Bonanza Oil & Gas, Inc.(fka BGOI)

[tinker13]

What about this? If I am reading it right Triumph bought the $750,000 secured note and had the option of converting it to common shares at the price of .005 per share. This makes Triumph holding 150 million shares. BGOI agreed to this to clear the debt to stop from having to file bankruptcy. Hence why the O/S was increased to over a billion shares- to allow the pay off of Triumph in shares and to allow themselves to be able to dilute also. Of course Triumph would sell their shares on the open market- try and make their money back someway as it appears BGOI is financially unstable considering they are trying to prevent bankruptcy....all JMO of course. Anyway here is the link http://ih.advfn.com/p.php?pid=nmona&cb=1270324818&article=40650392&symbol=NB%5EBGOI

In January 2008, the Company issued 14% Senior Secured Promissory Notes and Security to accredited investors for an aggregate principal amount of $800,000 (the “January 2008 Notes”). One accredited investor held $750,000 (the “Secured Note”) of the January 2008 Notes (the “Secured Investor). The January 2008 Notes matured on January 31, 2009, with interest payable on a monthly basis. The Company’s obligations under the January 2008 Notes are secured by the Company’s interest in three prospect areas located in Borden, Hidalgo and Brazoria counties of Texas. In addition, in May 2008, the Company entered into a Securities Purchase Agreement with the Secured Investor providing for the sale by the Company of an 8% convertible note in the principal amount of $750,000 (the “May 2008 Convertible Note” and collectively with the Secured Note, the “Restructured Notes”). The May 2008 Convertible Note matured on May 14, 2009, and interest is payable on a quarterly basis. The May 2008 Convertible Note is unsecured, however, in the event that the Company grants a secured interest in its assets in connection with any future financing, then the holder of the May 2008 Convertible Note will be entitled to a pari passu interest in such secured interest. The May 2008 Convertible Note was convertible into the Company’s common stock, at a conversion price of $0.3742 per common share, as adjusted, and is subject to normal and customary anti-dilution provisions. The Company has been advised by Triumph Small Cap Fund, Inc. (“Triumph”) and the Secured Investor that Triumph has purchased the Restructured Notes from the Secured Investor. In order to induce Triumph to convert the Restructured Notes into shares of common stock and, in turn, to reduce the Company’s debt and avoid potentially filing for bankruptcy, the Company entered into a Letter Agreement with Triumph on December 2, 2009, pursuant to which the Restructured Notes were amended providing that Triumph may from time to time convert all or any part of the outstanding and unpaid principal amount of the Restructured Notes into shares of common stock.


The Restructured Notes are convertible into common stock, upon the Company increasing its authorized shares of common stock to 1,500,000,000, at Triumph's option, at the lesser of (i) $0.005 or (ii) a 50% discount to the average of the three lowest trading prices of the common stock during the 20 trading day period prior to conversion. Triumph has agreed to restrict its ability to convert the Restructured Notes and receive shares of common stock such that the number of shares of common stock held by it in the aggregate and its affiliates after such conversion or exercise does not exceed 4.99% of the then issued and outstanding shares of common stock.


The Company will continue to reserve and keep available at all times, free of preemptive rights, all shares of common stock available enabling the Company to issue the shares of common stock upon conversion of the Restructured Notes. Upon increasing the authorized shares of common stock to 1,500,000,000, the Company will reserve a sufficient number of shares of common stock for the purpose of enabling the Company to issue the shares of common stock.