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~~June 3130, 2025


☐	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	☐

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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~~August 2019, 2025 there were 29,315,726 shares of Common Stock of the registrant outstanding.

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TABLE OF CONTENTS

PART I.	FINANCIAL STATEMENTS
ITEM 1.	Unaudited Condensed Interim Consolidated Financial Statements	3
	Notes to Unaudited Condensed Interim Consolidated Financial Statements	911
ITEM 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2834
ITEM 3.	Quantitative and Qualitative Disclosures About Market Risk	3848
ITEM 4.	Controls and Procedures	3848
PART II.	OTHER INFORMATION
ITEM 1.	Legal Proceedings	3950
ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	3951
ITEM 3.	Defaults Upon Senior Securities	3951
ITEM 4.	Mine Safety Disclosures	3951
ITEM 5.	Other Information	3951
ITEM 6.	Exhibits	4052

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

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DYNARESOURCE, INC.

CONDENSED INTERIM CONSOLIDATED BALANCE SHEETS

~~MARCH~~JUNE 3130, 2025 AND DECEMBER 31, 2024

	March 31,			December 31,
	2025			2024
	(Unaudited)			(Audited)
ASSETS
Current assets
Cash	$	2,192,594		$	4,781,352
Accounts receivable		1,754,209			1,208,346
Concentrate and ore inventories (Note 3)		1,331,292			1,576,392
Foreign tax receivable		2,549,111			2,690,309
Other current assets (Note 5)		3,014,190			1,914,303
Total current assets		10,841,396			12,170,702
Mineral property interests, plant and equipment (net of accumulated
depreciation and depletion of $205,304 and $42,738) (Note 4)		6,707,286			4,211,968
Right-of-use assets, net		706,475			734,229
Deferred tax asset, net (Note 13)		3,471,326			4,025,957
Foreign tax receivable		18,838,109			16,613,129
Other assets		162,211			160,407
TOTAL ASSETS	$	40,726,803		$	37,916,392
LIABILITIES, TEMPORARY EQUITY AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable	$	5,510,022		$	4,889,022
Accrued liabilities (Note 6)		12,288,210			9,857,317
Derivative liability (Note 7)		820,794			892,167
Notes payable (Note 8)		8,875,000			9,850,000
Current portion of operating lease payable (Note 14)		133,856			122,630
Mining concession duties payable (Note 9)		1,877,268			1,838,346
Total current liabilities		29,505,150			27,449,482
Operating lease payable, less current portion (Note 14)		637,197			702,531
Deferred tax liability (Note 13)		307,777			307,777
Asset retirement obligation (Note 10)		228,506			223,520
TOTAL LIABILITIES		30,678,630			28,683,310
TEMPORARY EQUITY (Note 11)
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 (Note 11)
Common Stock, $0.01 par value, 40,000,000 shares authorized 29,315,726 shares issued and outstanding		293,157			293,157
Series E Senior 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		69,382,893			69,131,186
Treasury stock, 37,180 shares each period, at cost		(95,023	)		(95,023	)
Accumulated other comprehensive income		(1,826,691	)		(1,788,699	)
Accumulated deficit		(66,103,643	)		(66,705,019	)
TOTAL STOCKHOLDERS’ EQUITY		4,190,693			3,375,602
TOTAL LIABILITIES, TEMPORARY EQUITY AND STOCKHOLDERS’ EQUITY	$	40,726,803		$	37,916,392

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	June 30,			December 31,
	2025			2024
	(Unaudited)			(Restated)
ASSETS
Current assets
Cash	$	2,537,373		$	4,781,352
Accounts receivable		774,654			1,208,346
Concentrate and ore inventories (Note 4)		1,597,036			1,576,392
Foreign tax receivable		1,684,755			2,690,309
Supplies inventory (Note 6)		2,145,355			1,258,064
Other current assets (Note 6)		2,102,257			656,239
Total current assets		10,841,430			12,170,702
Mineral property interests, plant and equipment (net of accumulated
depreciation and depletion of $451,275 and $42,738) (Note 5)		9,724,746			4,211,968
Right-of-use assets, net		678,720			734,229
Deferred tax asset, net (Note 14)		3,549,498			4,633,513
Foreign tax receivable		22,563,743			16,613,129
Other assets		167,809			160,407
TOTAL ASSETS	$	47,525,946		$	38,523,948

LIABILITIES, TEMPORARY EQUITY AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable and accrued liabilities (Note 7)	$	14,399,702		$	10,317,179
Accrued mining taxes and other liabilities (Note 7)		6,125,642			5,172,685
Derivative liability (Note 8)		1,159,816			892,167
Credit line (Note 9)		10,059,931			9,850,000
Current portion of operating lease payable (Note 15)		137,432			122,630
Mining concession duties payable (Note 10)		4,715,022			4,059,565
Total current liabilities		36,597,545			30,414,226
Operating lease payable, less current portion (Note 15)		611,554			702,531
Deferred tax liability (Note 14)		307,777			307,777
Asset retirement obligation (Note 11)		233,492			223,520
TOTAL LIABILITIES		37,750,368			31,648,054
TEMPORARY EQUITY (Note 12)
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 (Note 12)
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
Shares to be issued		240,000			—
Additional paid-in-capital		69,717,850			69,131,186
Treasury stock, 37,180 shares each period, at cost		(95,023	)		(95,023	)
Accumulated other comprehensive income		(821,077	)		(1,788,699	)
Accumulated deficit		(67,956,809	)		(69,062,207	)
TOTAL STOCKHOLDERS’ EQUITY		3,918,098			1,018,414
TOTAL LIABILITIES, TEMPORARY EQUITY AND STOCKHOLDERS’ EQUITY	$	47,525,946		$	38,523,948

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

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DYNARESOURCE, INC.
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF INCOME (LOSS) AND
COMPREHENSIVE INCOME (LOSS)
FOR THE THREE MONTHS ENDED MARCH 31, 2025 AND 2024
(Unaudited)
	Three Months			Three Months
	March 31,			March 31,
	2025			2024
REVENUE		13,696,401			9,428,856
OPERATING EXPENSES
Mine production costs		6,188,248			6,214,574
Mill production costs applicable to sales		1,100,852			1,478,662
Camp, warehouse and facilities		1,414,675			1,445,225
Transportation costs		1,323,877			1,412,962
Property holding costs		36,136			44,047
Facilities expansion costs		—			787,809
Exploration drilling		107,850			920,485
General and administrative		1,250,244			1,168,849
Stock-based compensation (Note 12)		251,707			—
Accretion expense (Note 10)		4,986			4,565
Right of use asset amortization		27,754			33,192
Depreciation and depletion (Note 4)		162,566			7,343
TOTAL OPERATING EXPENSES		11,868,895			13,517,713
NET OPERATING INCOME (LOSS)		1,827,506			(4,088,857	)
OTHER INCOME (EXPENSE)
Foreign currency gains (losses)		(15,155	)		28,077
Interest expense		(376,834	)		(427,888	)
Derivative mark-to-market gain		71,373			80,141
Other income		11,140			156
TOTAL OTHER EXPENSE		(309,476	)		(319,514	)
NET INCOME (LOSS) BEFORE TAXES		1,518,030			(4,408,371	)
Mining tax expense (Note 13)		304,420			—
Income tax expense (Note 13)		612,234			—
TOTAL TAX EXPENSE		916,654			—
NET INCOME (LOSS)	$	601,376		$	(4,408,371	)
DEEMED DIVIDEND FOR SERIES C & D PREFERRED		(58,575	)		(58,575	)
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS	$	542,801		$	(4,466,946	)
INCOME (LOSS) PER SHARE ATTRIBUTABLE TO THE EQUITY HOLDERS OF DYNARESOURCE, INC.
Basic income (loss) per common share	$	0.02		$	(0.19	)
Weighted average shares outstanding – Basic		29,315,726			23,371,708
Diluted income (loss) per common share	$	0.02		$	(0.19	)
Weighted average shares outstanding – Diluted		34,845,035			23,371,708
OTHER COMPREHENSIVE INCOME
Unrealized foreign currency translation gain (loss)		(37,992	)		203,239
TOTAL OTHER COMPREHENSIVE INCOME (LOSS)		(37,992	)		203,239
TOTAL COMPREHENSIVE INCOME (LOSS)	$	563,384		$	(4,205,132	)

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

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DYNARESOURCE, INC.
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF INCOME (LOSS) AND
COMPREHENSIVE INCOME (LOSS)
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2025 AND 2024
(Unaudited)

	Three months			Three months			Six months			Six months
	June 30,			June 30,			June 30,			June 30,
	2025			2024			2025			2024
REVENUE		15,886,286			11,083,602			29,582,687			20,512,458
OPERATING EXPENSES
Mine production costs		5,865,640			6,551,953			12,053,888			12,766,527
Mill production costs applicable to sales		1,820,016			1,231,743			2,920,868			2,710,405
Camp, warehouse and facilities		1,492,072			1,336,146			2,906,747			2,781,371
Transportation costs		1,252,973			1,161,409			2,576,850			2,574,371
Property holding costs		37,826			43,335			73,962			87,382
Facilities expansion costs (Note 3)		—			1,305,671			—			2,093,480
Exploration drilling		22,274			379,349			130,124			1,299,834
General and administrative		1,794,294			1,098,987			3,044,538			2,267,836
Stock-based compensation (Note 13)		574,957			822,500			826,664			822,500
Accretion expense (Note 11)		4,986			4,565			9,972			9,130
Right of use asset amortization		27,755			26,237			55,509			59,429
Depreciation and depletion (Note 5)		245,971			7,344			408,537			14,687
TOTAL OPERATING EXPENSES		13,138,764			13,969,239			25,007,659			27,486,952
NET OPERATING INCOME (LOSS)		2,747,522			(2,885,637	)		4,575,028			(6,974,494	)
OTHER INCOME (EXPENSE)
Foreign currency gains (losses)		178,021			(4,885	)		162,866			23,192
Interest expense		(398,843	)		(407,449	)		(775,677	)		(835,337	)
Derivative mark-to-market gain (loss)		(339,022	)		365,751			(267,649	)		445,892
Other income (expense)		(580,879	)		4,806			(569,739	)		4,962
TOTAL OTHER EXPENSE		(1,140,723	)		(41,777	)		(1,450,199	)		(361,291	)

NET INCOME (LOSS) BEFORE TAXES		1,606,799			(2,927,414	)		3,124,829			(7,335,785	)

Mining tax expense (Note 14)		507,343			—			811,763			—
Income tax expense (Note 14)		595,434			—			1,207,668			—
TOTAL TAX EXPENSE		1,102,777			—			2,019,431			—

NET INCOME (LOSS)	$	504,022		$	(2,927,414	)	$	1,105,398		$	(7,335,785	)
DEEMED DIVIDEND FOR SERIES C & D PREFERRED		(58,575	)		(58,575	)		(117,150	)		(117,150	)
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS	$	445,447		$	(2,985,989	)	$	988,248		$	(7,452,935	)

INCOME (LOSS) PER SHARE ATTRIBUTABLE TO THE EQUITY HOLDERS OF DYNARESOURCE, INC.
Basic income (loss) per common share	$	0.02		$	(0.13	)	$	0.03		$	(0.32	)
Weighted average shares outstanding – Basic		29,315,726			23,378,022			29,315,726			23,374,385
Diluted income (loss) per common share	$	0.03		$	(0.13	)	$	0.05		$	(0.32	)
Weighted average shares outstanding – Diluted		36,113,164			23,378,022			36,113,164			23,374,385

OTHER COMPREHENSIVE INCOME (LOSS)
Unrealized foreign currency translation gain (loss)		1,005,614			(700,791	)		967,622			(497,552	)
TOTAL OTHER COMPREHENSIVE INCOME (LOSS)		1,005,614			(700,791	)		967,622			(497,552	)
TOTAL COMPREHENSIVE INCOME (LOSS)	$	1,509,636		$	(3,628,205	)	$	2,073,020		$	(7,833,337	)

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

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DYNARESOURCE, INC.

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

FOR THE THREE AND SIX MONTHS ENDED ~~MARCH~~JUNE 3130, 2025 AND 2024

(~~Unaudited~~Restated)

	Preferred E				Common				Preferred		Preferred		~~Paid~~Shares InTo Be		~~Treasury~~Paid In		Treasury			~~Other Comp~~Treasury			~~Accumulated~~Other Comp			Accumulated
	Shares		Amount		Shares		Amount		Rights		Amount		~~Capital~~Issued		~~Shares~~Capital		~~Amount~~Shares			~~Income~~Amount			~~Deficit~~Income			~~Totals~~Deficit			Totals
Balance January 1, 2024		—	$	—		23,371,708	$	233,717		1	$	40,000	$	61,509,032		37,180	$	(95,023	)	$	697,700		$	(58,570,167	)	$	3,815,259
Balance, March 31, 2024 (restated)		—	$	—		23,371,708	$	233,717		1	$	40,000	$	—	$	61,509,032		37,180		$	(95,023	)	$	900,939		$	(65,335,726	)	$	(2,747,061	)
Other Comprehensive Income																					203,339					$	203,339
Sales of Series E Convertible Preferred Stock		1,552,795	$	2,500,000																									$	2,500,000
Net Loss																								(4,408,371	)	$	(4,408,371	)
Stock Issued for Services						287,287	$	2,873							$	459,659													$	462,532
Balance, March 31, 2024		—	$	—		23,371,708	$	233,717		1	$	40,000	$	61,509,032		37,180	$	(95,023	)	$	901,039		$	(62,978,538	)	$	(389,773	)
Stock Compensation - Vesting															$	822,500													$	822,500
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
Other Comprehensive Income																								(700,791	)				$	(700,791	)
Stock-based compensation - Vesting														251,707												$	251,707
Net Loss																											(2,927,414	)	$	(2,927,414	)
Other Comprehensive Income																					(37,992	)				$	(37,992	)
Balance, June 30, 2024		1,552,795	$	2,500,000		23,658,995	$	236,590		1	$	40,000	$	—	$	62,791,191		37,180		$	(95,023	)	$	200,148		$	(68,263,140	)	$	(2,590,234	)
Net Income																								601,376		$	601,376
Balance January 1, 2024 (restated)		—	$	—		23,371,708	$	233,717		1	$	40,000	$	—	$	61,509,032		37,180		$	(95,023	)	$	697,700		$	(60,927,355	)	$	1,458,071
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
Sales of Series E Convertible Preferred Stock		1,552,795	$	2,500,000																									$	2,500,000
Stock Issued for Services						287,287	$	2,873							$	459,659													$	462,532
Stock Compensation - Vesting															$	822,500													$	822,500
Other Comprehensive Income																								(497,552	)				$	(497,552	)
Net Loss																											(7,335,785	)	$	(7,335,785	)
Balance, June 30, 2024		1,552,795	$	2,500,000		23,658,995	$	236,590		1	$	40,000	$	—	$	62,791,191		37,180		$	(95,023	)	$	200,148		$	(68,263,140	)	$	(2,590,234	)
Balance, March 31, 2025 (restated)		1,552,795	$	2,500,000		29,315,726	$	293,157		1	$	40,000	$	—	$	69,382,893		37,180		$	(95,023	)	$	(1,826,691	)	$	(68,460,831	)	$	1,833,505
Stock Issued for Services														240,000															$	240,000
Stock-based compensation - Vesting																334,957													$	334,957
Other Comprehensive Income																								1,005,614					$	1,005,614
Net Income																											504,022		$	504,022
Balance, June 30, 2025		1,552,795	$	2,500,000		29,315,726	$	293,157		1	$	40,000	$	240,000	$	69,717,850		37,180		$	(95,023	)	$	(821,077	)	$	(67,956,809	)	$	3,918,098
Balance January 1, 2025 (restated)		1,552,795	$	2,500,000		29,315,726	$	293,157		1	$	40,000	$	—		69,131,186		37,180		$	(95,023	)	$	(1,788,699	)	$	(69,062,207	)	$	1,018,414
Stock Issued for Services														240,000															$	240,000
Stock-based compensation - Vesting																586,664													$	586,664
Other Comprehensive Income																								967,622					$	967,622
Net Income																											1,105,398		$	1,105,398
Balance, June 30, 2025		1,552,795	$	2,500,000		29,315,726	$	293,157		1	$	40,000	$	240,000		69,717,850		37,180		$	(95,023	)	$	(821,077	)	$	(67,956,809	)	$	3,918,098

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

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DYNARESOURCE, INC.

CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE ~~THREE~~SIX MONTHS ENDED ~~MARCH~~JUNE 3130, 2025 AND 2024

(Unaudited)

	2025			2024
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$	~~601~~1,~~376~~105,398		$	(47,~~408~~335,~~371~~785	)
Adjustments to reconcile net income (loss) to cash used in operating activities
Derivatives mark-to-market gain		~~(71~~267,~~373~~649	)		(80445,~~141~~892	)
Accretion expense		49,~~986~~972			49,~~565~~130
Depreciation and depletion		162,566			7,343
Depreciation and depletion (Note 5)		408,537			14,687
Right-of-use asset amortization		2755,~~754~~509			3359,~~192~~429
Stock-based compensation		251,707			—
Other expense		603,105			—
Deferred tax asset		554,631			—
Stock-based compensation		826,664			822,500
Foreign exchange		(23,913	)		—
Deferred tax asset		1,084,015			—
Operating cash flows before change in non-cash working capital items		14,~~507~~360,~~734~~849			(46,~~443~~875,~~412~~931	)
Change in non-cash working capital items:
Accounts receivable		~~(545~~433,~~863~~692	)		~~(266~~277,~~187~~508	)
Inventories		~~245~~(20,~~100~~644	)		5376,~~393~~981
Foreign tax receivable		(13,~~675~~296,~~086~~992	)		(21,~~170~~996,~~076~~889	)
Other assets		(12,~~037~~025,~~613~~802	)		(46283,~~969~~889	)
Accounts payable		728,382			2,285,437
Accounts payable and accrued expenses		2,935,627			2,420,265
Accrued expenses		2,602,451			1,278,167
Other liabilities		574,980			1,353,766
CASH FLOWS PROVIDED BY (USED IN) OPERATING ACTIVITIES		12,~~825~~961,~~105~~710			(34,~~357~~728,~~647~~189	)
CASH FLOWS FROM INVESTING ACTIVITIES
Mine development		(24,~~122~~939,~~579~~778	)		—
Purchase of equipment		(~~535~~981,~~305~~537	)		—(6,755	)
CASH FLOWS USED IN INVESTING ACTIVITIES		(25,~~657~~921,~~884~~315	)		—(6,755	)
CASH FLOWS FROM FINANCING ACTIVITIES
Payments of note payable (Note 8)		(975,000	)		(487,500	)
Proceeds from credit line (Note 9)		2,650,000			3,000,000
Operating lease payments		(54,108	)		(45,366	)
Proceeds from sale of Series E Convertible Preferred Stock (Note 12)		-			2,500,000
CASH FLOWS USED IN FINANCING ACTIVITIES		(1,029,108	)		(532,866	)
Payments of credit line (Note 9)		(2,440,069	)		(2,437,500	)
Effects of foreign currency		(726,871	)		259,189
Operating lease payments		(76,175	)		(64,278	)
NET DECREASE IN CASH		(2,588,758	)		(3,631,324	)
CASH FLOWS PROVIDED BY FINANCING ACTIVITIES		133,756			2,998,222
Effects of foreign currency		581,870			(666,025	)
NET DECREASE IN CASH		(2,243,979	)		(2,402,747	)
CASH AT BEGINNING OF PERIOD		4,781,352			5,603,713
CASH AT END OF PERIOD	$	2,~~192~~537,~~594~~373		$	13,~~972~~200,~~389~~966
SUPPLEMENTAL DISCLOSURES
Cash paid for interest	$	~~189~~464,~~089~~459		$	~~214~~614,~~794~~609
Cash paid for income taxes	$	—-		$	—

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

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DYNARESOURCE, INC.

NOTES TO THE UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

~~MARCH~~JUNE 3130, 2025

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, 2024, 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, 2024.

InAs of June 30, 2025, the ~~opinion~~Company had negative working capital of ~~management~~$25,756,115, ~~all~~an ~~adjustments~~accumulated ~~(consisting~~deficit of ~~normal~~$67,956,809, ~~recurring~~and ~~adjustments)~~for the period ended June 30, ~~necessary~~2025, ~~for~~had a ~~fair~~net ~~presentation~~income of ~~the~~$1,105,398. ~~interim~~These ~~results~~matters ~~have~~raise ~~been~~substantial ~~included.~~doubt ~~Interim~~about ~~results~~the ~~are~~Company’s ~~not~~ability ~~necessarily~~to ~~indicative~~continue as a going concern. The ability of the ~~results~~Company ~~that~~to ~~may~~continue beas ~~expected~~a ~~for~~going aconcern ~~full~~is ~~fiscal~~dependent ~~year.~~on the Company’s ability to further

~~Use of Estimates~~11

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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.

The Company operates as a single reportable segment, focused on the exploration, development, production, and sale of gold and silver in Mexico.

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~~June 3130, 2025, the Company ~~has~~had $~~991~~1,~~707~~452,257 in deposits in U.S. banks in excess of the FDIC limit. The Company had no cash equivalents as of ~~March~~June 3130, 2025 or December 31, 2024. Deposits are maintained with high-quality financial institutions that management believes are creditworthy.

Accounts Receivable and Allowances for Doubtful Accounts

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, 2025 and December 31, 2024 management believes all accounts receivable are fully collectable.12

Mined Tonnage Inventory

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Accounts receivable consist primarily of trade receivables related to the sale of metal concentrate, recorded net of allowances for doubtful accounts and mark-to-market adjustments on provisional invoices based on forward metal prices. An allowance is recorded when receivables are determined to be uncollectible. As of June 30, 2025 and December 31, 2024 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 isare 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. See Note 23.

Mineral Property Interests, Plant and Equipment

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, removal of overburden to initially expose an ore body at open pit surface mines, 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 (as defined by S-K 1300) exist, development costs are capitalized. Drilling and related costs are capitalized for an ore body where an economically viable deposit exists and the activities are directed at obtaining additional information, providing greater 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 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

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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.

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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.

12A write-down to fair value is recognized when the expected future cash flows are less than the net book value of the property, or when other events or changes in circumstances indicate that the carrying amount is not recoverable. As of June 30, 2025 and December 31, 2024, no indicators of impairment existed.

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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, 2025 and December 31, 2024, 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. See Note 23.

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

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 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).15

Foreign currency transactions are translated into the functional of the respective 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

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~~are~~The ~~recognized~~functional incurrency ~~profit~~of orthe ~~loss.~~Company’s ~~Non-monetary~~subsidiaries ~~items~~is ~~that~~the ~~are~~Mexican ~~not~~Peso. ~~remeasured~~Accordingly, atthe ~~period-end~~financial ~~are~~statements ~~measured~~of atthe ~~historical~~subsidiaries ~~cost,~~are translated from Mexican Pesos into U.S. dollars using (i) the exchange rate prevailing onat the ~~date~~balance ofsheet ~~the~~date ~~original transaction, except~~ for ~~non-monetary~~balance ~~items~~sheet ~~measured at fair value~~accounts, ~~which~~and ~~using~~(ii) the weighted average exchange rate onof the ~~date~~reporting ~~the~~period ~~fair~~for ~~value~~income ~~was~~statement ~~determined~~accounts. ~~Gains~~Foreign currency translation gains and losses are ~~included~~recorded inas ~~the~~a ~~consolidated~~separate ~~statement~~component of ~~operations~~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~~June 3130, 2025 and December 31, 2024 (expressed as Mexican Pesos per one U.S. dollar):

	March 31,2025		December 31,2024
	June 30,2025		December 31,2024
Current Exchange Rate		2018.4382		20.86

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~~June 3130, 2025 and 2024 (Mexican Pesos per one U.S. dollar):

	March 31,2025		March 31,2024
	June 30,2025		June 30,2024
Weighted Average Exchange Rate for the Three Months Ended		20.43		16.98
Weighted Average Exchange Rate for the Six Months Ended		19.96		17.12

The Company recorded currency transaction gains ~~(losses)~~ of $~~(15~~162,~~155)~~866 and $2823,~~077~~192 for the ~~three~~six months ended ~~March~~June 3130, 2025 and 2024, 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 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)~~16

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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 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~~six months ended ~~March~~June 3130, 2025 and 2024, 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, notes payable, installment notes payable and derivative liabilities. The carrying values of cash, accounts receivable, accounts payable, and notes payable approximate fair value due to their short-term nature. Installment notes payable 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 23,~~942~~031,~~695~~669 and 2,~~853~~942,~~721~~695 shares of Common Stock as of ~~March~~June 3130, 2025 and 2024, respectively. The Company’s Series D Senior Convertible Preferred Stock (the “Series D Preferred Stock”) and related outstanding dividends are convertible into ~~820~~851,~~800~~200 and ~~790~~820,~~400~~800 shares of common stock as of ~~March~~June 3130, 2025 and 2024, 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~~June 3130, 2025. During the periods ended ~~March~~June 3130, 2025 and 2024, the Company had warrants outstanding to purchase 892,165 shares of common stock.

~~Related Party Transactions~~17

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

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~~considered~~Related ~~related~~Party ~~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.~~Transactions

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.

Reclassification

~~Amounts~~Certain ~~previously~~prior ~~presented~~period amounts in the Condensed Interim Consolidated Balance Sheet have been reclassified to conform with current period presentation. All amounts previously presented under “Mining Concessions” as of December 31, 2024, have been reclassified to “Mineral Property Interests, Plant and Equipment”. See Note 3. Amounts relating to accrued interest on the Francisco Arturo mining concession duties payable (Note 9) that were previously included under “Accrued Liabilities” as of March 31, 2025 and December 31, 2024, have been reclassified to “~~Mineral~~Mining ~~Property~~concession ~~Interests~~duties payable”. In addition, ~~Plant~~certain non-trade obligations previously included under accounts payable and ~~Equipment~~accrued liabilities as of March 31, 2025 and December 31, 2024 have been reclassified to ~~conform~~“Accrued ~~with~~mining ~~current~~taxes ~~period~~and ~~presentation~~other liabilities”. ~~See~~These ~~Note~~reclassifications 2.better reflect the nature of the liabilities and had no effect on current liabilities, net income or cash flows in any period reported.

Amounts in the Condensed Interim Consolidated Statement of Income (Loss) and Comprehensive Income (Loss) related to mine development and stripping costs for the three and six months ended ~~March~~June 3130, ~~2025 and~~ 2024 have been included as part of Mine production costs to conform to current year presentation. See Note 23. This reclassification better reflects the nature of the costs and had no effect on net income or cash flows in any period presented.

Commodity Pricing Contract

In September 2024, the Company entered into a commodity pricing arrangement through its major purchaser. Under the contract, the Company locked in the sales price for 75% of its recoverable gold up to 9,000 ounces, at a price of $2,495 per ounce. This forward pricing arrangement ensured price certainty for a portion of the Company’s gold concentrate shipments, mitigating exposure to adverse fluctuations in gold prices. The Company fulfilled its delivery obligations under the contract in March 2025. The financial impact of this contract during the quarter ended March 31, 2025, was a reduction in revenue of approximately $1.1 million.

Recently Issued Accounting Standards

In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The update enhances transparency by requiring entities to provide more detailed income tax disclosures, including: (1) disaggregation of specific categories within the effective tax rate reconciliation; (2) disclosure of income (or loss) from continuing operations before income taxes, separately for domestic and foreign operations; and (3) disclosure of income tax expense or benefit from continuing operations, disaggregated by federal, state and foreign jurisdictions. ASU 2023-09 also introduces a requirement to disclose income taxes paid to federal, state, local, and foreign jurisdictions, along with other amendments aimed at improving the consistency and usefulness of tax disclosures for financial statement users. The standard is to be applied prospectively, although retrospective application is permitted. The Company is currently evaluating the impact of ASU 2023-09 on its consolidated financial statements and related disclosures.

ASU 2024-03, Income Statement – Reporting Comprehensive Income (Subtopic 220-240): Expense Disaggregation Disclosures. In March 2024, FASB issued ASU 2024-03, 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 18

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~~after~~operations; ~~the~~and ~~effective~~(3) ~~date~~disclosure of income tax expense or ~~retrospectively~~benefit from continuing operations, disaggregated by federal, state and foreign jurisdictions. ASU 2023-09 also introduces a requirement to ~~all~~disclose ~~prior~~income ~~periods~~taxes ~~presented~~paid to federal, state, local, and foreign jurisdictions, along with other amendments aimed at improving the consistency and usefulness of tax disclosures for financial statement users. The standard is to be applied prospectively, although retrospective application is permitted. The Company is currently evaluating the ~~potential~~ impact of ~~adopting~~ ASU ~~2024~~2023-0309 on its consolidated financial statements and related disclosures.

~~NOTE~~In 2March 2024, FASB issued ASU 2024-03, ~~CHANGE~~Income INStatement ~~ACCOUNTING~~– ~~ESTIMATE~~Reporting ~~DUE~~Comprehensive TOIncome ~~TRANSITION~~(Subtopic TO220-240): ~~PRODUCTION~~Expense ~~STAGE~~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 - RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS

In August 2025, management determined that the Company had accounted for Special and Extraordinary Mining Duties in Mexico inaccurately in certain prior periods, and that, mining tax expense and mining tax liabilities were not recognized in connection with consolidated financial statements prepared for the fiscal years ended December 31, 2021, 2022, and 2023 contained in its Annual Reports on Form 10-K for those years. As a result of these misstatements, the Company is restating certain financial information for the periods noted. All restated financial information is included in this Quarterly Report on Form 10-Q for the quarter ended June 30, 2025 (the “Form 10-Q”), and the Company has not filed, and does not intend to file, amendments to any of our filings that the Company have previously filed with the SEC.

Restatement Background

In March 2025, the Mexican Tax Authority (Servicio de Administracion, “SAT”) issued a re-assessment for the 2021 tax year of DynaMexico. Following receipt of such reassessment, the Company identified previously unrecognized liabilities related to Special and Extraordinary Mining Duties applicable to its mining operations in Mexico. These duties, which are statutory and recurring in nature, were not fully recognized in the fiscal year ended December 31, 2021. The Company undertook a thorough internal review of its tax filings from prior years to ensure compliance and completeness of any other potential liabilities. As a result of the internal review, management identified unrecognized mining duties and corresponding liabilities from DynaMexico and DynaMineras, two of the Company’s subsidiaries that operated the SJG mine during the years reviewed. The previously unrecognized liabilities total approximately $1.1 million, $0.9 million, $0.6 million, and $0.5 million for the fiscal years ended December 31, 2021, 2022, 2023 and 2024, respectively, inclusive of inflation adjustments, and penalties.

The internal review determined that restatement changes were necessary due to:

•

an understatement of mining tax expense in each period of the consolidated statement of operations; and

•

an understatement of mining tax liabilities in each period of the consolidated balance sheets

Items Included in this Filing

This Form 10-Q includes restated condensed consolidated financial statements and related disclosures as of and for the years ended December 31, 2021, 2022, 2023 and 2024.

The impact of the correction of the misstatements on the consolidated financial statements related to the mining duties as of and for the years ended December 31, 2021, 2022, 2023 and 2024, which have now been corrected, is summarized below. The applicable accompanying notes to the consolidated financial statements have also been updated, as applicable.

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2021		As previously stated				Adjustments				As restated
Consolidated Statements of Financial Position
Accrued expenses	$		5,440,204		$		1,070,806		$		6,511,010
Accumulated deficit	$		(50,722,465	)	$		(1,070,806	)	$		(51,793,271	)

Consolidated statements of loss and comprehensive loss
Other income/(expenses)	$		1,072		$		(1,070,806	)	$		(1,069,734	)
Comprehensive income for the year	$		8,534,363		$		(1,070,806	)	$		7,463,557
Income per share, basic and diluted	$		0.47		$				$		0.41

Consolidated statements of changes in equity
Income for the year	$		8,534,363		$		(1,070,806	)	$		7,463,557
Deficit – December 31, 2021	$		(50,722,465	)	$		(1,070,806	)	$		(51,793,271	)
Total equity	$		(151,589	)	$		(1,070,806	)	$		(1,222,395	)


2022		As previously stated				Adjustments				As restated
Consolidated Statements of Financial Position
Accrued expenses	$		5,756,961		$		891,894		$		6,648,855
Deferred tax asset	$		2,970,410		$		384,196		$		3,354,606
Accumulated deficit	$		(44,036,663	)	$		(507,698	)	$		(44,544,361	)

Consolidated statements of loss and comprehensive loss
Other income/(expenses)	$		2,242		$		(507,698	)	$		(505,456	)
Comprehensive income for the year	$		6,685,802		$		(507,698	)	$		6,178,104
Income per share, basic and diluted	$		0.33		$				$		0.29

Consolidated statements of changes in equity
Income for the year	$		6,685,802		$		(507,698	)	$		6,178,104
Deficit – December 31, 2021	$		(50,722,465	)	$		(1,070,806	)	$		(51,793,271	)
Deficit – December 31, 2022	$		(44,036,663	)	$		(1,578,504	)	$		(45,615,167	)
Total equity	$		13,192,141		$		(1,578,504	)	$		11,613,637

Consolidated statements of changes in assets
Deferred tax asset	$		2,970,410		$		384,196		$		3,354,606
Total Assets	$		40,942,912		$		384,196		$		41,327,108

Consolidated statements of changes in liabilities
Accrued expenses	$		5,756,961		$		1,962,700		$		7,719,661
Total liabilities	$		21,893,291		$		1,962,700		$		23,855,991


2023		As previously stated				Adjustments				As revised
Consolidated Statements of Financial Position
Accrued liabilities	$		7,727,621		$		627,025		$		8,354,646
Deferred tax asset	$		4,264,115		$		126,070		$		4,390,185
Accumulated deficit	$		(58,570,167	)	$		(500,955	)	$		(59,071,122	)

Consolidated statements of loss and comprehensive loss
Other income/(expenses)	$		2,218		$		(500,955	)	$		(498,737	)
Comprehensive loss for the year	$		(14,533,504	)	$		(500,955	)	$		(15,034,459	)
Loss per share, basic and diluted	$		(0.65	)	$				$		(0.68	)

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Consolidated statements of changes in equity
Loss for the year	$		(14,533,504	)	$		(500,955	)	$		(15,034,459	)
Deficit – December 31, 2021	$		(50,722,465	)	$		(1,070,806	)	$		(51,793,271	)
Deficit – December 31, 2022	$		(44,036,663	)	$		(507,698	)	$		(44,544,361	)
Deficit – December 31, 2023	$		(58,570,167	)	$		(2,079,459	)	$		(60,649,626	)
Total equity	$		3,815,259		$		(2,079,459	)	$		1,735,800

Consolidated statements of changes in assets
Deferred tax asset	$		4,264,115		$		510,266		$		4,774,381
Total Assets	$		35,438,350		$		510,266		$		35,948,616

Consolidated statements of changes in liabilities
Accrued expenses	$		7,727,621		$		2,589,725		$		10,317,346
Total liabilities	$		25,765,611		$		2,589,725		$		28,355,336

2024		As previously stated				Adjustments				As revised
Consolidated Statements of Financial Position
Accrued mining taxes and other liabilities	$		5,172,685		$		483,880		$		5,656,565
Deferred tax asset	$		4,025,957		$		97,289		$		4,123,246
Accumulated deficit	$		(66,705,019	)	$		(386,591	)	$		(67,091,610	)
	$				$				$
Consolidated statements of loss and comprehensive loss
Other income/(expenses)	$		50,171		$		(386,591	)	$		(336,420	)
Comprehensive loss for the year	$		(8,134,852	)	$		(386,591	)	$		(8,521,443	)
Loss per share, basic and diluted	$		(0.34	)	$				$		(0.36	)

Consolidated statements of changes in equity
Loss for the year	$		(8,134,852	)	$		(386,591	)	$		(8,521,443	)
Deficit – December 31, 2021	$		(50,722,465	)	$		(1,070,806	)	$		(51,793,271	)
Deficit – December 31, 2022	$		(44,036,663	)	$		(507,698	)	$		(44,544,361	)
Deficit – December 31, 2023	$		(58,570,167	)	$		(500,955	)	$		(59,071,122	)
Deficit – December 31, 2024	$		(66,705,019	)	$		(2,466,050	)	$		(69,171,069	)
Total equity	$		3,375,602		$		(2,466,050	)	$		909,552

Consolidated statements of changes in assets
Deferred tax asset	$		4,025,957		$		607,555		$		4,633,512
Total Assets	$		37,916,392		$		607,555		$		38,523,947

Consolidated statements of changes in liabilities
Accrued mining taxes and other liabilities	$		5,172,685		$		3,073,605		$		8,246,290
Total liabilities	$		28,683,310		$		3,073,605		$		31,756,915

NOTE 3 - CHANGE IN ACCOUNTING ESTIMATE DUE TO TRANSITION TO PRODUCTION STAGE

The TRS was filed as Exhibit 99.1 to the Company’s Current Report on Form 8-K filed with the SEC on May 20, 2025, and is incorporated herein by reference as Exhibit 96.1 to this Quarterly Report on Form 10-Q.

As a result of the declaration of proven and probable mineral reserves, the Company has revised certain accounting estimates prospectively, including the capitalization of certain development costs and the commencement of systematic depreciation of applicable assets. These changes have been applied prospectively in accordance with ASC 250, with no restatement of prior periods.

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Impact on Accounting Estimates

In connection with this transition, the Company revised its accounting estimates as follows:

1. Capitalization of Development Costs

• Prior to January 1, 2025, all underground mine development costs were expensed as incurred, as the SJG mine was classified as an exploration-stage property.

• Effective January 1, 2025, mine development costs that are directly related to sustaining and production-related activities are capitalized as part of “Mineral Property Interests, Plant and Equipment.”

• As a result capitalization of development costs during the ~~three~~six months ended ~~March~~June 3130, 2025 increased by approximately $24.~~123~~940 million, compared to prior periods.

2. Depreciation and Depletion

• Beginning in 2025, the Company commenced depletion of capitalized mine development costs and depreciation of mineral property interests (including mining concessions) using the Unit-of-Production (“UOP”) method, based on total proven and probable mineral reserves.

• As a result depreciation and depletion expense during the ~~three~~six months ended ~~March~~June 3130, 2025 increased by approximately $0.~~155~~378 million, compared to prior periods.

Financial Impact of the Change

The adoption of these revised estimates in Q1Q2 2025 had the following impact on the Company’s financial results:

Impact Area	Increase/(Decrease)
Capitalized Development Costs	$24.~~123~~940 million
Depreciation and Depletion Expense	$0.~~155~~378 million

This change in accounting estimate has been applied prospectively in accordance with ASC 250, Accounting Changes and Error Corrections, with no restatement of prior periods.

Forward-Looking Considerations

Management anticipates that these changes will result in increased capitalized costs and higher depreciation expense in future periods. The Company will continue to review and update its reserve estimates and related accounting assumptions on an ongoing basis, consistent with GAAP.

NOTE 34 - CONCENTRATE AND ORE INVENTORIES

Inventories are stated at the lower of cost or net realizable value and consist of mined ore and finished goods in the form of gold-silver concentrates. Inventory balances as of ~~March~~June 3130, 2025 and December 31, 2024 were as follows:


	June 30, 2025		December 31, 2024
Mined tonnage	$	1,288,243	$	1,406,448
Gold-Silver concentrates		308,793		169,944
Total inventories	$	1,597,036	$	1,576,392

NOTE 5 – MINERAL PROPERTY INTERESTS, PLANT AND EQUIPMENT

The cost and carrying value of mineral property interests, plant and equipment at June 30, 2025 and December 31, 2024 was as follows:

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	March 31, 2025			December 31, 2024
	June 30, 2025			December 31, 2024
Mined tonnage	$	921,542		$	1,406,448
Mineral property interests, cost
Gold-Silver concentrates		409,750			169,944
Mining concessions	$	4,132,678		$	4,132,678
Total inventories	$	1,331,292		$	1,576,392
Mine development		4,939,778			—
Subtotal	$	9,072,456		$	4,132,678
Less: accumulated depletion		(386,009	)		—
Mineral property interests, carrying value	$	8,686,447		$	4,132,678
Plant and equipment, cost
Construction in progress	$	649,097		$	—
Plant and equipment		406,131			73,691
Other		48,337			48,337
Subtotal		1,103,565			122,028
Less: Accumulated depreciation and amortization		(65,266	)		(42,738	)
Plant and equipment, carrying value	$	1,038,299		$	79,290
Mineral property interests, plant and equipment, carrying value	$	9,724,746		$	4,211,968

NOTE 4 – MINERAL PROPERTY INTERESTS, PLANT AND EQUIPMENT

The cost and carrying value of mineral property interests, plant and equipment at March 31, 2025 and December 31, 2024 was as follows:

	March 31, 2025			December 31, 2024
Mineral property interests, cost
Mining concessions	$	4,132,678		$	4,132,678
Mine development		2,122,579			—
Subtotal	$	6,255,257		$	4,132,678
Less: accumulated depletion		(119,084	)		—
Mineral property interests, carrying value	$	6,136,173		$	4,132,678
Plant and equipment, cost
Construction in progress	$	403,204		$	—
Plant and equipment		205,792			73,691
Other		48,337			48,337
Subtotal		657,333			122,028
Less: Accumulated depreciation and amortization		(86,220	)		(42,738	)
Plant and equipment, carrying value	$	571,113		$	79,290
Mineral property interests, plant and equipment, carrying value	$	6,707,286		$	4,211,968

Mineral properties include the SJG mining concessions (December 31, 2024 - $4,132,678) and capitalized mine development costs. The SJG property interests are depleted based on the units-of-production method over the estimated proven and probable mineral reserves.

The definitions of proven and probable mineral reserves are set forth in S-K 1300. If proven and probable mineral reserves exist at the Company’s properties, the relevant related capitalized mineral property interests are depleted using the units-of-production method. The Company’s SJG property has proven and probable mineral reserves estimated in accordance with S-K 1300. See Note 23.

Mineral properties totaled $68,~~136~~686,~~173~~447 as of ~~March~~June 3130, 2025 and included capitalized development costs of $24,~~122~~939,~~579~~778 during the period ended ~~March~~June 3130, 2025. Depletion expense during the ~~three~~six months ended ~~March~~June 3130, 2025 and 2024, was $~~119~~386,~~084~~009 and $nil, respectively.

Depreciation and amortization are recorded over each asset’s estimated useful life. Depreciation and amortization expense was $4322,~~482~~528 and $714,~~343~~687 for the ~~three~~six months ended ~~March~~June 3130, 2025 and 2024, respectively.

NOTE 56 - OTHER CURRENT ASSETS

As of ~~March~~June 3130, 2025 and December 31, 2024, other current assets consisted of the following:

	March 31,		December 31,
	June 30,		December 31,
	2025		2024
Warehouse inventory	$	1,522,334	$	1,258,064
Supplies inventory	$	2,145,355	$	1,258,064
Advances to suppliers		~~885~~1,~~766~~509,405		386,216
Prepaid expenses		~~606~~592,~~090~~852		270,023
Total other current assets	$	32,~~014~~102,~~190~~257	$	1656,~~914,303~~239

18NOTE 7 - ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

As of June 30, 2025 and December 31, 2024, the Company had the following accounts payable and accrued liabilities:

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NOTE 6 - ACCRUED LIABILITIES


	June 30,		December 31,
	2025		2024
			(Restated)
Accounts payable	$	11,420,287	$	8,777,183
Accrued vendors		1,386,762		406,487
Accrued payroll and board fees		556,000		412,500
Accrued interest		104,160		—
Other accrued liabilities		932,493		721,009
Trade payables and accruals	$	14,399,702	$	10,317,179

Accrued mining taxes (Note 2)		4,183,073		3,322,116
Other liabilities		1,942,569		1,850,569
Accrued mining taxes and other liabilities	$	6,125,642	$	5,172,685

AsNOTE of8 ~~March~~- ~~31,~~DERIVATIVE ~~2025~~LIABILITY ~~and December 31, 2024, the Company had the following accrued liabilities:~~

	March 31,		December 31,
	2025		2024
Accrued interest	$	2,458,118	$	2,221,219
Accrued mining expenses		4,273,433		3,515,893
Accrued taxes		1,677,269		1,241,111
Other accrued liabilities		3,879,390		2,879,094
Total accrued liabilities	$	12,288,210	$	9,857,317

NOTE 7 - 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 Senior Convertible 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 1112. 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:

Period Ended	~~March~~June 3130,2025			December 31,2024
Annual volatility rate		~~118~~112	%		128	%
Risk free rate		3.8972	%		4.25	%
Expected life (years)	54.1287			5.37
Fair value of common stock	$	01.9230		$	1.00

For the ~~three~~six months ended ~~March~~June 3130, 2025 and the twelve months ended December 31, 2024, 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 1516.

The following table summarizes the changes in the fair value of the derivative liability during the ~~three~~six months ended ~~March~~June 3130, 2025 and the twelve months ended December 31, 2024.

Period Ended	~~March~~June 3130,2025			December 31,2024
Fair value of derivative (warrants), beginning of period	$	892,167		$	1,797,341
Exercise of warrants		-			-
Change in fair value of derivative		~~(71~~267,~~373~~649	)		(905,174	)
Fair value of derivative (warrants), end of period	$	~~820~~1,~~794~~159,816		$	892,167

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NOTE 89 - ~~NOTES~~CREDIT ~~PAYABLE~~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)

On December 1, 2023, the Company exercised its option under the ACL to convert the outstanding balance of $9,750,000 into aan ~~one-year note payable (the “~~RCL~~”) bearing interest at 3M SOFR + 7~~.~~5%.~~ 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.

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.

The following is a summary of the RCL and TACL activity during the periods ended ~~March~~June 3130, 2025 and December 31, 2024:

	March 31,			December 31,
	June 30,			December 31,
	2025			2024
Balance beginning of year	$	9,850,000		$	9,750,000
Advances		—2,650,000			12,000,000
Principal Payments		(~~975~~2,~~000~~440,069	)		(11,900,000	)
Balance end of year	$	810,~~875~~059,~~000~~931		$	9,850,000

Interest expense on the RCL for the ~~period~~periods ended ~~March~~June 3130, 2025 ~~was~~and ~~$276,823~~2024 ~~(March~~were 31$554,252 ~~2024~~and - $~~305~~597,~~340)~~293, respectively.

NOTE 910 – 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.

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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.

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~~June 3130, 2025 and December 31, 2024, $2,~~367~~677,~~384~~884 and $2,221,219 of accrued interest ~~on the notes~~ was included in ~~accrued liabilities on~~ the ~~unaudited~~concessions ~~consolidated~~duties ~~balance~~payable ~~sheet~~balance.

InThe ~~October~~following ~~2019,~~summarizes the ~~Company~~activity ~~entered~~during ~~into a financing agreement for unpaid mining concession taxes related to its core mining concessions, totaling $299,474. The Company made an initial 20% down payment of $59,895 and financed~~ the ~~remaining~~six ~~balance over 36~~ months atended anJune ~~interest~~30, ~~rate of 22% per annum.~~ 2025:

The following summarizes the activity during the three months ended March 31, 2025:


Balance December 31, 2024	$	4,059,565
Exchange rate adjustment		451,458
2025 Interest		203,999
2025 principal payments		—
Balance June 30, 2025	$	4,715,022

Balance December 31, 2024	$	1,838,346
Exchange rate adjustment		38,922
2025 principal payments		—
Balance March 31, 2025	$	1,877,268

NOTE 11 - ASSET RETIREMENT OBLIGATION

NOTE 10 - ASSET RETIREMENT OBLIGATION

During 2023, the Company completed a significant upgrade to the milling facility. As a result, an asset retirement obligation (“ARO”) was established as of December 31, 2023, reflecting the estimated undiscounted costs totaling $316,800 to decommission the plant and tailings pond at the end of the estimated life of the mines in operation as of that date. The ARO was discounted using credit-adjusted, risk-free interest rate of 9.2%. As this is a production stage property that qualifies for asset capitalization, any new costs incurred after January 1, 2025 associated with the obligation can be capitalized to mineral property interests, plant and equipment.

Asset retirement obligation ~~consists~~consisted of the following as of ~~March~~June 3130, 2025 and December 31, 2024:

	March 31,		December 31,
	June 30,		December 31,
	2025		2024
Asset retirement obligation at beginning of year	$	223,520	$	198,468
Additions to ARO liability		—		6,792
Accretion		49,~~986~~972		18,260
Asset retirement obligation at end of year	$	~~228~~233,~~506~~492	$	223,520

NOTE 1112 - 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~~June 3130, 2025, 13,713,213 shares of Preferred Stock remain un-designated.

Series C Senior Convertible Preferred Stock

As of ~~March~~June 3130, 2025 and December 31, 2024 there were 1,734,992 shares of Series C Preferred Stock outstanding. As of ~~March~~June 3130, 2025, ~~these~~the Series C Preferred ~~Shares~~Stock ~~are~~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~~June 3130, 2025, dividends for the years 2016 to ~~2024~~2025 totaling $1,~~400~~574,~~775~~274 were in arrears.

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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.

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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 an a financing agreement with certain shareholders totaling $4,020,000, which was convertible into Series D ~~Senior~~ Preferred Stock. In connection with this financing, the noteholders also received the 2020 Warrants, as outlined in Note 78, to purchase an aggregate of 1,260,633 shares of the Company’s Common Stock at an exercise price of $.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~~June 3130, 2025 dividends for the years 2022 to 2024 totaling $182,400 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~~six months ended ~~March~~June 3130, 2025 and 2024, were $58117,~~575~~150 and $58117,~~575,~~150 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~~June 3130, 2025 and December 31, 2024, there were 1,552,795 Series E Preferred Stock outstanding. The Series E ~~shares~~Preferred ~~are~~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~~June 3130, 2025 and December 31, 2024, 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~~June 3130, 2025, and December 31, 2024, there were 29,315,726 shares of common stock outstanding. No dividends were declared or paid during the ~~three~~six months ended ~~March~~June 3130, 2025 and 2024.

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~~June 3130, 2025, $744,500 had been repaid, leaving a balance of $40,000 as of ~~March~~June 3130, 2025 and December 31, 2024.

Stock Issuances

•

On June 27, 2024 the Company issued 1,552,795 shares of Series E Preferred Stock for cash consideration of $2,500,000

•

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On June 28, 2024 the Company issued 287,287 shares of Common Stock, valued at $462,532, to senior executives as compensation.

•

On October 18, 2024, the Company issued 5,769,231 shares of Common Stock for cash consideration of $6,000,000

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Treasury Stock

There were no treasury stock transactions during the ~~three~~six months ended ~~March~~June 3130, 2025, or during the year ended December 31, 2024.

There were 37,180 shares of treasury stock outstanding as of ~~March~~June 3130, 2025 and December 31, 2024.

Warrants

As of ~~March~~June 3130, 2025, 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 ~~Convertible~~ Preferred Stock.

			Weighted		Weighted
			Average		Average
			Exercise		Remaining
	Number		Price		Contractual		Intrinsic
	of Shares		per share		Life (Years)		Value
Balance at December 31, 2023		892,165	$	0.01		6.37
Exercise of warrants		—		—
Forfeiture of the warrants		—		—				-
Balance at December 31, 2024		892,165	$	0.01		56.37
Exercise of warrants		—		—
Forfeiture of the warrants		—		—				-
Balance at March 31, 2025		892,165	$	0.01		5.12
Balance at June 30, 2025		892,165	$	0.01		4.87
Exercisable at March 31, 2025		892,165	$	0.01		5.12		-
Exercisable at June 30, 2025		892,165	$	0.01		4.87		-

A derivative liability was recognized upon the issuance of the ~~Series D warrants in~~ 2020 Warrants. As of ~~March~~June 3130, 2025, the derivative liability totaled $820,794. See Note 78.

Options

As of December 31, 2024, 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:

On February 16, 2024, in conjunction with joining the Board of Directors, Mr. Quinton Hennigh was awarded options to purchase up to 400,000 shares of Common Stock at an exercise price of $5.00 per share. The options vest in 25% increments on each of the first four anniversaries of the grant date and expiring five years after the grant date.

On June 3, 2024, in conjunction with accepting the position of Chief Executive Officer, Mr. Rohan Hazelton was awarded options to purchase up to 750,000 shares of Common Stock at an exercise price of $1.75 per share. The options vest and becoming exercisable in one-third increments on each of the first three anniversaries of the grant date and expiring five years after the grant date.

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			Weighted		Weighted
			Average		Average
			Exercise		Remaining
	Number		Price		Contractual		Intrinsic
	of Shares		per share		Life (Years)		Value
Balance at December 31, 2023		—	$	—		—		—
Issuance of options		1,150,000	$	2.88		—
Exercise of options		—	$	—
Forfeiture of the options		—	$	—
Balance at December 31, 2024		—	$	—		—		—
Issuance of options		1,150,000	$	2.88		3.97
Exercise of options		—	$	—
Forfeiture of the options		—	$	—
Balance at March 31, 2025		1,150,000	$	2.88		3.72		—
Balance at June 30, 2025		1,150,000	$	2.88		3.97		—
Vested & Exercisable at March 31, 2025		100,000	$	5.00		3.00		—
Vested & Exercisable at June 30, 2025		350,000	$	2.68		3.00		—

NOTE 1213 – STOCK-BASED COMPENSATION

On December 28, 2022, the Company issued 1,500,000 shares of restricted Common Stock to certain key employees and consultants. The shares were 25% vested upon issuance and vest an additional 25% on each of December 28, 2023, 2024, and 2025. The shares were valued at the closing stock price of $2.35 per share on the date of issuance and accounted for under ASC 718, Compensation – Stock Compensation. Stock-based compensation expense related to these awards was $1,219,062 and $881,250 for the years ended December 31, 2024 and December 31, 2023, respectively, representing the 25% vested portion of the total grant value recognized each year. The 2024 expenses also included an additional $327,813 related to accelerated vesting resulting from terminations. In connection with these terminations, 112,500 shares under these awards were cancelled in December 2024. As of December 31, 2024, deferred compensation totaling $297,063 remained unvested.

On June 3, 2024, Mr. Rohan Hazelton was appointed Chief Executive Officer of the Company. In connection with his appointment, the Company entered into an Employment Agreement with Mr. Hazelton providing for a signing bonus of 750,000 stock options (detailed below), 500,000 restricted stock units (“RSUs”) vesting one-third annually on each of the first three anniversaries of the grant date, and 500,000 deferred stock units (“DSUs”), with the terms and performance metrics to be determined by the Compensation Committee.

On July 22, 2024, Mr. Alonso Sotomayor was appointed Chief Financial Officer of the Company. In connection with his appointment, the Company entered into an Employment Agreement providing for a signing bonus of 225,000 RSUs, vesting one-third annually on each of the first three anniversaries of the grant date.

On February 16, 2024, in connection with joining the Board of Directors, Mr. Quinton Hennigh was awarded options to purchase up to 400,000 shares of Common Stock at an exercise price of $5.00 per share, vesting in 25% increments on each of the first four anniversaries of the grant date and expiring five years after the date of grant.

The inputs utilized in calculating the fair value of the stock options and awards are as follows:


	February 16, 2024
Annual volatility rate		127.93	%
Risk free rate		4.36	%
Expected life at issuance	5.0
Fair Value of stock options	$	1.15

On June 3, 2024, in conjunction with accepting the position of Chief Executive Officer, Mr. Rohan Hazelton was awarded options to purchase up to 750,000 shares of the Company’s Common Stock at an exercise price of $1.75 per share. The options vest and becoming exercisable in one-third increments on each of the first three anniversaries of the grant date and expiring five years after the grant date.

The inputs used to calculate the fair value of the options were as follows:

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	June 3, 2024
Annual volatility rate		105.55	%
Risk free rate		4.42	%
Expected life at issuance	5.0
Fair Value of stock options	$	1.38

Mr. Hazelton also received 500,000 DSUs payable upon achievement of performance targets and 500,000 RSUs vesting in one-third increments on each of first three anniversaries of the grant date, with the terms and performance metrics to be determined by the Compensation Committee.

~~NOTE~~Management 13BonusesOn -March ~~INCOME~~28, ~~TAXES~~2025, the Compensation Committee approved bonus awards for the management team totaling $457,500, consisting of $217,500 in cash and $240,000 in common stock. The stock portion represents 263,736 shares, calculated based on the closing price of $0.91 per share on March 28, 2025. Of these awards, $70,000 in cash and $135,000 in stock (equivalent to 148,352 shares) were allocated to directors and officers. The Board of Directors ratified these awards on April 2, 2025.

Independent Director Compensation

Also on March 28, 2025, the Compensation Committee approved annual compensation for independent directors, consisting of a base cash component of $25,000 and an additional $50,000 to be paid in shares of common stock. The equity portion of the compensation is subject to vesting as follows: one-third vests immediately, one-third vests one year from the grant date, and the remaining one-third vests two years from the grant date. This resulted in a total stock-based award of $250,000 for the five independent directors. The Board of Directors approved this compensation on April 2, 2025.

NOTE 14 - 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 1415 - 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. 30

The Company determines whether a contract is or contains a lease at inception. As of March 31, 2025, the Company has two operating leases: (i) a 52 month lease for office space with a remaining term of 32 months; and (ii) a 20-year ground lease associated with its Mexico mining operations, with a remaining term of approximately 8.75 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.

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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 determines whether a contract is or contains a lease at inception. As of June 30, 2025, the Company has two operating leases: (i) a 52 month lease for office space with a remaining term of 32 months; and (ii) a 20-year ground lease associated with its Mexico mining operations, with a remaining term of approximately 8.75 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.

NOTE 1516 - 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~~June 3130, 2025 and December 31, 2024, 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 78.

	Total		QuotedPrices inActiveMarketsForIdenticalAssets (Level 1)		SignificantOtherObservableInputs(Level 2)		SignificantUnobservableInputs(Level 3)
Fair Value Measurement as of March 31, 2025:
Fair Value Measurement as of June 30, 2025:
Liabilities:
Derivative Liabilities	$	~~820~~1,~~794~~159,816	$	-	$	-	$	~~820~~1,~~794~~159,816
Totals	$	~~820~~1,~~794~~159,816	$	-	$	-	$	~~820~~1,~~794~~159,816
Fair Value Measurement as of December 31, 2024:
Liabilities:
Derivative Liabilities	$	892,167	$	-	$	-	$	892,167
Totals	$	892,167	$	-	$	-	$	892,167

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 1617 - CUSTOMER CONCENTRATION

~~For the periods ended March~~ 31~~, 2025 and December 31, 2024, one customer accounted for 100% of revenue and accounts receivable.~~

NOTE 17 – 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 is 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, 2025 and December 31, 2024:

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	Mexico		United States		Total
March 31, 2025
Mineral property interests, plant and equipment, net		6,635,503		71,783		6,707,286
Current assets		9,661,114		1,180,282		10,841,396
Other assets		23,108,121		70,000		23,178,121
Total assets	$	39,404,738	$	1,322,065	$	40,726,803
December 31, 2024
Mineral property interests, plant and equipment, net		4,132,678		79,290		4,211,968
Current assets		7,591,704		4,578,998		12,170,702
Other assets		19,395,437		2,138,285		21,533,722
Total assets	$	31,119,819	$	6,796,573	$	37,916,392

For the periods ended June 30, 2025 and December 31, 2024, one customer accounted for 100% of revenue and accounts receivable.

	Three Months Ended		Three Months Ended
	March 31, 2025		March 31, 2024
Total Revenue for the year - Mexico	$	13,696,401	$	9,428,856
Total Revenue for the year - United States		-		-
Total Revenue for the year	$	13,696,401	$	9,428,856

NOTE 18 – SEGMENTED INFORMATION

	Three Months Ended			Three Months Ended
	March 31, 2025			March 31, 2024
Total comprehensive income (loss) for the year - Mexico	$	978,015		$	(4,115,718	)
Total comprehensive income (loss) for the year - United States		(414,631	)		(89,414	)
Total comprehensive income (loss) for the year	$	563,384		$	(4,205,132	)

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 is 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 June 30, 2025 and December 31, 2024:

NOTE 18 - RELATED PARTY TRANSACTIONS.



	Mexico		United States		Total
June 30, 2025
Mineral property interests, plant and equipment, net		9,661,269		63,477		9,724,746
Current assets		8,802,775		2,038,655		10,841,430
Other assets		25,775,648		1,184,122		26,959,770
Total assets	$	44,239,692	$	3,286,254	$	47,525,946

December 31, 2024 (Restated)
Mineral property interests, plant and equipment, net		4,132,678		79,290		4,211,968
Current assets		7,591,704		4,924,615		12,516,319
Other assets		19,049,820		2,138,285		21,188,105
Total assets	$	30,774,202	$	7,142,190	$	37,916,392

During the three months ended March 31, 2025 and 2024, the Company paid or accrued $90,000 and $87,500 in management fees to directors. As of March 31, 2025 and December 31, 2024, amounts due to related parties and included in accrued liabilities totaled $377,500 and $412,500.


	Six Months Ended		Six Months Ended
	June 30, 2025		June 30, 2024
Total Revenue for the year - Mexico	$	29,582,687	$	20,512,458
Total Revenue for the year - United States		-		-
Total Revenue for the year	$	29,582,687	$	20,512,458

NOTE 19 - SUBSEQUENT EVENTS


	Six Months Ended			Six Months Ended
	June 30, 2025			June 30, 2024
Total comprehensive income (loss) for the year - Mexico	$	3,978,543		$	(7,100,655	)
Total comprehensive income (loss) for the year - United States		(1,905,523	)		(732,682	)
Total comprehensive income (loss) for the year	$	2,073,020		$	(7,833,337	)

~~The~~NOTE ~~Company~~19 ~~has~~- ~~evaluated~~RELATED ~~subsequent~~PARTY ~~events through the date of these condensed interim consolidated financial statements were issued, and has identified the following occurring after March 31, 2025:~~TRANSACTIONS

•

InManagement ~~April 2025, the Company drew an additional $1.5 million under the Revolving Credit Line with Ocean Partners.~~Bonuses

•

InOn ~~May~~March 28, 2025, the ~~Company~~Compensation ~~drew~~Committee anapproved ~~additional~~bonus $1awards to the management team in cash and common stock.15 ~~million~~The ~~under~~stock portion is based on the ~~Revolving~~closing ~~Credit~~price ~~Line~~of ~~with~~$0.91 ~~Ocean~~per ~~Partners~~share on March 28, 2025. Of these awards $70,000 in cash and $135,000 in stock (equivalent to 148,352 shares) were allocated to directors and officers. The Board of Directors ratified these awards on April 2, 2025.

27Independent Director Compensation

On March 28, 2025, the Compensation Committee approved annual compensation for independent directors, consisting of a base cash payment of $25,000 per director, plus additional cash compensation of $4,000 for each committee membership and $3,000 for each committee chairmanship held by the director. In addition, each independent director was awarded $50,000 in equity compensation, to be paid in shares of common stock. The equity awards are subject to a vesting schedule whereby one-third vests immediately, one-third vests one year from the grant date, and the remaining one-third vests two years from the grant date. The Board of Directors approved this compensation on April 2, 2025.

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During the six months ended June 30, 2025 and 2024, the Company paid or accrued $94,500 and $132,500 in management fees to directors. As of June 30, 2025 and December 31, 2024, amounts due to related parties and included in accrued liabilities totaled $426,500 and $412,500.

NOTE 20 - SUBSEQUENT EVENTS

The Company has evaluated subsequent events through the date of these condensed interim consolidated financial statements were issued. There were no items requiring disclosure.

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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 2024 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) a decreased 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, 2024, 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.

Recent Developments

On May 20, 2025, the Company filed a Technical Report Summary (“TRS”) for the SJG mine, which was prepared in accordance with S-K 1300. The TRS includes the Company’s first declaration of mineral reserves and supports the transition from an Exploration Stage issuer to a Production Stage issuer. The TRS was filed as Exhibit 99.1 to the Company’s Current Report on Form 8-K filed with the SEC on May 20, 2025, and is incorporated herein by reference as Exhibit 96.1 to this Quarterly Report on Form 10-Q.

This transition to Production Stage has resulted in certain changes in accounting treatment, including the prospective capitalization of development expenditures and the commencement of depreciation on applicable assets, as further described in Note 23 to the unaudited condensed interim consolidated financial statements. Management anticipates that these changes will result in increased capitalized costs and higher depreciation expense in future periods.

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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.

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 700 tons per day in 2024. In 2023 alone, daily processing volumes rose by 30%, from 550 tons to 700 tons per day.

For 2025, the Company expects to increase average daily throughput to approximately 800 tons, with installed capacity now in place to support up to approximately 1,000 tons per day.

Summary of Mining and Mill Operations

Annual Results from 2018 to 2024:


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

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