DynaResource (OTC: DYNR) profit rises amid going‑concern warning
Rhea-AI Filing Summary
DynaResource, Inc. reports six‑month 2026 revenue of $29.5 million, essentially flat versus 2025, but net income rose to $3.2 million from $1.1 million. Higher depletion, depreciation and mark‑to‑market hedging losses partly offset operating profits, while a foreign currency gain and lower derivative liability supported earnings.
Cash declined to $1.8 million from $4.2 million as mine development and equipment spending of about $4.5 million and $2.5 million of credit‑line repayments exceeded operating cash flow. The company used a $12.5 million concentrate credit facility and issued 833,333 new shares for $1.0 million.
DynaResource discloses negative working capital of $38.4 million, an accumulated deficit of $62.2 million and states these conditions raise substantial doubt about its ability to continue as a going concern. It records a $1.0 million accrual related to Mercuria arbitration awards and notes a new SAT tax assessment of about MXN 173.7 million (approximately US$10 million), which it is contesting and has not accrued.
Positive
- Net income for six months 2026 rose to $3.16 million from $1.11 million in 2025, a substantial earnings improvement despite largely flat revenue.
- Derivative liability fell to $0.36 million from $1.25 million, reflecting favorable mark‑to‑market movements on warrants and reducing balance‑sheet leverage from this source.
Negative
- The company reports negative working capital of $38.36 million and acknowledges substantial doubt about its ability to continue as a going concern.
- Mining concession duties payable increased to $5.54 million with no principal payments in the period, adding to short‑term obligations.
- DynaResource discloses a SAT tax assessment of about MXN 173.7 million (≈US$10 million) for DynaMineras’ 2021 tax year, which it is contesting.
- Net cash decreased by $2.40 million in the first half of 2026 as capital expenditures and debt repayment exceeded operating cash flow.
Filing Explained
The proposed financing targets $3.0 million, while up to $6.4 million depends on later warrant exercise.
This Form 10-Q is an unaudited quarterly report covering interim financial statements and liquidity updates through
The August 11 private placement would sell units to certain existing stockholders at
Each warrant would have a
The named milestone to monitor is the authorized-share increase, because the filing makes it a condition to warrant exercise; the offering itself is described as proposed.
Key Figures
Key Terms
Production Stage issuer technical
Mineral reserve technical
Asset retirement obligation financial
Offtake Agreement financial
derivative liability financial
Exploration Stage Property technical
Earnings Snapshot
FAQ
How did DynaResource (DYNR) perform financially for the six months ended June 30, 2026?
What going concern risks does DynaResource (DYNR) disclose in this 10-Q?
What is the debt and credit facility situation for DynaResource (DYNR)?
How much cash and capital spending did DynaResource (DYNR) report for the first half of 2026?
What legal and tax contingencies affect DynaResource (DYNR)?
What are DynaResource’s (DYNR) recent equity and financing actions?
AI-generated analysis. How Rhea-AI works. Not financial advice.
Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period
Commission File Number:
(Exact Name of Registrant as Specified in its Charter)
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
(Address of principal executive offices) |
(Zip Code) |
Registrant’s telephone number, including area code:
(
Securities registered pursuant to Section 12(b) of the Act:
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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.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
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Table of Contents
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No
As of August 17, 2026 there were
Table of Contents
TABLE OF CONTENTS
PART I. |
FINANCIAL STATEMENTS |
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ITEM 1. |
Unaudited Condensed Interim Consolidated Financial Statements |
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Notes to Unaudited Condensed Interim Consolidated Financial Statements |
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ITEM 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
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ITEM 3. |
Quantitative and Qualitative Disclosures About Market Risk |
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ITEM 4. |
Controls and Procedures |
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PART II. |
OTHER INFORMATION |
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ITEM 1. |
Legal Proceedings |
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33 |
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ITEM 2. |
Unregistered Sales of Equity Securities and Use of Proceeds |
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34 |
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ITEM 3. |
Defaults Upon Senior Securities |
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34 |
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ITEM 4. |
Mine Safety Disclosures |
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34 |
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ITEM 5. |
Other Information |
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ITEM 6. |
Exhibits |
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CERTIFICATIONS
EXHIBIT 31.1 |
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CHIEF EXECUTIVE OFFICER CERTIFICATION |
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EXHIBIT 31.2 |
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CHIEF FINANCIAL OFFICER CERTIFICATION |
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EXHIBIT 32.1 |
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CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350 |
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Table of Contents
DYNARESOURCE, INC.
CONDENSED INTERIM CONSOLIDATED BALANCE SHEETS
JUNE 30, 2026 AND DECEMBER 31, 2025
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June 30, |
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December 31, |
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2026 |
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2025 |
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(Unaudited) |
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(Audited) |
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ASSETS |
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Current assets |
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Cash |
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$ |
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$ |
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Concentrate and ore inventories (Note 2) |
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Foreign tax receivable |
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Supplies inventory |
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Other current assets (Note 4) |
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Total current assets |
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Mineral property interests, plant and equipment (net of accumulated |
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depreciation and depletion of $ |
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Right-of-use assets, net |
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Deferred tax asset, net |
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Foreign tax receivable |
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TOTAL ASSETS |
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$ |
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$ |
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LIABILITIES, TEMPORARY EQUITY AND STOCKHOLDERS’ EQUITY |
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Current liabilities |
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Accounts payable and accrued liabilities (Note 5) |
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$ |
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$ |
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Accrued mining taxes and other liabilities (Note 5) |
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Derivative liability (Note 6) |
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Credit line (Note 7) |
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Current portion of operating lease payable |
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Mining concession duties payable (Note 8) |
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Total current liabilities |
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Credit line (Note 7) |
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Operating lease payable, less current portion |
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Deferred tax liability |
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Asset retirement obligation (Note 9) |
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Other liabilities |
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TOTAL LIABILITIES |
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TEMPORARY EQUITY (Note 10) |
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Series C Senior Convertible Preferred Stock, $ |
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Series D Senior Convertible Preferred Stock, $ |
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STOCKHOLDERS’ EQUITY (DEFICIENCY) (Note 10) |
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Common Stock, $ |
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Series E Convertible Preferred Stock, $ |
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Preferred rights |
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Additional paid-in-capital |
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Treasury stock, |
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Accumulated other comprehensive income |
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Accumulated deficit |
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TOTAL STOCKHOLDERS’ EQUITY (DEFICIENCY) |
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( |
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TOTAL LIABILITIES, TEMPORARY EQUITY AND STOCKHOLDERS’ EQUITY (DEFICIENCY) |
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$ |
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$ |
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The accompanying notes are an integral part of these unaudited condensed interim consolidated financial statements.
3
Table of Contents
DYNARESOURCE, INC. |
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CONDENSED INTERIM CONSOLIDATED STATEMENTS OF INCOME AND |
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COMPREHENSIVE INCOME |
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FOR THE THREE MONTHS AND SIX MONTHS ENDED JUNE 30, 2026 AND 2025 |
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(Unaudited) |
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Three months |
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Three months |
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Six months |
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Six months |
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June 30, |
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June 30, |
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June 30, |
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June 30, |
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2026 |
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2025 |
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2026 |
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2025 |
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REVENUE |
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Operating costs |
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Depreciation and depletion (Note 3) |
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( |
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( |
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( |
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( |
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GROSS PROFIT |
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$ |
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$ |
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$ |
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$ |
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General and administrative expenses |
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Stock-based compensation (Note 11) |
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Accretion expense (Note 9) |
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Right of use asset amortization |
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Depreciation and amortization (Note 3) |
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OPERATING (LOSS) INCOME |
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( |
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Foreign currency gain |
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( |
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( |
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( |
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( |
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Interest expense |
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Derivative mark-to-market (gain) / loss (Note 6) |
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( |
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( |
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Other (income) expenses |
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( |
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NET INCOME BEFORE TAXES |
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Mining tax expense |
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Income tax expense |
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TOTAL TAX EXPENSE |
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NET INCOME |
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$ |
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$ |
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$ |
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$ |
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DEEMED DIVIDEND FOR SERIES C & D PREFERRED |
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( |
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( |
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( |
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NET (LOSS) INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS |
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$ |
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$ |
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$ |
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$ |
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INCOME PER SHARE ATTRIBUTABLE TO THE EQUITY HOLDERS OF DYNARESOURCE, INC. |
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Basic income per common share |
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$ |
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$ |
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$ |
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Weighted average shares outstanding – Basic |
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Diluted income per common share |
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$ |
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$ |
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$ |
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$ |
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Weighted average shares outstanding – Diluted |
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OTHER COMPREHENSIVE (LOSS) INCOME |
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Unrealized foreign currency translation (loss) gain |
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TOTAL OTHER COMPREHENSIVE (LOSS) INCOME |
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TOTAL COMPREHENSIVE INCOME |
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$ |
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$ |
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$ |
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$ |
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The accompanying notes are an integral part of these unaudited condensed interim consolidated financial statements.
4
Table of Contents
DYNARESOURCE, INC.
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIENCY)
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2026 AND 2025
(Unaudited)
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Preferred E |
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Common |
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Preferred |
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Preferred |
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Shares To Be |
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Paid In |
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Treasury |
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Treasury |
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Other Comp |
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Accumulated |
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Shares |
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Amount |
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Shares |
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Amount |
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Rights |
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Amount |
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Issued |
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Capital |
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Shares |
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Amount |
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Income (loss) |
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Deficit |
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Totals |
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Balance, March 31, 2025 |
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$ |
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$ |
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$ |
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$ |
— |
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$ |
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$ |
( |
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$ |
( |
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$ |
( |
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$ |
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Stock Issued for Services |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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$ |
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Stock Compensation - Vesting |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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$ |
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Other Comprehensive Income |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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$ |
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Net income |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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$ |
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Balance, June 30, 2025 |
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$ |
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$ |
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$ |
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$ |
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$ |
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$ |
( |
) |
$ |
( |
) |
$ |
( |
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$ |
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Balance January 1, 2025 (restated) |
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$ |
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$ |
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$ |
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$ |
— |
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$ |
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$ |
( |
) |
$ |
( |
) |
$ |
( |
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$ |
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Stock Issued for Services |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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Stock-based compensation - Vesting |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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Other Comprehensive Income |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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Net income |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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Balance, June 30, 2025 |
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$ |
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$ |
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$ |
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$ |
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$ |
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$ |
( |
) |
$ |
( |
) |
$ |
( |
) |
$ |
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
|
|
|||||||||||||||||||||||||||||||||||||
Balance, March 31, 2026 |
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
$ |
— |
|
$ |
|
|
|
$ |
( |
) |
$ |
( |
) |
$ |
( |
) |
$ |
|
|||||||||
Issuance of Common Stock |
|
— |
|
|
— |
|
|
|
|
|
|
— |
|
|
— |
|
|
— |
|
|
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
$ |
|
||||
Stock-based compensation - Vesting |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
$ |
|
||
Other Comprehensive loss |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
( |
) |
|
— |
|
$ |
( |
) |
Net Income |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
|
$ |
|
||
Balance, June 30, 2026 |
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
$ |
- |
|
$ |
|
|
|
$ |
( |
) |
$ |
( |
) |
$ |
( |
) |
$ |
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
|
|
|||||||||||||||||||||||||||||||||||||
Balance January 1, 2026 |
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
$ |
— |
|
$ |
|
|
|
$ |
( |
) |
$ |
( |
) |
$ |
( |
) |
$ |
( |
) |
||||||||
Issuance of Common Stock |
|
— |
|
|
— |
|
|
|
|
|
|
— |
|
|
— |
|
|
— |
|
|
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
$ |
|
||||
Stock-based compensation - Vesting |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
|
||
Other Comprehensive Income |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
|
|
— |
|
|
|
||
Net Income |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
|
|
|
||
Balance, June 30, 2026 |
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
$ |
- |
|
$ |
|
|
|
$ |
( |
) |
$ |
( |
) |
$ |
( |
) |
$ |
|
|||||||||
The accompanying notes are an integral part of these unaudited condensed interim consolidated financial statements.
5
Table of Contents
DYNARESOURCE, INC.
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 2026 AND 2025
(Unaudited)
|
|
2026 |
|
|
2025 |
|
||
CASH FLOWS FROM OPERATING ACTIVITIES: |
|
|
|
|
|
|
||
Net income |
|
$ |
|
|
$ |
|
||
Adjustments to reconcile net income (loss) to cash used in operating activities |
|
|
|
|
|
|
||
Derivatives mark-to-market gain |
|
|
( |
) |
|
|
|
|
Accretion expense |
|
|
|
|
|
|
||
Depreciation and depletion |
|
|
|
|
|
|
||
Right-of-use asset amortization |
|
|
|
|
|
|
||
Interest expense |
|
|
|
|
|
|
||
Other expense |
|
|
|
|
|
|
||
Stock-based compensation |
|
|
|
|
|
|
||
Deferred tax asset |
|
|
|
|
|
|
||
Foreign exchange |
|
|
( |
) |
|
|
|
|
Operating cash flows before change in non-cash working capital items |
|
|
|
|
|
|
||
Change in non-cash working capital items: |
|
|
|
|
|
|
||
Accounts receivable |
|
|
|
|
|
|
||
Inventories |
|
|
|
|
|
( |
) |
|
Foreign tax receivable |
|
|
( |
) |
|
|
( |
) |
Other assets |
|
|
( |
) |
|
|
( |
) |
Accounts payable and accrued expenses |
|
|
( |
) |
|
|
|
|
Accrued mining taxes and other liabilities |
|
|
|
|
|
|
||
Other liabilities |
|
|
( |
) |
|
|
|
|
CASH FLOWS PROVIDED BY OPERATING ACTIVITIES |
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||
CASH FLOWS FROM INVESTING ACTIVITIES |
|
|
|
|
|
|
||
Mine development |
|
|
( |
) |
|
|
( |
) |
Purchase of equipment |
|
|
( |
) |
|
|
( |
) |
CASH FLOWS USED IN INVESTING ACTIVITIES |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
|
||
CASH FLOWS FROM FINANCING ACTIVITIES |
|
|
|
|
|
|
||
Proceeds from sale of common stock |
|
|
|
|
|
|
||
Proceeds from credit line |
|
|
|
|
|
|
||
Payments of credit line |
|
|
( |
) |
|
|
( |
) |
Operating lease payments |
|
|
( |
) |
|
|
( |
) |
CASH FLOWS (USED IN) PROVIDED BY FINANCING ACTIVITIES |
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|
||
Effects of foreign currency in cash |
|
|
|
|
|
|
||
NET DECREASE IN CASH |
|
|
( |
) |
|
|
( |
) |
CASH AT BEGINNING OF PERIOD |
|
|
|
|
|
|
||
CASH AT END OF PERIOD |
|
|
|
|
$ |
|
||
|
|
|
|
|
|
|
||
SUPPLEMENTAL DISCLOSURES |
|
|
|
|
|
|
||
Cash paid for interest |
|
$ |
|
|
$ |
|
||
Cash paid for income taxes |
|
$ |
|
|
$ |
|
||
The accompanying notes are an integral part of these unaudited condensed interim consolidated financial statements.
6
Table of Contents
DYNARESOURCE, INC.
NOTES TO THE UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2026
NOTE 1 - NATURE OF ACTIVITIES AND SIGNIFICANT ACCOUNTING POLICIES
Nature of Activities, History and Organization
DynaResource, Inc. (the “Company” or “DynaResource”) was organized on September 28, 1937, as a California corporation under the name of West Coast Mines, Inc. In 1998, the Company re-domiciled to Delaware and changed its name to DynaResource, Inc. The Company is in the business of acquiring, investing in, and developing precious metal properties, and the production of precious metals.
As of June 30, 2026, the Company had
Although the Company considers the four Mexican subsidiaries to be wholly owned, each has issued one qualifying share to a second shareholder as required under Mexican law, with such qualifying shares held by US Holding. DynaMéxico owns a portfolio of mining concessions that currently comprises its
Principles of Consolidation
The unaudited condensed interim consolidated financial statements include the accounts of DynaResource, Inc., as well as the Company’s wholly owned subsidiaries DynaMéxico, DynaMineras, DynaOperaciones and DynaAlica. All significant intercompany transactions have been eliminated. All amounts are presented in U.S. Dollars unless otherwise stated.
Significant Accounting Policies
The Company’s management selects and applies accounting policies in accordance with generally accepted accounting principles (“GAAP”) and determines the methods for their application. The application of these policies requires the use of estimates and the appropriate recognition, matching, and timing of revenues and expenses. The accounting policies adopted conform to GAAP and have been applied consistently in the preparation of these unaudited condensed interim consolidated financial statements.
The unaudited condensed interim consolidated financial statements and accompanying notes are representations of the Company’s management, which is responsible for their integrity and objectivity. Management acknowledges its responsibility for adopting sound accounting practices, establishing and maintaining an effective system of internal accounting controls, and preventing and detecting fraud. The Company’s system of internal accounting control is designed to ensure, among other objectives: (1) that recorded transactions are valid; (2) that valid transactions are recorded; and (3) that transactions are recorded in the proper period in a timely manner to produce financial statements that fairly present the financial position, results of operations, and cash flows of the Company for the periods presented.
Basis of Presentation
These unaudited condensed interim consolidated financial statements reflect the accounts of the Company and have been prepared in accordance with GAAP and the rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”) for interim financial reporting. Certain information and footnote disclosures normally included in audited annual consolidated financial statements prepared in accordance with GAAP have been condensed or omitted.
Going concern
These interim financial statements have been prepared on a going concern basis, which contemplates the realization of assets and discharge of liabilities in the normal course of business for the foreseeable future. The information should be read in conjunction with the Company’s audited consolidated financial statements and accompanying notes included in its Annual Report on Form 10-K for the year ended December 31, 2025.
As of June 30, 2026, the Company had negative working capital of $
7
Table of Contents
implement its business plan, raise additional capital as needed from the sales of stock, additional debt financing or debt refinancing as may be required. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.
Use of Estimates
The preparation of unaudited condensed interim consolidated financial statements in conformity with GAAP requires management to make estimates, judgments, and assumptions that affect the amounts reported in the financial statements and disclosures of contingent assets and liabilities. Actual results could differ materially from those estimates.
Production Stage Issuer
The definitions of Measured Mineral Resource, Mineral Reserve and Mineral Resource are set forth in SEC Regulation S-K, Item 1300 (“S-K 1300”).
Measured mineral resource is that part of a mineral resource for which quantity and grade or quality are estimated on the basis of conclusive geological evidence and sampling. The level of geological certainty associated with a measured mineral resource is sufficient to allow a qualified person to apply modifying factors in sufficient detail to support detailed mine planning and final evaluation of the economic viability of the deposit. Because a measured mineral resource has a higher level of confidence than the level of confidence of either an indicated mineral resource or an inferred mineral resource, a measured mineral resource may be converted to a proven mineral reserve or to a probable mineral reserve.
Mineral reserve is an estimate of tonnage and grade or quality of indicated and measured mineral resources that, in the opinion of the qualified person, can be the basis of an economically viable project. More specifically, it is the economically mineable part of a measured or indicated mineral resource, which includes diluting materials and allowances for losses that may occur when the material is mined or extracted.
Mineral resource is a concentration or occurrence of material of economic interest in or on the Earth’s crust in such form, grade or quality, and quantity that there are reasonable prospects for economic extraction. A mineral resource is a reasonable estimate of mineralization, taking into account relevant factors such as cut-off grade, likely mining dimensions, location or continuity, that, with the assumed and justifiable technical and economic conditions, is likely to, in whole or in part, become economically extractable. It is not merely an inventory of all mineralization drilled or sampled.
In accordance with S-K 1300, the SJG mine was classified as an Exploration Stage Property prior to January 1, 2025. This classification was based on the fact that the SJG mine had no Mineral Reserves as defined under S-K 1300. Although the SJG mine engaged in the mining of Mineral Resources and production of gold-silver concentrate, such activities were not sufficient to alter its classification as an Exploration Stage Property.
Effective January 1, 2025, following the completion of a Mineral Reserve estimate in accordance with S-K 1300, the Company transitioned from an Exploration Stage issuer to a Production Stage issuer. In connection with this transition, the Company updated its accounting estimates related to the capitalization of development costs and its depreciation and depletion methodologies. This change is treated as a change in accounting estimate under Accounting Standards Codification (“ASC”) 250, and has been applied prospectively from January 1, 2025.
Segment Information
The Company operates as
Cash and Cash Equivalents
The Company considers all highly liquid debt instruments with an original maturity of three months or less to be cash equivalents. Cash balances may, at times, exceed the Federal Deposit Insurance Corporation (“FDIC”) insurance limits. As of June 30, 2026, the Company had $
Accounts Receivable and Allowances for Doubtful Accounts
8
Table of Contents
Accounts receivable consist primarily of trade receivables related to the sale of metal concentrate, recorded net of allowances for doubtful accounts and mark-to-market adjustments on provisional invoices based on forward metal prices. An allowance is recorded when receivables are determined to be uncollectible. As of June 30, 2026 and December 31, 2025 management believes all accounts receivable are fully collectable.
Mined Tonnage Inventory
Concentrate Inventory
Concentrate inventory, consisting of metal concentrates located at the Company facilities or in transit to customers is carried at the lower of production cost or net realizable value, based on current metals prices.
Foreign Tax Receivable
Foreign tax receivable is comprised of recoverable value-added taxes (“IVA”) paid to the Mexican government on goods and services. Under certain circumstances, IVA is recoverable by filing a tax return. Amounts paid are tracked and recognized as receivables until collected.
Proven and Probable Reserves
The definitions of proven and probable mineral reserves are set forth in S-K 1300.
A proven mineral reserve is the economically mineable part of a measured mineral resource. The qualified person reflects a high degree of confidence in the results obtained from the application of modifying factors, as well as in the estimates of tonnage and grade or quality. A proven mineral reserve can only result from the conversion of a measured mineral resource.
A probable mineral reserve is the economically mineable part of an indicated mineral resource and in some cases, a measured mineral resource. The qualified person’s confidence in the modifying factors and in the estimates of tonnage and grade or quality is lower for a probable reserve than for a proven mineral reserve, but still sufficient to demonstrate that extraction is economically viable at the time of recording, based on reasonable investment and market assumptions.
The lower level of confidence associated with a probable reserve arises either from geologic uncertainty when converting an indicated mineral resource or from greater risks related to the modifying factors when converting a measured mineral resource. A qualified person must classify a measured mineral resource as a probable mineral reserve if confidence in the application of the modifying factors is insufficient to support classification as a proven mineral reserve.
Mineral Property Interests, Plant and Equipment and Mine Development Costs
Mineral property interests:
Mineral property interests consist of capitalized expenditures related to the development of mineral properties and mining concessions arising from acquisitions. The amount capitalized represents the fair value of the mineral property and associated mining concessions at the time of acquisition.
Development costs include engineering and metallurgical studies, drilling, and related costs to delineate an ore body, and the construction of access paths and other infrastructure to gain access to the ore body at underground mines. Development costs are expensed as Development and Stripping Costs when incurred until an economically viable deposit has been delineated, at which point such costs are capitalized. Where multiple open pits exist at a mine, pre-stripping costs are capitalized separately for each pit. Production commences when saleable minerals, beyond a de minimis amount, are produced.
During the production phase of a mine, costs incurred to provide access to reserves and resources that will be produced in future periods and that would not have otherwise been accessible are capitalized and included in the carrying value of the related mineral property interest.
When proven and probable mineral reserves exist, development costs are capitalized. Drilling and related costs are capitalized for an ore body where an economically viable deposit exists and the activities are directed at obtaining additional information, providing greater
9
Table of Contents
definition of the ore body, or converting non-reserve mineralization to proven and/or probable reserves if the benefit is expected to be realized over a period beyond one year. All other drilling and related costs are expensed as incurred as Exploration or Development and Stripping Costs. Exploration costs include costs incurred to identify new mineral resources, evaluate potential resources, and convert mineral resources into proven and probable mineral reserves. Drilling costs incurred for the purpose of operational ore control during the production stage, rather than for obtaining additional information about the ore body, are allocated to inventory costs and then expensed as a component of production costs applicable to sales once revenue from the sale of inventory is realized.
Mineral property interests are amortized upon commencement of production on a unit-of-production basis over proven and probable mineral reserves. When a property does not contain mineralized material that satisfies the definition of proven and probable reserves, the amortization of the capitalized costs is charged to expense based on the most appropriate method, which includes the straight-line method and the units-of-production method over the total estimated production over the life of the mine, as determined by internal mine plans.
Plant and equipment:
For properties where the Company has established economically viable deposits, expenditures for plant and equipment are capitalized and recorded at cost. The cost capitalized for plant and equipment includes borrowing costs that attributable to qualifying assets. Plant and equipment are depreciated using the straight-line method over the estimated productive lives of the assets.
Construction-in-progress costs:
Assets under construction are capitalized as construction-in-progress until the asset is available for its intended use, at which point costs are transferred to the appropriate category of plant and equipment or mineral property interest and amortized. Construction-in-progress costs comprise the purchase price of the asset and any directly attributable costs incurred to bring the asset into working condition for its intended use.
Office furniture and equipment are depreciated using the straight-line method over estimated useful lives ranging from to
For properties where the Company has not established economically viable deposits, substantially all costs, including design, engineering, construction, and installation of equipment, are expensed as incurred unless the equipment has alternative uses, significant salvage value, or probable future benefit, in which case the equipment is capitalized at cost.
Impairment of Long-Lived Assets:
The Company reviews its long-lived assets for impairment whenever events or changes in circumstances indicate that the related carrying amounts may not be recoverable. Mineral properties are monitored for indicators of impairment based on factors such as changes in mineral prices, government regulations and taxation, the Company’s continued right to explore the area, results from exploration activities (including assays, technical reports, and drill results), and the Company’s ongoing plans and ability to fund exploration programs on the property.
For operating mines, recoverability is assessed by comparing the undiscounted future net cash flows expected to be generated by the asset to its net book value. If the net book value exceeds future net undiscounted future net cash flows, an impairment loss is recognized and measured as the excess of the asset’s net book value over its estimated fair value. Fair value for operating mines is determined using a combined approach, which includes a discounted cash flow model for the existing operations and a market approach for the valuation of exploration land claims.
Future cash flows are estimated based on quantities of recoverable mineralized material, expected gold and silver prices (considering current and historical prices, trends, and relevant market factors), production levels, operating costs, capital requirements and reclamation obligations, all based on current life-of-mine plans. The term “recoverable mineralized material” refers to the estimated quantity of gold or other commodities recoverable after accounting for processing and treatment losses.
In estimating future cash flows, assets are grouped at the lowest level for which there are separately identifiable cash flows that are largely independent of the cash flows of other asset groups. The Company’s estimates of future cash flows involve significant judgments and assumptions. Actual future results, including quantities of recoverable minerals, commodity prices, production levels, operating and capital costs, may differ materially due the inherent risks and uncertainties involved.
10
Table of Contents
The recoverability of the carrying value of each mineral property is assessed annually or more frequently if events or changes in circumstances indicate potential impairment. Indicators of impairment include adverse changes in any of the following:
A write-down to fair value is recognized when the expected future cash flows are less than the net book value of the property, or when other events or changes in circumstances indicate that the carrying amount is not recoverable. As of June 30, 2026 and December 31, 2025, no indicators of impairment existed.
Asset Retirement Obligation (“ARO”)
Provisions for environmental rehabilitation are recognized for the estimated future closure, restoration, and rehabilitation costs (which include the dismantling and demolition of infrastructure, removal of residual materials, and remediation of disturbed areas) in the accounting period when the related environmental disturbance occurs. The associated asset retirement costs, including periodic adjustments, if any, are capitalized as part of the carrying amount of the long-lived asset if proven or probable reserves exist or if the costs relate to an acquired mineral property interest. Otherwise, the costs are expensed as incurred. Periodic accretion is recorded as an increase to the reclamation and remediation liabilities and recognized as an operating expense.
Prior to January 1, 2025, the Company was classified as an Exploration Stage issuer, had not demonstrated proven or probable reserves, and did not qualify for asset capitalization. Accordingly, all the costs associated with reclamation and remediation obligations were expensed as incurred.
The fair value of reclamation and remediation liabilities is measured by discounting the expected cash flows, using a credit-adjusted risk-free rate of interest and considering the effects of inflation. The Company prepares estimates of the timing and amounts of expected cash flows when reclamation and remediation liabilities are incurred, and updates these estimates to reflect changes in facts and circumstances. The estimation of fair value involves significant judgment, including assumptions regarding the amount and timing of cash flows, inflation rates, and credit risk.
Changes in regulations or laws, instances of non-compliance that result in fines, or unforeseen environmental contamination could result in a material impact on reclamation and remediation liabilities recognized in operations. Significant judgments and estimates are involved when assessing the fair value of AROs. Expected cash flows relating to AROs could occur over long periods of time, and the assessment of the extent of required environmental remediation work is highly subjective. As a result, the fair value of the AROs may change materially over time.
Property Holding Costs
Property holding costs to maintain a property on a care and maintenance basis are expensed as incurred. Such costs include security and maintenance expenses, lease and claim fees and payments, and environmental monitoring and reporting costs.
Exploration Costs
Exploration costs, including costs related to exploration activities, development, direct field operations, and related administrative expenses are expensed in the period in which they are incurred.
Leases
The Company adopted ASC 842, Leases which requires the recognition of a right-of-use asset and a corresponding lease liability for all leases at the commencement date, measured based on the present value of lease payments over the lease term. ASC 842 also requires additional qualitative and quantitative disclosures regarding leasing arrangements. The Company adopted ASC 842 prospectively and elected the package of transition practical expedients, which permits Company not to reassess of (i) whether existing or expired contracts contain leases, (ii) lease classification, and (iii) initial direct costs. In addition, the Company elected other available practical expedients, including the option not to separate lease and non-lease components – primarily common area maintenance charges – for all classes of underlying assets, and the option to exclude leases with an initial term of 12 months or less from recognition under ASC 842.
Transactions In and Translations of Foreign Currency
11
Table of Contents
The functional currency of the Company’s subsidiaries is the Mexican Peso. Accordingly, the financial statements of the subsidiaries are translated from Mexican Pesos into U.S. dollars using (i) the exchange rate prevailing at the balance sheet date for balance sheet accounts, and (ii) the weighted average exchange rate of the reporting period for income statement accounts. Foreign currency translation gains and losses are recorded as a separate component of stockholders’ equity and reported within comprehensive income (loss).
Foreign currency transactions are translated into the respective functional currency of the entity or division, using the exchange rates prevailing at the dates of the transactions (spot exchange rate). Foreign exchange gains and losses resulting from the settlement of such transactions and from the remeasurement of monetary items denominated in foreign currencies using period-end exchange rates are recognized in profit or loss. Non-monetary items that are not remeasured at period-end are measured at historical cost, translated using the exchange rate prevailing on the date of the original transaction, except for non-monetary items measured at fair value, which using the exchange rate on the date the fair value was determined. Gains and losses are included in the consolidated statement of operations and comprehensive income (loss).
The unaudited financial statements of the subsidiaries should not be construed as a representation that Mexican Pesos have been, could have been, or may in the future be converted into U.S. Dollars at the rates used for translation or any other exchange rates.
The relevant exchange rates used in the preparation of the unaudited financial statements for the subsidiaries were as follows for the periods ended June 30, 2026 and December 31, 2025 (expressed as Mexican Pesos per one U.S. dollar):
|
|
June 30, 2026 |
|
|
December 31, 2025 |
|
||
Current Exchange Rate |
|
|
|
|
|
|
||
The relevant exchange rates used in the preparation of the income statement portion of unaudited financial statements for the subsidiaries are as follows for the periods ended June 30, 2026 and 2025 (Mexican Pesos per one U.S. dollar):
|
|
June 30, 2026 |
|
|
June 30, 2025 |
|
||
Weighted Average Exchange Rate for the Six Months Ended |
|
|
|
|
|
|
||
The Company recorded currency transaction gain of $
Stock-based Compensation
The Company accounts for stock options at fair value as prescribed in ASC 718, Stock-Based Compensation. The Company estimates the fair value of each stock option at the grant date using the Black-Scholes option-pricing model and recognizes for expense over the service period, if any, associated with the stock option. The Company’s estimates may be impacted by variables including, but not limited to, stock price volatility, employee stock option exercise behavior, and estimates of forfeitures.
Income Taxes
The Company accounts for income taxes under ASC 740, Income Taxes, using the liability method. This approach recognizing certain temporary differences between the financial reporting basis and the related income tax basis for such liabilities and assets. This method generates either a net deferred tax asset or liability, measured using the statutory tax rates in effect. The deferred tax expense or benefit is derived from changes in the net deferred tax asset or liability during the reporting period. The Company records a valuation allowance against any portion of deferred tax assets when it concludes, based on the weight of available evidence, that it is more likely than not that some portion or all of the deferred tax assets will not be realized.
Income from the Company’s subsidiaries in México is taxed in accordance with applicable Mexican tax law.
Uncertain Tax Position
The Company is subject to income taxes in the U.S. and other foreign jurisdictions, where certain outcomes are uncertain. The evaluation of uncertain tax positions requires significant judgment in the interpretation and application of GAAP and complex domestic and international tax laws. The Company establishes reserves to eliminate some or all of the tax benefit of a position when it determine that one of the following conditions exists: (1) the tax position is not “more likely than not” to be sustained, (2) the tax position is “more likely than not” to be sustained, but for a lesser amount, or (3) the tax position is “more likely than not” to be sustained, but not in the period originally taken. In evaluating uncertainty: (1) it is presumed that the tax position will be examined by the relevant authority with full knowledge of all relevant information; (2) the technical merits of a tax position are based on sources such as legislation, legislative intent, regulations, rulings, and case law; and (3) each tax position is assessed independently, without offsetting or aggregation with other tax positions taken. Although management believes that the Company’s reserves are reasonable, there can be no assurance that the final outcome will not differ from the amounts reflected in the financial statements. A number of years may pass before an uncertain
12
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tax position is audited and ultimately resolved. The statute of limitations and audit period vary by jurisdiction. Any previously reserved tax benefit will be recognized in income tax expense in the first interim period during which: (1) the tax position is “more likely than not” to be sustained, (2) the tax position is settled through negotiation or litigation, or (3) the statute of limitations has expired.
Comprehensive Income (Loss)
The Company follows ASC 220, Comprehensive Income, which establishes standards for the reporting and presentation of comprehensive income and its components in general-purpose consolidated financial statements. Comprehensive income (loss) includes net income (loss) and other comprehensive income (loss), such as unrealized gains and losses resulting from the translation of assets and liabilities of the Company’s foreign operations.
Revenue Recognition
The Company recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers. Revenue is generated from the sale of gold and silver concentrate produced from its mining operations. Revenue is recognized, net of treatment and refining charges, when the Company satisfies its performance obligation – typically upon delivery to the customer’s facility. At that point, the customer assumes the risks and rewards of ownership and has the ability to control the material.
Revenue is initially recorded on a provisional basis using the contract price and estimated metal quantities based on assay results. Adjustments to provisional sales prices are made to reflect mark-to-market changes in forward metal prices until final settlement. The difference between the provisional and final sales price is treated as an embedded derivative, which be accrued for separately from the host contract. The host contract represents the receivable based on the quoted metal prices at the time of delivery. The embedded derivative, which does not qualify for hedge accounting, is remeasured at each reporting date, and changes in fair value are recognized in revenue until final pricing is determined. These price fluctuations – occurring between delivery and final settlement – result in revenue adjustments for previously recorded concentrate sales. The primary risk associated with the provisional pricing lies in potential variances between the estimated precious metals content, based on initial assay data, and the actual recoveries confirmed through final processing and settlement.
For the six months ended June 30, 2026 and 2025,
Shipping and handling costs incurred after control transfers to the customer are treated as fulfillment costs.
Derivative Financial Instruments
Certain warrants by the Company are classified as derivative financial liabilities. Their estimated fair value is determined using the Black-Scholes option pricing model and remeasured each reporting period. Changes in fair value are recorded in the statements of operations and comprehensive income (loss). Key inputs to the model include share price volatility, dividend yield, and expected term.
Fair Value of Financial Instruments
The Company’s financial instruments include cash, accounts payable, credit line and derivative liabilities. The carrying values of cash, accounts receivable, accounts payable, and credit line approximate fair value due to their short-term nature. Installment credit line also approximates fair value based on the relationship between stated interest rates and the Company’s risk-adjusted borrowing rate. Derivative liabilities are measured using the Black-Scholes model.
Earnings (Loss) Per Share
Earnings (loss) per share is calculated in accordance with ASC 260, Earnings per Share. Basic earnings (loss) is calculated using the weighted average number of common shares outstanding during the period. Dilutive earnings (loss) share includes the effect of potentially dilutive common shares, such as stock warrants and convertible preferred shares, except in periods of net loss, when such securities would be considered anti-dilutive.
The Company’s Series C Senior Convertible Preferred Stock (the “Series C Preferred Stock”) and related outstanding dividends are convertible into
13
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Related Party Transactions
ASC 850, Related Party Disclosures, requires companies to disclose material related party transactions in their financial statements. The Company complies with this requirement by disclosing all such transactions. A related party is defined as an individual or entity that, through direct or indirect means – including intermediaries – has the ability to control, is controlled by, or is under common control with the Company. Related parties also include principal owners of the Company, members of management, their immediate family members, and any other parties that may exert significant influence over the management or operating policies. A party is also considered related if it has an ownership interest in one transacting party and can significantly influence the other, to an extent that the affected party may be unable to pursue its own separate interests fully.
Significant Judgments, Estimates and Assumptions
The preparation of financial statements in accordance with GAAP requires management to make judgments, estimates, and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities as of the reporting date, and the reported amounts of revenues and expenses during the reporting period. These estimates and assumptions are based on management’s historical experience and best available information. Actual results could differ from these estimates, and such differences could have a material impact on future operating results and cash flows.
Key areas involving significant judgment and estimates that may result in material changes to the carrying amounts of assets and liabilities include, but are not limited to:
Commodity Pricing Contract
The results of the Company are substantially dependent upon the market prices of gold and silver, which are subject to significant volatility and fluctuate widely due to factors beyond the Company’s control. Pursuant to the terms of the Company’s Gold Concentrate Purchase Agreement (as amended, the “Offtake Agreement”), the Company has entered into commodity pricing arrangements from time to time to manage exposure to fluctuations in gold and silver prices.
In August 2025, the Company entered into a commodity pricing arrangement pursuant to the Offtake Agreement. Under this min/max pricing structure, the Company hedged the sales price of
Additionally, in November 2025, the Company entered into another commodity pricing arrangement under the Offtake Agreement. This arrangement also features a min/max pricing structure, hedging the sales price of
Furthermore, in December 2025, the Company entered into yet another commodity pricing arrangement under the Offtake Agreement. This arrangement hedged the sales price of
The effect of hedging activity for the three and six months ended June 30, 2026 was approximately negative $
Recently Issued Accounting Standards
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In March 2024, FASB issued ASU 2024-03, Income Statement – Reporting Comprehensive Income (Subtopic 220-240): Expense Disaggregation Disclosures, which requires all public entities to disclose disaggregated expense information for certain natural expense categories – including inventory purchases, employee compensation, depreciation, amortization of intangible assets, and depletion – within each relevant income statement line item. The objective is to provide greater transparency into the nature and function of expenses reported. The amendments are effective for annual periods beginning after December 15, 2026, and for interim periods beginning after December 15, 2027. Early adoption is permitted. Entities may apply the standard either prospectively to periods after the effective date or retrospectively to all prior periods presented. The Company is currently evaluating the potential impact of adopting ASU 2024-03 on its consolidated financial statements and related disclosures.
NOTE 2 – CONCENTRATE AND ORE INVENTORIES
Inventories are carried at the lower of cost or fair value and consist of mined tonnage, gravity-flotation concentrates, and gravity tailings (or, flotation feed material).
|
|
June 30, 2026 |
|
|
December 31, 2025 |
|
||
Mined tonnage |
|
$ |
|
|
$ |
|
||
Gold-Silver concentrates |
|
|
|
|
|
|
||
Total inventories |
|
$ |
|
|
$ |
|
||
NOTE 3 – MINERAL PROPERTY INTERESTS, PLANT AND EQUIPMENT
The cost and carrying value of mineral property interests, plant and equipment at June 30, 2026 and December 31, 2025 was as follows:
|
|
June 30, 2026 |
|
|
December 31, 2025 |
|
||
Mineral property interests, cost |
|
|
|
|
|
|
||
Mining concessions |
|
$ |
|
|
$ |
|
||
Mine development |
|
|
|
|
|
|
||
Subtotal |
|
$ |
|
|
$ |
|
||
Less: accumulated depletion |
|
|
( |
) |
|
|
( |
) |
Mineral property interests, carrying value |
|
$ |
|
|
$ |
|
||
|
|
|
|
|
|
|
||
Plant and equipment, cost |
|
|
|
|
|
|
||
Construction in progress |
|
$ |
|
|
$ |
|
||
Plant and equipment |
|
|
|
|
|
|
||
Other |
|
|
|
|
|
|
||
Subtotal |
|
|
|
|
|
|
||
Less: Accumulated depreciation and amortization |
|
|
( |
) |
|
|
( |
) |
Plant and equipment, carrying value |
|
$ |
|
|
$ |
|
||
|
|
|
|
|
|
|
||
Mineral property interests, plant and equipment, carrying value |
|
$ |
|
|
$ |
|
||
Mineral properties totaled $
Depreciation and amortization are recorded over each asset’s estimated useful life. Depreciation and amortization expense was $
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NOTE 4 - OTHER CURRENT ASSETS
As of June 30, 2026 and December 31, 2025, other current assets consisted of the following:
|
|
June 30, |
|
|
December 31, |
|
||
|
|
2026 |
|
|
2025 |
|
||
Advances to suppliers |
|
|
|
|
|
|
||
Prepaid expenses |
|
|
|
|
|
|
||
Total other current assets |
|
$ |
|
|
$ |
|
||
NOTE 5 - ACCOUNTS PAYABLE AND ACCRUED LIABILITIES AND ACCRUED MINING TAXES AND OTHER LIABILITIES
As of June 30, 2026 and December 31, 2025, the Company had the following accounts payable and accrued liabilities:
|
|
June 30, |
|
|
December 31, |
|
||
|
|
2026 |
|
|
2025 |
|
||
Accounts payable |
|
$ |
|
|
$ |
|
||
Accrued vendors |
|
|
|
|
|
|
||
Accrued payroll and board fees |
|
|
|
|
|
|
||
Accrued interest |
|
|
|
|
|
|
||
Other accrued liabilities |
|
|
|
|
|
|
||
Accounts payables and accruals |
|
$ |
|
|
$ |
|
||
|
|
|
|
|
|
|
||
Accrued mining taxes |
|
|
|
|
|
|
||
Other liabilities |
|
|
|
|
|
|
||
Accrued mining taxes and other liabilities |
|
$ |
|
|
$ |
|
||
NOTE 6 - DERIVATIVE LIABILITY
Warrants Issued With the Notes Convertible Into Series D Preferred
In fiscal 2020, the Company closed a financing agreement with Golden Post Rail, LLC (“Golden Post”) and certain shareholders pursuant to which the Company issued convertible promissory notes bearing interest at
In instances where the determination of fair value is based on inputs from different levels of the fair value hierarchy, the level within which the entire fair value measurement is classified is determined based on the lowest level input that is significant to the fair value measurement in its entirety. The Company’s assessment of the significance of a particular input to the overall fair value measurement requires judgment and considers factors specific to the asset or liability.
The Company classified the inputs in this valuation as Level 3 within the fair value hierarchy under ASC 820 and utilized an equity simulation model to determine the value of conversion feature associated with the 2020 Warrants issued in connection with the notes convertible into Series D Preferred Stock, based on the assumptions set forth below:
16
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Period Ended |
|
June 30, |
|
|
December 31, |
|
||
Annual volatility rate |
|
|
% |
|
|
% |
||
Risk free rate |
|
|
% |
|
|
% |
||
Expected life (years) |
|
|
|
|
|
|
||
Fair value of common stock |
|
$ |
|
|
$ |
|
||
The following table summarizes the changes in the fair value of the derivative liability during the six months ended June 30, 2026 and the twelve months ended December 31, 2025.
Period Ended |
|
June 30, |
|
|
December 31, |
|
||
Fair value of derivative (warrants), beginning of period |
|
$ |
|
|
$ |
|
||
Exercise of warrants |
|
|
|
|
|
|
||
|
|
( |
) |
|
|
|
||
Fair value of derivative (warrants), end of period |
|
$ |
|
|
$ |
|
||
NOTE 7 - CREDIT LINE
(A) Advance Credit Line Facility/Customer Advances
On February 4, 2021, the Company entered into an Advance Credit Line Facility and Purchase Agreement (the “ACL”), with a commercial buyer. On August 2, 2023, the ACL was extended through December 2026 in an Amendment Agreement (the “Amendment”). Under the terms of the ACL and Amendment:
(B) Revolving Credit Line (RCL) & Temporary Advance Credit Line (TACL)
In addition, during November 2025 and December 2025, the On December 1, 2023, the Company exercised its option under the ACL to convert the outstanding balance of $
On June 20, 2024, the Company amended the terms of the RCL. Under the amendment, the Company could receive up to an additional $
17
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As part of the June 20, 2024 amendment, the Company granted a security interest in its Mexican IVA tax claims to the holder of the RCL and TACL notes.
In November 2024, the Company repaid the TACL in full and renewed the RCL for an additional one-year term. Under the renewal, the TACL was discontinued, and the Put Option was removed. The maximum principal amount of $
(C) Amendment to Offtake Agreement and Credit Facility
On August 22, 2025, DynaMexico entered into an amendment (the “Offtake Amendment”) to the Gold Concentrate Purchase Agreement originally dated February 1, 2021 (as amended, the “Offtake Agreement”), with MK Metal Trading Mexico S.A. de C.V. (“Buyer”) and Ocean Partners UK Limited (“Ocean Partners UK”).
The Offtake Amendment:
The Credit Facility is structured as a
Concurrent with the Offtake Amendment, DynaMexico and Ocean Partners UK entered into the Credit Facility, and the Company executed a Parent Company Guarantee in favor of Ocean Partners UK, guaranteeing DynaMexico’s obligations under the Credit Facility.
The following is a summary of activity during the periods ended June 30, 2026 and December 31, 2025:
|
|
June 30, |
|
|
December 31, |
|
||
|
|
2026 |
|
|
2025 |
|
||
Balance beginning of period |
|
$ |
|
|
$ |
|
||
Advances |
|
|
|
|
|
|
||
Principal Payments |
|
|
( |
) |
|
|
( |
) |
Balance end of period |
|
$ |
|
|
$ |
|
||
Current liability |
|
$ |
|
|
$ |
|
||
Non-current liability |
|
|
|
|
|
|
||
Interest expense on the RCL for the periods ended June 30, 2026 and 2025 were $
NOTE 8 – MINING CONCESSION DUTIES PAYABLE
In June 2018, the Company entered into financing agreements for unpaid mining concession taxes on the Francisco Arturo mining concession for the year ended December 31, 2017 and the period ended June 30, 2018 in the amount of $
In February 2019, the Company entered into a financing agreement for unpaid mining concession taxes on the Francisco Arturo mining concession for the year ended December 31, 2018 in the amount of $
18
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As of June 2019, the Company ceased making monthly payments on the Francisco Arturo concession financing notes and petitioned the Servicio de Administración Tributaria (the “SAT”), the Mexican federal tax authority, for a reduction in the liability proportionate to the reduction in the Francisco Arturo concession area. For financial reporting purposes, the Company continues to carry all financing notes related to unpaid mining concession taxes on the Francisco Arturo concessions at their unpaid principal amounts and accrues interest. As of June 30, 2026 and December 31, 2025, $
The following summarizes the activity during the six months ended June 30, 2026:
Balance December 31, 2025 |
|
$ |
|
|
Exchange rate adjustment |
|
|
|
|
2026 Interest |
|
|
|
|
2026 principal payments |
|
|
|
|
Balance June 30, 2026 |
|
$ |
|
NOTE 9 - ASSET RETIREMENT OBLIGATION
The Company is responsible for the reclamation of certain past and future disturbances at its properties. During 2023, a significant upgrade was made to the milling facility and therefore, an ARO was established as of December 31, 2023.
During the year ended December 31, 2025, the Company recorded a change in estimate related to its ARO as a result of completing an updated, comprehensive closure plan. The increase in the ARO was recorded as an increase to mineral property, plant and equipment, with a corresponding increase to the ARO liability. The Company measures AROs using an expected present value technique in accordance with ASC 410‑20 and discounts expected future cash flows using a credit‑adjusted, risk‑free rate. As of December 31, 2025, the discount rate used was
Asset retirement obligation consisted of the following as of June 30, 2026 and December 31, 2025:
|
|
June 30, |
|
|
December 31, |
|
||
|
|
2026 |
|
|
2025 |
|
||
Asset retirement obligation at beginning of year |
|
$ |
|
|
$ |
|
||
Additions to ARO liability |
|
|
|
|
|
|
||
Accretion |
|
|
|
|
|
|
||
Foreign exchange |
|
|
|
|
|
|
||
Asset retirement obligation at end of year |
|
$ |
|
|
$ |
|
||
NOTE 10 - STOCKHOLDERS’ EQUITY
The total number of shares of all classes of capital stock authorized for issuance by the Company is
Series C Senior Convertible Preferred Stock
As of June 30, 2026 and December 31, 2025 there were
19
Table of Contents
Because the Series C Preferred Stock is mandatorily redeemable by the Company at the election of the holder upon maturity, it is classified as “temporary equity” on the consolidated balance sheet.
Series D Senior Convertible Preferred Stock
Financing Agreement with Golden Post Rail, LLC, and with Shareholders of DynaResource, Inc.
On May 14, 2020, the Company closed a financing agreement with certain shareholders totaling $
On October 7, 2021, the Company paid $
Because the Series D Preferred is mandatorily redeemable by the Company at the election of the holder upon maturity, it is classified as “temporary equity” on the consolidated balance sheet.
Deemed dividends on the Series C Preferred Stock and Series D Preferred Stock for the six months ended June 30, 2026 and 2025, were $
Series E Convertible Preferred Stock
As of June 30, 2026 and December 31, 2025, there were
Preferred Stock (Undesignated)
In addition to the
The shares of each series of Preferred Stock may vary from the shares of any other series thereof in any or all these rights and terms. The Board of Directors may increase the number of shares designated for any existing series by resolution, adding authorized but unissued and undesignated shares to that series. Unless otherwise provided in a particular Preferred Stock designation, the Board of Directors may also decrease the number of shares designated for any existing series by resolution, returning such shares to the pool of authorized, unissued and undesignated Preferred Stock.
Common Stock
The Company is authorized to issue
Preferred Rights
The Company issued “Preferred Rights” and received proceeds of $
20
Table of Contents
Stock Issuances
On May 26, 2026 the Company issued
Treasury Stock
There were no treasury stock transactions during the six months ended June 30, 2026, or during the year ended December 31, 2025.
There were
Warrants
As of June 30, 2026, the Company had outstanding warrants to purchase 892,165 shares of Common Stock. These warrants were issued as part of the 2020 financing transaction involving notes convertible into Series D Preferred Stock.
|
|
|
|
|
Weighted |
|
|
Weighted |
|
|
|
|
||||
|
|
|
|
|
Average |
|
|
Average |
|
|
|
|
||||
|
|
|
|
|
Exercise |
|
|
Remaining |
|
|
|
|
||||
|
|
Number |
|
|
Price |
|
|
Contractual |
|
|
Intrinsic |
|
||||
|
|
of Shares |
|
|
per share |
|
|
Life (Years) |
|
|
Value |
|
||||
Exercisable at December 31, 2024 |
|
|
|
|
$ |
|
|
|
|
|
|
|
||||
Exercise of warrants |
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
||
Forfeiture of the warrants |
|
|
|
|
|
|
|
|
— |
|
|
|
|
|||
Balance at December 31, 2025 |
|
|
|
|
$ |
|
|
|
|
|
|
— |
|
|||
Exercisable at December 31, 2025 |
|
|
|
|
$ |
|
|
|
|
|
|
|
||||
Exercise of warrants |
|
|
|
|
$ |
|
|
|
- |
|
|
|
— |
|
||
Forfeiture of the warrants |
|
|
|
|
|
|
|
|
— |
|
|
|
|
|||
Balance as of June 30, 2026 |
|
|
|
|
$ |
|
|
|
|
|
|
— |
|
|||
A derivative liability was recognized upon the issuance of the 2020 Warrants. As of June 30, 2026, the derivative liability totaled $
Options
As of June 30, 2026, the Company had outstanding options to purchase an aggregate of
|
|
|
|
|
Weighted |
|
|
Weighted |
|
|
|
|
||||
|
|
|
|
|
Average |
|
|
Average |
|
|
|
|
||||
|
|
|
|
|
Exercise |
|
|
Remaining |
|
|
|
|
||||
|
|
Number |
|
|
Price |
|
|
Contractual |
|
|
Intrinsic |
|
||||
|
|
of Shares |
|
|
per share |
|
|
Life (Years) |
|
|
Value |
|
||||
Balance at December 31, 2024 |
|
|
|
|
|
|
|
|
— |
|
|
|
|
|||
Issuance of options |
|
|
|
|
|
|
|
|
|
|
|
— |
|
|||
Exercise of options |
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
||
Forfeiture of the options |
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
||
Balance at December 31, 2025 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Issuance of options |
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
||
Exercise of options |
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
||
Forfeiture of the options |
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
||
Balance at June 30, 2026 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
NOTE 11 - STOCK-BASED COMPENSATION
For the six months ended June 30, 2026 and 2025, the Company recorded $
21
Table of Contents
NOTE 12 - INCOME TAXES
The Company has adopted ASC 740-10, Income Taxes, which requires the use of the liability method for the recognition of income tax expense, and for the measurement of current and deferred income tax liabilities and assets. Deferred tax assets and liabilities are recognized based on the differences between the financial reporting and tax bases of assets and liabilities and are measured using enacted tax rates expected to apply in the periods in which those temporary differences are expected to be recovered or settled. Valuation allowances are established when necessary to reduce deferred tax assets to the amounts that are more likely than not to be realized.
The Company’s income tax expense and effective tax rate are significantly impacted by the mix of domestic and foreign earnings before income taxes. The applicable statutory income tax rate in Mexico is
NOTE 13 - COMMITMENTS AND CONTINGENCIES
Concession Taxes
The Company is required to pay mining concession taxes in Mexico to maintain concessions owned by DynaMéxico. In addition, the Company must incur a minimum level of annual expenditures for all concessions held. The minimum expenditures are calculated based on the land area and the age of the concessions. Amounts spent in excess of the minimum may be carried forward indefinitely over the life of the concessions and are adjusted annually for inflation. Based on management’s recent business activities, current operations, and forward-looking plans – and considering expenditures incurred on mining concessions from 2002 through 2017, as well as continuing expenditures –
Leases
In addition to the surface rights held by DynaMéxico pursuant to the Mining Act of México and its Regulations (Ley Minera y su Reglamento), DynaMineras maintains access and surface rights to the SJG Project pursuant to a
The Company also leases office space for its corporate headquarters located in Irving, Texas. In February 2023, the Company entered into a
The Company determines whether a contract is or contains a lease at inception. As of June 30, 2026, the Company has two operating leases: (i) a
As the implicit discount rate is not readily determinable for most of the Company’s lease agreements, the Company uses an estimated incremental borrowing rate to determine the initial present value of lease payments. The incremental borrowing rate is based on the Company’s interest rates on its outstanding promissory notes.
Mercuria Matters
As described in Part II, Item 1 (Legal Proceedings) of this Quarterly Report on Form 10Q, Mercuria holds LCIA arbitration awards against DynaMineras and is pursuing enforcement proceedings in Mexico. Mercuria has also commenced proceedings in Texas against the Company and DynaMéxico seeking to hold them liable for DynaMineras' obligations under theories including fraudulent transfer, conspiracy, and alter ego. The Company and DynaMéxico dispute these claims and believe they have meritorious defenses. The Company is currently unable to predict the ultimate outcome of these proceedings.
22
Table of Contents
The Company has recorded an accrual of $
DynaMineras Tax Assessment
On August 10, 2026, the Mexican tax authority (Servicio de Administración Tributaria, or "SAT") issued a tax assessment following its review of the 2021 tax year of DynaMineras. The tax assessment includes proposed adjustments relating principally to the treatment of certain tax loss carryforwards, deductions and income recognition matters. The tax assessment resulted in an aggregate proposed assessment of approximately MXN $173.7 million (approximately US$10 million), consisting of tax, inflation adjustments, interest and penalties.
Management, together with its legal and tax advisors, disagrees with significant portions of the tax assessment and believes substantial factual and legal defenses remain available. The Company intends to pursue available administrative and judicial remedies with respect to those matters for which it disagrees with SAT's tax assessment.
While the tax assessment includes a quantified amount, the matter remains subject to available review and appeal processes. Based on the information currently available, management does not believe that a loss is probable and estimable under applicable accounting standards and, accordingly, the Company has not recorded a liability in the accompanying condensed consolidated financial statements related to SAT's review of DynaMineras' 2021 tax year.
NOTE 14 - FAIR VALUE OF FINANCIAL INSTRUMENTS
The Company follows the guidance in ASC 820, Fair Value Measurement, which establishes a framework for measuring fair value and requires disclosures about fair value measurements. ASC 820 defines a hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are described below:
Level 1 Inputs - Quoted prices (unadjusted) for identical instruments in active markets.
Level 2 Inputs - Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations for which all significant inputs are observable.
Level 3 Inputs - Valuations based on inputs that are unobservable and involve significant management judgement or estimation.
As of June 30, 2026 and December 31, 2025, the Company’s derivative liability was measured at fair value using Level 3 inputs. A description of the valuation techniques and assumptions for Level 3 measurements is provided in Note 6.
|
|
Total |
|
|
Quoted |
|
|
Significant |
|
|
Significant |
|
||||
Fair Value Measurement as of June 30, 2026: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Derivative Liability |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Totals |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Fair Value Measurement at December 31, 2025: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Derivative Liability |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Totals |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
The fair values of other financial assets and liabilities were estimated to approximate their carrying amounts due to their short-term maturities and historically negligible credit losses.
23
Table of Contents
NOTE 15 - CUSTOMER CONCENTRATION
For the periods ended June 30, 2026 and December 31, 2025, one customer accounted for
NOTE 16 – SEGMENTED INFORMATION
The Company operates as a reportable segment focused on the development and operation of its gold-silver project in Mexico,
|
|
|
|
|
|
|
|
|
|
|||
|
|
Mexico |
|
|
United States |
|
|
Total |
|
|||
June 30, 2026 |
|
|
|
|
|
|
|
|
|
|||
Mineral property interests, plant and equipment, net |
|
|
|
|
|
|
|
|
|
|||
Current assets |
|
|
|
|
|
|
|
|
|
|||
Other assets |
|
|
|
|
|
|
|
|
|
|||
Total assets |
|
$ |
|
|
$ |
|
|
$ |
|
|||
|
|
|
|
|
|
|
|
|
|
|||
December 31, 2025 |
|
|
|
|
|
|
|
|
|
|||
Mineral property interests, plant and equipment, net |
|
|
|
|
|
|
|
|
|
|||
Current assets |
|
|
|
|
|
|
|
|
|
|||
Other assets |
|
|
|
|
|
|
|
|
|
|||
Total assets |
|
$ |
|
|
$ |
|
|
$ |
|
|||
|
|
Six Months Ended |
|
|
Six Months Ended |
|
||
|
|
June 30, 2026 |
|
|
June 30, 2025 |
|
||
Total Revenue for the year - Mexico |
|
$ |
|
|
$ |
|
||
Total Revenue for the year - United States |
|
|
|
|
|
|
||
Total Revenue for the period |
|
$ |
|
|
$ |
|
||
|
|
Six Months Ended |
|
|
Six Months Ended |
|
||
|
|
June 30, 2026 |
|
|
June 30, 2025 |
|
||
Total comprehensive income (loss) for the period - Mexico |
|
$ |
|
|
$ |
|
||
Total comprehensive income (loss) for the period - United States |
|
|
( |
) |
|
|
( |
) |
Total comprehensive income (loss) for the period |
|
$ |
|
|
$ |
|
||
|
|
|
|
|
|
|
||
NOTE 17 - RELATED PARTY TRANSACTIONS
Independent Director Compensation
NOTE 18 - SUBSEQUENT EVENTS
On August 11, 2026 the Company announced a non-brokered private placement financing with certain of the Company’s existing stockholders (the “Offering”) to raise gross proceeds of US$
24
Table of Contents
Proposed Financing Terms
The Company expects to use the net proceeds from the Offering for general corporate purposes, working capital, debt service obligations, including overdue debt repayments, and capital expenditures at the San José de Gracia Project.
25
Table of Contents
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) which we refer to in this report as the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements are not historical facts, they reflect our current expectations, estimates and projections regarding future results and events, including matters related to our mining business, including resource estimates, exploration efforts, results and expenditures, development initiatives at the SJG mine, estimated production and capacity, costs, capital expenditures, expenses, recoveries, gold prices, sufficiency of assets, ability to discharge liabilities, liquidity management, financing needs, environmental compliance expenditures, environmental, social and governance (“ESG”) and human capital management initiatives, risk management strategies, capital resources and use, cash flow maximization, mine life and other strategic initiatives. Such forward-looking statements are identified by the use of words such as “believes,” “intends,” “expects,” “hopes,” “may,” “will”, “should,” “plan,” “projected,” “contemplates,” “anticipates” or similar words and involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance, or achievements to be materially different from any future results, performance, or achievements expressed or implied by the forward-looking statements. Forward-looking information in this report includes, but is not limited to, statements regarding the beliefs, plans, expectations or intentions of management, as of the date of report, regarding: (i) DynaResource, Inc.’s (the “Company”) ability to develop its exploration assets via operational cash flow from gold concentrate production; and (ii) the Company’s plans and expectations regarding its proposed 2025 exploration program for its SJG mine. Although the Company believes that the expectations reflected in the forward-looking information are reasonable, there can be no assurance that these expectations will be realized. Such forward-looking statements are subject to risks and uncertainties that may cause actual results, performance or developments to differ materially from those contained in the statements including, without limitation, risks related to: (1) fluctuations in commodity price, particularly gold and silver; (2) the Company’s ability to retain or engage qualified employees or contractors necessary to conduct operations at the SJG mine; (3) fluctuations in the demand for gold, silver and other minerals; (4) unexpected difficulties with the milling and the extraction of minerals from the Company’s projects; (5) unexpected interruptions and problems encountered in the operation of the SJG mine; (6) factors that delay or cause difficulties in timing of shipments of concentrates by the Company; (7) potential negative financial impact from regulatory investigations, claims, lawsuits and other legal proceedings and challenges; (8) the possibility that the Company may not have sufficient capital to operate its SJG mine or facilitate the further exploration of the SJG district; (9) inflationary pressures; (10) continued access to financing sources; (11) government orders that may require temporary suspension of operations or effects on our suppliers (12) the effects of environmental and other governmental regulations and government shut-downs; (13) the risks inherent in the ownership or operation of or investment in mining properties or businesses in foreign countries; (14) our ability to raise additional financing necessary to conduct our business, make payments or refinance our debt; and (15) other factors beyond the Company’s control. Additional risks are discussed in our Annual Report on Form 10K for the year ended December 31, 2025, and other filings with the SEC.
There is a significant risk that such forward-looking statements will not prove to be accurate. No assurance can be given that any of the events anticipated by the forward-looking statements will occur or, if they do occur, what benefits the Company will obtain from them. Given current economic volatility and commodity fluctuations, any forward-looking statements or projections may be impacted significantly. Consequently, there is no representation by the Company that actual results achieved will be the same as those forecast. You are cautioned not to place undue reliance on these forward-looking statements. No forward-looking statement is a guarantee of future results. The Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
Company
The Company is a minerals investment, production, and exploration company, currently advancing its high-grade SJG gold mine in Mexico through its operating subsidiary, DynaMéxico. Activities are focused on exploration, technical evaluation, and project development aimed at expanding the mineral resource base.
The Company conducts operations in Mexico through its wholly-owned subsidiary, DynaMéxico. As of the date of this report, the Company owns 100% of the outstanding shares of DynaMéxico, which in turn holds 100% ownership of the mining concessions, equipment, camp, and related facilities which comprise the SJG mine.
In addition to advancing the SJG mine, the Company has also focused on strengthening its corporate governance practices, with the objective of meeting the listing requirements of additional stock exchanges in the United States and/or Canada.
26
Table of Contents
Project Improvements, Expansion and Increased Output
Since 2015, the Company has carried out limited site-scale processing and operational activities at the SJG mine to support its exploration and evaluation programs. These activities have been directed toward enhancing the technical understanding of the deposit, optimizing on-site infrastructure, and advancing project development. In 2022, the Company expanded its exploration efforts at the SJG mine with the objective of increasing the project’s mineral resource base, primarily targeting gold mineralization.
From initial small-scale operations averaging 100 tons per 24-hour operating day in 2015, throughput has steadily increased, reaching an average of approximately 710 tons per day in 2025. For 2026, the Companies objective is to increase average daily throughput to between 750 to 800 tons per day with current installed optimized processing capacity of 3 ball mills only. During the second quarter 2026 average process plant throughput was a pleasing 754 tons per day within targeted range.
Summary of Mining and Mill Operations
Annual Results from 2018 to 2025:
Year |
|
Total Tons |
|
|
Reported |
|
|
Reported |
|
|
Gross Gold |
|
|
Net Gold (1) |
|
|||||
2018 |
|
|
52,038 |
|
|
|
9.82 |
|
|
|
86.11 |
% |
|
|
14,147 |
|
|
|
13,418 |
|
2019 |
|
|
66,031 |
|
|
|
5.81 |
|
|
|
86.86 |
% |
|
|
10,646 |
|
|
|
9,713 |
|
2020 |
|
|
44,218 |
|
|
|
5.65 |
|
|
|
87.31 |
% |
|
|
7,001 |
|
|
|
5,828 |
|
2021 |
|
|
97,088 |
|
|
|
9.67 |
|
|
|
88.79 |
% |
|
|
26,728 |
|
|
|
22,566 |
|
2022 |
|
|
137,740 |
|
|
|
8.18 |
|
|
|
88.05 |
% |
|
|
31,905 |
|
|
|
25,554 |
|
2023 |
|
|
198,518 |
|
|
|
5.58 |
|
|
|
76.50 |
% |
|
|
27,252 |
|
|
|
24,829 |
|
2024 |
|
|
257,676 |
|
|
|
4.07 |
|
|
|
76.24 |
% |
|
|
25,677 |
|
|
|
22,003 |
|
2025 |
|
|
260,694 |
|
|
|
3.46 |
|
|
|
73.69 |
% |
|
|
21,393 |
|
|
|
20,848 |
|
In 2025, on-site operational activities at the SJG mine resulted in the processing of approximately 260,694 tons of material and the production of approximately 21,393 gross ounces of gold (“Au Oz”). After applying dry weight adjustments pursuant to settlement terms with the buyer, approximately 20,848 Au Oz were sold.
Quarterly Results for the Three and Six Months Ended June 30, 2026 and 2025:
|
|
|
|
Three months ended |
|
Six months ended |
|
||||||||
|
Key Operating Information |
|
Unit |
June 30, 2026 |
|
June 30, 2025 |
|
June 30, 2026 |
|
June 30, 2025 |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Operating Data |
|
|
|
|
|
|
|
|
|
|
||||
|
Ore mined |
|
ton |
|
65,656 |
|
|
74,002 |
|
|
140,894 |
|
|
138,034 |
|
|
Mining rate |
|
tpd |
|
721 |
|
|
813 |
|
|
778 |
|
|
763 |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Ore Milled |
|
ton |
|
67,347 |
|
|
66,834 |
|
|
137,163 |
|
|
134,208 |
|
|
Mill Throughput |
|
tpd |
|
740 |
|
|
734 |
|
|
758 |
|
|
741 |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Grade |
|
g/t |
|
2.45 |
|
|
3.63 |
|
|
2.68 |
|
|
3.63 |
|
|
Recovery Au |
|
% |
|
69.71 |
% |
|
74.64 |
% |
|
71.78 |
% |
|
74.22 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Gold Ounces Produced |
|
oz |
|
3,703 |
|
|
5,701 |
|
|
8,543 |
|
|
11,482 |
|
|
Gold Ounces Sold |
|
oz |
|
3,286 |
|
|
5,712 |
|
|
7,815 |
|
|
11,321 |
|
27
Table of Contents
The decrease in the gold feed grade at the processing facility during the second quarter of 2026 resulted from a reduction in the mining of certain high-grade zones due to the company terminating one underground mining contractor for poor safety and production performance, as well as higher than expected dilution encountered in the processed material. Increased throughput at the SJG process plant also contributed to a greater volume of lower-grade ore being processed.
2026 SECOND QUARTER HIGHLIGHTS
Operational Performance
During the second quarter of 2026, the Company continued to advance the optimization program at the SJG mine. This program identified the ongoing poor safety and operational performance of one of the two underground mining contractors engaged. The decision was made early in the second quarter to terminate this contractor and work with the remaining underground contractor to safely take over 100% of the Company’s underground development and ore production requirements. It is anticipated that this change over will take 3 to 6 months to complete and an immediate positive impact has been a significant decrease in total project manning due to the elimination of duplicate positions, due to having two overlapping underground mining contractors.
The plan of operation for 2026 includes continued enhancement and is focused on increasing process plant throughput and recoveries, improving maintenance and equipment utilization, and ultimately enhancing operational efficiencies and profit margins at the SJG mine. Operational results for Q2 2026 showed marked improvement performance across several critical operational metrics (particularly in mill ore processing tonnes per day and unit costs) due to the ongoing optimization program.
The capital works program to add a primary gravity gold circuit to the processing plant, involved the installation of three new Falcon gravity concentrators installed downstream of the ball mills to recover a significant portion of the free gold present in the San Pablo, San Pablo Sur, Tres Amigos and La Mochomera deposits. The three new Falcon concentrator units are performing as design recovering approximately 30% of the gold in a specific gravity gold concentrate (average ~300 g/t Au) which achieves a higher payability factor. The target for 2026 is for the process plant to achieve a processing rate between 750 to 800 tpd and for the first 6 months of 2026 an average of 758 tonnes per day has been achieved.
Process plant reliability during the quarter was on target at 91%, which included several planned major maintenance shutdowns. Milled ore for Q2 2026 was 67,347 tons (approximately 740 tons per day). With the current high ball mill availability, the Company is evaluating cost-effective strategies to utilize additional processing capacity of approximately 50 wet tons per day. Gold metal recoveries for the quarter averaged 69.71%, higher than the 74.6% gold recovery achieved in Q2 2025.
During Q2 2026, metal production totaled 3,703 ounces of gold compared to 5,701 ounces in Q2 2025. The average gold feed grade was 2.45 g/t for Q2 2026 compared to 3.63 g/t for Q2 2025.
Mine development for Q2 2026 was below budget due to termination of one of the mining contractors during the quarter, with 1,804 meters of development completed, compared to 3,804 meters in Q2 2025. The completion of new development drifts enabled the Company to maintain more than 20 stopes in production by the end of the quarter. This additional mining flexibility is expected to positively impact ore tonnage and grades in the second half of 2026. The Company has also completed a capital works program to enhance mine ventilation across all three mines which included connecting the Mochomera and San Pablo Sur mines which has had an immediate impact on the working environment. Improved ventilation has resulted in an improvement in working conditions and faster re-entry times following blasting activities. Planning for a central Raise Bore ventilation shaft was cancelled due to unfavorable geotechnical conditions and this planned ventilation location was moved to Palo Chinos. This capital works program will involve approximately 100 metres of horizontal decline development with 30 meters of vertical development and, in addition to helping ventilation, will bring mine development closer to the Purisima historical works. Numerous exploration targets have been identified in this southern area of the mineral field. This ventilation development will also be a platform for underground exploration.
28
Table of Contents
Detailed Activities by Deposit:
Tres Amigos
Original mine planning at Tres Amigos anticipated closure by the end of Q2 2025. However, geological reinterpretations and targeted short exploration drifts identified two additional mineralized structures – the Victoria and Alexa veins – located within 40 meters of existing underground infrastructure.
To date approximately 65,000 tonnes of high-grade ore have been extracted from this high-grade structure. In addition, a new ore drive was completed on the upper levels of the Tres Amigos North Zone which is an area well known for free gold occurrences, providing access to a new high-grade ore face. Mining from this face is expected to continue throughout 2026. This new access will also enable future diamond drilling to test the north and south extensions of the deposit, with the goal of increasing inventory. In Q2 2026 approximately 58% of the process plant feed was sourced from the Tres Amigos area.
San Pablo Viejo and San Pablo Sur
Throughout Q2 2026, the Company continued mining multiple faces at the San Pablo and San Pablo Sur deposit while advancing development toward the deeper southern extensions of these deposits. San Pablo and San Pablo Sur are expected to be minor sources of gold production through the second half of 2026, with approximately 5 to 10% of the process plant feed sourced from these workings. There is the additional upside potential in these deposits and what is particularly promising is the South Extension at the 500 level, which could yield high-grade ("Bonanza”-style) gold mineralization in the short to mid-term.
La Mochomera
The La Mochomera vein is also expected to be a significant source of gold production in 2026, and in Q2 2026 the La Mochomera mine development provided approximately 38% of the process plant ore feed, with especially promising high-grade potential at depth. During 2025, development activities intersected a previously unrecognized high-grade mineralized structure, now designated as the "532 Vein” and mine extraction from this vein in Q2 2026 added to the Mochomera production profile.
OUTLOOK (SJG MINE)
While the Company made significant headway in 2025, optimization efforts will continue to focus on improving gold ore grades to the mill, throughput rates, and recoveries. San Pablo Sur, San Pablo, La Mochomera, Palos Chinos and the Tres Amigos ore bodies are expected to remain the main contributors to production in the year ahead. Further development in these areas will also be a key focus to access additional high-grade zones and additional mining faces. The Company's full-year 2026 production outlook is uncertain as it will depend on the successful transition and ramp-up of its new mining contractor, together with continued operational improvements throughout the remainder of the year.
A new tailings dam was completed during Q3 2024, with an estimated storage capacity of 670,751 cubic meters, distributed over four stages to accommodate up to three years of additional tailings. The third-stage facility is currently in use, and planning for construction of the fourth stage is underway. The Company has also begun evaluating a potential location for a third tailings storage facility at the SJG mine. These studies include environmental and geotechnical surveys to identify a preferred site.
Results for the Three Months Ended June 30, 2026 and 2025
Revenue for the three months ended June 30, 2026 and 2025 was $11,436,532 and $15,886,286, respectively. The decrease was primarily due to a decrease in the average grade in Q2 2026 of 2.45 g/t compared to 3.63 in Q2 2025, partially offset by a higher realized gold prices per ounce of gold sold of $3,480 in Q2 2026 compared to $2,781 in Q2 2025.
Operating costs for the three months ended June 30, 2026 and 2025 were $9,952,106 and $10,490,801, respectively, primarily due to lower tonnage mined and processed of 65,656 tonnes in Q2 2026 compared to 74,002 tonnes in Q2 2025.
General and administrative expenses for the three months ended June 30, 2026 and 2025 were $1,448,781 and $1,794,294, respectively. These represent corporate overhead not directly attributable to site operations, including management, accounting, and legal expenses. The decrease to general and administrative expenses in Q2 2026 primarily relate to due to cost cutting measures.
Stock-based compensation expense was $648,655 and $574,957 for the three months ended June 30, 2026 and 2025 respectively. The expense primarily relates to the vesting of restricted stock awards and other equity awards granted in prior periods. The increase in stock based compensation expense in the second quarter of 2026 reflects the normal run off of expense associated with the vesting schedules of previously granted awards, with no significant new equity grants issued during the quarter.
29
Table of Contents
Depreciation and depletion expense for the three months ended June 30, 2026 and 2025 were $469,304 and $245,971, respectively. With the Company’s transition from Exploration Stage to Production Stage under S-K 1300, in 2025, the Company began capitalizing mine development costs and commenced depreciation and depletion charges on a units-of- production basis.
Accretion expense for the three months ended June 30, 2026 and 2025 was $47,082 and $4,986, respectively. Mainly connected to the Company’s asset retirement obligation, related to estimated costs to decommission the milling plant and tailings pond at the estimated life of the mines in operation at the establishment of the ARO in 2025 as a result of the expansion of the milling operation.
Other (income) expense for the three months ended June 30, 2026 and 2025 were $(2,153,890) and $1,140,723, respectively. Included in 2026 was interest expense of $648,655, mark-to-market gain on the derivative liability of $820,800, currency translation gain of $1,540,773 and other income of $194,597. Included in 2025 was interest expense of $398,843, mark-to-market loss on the derivative liability of $339,022, currency translation gain of $178,021 and other expense of $580,879.
Total comprehensive income includes the Company’s net income plus the unrealized foreign currency translation (loss) gain for the period. The Company’s total comprehensive income for the three months ended June 30, 2026 and 2025 were $347,712 and $1,509,636, respectively.
Results for the Six Months (“Year to date” or “YTD”) Ended June 30, 2026 and 2025
Revenue for the six months ended June 30, 2026 and 2025 was $29,484,231 and $29,582,687, respectively. For the six months ended June 30, 2026, the gold sales reduced to 7,815 ounces compared to 11,321 ounces for the same period of 2025. This reduction was offset by the higher realized gold prices per ounce of gold sold of $3,773 in YTD 2026 compared to $2,613 in YTD 2025, resulting in the revenue balance in line for the comparable period.
Operating costs for the six months ended June 30, 2026 and 2025 were $20,633,880 and $20,662,439, respectively, primarily due to similar tonnage mined and processed of 140,894 tonnes in YTD 2026 compared to 138,034 tonnes in YTD 2025.
General and administrative expenses for the six months ended June 30, 2026 and 2025 were $2,822,309 and $3,044,538, respectively. These represent corporate overhead not directly attributable to site operations, including management, accounting, and legal expenses. The decrease to general and administrative expenses in Q2 2026 primarily relate to due to cost cutting measures.
Stock-based compensation expense was $831,834 and $826,664 for the six months ended June 30, 2026 and 2025 respectively. The expense primarily relates to the vesting of restricted stock awards and other equity awards granted in prior periods. The increase in stock based compensation expense in the second quarter of 2026 reflects the normal run off of expense associated with the vesting schedules of previously granted awards, with no significant new equity grants issued during the quarter.
Depreciation and depletion expense for the six months ended June 30, 2026 and 2025 were $998,024 and $408,537, respectively. With the Company’s transition from Exploration Stage to Production Stage under S-K 1300, in 2025, the Company began capitalizing mine development costs and commenced depreciation and depletion charges on a units-of- production basis.
Accretion expense for the six months ended June 30, 2026 and 2025 was $81,722 and $9,972, respectively. Mainly connected to the Company’s asset retirement obligation, related to estimated costs to decommission the milling plant and tailings pond at the estimated life of the mines in operation at the establishment of the ARO in 2025 as a result of the expansion of the milling operation.
Other (income) expense for the six months ended June 30, 2026 and 2025 were $(856,478), and $1,450,199, respectively. Included in 2026 was interest expense of $800,793, mark-to-market gain on the derivative liability of $892,173, currency translation gain of $1,416,022, and other expense of $650,924. Included in 2025 was interest expense of $775,677, mark-to-market loss on the derivative liability of $267,649, currency translation gain of $162,866 and other income of $569,739.
Total comprehensive income includes the Company’s net income (loss) plus the unrealized foreign currency translation gain for the period. The Company’s total comprehensive income for the six months ended June 30, 2026 and 2025 were $3,501,996 and $2,073,020, respectively.
Liquidity and Capital Resources
As of June 30, 2026, the Company had negative working capital of $38,360,011 comprised of current assets of $6,563,491 and current liabilities of $44,923,502. This represented an increase of $6,624,303 from the Company’s negative working capital of $31,735,708 as of December 31, 2025, primarily due a higher accounts payable and accrued liabilities and lower cash position as of June 30, 2026.
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Net cash provided by operating activities for the six months ended June 30, 2026 was $3,681,135 compared to $2,961,710 during the six months ended June 30, 2025. The improvement in the cash flow from operations was primarily attributable to the Company’s income generated in the six months of 2026, driven by increased net income.
Cash used in investing activities for the six months ended June 30, 2026 totaled $4,522,920 compared to $5,921,315 during the six months ended June 30, 2025. Mainly due a higher capitalization of mine development costs in 2026, in comparison with 2025.
Cash (used in) provided by financing activities for the six months ended June 30, 2026 and 2025 was $(1,588,090) and $133,756, respectively. Mainly as result of payment of credit line combined with the operating leasing payments in the related period.
Through June 30, 2026, the Company’s available liquidity and operations have been financed primarily through its operations and the revenue generated from the sale of product.
Although the Company has incurred positive net income and net cash inflows from operating activities for the six months ended June 30, 2026, there were many expenditures associated with investing activities which were made that were not expended for the production of revenue during the current period, such as underground development and mine expansion costs. If these expenses had not been made, the Company’s net decrease in cash would have been minimized. Future capital requirements will depend on many factors, including the Company’s rate of mining, milling, and exploration activities and growth. To the extent that existing capital and revenue growth are not sufficient to fund future activities, the Company may need to raise capital through additional equity or debt financings. Additional funds may not be available on terms favorable to the Company or at all. Failure to raise additional capital, if needed, could have a material adverse effect on the Company’s financial position, results of operations and cash flows.
Off-Balance Sheet Arrangements
As of June 30, 2026, the Company had no off-balance sheet arrangements that would have a material adverse effect on its financial condition, results of operations, or liquidity.
Plan of Operation
The plan of operation for 2026 includes the continued enhancement of site infrastructure and processing capabilities, along with expanded exploration drilling at the SJG mine. During 2025, the Company processed an average of approximately 710 tons of material per day. For Q2 2026 an average of 754 tons of material was milled and the Company anticipates increasing daily processing throughput towards an average of 750 to 800 tons per day. The Company has installed processing capacity of up to 900 tons per day (with three ball mills), with a target rate of achieving an average of 800 tons per day taking into consideration planned maintenance downtime. The Company has continued underground development as part of its exploration activities on additional target areas (Vein 532, Victoria and Palos Chinos structures) which are anticipated to yield higher-grade material for processing. The Company expects that a combination of higher-grade feed material, increased processing throughput, and higher gold prices will produce a significant increase in revenue in 2026, as part of its ongoing exploration and project optimization efforts.
The Company plans to commence its exploration drilling program from underground in the latter half of 2026 with firm quotes achieve to undertake this work received. Management and geologists will make decisions based on drill results, corporate strategies, market conditions, surface mapping, sampling, and target generation. The Company has contracted with a "Qualified Person,” within the meaning of S-K 1300, to interpret the collected data and compile a formal Mineral Resource Estimate update which was filed on May 20, 2025.
Capital Expenditures
Primary capital expenditures in 2026 will be directed toward increasing underground infrastructure development and enhancing processing capacity at the SJG mine. Average underground capitalized development in Q2 2026 was 602 meters per month, compared to 673 meters per month in Q2 2025. Processing systems have been upgraded through the installation of new Falcon Gravity gold concentrators and the repurposing of the original grinding mill. Replacement of the Primary Crusher with a new higher capacity machine which was purchased in 2025 is currently scheduled for installation for early Q3 2026. Additional equipment acquisitions and infrastructure improvements have also enhanced site access and operational capacity, and the company is targeting an average daily production rate of between 750 to 800 tpd.
The Company is implementing a major Ventilation Upgrade in the La Mochomera and San Pablo mines with the installation of approximately 100 metres of mine development and a 30 metre raise ventilation shaft. Works for this shaft are scheduled to finish in the second half of 2026 with 60 metres of the mine development completed during Q2 2026.
Exploration Activity
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The Company continues to invest in exploration spending on near-mine extensions as well as geological studies and reinterpretations. The Company completed an S-K 1300 Mineral Resource Estimate in Q2 2025 covering San Pablo Sur, San Pablo, La Mochomera and the Tres Amigos ore bodies which includes development proposals for additional exploration of ore veins in the short and mid-term.
The Company intends to prioritize exploration of high-grade underground targets that can be readily incorporated into the mine plan, as well continue the regional program to better understand the broader potential of the SJG land package. Additionally, planning for deeper and lateral drilling between the San Pablo and Tres Amigos veins has highlighted the potential to extend high-grade underground resources at the SJG mine, especially in areas previously considered discontinuous due to faulting. The Company has identified opportunities to develop San Pablo, San Pablo Sur, La Mochomera, and Tres Amigos exploration potential. At the La Mochomera deposit, the Company plans to explore southward toward the historic Palos Chinos and Purisima mines, which operated over 100 years ago as high-grade producers. Of note is the Palos Chinos exploration target, located within 40 meters of the existing La Mochomera mine infrastructure. A 4,000 metre drill program has been designed for these targets which is planned to commence in the latter half of 2026.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not applicable to smaller reporting companies.
ITEM 4. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
We conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of June 30, 2026. This evaluation was conducted under the supervision and with the participation of our principal executive officer and principal financial officer, who concluded that our disclosure controls and procedures are effective at the reasonable assurance level as of the end of the period covered by this Quarterly Report on Form 10-Q. For purposes of this section, the term “disclosure controls and procedures” refers to controls and other procedures designed to ensure that information required to be disclosed by the issuer in the reports that it files or submits under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed under the Exchange Act is accumulated and communicated to our management, including our principal executive and principal financial officers (or persons performing similar functions), as appropriate, to allow timely decisions regarding required disclosure.
We recognize the importance of having effective controls in place to manage risks and ensure the integrity of our financial reporting. We are committed to continuously improving our control environment through ongoing monitoring, testing, and remediation of control deficiencies. Our management team is actively involved in overseeing the effectiveness of our controls, and we have established a culture of accountability and transparency to ensure that all employees understand their roles and responsibilities in maintaining a strong control environment. We are also investing in technology to streamline our control processes and reduce the risk of errors and fraud. We believe that these efforts will enhance our level of control effectiveness.
Changes in Internal Control over Financial Reporting
The Company did not make any changes in its internal control over financial reporting during the period covered by this Quarterly Report on Form 10-Q that has materially affected, or is reasonably likely to materially affect, its internal control over financial reporting. Our process for evaluating controls and procedures is continuous and encompasses constant improvement of the design and effectiveness of established controls and procedures and the remediation of any deficiencies, which may be identified during this process.
Because of the inherent limitations of internal control over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may not be prevented or detected on a timely basis. Also, projections of any evaluation of the effectiveness of the internal control over financial reporting to future periods are subject to the risk that the controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
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PART II
ITEM 1. LEGAL PROCEEDINGS
The Company's legal proceedings are described in its Annual Report on Form 10-K for the year ended December 31, 2025. During the six months ended June 30, 2026, material developments occurred with respect to the Mercuria matter, as described below. Except as disclosed herein, there were no material changes in previously disclosed legal proceedings during the period.
Mercuria Energy Trading S.A. vs. Mineras de DynaResources S.A. de C.V.
As previously disclosed, Mercuria Energy Trading S.A. ("Mercuria") initiated arbitration proceedings against Mineras de DynaResources S.A. de C.V. (“DynaMineras”) arising from a Long-Term Supply Agreement and related Prepayment Agreement between the parties. On January 14, 2022 and July 1, 2022, a tribunal of the London Court of International Arbitration ("LCIA") issued awards in favor of Mercuria. Mercuria is pursuing enforcement of those awards against DynaMineras in the Mexican courts.
On March 20, 2026, Mercuria filed a lawsuit in the 193rd Judicial District Court of Dallas County, Texas, against DynaResource, Inc., DynaMineras, and DynaResource de México, S.A. de C.V. ("DynaMéxico"). The action alleges, among other things, that a 2022 assignment of a gold concentrate purchase agreement from DynaMineras to DynaMéxico constituted a fraudulent transfer under Texas law and asserts related civil conspiracy and alter ego claims. Mercuria seeks to hold DynaResource, Inc. and DynaMéxico liable for obligations arising from the LCIA awards.
The Company and DynaMéxico dispute the allegations and believe they have meritorious defenses. On July 24, 2026, the Company and DynaMéxico filed an Answer denying the allegations, and DynaMéxico separately filed a Special Appearance contesting the Texas court's exercise of personal jurisdiction over DynaMéxico. The matter remains pending.
Title of Properties
On August 5, 2026, The Company announced that the Federal District Court in Mexico (the “Court”) has issued a favorable ruling in the Amparo proceedings by the Company’s subsidiary, DynaResource de México, S.A. de C.V. (“DynaMéxico”), relating to eight mining concessions (the “Impacted Concessions”) associated with the San José de Gracia Project in Mexico.
The Court granted constitutional protection (“Amparo”) to the Company, concluding that DynaResource was not properly notified of the administrative proceedings that resulted in the claimed cancellation of the mining concessions posted to the Mexican Secretariat of Economy’s (Secretaría de Economía) website, and, as a result, was denied its constitutional right to due process and an opportunity to defend its interests. The Court further ordered the authorities to recommence the notification process in accordance with applicable legal requirements before continuing any administrative proceedings.
The ruling is subject to the applicable appeal process under Mexican law, and the respondent authorities may seek review of the decision. The Company, together with its legal counsel, will continue to monitor the proceeding and will provide further updates as material developments occur.
As previously disclosed on July 18, 2025, the Company initiated the Amparo proceeding to protect its legal rights in connection with the inactive claim on its Impacted Concessions. While this favorable ruling does not finally resolve the underlying administrative matter, it restores the Company’s procedural rights and requires the authorities to comply with constitutional due process requirements before any further administrative action may be taken.
The ruling covers the following mining concession titles held by DynaMéxico:
Concession Name |
Title Number |
San Sebastián |
184473 |
San José |
208537 |
Piedras de Lumbre Uno |
215555 |
Piedras de Lumbre Dos |
215556 |
La Nueva Esperanza |
226289 |
Nuevo Rosario |
184999 |
Los Tres Amigos |
172216 |
Finisterre 4 |
231166 |
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DynaMineras Tax Assessment
On August 10, 2026, the Mexican tax authority (Servicio de Administración Tributaria, or "SAT") issued a tax assessment following its review of the 2021 tax year of DynaMineras. The tax assessment includes proposed adjustments relating principally to the treatment of certain tax loss carryforwards, deductions and income recognition matters. The tax assessment resulted in an aggregate proposed assessment of approximately MXN $173.7 million (approximately US$10 million), consisting of tax, inflation adjustments, interest and penalties.
Management, together with its legal and tax advisors, disagrees with significant portions of the tax assessment and believes substantial factual and legal defenses remain available. The Company intends to pursue available administrative and judicial remedies with respect to those matters for which it disagrees with SAT's tax assessment.
While the tax assessment includes a quantified amount, the matter remains subject to available review and appeal processes. Based on the information currently available, management does not believe that a loss is probable and estimable under applicable accounting standards and, accordingly, the Company has not recorded a liability in the accompanying condensed consolidated financial statements related to SAT's review of DynaMineras' 2021 tax year.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
None
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. MINE SAFETY DISCLOSURES
The information concerning mine safety violations or other regulatory matters required by Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 104 of Regulation S-K is not applicable to the Company because its mining operations are conducted exclusively in Mexico through its subsidiary DynaMéxico, and are not subject to regulation by the Federal Mine Safety and Health Administration under the Federal Mine Safety and Health Act of 1977.
ITEM 5. OTHER INFORMATION
During the fiscal quarter ended June 30, 2026, none of our directors or officers informed us of the
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ITEM 6. EXHIBITS
Exhibit Number; |
|
Name of Exhibit |
10.1 |
|
Stock Purchase Agreement dated April 30, 2026 by and between DynaResource, Inc. and Ocean Partners UK Limited (incorporated by reference to Form 8-Kfiled with the SEC on May 6, 2026). |
31.1 |
|
Certification of Chief Executive Officer, pursuant to Rule 13a-14(a) of the Exchange Act, as enacted by Section 302 of the Sarbanes-Oxley Act of 2002. |
31.2 |
|
Certification of Chief Financial Officer, pursuant to Rule 13a-14(a) of the Exchange Act, as enacted by Section 302 of the Sarbanes-Oxley Act of 2002. |
32.1 |
|
Certification of Chief Executive Officer and Chief Financial Officer, pursuant to 18 United States Code Section 1350, as enacted by Section 906 of the Sarbanes-Oxley Act of 2002. |
101.INS |
|
Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document |
101.SCH |
|
Inline XBRL Taxonomy Extension Schema With Embedded Linkbase Documents |
104 |
|
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101.INS) |
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SIGNATURES
In accordance with 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.
|
DynaResource, Inc. |
|
|
|
|
|
|
Date: August 17, 2026 |
By: |
/s/ Rohan Hazelton |
|
|
|
Rohan Hazelton, |
|
|
|
President and Chief Executive Officer |
|
|
|
(principal executive officer) |
|
|
|
|
|
|
|
|
|
Date: August 17, 2026 |
By: |
/s/ Alonso Sotomayor |
|
|
|
Alonso Sotomayor, |
|
|
|
Chief Financial Officer |
|
|
|
(principal financial and accounting officer) |
|
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