Cover
Cover - shares | 3 Months Ended | |
Mar. 31, 2023 | May 12, 2023 | |
Cover [Abstract] | ||
Entity Registrant Name | DYNARESOURCE, INC. | |
Entity Central Index Key | 0001111741 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Small Business | true | |
Entity Shell Company | false | |
Entity Emerging Growth Company | false | |
Entity Current Reporting Status | Yes | |
Document Period End Date | Mar. 31, 2023 | |
Entity Filer Category | Non-accelerated Filer | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2023 | |
Entity Common Stock Shares Outstanding | 22,246,654 | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity File Number | 000-30371 | |
Entity Incorporation State Country Code | DE | |
Entity Tax Identification Number | 94-1589426 | |
Entity Address Address Line 1 | 222 W. Las Colinas Blvd. | |
Entity Address Address Line 2 | Suite 1910 North Tower | |
Entity Address City Or Town | Irving | |
Entity Address State Or Province | TX | |
Entity Address Postal Zip Code | 75039 | |
City Area Code | 972 | |
Local Phone Number | 868-9066 | |
Security 12b Title | Common Stock | |
Trading Symbol | DYNR | |
Entity Interactive Data Current | Yes |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Mar. 31, 2023 | Dec. 31, 2022 |
Current assets | ||
Cash and cash equivalents | $ 19,104,208 | $ 19,177,138 |
Accounts receivable | 1,885,597 | 724,642 |
Inventories | 2,348,881 | 2,720,811 |
Foreign tax receivable | 10,900,843 | 9,355,863 |
Other current assets | 1,401,709 | 1,145,501 |
Total current assets | 35,641,238 | 33,123,955 |
Right-of-use assets, net | 531,115 | 550,473 |
Mining concessions | 4,132,678 | 4,132,678 |
Deferred tax asset | 3,047,433 | 2,970,410 |
Other assets | 170,959 | 165,396 |
TOTAL ASSETS | 43,523,423 | 40,942,912 |
Current liabilities: | ||
Accounts payable | 2,169,896 | 2,057,880 |
Accrued expenses | 8,291,867 | 5,756,961 |
Customer advances | 9,200,000 | 9,350,000 |
Derivative liabilities | 2,002,983 | 2,172,417 |
Current portion of operating lease payable | 27,032 | 28,868 |
Installment notes payable | 2,127,196 | 1,968,251 |
Total current liabilities | 23,818,974 | 21,334,377 |
Operating lease payable, less current portion | 531,882 | 558,914 |
TOTAL LIABILITIES | 24,350,856 | 21,893,291 |
TEMPORARY EQUITY | ||
COMMITMENTS AND CONTINGENCIES | 0 | 0 |
STOCKHOLDERS' EQUITY | ||
Common Stock, $0.01 par value, 40,000,000 shares authorized 22,246,654 issued and outstanding | 222,467 | 222,467 |
Preferred rights | 40,000 | 40,000 |
Additional paid-in-capital | 56,889,031 | 56,889,031 |
Treasury stock, 12,180 shares each period, at cost | (34,773) | (34,773) |
Accumulated other comprehensive income | 203,319 | 112,078 |
Accumulated deficit | (44,004,958) | (44,036,663) |
TOTAL STOCKHOLDERS' EQUITY | 13,315,087 | 13,192,141 |
TOTAL LIABILITIES, TEMPORARY EQUITY AND STOCKHOLDERS' EQUITY | 43,523,423 | 40,942,912 |
Series C Senior Convertible Preferred Stock | ||
TEMPORARY EQUITY | ||
Series C Senior Convertible Preferred Stock, $0.0001 par value, 1,734,992 shares authorized, issued and outstanding | 4,337,480 | 4,337,480 |
Series D Senior Preferred Stock | ||
TEMPORARY EQUITY | ||
Series C Senior Convertible Preferred Stock, $0.0001 par value, 1,734,992 shares authorized, issued and outstanding | 1,520,000 | 1,520,000 |
Series A Preferred Stock [Member] | ||
TEMPORARY EQUITY | ||
Series C Senior Convertible Preferred Stock, $0.0001 par value, 1,734,992 shares authorized, issued and outstanding | $ 1 | $ 1 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Mar. 31, 2023 | Dec. 31, 2022 |
Common Stock, Par Value | $ 0.01 | $ 0.01 |
Common Stock, Shares Authorized | 40,000,000 | 40,000,000 |
Common Stock, Shares Issued | 22,246,654 | 22,246,654 |
Common Stock, Shares Outstanding | 22,246,654 | 22,246,654 |
Treasury Stock | 12,180 | 12,180 |
Preferred Stock, Par Value | $ 0.0001 | |
Preferred Stock, Shares Authorized | 20,001,000 | |
Preferred Stock, Shares Designated | 1,000 | |
Series C Senior Convertible Preferred Stock | ||
Preferred Stock, Par Value | $ 0.0001 | $ 0.0001 |
Preferred Stock, Shares Authorized | 1,734,992 | 1,734,992 |
Preferred Stock, Shares Designated | 1,734,992 | 1,734,992 |
Preferred Stock, Shares Issued | 1,734,992 | 1,734,992 |
Preferred Stock, Shares Outstanding | 1,734,992 | 1,734,992 |
Series A Preferred Stock [Member] | ||
Preferred Stock, Par Value | $ 0.0001 | $ 0.0001 |
Preferred Stock, Shares Authorized | 1,000 | 1,000 |
Preferred Stock, Shares Designated | 1,000 | |
Preferred Stock, Shares Issued | 1,000 | 1,000 |
Preferred Stock, Shares Outstanding | 1,000 | 1,000 |
Series D Senior Convertible Preferred Stock | ||
Preferred Stock, Par Value | $ 0.0001 | $ 0.0001 |
Preferred Stock, Shares Authorized | 3,000,000 | 3,000,000 |
Preferred Stock, Shares Issued | 760,000 | 760,000 |
Preferred Stock, Shares Outstanding | 760,000 | 760,000 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (Unaudited) | ||
REVENUE | $ 11,953,079 | $ 10,492,503 |
COSTS AND EXPENSES OF MINING OPERATION | ||
Production Cost Applicable to Sales | 1,711,262 | 765,495 |
Mine Production Costs | 2,529,437 | 1,227,884 |
Mine Exploration Costs | 2,216,949 | 878,188 |
Facilities Expansion Costs | 285,078 | 608,603 |
Exploration Drilling | 497,400 | 487,615 |
Camp, Warehouse and Facilities | 1,082,179 | 825,203 |
Transportation | 746,063 | 390,640 |
Property Holding Costs | 39,521 | 35,967 |
General and Administrative | 2,965,593 | 1,026,355 |
Depreciation and Amortization | 0 | 812 |
Total Operating Expenses | 12,073,482 | 6,246,762 |
NET OPERATING INCOME (LOSS) | (120,403) | 4,245,741 |
OTHER INCOME (EXPENSE) | ||
Foreign Currency Gains (Losses) | 18,254 | (2,402) |
Interest Expense | (116,308) | (119,769) |
Derivatives Mark-to-Market Gain | 169,434 | 938,706 |
Other Income | 3,705 | 526 |
TOTAL OTHER INCOME | 75,085 | 817,061 |
NET INCOME (LOSS) BEFORE TAXES | (45,318) | 5,062,802 |
INCOME TAX BENEFIT | 77,023 | 0 |
NET INCOME | 31,705 | 5,062,802 |
DEEMED DIVIDEND FOR SERIES C & D PREFERRED | (58,575) | (58,575) |
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS | $ (26,870) | $ 5,004,227 |
EARNINGS (LOSS) PER SHARE ATTRIBUTABLE TO THE EQUITY HOLDERS OF DYNARESOURCE, INC. | ||
Basic Earnings (Loss) Per Common Share | $ 0 | $ 0.28 |
Weighted Average Shares Outstanding - Basic | 22,246,654 | 18,091,293 |
Diluted earnings (Loss) Per Common Share | $ 0 | $ 0.27 |
Weighted Average Shares Outstanding - Diluted | 22,246,654 | 18,983,458 |
OTHER COMPREHENSIVE INCOME (LOSS) | ||
Foreign Currency Translation Gain (Loss) | $ 91,241 | $ (301,912) |
TOTAL OTHER COMPREHENSIVE INCOME (LOSS) | 91,241 | (301,912) |
TOTAL COMPREHENSIVE INCOME | $ 122,946 | $ 4,760,890 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS EQUITY (DEFICIT) (Unaudited) - USD ($) | Total | Series A Preferred Stocks | Common Stock | Other Comp Income | Preferred Stock | Paid In Capital | Treasury Stock | Accumulated Deficit |
Balance, shares at Dec. 31, 2021 | 1,000 | 18,091,293 | 1 | 12,180 | ||||
Balance, amount at Dec. 31, 2021 | $ (151,589) | $ 1 | $ 180,913 | $ (247,665) | $ 40,000 | $ 50,632,400 | $ (34,773) | $ (50,722,465) |
Other Comprehensive (Loss) | (301,912) | (301,912) | ||||||
Net Income | 5,062,802 | 5,062,802 | ||||||
Balance, shares at Mar. 31, 2022 | 1,000 | 18,091,293 | 1 | 12,180 | ||||
Balance, amount at Mar. 31, 2022 | 4,609,301 | $ 1 | $ 180,913 | (549,577) | $ 40,000 | 50,632,400 | $ (34,773) | (45,659,663) |
Balance, shares at Dec. 31, 2022 | 1,000 | 22,246,654 | 1 | 12,180 | ||||
Balance, amount at Dec. 31, 2022 | 13,192,141 | $ 1 | $ 222,467 | 112,078 | $ 40,000 | 56,889,031 | $ (34,773) | (44,036,663) |
Other Comprehensive (Loss) | 91,241 | 91,241 | ||||||
Net Income | 31,705 | 31,705 | ||||||
Balance, shares at Mar. 31, 2023 | 1,000 | 22,246,654 | 1 | 12,180 | ||||
Balance, amount at Mar. 31, 2023 | $ 13,315,087 | $ 1 | $ 222,467 | $ 203,319 | $ 40,000 | $ 56,889,031 | $ (34,773) | $ (44,004,958) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
CASH FLOWS FROM OPERATING ACTIVITES: | ||
Net Income | $ 31,705 | $ 5,062,802 |
Adjustments to reconcile net income to cash used in operating activities | ||
Change in Fair Value of Derivatives | (169,434) | (938,706) |
Depreciation and Amortization | 0 | 812 |
Deferred Taxes | (77,023) | 0 |
Change in Operating Assets and Liabilities | ||
Accounts Receivable | (1,160,955) | (701,274) |
Inventories | 371,930 | (507,353) |
Foreign Tax Receivable | (1,544,980) | (482,490) |
Operating Lease Assets | 19,358 | 23,517 |
Other Assets | (261,771) | (267,754) |
Accounts Payable | 112,016 | (5,585) |
Accrued Expenses | 2,534,906 | (668,718) |
Customer Advances | (150,000) | (1,375,000) |
Lease Liabilities | (28,868) | (35,939) |
CASH FLOWS PROVIDED BY (USED IN) OPERATING ACTIVITIES | (323,116) | 104,312 |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Payments of Notes Payable | 0 | (36,165) |
CASH FLOWS USED IN FINANCING ACTIVITIES | 0 | (36,165) |
Effects of Foreign Currency | 250,186 | (245,876) |
NET DECREASE IN CASH AND CASH EQUIVALENTS | (72,930) | (177,729) |
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD | 19,177,138 | 15,719,238 |
CASH AND CASH EQUIVALENTS AT END OF PERIOD | 19,104,208 | 15,541,509 |
SUPPLEMENTAL DISCLOSURES | ||
Cash Paid for Interest | 0 | 25,162 |
Cash Paid for Income Taxes | $ 0 | $ 0 |
NATURE OF ACTIVITIES AND SIGNIF
NATURE OF ACTIVITIES AND SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Mar. 31, 2023 | |
NATURE OF ACTIVITIES AND SIGNIFICANT ACCOUNTING POLICIES | |
NATURE OF ACTIVITIES AND SIGNIFICANT ACCOUNTING POLICIES | NOTE 1 - NATURE OF ACTIVITIES AND SIGNIFICANT ACCOUNTING POLICIES Nature of Activities, History and Organization DynaResource, Inc. (the “Company” or “DynaResource”) was organized 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. In 2000, the Company formed a wholly owned subsidiary, DynaResource de México S.A. de C.V., chartered in México (“DynaMéxico”). This Company was formed to acquire, invest in and develop resource properties in México. DynaMéxico owns a portfolio of mining concessions that currently includes its interests in the San José de Gracia Project (“SJG”) in northern Sinaloa State, México. The SJG District covers 9,920 hectares (24,513 acres) on the west side of the Sierra Madre Mountain range. The Company currently owns 100% of the outstanding capital of DynaMéxico. In 2005, the Company formed DynaResource Operaciones de San José De Gracia S.A. de C.V. (“DynaOperaciones”) and acquired control of Mineras de DynaResource, S.A. de C.V. (formerly Minera Finesterre S.A. de C.V., “DynaMineras”). The Company owns 100% of DynaMineras. The Company elected to become a voluntary reporting issuer in Canada in order to avail itself of Canadian regulations regarding reporting for mining properties and, more specifically, National Instrument 43-101 (“NI 43-101”). This regulation sets forth standards for reporting resources in a mineral property and is a reporting standard widely recognized in the mining industry. Significant Accounting Policies The Company’s management selects accounting principles generally accepted in the United States of America and adopts methods for their application. The application of accounting principles requires the estimating, matching and timing of revenues and expenses. The accounting policies used conform to generally accepted accounting principles which have been consistently applied in the preparation of these financial statements. The financial statements and notes are representations of the Company’s management, which is responsible for their integrity and objectivity. Management acknowledges that it is solely responsible for adopting sound accounting practices, establishing and maintaining a system of internal accounting control and preventing and detecting fraud. The Company’s system of internal accounting control is designed to assure, among other items, that: (1) recorded transactions are valid; (2) valid transactions are recorded; and (3) transactions are recorded in the proper period in a timely manner to produce financial statements which present fairly the financial condition, results of operations and cash flows of the Company for the respective periods presented. Basis of Presentation The Company prepares its unaudited consolidated financial statements on the accrual basis of accounting in conformity with accounting principles generally accepted in the United States. Correction of an Error The derivative liability in the Company’s December 31, 2022 balance sheet presented herein has been corrected to $2,172,417 from $2,334,377 from the Company’s Form 10-K which was filed with the Securities and Exchange Commission on April 17, 2023. The error was a typographical error made in that single line item and it did not impact any other financial statement balances including total liabilities, net income, earnings per share, or management compensation . Use of Estimates In order to prepare unaudited consolidated financial statements in conformity with accounting principles generally accepted in the United States, management must make estimates, judgments and assumptions that affect the amounts reported in the unaudited consolidated financial statements and determines whether contingent assets and liabilities, if any, are disclosed in the unaudited consolidated financial statements. The ultimate resolution of issues requiring these estimates and assumptions could differ significantly from resolution currently anticipated by management and on which the financial statements are based. Principles of Consolidation The unaudited consolidated financial statements include the accounts of DynaResource, Inc., as well as DynaResource de México, S.A. de C.V. (100% ownership), DynaResource Operaciones S.A. de C.V. (100% ownership) and Mineras de DynaResource S.A. de C.V. (100% ownership). All significant inter-company transactions have been eliminated. All amounts are presented in U.S. Dollars unless otherwise stated. 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. At times, cash balances may be in excess of the Federal Deposit Insurance Corporation (“FDIC”) insurance limits. As of March 31, 2023, the Company has $18,113,393 in deposits in U.S. banks in excess of the FDIC limit. The Company reduces this risk by maintaining such deposits at high quality financial institutions that management believes are creditworthy. Accounts Receivable and Allowances for Doubtful Accounts The Company maintains an allowance for doubtful accounts based upon its customers’ financial condition and payment history, and its historical collection experience and expected collectability. As of March 31, 2023 and December 31, 2022, no allowance has been deemed necessary. Foreign Tax Receivable Foreign Tax Receivable is comprised of recoverable value-added taxes (“IVA”) charged by the Mexican government on goods and services rendered. Under certain circumstances, these taxes are recoverable by filing a tax return. Amounts paid for IVA are tracked and held as receivables until the funds are remitted. Inventory Inventories are carried at the lower of cost or net realizable value and consist of mined tonnage, gravity and flotation concentrates, and gravity tailings or flotation feed material. Exploration Stage Issuer (No Reserves Disclosed) The definitions of Measured Mineral Resource, Mineral Reserve and Mineral Resource are set forth in SEC Regulation S-K, Item 1300 (“Reg. S-K, Item 1300”). Measured mineral resource Mineral reserve Mineral resource As of March 31, 2023, the Company meets the definition of an exploration stage issuer which is defined as an issuer that has no material property with established proven and probable mineral reserves as defined by Regulation S-K, Item 1300. Property, Plant & Equipment Substantially all property, plant and equipment at the Company’s mines, including design, engineering, mine construction, and installation of equipment are expensed as incurred, as the Company has not established proven and probable reserves on any of its properties. Only certain types of mining equipment which have alternative uses or significant salvage value, may be capitalized without proven and probable reserves. Office furniture and equipment are depreciated on a straight-line method over estimated economic lives ranging from 3 to 5 years. Leasehold improvements, which relate to the Company’s corporate office, are being amortized over the term of the lease of 10 years. As of March 31, 2023, all property, plant and equipment are fully depreciated or amortized. Design, Construction, and Development Costs: When proven and probable reserves (as defined by Reg. S-K, Item 1300) exist, development costs are capitalized. Mine development costs incurred either to develop new ore deposits, expand the capacity of operating mines, or to develop mine areas substantially in advance of current production would also be capitalized. Costs of start-up activities and costs incurred to maintain current production or to maintain assets on a standby basis are charged to operations as incurred. Costs of abandoned projects are charged to operations upon abandonment. All capitalized costs would be amortized using the units of production method over the estimated life of the ore body based on recoverable ounces to be mined from proven and probable reserves. Certain costs to design and construct mining and processing facilities may be incurred prior to establishing proven and probable reserves. As no proven and probable reserves have been established on any of the Company’s properties, the design, construction and development costs are not capitalized at any of the Company’s properties, and accordingly, substantially all such costs are expensed as incurred, resulting in the Company reporting higher operating costs than if such expenditures had been capitalized. Additionally, the Company does not have a corresponding depreciation or amortization of these costs going forward since such costs were expensed as incurred as opposed to being capitalized. As a result of these and other differences, the Company’s financial statements may not be comparable to the financial statements of mining companies that have established reserves. Mineral Property Interests Mineral property interests include acquired interests in development and exploration stage properties and are considered tangible assets. The amount capitalized relating to a mineral property interest represents its fair value at the time of acquisition. Mining properties consist of 33 mining concessions covering approximately 9,920 hectares at the San José de Gracia property. If it is determined that the deferred costs related to a property are not recoverable over its productive life, those costs will be written down to fair value as a charge to operations in the period in which the determination is made. The amounts at which mineral properties and the related costs are recorded do not necessarily reflect present or future values. Impairment of Assets: For operating mines, recoverability is measured by comparing the undiscounted future net cash flows to the net book value. When the net book value exceeds future net undiscounted cash flows, an impairment loss is measured and recorded based on the excess of the net book value over fair value. Fair value for operating mines is determined using a combined approach, which uses a discounted cash flow model for the existing operations and a market approach for the fair value assessment 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 related factors), production levels, operating costs, capital requirements and reclamation costs, all based on life-of-mine plans. The term “recoverable mineralized material” refers to the estimated amount of gold or other commodities that will be obtained after considering losses during processing and treatment of mineralized material. In estimating future cash flows, assets are grouped at the lowest level for which there are identifiable cash flows that are largely independent of future cash flows from other asset groups. The Company’s estimates of future cash flows are based on numerous assumptions, and it is possible that actual future cash flows will be significantly different than the estimates, as actual future quantities of recoverable minerals, gold, and silver, commodity prices, production levels and costs and capital are each subject to significant risks and uncertainties. The recoverability of the book value of each property will be assessed annually for indicators of impairment such as adverse changes to any of the following: · estimated recoverable ounces of gold, silver or other precious minerals; · estimated future commodity prices; · estimated expected future operating costs, capital expenditures and reclamation expenditures. A write-down to fair value will be recorded when the expected future cash flow is less than the net book value of the property, or when events or changes in the property indicate that carrying amounts are not recoverable. This analysis will be completed as needed. As of the date of this filing, no events have occurred that would require the write-down of any assets. As of March 31, 2023 and December 31, 2022, no indications of impairment existed. Asset Retirement Obligation As the Company is not obligated to remediate the mining properties, no Asset Retirement Obligation (“ARO”) has been established. Changes in regulations or laws, any instances of non-compliance with laws or regulations that result in fines, or any unforeseen environmental contamination could result in a material impact to the amounts charged to operations for reclamation and remediation. Significant judgments and estimates are made when estimating 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 environmental remediation work is highly subjective. Considering all of these factors that go into the determination of an ARO, the fair value of the AROs can materially change over time. Property Holding Costs Holding costs to maintain a property on a care and maintenance basis are expensed in the period they are incurred. These costs include security and maintenance expenses, lease and claim fees and payments, and environmental monitoring and reporting costs. Exploration Costs Exploration costs, including exploration, development, direct field costs and related administrative costs are expensed in the period incurred. Leases Effective January 1, 2019, the Company adopted ASC 842, which requires recognition of a right-of-use asset and lease liability for all leases at the commencement date based on the present value of lease payments over the lease term. Additional qualitative and quantitative disclosures regarding the Company’s leasing arrangements are also required. The Company adopted ASC 842 prospectively and elected the package of transition practical expedients that does not require reassessment of (1) whether any existing or expired contracts are or contain leases, (2) lease classification and (3) initial direct costs. In addition, the Company has elected other available practical expedients to not separate lease and non-lease components, which consist principally of common area maintenance charges, for all classes of underlying assets and to exclude leases with an initial term of 12 months or less. Transactions in and Translations of Foreign Currency The functional currency for the subsidiaries of the Company is the Mexican Peso. As a result, the financial statements of the subsidiaries have been translated from Mexican Pesos into U.S. dollars using (i) year-end exchange rates for balance sheet accounts, and (ii) the weighted average exchange rate of the reporting period for all income statement accounts. Foreign currency translation gains and losses are reported as a separate component of stockholders’ equity and comprehensive income (loss). The unaudited financial statements of the subsidiaries should not be construed as representations that Mexican Pesos have been, could have been or may in the future be converted into U.S. dollars at such rates or any other rates. Relevant exchange rates used in the preparation of the unaudited financial statements for the subsidiaries are as follows for the periods ended March 31, 2023, and December 31, 2022 (Mexican Pesos per one U.S. dollar): March 31, 2023 December 31, 2022 Current Exchange Rate 18.03 19.48 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 March 31, 2023 and 2022 (Mexican Pesos per one U.S. dollar): March 31, 2023 March 31, 2022 Weighted Average Exchange Rate for the Three Months Ended 18.66 20.50 The Company recorded currency transaction gains (losses) of $18,254 and $(2,402) for the three months ended March 31, 2023 and 2022, respectively. Income Taxes The Company accounts for income taxes under ASC 740 “Income Taxes” Income from the Company’s subsidiaries in México is taxed in accordance with applicable Mexican tax law and enacted rates. Comprehensive Income (Loss) ASC 220 “Comprehensive Income” Revenue Recognition The Company follows ASC 606 “ Revenue from Contracts with Customers The amount of revenue recognized is initially recorded on a provisional basis based on the contract price and the estimated metal quantities based on assay data. The revenue is adjusted upon final settlement of the sale. The chief risk associated with the recognition of sales on a provisional basis is the fluctuation (if any) between the estimated quantities of precious metals base on the initial assay and the actual recovery from treatment and processing. As of March 31, 2023, there are $9,200,000 in customer deposit liabilities for payments received in advance, all of which are expected to be settled, by the delivery of product, in the second quarter of 2023. During the three months ended March 31, 2023, and the year ended December 31, 2022, there was $9,350,000 and $9,250,000, respectively of revenue recognized during the period from customer deposit liabilities (deferred contract revenue) from prior periods, and no customer deposits were refunded to the customer due to order cancellation. Shipping and handling costs are considered fulfillment costs after the customer obtains control of the goods. Fair Value of Financial Instruments The Company’s financial instruments consist of cash, receivables, payables and long-term debt. Cash, receivables and payables approximate fair value because of the short-term nature of these items. As of March 31, 2023 and December 31, 2022, there were no long-term assets or liabilities, measured at their estimated fair value. Earnings (Loss) Per Share Earnings (loss) per share, attributable to the common equity holders of DynaResource, are calculated in accordance with ASC 260 “ Earnings per Share Related Party Transactions ASC 850, “ Related Party Disclosures |
INVENTORIES
INVENTORIES | 3 Months Ended |
Mar. 31, 2023 | |
INVENTORIES | |
INVENTORIES | NOTE 2 - 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). Inventory balances of March 31, 2023 and December 31, 2022 were as follows: 2023 2022 Mined Tonnage $ 2,238,791 $ 2,610,116 Gold-Silver Concentrates 110,090 110,695 Total Inventories $ 2,348,881 $ 2,720,811 |
PROPERTY, PLANT EQUIPMENT
PROPERTY, PLANT EQUIPMENT | 3 Months Ended |
Mar. 31, 2023 | |
PROPERTY, PLANT EQUIPMENT | |
PROPERTY, PLANT & EQUIPMENT | NOTE 3 – PROPERTY, PLANT & EQUIPMENT As of March 31, 2023 and December 31, 2022, all the Company’s property, plant and equipment have been fully depreciated, amortized or expensed, as discussed in “Property, Plant and Equipment” in Note 1 above. |
MINING CONCESSIONS
MINING CONCESSIONS | 3 Months Ended |
Mar. 31, 2023 | |
MINING CONCESSIONS | |
MINING CONCESSIONS | NOTE 4 - MINING CONCESSIONS Mining properties consist of the San José de Gracia concessions. Mining Concessions were $4,132,678 as of March 31, 2023 and December 31, 2022. There was no depletion expense during the three months ended March 31, 2023 and 2022, as the Company is an exploration stage issuer (See Note 1). |
INCOME TAXES
INCOME TAXES | 3 Months Ended |
Mar. 31, 2023 | |
INCOME TAXES | |
INCOME TAXES | NOTE 5- INCOME TAXES The Company has adopted ASC 740-10, “ Income Taxes” Our income tax expense and effective income tax rate are significantly impacted by the mix of our domestic and foreign earnings before income taxes. The Mexican applicable statutory rate is 30% which is higher than the U.S. federal and state combined statutory rate of approximately 21%. For the quarter, the increase in the effective benefit rate is primarily due to the beneficial impact of mark to market discrete items booked in the quarter when compared to the net loss before income taxes of $45,318. |
STOCKHOLDERS EQUITY
STOCKHOLDERS EQUITY | 3 Months Ended |
Mar. 31, 2023 | |
STOCKHOLDERS EQUITY | |
STOCKHOLDERS EQUITY | NOTE 6 - STOCKHOLDERS’ EQUITY The total number of shares of all classes of capital stock which the corporation has the authority to issue is 60,001,000 shares, consisting of (i) 20,001,000 shares of Preferred Stock, par value $0.0001 per share (“Preferred Stock”), of which 1,000 shares are designated as Series A Preferred Stock, 1,734,992 are designated as Series C Preferred Stock, and 3,000,000 shares are designated as Series D Preferred Stock and (ii) 40,000,000 shares of Common Stock, par value $0.01 per share (“Common Stock”). As of March 31, 2023, 15,265,008 shares of Preferred Stock remain undesignated. Series A Preferred Stock The Company has designated 1,000 shares of its Preferred Stock as Series A, having a par value of $0.0001 per share. Holders of the Series A Preferred Stock have the right to elect a majority of the Board of Directors of the Company. As of March 31, 2023 and December 31, 2022, there were 1,000 shares of Series A Preferred Stock outstanding. On April 19, 2023, the Company repurchased the Series A Preferred Stock, as discussed in Note 14 – “ Subsequent Events Series C Senior Convertible Preferred Stock As of March 31, 2023 and December 31, 2022 there were 1,734,992 Series C Preferred shares outstanding. As of March 31, 2023, these Series C Preferred Shares are convertible to common shares at $2.04 per share or redeemable in cash at the shareholder’s option and include anti-dilution protection. The Series C Preferred Shares may receive a 4% per annum dividend, payable if available, and in arrears. The dividend is calculated at 4.0% of $4,337,480 payable annually on June 30th. As of March 31, 2023, dividends for the years 2016 to 2022 totaling $1,053,777 were in arrears. Due to the nature of the Series C Preferred Shares as mandatorily redeemable, the Series C Preferred Shares are classified as “temporary equity” on the balance sheet. Series D Senior Convertible Preferred Stock On May 14, 2020, the Company closed an additional financing and related agreements with certain shareholders. On October 7, 2021, the Company paid $2,500,000 to repurchase one note. The remaining ten noteholders of notes convertible into Series D Preferred Stock elected to convert their notes totaling $1,520,000 into Series D Preferred Stock at $2.00 per share. On October 18, 2021, the Company issued 760,000 shares of Series D Preferred Stock for these notes. The Series D Preferred Stock may receive a 4% per annum dividend, payable if available, and in arrears. The dividend is calculated at 4.0% of $1,520,000 payable annually on October 18 th Due to the nature of the Series D Preferred as mandatorily redeemable by the Company at the election of the Series D Preferred stockholder at any time following maturity, the Series D Preferred Stock is classified as “temporary equity” on the balance sheet. The deemed dividends on the Series C and D Preferred Stock for the three months ended March 31, 2023 and 2022, were $58,575 and $58,575, respectively. As the Company has not declared these dividends, it is required as an item “below” the net income amount on the accompanying consolidated statements of income. Preferred Stock (Undesignated) In addition to the 1,000 shares designated as Series A Preferred Stock, and the 1,734,992 shares designated as Series C Preferred Stock, and the 3,000,000 shares designated as Series D Preferred Stock, the Company is authorized to issue an additional 15,265,008 shares of Preferred Stock, having a par value of $0.0001 per share. The Board of Directors of the Company has authority to issue the Preferred Stock from time to time in one or more series, and with respect to each series of the Preferred Stock, to fix and state by the resolution the terms attached to the Preferred Stock. As of March 31, 2023 and December 31, 2022, there were no other shares of Preferred Stock outstanding. The shares of each series of Preferred Stock may vary from the shares of any other series thereof in any or all the foregoing respects and in any other manner. The Board of Directors may increase the number of shares of Preferred Stock designated for any existing series by a resolution adding to such series authorized and unissued shares of Preferred Stock not designated for any other series. Unless otherwise provided in a particular Preferred Stock designation, the Board of Directors may decrease the number of shares of Preferred Stock designated for any existing series by a resolution subtracting from such series authorized and unissued shares of Preferred Stock designated for such existing series, and the shares so subtracted shall become authorized, unissued and undesignated shares of Preferred Stock. Common Stock The Company is authorized to issue 40,000,000 common shares at a par value of $0.01 per share. These shares have full voting rights. As of March 31, 2023, and December 31, 2022, there were 22,246,654 shares outstanding. No dividends were declared or paid during the three months ended March 31, 2023 and 2022. Preferred Rights The Company issued “Preferred Rights” for the rights to percentages of revenues generated from the San José de Gracia Pilot Production Plant and received $784,500 for these rights. The “Preferred Rights” are reflected in stockholders’ equity. As of March 31, 2023, $744,500 had been repaid, leaving a current balance of $40,000 and $40,000 as of March 31, 2023, and December 31, 2022, respectively. Stock Issuances There were no issuances of stock during the three months ended March 31, 2023. Treasury Stock During the three months ended March 31, 2023 no shares of treasury stock were purchased. There were 12,180 shares of Treasury Stock outstanding as of March 31, 2023 and December 31, 2022. Warrants 2023 activity As of March 31, 2023, the Company had outstanding warrants, which were a part of the issuance of notes convertible into Series D Convertible Preferred Stock in 2020, to purchase 892,165 shares of common stock: Number of Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Life (Years) Intrinsic Value Balance as of December 31, 2022 892,165 $ 0.01 7.37 - Granted - - - - Exercised - - - - Forfeited - - - - Balance as of March 31, 2023 892,165 0.01 7.13 - Exercisable as of March 31, 2023 892,165 $ 0.01 7.13 - |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Mar. 31, 2023 | |
COMMITMENTS AND CONTINGENCIES | |
COMMITMENTS AND CONTINGENCIES | NOTE 7 - COMMITMENTS AND CONTINGENCIES Concession Taxes The Company is required to pay taxes in México in order to maintain mining concessions owned by DynaMéxico. Additionally, the Company is required to incur a minimum amount of expenditures each year for all concessions held. The minimum expenditures are calculated based upon the land area, as well as 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 and current and forward plans and considering expenditures on mining concessions from 2002 to 2017 and continuing expenditures in current and forward activities, the Company does not anticipate that DynaMéxico will have any difficulties meeting the minimum annual expenditures for the concessions ($388 - $2,400 Mexican Pesos per hectare). DynaMéxico retains sufficient carry- forward amounts to cover over 10 years of the minimum annual expenditure (as calculated at the 2017 minimum, adjusted for annual inflation of 4%). Leases In addition to the surface rights held by DynaMéxico pursuant to the Mining Act Ley Minera y su Reglamento st The Company determines if a contract is or contains a lease at inception. As of March 31, 2023, the Company has two operating leases: corporate office space and a twenty-year ground lease in association with its México mining operations. An agreement for the lease of expanded office space was signed in the first quarter of 2023 and will commence when the build-out of the space is complete, which is anticipated to be during the second quarter of 2023. Until that time, the existing space is being leased on a month-to-month basis. The ground lease has a remaining term of approximately 10 years. Variable lease costs consist primarily of variable common area maintenance, storage parking and utilities. The Company’s leases do not have any residual value guarantees or restrictive covenants. As the implicit 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. These discount rates for leases are calculated using the Company’s interest rate of promissory notes |
DERIVATIVE LIABILITIES
DERIVATIVE LIABILITIES | 3 Months Ended |
Mar. 31, 2023 | |
DERIVATIVE LIABILITIES | |
DERIVATIVE LIABILITIES | NOTE 8 - DERIVATIVE LIABILITY Warrants Issued With the Notes Convertible Into Series D Preferred As discussed in Note 6, the Company analyzed the conversion features of the promissory notes convertible into Series D Preferred and determined that the Warrants issued with such notes qualified as a derivative liability. The fair value was required to be allocated among the notes, the notes’ conversion features, and the warrants, and then remeasured at each reporting date. The Company performed a valuation of the conversion feature. In performing the valuation, the Company applied the guidance in ASC 820, “Fair Value Measurements”, In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is 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 fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability. The Company considered the inputs in this valuation to be level 3 in the fair value hierarchy under ASC 820 and used an equity simulation model to determine the value of conversion feature of the Warrants issued with the notes convertible into Series D Preferred based on the assumptions below: March 31, Period Ended 2023 2022 Annual volatility rate 122 % 116 % Risk free rate 4.06 % 4.41 % Remaining Term 7.13 years 7.37 years Fair Value of common stock $ 2.25 $ 2.44 For the three and twelve months ended March 31, 2023 and December 31, 2022, an active market for the Company’s common stock did not exist. Accordingly, the fair value of the Company’s common stock was estimated using a valuation model with level 3 inputs. The below table represents the change in the fair value of the derivative liability during the three and twelve months ended March 31, 2023 and December 31, 2022. Period Ended 2023 2022 Fair value of derivative (warrants), beginning of period $ 2,172,417 $ 1,559,103 Exercise of warrants - - Change in fair value of derivative (169,434 ) 613,314 Fair value of derivative (warrants), end of period $ 2,002,983 $ 2,172,417 |
FAIR VALUE OF FINANCIAL INSTRUM
FAIR VALUE OF FINANCIAL INSTRUMENTS | 3 Months Ended |
Mar. 31, 2023 | |
FAIR VALUE OF FINANCIAL INSTRUMENTS | |
FAIR VALUE OF FINANCIAL INSTRUMENTS | NOTE 9 - FAIR VALUE OF FINANCIAL INSTRUMENTS The ASC 820 guidance for fair value measurements and disclosure establishes a fair value 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 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are described below: Level 1 Inputs - Level 2 Inputs - Level 3 Inputs - As of March 31, 2023 and December 31, 2022, the Company’s financial assets and liabilities were measured at fair value using Level 3 inputs, with the exception of cash, which was valued using Level 1 inputs. A description of the valuation of the Level 3 inputs is discussed in Note 8. Total Quoted Prices in Active Markets For Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Fair Value Measurement as of March 31, 2023: Liabilities: Derivative Liabilities $ 2,002,983 $ - $ - $ 2,002,983 Totals $ 2,002,983 $ - $ - $ 2,002,983 Fair Value Measurement as of December 31, 2022 Liabilities: Derivative Liabilities $ 2,172,417 $ - $ - $ 2,172,417 Totals $ 2,172,417 $ - $ - $ 2,172,417 |
CUSTOMER CONCENTRATION
CUSTOMER CONCENTRATION | 3 Months Ended |
Mar. 31, 2023 | |
CUSTOMER CONCENTRATION | |
CUSTOMER CONCENTRATION | NOTE 10 - CUSTOMER CONCENTRATION The Company had certain customers whose revenue individually represented 10% or more of the Company’s total revenue, or whose accounts receivable balances individually represented 10% or more of the Company’s total accounts receivable, as follows: For each of the three months ended March 31, 2023 and 2022, one customer accounted for 100% of revenue. As of March 31, 2023 and December 31, 2022, one customer accounted for 100% of accounts receivable. |
NOTES PAYABLE
NOTES PAYABLE | 3 Months Ended |
Mar. 31, 2023 | |
NOTES PAYABLE | |
NOTES PAYABLE | NOTE 11 - NOTES PAYABLE In September 2018, the Company entered into financing agreements for the unpaid mining concession taxes on the Francisco Arturo mining concession for the year ended December 31, 2017 and the period ending September 30, 2018 in the amount of $1,739,392. The Company paid an initial 20% payment of $347,826 and financed the balance over 36 months at an interest rate of 21.84% per annum. 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 $335,350. The Company paid an initial 20% payment of $67,070 and financed the balance over 36 months at an interest rate of 22% per annum. In September 2018, the Company applied for a reduction of the Francisco Arturo mining concession, from 69,121 hectares to 3,280 hectares. On July 31, 2018, the application for reduction was approved and the Company paid an initial amount of 985,116 MNP (Pesos), for the second semester 2018 mining concessions taxes on the reduced Francisco Arturo mining concession. The Company continues to accrue an amount of $22,500 (USD) per semester on the reduced Francisco Arturo mining concession. As of September 2019, the Company ceased making monthly payments on the above noted Francisco Arturo concession notes and has petitioned the Hacienda (Mexican federal tax authority) for a reduction in the liability which is pro-rata to the reduction in the Francisco Arturo concession. For financial reporting purposes the Company continues to carry all notes (to finance unpaid mining concession taxes) at their unpaid principal amount and accrues interest on a monthly basis. As of March 31, 2023, $1,777,164 of accrued interest on the notes was included in accrued liabilities on the unaudited consolidated balance sheet. In October 2019, the Company entered into a financing agreement for unpaid mining concession taxes on the core mining concessions in the amount of $299,474. The Company paid an initial 20% payment of $59,895 and financed the balance over 36 months at an interest rate of 22%. The following is a summary of the activity during the three months ended March 31, 2023: Balance December 31, 2022 $ 1,968,251 Exchange Rate Adjustment 158,945 2023 Principal Payments - Balance March 31, 2023 $ 2,127,196 |
REVOLVING CREDIT LINE FACILITY
REVOLVING CREDIT LINE FACILITY | 3 Months Ended |
Mar. 31, 2023 | |
REVOLVING CREDIT LINE FACILITY | |
REVOLVING CREDIT LINE FACILITY | NOTE 12 - REVOLVING CREDIT LINE FACILITY On February 4, 2021, the Company (through DynaMineras) entered into a Revolving Credit Line Facility and Commercial Offtake Agreement (the “RCL”), with a commercial buyer. The RCL was extended in December 2022 through December 2023. Under the terms of the RCL: · The Company will deliver 100% of its produced concentrates to the buyer and provider of the RCL, through December 31, 2023; unless extended by the Company; · An initial RCL was established by buyer in the amount of $3.75M USD; · On May 1, 2021, the RCL increased to an amount equal to 80% of the prior 3 months’ revenue; · Each successive month, the RCL shall be adjusted according to the Company’s prior 3 months’ revenue; · The RCL shall never be less than $3.75M USD; · The RCL will be interest free for 45 days; · The RCL is to be repaid through deliveries of concentrates or cash within 120 days; The RCL is included under Customer Advances on the unaudited consolidated balance sheet. Deposits under Revolving Credit Line Facility Under the terms of the RCL, DynaMineras received the following advances from the buyer (in millions): (1) $9.35 advance on December 28, 2022. Settled on February 16, 2023 (2) $9.60 advance on February 21, 2023. Settled on March 31, 2023 (3) $9.20 advance on March 31, 2023. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 3 Months Ended |
Mar. 31, 2023 | |
RELATED PARTY TRANSACTIONS | |
RELATED PARTY TRANSACTIONS | NOTE 13 – RELATED PARTY TRANSACTIONS Dynacap Group Ltd. The Company paid $43,750 to Dynacap Group, Ltd. (“Dynacap”, an entity formerly controlled by the CEO of the Company) for consulting and other fees during the periods ended March 31, 2022. There were no fees paid to Dynacap or any other related party for the quarter ended March 31, 2023. There are no other related party transactions that require disclosure. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 3 Months Ended |
Mar. 31, 2023 | |
SUBSEQUENT EVENTS | |
SUBSEQUENT EVENTS | NOTE 14 - SUBSEQUENT EVENTS On April 19, 2023, the Company entered into a Multi-Party Agreement (the “Agreement”) with Golden Post Rail, LLC (“Golden Post”), MKR 2022 Grantor Retained Annuity Trust, and Koy W. (“K.D.”) Diepholz (“Diepholz”). Golden Post is a holder of more than 5% of the outstanding shares of the Company’s Common Stock and of all the Company’s outstanding Series C Preferred Stock (the “Series C Stock”). Diepholz is the Company’s CEO and Chairman of the Company’s Board of Directors. The principal terms of the Agreement are as follows: · Diepholz agreed to sell to the Company, and the Company agreed to redeem and purchase from Diepholz, all of the 1,000 outstanding shares (the “A Shares”) of Series A Preferred Stock (the “Series A Stock”) held by Diepholz for a price of $1,250,000. · The A Shares constitute all of the outstanding shares of Series A Stock of the Company. The Series A Stock carried the right to elect a majority of the Company’s Board of Directors. Upon the redemption of the A Shares, the Company agreed to retire the A Shares, not to issue or sell any Series A Stock in the future, and not to create or issue any other class or series of Preferred Stock having the right to elect a majority of the Board of Directors without approval of the Board of Directors (including the director appointed by the holders of the Series C Stock (the “Series C Director”). · Within 90 days after closing of the Agreement, the Company will seek stockholder approval to amend its Certificate of Incorporation to eliminate the Series A Stock. · The Company will enter into executive employment agreements (the “Employment Agreements”) with its key executives – Diepholz, Rene Mladosich, Jose Vargas, and Lic. Santos. · Prior to the redemption of the A Shares, Diepholz agreed to vote the A Shares to elect Ronald Vail as a fourth independent member of the Company’s Board of Directors, resulting in the Company’s having a majority-independent Board of Directors. · The Company will create an Audit Committee, consisting of three or more independent members of its Board of Directors, one of which must be the Series C Director as long as Golden Post has the right to appoint the Series C Director. · The Company will create a Nominating Committee, consisting of (a) all of the independent members of the Board of Directors, including the Series C Director as long as Golden Post has the right to appoint the Series C Director; and (b) the CEO, as long Diepholz holds that position and is serving as a director. The foregoing description of the Agreement is qualified in its entirety by reference to the full text of the Agreement, a copy of which is available as filed on Form 8-K, filed with the SEC on April 26, 2023 and incorporated herein in its entirety by reference. |
NATURE OF ACTIVITIES AND SIGN_2
NATURE OF ACTIVITIES AND SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Mar. 31, 2023 | |
NATURE OF ACTIVITIES AND SIGNIFICANT ACCOUNTING POLICIES | |
Nature of Activities, History and Organization | DynaResource, Inc. (the “Company” or “DynaResource”) was organized 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. In 2000, the Company formed a wholly owned subsidiary, DynaResource de México S.A. de C.V., chartered in México (“DynaMéxico”). This Company was formed to acquire, invest in and develop resource properties in México. DynaMéxico owns a portfolio of mining concessions that currently includes its interests in the San José de Gracia Project (“SJG”) in northern Sinaloa State, México. The SJG District covers 9,920 hectares (24,513 acres) on the west side of the Sierra Madre Mountain range. The Company currently owns 100% of the outstanding capital of DynaMéxico. In 2005, the Company formed DynaResource Operaciones de San José De Gracia S.A. de C.V. (“DynaOperaciones”) and acquired control of Mineras de DynaResource, S.A. de C.V. (formerly Minera Finesterre S.A. de C.V., “DynaMineras”). The Company owns 100% of DynaMineras. The Company elected to become a voluntary reporting issuer in Canada in order to avail itself of Canadian regulations regarding reporting for mining properties and, more specifically, National Instrument 43-101 (“NI 43-101”). This regulation sets forth standards for reporting resources in a mineral property and is a reporting standard widely recognized in the mining industry. |
Significant Accounting Policies | The Company’s management selects accounting principles generally accepted in the United States of America and adopts methods for their application. The application of accounting principles requires the estimating, matching and timing of revenues and expenses. The accounting policies used conform to generally accepted accounting principles which have been consistently applied in the preparation of these financial statements. The financial statements and notes are representations of the Company’s management, which is responsible for their integrity and objectivity. Management acknowledges that it is solely responsible for adopting sound accounting practices, establishing and maintaining a system of internal accounting control and preventing and detecting fraud. The Company’s system of internal accounting control is designed to assure, among other items, that: (1) recorded transactions are valid; (2) valid transactions are recorded; and (3) transactions are recorded in the proper period in a timely manner to produce financial statements which present fairly the financial condition, results of operations and cash flows of the Company for the respective periods presented. |
Basis of Presentation | The Company prepares its unaudited consolidated financial statements on the accrual basis of accounting in conformity with accounting principles generally accepted in the United States. |
Correction of an Error | The derivative liability in the Company’s December 31, 2022 balance sheet presented herein has been corrected to $2,172,417 from $2,334,377 from the Company’s Form 10-K which was filed with the Securities and Exchange Commission on April 17, 2023. The error was a typographical error made in that single line item and it did not impact any other financial statement balances including total liabilities, net income, earnings per share, or management compensation . |
Use of Estimates | In order to prepare unaudited consolidated financial statements in conformity with accounting principles generally accepted in the United States, management must make estimates, judgments and assumptions that affect the amounts reported in the unaudited consolidated financial statements and determines whether contingent assets and liabilities, if any, are disclosed in the unaudited consolidated financial statements. The ultimate resolution of issues requiring these estimates and assumptions could differ significantly from resolution currently anticipated by management and on which the financial statements are based. |
Principles of Consolidation | The unaudited consolidated financial statements include the accounts of DynaResource, Inc., as well as DynaResource de México, S.A. de C.V. (100% ownership), DynaResource Operaciones S.A. de C.V. (100% ownership) and Mineras de DynaResource S.A. de C.V. (100% ownership). All significant inter-company transactions have been eliminated. All amounts are presented in U.S. Dollars unless otherwise stated. |
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. At times, cash balances may be in excess of the Federal Deposit Insurance Corporation (“FDIC”) insurance limits. As of March 31, 2023, the Company has $18,113,393 in deposits in U.S. banks in excess of the FDIC limit. The Company reduces this risk by maintaining such deposits at high quality financial institutions that management believes are creditworthy. |
Accounts Receivable and Allowances for Doubtful Accounts | The Company maintains an allowance for doubtful accounts based upon its customers’ financial condition and payment history, and its historical collection experience and expected collectability. As of March 31, 2023 and December 31, 2022, no allowance has been deemed necessary. |
Foreign Tax Receivable | Foreign Tax Receivable is comprised of recoverable value-added taxes (“IVA”) charged by the Mexican government on goods and services rendered. Under certain circumstances, these taxes are recoverable by filing a tax return. Amounts paid for IVA are tracked and held as receivables until the funds are remitted. |
Inventory | Inventories are carried at the lower of cost or net realizable value and consist of mined tonnage, gravity and flotation concentrates, and gravity tailings or flotation feed material. |
Exploration Stage | The definitions of Measured Mineral Resource, Mineral Reserve and Mineral Resource are set forth in SEC Regulation S-K, Item 1300 (“Reg. S-K, Item 1300”). Measured mineral resource Mineral reserve Mineral resource As of March 31, 2023, the Company meets the definition of an exploration stage issuer which is defined as an issuer that has no material property with established proven and probable mineral reserves as defined by Regulation S-K, Item 1300. |
Property, Plant & Equipment | Substantially all property, plant and equipment at the Company’s mines, including design, engineering, mine construction, and installation of equipment are expensed as incurred, as the Company has not established proven and probable reserves on any of its properties. Only certain types of mining equipment which have alternative uses or significant salvage value, may be capitalized without proven and probable reserves. Office furniture and equipment are depreciated on a straight-line method over estimated economic lives ranging from 3 to 5 years. Leasehold improvements, which relate to the Company’s corporate office, are being amortized over the term of the lease of 10 years. As of March 31, 2023, all property, plant and equipment are fully depreciated or amortized. Design, Construction, and Development Costs: When proven and probable reserves (as defined by Reg. S-K, Item 1300) exist, development costs are capitalized. Mine development costs incurred either to develop new ore deposits, expand the capacity of operating mines, or to develop mine areas substantially in advance of current production would also be capitalized. Costs of start-up activities and costs incurred to maintain current production or to maintain assets on a standby basis are charged to operations as incurred. Costs of abandoned projects are charged to operations upon abandonment. All capitalized costs would be amortized using the units of production method over the estimated life of the ore body based on recoverable ounces to be mined from proven and probable reserves. Certain costs to design and construct mining and processing facilities may be incurred prior to establishing proven and probable reserves. As no proven and probable reserves have been established on any of the Company’s properties, the design, construction and development costs are not capitalized at any of the Company’s properties, and accordingly, substantially all such costs are expensed as incurred, resulting in the Company reporting higher operating costs than if such expenditures had been capitalized. Additionally, the Company does not have a corresponding depreciation or amortization of these costs going forward since such costs were expensed as incurred as opposed to being capitalized. As a result of these and other differences, the Company’s financial statements may not be comparable to the financial statements of mining companies that have established reserves. |
Mineral Properties Interests | Mineral property interests include acquired interests in development and exploration stage properties and are considered tangible assets. The amount capitalized relating to a mineral property interest represents its fair value at the time of acquisition. Mining properties consist of 33 mining concessions covering approximately 9,920 hectares at the San José de Gracia property. If it is determined that the deferred costs related to a property are not recoverable over its productive life, those costs will be written down to fair value as a charge to operations in the period in which the determination is made. The amounts at which mineral properties and the related costs are recorded do not necessarily reflect present or future values. Impairment of Assets: For operating mines, recoverability is measured by comparing the undiscounted future net cash flows to the net book value. When the net book value exceeds future net undiscounted cash flows, an impairment loss is measured and recorded based on the excess of the net book value over fair value. Fair value for operating mines is determined using a combined approach, which uses a discounted cash flow model for the existing operations and a market approach for the fair value assessment 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 related factors), production levels, operating costs, capital requirements and reclamation costs, all based on life-of-mine plans. The term “recoverable mineralized material” refers to the estimated amount of gold or other commodities that will be obtained after considering losses during processing and treatment of mineralized material. In estimating future cash flows, assets are grouped at the lowest level for which there are identifiable cash flows that are largely independent of future cash flows from other asset groups. The Company’s estimates of future cash flows are based on numerous assumptions, and it is possible that actual future cash flows will be significantly different than the estimates, as actual future quantities of recoverable minerals, gold, and silver, commodity prices, production levels and costs and capital are each subject to significant risks and uncertainties. The recoverability of the book value of each property will be assessed annually for indicators of impairment such as adverse changes to any of the following: · estimated recoverable ounces of gold, silver or other precious minerals; · estimated future commodity prices; · estimated expected future operating costs, capital expenditures and reclamation expenditures. A write-down to fair value will be recorded when the expected future cash flow is less than the net book value of the property, or when events or changes in the property indicate that carrying amounts are not recoverable. This analysis will be completed as needed. As of the date of this filing, no events have occurred that would require the write-down of any assets. As of March 31, 2023 and December 31, 2022, no indications of impairment existed. |
Asset Retirement Obligation | As the Company is not obligated to remediate the mining properties, no Asset Retirement Obligation (“ARO”) has been established. Changes in regulations or laws, any instances of non-compliance with laws or regulations that result in fines, or any unforeseen environmental contamination could result in a material impact to the amounts charged to operations for reclamation and remediation. Significant judgments and estimates are made when estimating 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 environmental remediation work is highly subjective. Considering all of these factors that go into the determination of an ARO, the fair value of the AROs can materially change over time. |
Property Holding Costs | Holding costs to maintain a property on a care and maintenance basis are expensed in the period they are incurred. These costs include security and maintenance expenses, lease and claim fees and payments, and environmental monitoring and reporting costs. |
Exploration Costs | Exploration costs, including exploration, development, direct field costs and related administrative costs are expensed in the period incurred. |
Leases | Effective January 1, 2019, the Company adopted ASC 842, which requires recognition of a right-of-use asset and lease liability for all leases at the commencement date based on the present value of lease payments over the lease term. Additional qualitative and quantitative disclosures regarding the Company’s leasing arrangements are also required. The Company adopted ASC 842 prospectively and elected the package of transition practical expedients that does not require reassessment of (1) whether any existing or expired contracts are or contain leases, (2) lease classification and (3) initial direct costs. In addition, the Company has elected other available practical expedients to not separate lease and non-lease components, which consist principally of common area maintenance charges, for all classes of underlying assets and to exclude leases with an initial term of 12 months or less. |
Transactions in and Translations of Foreign Currency | The functional currency for the subsidiaries of the Company is the Mexican Peso. As a result, the financial statements of the subsidiaries have been translated from Mexican Pesos into U.S. dollars using (i) year-end exchange rates for balance sheet accounts, and (ii) the weighted average exchange rate of the reporting period for all income statement accounts. Foreign currency translation gains and losses are reported as a separate component of stockholders’ equity and comprehensive income (loss). The unaudited financial statements of the subsidiaries should not be construed as representations that Mexican Pesos have been, could have been or may in the future be converted into U.S. dollars at such rates or any other rates. Relevant exchange rates used in the preparation of the unaudited financial statements for the subsidiaries are as follows for the periods ended March 31, 2023, and December 31, 2022 (Mexican Pesos per one U.S. dollar): March 31, 2023 December 31, 2022 Current Exchange Rate 18.03 19.48 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 March 31, 2023 and 2022 (Mexican Pesos per one U.S. dollar): March 31, 2023 March 31, 2022 Weighted Average Exchange Rate for the Three Months Ended 18.66 20.50 The Company recorded currency transaction gains (losses) of $18,254 and $(2,402) for the three months ended March 31, 2023 and 2022, respectively. |
Income Taxes | The Company accounts for income taxes under ASC 740 “Income Taxes” Income from the Company’s subsidiaries in México is taxed in accordance with applicable Mexican tax law and enacted rates. |
Comprehensive Income (Loss) | ASC 220 “Comprehensive Income” |
Revenue Recognition | The Company follows ASC 606 “ Revenue from Contracts with Customers The amount of revenue recognized is initially recorded on a provisional basis based on the contract price and the estimated metal quantities based on assay data. The revenue is adjusted upon final settlement of the sale. The chief risk associated with the recognition of sales on a provisional basis is the fluctuation (if any) between the estimated quantities of precious metals base on the initial assay and the actual recovery from treatment and processing. As of March 31, 2023, there are $9,200,000 in customer deposit liabilities for payments received in advance, all of which are expected to be settled, by the delivery of product, in the second quarter of 2023. During the three months ended March 31, 2023, and the year ended December 31, 2022, there was $9,350,000 and $9,250,000, respectively of revenue recognized during the period from customer deposit liabilities (deferred contract revenue) from prior periods, and no customer deposits were refunded to the customer due to order cancellation. Shipping and handling costs are considered fulfillment costs after the customer obtains control of the goods. |
Fair Value of Financial Instruments | The Company’s financial instruments consist of cash, receivables, payables and long-term debt. Cash, receivables and payables approximate fair value because of the short-term nature of these items. As of March 31, 2023 and December 31, 2022, there were no long-term assets or liabilities, measured at their estimated fair value. |
Earnings (Loss) Per Share | Earnings (loss) per share, attributable to the common equity holders of DynaResource, are calculated in accordance with ASC 260 “ Earnings per Share |
Related Party Transactions | ASC 850, “ Related Party Disclosures |
NATURE OF ACTIVITIES AND SIGN_3
NATURE OF ACTIVITIES AND SIGNIFICANT ACCOUNTING POLICIES (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
NATURE OF ACTIVITIES AND SIGNIFICANT ACCOUNTING POLICIES | |
Exchange Rates | March 31, 2023 December 31, 2022 Current Exchange Rate 18.03 19.48 March 31, 2023 March 31, 2022 Weighted Average Exchange Rate for the Three Months Ended 18.66 20.50 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
INVENTORIES | |
Inventories | 2023 2022 Mined Tonnage $ 2,238,791 $ 2,610,116 Gold-Silver Concentrates 110,090 110,695 Total Inventories $ 2,348,881 $ 2,720,811 |
STOCKHOLDERS EQUITY (Tables)
STOCKHOLDERS EQUITY (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
STOCKHOLDERS EQUITY | |
Warrant Activity | Number of Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Life (Years) Intrinsic Value Balance as of December 31, 2022 892,165 $ 0.01 7.37 - Granted - - - - Exercised - - - - Forfeited - - - - Balance as of March 31, 2023 892,165 0.01 7.13 - Exercisable as of March 31, 2023 892,165 $ 0.01 7.13 - |
DERIVATIVE LIABILITIES (Tables)
DERIVATIVE LIABILITIES (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
DERIVATIVE LIABILITIES | |
Change in the Fair Value of the Derivative Liability | March 31, Period Ended 2023 2022 Annual volatility rate 122 % 116 % Risk free rate 4.06 % 4.41 % Remaining Term 7.13 years 7.37 years Fair Value of common stock $ 2.25 $ 2.44 Period Ended 2023 2022 Fair value of derivative (warrants), beginning of period $ 2,172,417 $ 1,559,103 Exercise of warrants - - Change in fair value of derivative (169,434 ) 613,314 Fair value of derivative (warrants), end of period $ 2,002,983 $ 2,172,417 |
FAIR VALUE OF FINANCIAL INSTR_2
FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
FAIR VALUE OF FINANCIAL INSTRUMENTS | |
Fair Value Measurement | Total Quoted Prices in Active Markets For Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Fair Value Measurement as of March 31, 2023: Liabilities: Derivative Liabilities $ 2,002,983 $ - $ - $ 2,002,983 Totals $ 2,002,983 $ - $ - $ 2,002,983 Fair Value Measurement as of December 31, 2022 Liabilities: Derivative Liabilities $ 2,172,417 $ - $ - $ 2,172,417 Totals $ 2,172,417 $ - $ - $ 2,172,417 |
NOTES PAYABLE (Tables)
NOTES PAYABLE (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
NOTES PAYABLE | |
Notes Payable | Balance December 31, 2022 $ 1,968,251 Exchange Rate Adjustment 158,945 2023 Principal Payments - Balance March 31, 2023 $ 2,127,196 |
NATURE OF ACTIVITIES AND SIGN_4
NATURE OF ACTIVITIES AND SIGNIFICANT ACCOUNTING POLICIES (Details) | Mar. 31, 2023 | Dec. 31, 2022 |
NATURE OF ACTIVITIES AND SIGNIFICANT ACCOUNTING POLICIES | ||
Current Exchange Rate | 18.03 | 19.48 |
Weighted Average Exhange Rate for the Period | 18.66 | 20.50 |
NATURE OF ACTIVITIES AND SIGN_5
NATURE OF ACTIVITIES AND SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Amortized Of Lease Term | 10 years | ||
Bank Deposite Excess Of Fdic Limit | $ 18,113,393 | ||
Ownership Percentage | 100% | ||
Currency Transaction Gains (losses) | $ 18,254 | (2,402) | |
Customer Deposit Liabilities For Payment Received In Advance | $ 9,200,000 | ||
Deferred Contract Revenue | $ 9,350,000 | $ 9,250,000 | |
Potentially Dilutive Common Stock | 3,433,482 | ||
Derivative liability correction amount | 2,334,377 | ||
Derivative liability | $ 2,172,417 | ||
Minimum | Leasehold improvements [Member] | |||
Property Estimate Useful Life | 3 years | ||
Maximum | Leasehold improvements [Member] | |||
Property Estimate Useful Life | 5 years |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) | Mar. 31, 2023 | Dec. 31, 2022 | Mar. 31, 2022 | Dec. 31, 2021 |
Total Inventories | $ 2,348,881 | $ 2,720,811 | $ 2,348,881 | $ 2,720,811 |
Gold-Silver Concentrates [Member] | ||||
Total Inventories | 110,090 | 110,695 | ||
Mined Tonnage [Member] | ||||
Total Inventories | $ 2,238,791 | $ 2,610,116 |
MINING CONCESSIONS (Details Nar
MINING CONCESSIONS (Details Narrative) - USD ($) | Mar. 31, 2023 | Dec. 31, 2022 | Mar. 31, 2022 | Dec. 31, 2021 |
MINING CONCESSIONS | ||||
Total Mining Concessions | $ 4,132,678 | $ 4,132,678 | $ 4,132,678 | $ 4,132,678 |
INCOME TAXES (Details Narrative
INCOME TAXES (Details Narrative) | 3 Months Ended |
Mar. 31, 2023 USD ($) | |
Net loss before income taxes | $ 45,318 |
Effective Income Tax Rate Reconciliation, At Federal Statutory Income Tax Rate, Percent | 21% |
Mexican [Member[ | |
Effective Income Tax Rate Reconciliation, At Federal Statutory Income Tax Rate, Percent | 30% |
STOCKHOLDERS EQUITY (Details)
STOCKHOLDERS EQUITY (Details) | 3 Months Ended |
Mar. 31, 2023 USD ($) $ / shares shares | |
STOCKHOLDERS EQUITY | |
Warrants, Outstanding, Beginning Balance | shares | 892,165 |
Warrants, Granted | shares | 0 |
Warrants, Exercised | shares | 0 |
Warrants, Forfeited | shares | 0 |
Warrants, Outstanding, Ending Balance | shares | 892,165 |
Warrant, Exercisable | shares | 892,165 |
Weighted Average Exercise Price, Outstanding, Beginning Balance | $ / shares | $ 0.01 |
Weighted Average Exercise Price, Granted | $ / shares | 0 |
Weighted Average Exercise Price, Exercised | $ / shares | 0 |
Weighted Average Exercise Price, Forfeited | $ / shares | 0 |
Weighted Average Exercise Price, Outstanding, Ending Balance | $ / shares | 0.01 |
Weighted AverageExercise Price Exercisable at December 31, 2021 | $ / shares | $ 0.01 |
Weighted Average Remaining Contractual Life, Outstanding, Beginning Balance | 7 years 4 months 13 days |
Weighted Average Remaining Contractual Life, Outstanding, End Balance | 7 years 1 month 17 days |
Weighted Average Remaining Contractual Life, Outstanding, Exercisable | 7 years 1 month 17 days |
Intrinsic Value, beginning balance | $ | $ 0 |
Intrinsic Value, Granted | $ | 0 |
Intrinsic Value, Forfeited | $ | 0 |
Intrinsic Value, ending balance | $ | 0 |
Intrinsic Value, Excercisable | $ | $ 0 |
STOCKHOLDERS EQUITY (Details Na
STOCKHOLDERS EQUITY (Details Narrative) | 3 Months Ended | |||||
Oct. 07, 2021 USD ($) integer $ / shares | Mar. 31, 2023 USD ($) $ / shares shares | Dec. 31, 2022 USD ($) $ / shares shares | Jun. 30, 2022 shares | Dec. 31, 2021 $ / shares shares | Oct. 18, 2021 shares | |
Capital stock authorized issue | 60,001,000 | |||||
Preferred stock, par value | $ / shares | $ 0.0001 | |||||
Preferred stock, shares designated | 1,000 | |||||
Preferred stock, shares authorized | 20,001,000 | |||||
Amount recieved from preferred right | $ | $ 784,500 | |||||
Repaid amount under preferred right | $ | 744,500 | |||||
Current balance, preferred right | $ | 40,000 | $ 40,000 | ||||
Derivative Liabilities | $ | $ 2,002,983 | $ 2,172,417 | ||||
Common stock, shares authorized | 40,000,000 | 40,000,000 | ||||
Common stock, par value | $ / shares | $ 0.01 | $ 0.01 | ||||
Common stock, shares outstanding | 22,246,654 | 22,246,654 | ||||
Treasury Stock outstanding | 12,180 | 12,180 | ||||
2023 Activity [Member] | ||||||
Common stock purchase | 892,165 | |||||
Series A Preferred Stock [Member] | ||||||
Preferred stock, par value | $ / shares | $ 0.0001 | $ 0.0001 | ||||
Preferred stock, shares designated | 1,000 | |||||
Preferred stock, shares authorized | 1,000 | 1,000 | ||||
Preferred stock shares outstanding | 1,000 | 1,000 | ||||
Preferred stock, shares issued | 1,000 | 1,000 | ||||
Series C Senior Convertible Preferred Stock | ||||||
Preferred stock, par value | $ / shares | $ 0.0001 | $ 0.0001 | $ 0.0001 | |||
Preferred stock, shares designated | 1,734,992 | 1,734,992 | ||||
Preferred stock, shares authorized | 1,734,992 | 1,734,992 | 1,734,992 | |||
Preferred stock shares outstanding | 1,734,992 | 1,734,992 | 1,734,992 | |||
Conversion price per shares | $ / shares | $ 2.04 | $ 2.04 | ||||
Shares dividend receive per annum | 0.04% | |||||
Total arrears on dividend | $ | $ 1,053,777 | |||||
Preferred stock, shares issued | 1,734,992 | 1,734,992 | 1,734,992 | |||
Description of 2015 warrant | Attached to the Series C Preferred Stock issued in 2015 were 2,000,000 warrants, described as the “2015 Warrant” which gave the holder the right to purchase common shares at $2.50 per share. After anti-dilution protection, these warrants became 2,166,527 warrants to purchase common shares at $2.04 and on June 28, 2022, the 2015 Warrant was exercised | |||||
Series C, shares authorized | 1,734,992 | 1,734,992 | ||||
Common stock acquired | 2,655,361 | |||||
Preferred Stock Undesignated | ||||||
Preferred stock, par value | $ / shares | $ 0.0001 | |||||
Preferred stock, shares designated | 15,265,008 | |||||
Additional share issued of preferred stock | 15,265,008 | |||||
Common Stock [Member] | ||||||
Common stock, shares authorized | 40,000,000 | |||||
Common stock, par value | $ / shares | $ 0.01 | |||||
Common stock, shares outstanding | 22,246,654 | 22,246,654 | ||||
Series C Senior Preferred Stock | ||||||
Preferred stock, shares designated | 1,734,992 | |||||
Preferred stock shares outstanding | 1,734,992 | 1,734,992 | ||||
Conversion price per shares | $ / shares | $ 2.04 | |||||
Shares dividend receive per annum | 4% | |||||
Dividend payable | $ | $ 4,337,480 | |||||
Total arrears on dividend | $ | 1,053,777 | |||||
Deemed dividend | $ | $ 58,575 | |||||
Series D Convertible Preferred Stock [Member] | ||||||
Preferred stock, shares designated | 3,000,000 | |||||
Shares dividend receive per annum | 4% | |||||
Dividend payable | $ | $ 1,520,000 | |||||
Total arrears on dividend | $ | 60,800 | |||||
Preferred stock, shares issued | 760,000 | |||||
Convertible note into preferred stock | $ | $ 1,520,000 | |||||
Convertible note into preferred stock price per share | $ / shares | $ 2 | |||||
Derivative Liabilities | $ | 2,002,983 | |||||
Deemed dividend | $ | $ 58,575 | |||||
Convertible note repurchase amount | $ | $ 2,500,000 | |||||
Number of noteholders | integer | 10 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($) | 3 Months Ended | |
Jan. 06, 2014 | Mar. 31, 2023 | |
Concession taxes, description | the Company does not anticipate that DynaMéxico will have any difficulties meeting the minimum annual expenditures for the concessions ($388 - $2,400 Mexican Pesos per hectare). DynaMéxico retains sufficient carry- forward amounts to cover over 10 years of the minimum annual expenditure (as calculated at the 2017 minimum, adjusted for annual inflation of 4%) | |
DynaMineras [Member] | ||
Lease payment anually | $ 73,000 | |
Rent expense | $ 236,000 | |
Land Lease Agreement [Member] | ||
Land area | 4,399 hectares | |
Lease agreement term | 20 years |
DERIVATIVE LIABILITIES (Details
DERIVATIVE LIABILITIES (Details) - Preferred Series D Warrant - $ / shares | 3 Months Ended | 12 Months Ended |
Mar. 31, 2023 | Dec. 31, 2022 | |
Annual Volatility Rate | 122% | 116% |
Risk Free Rate | 4.06% | 4.41% |
Remaining Term | 7 years 1 month 17 days | 7 years 4 months 13 days |
Fair Value of Common Stock | $ 2.25 | $ 2.44 |
DERIVATIVE LIABILITIES (Detai_2
DERIVATIVE LIABILITIES (Details 1) - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Change in Fair Value of Derivative | $ (169,434) | $ (938,706) | |
Preferred Series D Warrant | |||
Fair Value of Derivative, Beginning Balance | 2,172,417 | $ 1,559,103 | $ 1,559,103 |
Exercise of warrants | 0 | 0 | |
Change in Fair Value of Derivative | (169,434) | 613,314 | |
Fair Value of Derivative, Ending Balance | $ 2,002,983 | $ 2,172,417 |
FAIR VALUE OF FINANCIAL INSTR_3
FAIR VALUE OF FINANCIAL INSTRUMENTS (Details) - USD ($) | Mar. 31, 2023 | Dec. 31, 2022 |
Liabilities: | ||
Derivative Liabilities | $ 2,002,983 | $ 2,172,417 |
Total Liabilities | 2,002,983 | 2,172,417 |
Level 1 | ||
Liabilities: | ||
Derivative Liabilities | 0 | 0 |
Total Liabilities | 0 | 0 |
Level 2 | ||
Liabilities: | ||
Derivative Liabilities | 0 | 0 |
Total Liabilities | 0 | 0 |
Level 3 | ||
Liabilities: | ||
Derivative Liabilities | 2,002,983 | 2,172,417 |
Total Liabilities | $ 2,002,983 | $ 2,172,417 |
CUSTOMER CONCENTRATION (Details
CUSTOMER CONCENTRATION (Details Narrative) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2023 | Dec. 31, 2022 | |
Revenue | ||
Concentration of risk | 10% | 10% |
Revenue | One Customers [Member] | ||
Concentration of risk | 100% | 100% |
Accounts Receivable | ||
Concentration of risk | 10% | 10% |
Accounts Receivable | One Customer [Member] | ||
Concentration of risk | 100% | 100% |
NOTES PAYABLE (Details)
NOTES PAYABLE (Details) | 3 Months Ended |
Mar. 31, 2023 USD ($) | |
NOTES PAYABLE | |
Property Holding Taxes, Beginning Balance | $ 1,968,251 |
Exchange Rate Adjustment | 158,945 |
2023 Principal Payments | 0 |
Property Holding Taxes, Ending Balance | $ 2,127,196 |
NOTES PAYABLE (Details Narrativ
NOTES PAYABLE (Details Narrative) - USD ($) | 1 Months Ended | ||||
Oct. 31, 2019 | Feb. 28, 2019 | Sep. 30, 2018 | Jul. 31, 2018 | Mar. 31, 2023 | |
NOTES PAYABLE | |||||
Unpaid mining concession taxes on the Francisco Arturo mining concession | $ 299,474 | $ 335,350 | $ 1,739,392 | ||
Initial payment amount | $ 59,895 | $ 67,070 | $ 347,826 | ||
Initial payment percentage rate | 20% | 20% | 20% | ||
Remaining finance balance term over the period | 36 years | 36 years | 36 years | ||
Remaining finance balance term over the period percentage rate | 22% | 22% | 21.84% | ||
Accrued interest included in accrued liabilities | $ 1,777,164 | ||||
Reduction in the volume of mining concession | In September 2018, the Company applied for a reduction of the Francisco Arturo mining concession, from 69,121 hectares to 3,280 hectares | ||||
Reduction in the value of initial payment amount | $ 22,500 | ||||
Reduction in the value of initial payment amount in pesos | $ 985,116 |
REVOLVING CREDIT LINE FACILITY
REVOLVING CREDIT LINE FACILITY (Details Narrative) - USD ($) | 3 Months Ended | |||
Mar. 31, 2023 | Feb. 21, 2023 | Dec. 28, 2022 | Feb. 04, 2021 | |
REVOLVING CREDIT LINE FACILITY | ||||
Revolving credit line facility amount | $ 3,750,000 | |||
Revolving credit line facility maximum amount | $ 3,750,000 | |||
Concentrates on delivery percentage rate | 100% | |||
Revolving credit line facility interest free term | 45 years | |||
Revolving credit line facility deliveries of concentrates or cash free term | 120 years | |||
Proceeds advances from buyers | $ 9,200 | $ 9,600 | $ 9,350 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details Narrative) | Mar. 31, 2023 USD ($) |
Dynacap Group Ltd [Member] | |
Amount paid by related party | $ 43,750 |
SUBSEQUENT EVENTS (Details Narr
SUBSEQUENT EVENTS (Details Narrative) - Series A Preferred Stock [Member] - USD ($) | Apr. 19, 2023 | Mar. 31, 2023 | Dec. 31, 2022 |
Preferred stock outstanding shares | 1,000 | 1,000 | |
Subsequent Event [Member] | Diepholz [Member] | |||
Preferred stock outstanding shares | 1,000 | ||
Share price | $ 1,250,000 |