereafter, the Company shall pay to Tonaquint principal payments of $69,167 plus the sum of any accrued and unpaid interest due on such date by converting such amount at a conversion price equals to the lower of the (i) conversion price in effect ($0.05 per share if no anti-dilution adjustment) (ii) 65% of the arithmetic average of the three lowest volume-weighted average prices of the stock price during the 20 consecutive trading day period immediately preceding the date of the payment date;

provided, however, the Company may, at its option as described in the agreement, pay all or any part of such installment amount by redeeming such installment amount in cash or by any combination of a Company conversion and a Company redemption.

At June 30, 2013, the Company offset the notes receivable from Tonaquint of $1,202,486 with notes payable to Tonaquint of $1,651,671 as permitted under the agreement and had interest receivable from Tonaquint of $43,770.

During the year ended June 30, 2013, the Company recorded interest income of $43,770 which was offset with interest expense of $101,752 related to the agreement with Tonaquint.

During the year ended June 30, 2013, the Company issued Tonaquint 34,430,262 common shares to repay interest of $101,752 and principal of $8,329.

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

NOTE 6 - EQUITY

On March 31, 2011, the Company increased the authorized common shares to 500,000,000.

Preferred Stock

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Year ended June 30, 2013

In the year ended June 30, 2012, the Company issued 55,904,764 common shares for $559,000 in cash.

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

During the year ended June 30, 2013, the Company also granted 1,000,000 shares valued at $20,000 to one of the directors as a director fee and 10,000,000 shares valued at $200,000 to its Chief Executive Officer as compensation.

These shares have not been issued and the value was recorded as stock payable at June 30, 2013.

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

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

On January 29, 2013, Charles Chapman was issued 300,000 common shares each, 600,000 shares in the aggregate, valued at $17,450, for interest payable on a note.

Within the 600,000 shares, 500,000 shares were for interest expense in fiscal year 2012 and the value of $15,500 was recorded as stock payable as of June 30, 2012.

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

Year ended June 30, 2012

During the year ended June 30, 2012, the Company issued 55,904,764 common shares for $559,000 in cash.

Within the 55,904,764 shares issued, 7,000,000 shares were issued to an investor with a right to sell the shares back to the Company at an interest rate of 12% after April 11, 2012.

On April 12, 2012, the holder waived the right to sell the 7,000,000 shares back.

On April 12, 2012, the holder waived the right to sell 7,000,000 shares back.

As consideration, the Company issued the investor warrants to purchase 2,500,000 shares of the Company’s common stock at $0.02 per share.

The warrants expire on October 11, 2013 and have a fair value of $66,330 on the grant date.

Proceeds of $56,000 from this issuance originally recorded as refundable subscriptions have been reclassified to additional paid-in capital.

Proceeds of $56,000 from this issuance originally recorded as refundable subscription has been reclassified to additional paid-in capital.

In June, 2012, the Company received $10,000 for a common stock subscription.

Those shares have not been issued and the cash received is recorded under common stock payable as of June 30, 2012.

On September 23, 2011, the Company issued 750,000 shares of common stock valued at $7,500 to settle a payable to purchase equipment valued at $2,000.

The Company recorded a $5,500 loss on settlement of accounts payable related to this transaction.

Those shares had not been issued as of June 30, 2012 and the cash received was recorded under common stock payable as of June 30, 2012.

The 1,000,000 common shares were issued during the year ended June 30, 2013.

On September 23, 2011, the Company issued 750,000 shares of common stock valued at $7,500 to settle payable to purchase equipment valued at $2,000.

The Company recorded $5,500 loss on conversion of accounts payable related to this transaction.

During September 2011, as a result of the resignation of David Janney, former Chief Executive Officer and Chief Financial Officer of the Company, Mr.

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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 increased by $19,327 to write off the accrued compensation payable to Mr.

Additional paid-in capital was also decreased by $19,327 to write off the accrued compensation payable to Mr.

Janney initially recorded in prior periods.

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

During year ended June 30, 2012, the Company issued 1,000,000 shares of common stock for interest payments on a note held by Mr.

On December 28, 2011, the Company issued 1,000,000 shares of common stock for interest payment to a note held by Mr.

Charles Chapman.

The shares were valued at $15,000.

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

On March 19, 2012, the Company agreed to issue 500,000 shares to a note holder pursuant to an amendment to a note agreement.

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

On March 19, 2012, the Company agreed to issue 500,000 common shares to a note holder pursuant to an amendment to a note agreement.

See Note 4 (p).

The shares were valued at $15,500 based on the grant date market price of the stock.

Those shares have not been issued and are recorded under common stock payable as of June 30, 2012.

Those shares have been issued as of June 30, 2013

On October 25, 2011 and November 4, 2011, the Company granted its interim CFO, Mr.

Peng Foo and a investor relations consultant, Mr.

Jack Chow, 1,000,000 and 3,000,000 shares, respectively.

Those shares, valued at $42,700, have not been issued and are recorded as common stock payable as of June 30, 2012.

On May 8, 2012, the Company entered into an employment agreement with Mr.

Peng Foo and its consultant, Mr.

Jack Chow, 1,000,000 and 3,000,000 common shares, respectively.

Those shares, valued at $42,700, have not been issued and are recorded as disputed payable as of June 30, 2012 and 2013.

On May 8, 2012, the Company entered into a consulting agreement with Mr.

Michael Stallings where the Company agreed to issue 500,000 shares of common stock.

The 500,000 shares of common stock were valued at $12,500 based on the market price of grant date and were recorded as stock payable as of June 30, 2012.

Year ended June 30, 2011

On July 29, 2010, the Company issued 8,300,000 common shares valued at $83,000 (or $0.01 per share) based upon the closing price of the Company’s stock on the date the agreement was executed to Gold Exploration LLC towards a $10,000 payment on the promissory note for the Global Mineral Resources Corporation mining claim acquisition note held by Gold Exploration LLC.

This payment of common stock reduced the outstanding balance with Gold Exploration LLC to $97,000 effective September 16, 2010, and the Company recognized a loss on debt conversion of $73,000.

On August 7, 2010, the Company purchased a 160 acre placer mining claim from Global Mineral Resources Corporation.

As partial consideration for the transaction, the Company transferred 41,700,000 restricted common shares valued at $458,700 or $0.011 per share based upon the closing price of the Company’s stock on the date the transaction was executed.

On November 22, 2010, the Company granted 7,220,000 common shares valued at $54,150 (or $0.0075 per share) based on the market price of the Company’s common stock on the date of grant to Summit Technology Corporation, Inc.

in satisfaction of outstanding debt.

The conversion of debt reduced the corresponding notes payable and accrued interest payable by $28,880, and the Company recognized a loss on debt conversion of $25,270.

On February 7, 2011, the Company granted 5,000,000 common shares valued at $48,387 to Freedom Boat as compensation for modification of their note payable with the company.

This note was discount by $48,387 based on the fair value of common stock issued as part of the note.

As of June 30, 2011, $18,957 of this discount had been amortized over the remaining life of the note.

On February 17, 2011, the Company granted 5,000,000 common shares valued at $62,500 (or $0.0125 per share) based on the market price of the Company’s common stock on the date of grant to Pop Holdings, Inc.

in satisfaction of outstanding debt.

The conversion of debt reduced the note payable and accrued interest payable by $39,000 and the Company recognized a loss on debt conversion of $23,500.

On May 9, 2011, the Company granted 4,780,000 common shares valued at $42,064 (or $0.0088 per share) based on the market price of the Company’s common stock on the date of grant to Michael Cao in satisfaction of outstanding accounts payable.

The share issuance satisfied $14,550 in accounts payables, and the Company recognized a loss on settlement of accounts payable of $27,514.

In the year ended June 30, 2011, the Company issued 34,000,000 common shares at a fair value quoted market price on the date of grant for $175,000 in cash.

In the year ended June 30, 2011, the Company issued 3,777,778 common shares at a fair value quoted market price on the date of grant for $36,372 in the purchase of fixed assets.

In the year ended June 30, 2011, the Company issued 10,800,000 common shares for services at a fair value quoted market price on the date of grant for $88,940 and expensed that as stock issued for services.

In addition to the shares issued for services as noted above, the Company recorded non-cash stock compensation totaling $985,100 for 86,000,000 shares originally thought to have been issued related to conversion of debt.

In October 2011, 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 the new Management and independent legal counsel:

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.

January 24, 2011;

Tucker Financial Services, Inc.

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.

February 22, 2011:

Nicolas Sprung of Tucker Financial Services, Inc.

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.

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.

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.

June 28, 2011:

Scott Geisler received 17,000,000 common shares alleged to be exempt from registration under Rule 144 of the Securities Act of 1933 (although new management believes that such exemption was not available) for the conversion of $2,900 of debt.

The 500,000 shares of common stock were valued at $12,500 based on the market price of grant date and were recorded as stock payable as of June 30, 2012 and 2013.

NOTE 7 – STOCK-BASED COMPENSATION

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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 year ended June 30, 2012 and 2011 is presented below:

A summary of warrant activity for the years ended June 30, 2013 and 2012 is presented below:

Outstanding Options

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June 30, 2012

Forfeitures/Cancellation

June 30, 2013

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No discounts were applied to the valuation determined by the Black Scholes option-pricing model.

On November 4, 2011, the Company granted Mr.

Jack Chow, consultant, 3,000,000 warrants to purchase common stock of the Company at a price of $0.01 per share.

The warrants are fully vested, have a four-year expected life, and were valued at $29,814.

On August 23, 2011 and June 24, 2011, the Company granted Mr.

Michael Cao, consultant, 6,000,000 and 6,000,000 warrants, respectively, to purchase common stock of the Company at a price of $0.01 per share.

The warrants are fully vested, have a five-year expected life, and were valued at $42,600 and $42,599, respectively.

On May 8, 2012, the Company granted Mr.

Peter Cao, a member of the Company’s Board of Directors, 8,000,000 options to purchase common stock of the Company at a price of $0.025 per share.

The warrants are fully vested, have a five-year expected life, and were valued at $198,519.

The following inputs and assumptions were used in the option-pricing model:

Fiscal Year 2012

The options have a five-year expected life, and were valued at $198,519, within which $132,348 was recorded during the year ended June 30, 2013.

On October 1, 2012, the Company cancelled the 8,000,000 options and concurrently, agreed to issue 8,000,000 shares of the Company’s common stock to Mr.

No additional compensation expense was recorded because the value of the options cancelled on October 1, 2012 was the same as the value of the common stock granted based on the fair market value on grant date.

The following inputs and assumptions were used in the Black-Scholes option-pricing model:

Fiscal year 2012

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Expected dividend yield

238.96%~273.09

Weighted average risk free interest rate

Weighted average expected life (in years)

On November 4, 2011, the Company granted Mr.

Jack Chow, consultant, 3,000,000 warrants to purchase common stock of the Company at a price of $0.01 per share.

The warrants are fully vested, have a four-year expected life, and were valued at $29,814.

On August 23, 2011 and June 24, 2011, the Company granted Mr.

Michael Cao, consultant, 6,000,000 and 6,000,000 warrants, respectively, to purchase common stock of the Company at a price of $0.01 per share.

The warrants are fully vested, have a five-year expected life, and were valued at $42,600 and $42,599, respectively.

On March 26, 2013, Michael Cao forfeited his options to purchase 12,000,000 shares of the Company’s common stock.

NOTE 8 - INCOME TAXES

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Temporary differences between taxable income reported for financial reporting purposes and income tax purposes are insignificant.

At June 30, 2012, the Company’s had net operating losses of approximately $4,141,107 which expire, if unused, in various years through 2029.

Utilization of the net operation loss carry-forwards could be subject to a substantial annual limitation due to the ownership change limitations provided by the Internal Revenue Code.

The Company fully reserved its deferred tax assets because, in the opinion of management, it is more likely than not that the benefits will not be realized based upon the earning history of the Company.

At June 30, 2013, the Company’s had net operating losses approximate $5,262,599 which expire, if unused, in various years through 2030.

Utilization of the net operation loss carry-forwards could be subject to a substantial annual limitation due to the ownership change limitations provided by the Internal Revenue Code of 1986 of United States, as amended.

The Company fully reserved its deferred tax assets because in the opinion of management, based upon the earning history of the Company;

it is more likely than not that the benefits will not be realized.

The valuation allowance increased $135,326 for the year ended June 30, 2013.

The provision (benefit) for income taxes from continued operations for the year ended June 30, 2012 and 2011 consist of the following:

June 30, 2012

June 30, 2011

Valuation allowance

Provision (benefit) for income taxes, net

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

12 unchanged sentences

Deferred income tax asset

NOTE 8 – RELATED PARTY TRANSACTIONS

NOTE 9 – RELATED PARTY

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

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

The director resigned on July 20, 2012.

NOTE 9 – COMMITMENTS AND CONTINGENCIES

During the year ended June 30, 2012, the Company incurred fees totaled $37,725 to Auric Resources International, Inc., a company controlled by a former director.

The director resigned on June 20, 2012.

NOTE 10 – COMMITMENT AND CONTINGENCIES

The Company believes that through a fraudulent scheme by former management, 86,000,000 shares of our common stock were improperly issued.

The Company is in the process of seeking a legal remedy to this issue however, if the Company is not successful in its efforts to cancel the shares, the stock value could be improperly diminished because of the dilution created by this fraudulent scheme to the detriment of the shareholders.

The Company will bring an action in the appropriate court against the original recipients of the shares and the former CEO and to request an order to cancel the shares.

Securities issued in violation of section 5 are subject to rescission under section 12(a) (l) of the Act.

Sections 12(a) (1) of the Securities Act and Section 5 allow purchasers to sue sellers for offering or selling a non-exempt security without registering it.

As long as the purchaser can prove a direct link between the purchaser and the seller and the purchaser may obtain rescission with interest or damages if the investor sold his securities for less than he purchased them.

The Company did not receive any consideration for the improper sale of the shares and will pursue all legal remedies available to correct this issue including but not limited to bringing an action in federal court to cancel the shares and for damages sustained by the Company.

However, if the Company is not successful the stock value could be improperly diminished because of the dilution created by this fraudulent scheme.

The Company believes that the former CEO in concert with associates and acting outside his authority defrauded the Company.

The legitimate purchasers of the shares could have an action against the seller who knew the shares were not registered or exempt from registration.

The Company was not a party to this fraudulent scheme and therefore believes rescission is not available to the Company.

The damage sustained by the Company could be at least $985,100, which is the amount that the Company would have realized if the shares had been sold pursuant to a registration statement or as restricted shares to legitimate buyers at the time of this incident.

The Company has classified $985,100 as common stocks subject to rescission.

On May 8, 2012, the Company entered into an employment contract with Mr.

6 unchanged sentences

After six months of Mr.

Cao’s employment with the Company, additional options to purchase 4,000,000 shares at $0.025 per share will vest.

The 8,000,000 options were valued at $198,519, which is being expensed over the vesting periods.

Cao’s employment with the Company (November 8, 2012), additional options to purchase 4,000,000 shares at $0.025 per share have vested.

The 8,000,000 options were valued at $198,519, which is expensed over the vesting periods.

On October 1, 2012, Mr.

Cao entered into a new employment agreement with the Company to replace the agreement dated May 8, 2012.

The October 1, 2012 agreement states the following:

(1) Starting October 1, 2012, the Company will compensate Mr.

Cao $4,000 monthly;

(2) 8,000,000 shares of common stock were granted immediately and valued at $200,000 based on the market price at October 1, 2012.

The stock has not been issued and was recorded as stock payable as of June 30, 2013.

(3) Salary will increase as the Company’s monthly production hits the operational milestones as follows:

Production of 200 ounces:

salary of $5,000 per month

Production of 400 ounces:

salary of $6,000 per month

Production of 600 ounces:

salary of $7,000 per month

Production of 800 ounces:

salary of $8,000 per month

Production of 1,000 ounces:

salary of $9,000 per month

Production of 1,200 ounces:

salary of $10,000 per month

At production of 1,200 ounces per month, another 4,000,000 shares will be granted.

Cao will be eligible for bonuses based on a combination of individual performance and company performance which will be determined by the CEO and Board of Directors.

On June 19, 2012, the Board of Directors appointed Mr.

Michael Stojsavljevich as the new Chief Executive Officer, secretary and a member of the Board of Directors.

Stojsavljevich would receive $5,500 for the first two months and $11,000 per month from the third month of his employment.

Stojsavljevich is entitled to 2,500,000 shares of common stock quarterly from July 1, 2012 and every quarter thereafter to a total of 10,000,000 shares.

On August 1, 2012, Mr.

Stojsavljevich entered into a new employment agreement with the Company to replace the agreement dated June 19, 2012 as follows:

(1) Starting August 1, 2012, the Company will compensate Mr.

Stojsavljevich at $5,500 monthly salary;

(2) 10,000,000 shares of common stock were granted immediately and valued at $200,000 based on the market price at August 1, 2012.

On October 30, 2012, Mr.

Stojsavljevich entered into an amendment to the employment agreement to say that the term to issue 2,500,000 shares of common stock quarterly from July 1, 2012 and every quarter thereafter to a total of 10,000,000 shares stated in the June 19, 2012 agreement is replaced.

(3) Salary will increase as the Company monthly production achieves operational milestones as described below:

Production of 200 ounces:

salary of $6,500 per month

Production of 400 ounces:

salary of 7,500 per month

Production of 600 ounces:

salary of $8,500 per month

Production of 800 ounces:

salary of $9,500 per month

Production of 1,000 ounces:

salary of $10,500 per month

Production of 1,200 ounces:

salary of 11,500 per month

At a monthly production of 1,200 ounces per month, another 4,000,000 shares will be granted.

Stojsavljevich will be eligible for bonuses based on a combination of individual performance and company performance which will be determined by the Board of Directors.

On May 10, 2012, the Company entered into a two-year employment contract with Mr.

Scott Geisler, Chief Executive Officer.

Scott Geisler, Chief Executive Officer at that time.

The agreement allows the immediate accrual of unpaid salary from August 29, 2011 at $100,000 per year.

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Options for 8,500,000 common shares at an exercise price of $0.01 per share vested immediately.

Additional options to purchase 8,500,000 common shares at an exercise price of $0.01 per share will vest in August 2012.

Additional options to purchase 8,500,000 common shares at an exercise price of $0.01 per share vested in August 2012.

The 17,000,000 options are valued at $507,862.

These options have a term of 5 years and could be exercised on a cashless basis.

On June 2, 2012, the Company entered into a mutual release agreement with Mr.

That mutual release agreement superseded the employment agreement dated May 10, 2012.

Pursuant to the mutual release agreement, Mr.

Geisler would receive $75,000 in the next 25 months commencing July 15, 2012, and 7,500,000 shares of the Company’s common stock.

These options have a term of 5 years and can be exercised on a cashless basis.

On June 8, 2012, the Company entered into a Settlement and Mutual Release Agreement with Mr.

That Settlement and Mutual Release Agreement superseded the employment agreement dated May 10, 2012.

Pursuant to the Settlement and Mutual Release Agreement, Mr.

Geisler would receive 7,500,000 shares of the Company’s common stock and $75,000 in the next 25 months commencing July 15, 2012.

On June 1, 2012, Mr.

Geisler resigned as Chief Executive Officer of the Company.

The Company disputes both agreements as all information was not fully disclosed to the Board of Directors and was negotiated in bad faith.

As of June 30, 2012, a disputed payable of $221,250 is recorded related to this mutual release agreement.

On June 19, 2012, the Board of Directors appointed Mr.

Michael Stojsavljevich as the new Chief Executive Officer, secretary and a member of the Board of Directors.

Stojsavljevich will receive $5,500 for the first two months and $11,000 per month from the third month of his employment.

Stojsavljevich is entitled to 2,500,000 shares of common stock quarterly from July 1, 2012 and every quarter thereafter to a total of 10,000,000 shares.

On October 30, 2012, management learned that former President and CEO, Mr.

Scott Geisler, filed suit against the Company on September 20, 2012, in the Circuit Court of the Sixth Judicial District in the State of Florida.

The Company has not yet been served with the summons and complaint or filed an answer.

Geisler asserts that the Company is in default with respect to payments under a Settlement and Mutual Release Agreement entered into upon his resignation as an officer and director of the Company and effective June 8, 2012.

Geisler claims monetary damages "in excess of $15,000," attorneys' fees, court costs and seeks the issuance of 7,500,000 shares of common stock that is provided for under the Settlement and Mutual Release Agreement.

We have engaged legal counsel to represent the Company in this dispute and counsel has identified defenses to the claims and setoffs.

We are optimistic that a settlement of the dispute will be reached in the near future without having a materially adverse effect on our financial condition or results of operations.

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

The Company entered into a purchase agreement to purchase mining claims from Gold Exploration LLC in the amount of $99,000 on June 1, 2008.

The agreement requires the Company to make royalty payments equal to 2% of the Net Smelter Returns (“NSR”) per year.

The Company had no Net Smelter Returns for the year ended June 30, 2012 and no royalties were paid.

The Company had no NSR for the years ended June 30, 2013 and 2012 and no royalties have been paid.

The agreement does not have any commitment dates of when production is to begin.

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 the fiscal year ended June 30, 2011.

No additional payments that were scheduled have been paid.

The Company has settled this agreement and paid the outstanding legal fees of $3,170 during the fiscal year ended June 30, 2012.

This agreement is in a legal dispute as the Company believes that Gold Exploration LLC never owned the mining claims that should have been transferred to the Company.

On February 7, 2011, the Company entered into a $250,000 promissory note agreement with Freedom Boat which bears interest rate at 12%.

The agreement includes a royalty payment which includes 5% in royalty of its gross profits from gold extraction form the Tarantula Placer Mine and 5% royalty payment from Hull Placer Mine.

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 as compensation.

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:

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:

December 9, 2010:

Tucker Financial Services, Inc.

January 24, 2011;

Tucker Financial Services, Inc.

February 16, 2011:

February 22, 2011:

Nicolas Sprung of Tucker Financial Services, Inc.

April 18, 2011:

Vanilla Sky, S.A.

June 28, 2011:

Scott Geisler received 17,000,000 common shares alleged to be exempt from registration under Rule 144 of the Securities Act of 1933 (although Mr.

Geisler had no knowledge of the documentation provided by John Thomas was false) for the conversion of $2,900 of debt.

On February 23, 2012, the Company cancelled the common shares and reissued based upon the original pricing of the shares.

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

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 10.

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

Current management has negotiated the cash payment of this note and has cancelled the 53,000,000 common shares held in escrow.

In September 2011, David Janney created Board of Directors minutes dated June 15, 2011 for shares issued to employees of the company and included 1,000,000 shares issued to Frank Baumgartner.

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 February 7, 2011, David Janney entered an agreement with Amazon Holding LLC to pay a finder’s fee for raising $250,000 in the acquisition of mining property.

On January 19, 2012, Amazon Holding LLC demanded the Company to make the payment.

The dispute is still pending but the Company believes that it is not possible that Amazon Holding LLC will prevail if a suit is filed against the Company according to this agreement.

NOTE 10– LOSS ON SETTLEMENT OF LITIGATION

The agreement includes a royalty payment which includes 5% in royalty of its gross profits from gold extraction from the Hull Lode Placer Claim and 5% royalty payment from Hull Placer Mine when and if production occurs.

There is currently no production.

On February 7, 2011, David Janney, former officer, entered an agreement with Amazon Holding LLC to pay a finder’s fee for raising $250,000 in the acquisition of mining property.

On January 19, 2012, Amazon Holding LLC demanded the Company make the payment.

The dispute is still pending but the Company believes that it is not likely that Amazon Holding LLC will prevail if a suit is filed against the Company related to this agreement.

NOTE 11– GAIN (LOSS) ON SETTLEMENT OF LITIGATION

On February 26, 2012, the Company entered into a settlement agreement with David Janney (our former CEO/CFO) for his actions related to wrongfully issued common stock of the Company, among many other things.

The settlement agreement includes the following terms:

The Company agreed to issue 5 million shares of restricted Bonanza Goldfields common stock to Mr.

The Company agreed to issue 5 million restricted shares of the Company’s common stock to Mr.

Janney as a form of compensation.

6 unchanged sentences

Janney's return of 20,000,000 shares to the treasury on August 29, 2011.

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

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

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

The Company recorded loss of $59,000 on this settlement during the year ended June 30, 2012.

During the year ended June 30, 2012, the Company learned that the title of Midas Placer Claim which the Company purchased from Global Minerals, Inc., a company controlled by Mr.

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

During the year ended June 30, 2012, the Company learned that the title of the Midas Placer Claim which the Company purchased from Global Minerals, Inc., a company controlled by Mr.

David Janney, was never transferred to the Company.

As such, the Company is currently in dispute with Mr.

NOTE 11 – SUBSEQUENT EVENTS

On July 27, 2012, the Company issued 7,500,000 common shares to Scott Geisler in accordance with his mutual release agreement with the Company.

The shares were valued at $146,250.

The shares issued are currently held in escrow and are not considered outstanding.

On July 31, 2012, the Company appointed Baoky Vu as a member of the Board of Directors and granted 1,000,000 shares of the Company’s common stock to Mr.

Vu as a bonus, valued at $20,000.

On September 13, 2012, the Company entered into an agreement with Choice Capital Group, Inc.

for Choice Capital Group to act as a transaction facilitator to acquire certain proprietary extraction technology.

According the agreement, the Company shall escrow 20,000,000 common shares during the testing period of this technology.

On September 18, 2012, the Company entered into a mining claims lease agreement with Judgetown LLC (“Judgetown”) to lease 130.76 acres land located in Yavapai, Arizona for 2 years .

Under the lease agreement, the Company has the option to purchase the mining claims for $ 1,500,000, with all lease payments over the 2-year lease subtracted from the $1,500,000.

As initial consideration for the lease, the Company shall pay to Judgetown $100,000 within ninety days after October 15, 2012.

After the first lease payments, the Company needs to pay Judgetown $30,000 every 3 months for the rest of the lease term.

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

David Janney was allowed to retain 2,500,000 shares as part of a settlement in litigation with the Company.

The Company recorded the par value of the 3,670,000 shares against additional paid-in capital.

In the settlement agreement dated February 19, 2013, David Janney also agreed to forfeit his right to receive 2,500,000 common shares based on the settlement agreement dated February 26, 2012.

The Company recorded a gain on the settlement of litigation for the year ended June 30, 2013 of $29,500 and eliminated the corresponding disputed payable previously recorded.

NOTE 12 – SUBEQUENT EVENTS

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

On September 20, 2013, the Company entered into an Amended and Restated Asset Purchase Agreement with Gunner Gold, LLC.

Pursuant to the terms of the Amended and Restated Asset Purchase Agreement, Gunner Gold, LLC purchased certain assets and assumed certain liabilities from the Company for 3,300,000 units of Gunner Gold, LLC stock.

Assets sold to Gunner Gold LLC includes 1) Mining equipment and materials;

2) Right to conduct mining operations on the Company’s BLM properties for 7 years with the option to acquire the mineral rights for 700,000 additional units of Gunner Gold, LLC’s stock.

The Company will receive a 5% of the net proceeds, after the payment of all maintenance costs, earned by Gunner Gold from the mining operation on BLM properties.

3) Right to conduct mining operations on the Company’s Hull Lode Mining Claim with a monthly payment of $2,500.

Liabilities assumed by the Company includes 1) lease payments to Judgetown LLC pursuant to a lease agreement dated September 30, 2012 (See Note 4);

2) $275,000 note payable to Tonaquint;

3) $162,000 of accrued liabilities and accounts payable.

The Company received $307,500 at the closing, $275,000 of which was used to satisfy the Company’s entire obligation to Tonaquint Inc.

under the Secured Convertible Promissory Note and Warrant Purchase Agreement entered o n October 1, 2012 and the remaining $32,500 was used to pay other obligations.

The Secured Convertible Promissory Note and Warrant Purchase Agreement was terminated entirely after this payment.

The Company is currently evaluating the accounting impact of the agreement with Gunner Gold LLC.

NOTE 13 – RESTATEMENT

During the year ended June 30, 2011, the Company issued 86,000,000 shares to several parties.

The Company believes those shares were improperly issued by former management and is subject to rescission.

Shares that are subject to rescission or redemption requirements that are outside of the control of the Company are classified outside of permanent equity until they are no longer subject to rescission or redemption.

Accordingly, the Company has reclassified $985,100 as common stock subject to rescission.

The $985,100 was calculated at the trading price on the date those shares were issued.

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

1 unchanged sentence

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 8. Financial Statements and Supplementary Data