I just started reviewing their filing and wow, what a mess the company is in.
The prior CEO/CFO entered another problematic agreement with Amazon Holding LLC to pay a finder’s fee for raising $250,000 in the acquisition of mining property. These finder’s fees were 100% of the entire transaction with a 24% interest rate and current management is of the belief that David Janney was to receive 50% of those payments. Management disputes this agreement with Amazon Holdings, LLC.
On February 26, 2012, the Company entered into a settlement agreement with David Janney (our former CEO/CFO) for his actions outlined above related to wrongfully issued common stock of the Company, among many other things. The settlement agreement includes the following terms:
a.
The Company agreed to issue 5 million shares of restricted Bonanza Goldfields common stock to Mr. Janney as a form of compensation. The shares will be paid in two tranches. The first 2,500,000 shares should be issued upon the execution of the settlement and is issued on March 19, 2012. The second 2,500,000 shares were to be issued six months from the execution date of the settlement but have not been issued.
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b.
The funds held in escrow by Christine Wright at the Wright Law Firm, P.A. on behalf of Freedom Boat, LLC for a loan under Mr. Janney’s name will be considered payment in full for Mr. Janney's return of 20,000,000 shares to the treasury on August 29, 2011.
c.
Mr. Janney agreed not to sell any more than 1,000,000 shares of his personal holdings of Bonanza Goldfields common stock in the open market in any thirty-day period.
Mr. Janney agreed to return to the Company all of the Company’s property in his possession or in the possession of his family or agents including without limitation Bonanza's files and all documentation (and all copies thereof) dealing with the finances, operations and activities of the Company, its clients, employees or suppliers.
The Company recorded a loss of $59,000 on this settlement in the quarter ended December 31, 2011 as a recognized subsequent event.
Management is in the process of assessing these agreements and settlement with David Janney and learned that the title of the Midas Claim that the Company purchased from David Janney’s company, Global Minerals, Inc. never transferred to the Company. Since the title was never transferred, the transaction is being investigated and the Company is determining the validity of the David Janney settlement agreement.
I am guessing it's going to cost a few bucks in legal and accounting fees to untangle all this.
