DYNARESOURCE, INC. Annual Report - How They Did This Year

I’ve put together this guide to help you understand how DynaResource, Inc. performed. My goal is to turn complex filing information into clear details to help you decide if this company fits your investment goals.

1. What does this company do?

DynaResource mines gold and silver in Sinaloa, Mexico, at the San José de Gracia (SJG) mine. They do not sell finished gold bars. Instead, they produce a sand-like "gold-silver concentrate" that a third party must process. The company operates through its subsidiary, DynaResource de México, and holds a joint venture interest in the SJG project. This project spans 34 mining concessions covering about 69,000 hectares.

2. A Big Milestone: Moving to "Production Stage"

The company transitioned from an "Exploration Stage" to a "Production Stage" in 2025. Commercial operations at the SJG mine have officially begun.

What this means for you: This is a major shift. It signals that the mine is now ready for commercial-scale work. However, this changes how they handle their books. They are now spreading out development costs and recording depreciation—the wear and tear of their equipment—as an expense. Expect to see higher costs on their financial statements, which will directly lower their profit margins.

3. Financial Health: The "Going Concern" Warning

This is the most critical update for investors. The company’s auditors included a "going concern" warning in their report. They cited the company's inability to generate enough cash from operations to cover its bills.

What this means: The auditors are saying there is "substantial doubt" about whether the company can stay in business over the next 12 months.

• The Numbers: As of December 31, 2025, they had about $4.2 million in cash but an accumulated deficit of $65.4 million. Their current debts exceed their current assets, leaving them with a cash shortfall.
• Debt Load: They carry roughly $15 million in debt. Much of this is held by related parties or private lenders with high-interest costs. If they cannot generate enough cash to pay this back, they may have to sell assets, issue more shares (reducing your ownership percentage), or face bankruptcy.

4. Real-World Risks

Beyond standard mining risks, the company faces several specific threats:

• Legal & Regulatory: They operate in regions where corruption can be an issue. Violating anti-bribery laws could lead to massive fines or the loss of their mining licenses. Ongoing legal disputes over land rights could also stop operations entirely.
• Stock Volatility: The company warns that their stock is prone to extreme price swings unrelated to mine performance. Low trading volume makes it difficult to buy or sell shares, which adds significant risk.
• Dilution: The company can issue millions of new shares without asking you first. This would likely lower the value of your current shares.
• Operational Hurdles: They lack insurance for property loss, cyberattacks, or water shortages. They also rely on a single customer for all their revenue. If that customer stops buying, DynaResource would have no way to sell its product.

The Bottom Line

DynaResource is trying to turn a project into a business, but they are in a precarious position. The "going concern" warning is a major red flag. Between legal issues, operational risks, and market volatility, this is a highly speculative investment. You should be prepared for the possibility of losing your entire investment.

Before you decide: If you are considering an investment, look closely at their next quarterly update to see if they have secured new financing or increased their cash flow from the mine. Without a clear path to profitability, the risks currently outweigh the potential rewards for most investors.