[b]BONZ [/b] [u]From today's filing it appears that the company still has substantial funds to start a testing program on the viability of a "lode mining" project.
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The principal amount of the Company Note is $1,660,000 ("Maturity Amount") and the Company Note is due 30 months from the issuance date of October 1, 2012. The Company Note has an interest rate of 8% payable monthly. The Company Note, if prepaid, has a penalty of 135% prepayment obligation. The total amount funded (in cash and notes) at closing will be $1,500,000, representing the Maturity Amount less an original issue discount of $150,000 and the payment of $10,000 to the Investor to cover its fees, with payment consisting of $150,000 in cash advanced at closing and $1,350,000 in a series of three secured Buyer Mortgage Notes and one Promissory Note with interest rates of 5% described in more detail below. The Company also has the right to offset the payment of any of these notes and not receive payment for such notes or be obligated to pay such portion of the notes, subject to certain conditions and obligations. The shares of common stock underlying the Company Note and Warrant are to be registered to a registration statement on Form S-1 pursuant to the terms and conditions of a registration rights agreement (“Registration Rights Agreement”).
The Investor has the right to convert, subject to restrictions described in the Company Note, all or a portion of the outstanding amount of the Company Note that is eligible for conversion into shares of the Company’s common stock. The number of common shares delivered to the Investor upon conversion will be calculated by dividing the amount of the Company Note that is being converted by $0.05.
The Investor has also received a warrant to purchase shares of common stock of the Company equal to $1,660,000 divided by the Market Price (defined in the Company Note, as of October 1, 2012) at an exercise price of US$0.075 per share at any time within five years after October 1, 2012. The warrant also contains a net exercise provision.
Each of the Company Note and the Warrant contain "blocker provisions" such that the Investor shall not be permitted to hold by virtue of payment of interest or principal under the Company Note or conversion of the Company Note or the exercise of the Warrant a number of shares of common stock exceeding 9.99% of the number of shares of the Company’s common stock outstanding on such date (the “9.99% Cap”). The Company shall not be obligated and shall not issue to the Investor shares of its common stock which would exceed the 9.99% Cap, but only until such time as the 9.99% Cap would no longer be exceeded by any such receipt of shares of common stock by the Investor.
The Investor's obligation to pay the balance of the purchase price of the Company Note is evidenced by 3 Buyer Mortgage Notes, in the principal amount of $50,000, $150,000, and $400,000 (“Buyer Notes”). The Buyer Notes are secured by certain mortgages (“Mortgage”) executed by the Investor, as Mortgagor, in favor of the Bonanza, as Mortgagee, encumbering certain real property of the Investor located in Cook County, Illinois. The Investor obligation to pay the balance of the purchase price of the Company Note is further evidenced by a Promissory Note in the amount of $750,000 (“Promissory Note”). Each Buyer Note and the promissory Note is due and payable on or before the earlier of (i) sixty (60) days following the occurrence of the Maturity Date (as defined in the Company Note), and (ii) subject to certain conditions described in each Buyer Note and the Promissory Note. The Buyer Notes and Promissory Note each contain standard events of default related to payment, certain covenants and bankruptcy events.
Bonanza Goldfields (BONZ) Stock Trading Info
