BRIGHTLANE CORP. - FORM 10-Q

Attached files

file	filename
EX-32.1 - CERTIFICATION - BRIGHTLANE CORP.	f10q0311ex32i_bonanza.htm
EX-31.1 - CERTIFICATION - BRIGHTLANE CORP.	f10q0311ex31i_bonanza.htm
EX-10.2 - TERMINATION AGREEMENT - BRIGHTLANE CORP.	f10q0311ex10ii_bonanza.htm
EX-31.2 - CERTIFICATION - BRIGHTLANE CORP.	f10q0311ex31ii_bonanza.htm
EX-10.3 - ASSIGNMENT AND ASSUMPTION AGREEMENT - BRIGHTLANE CORP.	f10q0311ex10iii_bonanza.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2011

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _________to ________

Commission File Number: 000-53943

BONANZA GOLD CORP.

(Exact name of registrant as specified in its charter)

Nevada		20-8560967
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

2415 East Camelback Road, Suite 700

Phoenix, AZ 85016

(Address of principal executive offices) (Zip Code)

(602) 553-1190

(Registrant’s telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes x No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes o No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	o	Accelerated filer	o
Non-accelerated filer	o	Smaller reporting company	x
(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes o No x

As of May 23, 2011, the registrant had 1,248,005 shares of common stock outstanding.

TABLE OF CONTENTS

	Page
PART I
Item 1. Financial Statements	F-1
Item 2. Management’s Discussion and Analysis or Plan of Operation	3
Item 3 Quantitative and Qualitative Disclosures About Market Risk	6
Item 4 Controls and Procedures	6

PART II
Item 1. Legal Proceedings	7
Item IA. Risk Factors	7
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	7
Item 3. Defaults Upon Senior Securities	7
Item 4. Removed and Reserved	7
Item 5. Other Information	7
Item 6 Exhibits	7

PART I

FINANCIAL INFORMATION

BONANZA GOLD CORP.

(AN EXPLORATION STAGE COMPANY)

INDEX TO FINANCIAL STATEMENTS

MARCH 31, 2011

Financial Statements-

Balance Sheets as of March 31, 2011 and December 31, 2010	F-2

Statements of Operations for the Three Months Ended
March 31, 2011 and 2010, and Cumulative from Inception	F-3

Statement of Stockholders’ Deficit for the Period from Inception
Through March 31, 2011	F-4

Statements of Cash Flows for the Three Months Ended March 31, 2011
And 2010 and Cumulative from Inception	F-5

Notes to Financial Statements	F-6

F-1

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements.

BONANZA GOLD CORP.
(FORMERLY COLD GIN CORPORATION)
(AN EXPLORATION STAGE COMPANY)
BALANCE SHEETS (unaudited)
At March 31, 2011 and December 31, 2010

	March 31,			December 31,
	2011			2010

ASSETS

Current Assets
Cash and cash equivalents	$	-		$	-

Mineral Properties, net		-			-

TOTAL ASSETS	$	-		$	-


LIABILITIES AND STOCKHOLDERS' DEFICIT

LIABILITIES
Current Liabilities
Accounts payable	$	207,509		$	7,509
Accrued interest		-			-
Notes payable - affiliate		-			-
Due to shareholder		122,343			95,945
Note payable - current portion		800,000			800,000
Total current liabilities		1,129,852			903,454

Long-Term Liabilities
Note payable		-			200,000
Total long-term liabilities		-			200,000

TOTAL LIABILITIES		1,129,852			1,103,454

COMMITMENTS AND CONTINGENCIES (Notes 2, 4,and 5)

STOCKHOLDERS' DEFICIT
Common stock, par $0.001, 250,000,000 shares authorized, 188,700,000
shares issued and outstanding		188,700			188,700

Paid in capital		(115,620	)		(115,620	)
Deficit accumulated during the development stage		(1,202,932	)		(1,176,534	)

TOTAL STOCKHOLDERS' DEFICIT		(1,129,852	)		(1,103,454	)

TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT	$	-		$	-

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

F-2

BONANZA GOLD CORP.
(FORMERLY COLD GIN CORPORATION)
(AN EXPLORATION STAGE COMPANY)
STATEMENTS OF OPERATIONS (unaudited)
FOR THE THREE MONTHS ENDED MARCH 31, 2011 and 2010
AND FROM THE PEIOD FROM AUGUST 7, 2006 (INCEPTION) TO MARCH 31, 2011

				Three Months Ended March 31, 2010			From inception (August 7, 2006) to March 31, 2011
	Three Months Ended March 31, 2011




REVENUE	$	-		$	-		$	-

OPERATING EXPENSES
Selling, general and administrative		26,398			2,068			1,202,435

NET OPERATING LOSS		(26,398	)		(2,068	)		(1,202,435	)

OTHER EXPENSES		-			-			(497	)

NET LOSS BEFORE INCOME TAXES		(26,398	)		(2,068	)		(1,202,932	)

PROVISION FOR INCOME TAXES		-			-			-

NET LOSS	$	(26,398	)	$	(2,068	)	$	(1,202,932	)

Weighted Average Number of Shares Outstanding		188,700,000			68,000,000

Net Loss Per Share		(0.00	)		(0.00	)

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

F-3

BONANZA GOLD CORP.
(FORMERLY COLD GIN CORPORATION)
(AN EXPLORATION STAGE COMPANY)
STATEMENT OF STOCKHOLDERS' DEFICIT (unaudited)
AS AT March 31,2011

	Common Stock			Amount			Additional Paid in Capital			(Deficit) Accumulated During Development Stage			Stockholders’ Equity (Deficit)
Beginning balance, August 7, 2006		-		$	-		$	-		$	-		$	-
Common stock issued		127,500,000			850			1,000			-			1,850
Net (loss) for the period		-			-			-			(1,750	)		(1,750	)

Balance December 31, 2006		127,500,000		$	850		$	1,000		$	(1,750	)	$	100
Net income (loss) for the year		-			-			-			(2,382	)		(2,382	)

Balance December 31, 2007		127,500,000		$	850		$	1,000		$	-		$	(2,282	)
Shares Issued for cash		75,000,000		$	500		$	49,500			-		$	50,000
Shares issued for services		1,500,000		$	10		$	990			-		$	1,000
Net income (loss) for the year		-			-			-			(44,375	)		(44,375	)

Balance December 31, 2008		204,000,000		$	1,360		$	51,490		$	(47,564	)	$	4,343
Net (loss) for the year		-			-			-			(24,356	)		(24,356	)

Balance December 31, 2009		204,000,000		$	1,360		$	51,490		$	(72,863	)	$	(20,013	)
Conversion of debt to contributed captial		-			-		$	18,560			-			18,560
Cancellation of shares		(16,800,000	)		(112	)	$	112			-			-
Shares issued for mineral property acquisition		750,000			5		$	830						835
Shares issued for mineral property acquisition		750,000			5		$	830						835
Stock split 1 to 50		-			187,442		$	(187,442	)		-			-
Net loss - December 31, 2010											(1,103,671	)		(1,103,671	)

Balance December 31, 2010		188,700,000		$	188,700		$	(115,620	)	$	(1,176,534	)	$	(1,103,454	)

Net loss - March 31, 2011										$	(26,398	)	$	(26,398	)

Balance March 31, 2011		188,700,000		$	188,700		$	(115,620	)	$	(1,202,932	)	$	(1,129,852	)

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

F-4

BONANZA GOLD CORP.
(FORMERLY COLD GIN CORPORATION)
(AN EXPLORATION STAGE COMPANY)
STATEMENTS OF CASH FLOWS (unaudited)
FOR THE THREE MONTHS ENDED MARCH 31, 2011 and 2010
AND FROM THE PEIOD FROM AUGUST 7, 2006 (INCEPTION) TO MARCH 31, 2011

	Three Months Ended March 31, 2011			Three Months Ended March 31, 2010			From inception (August 7, 2006) to March 31, 2011
							From inception (August 7, 2006) to March 31, 2011
Cash (used in) operating activities:
Net (loss) for the period	$	(26,398	)	$	(19,037	)	$	(1,202,932	)

Adjustments to Reconcile Net Loss to Net Cash Used in
Operating Activities:
Common stock issued for services		-			-			1,000
Impariment of mineral properties		-			-			-
Changes in Asstes and Liabilities
Increase in accounts payable		-			943			207,509
Increade (decrease) in accrued interest		-			148			-
Net cash (used in) operating activities		(26,398	)		(17,946	)		(994,423	)

Cash Flows from Financing Activities:
Proceeds from notes payable - shareholders		26,398			-			122,343
Proceeds from sale of common stock		-			-			72,080
Proceeds from notes payable		-			-			800,000
Net Cash Provided by Financing Activities		26,398			-			994,423

Net Decrease in Cash and Cash Equivalents		-			(17,946	)		(0	)

Cash and Cash Equivalents - Beginning		-			17,956			-

Cash and Cash Equivalents - End	$	-		$	10		$	(0	)

Supplemental disclosures:
Cash paid for interest	$	-		$	-		$	-
Cash paid for income taxes	$	-		$	-		$	-
Supplemental Non-Cash Investing and Financing Information
Shares issued for acquisition of mineral properties
Note payable issued for acquisition of mineral properties
Conversion of related party	$	-		$	-		$	-
Forgiveness of shareholder's loan	$	-		$	-		$	-

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

F-5

NOTE 1 – ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization and Business

Bonanza Gold Corp. (“we” the “Company” or “Bonanza”) was incorporated under the laws of the State of Delaware in December 2006 under the name “Cold Gin Corporation.” Effective December 10, 2010, we transitioned our business focus from that of a developer of Internet media for martial arts to a company engaged in the exploration and mining of minerals. On December 27, 2010, we entered into an Agreement and Plan of Reorganization with Bonanza Gold Corp., a wholly-owned subsidiary of the Company, pursuant to which we merged with and into Bonanza Gold Corp, with Bonanza Gold Corp. being the surviving corporation.

The Company is currently in the exploration stage. All activities of the Company to date relate to its organization, initial funding and share issuances.

Exploration Stage Company

The accompanying financial statements have been prepared in accordance with generally accepted accounting principles related to exploration stage companies. An exploration-stage company is one in which planned principal operations have not commenced or if its operations have commenced, there has been no significant revenues there from.

Basis of Presentation

The financial statements of the Company have been prepared on the accruals basis and in accordance with generally accepted accounting principles in the United States of America and are presented in US dollars. In the opinion of management, these interim financial statements include all adjustments necessary in order to make them not misleading.

Accounting Basis

The Company uses the accrual basis of accounting and accounting principles generally accepted in the United States of America (“GAAP” accounting). The Company has adopted a December 31 fiscal year end.

Cash and Cash Equivalents

The Company considers all highly liquid investments with the original maturities of three months or less to be cash equivalents. The Company had $0 of cash as of March 31, 2011.

Income Taxes

Income taxes are computed using the asset and liability method. Under the asset and liability method, deferred income tax assets and liabilities are determined based on the differences between the financial reporting and tax bases of assets and liabilities and are measured using the currently enacted tax rates and laws. A valuation allowance is provided for the amount of deferred tax assets that, based on available evidence, are not expected to be realized.

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Revenue Recognition

The Company recognizes revenue when products are fully delivered or services have been provided and collection is reasonably assured.

Stock-Based Compensation

Stock-based compensation is accounted for at fair value in accordance with ASC Topic 718. To date, the Company has not adopted a stock option plan and has not granted any stock options.

Basic Income (Loss) Per Share

Basic income (loss) per share is calculated by dividing the Company’s net loss applicable to common shareholders by the weighted average number of common shares during the period. Diluted earnings per share is calculated by dividing the Company’s net income available to common shareholders by the diluted weighted average number of shares outstanding during the year. The diluted weighted average number of shares outstanding is the basic weighted number of shares adjusted for any potentially dilutive debt or equity. There are no such common stock equivalents outstanding as of March 31, 2011.

F-6

Comprehensive Income

The Company has established standards for reporting and display of comprehensive income, its components and accumulated balances. When applicable, the Company would disclose this information on its Statement of Stockholders’ Equity. Comprehensive income comprises equity except those resulting from investments by owners and distributions to owners. The Company has not had any significant transactions that are required to be reported in comprehensive income.

Recent Accounting Pronouncements

Bonanza does not expect the adoption of recently issued accounting pronouncements to have a significant impact on the Company’s results of operations, financial position or cash flow.

NOTE 2 – MINERAL PROPERTIES

On December 8, 2010, the Company acquired mineral properties that consisted of an undivided 100% interest in 2 patented claims, 6 federal claims and 25 prospects comprising 660 acres near Kingman, Arizona in exchange for an agreement to issue 5,000 shares on a presplit basis of the Company’s common stock and a promissory note in the amount of $1,000,000.

The Company is required to pay $200,000 within 3 months of the closing of the definitive agreement, $200,000 within 6 months of the closing, $200,000 within 9 months of the closing, $200,000 within 12 months of the closing and an additional $200,000 within 15 months of the closing of the definitive agreement.

The Company agreed to maintain the Assets for five years and to make all future payments required to maintain the Assets other than payments required for actions or omissions prior to the closing. If at any time within the first five years of the closing, the asset mining operations result in the discovery (as such term is defined by industry best practices such as JORC, 43-101) of either One Million (1,000,000) ounces of gold or Ten Million (10,000,000) ounces of silver, the Company shall issue to the seller an additional One Million Five Hundred Thousand (1,500,000) shares of its common stock upon such discovery.

The seller has the option to appoint an individual to serve on the Company’s advisory board for one (1) year. Any such individual shall be approved by the Company, such approval not to be unreasonably withheld. The compensation for such service shall be the issuance by the Company at the end of each year of service of One Hundred Thousand (100,000) shares of its common stock, such service to be limited to a maximum of three years.

Also on December 8, 2010, the Company acquired mineral properties that consisted of a seventy-five percent (75%) interest in and to the three (3) mining concessions in the project area known as “Monte de El Favor”, these are El Favor, Exploitation title No. 165974 and Guadalupe, Exploitation title No. 183638 and Buenaventura Exploitation title issued No. 218973, which approximate 217.49 hectares in total located in the Municipality of Hostotipaquillo, State of Jalisco, Mexico in exchange for an agreement to issue 5,000 shares on a pre-split basis of the Company’s common stock. The contract required additional issuance of 2,250,000 shares on a post-split basis over the nine months following the closing of the deal.

If at any time within the first two years of the closing, the asset mining operations result in the discovery (as such term is defined by industry best practices such as JORC, 43-101) of either One Million (1,000,000) ounces of gold or Ten Million (10,000,000) ounces of silver, the Company shall issue to the seller an additional Five Million Five Hundred Thousand (5,500,000) shares of its common stock upon such discovery.

The seller shall provide a consulting prospector, or engineer acceptable to the Company to act as VP of Exploration to oversee activities related to the assets. The Company shall enter into a consulting agreement with such individual that shall have a minimum term of one year, with an option to renew for an additional one year and provide for compensation of Ten Thousand Dollars (US$10,000) per month. Any amounts paid to the consultant will be applied against and reduce the amount of the work commitment.

F-7

The Company shall provide a work commitment for the assets in the amount of Eight Hundred Fifty Thousand Dollars (US $850,000) to be paid over a two year period commencing on the closing. The work commitment shall provide that the Company is required to with the following term:

· The Company must spend at least Three Hundred Fifty Thousand Dollars (US $350,000) within 9 months of the closing for the commencement and continuation of exploration of the assets for the express purpose of advancing the geologic knowledge of the assets.

· The Company must spend at least a minimum of Five Hundred Thousand Dollars (US $500,000) within the following 12 months after the termination of the initial nine month period for the express purpose of advancing the geologic knowledge of the Assets.

All exploration and mine development work will be conducted as part of the work commitment will be in accord with the best practices and usual standards of professional conduct with the express focus of further exploring and defining mineral resources and mining reserves. The required amount of the work commitment shall be reduced by any amounts paid to the consultant.

The Company’s management has experience in the field of mineral exploration and intends to continue to invest resources into our exploration and drilling program, and intends to extend the campaign over the next several years. Depending upon our ability to obtain sufficient funding, we may also acquire additional properties for exploration. In addition, assuming sufficient funding, we plan to engage an internationally recognized mining and geological consultancy firm to assist us in our drilling efforts.

We believe that an expanded exploration and drilling program is currently our best option for increasing the value of our Company. However, we have no revenues, our stock has no trading volume, and we believe our stock price does not reflect the true value of our Company. These factors limit our ability to obtain financing. Therefore, in an effort to generate revenue to commence continue our operations we have acquired two properties, one located in Arizona and the other in Mexico. While, due to the lack of capital, we have not commenced such exploitation program at this time, we have the legal and functional capability to do so, including the required exploitation permits.

At March 31, 2011, we had not yet obtained sufficient funding to commence exploration on these properties, we had not yet received any revenues, and we had a working capital deficit. Our auditors had determined at December 31, 2010 that there was sufficient doubt about our ability to operate as a going concern. Due to these factors we recorded an impairment charge of $1,001,670 in 2010 to the carrying values of these properties, writing their carrying costs to $-0-.

NOTE 3 – DUE TO SHAREHOLDERS

A shareholder who is our current Chief Executive Officer provided advances to fund operations. The advances are unsecured, non-interest bearing and due on demand. The amount due to the shareholder was $122,343 as of March 31, 2011.

NOTE 4 – NOTE PAYABLE

On December 8, 2010, the Company entered into an asset purchase agreement to acquire certain mineral properties. See note 2. In connection with this acquisition, the Company issued a promissory note in the amount of $1,000,000. The note is non-interest bearing and provides for payments as follows:

NOTE 5 – CAPITAL STOCK

The total number of shares of capital stock which the Company shall have authority to issue is 250,000,000 common shares with a par value of $.001. As part of the change in control, the Company cancelled 112,000 shares on July 8, 2010. Additionally as part of the change in control the former shareholder agreed to forgive debts outstanding to them totaling $18,560 which have been recorded as contributed capital.

F-8

The Company agreed to issue 5,000 and 5,000 shares on a pre-split basis of common stock in connection with the two mineral property acquisitions discussed in Note 2. The shares were valued at $0.167 per share. On January 5, 2011, the Bonanza enacted a 1 to 150 reverse stock split of the Company’s common stock and increased the authorized shares of common stock to 250,000,000.

On December 27, 2010, we entered into an Agreement and Plan of Reorganization with Bonanza Gold Corp., a wholly-owned subsidiary of the Company, pursuant to which we merged with and into Bonanza Gold Corp, with Bonanza Gold Corp. being the surviving corporation. In connection with the merger each outstanding share of our common stock was exchanged for one hundred fifty shares of the common stock of the Nevada entity.

On January 5, 2011, the Company enacted a 1 to 150 reverse stock split of the Company’s common stock and increased the authorized shares of common stock to 250,000,000.

In March 2011, payment of the first $200,000 of the note payable connected to the mineral property acquisition was due. No payment has been made as of this filing.

Also in March 2011, an additional 750,000 shares on a post-split basis (5,000 post reverse split basis) were to be granted in connection with the mineral property acquisition.

The Company had 188,700,000 shares of common stock issued and outstanding as of March 31, 2011.

NOTE 6 – COMMITMENTS AND CONTINGENCIES

An officer has provided office services without charge. There is no obligation for the officer to continue this arrangement. Such costs are immaterial to the financial statements and accordingly are not reflected herein. The officers and directors are involved in other business activities and most likely will become involved in other business activities in the future.

NOTE 7 – INCOME TAXES

For the three months ended March 31, 2011, the Company has incurred net losses and, therefore, has no tax liability. The net deferred tax asset generated by the loss carry-forward has been fully reserved. The cumulative net operating loss carry-forward is approximately $1,202,932 at March 31, 2011, and will expire beginning in the year 2026.

The cumulative tax effect at the expected rate of 34% of significant items comprising our net deferred tax amount is as follows:

	2011			2010

Deferred tax asset attributable to
Net operating loss carryover	$	408,997		$	23,949
Valuation allowance		(408,997	)		(23,949	)

Net deferred tax asset	$	-		$	-

NOTE 8 – RELATED PARTY TRANSACTIONS

A shareholder provided advances to fund operations. The advances are unsecured, non-interest bearing and due on demand. The amount due to the shareholder was $122,343 as of March 31, 2011.

NOTE 9 – GOING CONCERN

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As shown in the accompanying financial statements, the Company incurred losses of $1,202,932 since its inception, has not yet produced revenues from operations, and has a working capital deficit. These factors raise substantial doubt about the Company's ability to continue as a going concern.

The financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts and classification of liabilities that might be necessary in the event that the Company cannot continue as a going concern. Management anticipates that it will be able to raise additional working capital through the issuance of stock and through additional loans and advances from investors.

The ability of the Company to continue as a going concern is dependent upon the Company’s ability to attain a satisfactory level of profitability and obtain suitable and adequate financing. There can be no assurance that management's plan will be successful.

NOTE 10 – SUBSEQUENT EVENTS

On April 29, 2011, the Company executed an asset purchase agreement for the acquisition of certain assets from Independent Resources, Inc. (the “Seller”) pursuant to which the Company acquired an undivided interest in six (6) mineral claims representing 1002.16 ha that has been staked and recorded as MTO Cell Claims (the “Assets”). The property is located east of Harrison Lake and northwest of Hope in southwestern British Columbia. The Company acquired the Assets from the Seller for Ten Thousand Dollars (US$10,000.00), which was funded by a loan from the Chief Executive Officer to the Company.

On May 19, 2011, the Company executed a termination agreement with Precious Metals Exploration, Ltd. (“Precious Metals”), pursuant to which the parties terminated all payment obligations under the two asset purchase agreements, dated December 10, 2010, pursuant to which the Company had acquired (i) an undivided interest in 2 patented claims, 6 federal claims and 25 prospects comprising 660 acres near Kingman, Arizona (the “Arizona Assets”) and (ii) a 75% interest in and to three mining concessions in the project area known as “Monte de El Favor” in Jalisco, Mexico (the “Mexican Assets”). The Company and Precious Metals also executed an assignment agreement, dated May 19, 2011, pursuant to which the Company assigned the Arizona Assets and the Mexican Assets to Precious Metals.

In accordance with SFAS 165 (ASC 855-10) the Company has analyzed its operations subsequent to March 31, 2011 to May 18, 2011, the date these financial statements were issued, and has determined that it does not have any material subsequent events to disclose in these financial statements other than those disclosed above.

F-9

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following analysis of our consolidated financial condition and results of operations for the period January 1, 2011 through March 31, 2011 should be read in conjunction with the consolidated financial statements, including footnotes, and other information presented elsewhere in this Report on Form 10-Q and the risk factors and the financial statements for the year ended December 31, 2010 and the other information set forth in our Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 31, 2011. In addition to historical information, the following discussion contains forward-looking statements that involve risks, uncertainties and assumptions. Where possible, we have tried to identify these forward looking statements by using words such as “anticipate,” “believe,” “intends,” or similar expressions. Our actual results could differ materially from those anticipated by the forward-looking statements due to important factors and risks including, but not limited to, those set forth under “Risk Factors” in Part I, Item 1A of our Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 31, 2011.

Company Overview

The Company was incorporated under the laws of the State of Delaware in December 2006 under the name “Cold Gin Corporation.” On December 27, 2010, we entered into an Agreement and Plan of Reorganization with Bonanza Gold Corp., a wholly-owned subsidiary of the Company, pursuant to which we merged with and into Bonanza Gold Corp, with Bonanza Gold Corp. being the surviving corporation. In connection with the reincorporation merger we changed our domicile from Delaware to Nevada, our name to Bonanza Gold Corp. and each outstanding share of our common stock was exchanged for one hundred fifty shares of the common stock of the Nevada entity. Thereafter, our trading market experienced some unusual activity. In an effort to stabilize the market, we effectuated a 150:1 reverse stock split on March 4, 2011.

We were initially established to become a developer of Internet media content for mixed martial arts fans and consumers. We have not derived any revenue from the martial arts business. Due to a change of control that occurred in August 2010, we abandoned the martial arts business. Accordingly, results from operations related to the martial arts business have been reclassified from current operations to that of discontinued operations. Effective December 10, 2010, we transitioned our business focus to that of a developer of Internet media for martial arts to a company engaged in the exploration and mining of minerals.

We believe that an expanded exploration and drilling program is currently our best option for increasing the value of our Company. However, we have no revenues, our stock has limited trading volume, and we believe our stock price does not reflect the true value of our Company. These factors limit our ability to obtain financing. In December 2010, in an effort to generate revenue to continue our operations, we acquired two properties, one located in Arizona and the other in Mexico. In April 2011, we acquired an undivided interest in six mineral claims located in southwestern British Columbia. In May 2011, we assigned the property located in Arizona and the property located in Mexico back to the original owner that had sold us the properties in exchange for a termination of all of our payment obligations for such assets. While, due to the lack of capital, we have not commenced such exploitation program at this time, we have the legal and functional capability to do so, including the required exploitation permits.

Recent Developments

Critical Accounting Policies

Management believes that the critical accounting policies and estimates discussed below involve the most complex management judgments due to the sensitivity of the methods and assumptions necessary in determining the related asset, liability, revenue and expense amounts. Specific risks associated with these critical accounting policies are discussed throughout this MD&A, where such policies have a material effect on reported and expected financial results. For a detailed discussion of the application of these and other accounting policies, refer to the individual Notes to the Financial Statements for the quarterly period ended March 31, 2011.

Revenue Recognition

The Company recognizes revenues when products are shipped or services are delivered to customers, pricing is fixed or determinable, and collection is reasonably assured. Net revenues include product sales net of returns and allowances.

Use of Estimates

The preparation of financial statements in conformity with U.S. generally accepted accounting principles (GAAP) requires management to make estimates and assumptions that affect the amounts reported in the financial statements. Estimates are based on historical experience, management expectations for future performance, and other assumptions as appropriate. Key areas affected by estimates include the assessment of the recoverability of long-lived assets, which is based on such factors as estimated future cash flows. We re-evaluate estimates on an ongoing basis; therefore, actual results may vary from those estimates.

Fair Values of Financial Instruments

The carrying values of cash, accounts receivable, accounts payable and accrued expenses approximate the fair values of these instruments due to their short-term nature. The carrying amount for borrowings under the financing agreement approximates fair value because of the variable market interest rates charged for these borrowings. We adopted SFAS No. 157, Fair Value Measurements (ASC 820-10) , for financial assets and financial liabilities in the first quarter of fiscal 2009, which did not have an impact on our financial statements.

In accordance with FASB Staff Position (“FSP FAS”) 157-2, Effective Date of FASB Statement No. 157 , we deferred application of SFAS No. 157 until January 1, 2010, the beginning of our fiscal year, in relation to nonrecurring nonfinancial assets and nonfinancial liabilities including goodwill impairment testing, asset retirement obligations, long-lived asset impairments and exit and disposal activities. As of March 31, 2011 the application of SFAS 157 had no impact on our financial statements.

Concentration of Credit Risk

Financial instruments, which potentially subject us to concentrations of credit risk, consist of cash and cash equivalents and accounts receivable. We place our cash with high quality financial institutions and at times may exceed the FDIC insurance limit. We extend credit based on an evaluation of the customer’s financial condition, generally without collateral. Exposure to losses on receivables is principally dependent on each customer’s financial condition. We monitor our exposure for credit losses and maintain allowances for anticipated losses, as required.

Recently Issued Accounting Standards

For a discussion of the adoption and potential impacts of recently issued accounting standards, refer to the “Recently Issued Accounting Standards” section of Note 1, “Summary of Significant Accounting Policies,” in the Notes to Financial Statements.

Plan of Operations

We are developing a gold and metals exploration company. Lynn Harrison, our Chief Executive Officer, President, Chief Financial Officer, Secretary and Treasurer, has experience in the precious metals industry. During 2009 and 2010 she managed and developed networks of special metals groups (manufacturer and engineers) for UK Metals Technology Centre. Her primary responsibilities were the management of relationships and collaboration between metallurgists, businesses, academics and founders. The Company plans to leverage her vast knowledge of the industry to acquire properties for exploration. We recently acquired an undivided interest in six mineral claims located in southwestern British Columbia for our mineral exploration activity and intend to commence exploration activities, upon receipt of additional financing.

Off Balance Sheet Arrangements

There are no off balance sheet arrangements.

Results of Operations for the Three Months Ended March 31, 2011 and 2010

To date we have had no revenue. For the quarter ended March 31, 2011 we incurred operating expenses of $26,398, as compared to $2,068 for the quarter ended March 31, 2010. We anticipate incurring increased expenses once we begin exploration activities and will require additional funding to support our working capital needs.

Liquidity and Capital Resources

At March 31, 2011 we had no cash or cash equivalents and had a working capital deficit of ($1,129,852). At March 31, 2011, all of our assets had been fully impaired due to our lack of funding to commence exploration activities on our properties. Subsequent to the end of the quarter we acquired a new property and assigned our interest in the Arizona Assets and Mexican Assets to the original owner of such assets in exchange for a termination of all of our payment obligations for such assets. Our current liabilities included notes payable in the principal amount of $800,000 that were issued in connection with our acquisition of the Arizona Assets and Mexican Assets. We also owe $132,343 to our Chief Executive Officer and principal shareholder for funds loaned for operations. This loan is unsecured, non-interest bearing and has no fixed term of repayment. Our notes payable current portion of $800,000 was subsequently terminated when we assigned the properties back to their original owner.

We have incurred negative cash flow from operations since we started our business. We have spent, and expect to continue to spend, substantial amounts in connection with implementing our business strategy, including our planned exploration activities. Based on our current plans, we believe that our cash will not be sufficient to enable us to meet our planned operating needs in the next 12 months and we will need to raise additional funding.

Current and Future Financing Needs

The actual amount of funds we will need to operate is subject to many factors, some of which are beyond our control. We have based our estimate on assumptions that may prove to be wrong. We may need to obtain additional funds sooner or in greater amounts than we currently anticipate. Potential sources of financing include strategic relationships, public or private sales of our shares or debt and other sources. We may seek to access the public or private equity markets when conditions are favorable due to our long-term capital requirements. We do not have any committed sources of financing at this time, and it is uncertain whether additional funding will be available when we need it on terms that will be acceptable to us, or at all. If we raise funds by selling additional shares of common stock or other securities convertible into common stock, the ownership interest of our existing stockholders will be diluted. If we are not able to obtain financing when needed, we may be unable to carry out our business plan. As a result, we may have to significantly limit our operations and our business, financial condition and results of operations would be materially harmed.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

Not applicable because the Company is a smaller reporting company.

Item 4. Controls and Procedures.

Disclosure Controls and Procedures

The Company has adopted and maintains disclosure controls and procedures that are designed to provide reasonable assurance that information required to be disclosed in the reports filed under the Exchange Act, such as this quarterly report, is collected, recorded, processed, summarized and reported within the time periods specified in the rules of the SEC. The Company’s disclosure controls and procedures are also designed to ensure that such information is accumulated and communicated to management to allow timely decisions regarding required disclosure. As required under Exchange Act Rule 13a-15, the Company’s management, including the Chief Executive Officer and Principal Financial Officer, has conducted an evaluation of the effectiveness of disclosure controls and procedures as of the end of the period covered by this report. Inasmuch as we only have one individual serving as our officer, director and employee we have determined that the Company has, per se, inadequate controls and procedures over financial reporting due to the lack of segregation of duties despite the fact that the Company has very little operating activity. Management recognizes that its controls and procedures would be substantially improved if there was a greater segregation of the duties of Chief Executive Officer and Chief Financial Officer and as such is actively seeking to remediate this issue. Management believes that the material weakness in its controls and procedures referenced did not have an effect on our financial results. Based on that evaluation, the Chief Executive Office and Principal Financial Officer concluded that the disclosure controls and procedures are ineffective.

Changes in Internal Control

There have been no changes in internal controls over the financial reporting that occurred during the most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect our internal controls over financial reporting.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings.

We are not currently a party to any legal proceedings, and we are not aware of any proceeding pending or threatened against us by any governmental authority or other party.

Item 1A. Risk Factors.

Not applicable because the Company is a smaller reporting company.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

None.

Item 3. Defaults upon Senior Securities.

None.

Item 4. (Removed and Reserved).

Item 5. Other Information.

None.

Item 6. Exhibits.

10.1 Asset Purchase Agreement, dated April 29, 2011, by and between Bonanza Gold Corp. and Independent Resources Inc. (incorporated herein by reference to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on May 5, 2011)

10.2 Termination Agreement, dated May 19, 2011, by and between the Company and Precious Metals Exploration, Ltd. (1)

10.3 Assignment Agreement, dated May19, 2011, by and between the Company and Precious Metals Exploration, Ltd. (1)

31.1 Certification pursuant to Rule 13a-14(a)/15d-14(a) (1)

31.2 Certification pursuant to Rule 13a-14(a)/15d-14(a) (1)

32.1 Certification pursuant to Section 1350 of the Sarbanes-Oxley Act of 2002 (1)

(1) Filed herewith.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	BONANZA GOLD CORP.

Date: May 23, 2011	By:	/s/ Lynn Harrison
		Lynn Harrison
		Chief Executive Officer & Vice Chairman
		(Principal Executive Officer, Principal Accounting Officer and Principal Financial Officer)

BRIGHTLANE CORP. - FORM 10-Q - May 23, 2011

Attached files

BRIGHTLANE CORP. Reports