10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark One)


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

For the quarterly period ended March 31, 2026


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

For the transition period

Commission File Number: 000-30371

DYNARESOURCE, INC.

(Exact Name of Registrant as Specified in its Charter)


Delaware	94-1589426
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
222 W. Las Colinas Blvd., Suite 1910 North Tower Irving, TX	75039
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code:

(972) 869-9400

Securities registered pursuant to Section 12(b) of the Act:

     Title of each class

     Trading
Symbol(s)

     Name of each exchange on which registered

     None

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

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). Yes ☒ No ☐

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.


Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
Emerging growth company	☐

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 May 15, 2026 there were 29,315,726 shares of Common Stock of the registrant outstanding.

Table of Contents

TABLE OF CONTENTS


PART I.	FINANCIAL STATEMENTS

ITEM 1.	Unaudited Condensed Interim Consolidated Financial Statements	3

	Notes to Unaudited Condensed Interim Consolidated Financial Statements	7

ITEM 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	25

ITEM 3.	Quantitative and Qualitative Disclosures About Market Risk	30

ITEM 4.	Controls and Procedures	30

PART II.	OTHER INFORMATION

ITEM 1.	Legal Proceedings	32

ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	32

ITEM 3.	Defaults Upon Senior Securities	32

ITEM 4.	Mine Safety Disclosures	32

ITEM 5.	Other Information	32

ITEM 6.	Exhibits	33

CERTIFICATIONS


EXHIBIT 31.1		CHIEF EXECUTIVE OFFICER CERTIFICATION

EXHIBIT 31.2		CHIEF FINANCIAL OFFICER CERTIFICATION

EXHIBIT 32.1		CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350

Table of Contents

DYNARESOURCE, INC.

CONDENSED INTERIM CONSOLIDATED BALANCE SHEETS

MARCH 31, 2026 AND DECEMBER 31, 2025


	March 31,			December 31,
	2026			2025
	(Unaudited)			(Audited)
ASSETS
Current assets
Cash	$	2,489,783		$	4,171,891
Concentrate and ore inventories (Note 2)		1,491,984			1,595,363
Foreign tax receivable		973,403			1,424,244
Supplies inventory		2,318,315			2,313,917
Other current assets (Note 4)		908,877			694,939
Total current assets		8,182,362			10,200,354
Mineral property interests, plant and equipment (net of accumulated
depreciation and depletion of $1,582,087 and $1,094,844) (Note 3)		20,009,931			17,308,323
Right-of-use assets, net		492,951			500,392
Deferred tax asset, net		1,542,011			2,349,186
Foreign tax receivable		28,597,347			27,238,331
TOTAL ASSETS	$	58,824,602		$	57,596,586

LIABILITIES, TEMPORARY EQUITY AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable and accrued liabilities (Note 5)	$	15,263,761		$	17,305,927
Accrued mining taxes and other liabilities (Note 5)		10,612,611			9,786,005
Derivative liability (Note 6)		1,177,657			1,249,030
Credit line (Note 7)		9,166,667			8,333,333
Current portion of operating lease payable		99,284			87,689
Mining concession duties payable (Note 8)		5,242,921			5,174,078
Total current liabilities		41,562,901			41,936,062
Credit line (Note 7)		5,000,000			6,666,667
Operating lease payable, less current portion		436,449			511,317
Deferred tax liability		622,030			622,030
Asset retirement obligation (Note 9)		2,838,892			2,831,430
Other liabilities		264,337			266,550
TOTAL LIABILITIES		50,724,609			52,834,056
TEMPORARY EQUITY (Note 10)
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 Convertible Preferred Stock, $0.0001 par value, 3,000,000 shares authorized, 760,000 shares issued and outstanding		1,520,000			1,520,000
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS’ EQUITY (DEFICIENCY) (Note 10)
Common Stock, $0.01 par value, 40,000,000 shares authorized 29,315,726 shares issued and outstanding		293,157			293,157
Series E Convertible Preferred Stock, $0.0001 par value, 1,552,795 shares authorized, issued and outstanding		2,500,000			2,500,000
Preferred rights		40,000			40,000
Additional paid-in-capital		70,351,574			70,168,395
Treasury stock, 37,180 shares each period, at cost		(95,023	)		(95,023	)
Accumulated other comprehensive income		(8,027,374	)		(8,647,513	)
Accumulated deficit		(62,819,821	)		(65,353,966	)
TOTAL STOCKHOLDERS’ EQUITY (DEFICIENCY)		2,242,513			(1,094,950	)
TOTAL LIABILITIES, TEMPORARY EQUITY AND STOCKHOLDERS’ EQUITY (DEFICIENCY)	$	58,824,602		$	57,596,586

The accompanying notes are an integral part of these unaudited condensed interim consolidated financial statements.

Table of Contents


DYNARESOURCE, INC.
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF INCOME AND
COMPREHENSIVE INCOME
FOR THE MONTHS THREE ENDED MARCH 31, 2026 AND 2025
(Unaudited)

	Three months			Three months
	March 31,			March 31,
	2026			2025
REVENUE		18,047,699			13,696,401
Operating costs		(10,681,774	)		(10,171,638	)
Depreciation and depletion		(459,792	)		(162,566	)
GROSS PROFIT	$	6,906,133		$	3,362,197

General and administrative expenses		1,373,528			1,250,244
Stock-based compensation		183,179			251,707
Accretion expense (Note 9)		34,640			4,986
Right of use asset amortization		15,674			27,754
Depreciation and amortization		68,928			—
OPERATING INCOME		5,230,184			1,827,506

Foreign currency losses		124,751			15,155
Interest expense		398,513			376,834
Derivative mark-to-market gain		(71,373	)		(71,373	)
Other expenses		845,521			(11,140	)
NET INCOME BEFORE TAXES		3,932,772			1,518,030

Mining tax expense		548,401			304,420
Income tax expense		850,226			612,234
TOTAL TAX EXPENSE		1,398,627			916,654

NET INCOME	$	2,534,145		$	601,376

DEEMED DIVIDEND FOR SERIES C & D PREFERRED		(58,575	)		(58,575	)
NET INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS	$	2,475,570		$	542,801

INCOME PER SHARE ATTRIBUTABLE TO THE EQUITY HOLDERS OF DYNARESOURCE, INC.
Basic income per common share	$	0.08		$	0.02
Weighted average shares outstanding – Basic		29,315,726			29,315,726
Diluted income per common share	$	0.07		$	0.02
Weighted average shares outstanding – Diluted		37,612,085			34,845,035

OTHER COMPREHENSIVE INCOME (LOSS)
Unrealized foreign currency translation gain (loss)		620,139			(37,992	)
TOTAL OTHER COMPREHENSIVE INCOME (LOSS)		620,139			(37,992	)
TOTAL COMPREHENSIVE INCOME	$	3,154,284		$	563,384

The accompanying notes are an integral part of these unaudited condensed interim consolidated financial statements.

Table of Contents

DYNARESOURCE, INC.

CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIENCY)

FOR THE THREE MONTHS ENDED MARCH 31, 2026 AND 2025

(Restated)


	Preferred E				Common				Preferred		Preferred		Paid In		Treasury		Treasury			Other Comp			Accumulated
	Shares		Amount		Shares		Amount		Rights		Amount		Capital		Shares		Amount			Income			Deficit			Totals


Balance January 1, 2025		1,552,795	$	2,500,000		29,315,726	$	293,157		1	$	40,000	$	69,131,186		37,180	$	(95,023	)	$	(1,788,699	)	$	(66,705,019	)	$	3,375,602
Stock-based compensation - Vesting		—		—		—		—		—		—		251,707		—		—			—			—		$	251,707
Other Comprehensive Income		—		—		—		—		—		—		—		—		—			(37,992	)		—			(37,992	)
Net Loss		—		—		—		—		—		—		—		—		—			—			601,376			601,376
Balance, March 31, 2025		1,552,795	$	2,500,000		29,315,726	$	293,157		1	$	40,000	$	69,382,893		37,180	$	(95,023	)	$	(1,826,691	)	$	(66,103,643	)	$	4,190,693


Balance January 1, 2026		1,552,795	$	2,500,000		29,315,726	$	293,157		1	$	40,000	$	70,168,395		37,180	$	(95,023	)	$	(8,647,513	)	$	(65,353,966	)	$	(1,094,950	)
Stock-based compensation - Vesting		—		—		—		—		—		—		183,179		—		—			—			—			183,179
Other Comprehensive Income		—		—		—		—		—		—		—		—		—			620,139			—			620,139
Net Income		—		—		—		—		—		—		—		—		—			—			2,534,145			2,534,145
Balance, March 31, 2026		1,552,795	$	2,500,000		29,315,726	$	293,157		1	$	40,000	$	70,351,574		37,180	$	(95,023	)	$	(8,027,374	)	$	(62,819,821	)	$	2,242,513

The accompanying notes are an integral part of these unaudited condensed interim consolidated financial statements.

Table of Contents

DYNARESOURCE, INC.

CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE THREE MONTHS ENDED MARCH 31, 2026 AND 2025

(Unaudited)


	2026			2025
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	2,534,145		$	601,376
Adjustments to reconcile net income (loss) to cash used in operating activities
Derivatives mark-to-market gain		(71,373	)		(71,373	)
Accretion expense		34,640			4,986
Depreciation and depletion (Note 3)		528,720			162,566
Right-of-use asset amortization		15,674			27,754
Interest expense		115,343			—
Other expense		125,664			—
Stock-based compensation		183,179			251,707
Deferred tax asset		807,175			554,631
Foreign exchange		313,273			(23,913	)
Operating cash flows before change in non-cash working capital items		4,586,440			1,507,734
Change in non-cash working capital items:
Accounts receivable		—			(545,863	)
Inventories		79,008			245,100
Foreign tax receivable		(1,307,849	)		(1,675,086	)
Other assets		(224,424	)		(1,037,613	)
Accounts payable and accrued expenses		(1,994,527	)		3,330,833
Accrued mining taxes and other liabilities		901,713			—
Other liabilities		(2,213	)		—
CASH FLOWS PROVIDED BY OPERATING ACTIVITIES		2,038,148			1,825,105

CASH FLOWS FROM INVESTING ACTIVITIES
Mine development		(2,547,126	)		(2,122,579	)
Purchase of equipment		(245,341	)		(535,305	)
CASH FLOWS USED IN INVESTING ACTIVITIES		(2,792,467	)		(2,657,884	)

CASH FLOWS FROM FINANCING ACTIVITIES
Payments of credit line (Note 7)		(833,333	)		(975,000	)
Operating lease payments		(74,179	)		(54,108	)
CASH FLOWS USED IN FINANCING ACTIVITIES		(907,512	)		(1,029,108	)

Effects of foreign currency in cash		(20,277	)		(726,871	)
NET DECREASE IN CASH		(1,682,108	)		(2,588,758	)
CASH AT BEGINNING OF PERIOD		4,171,891			4,781,352
CASH AT END OF PERIOD		2,489,783		$	2,192,594

SUPPLEMENTAL DISCLOSURES
Cash paid for interest	$	398,388		$	189,089
Cash paid for income taxes	$	—		$	—

The accompanying notes are an integral part of these unaudited condensed interim consolidated financial statements.

Table of Contents

DYNARESOURCE, INC.

NOTES TO THE UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 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 December 31, 2025, the Company had one wholly owned subsidiary in the United States, DynaMéxico US Holding, LLC (“US Holding”) and three wholly owned subsidiaries in Mexico, DynaResource de México, S.A. de C.V. (“DynaMéxico”), Mineras de DynaResources S.A. de C.V. (“DynaMineras”) and DynaResource Operaciones de San José de Gracia S.A. de C.V. (“DynaOperaciones”). In April 2024, as part of the Company’s organizational, operating and tax strategy in Mexico, the Company purchased Minera de Alica S.A. de C.V. (“DynaAlica”) a Mexican corporation with no assets, liabilities or activity.

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 100% interest in the San José de Gracia mine (“SJG”) in northern Sinaloa State, México.

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 March 31, 2026, the Company had negative working capital of $33,380,539, an accumulated deficit of $62,819,821, and for the period ended March 31, 2026, had a net income of $2,534,145. These matters raise substantial doubt about the Company’s suability to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company’s ability to further

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 one reportable segment, focused on the exploration, development, production and sale of gold and silver in Mexico.

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 March 31, 2026, the Company had $1,001,717 in deposits in United States banks, and $1,488,066 in Mexico banks. The Company had no cash equivalents as of March 31, 2026 or December 31, 2025. Deposits are maintained with high-quality financial institutions that management believes are creditworthy.

Accounts Receivable and Allowances for Doubtful Accounts

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 March 31, 2026 and December 31, 2025 management believes all accounts receivable are fully collectable.

Mined Tonnage Inventory

Mined tonnage inventory represents ore mined and stockpiled for further processing. Stockpile quantities are estimated based on tonnes added and removed, contained metals (based on assays), and estimated metallurgical recovery rates. Costs are allocated to stockpiles based on relative values and mining costs. Stockpiles are carried at the lower of average cost or net realizable value, based on estimated future sales prices, less estimated costs to complete production and sale.

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

Table of Contents

ore body where an economically viable deposit exists and the activities are directed at obtaining additional information, providing greater 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 three to five years. Leasehold improvements related to the Company’s corporate office are amortized over the term of the lease, which is 52 months.

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.

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:

•

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 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 March 31, 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

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 March 31, 2026 and December 31, 2025 (expressed as Mexican Pesos per one U.S. dollar):


	March 31, 2026		December 31, 2025
Current Exchange Rate		18.10		20.43

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 March 31, 2026 and 2025 (Mexican Pesos per one U.S. dollar):


	March 31, 2026		March 31, 2025
Weighted Average Exchange Rate for the Three Months Ended		17.56		16.98

The Company recorded currency transaction gain (loss) of $620,139 and $(37,992) for the three months ended March 31, 2026 and 2025, respectively.

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

Table of Contents

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 three months ended March 31, 2026 and 2025, no revenue was recognized during the period from deferred contract liabilities, and no customer deposits were refunded to the customer due to order cancellations.

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 receivable, accounts payable, credit line, installment notes payable 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 3,031,669 and 2,942,695 shares of Common Stock as of March 31, 2026 and 2025, respectively. The Company’s Series D Senior Convertible Preferred Stock (the “Series D Preferred Stock”) and related outstanding dividends are convertible into 851,200 and 820,800 shares of common stock as of March 31, 2026 and 2025, respectively. The Company’s Series E Convertible Preferred Stock (the “Series E Preferred Stock”) are convertible into 1,552,794 shares of common stock as of March 31, 2026. During the periods ended March 31, 2026 and 2025, the Company had warrants outstanding to purchase 892,165 shares of common stock.

Table of Contents

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:

•

the determination of income tax provisions, which involves complex estimates and assumptions about future events;

•

quantitative and qualitative factors used in the assessment of impairment of the Company’s mineral property;

•

the evaluation of drilling results, resource models, and any other technical data affecting the impairment assessment and provisions for environmental rehabilitation and restoration obligations; and

•

the valuation of derivatives liabilities, which requires the selection of appropriate valuation models and significant judgment in determining input assumptions.

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 6,000 troy ounces of gold, representing 1,000 ounces per month for the period from September 30, 2025 through February 27, 2026. This arrangement utilizes monthly expiring options that establish a minimum price of $3,200 per ounce (put strike) and a maximum price of $3,500 per ounce (call strike). The effect of this hedging activity was approximately negative $2.9 million in Q1 2026 and negative $2.8 million in Q1 2025.

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 3,000 troy ounces of gold, or 500 ounces per month, for the timeframe from March 31, 2026, to August 31, 2026. Here, the minimum price (put strike) is set at $3,600 per ounce, with a maximum price (call strike) of $4,425 per ounce.

Furthermore, in December 2025, the Company entered into yet another commodity pricing arrangement under the Offtake Agreement. This arrangement hedged the sales price of 1,500 troy ounces of gold, or 250 ounces per month, for the same period from March 31, 2026, to August 31, 2026. The minimum price for this arrangement (put strike) is $4,000 per ounce, while the maximum price (call strike) is $4,800 per ounce. However, these arrangements were not effective during fiscal Q1 2026 and, as such, had no impact on the Company’s results of operations for that quarter.

Table of Contents

Recently Issued Accounting Standards

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). Inventory balances as of March 31, 2026 and December 31, 2025, respectively, were as follows:


	March 31, 2026		December 31, 2025
Mined tonnage	$	1,102,043	$	899,302
Gold-Silver concentrates		389,941		696,061
Total inventories	$	1,491,984	$	1,595,363

NOTE 3 – MINERAL PROPERTY INTERESTS, PLANT AND EQUIPMENT

The cost and carrying value of mineral property interests, plant and equipment at March 31, 2026 and December 31, 2025 was as follows:


	March 31, 2026			December 31, 2025
Mineral property interests, cost
Mining concessions	$	4,132,678		$	4,132,678
Mine development		11,927,438			8,911,872
Subtotal	$	16,060,116		$	13,044,550
Less: accumulated depletion		(1,387,471	)		(964,295	)
Mineral property interests, carrying value	$	14,672,645		$	12,080,255

Plant and equipment, cost
Construction in progress	$	653,481		$	542,000
Plant and equipment		2,311,970			2,228,651
Other		2,566,451			2,587,966
Subtotal		5,531,902			5,358,617
Less: Accumulated depreciation and amortization		(194,616	)		(130,549	)
Plant and equipment, carrying value	$	5,337,286		$	5,228,068

Mineral property interests, plant and equipment, carrying value	$	20,009,931		$	17,308,323

Mineral properties totaled $14,672,645 as of March 31, 2026 and included capitalized development costs of $3,015,556 during the period ended March 31, 2026. Depletion expense during the three months ended March 31, 2026 and 2025, was $459,792 and $162,566, respectively.

Depreciation and amortization are recorded over each asset’s estimated useful life. Depreciation and amortization expense was $68,928 and $nil for the three months ended March 31, 2026 and 2025, respectively.

Table of Contents

NOTE 4 - OTHER CURRENT ASSETS

As of March 31, 2026 and December 31, 2025, other current assets consisted of the following:


	March 31,		December 31,
	2026		2025
Advances to suppliers		655,767		662,271
Prepaid expenses		253,110		32,668
Total other current assets	$	908,877	$	694,939

NOTE 5 - ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

As of March 31, 2026 and December 31, 2025, the Company had the following accounts payable and accrued liabilities:


	March 31,		December 31,
	2026		2025
Accounts payable	$	9,833,899	$	11,644,576
Accrued vendors		869,162		2,586,453
Accrued payroll and board fees		55,073		222,250
Accrued interest		-		135,920
Other accrued liabilities		4,505,627		2,716,728
Trade payables and accruals	$	15,263,761	$	17,305,927

Accrued mining taxes		7,257,997		7,533,493
Other liabilities		3,354,614		2,252,512
Accrued mining taxes and other liabilities	$	10,612,611	$	9,786,005

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 10%. These notes were convertible into shares of Series D Preferred Stock and Common Stock purchase warrants (the “2020 Warrants”) exercisable at $0.01 per share, with a ten-year expiration. The 2020 Warrants contain anti-dilution provisions. See Note 12. The Company analyzed the conversion features of the promissory notes and determined that the 2020 Warrants and the remaining purchaser warrants issued in connection with the notes qualified as derivative liabilities. The fair value was required to be allocated among the notes, the notes’ conversion features, and the 2020 Warrants and remaining purchaser warrants, and was subsequently remeasured at each reporting date. The Company performed a valuation of the conversion features of the 2020 Warrants and remaining purchaser warrants. In performing the valuation, the Company applied the guidance in ASC 820, Fair Value Measurements, which defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). To measure fair value, the Company incorporated assumptions that market participants would use in pricing the asset or liability and utilized market data to the maximum extent possible.

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:

Table of Contents


Period Ended	March 31, 2026			December 31, 2025
Annual volatility rate		114	%		115	%
Risk free rate		3.79	%		3.47	%
Expected life (years)		4.12			4.37
Fair value of common stock	$	1.32		$	1.40

For the three months ended March 31, 2026 and the twelve months ended December 31, 2025, 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. See Note 14.

The following table summarizes the changes in the fair value of the derivative liability during the three months ended March 31, 2026 and the twelve months ended December 31, 2025.


Period Ended	March 31, 2026			December 31, 2025
Fair value of derivative (warrants), beginning of period	$	1,249,030		$	892,167
Exercise of warrants		-			-
Change in fair value of derivative		(71,373	)		356,863
Fair value of derivative (warrants), end of period	$	1,177,657		$	1,249,030

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:

•

Beginning in September 2023, up to $10 million of the ACL advance may be converted into a one-year installment loan (the “RCL”) bearing interest at 3M SOFR + 7.5% and amortized as follows: Month 1, interest only; Months 2-11, 5% principal plus interest; and Month 12, final 50% principal plus interest. Conversion into an installment loan reduces the available ACL on a pro rata basis;

•

If the ACL is converted into the RCL, subsequent deliveries during the term must be paid in cash within ten days of delivery;

•

The Amendment provides the buyer with a right of first refusal under the Offtake Agreement, to provide offtake financing and purchase other concentrates (zinc, silver, copper, etc) and doré from the Company’s open pit and underground operations.

(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 $9,750,000 into an RCL. The RCL is repayable as follows: Month 1, interest only; Months 2-11, 5% principal plus interest; and Month 12, final 50% principal plus interest.

On June 20, 2024, the Company amended the terms of the RCL. Under the amendment, the Company could receive up to an additional $4,000,000 under a temporary advance credit line (the "TACL”) at the same interest rate, with the TACL maturing on November 30, 2024. As part of the amendment, the Company also received a put option (the "Put Option”) allowing it to convert up to $9,000,000 of the RCL into common stock at $1.61 per share, exercisable from November 1, 2024 until the November 30, 2024. If both the RCL and the TACL were repaid in full on or before November 30, 2024, the maximum principal amount of the RCL would increase to $12,500,000. However, if the Put Option was exercised for an amount greater than $4,000,000, the maximum principal amount of the RCL would be reduced on a dollar-for-dollar basis by the excess.

Table of Contents

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 $12,500,000, the interest rate, and repayment terms remained unchanged.

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:

•

Extends the term of the Offtake Agreement through December 31, 2030, with automatic annual renewals unless terminated by either party with 365 days’ notice;

•

Adds Ocean Partners UK as a joint buyer under the Offtake Agreement, with full rights and obligations;

•

Establishes a new $15 million Concentrate Credit Facility (the “Credit Facility”), replacing the prior $12.5 million facility, with principal repayable in equal monthly installments over months 7 through 24, bearing interest at 3-month SOFR plus 6.75%;

•

Introduces a $3 million termination fee payable by DynaMexico to Buyer under certain conditions; and

•

Provides security for the Credit Facility, including a parent company guarantee from the Company, a general security agreement, and a pledge of DynaMexico shares.

The Credit Facility is structured as a 24-month loan. For the first six months of the loan tenor, DynaMexico is required to make interest-only payments. Beginning in month 7 and continuing through month 24, the loan is repayable in 18 equal monthly principal installments, plus interest.

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 March 31, 2026 and December 31, 2025:


	March 31,			December 31,
	2026			2025
Balance beginning of period	$	15,000,000		$	9,850,000
Advances		—			17,650,000
Principal Payments		(833,333	)		(12,500,000	)
Balance end of period	$	14,166,667		$	15,000,000
Current liability	$	9,166,667		$	8,333,333
Non-current liability		5,000,000			6,666,667

Interest expense on the RCL for the periods ended March 31, 2026 and 2025 were $398,388 and $376,834, respectively.

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 $1,739,392. The Company paid an initial 20% down payment of $347,826 and financed the balance over 36 months at an interest rate of 22% 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% down payment of $67,070 and financed the balance over 36 months at an interest rate of 22% per annum.

Table of Contents

In June 2018, the Company applied for a reduction of the Francisco Arturo mining concession, from 69,121 hectares to 3,280 hectares. The Company continues to accrue approximately $22,500 (USD) every semester (six months) on the Francisco Arturo mining concession.

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 March 31, 2026 and December 31, 2025, $3,153,528 and $2,642,464 of accrued interest was included in the concessions duties payable balance.

The following summarizes the activity during the three months ended March 31, 2026:


Balance December 31, 2025	$	5,174,078
Exchange rate adjustment		(46,501	)
2026 Interest		115,344
2025 principal payments		—
Balance March 31, 2026	$	5,242,921

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 4.92%. The ARO represents estimated undiscounted future cash outflows of approximately $4.7 million, expected to be incurred over the closure and post‑closure periods.

Asset retirement obligation consisted of the following as of March 31, 2026 and December 31, 2025:


	March 31,			December 31,
	2026			2025
Asset retirement obligation at beginning of year	$	2,831,430		$	223,520
Additions to ARO liability		—			2,565,906
Accretion		34,640			42,004
Foreign exchange		(27,178	)		—
Asset retirement obligation at end of year	$	2,838,892		$	2,831,430

NOTE 10 - STOCKHOLDERS’ EQUITY

The total number of shares of all classes of capital stock authorized for issuance by the Company 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 1,734,992 are designated as Series C Preferred Stock, 3,000,000 shares are designated as Series D Preferred Stock, and 1,552,795 shares are designated as Series E Preferred Stock; and (ii) 40,000,000 shares of Common Stock, par value $0.01 per share (“Common Stock”). As of March 31, 2026, 13,713,213 shares of Preferred Stock remain un-designated.

Series C Senior Convertible Preferred Stock

As of March 31, 2026 and December 31, 2025 there were 1,734,992 shares of Series C Preferred Stock outstanding. As of March 31, 2026, the Series C Preferred Stock is convertible to Common Stock at $1.95 per share or redeemable in cash at the shareholder’s option and include anti-dilution protection. The Series C Preferred Stock may receive a 4% per annum dividend, payable if available, and in arrears, calculated at 4% of $4,337,480 payable annually on June 30. As of March 31, 2026, dividends for the years 2016 to 2025 totaling $1,574,274 were in arrears.

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 $4,020,000, which was convertible into Series D Preferred Stock. In connection with this financing, the noteholders also received the 2020 Warrants, as outlined in Note 6, to purchase an aggregate of 1,260,633 shares of the Company’s Common Stock at an exercise price of $0.01 a share.

On October 7, 2021, the Company paid $2,500,000 to repurchase one note. The remaining ten noteholders elected to convert their notes totaling $1,520,000 into Series D Preferred Stock at $2.00 per share. Concurrently with the note conversion the noteholders exercised 368,468 of the 2020 Warrants to purchase 368,468 shares of the Company’s Common Stock at $0.01 per share. On October 18, 2021, the Company issued 760,000 shares of Series D Preferred Stock. The Series D Preferred Stock may receive a 4% per annum dividend, payable if available, and in arrears, calculated at 4.0% of $1,520,000 payable annually on October 18. As of March 31, 2026 dividends for the years 2022 to 2025 totaling $243,200 were in arrears.

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 three months ended March 31, 2026 and 2025, were $58,575 and $58,575 respectively. As these dividends have not been declared by the Company, they are required to be presented as an adjustment “below” the net income (loss) line on the accompanying unaudited condensed interim consolidated statements of income.

Series E Convertible Preferred Stock

As of March 31, 2026 and December 31, 2025, there were 1,552,795 Series E Preferred Stock outstanding. The Series E Preferred Stocks is convertible on a one-for-one basis into shares of Common Stock, subject to equitable adjustment. They are eligible to receive the equivalent of any Common Stock dividend declared but carry no preferred dividend rights and are not redeemable for cash.

Preferred Stock (Undesignated)

In addition to the 1,734,992 shares designated as Series C Preferred Stock, the 3,000,000 shares designated as Series D Preferred Stock, and 1,552,795 such shares designated as Series E Preferred Stock, the Company is authorized to issue an additional 13,713,213 shares of Preferred Stock, each having a par value of $0.0001 per share. The Board of Director has authority to issue Preferred Stock from time to time in one or more series and, with respect to each series, to fix and determine by resolution the designations, powers, preferences, rights, qualifications, limitations, and restrictions of such series. As of March 31, 2026 and December 31, 2025, 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 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 40,000,000 shares of Common Stock, par value $0.01 per share. These shares carry full voting rights. As of March 31, 2026, and December 31, 2025, there were 29,315,726 shares of common stock outstanding. No dividends were declared or paid during the three months ended March 31, 2026 and 2025.

Preferred Rights

The Company issued “Preferred Rights” and received proceeds of $784,500 for these rights. This amount is reflected as “Preferred Rights” within stockholders’ equity in the accompanying condensed interim consolidated balance sheets. As of March 31, 2026, $744,500 had been repaid, leaving a balance of $40,000 as of March 31, 2026 and December 31, 2025.

Table of Contents

Treasury Stock

There were no treasury stock transactions during the three months ended March 31, 2026, or during the year ended December 31, 2025.

There were 37,180 shares of treasury stock outstanding as of March 31, 2026 and December 31, 2025.

Warrants

As of March 31, 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		892,165	$	0.01		5.37		—
Exercise of warrants		—		—		—		—
Forfeiture of the warrants		—		—		—		—
Balance at December 31, 2025		892,165	$	0.01		4.37		—
Exercisable at December 31, 2025		892,165	$	0.01		4.37		—
Exercise of warrants		—	$	—		-		—
Forfeiture of the warrants		—		—		—		—
Balance as of March 31, 2026		892,165	$	0.01		4.12		—

A derivative liability was recognized upon the issuance of the 2020 Warrants. As of March 31, 2026, the derivative liability totaled $1,177,657, and $1,249,030 as of December 31, 2025. See Note 6.

Options

As of March 31, 2026, the Company had outstanding options to purchase an aggregate of 1,150,000 shares of Common Stock, issued to Directors and Executive Officers as compensation:


			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		1,150,000		2.88		3.97		—
Exercise of options		—		—		—		—
Forfeiture of the options		—		—		—		—
Balance at December 31, 2025		1,150,000		2.88		2.97		—
Issuance of options		—		—		—		—
Exercise of options		—		—		—		—
Forfeiture of the options		—		—		—		—
Balance at March 31, 2026		1,150,000		2.88		2.72		—

NOTE 11 - STOCK-BASED COMPENSATION

For the three months ended March 31, 2026 and 2025, the Company recorded $0.2 million and $0.3 million in share-based compensation, associated with the vesting of granted Stock Options and Restricted Share Units (“RSUs”).

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 30%, which is higher than the combined U.S. federal and state statutory tax rate of approximately 21%.

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 – the Company does not anticipate any difficulty for DynaMéxico in meeting the minimum annual expenditure requirements. The current minimum expenditure rate ranges from approximately $388 – $2,400 Mexican Pesos per hectare). DynaMéxico retains sufficient carry-forward amounts to cover more than ten years of the minimum annual requirements (calculated based on the 2017 minimum, adjusted annually for inflation at an assumed rate of 4%).

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 20-year Land Lease Agreement. The 20 Year Land Lease Agreement with the Santa Maria Ejido Community surrounding San Jose de Gracia was dated January 6, 2014 and continues through January 2033. It covers an area of 4,399 hectares surrounding the main mineral resource areas of SJG and provides for annual lease payments on January 1st each year by DynaMineras, in the amount of $1,359,443 Pesos (approximately $67,000 USD) adjusted for inflation based on the Mexico minimum wage increase. Rent was $5,429,373 Pesos (approximately $266,000 USD) for the year ended December 31, 2025. The Land Lease Agreement provides DynaMineras with surface access to the core resource areas of SJG (4,399 hectares) and allows for all permitted mining and exploration activities.

The Company also leases office space for its corporate headquarters located in Irving, Texas. In February 2023, the Company entered into a 52-month lease extension that included additional office space. As part of the amended lease, the Company received four months of free rent upon completion of the office expansion. The expansion was completed and the Company moved into the new space effective August 1, 2023. The Company makes tiered monthly lease payments on the first day of each month.

The Company determines whether a contract is or contains a lease at inception. As of March 31, 2026, the Company has two operating leases: (i) a 52 month lease for office space with a remaining term of 20 months; and (ii) a 20-year ground lease associated with its Mexico mining operations, with a remaining term of approximately 7.75 years. Variable lease costs consist primarily of common area maintenance, storage, parking, and utilities. The Company’s leases do not have any residual value guarantees or restrictive covenants.

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.

Table of Contents

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 March 31, 2026 and December 31, 2025, the Company’s financial assets and liabilities were measured at fair value using Level 3 inputs, with the exception of cash, accounts receivable, foreign tax receivable, notes payable, mining concession duties payable, which were valued using Level 1 inputs. A description of the valuation techniques and assumptions for Level 3 measurements is provided 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, 2026:
Liabilities:
Derivative Liability	$	1,177,657	$	-	$	-	$	1,177,657
Totals	$	1,177,657	$	-	$	-	$	1,177,657
Fair Value Measurement at December 31, 2025:
Liabilities:
Derivative Liability	$	1,249,030	$	-	$	-	$	1,249,030
Totals	$	1,249,030	$	-	$	-	$	1,249,030

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, and are classified within Level 1 of the fair value hierarchy.

NOTE 15 - CUSTOMER CONCENTRATION

For the periods ended March 31, 2026 and December 31, 2025, one customer accounted for 100% of revenue and accounts receivable.

NOTE 16 – SEGMENTED INFORMATION

The Company operates as a single reportable segment focused on the development and operation of its gold-silver project in Mexico, The Company’s Chief Executive Officer ("CEO”) serves as the Chief Operating Decision Maker (“CODM”). The CODM uses consolidated net income (loss) as the measure of segment performance and for purposes of resource allocation. Segment assets are reported on the consolidated balance sheet as total consolidated assets. A majority of the Company’s assets located in Mexico, with the following geographic concentrations as of March 31, 2026 and December 31, 2025:

Table of Contents



	Mexico		United States		Total
March 31, 2026
Mineral property interests, plant and equipment, net		20,009,931		—		20,009,931
Current assets		7,017,979		1,164,383		8,182,362
Other assets		28,849,522		1,782,787		30,632,309
Total assets	$	55,877,432	$	2,947,170	$	58,824,602

December 31, 2025
Mineral property interests, plant and equipment, net		17,260,659		47,664		17,308,323
Current assets		9,919,495		280,859		10,200,354
Other assets		28,642,912		1,444,997		30,087,909
Total assets	$	55,823,066	$	1,773,520	$	57,596,586


	Three Months Ended		Three Months Ended
	March 31, 2026		March 31, 2025
Total Revenue for the year - Mexico	$	18,047,699	$	13,696,401
Total Revenue for the year - United States		-		-
Total Revenue for the year	$	18,047,699	$	13,696,401


	Three Months Ended			Three Months Ended
	March 31, 2026			March 31, 2025
Total comprehensive income (loss) for the year - Mexico	$	4,303,978		$	978,015
Total comprehensive income (loss) for the year - United States		(1,149,694	)		(414,631	)
Total comprehensive income (loss) for the year	$	3,154,284		$	563,384

NOTE 17 - RELATED PARTY TRANSACTIONS

Independent Director Compensation

During the three months ended March 31, 2026 and 2025, the Company paid or accrued $62,250 and $90,000 in management fees to directors. As of March 31, 2026 and December 31, 2025, amounts due to related parties and included in accrued liabilities totaled $62,250 and $278,600.

NOTE 18 - SUBSEQUENT EVENTS

On 1 May 2026, the Company completed a non‑brokered private placement financing with Ocean Partners UK Limited, pursuant to which the Company will issue 833,333 common shares at a price of $1.20 per share, for gross proceeds of $1.0 million.

The Company intends to use the proceeds from the Offering to strengthen the Company’s balance sheet while management continues to focus on grade and operational productivity and the recovery of Impuesto al Valor Agregado (“IVA”) tax payments relatable to its wholly owned Mexican subsidiary.

The Company has evaluated subsequent events through the date these unaudited interim consolidated financial statements were issued and determined that no other subsequent events occurred requiring recognition or disclosure.

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.

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 first Quarter 2026 average process plant throughput was a pleasing 767 tons per day within targeted range.

Summary of Mining and Mill Operations

Annual Results from 2018 to 2025:


Year	Total Tons Mined & Processed		Reported Mill Feed Grade (g/t Au)		Reported Recovery %			Gross Gold Concentrates Recovered (Au oz.)		Net Gold (1) Concentrates Sold (Au oz.)
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 Months Ended March 31, 2026 and 2025:


		Three months ended
Key Operating Information	Unit	March 31, 2026			March 31, 2025

Operating Data
Ore mined	ton		75,238			64,032
Mining rate	tpd		827			704

Ore Milled	ton		69,816			67,374
Mill Throughput	tpd		767			740

Grade	g/t		2.90			3.63
Recovery Au	%		73.77	%		73.80	%

Gold Ounces Produced	oz		4,840			5,781
Gold Ounces Sold	oz		4,529			5,609

(1)

Gold concentrate sold during the period does not equal gold concentrate recovered during the period due to timing of shipments to the buyer, the buyer’s payability discounts on gold concentrate purchases, and adjustments based on dry weight and final assay results under provisional settlement terms. Mill feed grades and recovery rates are based on internal estimates derived from assay data and estimated weights of material processed.

The decrease in feed grade at the processing facility during the first quarter of 2026 resulted from a planned reduction in the mining of certain high-grade zones in accordance with the mine plan, as well as higher than expected dilution

Table of Contents

encountered in the processed material. Increased throughput at the SJG process plant also contributed to a greater volume of lower-grade ore being treated.

2026 FIRST QUARTER HIGHLIGHTS

Operational Performance

During the first quarter of 2026, the Company continued to advance the optimization program at the SJG mine. This program The plan of operation for 2026 includes the continued enhancement 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 Q1 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.

Process plant reliability during the quarter was on target at 91%, which included several planned major maintenance shutdowns. Milled ore for Q1 2026 was 69,816 tons (approximately 767 tons per day) within the target objective for 2026 of between 750 to 800 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 74%, similar to the 74% gold recovery achieved in Q1 2025. Higher gravity gold recovery in the quarter was offset by lower head grades.

During Q1 2026, metal production totaled 4,840 ounces of gold compared to 5,781 ounces in Q1 2025. The average gold feed grade was 2.90 g/t for Q1 2026 compared to 3.63 g/t for Q1 2025.

Mine development for Q1 2026 was on budget with 3,219 meters of development completed, compared to 3,172 meters in Q4 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 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 time 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 decline 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.

Detailed Activities by Deposit:

Tres Amigos

Original mine planning at Tres Amigos anticipated closure by the end of Q1 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 45,000 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.

Table of Contents

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 Q1, 2026 approximately 37% of the process plant feed was sourced from the Tres Amigos area.

San Pablo Viejo and San Pablo Sur

Throughout Q1 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 2026, with approximately 15% 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 Q1 2026 the Mochomera mine development provided approximately 48% 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 Q1 2026 added to the Mochomera production profile.

OUTLOOK (SJG MINE)

With the development progress achieved in Q4 2025 and the increase in mining faces now available to the Company, management remains confident in the ongoing progress and long-term performance of the SJG mine. The Company’s focus for 2026 is to improve production and grade through the implementation of additional and ongoing operational enhancements and development work.

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.

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 March 31, 2026 and 2025

REVENUE: Revenue for the three months ended March 31, 2026 and 2025 was $18,047,699 and $13,696,401, respectively. The increase was primarily due to a higher realized gold prices.

OPERATING COSTS: Operating costs for the three months ended March 31, 2026 and 2025 were $10,681,774 and $10,171,638, respectively, primarily due to higher tonnage mined and processed.

GENERAL AND ADMINISTRATIVE EXPENSES: General and administrative expenses for the three months ended March 31, 2026 and 2025 were $1,373,528 and $1,250,244, respectively. These represent corporate overhead not directly attributable to site operations, including management, accounting, and legal expenses. Increases to general and administrative expenses in Q1 2026 primarily relate to an increase in consulting and professional fees related to the Company’s legal matters.

STOCK-BASED COMPENSATION EXPENSE: Stock-based compensation expense was $183,179 and $251,707 for the three months ended March 31, 2026 and 2025 respectively. The expense primarily relates to the vesting of restricted stock awards and other equity awards granted in prior periods. The decrease in stock based compensation expense in the first 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: Depreciation and depletion expense for the three months ended March 31, 2026 and 2025 were $528,720 and $162,566, 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. Accretion expense for the three months ended March 31, 2026 and 2025 was $34,640 and $4,986, respectively. Mainly connected to the Company’s asset retirement obligation, related to estimated costs to decommission the milling

Table of Contents

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 EXPENSE: Other expense for the three months ended March 31, 2026 and 2025 were $1,297,412 and $309,476, respectively. Included in 2026 was interest expense of $398,513, mark-to-market gain on the derivative liability of $71,373, currency translation loss of $124,751, and other expense of $845,521. Included in 2025 was interest expense of $376,834, mark-to-market gain on the derivative liability of $71,373, currency translation loss of $15,155 and other income of $11,140.

OTHER COMPREHENSIVE INCOME (LOSS): Comprehensive income (loss) includes the Company’s net income (loss) plus the unrealized foreign currency translation gain for the period. The Company’s other comprehensive income (loss) for the three months ended March 31, 2026 and 2025 were $620,139 and ($37,992), respectively.

Liquidity and Capital Resources

As of March 31, 2026, the Company had negative working capital of $33,380,539 comprised of current assets of $8,182,362 and current liabilities of $41,562,901. This represented an increase of $1,644,831 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 as of March 31, 2026.

Net cash provided by operating activities for the three months ended March 31, 2026 was $2,038,148 compared to $1,825,105 during the three months ended March 31, 2025. The improvement in the cash flow from operations was primarily attributable to the Company’s income generated in the three months of 2026, driven by increased revenue.

Cash used in investing activities for the three months ended March 31, 2026 totaled $2,792,467 compared to $2,657,884 during the three months ended March 31, 2025. Mainly due a higher capitalization of mine development costs in Q1 2026, in comparison with Q1 2025.

Cash used by financing activities for the three months ended March 31, 2026 and 2025 was $907,512 and $1,029,108, respectively. Mainly as result of payment of credit line combined with the operating leasing payments in the related period.

Through March 31, 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 three months ended March 31, 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 March 31, 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 Q1 2026 an average of 767 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 later 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

Table of Contents

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 Q1 2026 was 383 meters per month, compared to 673 meters per month in Q1 2025. Processing systems have been upgraded through the installation of new Falcon Gravity gold concentrators and the repurposing of the original grinding mill. 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 Q2 2026.

Exploration Activity

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 later 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 March 31, 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

Table of Contents

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.

Table of Contents

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 31 December 2025. There were no material changes or developments in such proceedings during the quarter ended 31 March 2026, and no new material legal proceedings were initiated during the quarter

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 March 31, 2026, none of our directors or officers informed us of the adoption, modification or termination of a “Rule 10b-5 trading arrangement” or “non-Rule 10b-5 trading arrangement,” as those terms are defined in Regulation S-K, Item 408.

Table of Contents

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)

Table of Contents

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: May 15, 2026	By:	/s/ Rohan Hazelton
		Rohan Hazelton,
		President and Chief Executive Officer
		(principal executive officer)




Date: May 15, 2026	By:	/s/ Alonso Sotomayor
		Alonso Sotomayor,
		Chief Financial Officer
		(principal financial and accounting officer)