Dynaresource, Inc 10-Q for FY2021 Q2

Dynaresource, Inc. (DYNR)

10-Q 2021-08-12 For: 2021-06-30

Added on April 06, 2026

About this 10-Q

Dynaresource, Inc filed this 10-Q on August 12, 2021, covering the quarter ended June 30, 2021 (FY2021 Q2).

Headline figures

Quarter ended June 30, 2021, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $10.53M; compared with -$3409 a year earlier
Net income: $4.46M; compared with a net loss of $3.45M a year earlier
Diluted EPS: $0.24; compared with -$0.19 a year earlier

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Large Accelerated Filer	☐	Accelerated Filer	☐
Non-Accelerated Filer	☐	Smaller Reporting Company	☒

PART I.	FINANCIAL STATEMENTS

ITEM 1.	Unaudited Financial Statements

	Notes to Unaudited Financial Statements	7

ITEM 2.	Management's Discussion and Analysis and Plan of Operation	33

ITEM 3.	Quantitative and Qualitative Disclosure About Market Risk	44

ITEM 4.	Controls and Procedures	44

PART II.	OTHER INFORMATION

ITEM 1.	Legal Proceedings	45

ITEM 2.	Unregistered Sales of Securities and Use of Proceeds	49

ITEM 3.	Default Upon Senior Securities	49

ITEM 4.	Mine Safety Disclosures	49

ITEM 5.	Other Information	49

ITEM 6.	Exhibits	50

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

	2021			2020
	(Unaudited)
ASSETS
Current Assets
Cash and Cash Equivalents	$	9,364,960		$	1,504,016
Accounts Receivable		3,828,995			840,743
Inventories		1,364,836			603,967
Foreign Tax Receivable		3,204,226			2,179,914
Appeal Bond		-			1,111,111
Other Current Assets		714,766			578,661
Total Current Assets		18,477,783			6,818,412

Mining Equipment and Fixtures (Net of Accumulated
Depreciation of $114,801 and $113,176)		4,353			5,978
Operating Lease		692,889			735,220
Mining Concessions		4,132,678			4,132,678
Investment in Affiliate		70,000			70,000
Other Assets		95,267			95,380

TOTAL ASSETS	$	23,472,970		$	11,857,668

LIBILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
Current Liabilities:
Accounts Payable	$	1,363,617		$	2,274,011
Accrued Expenses		4,404,998			3,385,093
Customer Advances		9,250,000			2,500,000
Derivative Liabilities		2,556,676			2,371,560
Current Portion of Convertible Notes Payable – Series D		3,539,409			-
Current Portion of Convertible Notes Payable – Series I & II		543,279			-
Current Portion of Long-Term Debt		2,009,461			1,984,007
Current Portion of Operating Lease Payable		92,386			82,733
Total Current Liabilities		23,759,826			12,597,404

Convertible Notes Payable – Series D, (Net of Unamortized Discount of $480,591 and $755,214), Less Current Portion		-			3,264,786
Convertible Notes Payable – Series I & II, Less Current Portion		-			543,279
Long Term Debt, Less Current Portion		33,119			97,428
Operating Lease Payable, Less Current Portion		630,158			685,951

TOTAL LIABILITIES		24,423,103			17,188,848

Preferred Stock, Series C, $0.0001 par value, 1,734,992 shares Authorized, issued and outstanding		4,337,480			4,337,480
COMMITMENTS AND CONTINGENCIES		-			-
STOCKHOLDERS' EQUITY (DEFICIT)
Preferred Stock, Series A, $0.0001 par value, 1,000 shares authorized, issued and outstanding		1			1
Common Stock, $0.01 par value, 40,000,000 shares authorized 17,722,825 and 17,722,825 issued and outstanding		177,228			177,228
Preferred Rights		40,000			40,000
Additional Paid In Capital		50,407,333			50,407,333
Treasury Stock, 516,480 and 516,480 shares		(1,474,486	)		(1,474,486	)
Accumulated Other Comprehensive income		66,685			438,092
Accumulated Deficit		(54,504,374	)		(59,256,828	)
TOTAL STOCKHOLDERS’ DEFICIT		(5,287,613	)		(9,668,660	)

TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT	$	23,472,970		$	11,857,668

	Preferred A				Common				Preferred		Preferred		Paid In			Treasury			Treasury			Other Comp			Accumulated			Non Controlling
	Shares			Amount	Shares		Amount		Rights		Amount		Capital			Shares			Amount			Income			Deficit			Interests		Totals
Balance, March 31, 2020		1,000	$	1		17,722,825	$	177,228		1	$	40,000	$	51,056,738			778,980		$	(2,223,891	)	$	1,471,814		$	(55,697,616	)	$	0	$	(5,175,726	)

Treasury Stock Issued for Services														(363,917	)		(162,500	)		463,917											100,000

Other Comprehensive Income (Loss)																							10,683								10,683

(Loss)																										(3,448,460	)				(3,448,460	)

Balance, June 30, 2020		1,000	$	1		17,722,825	$	177,228		1	$	40,000	$	50,692,821			616,480		$	(1,759,974	)	$	1,482,497		$	(59,146,076	)	$	0	$	(8,513,503	)

Balance, March 31, 2021		1,000	$	1		17,722,825	$	177,228		1	$	40,000	$	50,407,333			516,480		$	(1,474,486	)	$	730,463		$	(58,967,119	)	$	0	$	(9,086,580	)

Other Comprehensive Income (Loss)																							(663,778	)							(663,778	)

Net Income																										4,462,745					4,462,745

Balance, June 30, 2021		1,000	$	1		17,722,825	$	177,228		1	$	40,000	$	50,407,333			516,480		$	(1,474,486	)	$	66,685		$	(54,504,374	)	$	0	$	(5,287,613	)

Balance, December 31, 2019	1,000	$	1	17,722,825	$	177,228	1	$	40,000	$	56,622,159		778,980		$	(2,223,891	)	$	325,841		$	(53,952,594	)	$	(5,723,663	)	$	(4,734,919	)

Treasury Stock Issued for Services											(363,917	)	(162,500	)		463,917												100,000

Other Comprehensive Income (Loss)																			1,156,656						(11,669	)		1,144,987

Net (Loss)																						(5,193,482	)		(61,589	)		(5,255,071	)

Elimination of Non-Controlling Interest											(5,565,421	)													5,796,921			231,500

Balance, June 30, 2020	1,000	$	1	17,722,825	$	177,228	1	$	40,000	$	50,692,821		616,480		$	(1,759,974	)	$	1,471,814		$	(59,146,076	)	$	0		$	(8,513,503	)


Balance, December 31, 2020	1,000	$	1	17,722,825	$	177,228	1	$	40,000	$	50,407,333		516,480		$	(1,474,486	)	$	438,092		$	(59,256,828	)	$	0		$	(9,668,660	)

Other Comprehensive Income (Loss)																			(371,407	)								(371,407	)

Net Income																						4,752,454						4,752,454

Balance, June 30, 2021	1,000	$	1	17,722,825	$	177,228	1	$	40,000	$	50,407,333		516,480		$	(1,474,486	)	$	66,685		$	(54,504,374	)	$	0		$	(5,287,613	)

	2021			2020
CASH FLOWS FROM OPERATING ACTIVITES:
Net income (Loss)	$	4,752,454		$	(5,255,071	)
Adjustments to reconcile net loss to cash used in operating activities
Change in Derivatives		185,116			689,275
Depreciation		1,625			1,625
Amortization of Loan Discount		274,623			68,656
Stock issued for Services		-			100,000
Non-Dilution Stock Issuance		-			4,427
Change in Operating Assets and Liabilities
Accounts Receivable		(2,988,252	)		718,487
Inventories		(760,869	)		523,089
Foreign Tax Receivable		(1,024,312	)		139,260
Appeal Bond		1,111,111			-
Operating Lease Assets		42,331			37,887
Other Assets		(135,992	)		(41,059	)
Accounts Payable		(910,394	)		(598,917	)
Accrued Expenses		1,019,905			220,056
Customer Advances		6,750,000			-
Lease Liabilities		(46,140	)		(37,659	)
CASH FLOWS PROVIDED BY (USED IN) OPERATING ACTIVITIES		8,271,206			(3,429,944	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Advances from Stockholders					45,000
Proceeds from Borrowing		-			3,275,000
Payments of Convertible Notes		-			(112,500	)
Payments of Long-Term Debt		(36,460	)		(29,315	)
CASH FLOWS PROVIDED BY (USED IN) FINANCING ACTIVITIES		(36,460	)		3,178,185

Effects of Foreign Exchange		(373,802	)		728,966

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVILANTS		7,860,944			477,207
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD		1,504,016			354,572
CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	9,364,960		$	831,779

SUPPLEMENTAL DISCLOSURES
Cash Paid for Interest	$	243,979		$	47,875
Cash Paid for Income Taxes	$	-		$	-
NON-CASH TRANSACTION Accrued Interest Rolled into Notes Payable	$	-		$	23,934

●	estimated recoverable ounces of gold, silver or other precious minerals;
●	estimated future commodity prices;
●	estimated expected future operating costs, capital expenditures and reclamation expenditures.

	2021		2020

Mined Tonnage	$	1,218,021	$	555,608
Gold-Silver Concentrates		146,815		48,359
Total Inventories	$	1,364,836	$	603,967

	2021			2020

Leasehold improvements	$	9,340		$	9,340
Office equipment		31,012			31,012
Office furniture and fixtures		78,802			78,802
Sub-total		119,154			119,154
Less: Accumulated depreciation		(114,801	)		(113,176	)
Total Property	$	4,353		$	5,978

	June 30, 2021			December 31, 2020
Prior Year	$	13,473,000		$	13,780,490
Tax (Expense) Benefit for Current Year		(1,421,781	)		953,120
Expiration of NOL Carryforward Period		-			(1,260,610	)
Total Deferred Tax Asset		12,051,219			13,473,000
Less Valuation Allowance		(12,051,219	)		(13,473,000	)
Net Deferred Tax Asset	$	-		$	-

	2021			2020
United States	$	(4,841,452	)	$	(1,862,612	)
Foreign		9,593,906			(3,392,459	)
	$	4,752,454		$	(5,255,071	)

Current
Federal	$	-		$	-
State		-			-
Foreign		-			-
	$	-		$	-
Deferred and Other
Federal	$	(920,960	)	$	(285,487	)
State		-			-
Foreign		2,342,741			(848,115	)
		1,421,781			(1,133,602	)

Total Tax Expense (Benefit)		1,421,781			(1,133,602	)
Change in Valuation Allowance		(1,421,781	)		1,133,602
Net Tax Expense (Benefit)	$	-		$	-

	2021			2020
Tax Expense (Benefit) at Statutory Rate	$	998,015		$	(1,103,565	)
Foreign Tax Rate Differential		863,450			(210,203	)
Permanent Differences
Stock Issued for Services		-			21,000
Change in Derivative Liability		38,874			144,748
Amortization of Loan Discount		57,671			14,418
Timing Differences
Depreciation & Capitalized Assets		(15,283	)
Sales & Accounts Receivable		(321,479	)
Inventory and COGS		(198,667	)
Other		(800	)
Change in Valuation Allowance		(1,421,781	)		1,133,602
Provision for Income Tax Expense (Benefit)	$	-		$	-

United States Expiring 2029 through	$	18,500,000
United States indefinite limited to 80% of NOL		11,300,000
Foreign expiring from 2021 to 2030		20,000,000
Total	$	49,800,000

	a)	1,600,000 shares of Series C Senior Convertible Preferred Stock (the “Series C Preferred”) at a purchase price of $2.50 per share ($4M USD), plus an additional 133,221 shares of Series C Preferred pursuant to anti-dilution provisions. The Series C Preferred is entitled to receive dividends at the per share rate of four percent (4%) per annum, ranks senior (in priority) to the Common Stock, the Series A Preferred Stock, and each other class or series of equity security of the Company. The Series C Preferred is convertible into Common Stock of the Company at the price of $2.41 per share and is entitled to anti-dilution protection for (i) subsequent equity issuances by the Company and (ii) changes in the Company’s ownership of DynaResource de México SA de CV (“DynaMéxico”). The Series C Preferred is also entitled to preemptive rights, and the holder has the right to designate one person to the Company’s Board of Directors as a Class III director.

	b)	A Common Stock Purchase Warrant (the “Golden Post Warrant”) for the purchase of 2,166,527 shares of the Company’s Common Stock, at an exercise price of $2.50 per share, and expiring June 30, 2020. The anti-dilution protections contained in the terms of the Series C Preferred are essentially replicated in the Golden Post Warrant. The expiration of the Golden Post Warrant was extended on May 14, 2020, pursuant to an additional financing agreement with Golden Post.

	(a)	A convertible promissory note (the “Golden Post Note”) payable to Golden Post in the principal amount of $2,500,000, bearing interest at 10%, and maturing two years from the date of execution. One half of the principal amount of the Golden Post Note, or $1,250,000, has been fully funded in accordance with an agreed-upon draw summary and budget. The balance of the principal amount will also be funded in accordance with agreed-upon draw summaries and the budget. The Golden Post Note is convertible, at the option of Golden Post, into shares of Series D Senior Convertible Preferred Stock (the “Series D Preferred”) at a conversion price of $2.00 per share; and
	(b)	A common stock purchase warrant (the “2020 Warrant”) for the purchase of 783,976 shares of the Company’s common stock, at an exercise price of $0.01 per share, and maturing on the 10-year anniversary of the date of issuance. The 2020 Warrant contains anti-dilution provisions; and

	(a)	Convertible promissory notes (the “Remaining Notes”) in the aggregate principal amount of $1,400,000, bearing interest at 10%, and maturing two years from the date of issuance. The Remaining Notes have been fully funded. The Remaining Notes are convertible, at the option of each individual Remaining Purchaser, into shares of Series D Preferred at a conversion price of $2.00 per share; and
	(b)	Common stock purchase warrants (the “Remaining Purchasers Warrants”) for the purchase of an aggregate of 439,026 shares of the Company’s common stock, at an exercise price of $0.01 per share, and maturing on the 10-year anniversary of the date of issuance. The Remaining Purchasers Warrants contain anti-dilution provisions.

	4.	Pursuant to the transaction contemplated by the NPA, the Company agreed to call a special meeting of Company stockholders, to be held not later than July 14, 2020, to solicit stockholder approval of (a) an amendment of the Company’s certificate of incorporation to increase the number of authorized shares of common stock from 25,000,000 shares to 40,000,000 shares, and (b) an amendment of the Certificate of Designations of the Series C Preferred, in order to (a) extend the maturity date of the Series C Preferred by an additional two (2) years, (ii) add an equity cap in respect of the conversion of Series C Preferred into common stock of the Company, and (iii) add certain restrictions on the ability of the Company to issue Series C Preferred. The special meeting was properly called and held on July 13, 2020, whereby Company stockholders confirmed approval for each item referenced in item 4 above.

	4.	Compensatory Issuances. On May 13, 2020, one business day prior to the NPA, the Company issued to the Lead Purchaser the following: (i) a common stock purchase warrant for 2,306 shares, at an exercise price of $0.01 per share, and maturing on the 7-year anniversary of the date of issuance (the “Compensatory Warrant”); and (ii) 1,771 shares of Series C Preferred Shares. These issuances were occasioned by the Company’s obligations under the Securities Purchase Agreement dated as of May 6, 2015.

	6.	In order to accommodate the issuance of the additional 1,771 shares of Series C Preferred, on May 13, 2020 the Company filed with the Secretary of State of Delaware a Certificate of Increase of Series C Senior Convertible Preferred Stock, to increase the number of shares of preferred stock designated as Series C Preferred from 1,733,221 shares to 1,734,992 shares (“Certificate of Increase”).

	Preferred Series C

Carrying Value, December 31, 2019	$	4,333,053
Issuances at Fair Value, Net of Issuance Costs		-
Bifurcation of Derivative Liability		-
Relative Fair Value of Warrants – Preferred Stock Discount		4,427
Accretion of Preferred Stock to Redemption Value		-
Carrying Value, December 31, 2020		4,337,480

Issuances at Fair Value, Net of Issuance Costs		-
Bifurcation of Derivative Liability		-
Relative Fair Value of Warrants – Preferred Stock Discount		-
Accretion of Preferred Stock to Redemption Value		-
Carrying Value, June 30, 2021	$	4,337,480

	Number of Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (Years)		Intrinsic Value
Balance at December 31, 2019		2,166,527	$	2.45		0.51	$	-
Granted		3,391,815	$	1.31		4.89	$	-
Exercised		-	$	-			$	-
Forfeited		2,166,527	$	-			$	-
Balance at December 31, 2020		3,391,815	$	1.31		4.34	$	-
Granted		-	$	-			$	-
Exercised		-	$	-			$	-
Forfeited		-	$	-			$	-
Balance at June 30, 2021		3,391,815	$	1.31		3.84	$	-
Exercisable at June 30, 2021		3,391,815	$	1.31		3.84	$	-

	Period Ended June 30, 2021
Operating Lease – Office Lease	$	42,742
Operating Lease – Ground Lease		44,337
Short Term Lease Costs		6,279
Variable Lease Costs		-
TOTAL	$	93,358

Weighted Average Remaining Lease Term (Years) – Operating Leases			11.00
Weighted Average Discount Rate – Operating Leases			12.50	%

YEAR
2022	$	179,474
2023		145,896
2024		96,896
2025		99,803
2026		102,797
Thereafter		684,885
Total	$	1,308,751
Less Imputed Interest		(586,207	)
OPERATING LEASE PAYABLE	$	722,544

	a)	Wrongfully using and disseminating confidential information and data belonging to DynaMéxico;
	b)	Asserting that Goldgroup owns any interest in the San Jose de Gracía Project in northern Sinaloa, México, rather than accurately disclosing that Goldgroup owns a common shares equity interest (shareholder’s interest) in DynaMéxico;
	c)	Improperly disclosing the percentage of common shares equity interest (shareholder’s interest) owned by Goldgroup in DynaMéxico;
	d)	Improperly disclosing or implying that Goldgroup is the operator of the San Jose de Gracía Project;
	e)	Attempting to delay, stop, or otherwise impair the financing of, and further development of, the SJG Project;
	f)	Making numerous threats against DynaMéxico management and officers;
	g)	Failing to properly disclose that broad powers of attorney for acting on behalf of DynaMéxico are held by an individual not affiliated with Goldgroup.

	a)	The AAA must “cease and desist” from the arbitration proceeding;
	b)	The AAA does not have jurisdiction to hear any conflict and/or interpretation arising from the Earn In/Option Agreement, dated September 1, 2006; and
	c)	The AAA does not have jurisdiction to hear disputes arising between shareholders of DynaMexico, which disputes do not arise directly and immediately from the Earn In/Option Agreement, dated September 1, 2006.

FIRST:	The action and litigation based on commercial law filed by DynaMéxico is valid and enforceable, and where Goldgroup and the American Arbitration Association were found to be in default, was proper.
SECOND:	Goldgroup is declared in breach of its corporate duties, for failure to refrain from claiming direct ownership of 50% of the San José de Gracía Mining Project.
THIRD:	Goldgroup is condemned and ordered to pay to DynaMéxico the amount of USD $20,000,000 (Twenty Million Dollars) in damages caused by Goldgroup to DynaMéxico, deriving from its breach of obligations in refraining from claiming direct ownership of 50% of the San Jose de Gracía Mining Project; which amount should be paid within five days upon execution of this order and resolution.
FOURTH:	Goldgroup is condemned and ordered to pay to DynaMéxico the amount of USD $28,280,808.34 (Twenty Eight Million Two Hundred and Eighty Thousand Eight Hundred and Eight and 34/100 Dollars), for breach of its corporate duty and covenants with regards to the San Jose de Gracía mining project, as a result of depriving profits from DynaMéxico which DynaMéxico could have earned for the sale of gold produced and extracted during the years 2013 and 2014; amounts that should be paid within five days upon execution of this order and resolution.
FIFTH:	Goldgroup is condemned and ordered to pay losses and damages to DynaMéxico, which Goldgroup continues to cause, until full payment of the above-mentioned amounts has been made, which damages, and losses shall be calculated by an expert opinion in a corresponding legal procedure related to this litigation.
SIXTH:	Pursuant to Article 1424 of the Commercial Code of México, the arbitration provision established under clause 8.16 of the Earn In/Option Agreement, dated as of September 1, 2006, is ineffective and impossible to execute.
SEVENTH:	This court declares that any controversy arising from the Ear In/Option Agreement must be brought and resolved under Mexican Law and by competent Mexican Courts with proper jurisdiction, in recognition of the waiver and exclusion of the arbitration clause (contained in the Earn In/Option Agreement) by both parties.
EIGHTH:	This Court declares that the American Arbitration Association must abstain from hearing arbitration procedure number 50 501 T 00226 14, or any other ongoing and/or future arbitration proceeding already filed or that may be filed by the co-defendant Goldgroup against DynaResource.
NINTH:	This Court declares that the American Arbitration Association does not have jurisdiction to hear any conflict and/or interpretation arising from the Earn In/Option Agreement, dated September 1, 2006.
TENTH:	This Court declares that the American Arbitration Association does not have jurisdiction to hear disputes arising between shareholders of DynaMéxico, which disputes do not arise directly and immediately from the Earn In/Option Agreement, dated September 1, 2006.
ELEVENTH:	This Court declares that the American Arbitration Association does not have jurisdiction to hear any matters where Koy Wilber Diepholz, who is the President of the Board of Directors of DynaMéxico and has been personally sued in relation to the arbitration clause established under clause 8.16 of the Earn In/Option Agreement, dated September 1, 2006, since he signed the mentioned instrument in representation of the Company and not in his personal capacity.
TWELFTH:	The expenses and costs associated with these proceedings are hereby waived.
THIRTEENTH:	LET IT SO BE PUBLISHED. A Copy of this order and Sentence shall be found in the corresponding records.

	1.	The $48,280,808.34 USD damages award (dated October 05, 2015) in favor of DynaMéxico and against Goldgroup Resources Inc. is now Final. Goldgroup Resources’ challenge(s) to that award have been fully denied and the damages award is Final.
	2.	The Lien against the Shares of DynaMéxico owned by Goldgroup Resources Inc. (established October 5, 2016, the “Lien against Goldgroup Shares”) is now fully confirmed, Final, and enforceable.
	3.	Ownership of the shares of DynaMéxico currently held by Goldgroup Resources (currently representing 20% of the outstanding shares of DynaMéxico) are subject to the Lien against Goldgroup Shares.

	·	On December 5, 2020, DynaUSA and DynaMéxico filed an Original Petition for Recognition of the $48M USD Foreign Judgment in US. District Court in Dallas County Texas.
	·	On February 4, 2021, DynaUSA and DynaMéxico filed a First Amended Petition for Recognition of the $48M USD Foreign Judgment in US. District Court, 134^th Judicial District, Dallas County, Texas.
	·	On May 12, 2021, The US District Court for Dallas County issued a ruling stating the Court was not obligated to recognize the $48M Judgment in the US.; but found the $48M Judgment to be final, conclusive and enforceable under Mexican Law.

	(a)	The Arbitration Ruling contains an acknowledgement by the AAA that the AAA was named as a defendant in the legal demand filed by DynaMéxico in the Thirty Sixth Civil Court of the Superior Court of Justice of the Federal District of México (the “DynaMéxico Legal Demand”). The Arbitration Ruling also contains a statement that the AAA was not properly served notice of the DynaMéxico Legal Demand;
	(b)	DynaMéxico obeyed the October 5, 2015 Court Order and did not attend the Arbitration hearing;
	(c)	DynaMéxico will pursue all legal remedies in order to obtain a full dismissal of the Arbitration Ruling;
	(d)	The Arbitration Ruling contains an acknowledgement by the AAA that the AAA was named as a defendant in the legal demand filed by DynaMéxico in the Thirty Sixth Civil Court of the Superior Court of Justice of the Federal District of México (the “DynaMéxico Legal Demand”). The Arbitration Ruling also contains a statement that the AAA was not properly served notice of the DynaMéxico Legal Demand;

	·	DynaUSA and DynaMéxico filed Motion to Alter Judgment

		On June 6, 2019, DynaUSA and DynaMéxico file a Motion to Alter Judgment.

	·	DynaUSA and DynaMéxico filed Motion for Stay of Judgment Pending Appeal and to Waive Bond

		On June 7, 2019, DynaUSA and DynaMéxico filed A Motion for Stay of Judgment Pending Appeal and to Waive Bond.

	·	DynaUSA and DynaMéxico filed Motion for Leave to Supplement the Record

		On July 13, 2019, DynaUSA and DynaMéxico filed A Motion for Leave to Supplement the Record with the following information:

	·	“Rejection of Goldgroup Resources Inc. request to the Supreme Court of México”

		On July 3, 2019, an Official Ruling from The Supreme Court of México was issued to Reject the Request of Goldgroup Resources Inc. (the “México Supreme Court Rejection to Goldgroup”). The Justices of the First Chamber of the Supreme Court of Justice of México issued a Rejection Notice to Goldgroup Resources Inc., “due to the lack of legitimacy presented by Goldgroup”; and in issuing the Rejection Notice to Goldgroup, the Supreme court thereby reverted the Amparo Appeal back to the México Circuit Court where the Official and Final Ruling from the México Circuit Court is expected to be issued.

	·	DynaUSA and DynaMéxico filed Reply in Support of Motion to Alter Judgment.

		On July 23, 2019, DynaUSA and DynaMéxico filed a Reply in Support of Motion to Alter Judgment. Goldgroup Resources was confirmed to be misleading the US District Court with inaccurate reports of the ruling of the México Supreme Court Rejection.

	·	Final Legal Ruling in México (DynaMéxico Final México Legal Ruling)

		On December 6, 2019, the 11^th Federal Circuit Collegiate Court in México issued its Final Ruling (“the DynaMéxico Final México Legal Ruling”).

		The DynaMéxico Final México Legal Ruling is Favorable to DynaMéxico, and denies the Amparo challenge of Goldgroup Resources Inc., the subsidiary of Goldgroup Mining Inc. (“GGA.TO”). The DynaMéxico Final México Legal Ruling constitutes the Final Appeal of Goldgroup Resources Inc.; and is Not subject to further appeal or protest.

		The DynaMéxico Final Legal Ruling is the result and culmination of 7 years of legal action performed by DynaMéxico and is the Final Ruling of the 11^th Federal Circuit Collegiate Court. With this DynaMéxico Final Legal Ruling issued, all matters before the Court in México with respect to DynaMéxico and Goldgroup Resources Inc. in México are fully resolved and are no longer subject to appeal or reconsideration.

	·	Legal Summary - Consequence of the México Final Legal Ruling:

	·	DynaMéxico Recovery of 100% of Goldgroup Shares

		On February 20, 2020, a México City court issued its Final Judgment, effectively foreclosing on all shares of DynaMéxico formerly held by Goldgroup Resources Inc. and awarding those shares to DynaMéxico (the “DynaMéxico Foreclosure Judgment”).

		The DynaMéxico Foreclosure Judgment awarded to DynaMéxico 100% of the Shares of DynaMéxico previously owned by Goldgroup Resources Inc. (a Subsidiary Company in México owned 100% by Goldgroup Mining Inc., Vancouver, BC., “GGA.TO”). Prior to the DynaMéxico Foreclosure Judgment, Goldgroup Resources Inc. owned shares of DynaMéxico constituting 20% of the total outstanding shares of DynaMéxico (the “Goldgroup Shares of DynaMéxico”). The Goldgroup Shares of DynaMéxico were held under Lien by DynaMéxico since October 2016. DynaUSA previously owned 80% of the outstanding shares of DynaMéxico.

Confirmation of Arbitration Award in U.S. District Court – District of Colorado

On March 25, 2020 The U.S. District Court, District of Colorado affirmed the August 24, 2016 Arbitration Award in favor of Goldgroup Resources Inc.

DynaUSA and DynaMéxico filed Appeal of Arbitration Affirmation to U.S. District Court - 10^th Circuit Court of Appeals

	·	On July 17, 2020, DynaUSA and DynaMéxico filed an Appeal of the Affirmation of the Arbitration Award to the U.S. District Court – 10^th Circuit Court of Appeals.

	·	On July 17, 2020, DynaUSA and DynaMéxico posted supersedeas bond with the U.S. District Court, District of Colorado, in the amount of $1.111M USD.; and DynaUSA and DynaMéxico filed a motion for Stay of Judgment pending Appeal.

U.S. Court of Appeals - 10^th Circuit Court of Appeals Denial of DynaUSA and DynaMéxico Appeal

On April 16, 2021, the U.S. Court of Appeals for the 10^th Circuit Court issued a Ruling which denied the DynaUSA and DynaMéxico Appeal of the August 24, 2016 Arbitration Award in favor of Goldgroup Resources, Inc. In denying the Appeal of DynaUSA and DynaMéxico, the Arbitration Award in favor of Goldgroup was affirmed.

	·	On July 17, 2020, DynaUSA and DynaMéxico posted supersedeas bond with the U.S. District Court, District of Colorado, in the Amount of $1.111M USD, in order to fully bond the Monetary portion of the Arbitration Award.
	·	On August 24, 2020, DynaMéxico conducted an Extraordinary Shareholder’s Meeting of DynaMéxico, wherein all Non-Monetary portions of the Arbitration Award were fully performed and executed.

Full Performance of Arbitration Award by DynaUSA and DynaMéxico / Closure of the Arbitration Case by US. District Court

	·	On August 24, 2020, DynaMéxico conducted an Extraordinary Shareholder’s Meeting of DynaMéxico, wherein all Non-Monetary portions of the Arbitration Award were fully performed and executed.
	·	On May 20, 2021, DynaUSA and DynaMéxico agreed to release the $1.111 M USD supersedeas bond and paid an addition amount of $4,054.59 in interest calculated to June 2, 2021; in full performance and satisfaction of the monetary portion of the Arbitration Award.

	2021			2020
Annual volatility rate		167	%		156	%
Risk free rate		0.25	%		0.13	%
Remaining Term	1.00 years			1.50 years
Fair Value of common stock	$	0.90		$	0.78

Period Ended	2021		2020
Fair value of derivative (stock), beginning of period	$	601,313	$	37,038
Change in fair value of derivative		25,266		276,547
Fair value of derivative on the date of issuance		-		287,728
Fair value of derivative (stock), end of period	$	626,579	$	601,313

	2020
Beginning balance	$	(5,723,663	)
Operating income (loss)		(61,589	)
Share of Other Comprehensive Income (loss)		(11,669	)
Elimination of Non-Controlling Interest		5,796,921
Ending balance	$	-

	Level 1 Inputs –	Quoted prices 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 whose inputs are observable or whose significant value drivers are observable.
	Level 3 Inputs –	Instruments with primarily unobservable value drivers.