SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q/A
(Amendment No. 1)
(Mark One)
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2016
OR
[ ] TRANSITION REPORT UNDER SECTION 13 OF 15(d) OF THE EXCHANGE ACT OF 1934
From the transition period ___________ to ____________.
Commission File Number 000-30371
DYNARESOURCE, INC.
(Exact name of small business issuer as specified in its charter)
Delaware | 94-1589426 | |
(State or other jurisdiction of incorporation or organization) | (IRS Employer Identification No.) |
222 W Las Colinas Blvd., Suite 744 East Tower, Irving, Texas 75039
(Address of principal executive offices)
(972) 868-9066
(Issuer's telephone number)
N/A
(Former name, former address and former fiscal year, if changed since last report)
Indicate by check mark whether the registrant (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 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 [X] No [ ]
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act:
Large Accelerated Filer [ ] | Accelerated Filer [ ] | ||
Non-Accelerated Filer [ ] | Smaller Reporting Company [X] |
Indicate by a check mark whether the company is a shell company (as defined by Rule 12b-2 of the Exchange Act):
Yes [ ] No [X].
As of August 17, 2016, there were 16,722,825 shares of Common Stock of the issuer outstanding.
1 |
AMENDMENT NO. 1 TO THE QUARTERLY REPORT ON FORM 10-Q
FOR THE QUARTER ENDED JUNE 30, 2015
EXPLANATORY NOTE
The purpose of this Amendment No. 1 to our Quarterly Report on Form 10-Q for the period ended September 30, 2016 as filed with the Securities and Exchange Commission on November 17, 2016 is to furnish Exhibits 101 to the Form 10-Q.
No changes have been made to the Quarterly Report other than the furnishing of Exhibit 101.INS, 101.SCH, 101.CAL, 101.DEF, 101.LAB and 101.PRE described above. This Amendment No. 1 to Form 10-Q does not reflect subsequent events occurring after the original filing date of the Form 10-Q or modify or update in any way disclosures made in the Form 10-Q, as amended.
In addition, pursuant to Rule 12b-15 under the Securities Exchange Act of 1934, as a result of this Amended Report, the certifications pursuant to Section 302 and Section 906 of the Sarbanes-Oxley Act of 2002, filed and furnished, respectively as exhibits to the Original Report have been re-executed and re-filed as of the date of this Amended Report and are included as exhibits hereto.
2 |
ITEM 6. EXHIBITS
The following exhibits are included herein:
Exhibit Number | Name of Exhibit | |
31.1 | Certification of Chief Executive Officer, pursuant to Rule 13a-14(a) of the Exchange Act, as enacted by Section 302 of the Sarbanes-Oxley Act of 2002. | |
31.2 | Certification of Chief Financial Officer, pursuant to Rule 13a-14(a) of the Exchange Act, as enacted by Section 302 of the Sarbanes-Oxley Act of 2002. | |
32.1 | Certification of Chief Executive Officer and Chief Financial Officer, pursuant to 18 United States Code Section 1350, as enacted by Section 906 of the Sarbanes-Oxley Act of 2002. | |
101 | XBRL |
SIGNATURES
In accordance with the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.
DynaResource, Inc.
By /s/ K.W. (“K.D.”) Diepholz
K.W. (“K.D.”) Diepholz, Chairman / CEO
Date: November 23, 2016
3 |
Exhibit 31.1
CHIEF EXECUTIVE OFFICER CERTIFICATION
I, K.W. (“K.D.”) Diepholz, certify that:
1. | I have reviewed this report on Form 10-Q of DYNARESOURCE, INC.; |
2. | Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15 (f) for the registrant and have: |
a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared. |
b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; |
d. | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
a. | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
b. | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
Date: November 23, 2016
/s/ K.W. (“K.D.”) Diepholz
K.W. (“K.D.”) Diepholz Chairman and Chief Executive Officer
|
EXHIBIT 31.2
CHIEF FINANCIAL OFFICER CERTIFICATION
I, K.W. (“K.D.”) DIEPHOLZ, certify that:
4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15 (e) and 15d-15(e) and internal controls over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b) Designed such internal controls over financial reporting, or caused such internal controls over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusion about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation;
d) | Disclosed in this report any change to the registrant's internal controls over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal controls over financial reporting; and, |
a) | all significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and, |
b) | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls over financial reporting. |
Date: November 23, 2016
/s/ K.W. (“K.D.”) Diepholz
K.W. (“K.D.”) Diepholz
Chief Financial Officer
EXHIBIT 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Report of DynaResource, Inc. on Form 10-Q for the period ended September 30, 2016 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), the undersigned, in the capacities and on the dates indicated below, hereby certifies pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of his knowledge:
1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operation of the Company.
/s/ K.W. (“K.D.”) DIEPHOLZ K.W. (“K.D.”) Diepholz Chairman of the Board of Directors Dated: November 23, 2016 /s/ K.W. (“K.D.”) DIEPHOLZ K.W. (“K.D.”) Diepholz Chief Executive Officer Dated: November 23, 2016
/s/ K.W. (“K.D.”) Diepholz K.W. (‘KD”) Diepholz; /s/ K.W. (“KD”) Diepholz K.W. (“KD”) Diepholz Chief Financial Officer Dated: November 23, 2016
/s/ K.W. (“K.D.”) Diepholz K.W. (“KD”) Diepholz; /s/ K.W. (“KD”) Diepholz K.W. (“KD”) Diepholz Principal Accounting Officer Dated: November 23, 2016
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This certification accompanies the Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by the Sarbanes-Oxley Act of 2002, be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.
Document and Entity Information - shares |
9 Months Ended | |
---|---|---|
Sep. 30, 2016 |
Nov. 15, 2016 |
|
Document And Entity Information | ||
Entity Registrant Name | DYNARESOURCE INC | |
Entity Central Index Key | 0001111741 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2016 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Is Entity a Well-known Seasoned Issuer? | No | |
Is Entity a Voluntary Filer? | No | |
Is Entity's Reporting Status Current? | Yes | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 16,722,825 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2016 |
Balance Sheets (Parenthetical) - USD ($) |
Sep. 30, 2016 |
Dec. 31, 2015 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Accumulated Depreciation, Mining Equipment and Fixtures | $ 835,441 | $ 823,044 |
Preferred stock, par value | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 19,000,000 | 19,000,000 |
Preferred Stock, shares issued | 0 | 0 |
Preferred Stock, shares outstanding | 0 | 0 |
Series A, shares authorized | 1,000 | 1,000 |
Series A, shares issued | 1,000 | 1,000 |
Series A, shares outstanding | 1,000 | 1,000 |
Series C, shares authorized | 1,733,221 | 1,733,221 |
Series C, shares issued | 1,733,221 | 1,733,221 |
Series C, shares outstanding | 1,733,221 | 1,733,221 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 25,000,000 | 25,000,000 |
Common stock, shares issued | 16,722,825 | 16,722,825 |
Common stock, shares outstanding | 16,722,825 | 16,722,825 |
Statements of Operations - USD ($) |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2016 |
Sep. 30, 2015 |
Sep. 30, 2016 |
Sep. 30, 2015 |
|
Income Statement [Abstract] | ||||
REVENUES | $ 3,027,305 | $ 0 | $ 8,192,230 | $ 140,548 |
COSTS AND EXPENSES OF MINING OPERATIONS | ||||
Production Costs Applicable to Sales | 443,703 | 0 | 1,308,858 | 45,000 |
Mine Operating Costs | 747,403 | 0 | 2,030,093 | 78,452 |
Refining and Treatment Cost | 313,670 | 0 | 1,006,330 | 16,548 |
Pre-Pilot Production Costs | 0 | 662,420 | 0 | 1,462,981 |
Property Holding Costs | 110,978 | 178,564 | 244,062 | 414,881 |
General and Administrative | 653,429 | 565,420 | 1,666,029 | 1,286,064 |
Share Based Compensation | 0 | 791,400 | 0 | 1,277,535 |
Depreciation and Amortization | 29,495 | 35,443 | 77,626 | 53,253 |
Total Operating Expenses | 2,298,678 | 2,233,247 | 6,332,998 | 4,634,714 |
NET OPERATING INCOME (LOSS) | 728,627 | (2,233,247) | 1,859,232 | (4,494,166) |
OTHER EXPENSE | ||||
Foreign Currency Translation Gains (Losses) | (460,885) | (1,359,680) | (1,603,758) | (2,204,363) |
Interest Expense | (29,883) | (35,759) | (89,649) | (195,780) |
Inducement Costs | 0 | (293,822) | 0 | (293,822) |
Derivatives Adj. Mark-to-Market Gain (Loss) | (204,279) | 60,515 | 0 | 60,515 |
Other Income | 185 | 432 | 545 | 432 |
Total Other Income (Expense) | (694,862) | (1,628,314) | (1,692,862) | (2,633,018) |
NET INCOME (LOSS) BEFORE TAXES | 33,765 | (3,861,561) | 166,370 | (7,127,184) |
TAXES | 0 | 0 | 0 | 0 |
NET INCOME (LOSS) | 33,765 | (3,861,561) | 166,370 | (7,127,184) |
Cumulative Dividend for Series C Preferred | (40,000) | (43,687) | (120,000) | (43,687) |
Accretion Expense of Preferred Stock to Redemption Value | 0 | 0 | 0 | (4,637,178) |
ATTRIBUTABLE TO NON-CONTROLLING INTERESTS | 2,294 | 262,976 | 150,151 | 380,045 |
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON SHAREHOLDERS | $ (3,941) | $ (3,642,272) | $ 196,521 | $ (11,428,004) |
EARNINGS PER SHARE DATA ATTRIBUTABLE TO THE EQUITY HOLDERS OF DYNARESOURCE, INC. | ||||
Basic and Diluted Earnings (Loss) per Common Share | $ 0 | $ (.22) | $ 0.01 | $ (.73) |
Weighted Average Shares Outstanding, Basic and Diluted | 16,722,825 | 16,380,368 | 16,722,825 | 15,549,701 |
OTHER COMPREHENSIVE LOSS: | ||||
NET INCOME (LOSS) PER ABOVE | $ 33,765 | $ (3,861,561) | $ 166,370 | $ (7,127,184) |
Accretion Expense of Preferred Stock to Redemption Value | 0 | 0 | 0 | 4,637,178 |
Foreign Currency Translation Losses) | (1,083,766) | (1,435,514) | (1,813,703) | (2,506,860) |
TOTAL OTHER COMPREHENSIVE INCOME (LOSS) | (1,083,766) | (1,435,514) | (1,813,703) | (2,506,860) |
TOTAL COMPREHENSIVE INCOME (LOSS) | (1,050,001) | (5,297,075) | (1,647,333) | (14,271,222) |
ATTRIBUTABLE TO: | ||||
EQUITY HOLDERS OF DYNARESOURCE, INC. | 219,610 | (5,400,312) | (117,133) | (14,476,451) |
NON-CONTROLLING INTERESTS | (1,269,611) | (103,237) | (1,530,200) | (205,229) |
Total | $ (1,050,001) | $ (5,297,075) | $ (1,647,333) | $ (14,271,222) |
Shareholders Equity - 9 months ended Sep. 30, 2016 - USD ($) |
Preferred Series A |
Common Stock |
Preferred Rights |
Additional Paid-In Capital |
Treasury Stock |
Other Comprehensive Income |
Accumulated Deficit |
Total |
---|---|---|---|---|---|---|---|---|
Beginning Balance, Shares at Dec. 31, 2015 | 1,000 | 16,722,825 | 1,112,313 | |||||
Beginning Balance, Amount at Dec. 31, 2015 | $ 1 | $ 167,228 | $ 40,000 | $ 55,083,783 | $ (3,175,515) | $ 4,822,094 | $ (54,800,910) | $ 2,136,681 |
Other Comprehensive Income | 1,813,703 | 1,813,703 | ||||||
Net Income (Loss) | 316,521 | 166,370 | ||||||
Dividends | (160,000) | (160,000) | ||||||
Ending Balance, Shares at Sep. 30, 2016 | 1,000 | 16,722,825 | 1,112,313 | |||||
Ending Balance, Amount at Sep. 30, 2016 | $ 1 | $ 167,228 | $ 40,000 | $ 55,083,783 | $ (3,175,515) | $ 6,635,797 | $ (54,644,389) | $ 4,106,905 |
1. Nature of Operations and Basis of Presentation |
9 Months Ended |
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Sep. 30, 2016 | |
Accounting Policies [Abstract] | |
Nature of Operations and Basis of Presentation | DynaResource, Inc. (The “Company”, “DynaResource”, or “DynaUSA”) was organized September 28, 1937, as a California corporation under the name of West Coast Mines, Inc. In 1998, the Company re-domiciled to Delaware and changed its name to DynaResource, Inc. The Company is in the business of acquiring, investing in, and developing precious metal properties, and the production of precious metals. The interim consolidated financial statements included herein have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and note disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) has been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures included are adequate to make the information presented not misleading. In management’s opinion, the unaudited Consolidated Statements of Operations and Comprehensive Income for the nine months ended September 30, 2016 and 2015, the Consolidated Balance Sheets as at September 30, 2016 (unaudited) and December 31, 2015, the unaudited Consolidated Statement of Changes in Shareholders’ Equity for the nine months ended September 30, 2016, and the unaudited Consolidated Statements of Cash Flows for the nine months ended September 30, 2016 and 2015, contained herein, reflect all adjustments, consisting solely of normal recurring items, which are necessary for the fair presentation of the Company’s financial position, results of operations and cash flows on a basis consistent with that of the Company’s prior audited annual consolidated financial statements. However, the results of operations for the interim periods may not be indicative of results to be expected for the full fiscal year. Therefore, these financial statements should be read in conjunction with the audited financial statements and notes thereto and summary of significant accounting policies included in the Company’s Form 10-K for the year ended December 31, 2015. Certain prior-period amounts have been reclassified to conform to the current period presentation. Except as noted below, there have been no material changes in the footnotes from those accompanying the audited consolidated financial statements contained in the Company’s Form 10-K for the year ended December 31, 2015. The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All inter-company accounts and transactions have been eliminated. |
2. Inventory |
9 Months Ended |
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Sep. 30, 2016 | |
Inventory | |
Inventory | DynaResource Nevada, Inc., a Nevada Corporation (“DynaNevada”), with one operating subsidiary in México, DynaNevada de México, S.A. de C.V. (“DynaNevada de México”) have common officers, directors and shareholders. The total amount loaned by the Company to DynaNevada at December 31, 2010 was $805,760. The terms of the Note Receivable provided for a “Convertible Loan,” repayable at 5% interest over a 3-year period, and convertible at the Company’s option into Common Stock of DynaNevada at $0.25 / Share. On December 31, 2010, the Company converted its receivable from DynaNevada into 3,223,040 Shares of DynaNevada; and as a result, the Company owns 19.92% of the outstanding share capital of DynaNevada. DynaNevada is a related entity, and through its subsidiary in México (DynaNevada de México), (“DynaNevada de México”), entered into an Option agreement with Grupo México (“IMMSA”) in México, for the exploration and development of approximately 3,000 hectares in the State of San Luis Potosi (“the Santa Gertrudis Property”). In March, 2010, DynaNevada de México completed the Option with IMMSA so that it now owns 100% of Santa Gertrudis. In June, 2010, DynaNevada de México acquired an additional 6,000 Hectares in the State of Sinaloa (“the San Juan Property”). The Company has loaned additional funds to DynaNevada since 2010 for maintenance of concessions and other nominal required fees and expenses. The Company currently has a receivable from DynaResource Nevada, Inc. of $141,686 and an investment balance of $70,000 as of September 30, 2016. The balances as of December 31, 2015 were $159,143 in receivables and $70,000 in investment, respectively. |
5. Stockholders' Equity |
9 Months Ended |
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Sep. 30, 2016 | |
Equity [Abstract] | |
Commitments and Contingencies | The Company is required to pay taxes in México in order to maintain mining concessions owned by DynaMéxico. Additionally, the Company is required to incur a minimum amount of expenditures each year for all concessions held. The minimum expenditures are calculated based upon the land area, as well as the age of the concessions. Amounts spent in excess of the minimum may be carried forward indefinitely over the life of the concessions, and are adjusted annually for inflation. Based on Management’s business plans, the Company does not anticipate that DynaMéxico will have any issues in meeting the minimum annual expenditures for the concessions, and DynaMéxico retains sufficient carry-forward amounts to cover over 20 years of the minimum expenditure (as calculated at the 2012 minimum, adjusted for annual inflation of 4%). 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 the 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 2033. It covers an area of 4,399 hectares surrounding the main mineral resource areas of SJG, and provides for annual lease payments by DynaMineras of $1,359,443 Pesos (approx. $104,250 USD), commencing in 2014. 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 from the owners of the surface rights (Santa Maria Ejido community). In September 2008, the Company entered into a 37-month lease agreement for its corporate office. In August, 2011, 2012, 2013, 2014, and 2015 the Company entered into a one-year extension of the lease through August 31, 2016. The Company paid rent expense of $51,663 and $45,496 related to this lease for the nine months ended September 30, 2016 and 2015, respectively. Other Contingencies The Company's mining and exploration activities are subject to various laws and regulations governing the protection of the environment. These laws and regulations are continually changing and generally becoming more restrictive. The Company conducts its operations so as to protect public health and the environment, and believes its operations are materially in compliance with all applicable laws and regulations. The Company has made, and expects to make in the future, expenditures to comply with such laws and regulations. Damages Awarded to DynaMéxico in México Litigation On October 5, 2015, DynaResource de México SA de C.V. (“DynaMéxico”), was awarded in excess of $48 M USD (Forty-Eight Million Dollars) in damages from Goldgroup Resources, Inc. (the “Goldgroup Damages”) by virtue of a Sentencia Definitiva (the “Definitive Sentence”) issued by the Thirty Sixth Civil Court of the Superior Court of Justice of the Federal District of México (Tribunal Superior de Justicia del Distrito Federal), File number 1120/2014. The Definitive Sentence included the considerations and resolutions by the Court, and additional Resolutions were also ordered in favor of DynaMéxico (together the Goldgroup Damages and the additional Resolutions are referred to as, the “Oct. 5, 2015 Resolution”). The October 5, 2015 Resolution is described below; See Litigation below, and see Part II, Item 1., Legal Proceedings. Litigation The Company believes that no material adverse change will occur as a result of the actions taken, and the Company further believes that there is little to no potential for the assessment of a material monetary judgment against the Company for legal actions it has filed in México. (See Part II, Item 1. Legal Proceedings.) |
6. Related Party Transactions |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Related Party Transactions [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Non-Controlling Interest | The Company’s Non-Controlling Interest recorded in the consolidated financial statements relates to an interest in DynaResource de México, S.A. de C.V. of 20%. Changes in Non-Controlling Interest for the nine months ended September 30, 2016 and 2015, respectively were as follows:
The Company began allocating a portion of other comprehensive income (loss) to the non-controlling interest with the adoption of ASC 160 as of January 1, 2009. However, this amount is only reflected in the income statement. |
7. Commitments and Contingencies |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stockholders' Equity | Stock Issuances During the nine months ended September 30, 2016 the Company paid Dividends of $160,000 to the holder of Series C Convertible Preferred Stock. The Dividend is calculated at 4.0% of $4,000,000 payable annually on June 30. During the nine months ended September 30, 2016, no common shares or other equity instruments were issued. Options / Warrants During the year ended December 31, 2015 and the quarter ending September 30, 2016, no warrants were issued or exercised.
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8. Non-Controlling Interest |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Noncontrolling Interest [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Non-Controlling Interest | The Company’s Non-Controlling Interest recorded in the consolidated financial statements relates to an interest in DynaResource de México, S.A. de C.V. of 20%. Changes in Non-Controlling Interest for the nine months ended September 30, 2016 and 2015, respectively were as follows:
The Company began allocating a portion of other comprehensive income (loss) to the non-controlling interest with the adoption of ASC 160 as of January 1, 2009. However, this amount is only reflected in the income statement. |
9. Subsequent Events |
9 Months Ended |
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Sep. 30, 2016 | |
Subsequent Events [Abstract] | |
Subsequent Events | Revenues from Previous Delivery and Sale of Gold Concentrates (Third Quarter 2016) In October 2016, the Company, through its wholly owned subsidiary DynaMineras, reported the receipt of a total of $518,609 as payment for the sale of gold concentrates produced in September and delivered for sale on September 30, 2016. This amount was recorded as accounts receivable at September 30, 2016. Gold Concentrate Deliveries for Sale (2016) On October 12-13, DynaMineras reported the delivery for sale of 500 gross oz. gold concentrates (exact weights in gold and silver concentrates to be determined at final settlement). On October 30-31, DynaMineras reported the delivery for sale of 550 gross oz. gold concentrates (exact weights in gold and silver concentrates to be determined at final settlement). |
10. Fair Value of Financial Instruments |
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Fair Value of Financial Instruments |
The ASC guidance for fair value measurements and disclosure establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are described below: Level 1 Inputs – 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. As of September 30, 2016, and December 31, 2015, the Company’s financial assets were measured at fair value using Level 3 inputs, with the exception of cash, which was valued using Level 1 inputs. A description of the valuation of the Level 3 inputs is discussed in Note 11. Fair Value Measurement at September 30, 2016 Using:
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11. Derivative Liabilities |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Liabilities | Preferred Series C Stock The Company analyzed the embedded conversion features of the Series C Preferred Stock and determined that the stock qualified as a derivative liability and is required to be bifurcated and accounted for as such since the host and the embedded instrument are not clearly and closely related. The Company performed a valuation of the conversion feature. In performing the valuation, the Company applied the guidance in ASC 820, “Fair Value Measurements”, to nonfinancial assets and liabilities that are recognized or disclosed at fair value on a nonrecurring basis. ASC 820 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 incorporates assumptions that market participants would use in pricing the asset or liability, and utilizes market data to the maximum extent possible. In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability. The Company considered the inputs in this valuation to be level 3 in the fair value hierarchy under ASC 820 and used an equity simulation model to determine the value of conversion feature of the Series C Preferred Stock based on the assumptions below:
For the period ended September 30, 2016, 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. It was determined that the estimated valuation of the stock price at June 30, 2016 of $1.50 changed to $1.64 as of September 30, 2016. The adjustment for the three-month period ending September 30, 2016 was $(204,279). The net change for the nine-period ending September 30, 2016 was $0. The below table represents the change in the fair value of the derivative liability during the nine months ended September 30, 2016 and year ended December 31, 2015:
Preferred Series C Warrants The Company analyzed the embedded conversion features of the Series C Preferred Stock and determined that the Warrants qualified as a derivative liability and is required to be bifurcated and accounted for as such since the host and the embedded instrument are not clearly and closely related. The Company performed a valuation of the conversion feature. In performing the valuation, the Company applied the guidance in ASC 820, “Fair Value Measurements”, to nonfinancial assets and liabilities that are recognized or disclosed at fair value on a nonrecurring basis. ASC 820 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 incorporates assumptions that market participants would use in pricing the asset or liability, and utilizes market data to the maximum extent possible. In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability. The Company considered the inputs in this valuation to be level 3 in the fair value hierarchy under ASC 820 and used an equity simulation model to determine the value of conversion feature of the Warrants based on the assumptions below:
For the year ended December 31, 2015, an active market for the Company’s common stock did not exist. Accordingly, the fair value of the Company’s common stock was estimated using a valuation model with level 3 inputs. The below table represents the change in the fair value of the derivative liability during the nine months ended September 30, 2016 and the year ended December 31, 2015:
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12. Foreign Currency Translation |
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Sep. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Foreign Currency Translation [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Foreign Currency Translation | The functional currency for the subsidiaries of the Company is the Mexican Peso. As a result, the financial statements of the subsidiaries have been re-measured from Mexican Pesos into U.S. dollars using (i) current exchange rates for monetary asset and liability accounts, (ii) historical exchange rates for nonmonetary asset and liability accounts, (iii) historical exchange rates for revenues and expenses associated with nonmonetary assets and liabilities and (iv) the weighted average exchange rate of the reporting period for all other revenues and expenses. In addition, foreign currency translation gains and losses are reported as a separate component of stockholders’ equity (comprehensive income (loss). The financial statements of the subsidiaries should not be construed as representations that Mexican Pesos have been, could have been or may in the future be converted into U.S. dollars at such rates or any other rates. Relevant exchange rates used in the preparation of the financial statements for the subsidiaries are as follows for the periods ended September 30, 2016 and September 30, 2015 (Mexican Pesos per one U.S. dollar):
The Company recorded currency transaction losses of $(460,885) for the three-month period ended September 30, 2016 and $(1,359,680) September 30, 2015. The Company recorded currency transaction losses of $(1,603,758) for the nine-month period ended September 30, 2016 and $(2,204,363) September 30, 2015. |
2. Inventory (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory Tables | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of inventory |
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5. Stockholders' Equity (Tables) |
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Summary of Warrants |
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8. Non-Controlling Interest (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Non-controlling Interest Tables | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Changes in Non-controlling Interest |
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10. Fair Value of Financial Instruments (Tables) |
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Fair Value of Financial Instruments |
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11. Derivative Liabilities (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Valuation assumption |
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Change in the fair value of the derivative liability |
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12. Foreign Currency Translation (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Foreign Currency Translation Tables | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Foreign Currency Translation |
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2. Inventory (Details) - USD ($) |
Sep. 30, 2016 |
Dec. 31, 2015 |
---|---|---|
Inventory Details | ||
Mined Tonnage (Stock Piled, Non-Crushed) | $ 490,450 | $ 0 |
Gravity Tailings (Flotation Feed Material) | 67,000 | 98,056 |
Total Inventories | $ 557,450 | $ 98,056 |
3. Investment in Affiliate / Receivables from Affilate/Other Assets (Details Narrative) - USD ($) |
Sep. 30, 2016 |
Dec. 31, 2015 |
---|---|---|
Investment In Affiliate Receivables From Affilateother Assets Details Narrative | ||
Receivables from Affiliate | $ 141,686 | $ 159,143 |
Investments in Affiliate | $ 70,000 | $ 70,000 |
5. Stockholders' Equity (Details) - Warrant - $ / shares |
9 Months Ended | 12 Months Ended |
---|---|---|
Sep. 30, 2016 |
Dec. 31, 2015 |
|
Number of options | ||
Outstanding, beginning of year | 4,161,189 | 1,259,650 |
Granted | 0 | 3,892,689 |
Exercised | 0 | 0 |
Forfeited | (18,000) | (991,150) |
Outstanding, end of year | 4,143,189 | 4,161,189 |
Weighted average exercise price | ||
Warrants Outstanding, Beginning | $ 5.80 | $ 5.80 |
Warrants Granted | 0 | 6.25 |
Warrants Exercised | 0 | 0.00 |
Warrants forfeited | 5.00 | 4.69 |
Warrants Outstanding, Ending | 5.80 | $ 5.80 |
Warrants Exercisable, Ending | $ 5.80 | |
Weighted Average Remaining Contractual Life (Years) | 5 months 16 days | 11 months 16 days |
Exercisable: Weighted Average Remaining Contractual Life (Years) | 5 months 16 days |
7. Commitments and Contingencies (Details Narrative) - USD ($) |
9 Months Ended | |
---|---|---|
Sep. 30, 2016 |
Sep. 30, 2015 |
|
Commitments And Contingencies Details Narrative | ||
Rent expense | $ 51,663 | $ 45,496 |
8. Non-Controlling Interest (Details) - USD ($) |
9 Months Ended | |
---|---|---|
Sep. 30, 2016 |
Sep. 30, 2015 |
|
Non-controlling Interest Details | ||
Noncontrolling interest | $ (6,461,950) | $ (6,181,229) |
Operating income (loss) | (150,151) | (380,045) |
Share of Other Comprehensive Income (loss) | (117,133) | (205,229) |
Ending balance | $ (6,729,234) | $ (6,766,503) |
10. Fair Value of Financial Instruments (Details) - USD ($) |
Sep. 30, 2016 |
Dec. 31, 2015 |
---|---|---|
Assets: | ||
Total Asset | $ 0 | $ 0 |
Liabilities | ||
Derivative Liabilities | 5,382,737 | 5,382,737 |
Total | 5,382,737 | 5,382,737 |
Level 1 | ||
Assets: | ||
Total Asset | 0 | 0 |
Liabilities | ||
Derivative Liabilities | 0 | 0 |
Total | 0 | 0 |
Level 2 | ||
Assets: | ||
Total Asset | 0 | 0 |
Liabilities | ||
Derivative Liabilities | 0 | 0 |
Total | 0 | 0 |
Level 3 | ||
Assets: | ||
Total Asset | 0 | 0 |
Liabilities | ||
Derivative Liabilities | 5,382,737 | 5,382,737 |
Total | $ 5,382,737 | $ 5,382,737 |
11. Derivative Liabilities (Details) - Preferred Series C Stock |
9 Months Ended |
---|---|
Sep. 30, 2016
$ / shares
| |
Annual volatility rate | 134.00% |
Risk free rate | 1.76% |
Holding Period | 5 years |
Fair Value of common stock | $ 1.64 |
11. Derivative Liabilities (Details 1) - Preferred Series C Stock - USD ($) |
9 Months Ended | 12 Months Ended |
---|---|---|
Sep. 30, 2016 |
Dec. 31, 2015 |
|
Fair value of derivative, beginning of year | $ 2,419,359 | $ 0 |
Gain on change in fair value of derivative | 0 | 0 |
Fair value of derivative on the date of issuance | 0 | 2,419,359 |
Fair value of derivative, September 30, 2016 | $ 2,419,359 | $ 2,419,359 |
11. Derivative Liabilities (Details 2) - Warrant |
9 Months Ended |
---|---|
Sep. 30, 2016
$ / shares
| |
Annual volatility rate | 134.00% |
Risk free rate | 1.76% |
Holding Period | 5 years |
Fair Value of common stock | $ 1.64 |
11. Derivative Liabilities (Details 3) - Warrant - USD ($) |
9 Months Ended | 12 Months Ended |
---|---|---|
Sep. 30, 2016 |
Dec. 31, 2015 |
|
Fair value of derivative, beginning of year | $ 2,963,378 | $ 0 |
Gain on change in fair value of derivative | 0 | 2,963,378 |
Fair value of derivative on the date of issuance | 0 | 2,963,378 |
Fair value of derivative, September 30, 2016 | $ 2,963,378 | $ 2,963,378 |
12. Foreign Currency Translation (Details) |
Sep. 30, 2016 |
Sep. 30, 2015 |
---|---|---|
Foreign Currency Translation Details | ||
Current exchange rate | 19.47 | 16.93 |
Weighted average exchange rate for the period ended | 18.30 | 15.59 |
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