Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2020 | Nov. 15, 2020 | |
Cover [Abstract] | ||
Entity Registrant Name | DYNARESOURCE INC | |
Entity Central Index Key | 0001111741 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2020 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Is Entity's Reporting Status Current? | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Emerging Growth Company | false | |
Entity Small Business | true | |
Entity Shell Company | false | |
Entity Interactive Data Current | Yes | |
Entity Incorporation, State or Country Code | DE | |
Entity File Number | 000-30371 | |
Entity Common Stock, Shares Outstanding | 17,722,825 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2020 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 |
Current Assets: | ||
Cash and Cash Equivalents | $ 1,271,032 | $ 354,572 |
Accounts Receivable | 983,193 | 1,103,205 |
Inventories | 76,332 | 523,089 |
Foreign Tax Receivable | 1,539,095 | 1,297,387 |
Appeal Bond | 1,111,111 | 0 |
Other Current Assets | 573,352 | 336,969 |
Total Current Assets | 5,554,115 | 3,615,222 |
Mining Equipment and Fixtures (Net of Accumulated Depreciation of $112,364 and $109,927) | 6,790 | 9,227 |
Operating Lease | 755,341 | 812,861 |
Mining Concessions | 4,132,678 | 4,132,678 |
Investment in Affiliate | 70,000 | 70,000 |
Other Assets | 87,529 | 99,223 |
TOTAL ASSETS | 10,606,453 | 8,739,211 |
Current Liabilities: | ||
Accounts Payable | 1,642,880 | 2,059,429 |
Accrued Expenses | 2,634,480 | 1,775,404 |
Customer Advances | 1,000,000 | 1,000,000 |
Due to Non-controlling Interest | 0 | 231,500 |
Derivative Liabilities | 3,741,363 | 86,104 |
Current Portion of Convertible Notes Payable | 0 | 112,500 |
Current Portion of Operating Lease Payable | 80,140 | 69,146 |
Current Portion of Long-Term Debt | 1,769,546 | 1,637,509 |
Total Current Liabilities | 10,868,409 | 6,971,592 |
Convertible Notes Payable - Series D (Net of Amortized Discount of $892,525 and $0) | 3,127,475 | 0 |
Convertible Notes Payable - Series I & II, Less Current Portion | 789,813 | 765,879 |
Operating Lease Payable, Less Current Portion | 704,607 | 768,684 |
Long Term Debt, Less Current Portion | 131,150 | 634,922 |
TOTAL LIABILITIES | 15,621,454 | 9,141,077 |
Preferred Stock, Series C, $0.0001 par value, 1,734,992 and 1,733,221 shares authorized, issued and outstanding | 4,337,480 | 4,333,053 |
COMMITMENTS AND CONTINGENCIES | ||
STOCKHOLDERS' EQUITY (DEFICIT) | ||
Common Stock, $0.01 par value, 40,000,000 and 25,000,000 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 | 50,692,821 | 56,622,159 |
Treasury Stock, 616,480 and 778,980 shares | (1,759,974) | (2,223,891) |
Accumulated Other Comprehensive Income | 2,052,086 | 325,841 |
Accumulated Deficit | (60,554,643) | (53,952,594) |
Total DynaResource, Inc. Stockholders' Equity (Deficit) | (9,352,481) | 988,744 |
Non-Controlling Interest | 0 | (5,723,663) |
TOTAL STOCKHOLDERS' DEFICIT | (9,352,481) | (4,734,919) |
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT | 10,606,453 | 8,739,211 |
Preferred Stock Series A | ||
STOCKHOLDERS' EQUITY (DEFICIT) | ||
Preferred Stock | 1 | 1 |
Preferred Stock Series D | ||
STOCKHOLDERS' EQUITY (DEFICIT) | ||
Preferred Stock | $ 0 | $ 0 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 |
Accumulated Depreciation, Mining Equipment and Fixtures | $ 112,364 | $ 109,927 |
Amortized Discount | $ 892,525 | $ 0 |
Series C, Par Value | $ 0.0001 | $ 0.0001 |
Series C, Shares Authorized | 1,734,992 | 1,733,221 |
Series C, Shares Issued | 1,734,992 | 1,733,221 |
Series C, Shares Outstanding | 1,734,992 | 1,733,221 |
Common Stock, Par Value | $ 0.0001 | $ 0.0001 |
Common Stock, Shares Authorized | 40,000,000 | 25,000,000 |
Common Stock, Shares Issued | 17,722,825 | 17,722,825 |
Common Stock, Shares Outstanding | 17,722,825 | 17,722,825 |
Treasury Stock | 616,480 | 778,980 |
Preferred Stock Series A | ||
Preferred Stock, Par Value | $ 0.0001 | $ 0.0001 |
Preferred Stock, Shares Authorized | 1,000 | 1,000 |
Preferred Stock, Shares Issued | 1,000 | 1,000 |
Preferred Stock, Shares Outstanding | 1,000 | 1,000 |
Preferred Stock Series D | ||
Preferred Stock, Par Value | $ 0.0001 | $ 0.0001 |
Preferred Stock, Shares Authorized | 3,000,000 | 3,000,000 |
Preferred Stock, Shares Issued | 0 | 0 |
Preferred Stock, Shares Outstanding | 0 | 0 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME (LOSS) AND COMPREHENSIVE INCOME (LOSS) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Income Statement [Abstract] | ||||
REVENUES | $ 4,830,461 | $ 3,417,521 | $ 5,245,096 | $ 9,160,057 |
COSTS AND EXPENSES OF MINING OPERATIONS | ||||
Production Costs Applicable to Sales | 471,025 | 472,053 | 682,600 | 1,328,507 |
Mine Production Costs | 854,297 | 1,306,831 | 1,388,198 | 3,156,476 |
Mine Exploration Costs | 676,511 | 193,397 | 717,336 | 1,710,612 |
Mine Expansion Costs | 0 | 166,820 | 909,190 | 765,024 |
Camp, Warehouse and Facilities | 542,630 | 647,146 | 1,415,954 | 1,968,587 |
Transportation | 201,281 | 196,533 | 277,015 | 634,688 |
Property Holding Costs | 33,394 | 292,956 | 101,523 | 399,185 |
General and Administrative | 557,069 | 546,919 | 2,074,640 | 1,590,196 |
Depreciation and Amortization | 812 | 812 | 2,437 | 2,442 |
Total Operating Expenses | 3,337,019 | 3,823,467 | 7,568,893 | 11,555,717 |
NET OPERATING INCOME (LOSS) | 1,493,442 | (405,946) | (2,323,797) | (2,395,660) |
OTHER INCOME (EXPENSE) | ||||
Foreign Currency Gains (Losses) | (685,509) | (401,826) | (1,025,194) | (108,126) |
Interest Expense | (349,008) | (208,721) | (753,453) | (462,133) |
Derivatives Adj. Mark-to-Market Gain (Loss) | (1,867,492) | 185,029 | (2,556,767) | 831,114 |
Other Income (Expense) | 0 | 163 | (4,427) | 770 |
Total Other Income (Expense) | (2,902,009) | (425,355) | (4,339,841) | 261,625 |
LOSS BEFORE TAXES | (1,408,567) | (831,301) | (6,663,638) | (2,134,035) |
TAXES | 0 | 0 | 0 | 0 |
NET LOSS | (1,408,567) | (831,301) | (6,663,638) | (2,134,035) |
Cumulative Dividend for Series C Preferred | (43,330) | (43,330) | (129,990) | (129,990) |
ATTRIBUTABLE TO NON-CONTROLLING INTERESTS | 0 | 133,974 | 61,589 | 164,824 |
ATTRIBUTABLE TO COMMON SHAREHOLDERS | $ (1,451,897) | $ (740,657) | $ (6,732,039) | $ (2,099,201) |
EARNINGS PER SHARE DATA ATTRIBUTABLE TO THE EQUITY HOLDERS OF DYNARESOURCE, INC.: | ||||
Basic Loss Per Common Share | $ (.08) | $ (.04) | $ (.38) | $ (.12) |
Diluted Loss Per Common Share | $ (.08) | $ (.04) | $ (.38) | $ (.12) |
Weighted Average Shares Outstanding - Basic | 17,722,825 | 17,722,825 | 17,722,825 | 17,722,825 |
Weighted Average Shares Outstanding - Diluted | 17,722,825 | 17,722,825 | 17,722,825 | 17,722,825 |
OTHER COMPREHENSIVE LOSS | ||||
NET LOSS PER ABOVE | $ (1,408,567) | $ (831,301) | $ (6,663,638) | $ (2,134,035) |
Foreign Currency Exchange Gains (Losses) | 569,589 | 405,791 | 1,714,576 | 105,526 |
TOTAL OTHER COMPREHENSIVE INCOME (LOSS) | 569,589 | 405,791 | 1,714,576 | 105,526 |
TOTAL COMPREHENSIVE INCOME (LOSS) | (838,978) | (425,510) | (4,949,062) | (2,028,509) |
ATTRIBUTABLE TO: | ||||
EQUITY HOLDERS OF DYNARESOURCE, INC. | (838,978) | (421,823) | (4,975,804) | (1,953,746) |
NON-CONTROLLING INTEREST | 0 | (3,687) | (73,258) | (74,763) |
TOTAL COMPREHENSIVE INCOME (LOSS) | $ (838,978) | $ (425,510) | $ (4,949,062) | $ (2,028,509) |
CONSOLIDATED STATEMENT OF CHANG
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY - USD ($) | Preferred Stock Series A | Common Stock | Preferred Rights | Paid In Capital | Treasury Stock | Other Comprehensive Income / Loss | Accumulated Deficit | Non Controlling Interests | Total |
Beginning Balance, Shares at Dec. 31, 2018 | 0 | 17,722,825 | 40,000 | 778,980 | |||||
Beginning Balance, Amount at Dec. 31, 2018 | $ 1 | $ 177,228 | $ 40,000 | $ 56,622,159 | $ (2,223,891) | $ 1,247,198 | $ (53,154,259) | $ (5,611,528) | $ (2,903,092) |
Other Comprehensive Income (Loss) | 15,465 | 90,061 | 105,526 | ||||||
Net Income (Loss) | (1,969,211) | (164,825) | (2,134,035) | ||||||
Ending Balance, Shares at Sep. 30, 2019 | 0 | 17,722,825 | 40,000 | 778,980 | |||||
Ending Balance, Amount at Sep. 30, 2019 | $ 1 | $ 177,228 | $ 40,000 | 56,622,159 | $ (2,223,891) | 1,262,663 | (55,123,470) | (5,686,291) | (4,931,601) |
Beginning Balance, Shares at Jun. 30, 2019 | 0 | 17,722,825 | 40,000 | 778,980 | |||||
Beginning Balance, Amount at Jun. 30, 2019 | $ 1 | $ 177,228 | $ 40,000 | 56,622,159 | $ (2,223,891) | 987,159 | (54,426,143) | (5,682,604) | (4,506,091) |
Other Comprehensive Income (Loss) | 275,504 | 130,287 | 405,791 | ||||||
Net Income (Loss) | (697,327) | (133,974) | (831,301) | ||||||
Ending Balance, Shares at Sep. 30, 2019 | 0 | 17,722,825 | 40,000 | 778,980 | |||||
Ending Balance, Amount at Sep. 30, 2019 | $ 1 | $ 177,228 | $ 40,000 | 56,622,159 | $ (2,223,891) | 1,262,663 | (55,123,470) | (5,686,291) | (4,931,601) |
Beginning Balance, Shares at Dec. 31, 2019 | 0 | 17,722,825 | 40,000 | 778,980 | |||||
Beginning Balance, Amount at Dec. 31, 2019 | $ 1 | $ 177,228 | $ 40,000 | 56,622,159 | $ (2,223,891) | 325,841 | (53,952,594) | (5,723,663) | (4,734,919) |
Treasury Stock Issued For Services, Shares | (162,500) | ||||||||
Treasury Stock Issued For Services, Amount | (363,917) | $ 463,917 | 100,000 | ||||||
Other Comprehensive Income (Loss) | 1,726,245 | (11,669) | 1,714,576 | ||||||
Net Income (Loss) | (6,602,049) | (61,589) | (6,663,638) | ||||||
Ending Balance, Shares at Sep. 30, 2020 | 0 | 17,722,825 | 40,000 | 453,980 | |||||
Ending Balance, Amount at Sep. 30, 2020 | $ 1 | $ 177,228 | $ 40,000 | 50,328,904 | $ (1,296,057) | 2,052,086 | (60,554,643) | 0 | (9,352,481) |
Beginning Balance, Shares at Jun. 30, 2020 | 0 | 17,722,825 | 40,000 | 616,480 | |||||
Beginning Balance, Amount at Jun. 30, 2020 | $ 1 | $ 177,228 | $ 40,000 | 50,692,821 | $ (1,759,974) | 1,482,497 | (59,146,076) | 0 | (8,513,503) |
Treasury Stock Issued For Services, Shares | (162,500) | ||||||||
Treasury Stock Issued For Services, Amount | (363,917) | $ 463,917 | 100,000 | ||||||
Other Comprehensive Income (Loss) | 569,589 | 569,589 | |||||||
Net Income (Loss) | (1,408,567) | (1,408,567) | |||||||
Ending Balance, Shares at Sep. 30, 2020 | 0 | 17,722,825 | 40,000 | 453,980 | |||||
Ending Balance, Amount at Sep. 30, 2020 | $ 1 | $ 177,228 | $ 40,000 | $ 50,328,904 | $ (1,296,057) | $ 2,052,086 | $ (60,554,643) | $ 0 | $ (9,352,481) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net Loss | $ (6,663,638) | $ (2,134,035) |
Adjustments to reconcile net loss to cash used in operating activities | ||
Derivatives Adjustment (Gain) Loss | 2,556,767 | (831,114) |
Depreciation and Amortization | 2,437 | 2,442 |
Amortization of Loan Discount | 205,967 | 0 |
Stock Issued for Services | 100,000 | 0 |
Non-Dilution Stock Issuance | 4,427 | 0 |
Change in Operating Assets and Liabilities | ||
Accounts Receivable | 120,012 | 688,892 |
Inventories | 446,757 | 244,308 |
Foreign Tax Receivable | (241,708) | (361,125) |
Operating Lease Assets | 57,520 | (831,070) |
Other Assets | (224,689) | (179,868) |
Appeal Bond | (1,111,111) | 0 |
Accounts Payable | (416,549) | 1,296,452 |
Accrued Expenses | 883,010 | 332,893 |
Customer Advances | 0 | (250,000) |
Lease Liabilities | (53,083) | 851,604 |
CASH FLOWS USED IN OPERATING ACTIVITIES | (4,333,881) | (1,170,621) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchase of Property and Equipment | 0 | 0 |
CASH FLOWS PROVIDED BY INVESTING ACTIVITIES | 0 | 0 |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Proceeds from Borrowing | 4,020,000 | 0 |
Payments on Convertible Notes | (112,500) | 0 |
Payments of Long-Term Debt | (40,085) | (132,658) |
CASH FLOWS PROVIDED BY (USED IN) FINANCING ACTIVITIES | 3,867,415 | (132,658) |
Effect of Foreign Exchange | 1,382,926 | 95,977 |
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVILANTS | 916,460 | (1,207,302) |
CASH AND CASH EQUIVILANTS AT BEGINNING OF PERIOD | 354,572 | 2,685,576 |
CASH AND CASH EQUIVILANTS AT END OF PERIOD | 1,271,032 | 1,478,274 |
SUPPLEMENTAL DISCLOSURES | ||
Cash Paid for Interest | 89,396 | 189,518 |
Cash Paid for Income Taxes | 0 | 0 |
NON CASH TRANSACTIONS | ||
Conversion of Accounts Payable to Long-Term Debt | 0 | 256,433 |
Accrued Interest Rolled into Notes Payable | 23,934 | 0 |
Treasury Stock Issued for Services | $ 100,000 | $ 0 |
1. NATURE OF ACTIVITIES AND SIG
1. NATURE OF ACTIVITIES AND SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
NATURE OF ACTIVITIES AND SIGNIFICANT ACCOUNTING POLICIES | Nature of Activities, History and Organization 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. In 2000, the Company formed a wholly owned subsidiary, DynaResource de México S.A. de C.V., chartered in México (“DynaMéxico”). This Company was formed to acquire, invest in and develop resource properties in México. DynaMéxico owns a portfolio of mining concessions that currently includes its interests in the San José de Gracía Project (“SJG”) in northern Sinaloa State, México. The SJG District covers 69,121 hectares (170,802 acres) on the west side of the Sierra Madre mountain range. The Company currently owns 100% of the outstanding capital of DynaMéxico. A 20% minority interest in Dyna México was held by Goldgroup Resources Inc., a wholly owned subsidiary of Goldgroup Mining Inc. Vancouver BC (“Goldgroup”) until February 24, 2020. In 2005, the Company formed DynaResource Operaciones de San Jose De Gracía S.A. de C.V. (“DynaOperaciones”), and acquired effective control of Mineras de DynaResource, S.A. de C.V. (formerly Minera Finesterre S.A. de C.V., “DynaMineras”). The Company owns 100% of Dyna Mineras. The Company elected to become a voluntary reporting issuer in Canada in order to avail itself of Canadian regulations regarding reporting for mining properties and, more specifically, National Instrument 43-101 (“NI 43-101”). This regulation sets forth standards for reporting resources in a mineral property in Canada and is a standard recognized in the mining industry. Reclassifications and Adjustments Certain financial statement reclassifications have been made to prior period balances to reflect the current period’s presentation format; such reclassifications had no impact on the Company’s consolidated statements of income or consolidated statements of cash flows and had no material impact on the Company’s consolidated balance sheets. Significant Accounting Policies The Company’s management selects accounting principles generally accepted in the United States of America and adopts methods for their application. The application of accounting principles requires the estimating, matching and timing of revenue and expense. The accounting policies used conform to generally accepted accounting principles which have been consistently applied in the preparation of these financial statements. The financial statements and notes are representations of the Company’s management which is responsible for their integrity and objectivity. Management further acknowledges that it is solely responsible for adopting sound accounting practices, establishing and maintaining a system of internal accounting control and preventing and detecting fraud. The Company's system of internal accounting control is designed to assure, among other items that: 1) recorded transactions are valid; 2) valid transactions are recorded; and 3) transactions are recorded in the proper period in a timely manner to produce financial statements which present fairly the financial condition, results of operations and cash flows of the Company for the respective periods presented. Basis of Presentation The Company prepares its financial statements on the accrual basis of accounting in conformity with accounting principles generally accepted in the United States. Principles of Consolidation The financial statements include the accounts of DynaResource, Inc., as well as DynaResource de México, S.A. de C.V. (100% ownership), DynaResource Operaciones S.A. de C.V. (100% ownership) and Mineras de DynaResource S.A. de C.V. (100% ownership). All significant inter-company transactions have been eliminated. All amounts are presented in U.S. Dollars unless otherwise stated. Non-Controlling Interest The Company’s subsidiary, DynaResource de México S.A. de C.V, was 20% owned by Goldgroup Resources, Inc. until February 24, 2020 when the Company recovered the shares as partial satisfaction of a legal judgement. See Note 10 for further details. The Company accounted for this outside interest as “non-controlling interest” through February, 2020. A 20% share of operating income (loss) and comprehensive income (loss) is allocated to the non-controlling interest through the date of the recovery of the shares. Investments in Affiliates The Company owns a 19.95% interest in DynaResource Nevada, Inc., a Nevada Corporation (“DynaNevada”), with one operating subsidiary in México, DynaNevada de México, S.A. de C.V. (“DynaNevada de México”), together “DynaNevada”. The Company accounts for this investment using the cost basis. The Company has significant influence over DynaNevada, but not control, due to the lack of a majority voting interest in the entity. DynaNevada has been dormant for several years. DynaUSA has no plan or intention of future funding with DynaNevada nor are any other transactions with DynaNevada contemplated at this time. The Company therefore accounts for this investment using the cost basis. The investment was $70,000 and $70,000 at September 30, 2020 and December 31, 2019, respectively. Cash and Cash Equivalents The Company considers all highly liquid financial instruments with an original maturity of three months or less to be cash equivalents. At times, cash balances may be in excess of the Federal Deposit Insurance Corporation (“FDIC”) insurance limits. Accounts Receivable and Allowances for Doubtful Accounts The allowance for accounts receivable is recorded when receivables are considered to be doubtful of collection. As of September 30, 2020 and December 31, 2019, respectively, no allowance has been made. Foreign Tax Receivable Foreign Tax Receivable is comprised of recoverable value-added taxes (“IVA”) charged by the Mexican government on goods and services rendered. Under certain circumstances, these taxes are recoverable by filing a tax return. Amounts paid for IVA are tracked and held as receivables until the funds are remitted. The total amounts of the IVA receivable as of September 30, 2020 and December 31, 2019 are $1,539,095 and $1,297,387, respectively. Inventory Inventories are carried at the lower of cost or net realizable value and consist of mined tonnage, and gravity and flotation concentrates, and gravity tailings or flotation feed material. The inventories are $76,332 and $523,089 as of September 30, 2020 and December 31, 2019, respectively. Proven and Probable Reserves (No Known Reserves) The definition of proven and probable reserves is set forth in SEC Industry Guide 7 (“Industry Guide 7”). Proven reserves for which (1) quantity is computed from dimensions revealed in outcrops, trenches, workings or drill holes, grade and/or quality are computed from the results of detailed sampling and (2) the sites for inspection, sampling and measurement are spaced so closely and the geological character is so well defined that size, shape, depth and mineral content of the reserves are well-established. Probable reserves are reserves for which quantity and grade and/or quality are computed from information similar to that used for proven (measured) reserves, but the sites for inspection, sampling, and measurement are farther apart or are otherwise less adequately spaced. The degree of assurance, although lower than that for proven (measured) reserves, is high enough to assume continuity between points of observations. As of September 30, 2020, none of the Company's properties contain resources that satisfy the definition of proven and probable reserves. The Company classifies the development of its properties, including the San Jose de Gracía Property, as exploration stage projects since no proven or probable reserves have been established under Industry Guide 7. Property Substantially all mine development costs, including design, engineering, mine construction, and installation of equipment are expensed as incurred as the Company has not established proven and probable reserves on any of its properties. Only certain types of mining equipment which has alternative uses or significant salvage value, may be capitalized without proven and probable reserves. Depreciation is computed using the straight-line method. Office furniture and equipment are being depreciated on a straight-line method over estimated economic lives ranging from 3 to 5 years. Leasehold improvements, which relate to the Company's corporate office, are being amortized over the term of the lease of 10 years. Design, Construction, and Development Costs: When proven and probable reserves as defined by Industry Guide 7 exist, development costs are capitalized, and the property is a commercially minable property. Mine development costs incurred either to develop new ore deposits, expand the capacity of operating mines, or to develop mine areas substantially in advance of current production would be capitalized. Costs of start-up activities and costs incurred to maintain current production or to maintain assets on a standby basis are charged to operations as incurred. Costs of abandoned projects are charged to operations upon abandonment. All capitalized costs would be amortized using the units of production method over the estimated life of the ore body based on recoverable ounces to be mined from proven and probable reserves. Certain costs to design and construct mining and processing facilities may be incurred prior to establishing proven and probable reserves. As no proven and probable reserves have been established on any of the Company's properties, design, construction and development costs are not capitalized at any of the Company's properties, and accordingly, substantially all costs are expensed as incurred, resulting in the Company reporting larger losses than if such expenditures had been capitalized. Additionally, the Company does not have a corresponding depreciation or amortization of these costs going forward since these expenditures were expensed as incurred as opposed to being capitalized. As a result of these and other differences, the Company's financial statements may not be comparable to the financial statements of mining companies that have established reserves. Mineral Properties Interests Mineral property interests include acquired interests in development and exploration stage properties, which are considered tangible assets. The amount capitalized relating to a mineral property interest represents its fair value at the time of acquisition. When a property does not contain mineralized material that satisfies the definition of proven and probable reserves, such as with the San Jose de Gracía Property, capitalized costs and mineral property interests are amortized using the straight-line method once production begins. As of June 30, 2020, the mining interests have been in the pilot production stage and therefore, no amortization has been expensed. Mining properties consist of 33 mining concessions covering approximately 9,919 hectares at the San Jose de Gracía property (“SJG”), the basis of which are amortized on the unit of production method based on estimated recoverable resources. If it is determined that the deferred costs related to a property are not recoverable over its productive life, those costs will be written down to fair value as a charge to operations in the period in which the determination is made. The amounts at which mineral properties and the related costs are recorded do not necessarily reflect present or future values. Impairment of Assets: For operating mines, recoverability is measured by comparing the undiscounted future net cash flows to the net book value. When the net book value exceeds future net undiscounted cash flows, an impairment loss is measured and recorded based on the excess of the net book value over fair value. Fair value for operating mines is determined using a combined approach, which uses a discounted cash flow model for the existing operations and a market approach for the fair value assessment 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 related factors), production levels, operating costs, capital requirements and reclamation costs, all based on life-of-mine plans. The term "recoverable mineralized material" refers to the estimated amount of gold or other commodities that will be obtained after considering losses during processing and treatment of mineralized material. In estimating future cash flows, assets are grouped at the lowest level for which there are identifiable cash flows that are largely independent of future cash flows from other asset groups. The Company's estimates of future cash flows are based on numerous assumptions and it is possible that actual future cash flows will be significantly different than the estimates, as actual future quantities of recoverable minerals, gold, silver and other commodity prices, production levels and costs and capital are each subject to significant risks and uncertainties. The recoverability of the book value of each property will be assessed annually for indicators of impairment such as adverse changes to any of the following: ● estimated recoverable ounces of gold, silver or other precious minerals; ● estimated future commodity prices; ● estimated expected future operating costs, capital expenditures and reclamation expenditures. A write-down to fair value will be recorded when the expected future cash flow is less than the net book value of the property or when events or changes in the property indicate that carrying amounts are not recoverable. This analysis will be completed as needed, and at least annually. As of the date of this filing, no events have occurred that would require write-down of any assets. As of September 30, 2020 and December 31, 2019, no indications of impairment existed. Asset Retirement Obligation As the Company is not obligated to remediate the mining properties, no Asset Retirement Obligation (“ARO”) has been established. Changes in regulations or laws, any instances of non-compliance with laws or regulations that result in fines, or any unforeseen environmental contamination could result in a material impact to the amounts charged to operations for reclamation and remediation. Significant judgments and estimates are made when estimating 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 environmental remediation work is highly subjective. Considering all of these factors that go into the determination of an ARO, the fair value of the AROs can materially change over time. Property Holding Costs Holding costs to maintain a property on a care and maintenance basis are expensed in the period they are incurred. These costs include security and maintenance expenses, lease and claim fees and payments, and environmental monitoring and reporting costs. Exploration Costs Exploration costs are charged to operations and expenses as incurred. Exploration, development, direct field costs and administrative costs are expensed in the period incurred. Transactions in and Translations of Foreign Currency The functional currency for the subsidiaries of the Company is the Mexican Peso. As a result, the financial statements of the subsidiaries have been translated from Mexican Pesos into U.S. dollars using (i) yearend exchange rates for balance sheet accounts, and (ii) the weighted average exchange rate of the reporting period for all income statement accounts. Foreign currency translation gains and losses are reported as a separate component of stockholders’ equity and 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, 2020 and December 31, 2019 (Mexican Pesos per one U.S. dollar): Sept 30, 2020 Dec 31, 2019 Exchange Rate at Period End Pesos 22.07 18.86 Relevant exchange rates used in the preparation of the income statement portion of financial statements for the subsidiaries are as follows for the periods ended June 30, 2020 and June 30, 2019 (Mexican Pesos per one U.S. dollar): Sept 30, 2020 Sept 30, 2019 Weighted Average Exchange Rate for the Nine Months Ended Pesos 21.79 19.25 The Company recorded currency transaction gains (losses) of $(1,025,194) and $(108,126) for the nine months ended September 30, 2020 and 2019, respectively and $(685,509) and $(401,826) for the three months ended September 30, 2020 and 2019, respectively. Income Taxes The Company accounts for income taxes under ASC 740 “Income Taxes” Income from the Company’s subsidiaries in México are taxed under applicable Mexican tax law. Use of Estimates In order to prepare financial statements in conformity with accounting principles generally accepted in the United States, management must make estimates, judgments and assumptions that affect the amounts reported in the financial statements and determines whether contingent assets and liabilities, if any, are disclosed in the financial statements. The ultimate resolution of issues requiring these estimates and assumptions could differ significantly from resolution currently anticipated by management and on which the financial statements are based. Comprehensive Income (Loss) ASC 220 “Comprehensive Income” Revenue Recognition The Company follows ASC 606 “ Revenue from contracts with customers The amount of revenue recognized is initially recorded on a provisional basis based on the contract price and the estimated metal quantities based on assay data. The revenue is adjusted upon final settlement of the sale. The chief risk associated with the recognition of sales on a provisional basis is the fluctuations between the estimated quantities of precious metals base on the initial assay and the actual recovery from treatment and processing. As of September 30, 2020, there are $1,000,000 in customer deposit liabilities for payments received in advance expected to be settled in 2020. During the periods ended September 30, 2020 and 2019 there was $0 and $0 of revenue recognized during the period from customer deposit liabilities (deferred contract revenue) from prior periods, and $0 of customer deposits refunded to the customer on order cancellation. As of and for the periods ended September 30, 2020 and December 31, 2019, there are no contract costs or commissions deferred. We have elected to account for shipping and handling costs as fulfillment costs after the customer obtains control of the goods. Stock-Based Compensation The Company accounts for stock options at fair value as prescribed in ASC 718. The Company estimates the fair value of each stock option at the grant date by using the Black-Scholes option-pricing model and provides for expense recognition over the service period, if any, of the stock option. Fair Value of Financial Instruments The Company’s financial instruments consist of cash, receivables, payables, accrued expenses and long-term debt. The carrying amount of cash, receivables and payables approximates fair value because of the short-term nature of these items. The carrying amount of long-term debt approximates fair value due to the relationship between the interest rate on long-term debt and the Company’s incremental risk adjusted borrowing rate. Per Share Amounts Earnings per share are calculated in accordance with ASC 260 “ Earnings per Share The Company had 3,391,835 warrants outstanding at September 30, 2020 which upon exercise, would result in the issuance of 3,391,835 shares of common stock. Of these warrants 2,166,527 were exercisable at $2.05 per share and 1,225,308 were exercisable at $.01 per share. The Company also had convertible debt instruments as of September 30, 2020 which, upon conversion at a valuations from $2.00 to $2.50 per share, would result in the issuance of 2,325,925 shares of stock. The Company had 2,166,527 warrants outstanding at December 31, 2019 exercisable at $2.50 per share, which upon exercise, would result in the issuance of 2,166,527 shares of common stock. The Company also had convertible debt instruments as of December 31, 2019 which would result in the issuance of 351,352 shares of stock. Three Month Ended Sept 30, 2020 Three Month Ended Sept 30, 2019 Nine Month Ended Sept 30, 2020 Nine Month Ended Sept 30, 2019 Net loss attributable to common shareholders $ (1,451,897 ) $ (740,657 ) $ (6,732,039 ) $ (2,099,201 ) Weighted average number of common shares outstanding, Basic 17,722,825 17,722,825 17,722,825 17,722,825 Diluted weighted average number of common shares outstanding, 17,722,825 17,722,825 17,722,825 17,722,825 Basic earnings (loss) per share $ (0.08 ) $ (0.04 ) $ (0.38 ) $ (0.12 ) Diluted earnings (loss) per share $ (0.08 ) $ (0.04 ) $ (0.38 ) $ (0.12 ) Related Party Transactions FASB ASC 850, "Related Party Disclosures" requires companies to include in their financial statements, disclosures of material related party transactions. The Company discloses all material related party transactions. A party is considered to be related to the Company if the party directly or indirectly or through one or more intermediaries, controls, is controlled by, or is under common control with the Company. Related parties also include principal owners of the Company, its management, members of the immediate families of principal owners of the Company and its management and other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests. A party which can significantly influence the management or operating policies of the transacting parties or if it has an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests is also a related party. |
2. INVENTORIES
2. INVENTORIES | 9 Months Ended |
Sep. 30, 2020 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | The Company commenced underground test mining and pilot milling activities (“pilot production”) in the 2nd quarter of 2014. Rehabilitation of the San Pablo Mine and refurbishing of the Pilot Mill Facility and construction of the adjacent tailings pond continued through 2016. Inventories are carried at the lower of cost or fair value and consist of mined tonnage, gravity-flotation concentrates, and gravity tailings (or, flotation feed material). Inventory balances of September 30, 2020 and December 31, 2019, respectively, were as follows: 2020 2019 Mined Tonnage, Gold-Silver Concentrates, and/or Gravity Tailings (Flotation Feed Material) $ 76,332 $ 523,089 Total Inventories $ 76,332 $ 523,089 |
3. PROPERTY AND EQUIPMENT
3. PROPERTY AND EQUIPMENT | 9 Months Ended |
Sep. 30, 2020 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | Property consists of the following at September 30, 2020 and December 31, 2019: 2020 2019 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 (112,364 ) (109,927 ) Total Property $ 6,790 $ 9,227 Depreciation has been provided over each asset’s estimated useful life. Depreciation expense was $2,437 and $2,442 for the nine months ended September 30, 2020 and 2019 respectively and $812 and $812 for the three months ended September 30, 2020 and 2019, respectively. |
4. MINING CONCESSIONS
4. MINING CONCESSIONS | 9 Months Ended |
Sep. 30, 2020 | |
Mining Concessions Abstract | |
MINING CONCESSIONS | Mining properties consist of the following at September 30, 2020 and December 31, 2019: 2020 2019 San Jose de Gracia (“SJG”): $ 4,132,678 $ 4,132,678 Total Mining Concessions $ 4,132,678 $ 4,132,678 There was no depletion expense the periods ended September 30, 2020 and 2019, respectively. |
5. INVESTMENT IN AFFILIATE
5. INVESTMENT IN AFFILIATE | 9 Months Ended |
Sep. 30, 2020 | |
Investments in and Advances to Affiliates, Schedule of Investments [Abstract] | |
INVESTMENT IN AFFILIATE | The Company owns 19.95% DynaResource Nevada, Inc. (“DynaNevada”), a Nevada Corporation, which owns 100% of one operating subsidiary in México, DynaNevada de México, S.A. de C.V. (“DynaNevada de México”). DynaNevada is a related entity (affiliate), and through its subsidiary, DynaNevada de México has 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”). DynaNevada de México exercised the Option with IMMSA in March 2010, so that DynaNevada de México now owns 100% of the Santa Gertrudis Property. In June 2010, DynaNevada de México acquired an additional 6,000 hectares in the State of Sinaloa (the “San Juan Property”). On December 31, 2010, the Company received 3,223,040 shares, which represents approximately 19.95% of the outstanding shares of DynaNevada. At the time of the exchange, DynaNevada’s net book value was approximately $695,000, consisting of $30,000 cash and the remainder unproven mining properties. Based upon the above, Management estimated the value of the Company’s DynaNevada shares as of September 30, 2020 and December 31, 2019 to be $70,000 and $70,000, respectively. At September 30, 2020 and December 31, 2019, the Company had a receivable from DynaNevada de México of $65,954 and $73,976, respectively for working capital advances which is included in other assets on the accompanying balance sheet. |
6. CONVERTIBLE PROMISSORY NOTES
6. CONVERTIBLE PROMISSORY NOTES | 9 Months Ended |
Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
CONVERTIBLE PROMISSORY NOTES | Notes Payable – Series I In April and May 2013, the Company entered into note agreements with shareholders in the principal amount of $1,495,000, of which $340,000 was then converted to preferred shares within the same year, netting to proceeds of $1,155,000 (the “Series I Notes”). The Series I Notes bear simple interest at twelve and a half percent (12.5%), accrued for twelve months, and with the accrued interest to be added to the principal, and then interest will be paid by the Company, quarterly in arrears. The holders of the Series I Notes (in aggregate) are also entitled to receive ten percent (10%) of the net profits received by the Company, on the first fifty thousand tons processed through the mill facilities at San Jose de Gracía. Such net profits (if any) are to be calculated after deducting “all expenses related to the production”, and after a prior deduction of thirty-three percent (33%) from the net profits, to be deposited into a sinking fund cash reserve. To date, the Company has not produced any net profits as calculated in accordance with the Series I Notes. The Notes originally matured on December 31, 2015. On December 31, 2019, the Company entered into agreements to extend seven outstanding notes totaling $646,875 plus accrued interest totaling $34,277 for new total notes of $681,152 until December 31, 2020. At December 31, 2019 seven Series I Notes remained outstanding with a total balance of $681,152. On March 31, 2020, the Company entered into agreements to extend the seven outstanding notes totaling $681,152 plus accrued interest totaling $21,286 for a new total of $702,438 until June 30, 2022. At September 30, 2020 seven Series I Notes remaining outstanding with a total balance of $702,438. The Company has the right to prepay the Series I Notes with a ten percent (10%) penalty. The Series I Note holder retains the option, at any time prior to maturity or prepayment, to convert any unpaid principal and accrued interest into Common Stock at $2.50 per share. If the Series I Note is converted into Common Stock, at the time of conversion, the holder would also receive warrants, in the same number as the number of common shares received upon conversion, to purchase additional common shares of the Company for $7.50 per share, with such warrants expiring one year from their issuance date. Notes Payable – Series II In 2013 and 2014, the Company entered into additional note agreements of $199,808 and $250,000, respectively (the “Series II Notes”) with similar terms as the Series I Notes. The Series II Notes bear simple interest at twelve and a half percent (12.5%), accrued for twelve months, and with the accrued interest to be added to the principal, and then interest will be paid by the Company, quarterly in arrears. The holders of the Series II Notes (in aggregate) are also entitled to receive ten percent (10%) of the net profits received by the Company, on the second fifty thousand tons processed through the mill facilities at San Jose de Gracía. Such net profits (if any) are to be calculated after deducting “all expenses related to the production” and after a prior deduction of thirty-three percent (33%) from the net profits, to be deposited into a sinking fund cash reserve. To date, the Company has not produced any net profits as calculated in accordance with the Series II Notes. The Notes originally matured on December 31, 2015. At December 31, 2018 three of the Series II notes totaling $191,250 had been extended to December 30, 2019. On December 31, 2019 the Company entered into agreements to extend two of the three notes totaling $78,750 plus accrued interest of $5,976 for total new notes of $84,726 to December 31, 2020. The other note for $112,500 was not extended and was past due as of December 31, 2019. At December 31, 2019 three Series II notes remained outstanding for $197,226. On March 31, 2019 the Company entered into agreements to extend two of the three notes totaling $84,726 plus accrued interest of $2,648 for total new notes of $87,374 to June 30, 2022. The other note for $112,500 was not extended and was paid off in May 2020. At September 30, 2020 two Series II notes remained outstanding for $87,374. The Company has the right to prepay the Series II Notes with a ten percent (10%) penalty. The Note holder may, at any time prior to maturity or prepayment, convert any unpaid principal and accrued interest into common stock of the Company at $2.50 per share. At the time of conversion, the holder would receive a warrant to purchase additional common shares of the Company for $7.50 per share. These warrant would expire one year from their issuance date. At December 31, 2019 the principal and capitalized interest balance on the remaining Series I Notes was $681,152, and the principal and capitalized interest on the Series II Notes was $197,227, for a total Note balance of $878,379. At September 30, 2020, the principal and capitalize interest balance on the remaining Series I Notes was $702,438, and the principal and capitalized interest on the Series II Notes was $87,374, for a total Note balance of $789,813. Notes Payable – Series D On May 14, 2020, DynaUSA (the “Company”) closed a financing agreement with Golden Post Rail, LLC, a Texas limited liability company and certain individual investors. A summary of the transaction is set forth below: 1. Pursuant to the May 14, 2020 Note Purchase Agreement (the “NPA”) among the Company, Golden Post Rail, LLC (the “Lead Purchaser”), and the other parties (the “Remaining Purchasers”): Golden Post acquired the following securities (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. $1,250,000 of the principal amount of Golden Post Note, was funded at closing in accordance with an agreed-upon draw summary and budget. The balance of the principal amount was 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 The Remaining Purchasers acquired the following securities a) Convertible promissory notes (the “Remaining Notes”) in the aggregate principal amount of $1,520,000, 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. |
7. INCOME TAXES
7. INCOME TAXES | 9 Months Ended |
Sep. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | The Company has adopted ASC 740-10, “ Income Taxes” Deferred Tax Asset Related to: 2020 2019 Prior Year $ 13,780,490 $ 13,343,134 Tax Benefit for Current Year 950,226 437,356 Total Deferred Tax Asset 14,730,716 13,780,490 Less: Valuation Allowance (14,730,716 ) (13,780,490 ) Net Deferred Tax Asset $ — $ — The income tax provision for the Company as of September 30, 2020 and 2019 differ from those computed using the statutory rates of 25% due to the following: 2020 2019 Tax Expense (Benefit) at Statutory Rates $ (1,665,910 ) $ (533,509 ) Other Permanent Differences 715,684 (207,779 ) Change in Valuation Allowance 950,226 741,288 Provision for (Benefit from) Income Taxes, Net $ — $ — The net deferred tax asset and benefit for the current year is generated primarily from the cumulative net operating loss carry-forward which is approximately $58,500,000 at September 30, 2020 and will expire in the years 2028 through 2034. The realization of deferred tax benefits is contingent upon future earnings and is fully reserved at September 30, 2020. On December 11, 2013, the Mexican government enacted a tax reform that increased the effective tax rate applicable to the Company's Mexican operations. The law, effective January 1, 2014, increased the future corporate income tax rate to 30%, created a 10% withholding tax on dividends paid to non-resident shareholders and created a new Extraordinary Mining duty which is equal to 0.5% of gross revenues from the sale of gold, silver and platinum. Furthermore, the reform introduced a Special Mining Duty of 7.5%. The Special Mining Duty is deductible for income tax purposes. The Special Mining Duty is generally applicable to earnings before income tax, depreciation, depletion, amortization and interest. There will be no deductions related to development type costs, but exploration and prospecting costs are deductible when incurred. Certain non-deducted exploration expenditures incurred prior to January 1, 2014 are also deductible in the calculation of the Special Mining Duty. For the years ended December 31, 2019 and 2018, the Company had no taxes payable under the 7.5% Special Mining Duty. The Company or its subsidiaries file income tax returns in the United States and México. These tax returns are subject to examination by local taxation authorities provided the tax years remain open to audit under the relevant statute of limitations. The following summarizes the open tax years by major jurisdiction: United States: 2016 to 2019 México: 2015 to 2019 The Company does not have any other material items of temporary or permanent differences, which give rise to deferred tax assets or liabilities. |
8. STOCKHOLDERS' EQUITY
8. STOCKHOLDERS' EQUITY | 9 Months Ended |
Sep. 30, 2020 | |
Stockholders' Equity Note [Abstract] | |
STOCKHOLDERS' EQUITY | Authorized Capital Series A Preferred Stock The Company has designated 1,000 shares of its Preferred Stock as Series A, having a par value of $0.0001 per share. Holders of the Series A Preferred Stock have the right to elect a majority of the Board of Directors of the Company. The Company issued 1,000 shares of Series A Preferred Stock to its CEO. At September 30, 2020 and December 31, 2019, there were 1,000 shares of Series A Preferred Stock outstanding. Series C Senior Convertible Preferred Shares On June 30, 2015, the Company issued 1,600,000 Series C Senior Convertible Preferred Shares (the “Series C Preferred Shares”) at $2.50 per share for gross proceeds of $4,000,000, as well as issuing 133,221 additional Series C Preferred Shares due to anti-dilution provisions (with no cash remuneration). Legal fees of $45,000 were deducted from the proceeds of this transaction at closing. On May 13, 2020 the Company issued an additional 1,771 shares of Series C Preferred Stock related to the anti-dilution provision bringing the total shares outstanding to 1,734,992. These Series C Preferred Shares are convertible to common shares at $2.50 per share, through June 30, 2022. The Series C Preferred Shares may receive a 4% per annum dividend, payable if available, and in arrears. A description of the transaction which included the issuance of the Series C Preferred Shares is included below. The dividend is calculated at 4.0% of $4,333,053 and is payable annually on June 30 of each year. At September 30, 2020, dividends for the years 2017 to 2020 totaling $693,280 were in arrears. 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 Series D Preferred Stock Also on May 13, 2020, the Company filed with the Secretary of State of Delaware a Certificate of Designations contemplating the authorization of 3,000,000 shares of Financing Agreement with Golden Post Rail, LLC, a Texas Limited Liability Company 1. On May 6, 2015, the Company, Golden Post Rail, LLC, a Texas limited liability company (“Golden Post”), and Mr. Koy W. (“K.D.”) Diepholz, Chairman-CEO of the Company entered into a Securities Purchase Agreement (the “SPA”). Pursuant to the SPA, Golden Post acquired the following securities: 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 $2.05 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 which expires June 30, 2022. The anti-dilution protections contained in the terms of the Series C Preferred are essentially replicated in the Golden Post Warrant. 2. Pursuant to the SPA, the Company executed a Registration Rights Agreement pursuant to which Golden Post may require the Company to register the shares of Common Stock which may be issued upon the conversion of the Series C Preferred and the shares of Common Stock issuable upon the exercise of the Warrant, including any additional shares of Common Stock issuable pursuant to anti-dilution provisions. Due to underlying anti-dilutive provisions contained in the Series C Preferred Shares and the Golden Post Warrant, the Company incurred derivative liabilities. On May 14, 2020 in connection with the Series D Convertible Note financing the expiration date for the Series C Preferred Shares and the Golden Post warrants were extended to June 30, 2022. In addition, a new derivative liability was incurred due to the insurance of warrants for kicker shares at December 31, 2019 the total derivative liability was $24,854 which included $10,787 for the Series C Preferred shares, and $14,068 in connection with the Golden Post Warrants. At September 30, 2020 the total derivative liability was $3,741,363 which included $1,203,559 for the Series C Preferred Shares, and $1,315,816 in connection with the Golden Post Warrants and $1,221,988 in connection with the Series D Convertible Note Kicker Warrants. The deemed dividend for the nine months ending September 30, 2020 and September 30, 2019 was $129,990, and $129,990 respectively. As the Company has not declared these dividends, it is required only as an item “below” the net income (loss) amount. Due to the nature of this transaction as mandatorily redeemable, the Series C Preferred Shares are classified as “temporary equity” on the balance sheet. Preferred Series C Carrying Value, December 31, 2018 $ 4,333,053 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, December 31, 2019 4,333,053 Issuances of 1,771 shares at Fair Value for anti-dilution — Bifurcation of Derivative Liability 4,427 Relative Fair Value of Warrants – Preferred Stock Discount — Accretion of Preferred Stock to Redemption Value — Carrying Value, September 30, 2020 $ 4,337,480 Preferred Stock (Undesignated) In addition to the 1,000 shares designated as Series A Preferred Stock, the 1,734,992 shares designated as Series C Preferred Shares and the 3,000,000 shares designated as Series D Preferred Stock, the Company is authorized to issue an additional 13,266,779 shares of preferred stock, having a par value of $0.0001 per share. The Board of Directors of the Company has authority to issue the preferred stock from time to time in one or more series, and with respect to each series of the Preferred Stock, to fix and state by the resolution, the terms attached to the preferred stock. At September 30, 2020 and December 31, 2019, there were no other shares of preferred stock outstanding. Separate Series; Increase or Decrease in Authorized Shares. Common Stock The Company is authorized to issue 40,000,000 common shares at a par value of $0.01 per share. These shares have full voting rights. At September 30, 2020 and December 31, 2019, there were 17,722,825 and 17,722,825 shares outstanding, respectively. No dividends were paid for the periods ended September 30, 2020 and 2019, respectively. Preferred Rights The Company issued “Preferred Rights” for the rights to percentages of revenues generated from the San Jose de Gracía Pilot Production Plant and received $784,500. This has been reflected as “Preferred Rights” in stockholders’ equity. As of September 30, 2020, $744,500 had been repaid, leaving a current balance of $40,000 and $40,000 as of September 30, 2020 and December 31, 2019, respectively. Stock Issuances There were no issuances of common stock during the periods ending September 30, 2020 and December 31, 2019. Treasury Stock No treasury shares were issued or acquired during the year ended December 31, 2019. At December 31 2019, 778,980 treasury shares were outstanding. During the period ending September 30, 2020, 162,500 treasury shares were issued for services provided to the Company. At September 30, 2020, 616,480 treasury shares remained outstanding. Warrants 2020 activity On May 13, 2020 the Company issued 2,306 warrants to purchase shares of common stock at $.01per share related to anti-dilution provisions of the Series C preferred stock. These warrants expire on May 13, 2027. On May 14, 2020, the Company issued 1,223,002 warrants to purchase shares of common stock at $.01 per share as kicker shares as part of the Series D note agreements. These warrants expire on May 14, 2030. On June 30, 2020, as part of the Series D note agreement the Company issued 2,166,527 warrants to purchase share of common stock at $2.04 per share to replace the 2,166,527 warrants previously outstanding which expired on that date. These warrants expire on June 30, 2022. At September 30, 2020, the Company had a total of 3,391,835 warrants outstanding. 2019 activity The Company had 2,166,527 warrants outstanding at December 31, 2019. There were no warrants issued or exercised in 2019 and no warrants expired in 2019. Number of Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Life (Years) Intrinsic Value Balance at December 31, 2018 2,166,527 $ 2.45 1.51 $ — Granted — $ — $ — Exercised — $ — $ — Forfeited — $ — $ — Balance at December 31, 2019 2,166,527 $ 2.45 0.51 $ — Granted 3,391,845 $ 1.31 4.89 $ — Exercised — $ — $ — Forfeited 2,166,527 $ 2.45 $ — Balance at September 30, 2020 3,391,845 $ 1.31 4.84 $ — Exercisable at September 30, 2020 3,391,845 $ 1.31 4.84 $ — |
9. RELATED PARTY TRANSACTIONS
9. RELATED PARTY TRANSACTIONS | 9 Months Ended |
Sep. 30, 2020 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | Related Party Transactions The Company follows FASB ASC subtopic 850-10, Related Party Disclosures, for the identification of related parties and disclosure of related party transactions. Pursuant to ASC 850-10-20, related parties include: a) affiliates of the Company; b) entities for which investments in their equity securities would be required, absent the election of the fair value option under the fair value option subsection of Section 825–10–15, to be accounted for using the equity method by the investing entity; c) trusts for the benefit of employees, such as pension and profit-sharing trusts that are managed by or under the trusteeship of management; d) principal owners of the Company; e) management of the Company; f) other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests; and g) other parties that can significantly influence the management or operating policies of the transacting parties or that have an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests. Material related party transactions are required to be disclosed in the consolidated financial statements, other than compensation arrangements, expense allowances, and other similar items in the ordinary course of business. However, disclosure of transactions that are eliminated in the preparation of consolidated or combined financial statements is not required in those statements. The disclosures shall include: a) the nature of the relationship(s) involved; b) a description of the transactions, including transactions to which no amounts or nominal amounts were ascribed, for each of the periods for which statements of operation are presented, and such other information deemed necessary to an understanding of the effects of the transactions on the financial statements; c) the dollar amounts of transactions for each of the periods for which statements of operations are presented and the effects of any change in the method of establishing the terms from that used in the preceding period; and d) amounts due from or to related parties as of the date of each balance sheet presented and, if not otherwise apparent, the terms and manner of settlement. Dynacap Group Ltd. The Company paid $71,250 and $114,875 to Dynacap Group, Ltd. (“Dynacap”, an entity controlled by the CEO of the Company) for consulting and other fees during the periods ended September 30, 2020 and 2019, respectively. Advances from Goldgroup Mining Inc. (“Goldgroup”) to Dyna México In 2014, Goldgroup advanced $111,500 to DynaMéxico and in 2013 Goldgroup advanced $120,000 USD to DynaMéxico. This total of $231,500 was carried by DynaMéxico as a Due to Non-Controlling Interest. This balance was removed as part of the elimination of the non-controlling interest in February 2020. At September 30, 2020 and December 31, 2019 the balance of Due to Non-Controlling interest was $0 and $231,500, respectively. |
10. COMMITMENTS AND CONTINGENCI
10. COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | Concession Taxes 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 recent business activities and current and forward plans and considering expenditures on mining concessions from 2002 to 2017 and continuing expenditures in current and forward activities, the Company does not anticipate that DynaMéxico will have any difficulties meeting the minimum annual expenditures for the concessions ($388 – $2,400 Mexican Pesos per hectare). DynaMéxico retains sufficient carry-forward amounts to cover over 10 years of the minimum expenditure (as calculated at the 2017 minimum, adjusted for annual inflation of 4%). Leases In addition to the surface rights held by DynaMéxico pursuant to the Mining Act Ley Minera y su Reglamento 20 year land lease agreement with the Santa Maria Ejido Community surrounding San Jose de Gracía 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 on January 1 st The Company leases office space for its corporate headquarters in Irving, Texas. In September 2017, the Company entered into a sixty-six-month extension of the lease through 2023. As part of the agreement the Company received six months free rent as a finish out allowance. The Company capitalized the leasehold improvement costs and amortized them over the rent abatement period as rent expense. The Company makes tiered lease payments on the 1 st Effective January 1, 2019, the Company adopted ASC 842, which requires recognition of a right-of-use asset and lease liability for all leases at the commencement date based on the present value of lease payments over the lease term. Additional qualitative and quantitative disclosures regarding the Company's leasing arrangements are also required. The Company adopted ASC 842 prospectively and elected the transition practical expedients that do not require reassessment of (1) whether any existing or expired contracts are or contain leases, (2) lease classification and (3) initial direct costs. In addition, the Company has elected other available practical expedients to not separate lease and non-lease components, which consist principally of common area maintenance charges, for all classes of underlying assets and to exclude leases with an initial term of 12 months or less. The Company determines if a contract is or contains a lease at inception. As of September 30, 2020, the Company has two operating leases - a six- and one-half year lease for office space with a remaining term of thirty-six months and a twenty-year ground lease in association with its México mining operations with a remaining term of fourteen years. Variable lease costs consist primarily of variable common area maintenance, storage parking and utilities. The Company’s leases do not have any residual value guarantees or restrictive covenants. As the implicit 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. These discount rates for leases are calculated using the Company's promissory note interest rate. The Company’s components of lease expense are as follows: Period Ended Sept 30, 2020 Operating Lease – Office Lease $ 63,060 Operating Lease – Ground Lease 64,568 Short Term Lease Costs 10,158 Variable Lease Costs — TOTAL $ 137,786 Weighted average remaining lease term and weighted average discount rate are as follows: Weighted Average Remaining Lease Term (Years) – Operating Leases 11.00 Weighted Average Discount Rate – Operating Leases 12.50% Estimated future minimum lease obligations are as follow for the years ending September 30: YEAR 2021 $ 174,459 2022 178,925 2023 123,773 2024 96,896 2025 99,803 Thereafter 787,682 Total $ 1,461,538 Less Imputed Interest (676,791 ) RIGHT OF USE LIABILITY $ 784,747 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”). On October 5, 2016, the Thirty-Sixth Civil Court of the Superior Court of Justice of the Federal District of México (Tribunal Superior de Justicia del Distrito Federal) approved a lien (referred to by the court as an “Embargo”), in favor of DynaMéxico, upon Stock Certificates in the name of Goldgroup Resources Inc. (“Goldgroup”). The Stock Certificates subject to the Lien (“Embargo”) constitute shares of DynaMéxico (“the Goldgroup DynaMéxico Shares”). On August 24, 2017 a Federal Amparo Judge (“Juzgado de Distrito”) in the State of Vera Cruz, México, dismissed Goldgroup Resources Inc’s Amparo Trial Challenge to the $48M USD damages award previously granted in favor of DynaMéxico. Pursuant to the dismissal ruling, the $48M USD damages award, previously granted to DynaMéxico by the Thirty-Sixth Civil Court of the Superior Court of Justice of the Federal District of México on October 5, 2015, was effectively confirmed. On May 27, 2019, The Eleventh Collegiate Court in Civil Matters of the First Circuit (“México Circuit Court”, and the Court of Final Appeal for Goldgroup Resources Inc.) issued a written notice confirming it was ruling against the Amparo Appeal filed by Goldgroup Resources Inc. and in Favor of DynaResource de México, S.A. de C.V. In an effort to stay the issuance of the Ruling by the México Circuit Court, Goldgroup Resources Inc. filed a request to The Supreme Court of México to review the Amparo Appeal decision. 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. On December 6, 2019 the 11 th 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. 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 Legal Summary - Consequence of the DynaMéxico Final México Legal Ruling: 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. On August 28, 2020, the Company filed in Dallas County, Texas a Petition for Recognition of the $48M USD Foreign Judgment, to be recognized in the U.S. 3. On November 6, 2020, the Mexican courts ruled the $48M USD judgement could be transferred to the U.S. 4. 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. 5. Ownership of the shares of DynaMéxico held by Goldgroup Resources (currently representing 20% of the outstanding shares of DynaMéxico) are subject to the Lien against Goldgroup Shares. DynaResource Filed Appeal in US District Court – 10 th On August 10, 2020, DynaResource filed an Appeal Brief in US District Court – 10 th United States District Court Denial of DynaUSA and DynaMéxico Motion to Alter or Amend Judgment On March 25, 2020, the United States District Court for the District of Colorado denied the motion to alter or amend its judgment (confirming the August 2016 arbitration award), and denied DynaUSA and DynaMéxico’s motions for stay and judgment pending appeal and to waive or reduce supersedes bond. Previously, on February 13, 2018, United States Magistrate Judge Kathleen M. Tafoya issued a thoughtful and well-reasoned formal Recommendation. In the formal Recommendation, Magistrate Judge Tafoya had recommended that the district court rule in favor of DynaResource and DynaResource de México, and the Recommendation requested the court to vacate the arbitration award. On April 10, 2020, DynaUSA and DynaMéxico appealed the March 25, 2020 ruling to the Tenth Circuit Court of Appeals and in accordance with the requirements of the appeal, posted a cash bond of $1,111,111 which is being held with the court. This amount is included in the Current Asset section of the balance sheet. Coronavirus Pandemic In March 2020, the World Health Organization declared the outbreak of a novel coronavirus (COVID-19) as a pandemic, which continues to spread throughout the United States of America. Efforts implemented by local and national governments, as well as businesses, including temporary closures, are expected to have adverse impacts on local, national and the global economies. Although the disruption is currently expected to be temporary, there is uncertainty around the duration and the related economic impact. Therefore, while we expect this matter to have an impact our business, the impact to our results of operations and financial position cannot be reasonably estimated at this time. |
11. DERIVATIVE LIABILITIES
11. DERIVATIVE LIABILITIES | 9 Months Ended |
Sep. 30, 2020 | |
Derivative Liability [Abstract] | |
DERIVATIVE LIABILITIES | Preferred Series C Stock As discussed in Note 8, 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”, 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: 2020 2019 Annual volatility rate 162% 144% Risk free rate 0.13% 1.58% Remaining Term 1.75 years 0.5 years Fair Value of common stock $1.00 $0.47 For the period ended September 30, 2020 and year ended December 31, 2019, 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 period ended September 30, 2020 and year ended December 31, 2019. Period Ended 2020 2019 Fair value of derivative (stock), beginning of period/year $ 37,038 $ 402,909 Change in fair value of derivative 878,793 (365,871 ) Fair value of derivative on the date of extension 287,728 - Fair value of derivative(stock), end of period/year $ 1,203,559 $ 37,038 Preferred Series C Warrants As discussed in Note 8, 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”, 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: 2020 2019 Annual volatility rate 162% 144% Risk free rate 0.13% 1.58% Remaining Term 1.75 years 0.5 years Fair Value of common stock $1.00 $0.47 For the period ended September 30, 2020 and year ended December 31, 2019, 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 period ended September 30, 2020 and year ended December 31, 2019. Period Ended 2020 2019 Fair value of derivative (warrants), beginning of period/year $ 49,066 $ 571,774 Change in fair value of derivative 865,984 (522,708 ) Fair value of derivative on the date of issuance 400,766 — Fair value of derivative(warrants), end of period/year $ 1,315,816 $ 49,066 Series D Notes Kicker Warrants As discussed in Note 8, the Company analyzed the embedded conversion features of the Series D Notes 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”, 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: 2020 2019 Annual volatility rate 162% — Risk free rate 0.13% — Remaining Term 9.62 years — Fair Value of common stock $1.00 — For the period ended September 30, 2020 and year ended December 31, 2019, 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 period ended September 30, 2020 and year ended December 31, 2019. Period Ended 2020 2019 Fair value of derivative (warrants), beginning of period/year $ — $ — Change in fair value of derivative 811,990 — Fair value of derivative on the date of issuance 409,998 — Fair value of derivative(warrants), end of period/year $ 1,221,988 $ — |
12. NON-CONTROLLING INTEREST
12. NON-CONTROLLING INTEREST | 9 Months Ended |
Sep. 30, 2020 | |
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 50% through May 13, 2013, and 20% from then until February 24, 2020 when the minority interest was eliminated. Changes in Non-Controlling Interest for the nine months ended September 30, 2020 and year ended December 31, 2019, respectively were as follows: 2020 2019 Beginning balance $ (5,723,663 ) $ (5,611,528 ) Operating income (loss) (61,589 ) (62,511 ) Share of Other Comprehensive Income (loss) (11,669 ) (49,624 ) Elimination of Non-Controlling Interest (5,796,921 ) — Ending balance $ - $ (5,723,663 ) |
13. FAIR VALUE OF FINANCIAL INS
13. FAIR VALUE OF FINANCIAL INSTRUMENTS | 9 Months Ended |
Sep. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
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 Level 2 Inputs Level 3 Inputs As of September 30, 2020, and December 31, 2019, 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 and changes to the Level 3 inputs is discussed in Note 11. Fair Value Measurement at September 30, 2020 Using: Quoted Prices in Active Markets For Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets: None $ — $ — $ — $ — Totals $ — $ — $ — $ — Liabilities: Derivative Liabilities $ 3,741,363 — — 3,741,363 Totals $ 3,741,363 $ — $ — $ 3,741,363 Fair Value Measurement at December 31, 2019 Using: Assets: None $ — $ — $ — $ — Totals $ — $ — $ — $ — Liabilities: Derivative Liabilities $ 86,104 $ — $ — $ 86,104 Totals $ 86,104 $ — $ — $ 86,104 |
14. REVENUE CONCENTRATION
14. REVENUE CONCENTRATION | 9 Months Ended |
Sep. 30, 2020 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE CONCENTRATION | The Company had certain customers whose revenue individually represented 10% or more of the Company’s total revenue, or whose accounts receivable balances individually represented 10% or more of the Company’s total accounts receivable, as follows: For each of the nine months ended September 30, 2020 and 2019, two and one customers accounted for 100% of revenue, respectively. At September 30, 2020 and December 31, 2019, three and one customer accounted for 100% of accounts receivable, respectively. |
15. NOTES PAYABLE
15. NOTES PAYABLE | 9 Months Ended |
Sep. 30, 2020 | |
Notes Payable [Abstract] | |
NOTES PAYABLE | In June 2017, the Company entered into financing agreements for unpaid mining concession taxes for the period July 1, 2014 to December 31, 2015 in the amount of $533,580. The Company paid an initial 20% payment in the amount of $106,716 and financed the balance over 36 months at 18% interest. In February 2018, the Company entered into a financing agreement for unpaid mining concessions taxes for the year ended December 31, 2016 in the amount of $552,990. The Company paid an initial payment of $110,598 and financed the balance over 36 months at 18%. In June 2018, the Company entered into financing agreements for the unpaid mining concession taxes for the year ended December 31, 2017 and the period ending June 30, 2018 in the amount of $1,739,392. The Company paid an initial 20% payment of $347,826 and financed the balance over 36 months at 21.84% In February 2019, the Company entered into a financing agreement for unpaid mining concession taxes for the year ended December 31, 2018 in the amount of $335,350. The Company paid an initial 20% payment of $67,070 and financed the balance over 36 months at an interest rate of 21%. In October 2019, the Company entered into a financing agreement for unpaid mining concession taxes in the amount of $299,474. The Company paid an initial 20% payment of $59,895 and financed the balance over 36 months at an interest rate of 22%. The following is a summary of the transaction during the period ended September 30, 2020 and year ended December 31, 2019: Balance December 31, 2018 $ 1,803,235 Exchange Rate Adjustment 73,314 Property Holding Taxes - Core Concessions 634,824 20% Down Payment (126,965 ) 2019 Principal Payments (111,977 ) Balance December 31, 2019 2,272,431 Exchange Rate Adjustment (334,572 ) 2020 Principal Payments (40,085 ) Balance September 30, 2020 $ 1,897,774 At September 30, 2020 future maturities of notes payable are as follows: Year Ending September 30: 2021 $ 1,766,624 2022 123,467 2023 7,683 $ 1,897,774 |
16. SUBSEQUENT EVENTS
16. SUBSEQUENT EVENTS | 9 Months Ended |
Sep. 30, 2020 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | The Company has evaluated events from September 30, 2020, through the date whereupon the financial statements were issued, and has determined the below described events subsequent to the end of the period. On November 6, 2020, the Mexican courts ruled the $48M USD judgement could be transferred to the U.S. to support the Company’s filing on August 28, 2020 when the Company filed a Petition for Recognition in the U.S. of the $48M USD Foreign Judgment. |
1. NATURE OF ACTIVITIES AND S_2
1. NATURE OF ACTIVITIES AND SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
Nature of Activities, History and Organization | 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. In 2000, the Company formed a wholly owned subsidiary, DynaResource de México S.A. de C.V., chartered in México (“DynaMéxico”). This Company was formed to acquire, invest in and develop resource properties in México. DynaMéxico owns a portfolio of mining concessions that currently includes its interests in the San José de Gracía Project (“SJG”) in northern Sinaloa State, México. The SJG District covers 69,121 hectares (170,802 acres) on the west side of the Sierra Madre mountain range. The Company currently owns 100% of the outstanding capital of DynaMéxico. A 20% minority interest in Dyna México was held by Goldgroup Resources Inc., a wholly owned subsidiary of Goldgroup Mining Inc. Vancouver BC (“Goldgroup”) until February 24, 2020. In 2005, the Company formed DynaResource Operaciones de San Jose De Gracía S.A. de C.V. (“DynaOperaciones”), and acquired effective control of Mineras de DynaResource, S.A. de C.V. (formerly Minera Finesterre S.A. de C.V., “DynaMineras”). The Company owns 100% of Dyna Mineras. The Company elected to become a voluntary reporting issuer in Canada in order to avail itself of Canadian regulations regarding reporting for mining properties and, more specifically, National Instrument 43-101 (“NI 43-101”). This regulation sets forth standards for reporting resources in a mineral property in Canada and is a standard recognized in the mining industry. |
Reclassifications and Adjustments | Certain financial statement reclassifications have been made to prior period balances to reflect the current period’s presentation format; such reclassifications had no impact on the Company’s consolidated statements of income or consolidated statements of cash flows and had no material impact on the Company’s consolidated balance sheets. |
Significant Accounting Policies | The Company’s management selects accounting principles generally accepted in the United States of America and adopts methods for their application. The application of accounting principles requires the estimating, matching and timing of revenue and expense. The accounting policies used conform to generally accepted accounting principles which have been consistently applied in the preparation of these financial statements. The financial statements and notes are representations of the Company’s management which is responsible for their integrity and objectivity. Management further acknowledges that it is solely responsible for adopting sound accounting practices, establishing and maintaining a system of internal accounting control and preventing and detecting fraud. The Company's system of internal accounting control is designed to assure, among other items that: 1) recorded transactions are valid; 2) valid transactions are recorded; and 3) transactions are recorded in the proper period in a timely manner to produce financial statements which present fairly the financial condition, results of operations and cash flows of the Company for the respective periods presented. |
Basis of Presentation | The Company prepares its financial statements on the accrual basis of accounting in conformity with accounting principles generally accepted in the United States. |
Principles of Consolidation | The financial statements include the accounts of DynaResource, Inc., as well as DynaResource de México, S.A. de C.V. (100% ownership), DynaResource Operaciones S.A. de C.V. (100% ownership) and Mineras de DynaResource S.A. de C.V. (100% ownership). All significant inter-company transactions have been eliminated. All amounts are presented in U.S. Dollars unless otherwise stated. |
Non-Controlling Interest | The Company’s subsidiary, DynaResource de México S.A. de C.V, was 20% owned by Goldgroup Resources, Inc. until February 24, 2020 when the Company recovered the shares as partial satisfaction of a legal judgement. See Note 10 for further details. The Company accounted for this outside interest as “non-controlling interest” through February, 2020. A 20% share of operating income (loss) and comprehensive income (loss) is allocated to the non-controlling interest through the date of the recovery of the shares. |
Investments in Affiliates | The Company owns a 19.95% interest in DynaResource Nevada, Inc., a Nevada Corporation (“DynaNevada”), with one operating subsidiary in México, DynaNevada de México, S.A. de C.V. (“DynaNevada de México”), together “DynaNevada”. The Company accounts for this investment using the cost basis. The Company has significant influence over DynaNevada, but not control, due to the lack of a majority voting interest in the entity. DynaNevada has been dormant for several years. DynaUSA has no plan or intention of future funding with DynaNevada nor are any other transactions with DynaNevada contemplated at this time. The Company therefore accounts for this investment using the cost basis. The investment was $70,000 and $70,000 at September 30, 2020 and December 31, 2019, respectively. |
Cash and Cash Equivalents | The Company considers all highly liquid financial instruments with an original maturity of three months or less to be cash equivalents. At times, cash balances may be in excess of the Federal Deposit Insurance Corporation (“FDIC”) insurance limits. |
Accounts Receivable and Allowances for Doubtful Accounts | The allowance for accounts receivable is recorded when receivables are considered to be doubtful of collection. As of September 30, 2020 and December 31, 2019, respectively, no allowance has been made. |
Foreign Tax Receivable | Foreign Tax Receivable is comprised of recoverable value-added taxes (“IVA”) charged by the Mexican government on goods and services rendered. Under certain circumstances, these taxes are recoverable by filing a tax return. Amounts paid for IVA are tracked and held as receivables until the funds are remitted. The total amounts of the IVA receivable as of September 30, 2020 and December 31, 2019 are $1,539,095 and $1,297,387, respectively. |
Inventory | Inventories are carried at the lower of cost or net realizable value and consist of mined tonnage, and gravity and flotation concentrates, and gravity tailings or flotation feed material. The inventories are $76,332 and $523,089 as of September 30, 2020 and December 31, 2019, respectively. |
Proven and Probable Reserves (No Known Reserves) | The definition of proven and probable reserves is set forth in SEC Industry Guide 7 (“Industry Guide 7”). Proven reserves for which (1) quantity is computed from dimensions revealed in outcrops, trenches, workings or drill holes, grade and/or quality are computed from the results of detailed sampling and (2) the sites for inspection, sampling and measurement are spaced so closely and the geological character is so well defined that size, shape, depth and mineral content of the reserves are well-established. Probable reserves are reserves for which quantity and grade and/or quality are computed from information similar to that used for proven (measured) reserves, but the sites for inspection, sampling, and measurement are farther apart or are otherwise less adequately spaced. The degree of assurance, although lower than that for proven (measured) reserves, is high enough to assume continuity between points of observations. As of September 30, 2020, none of the Company's properties contain resources that satisfy the definition of proven and probable reserves. The Company classifies the development of its properties, including the San Jose de Gracía Property, as exploration stage projects since no proven or probable reserves have been established under Industry Guide 7. |
Property | Substantially all mine development costs, including design, engineering, mine construction, and installation of equipment are expensed as incurred as the Company has not established proven and probable reserves on any of its properties. Only certain types of mining equipment which has alternative uses or significant salvage value, may be capitalized without proven and probable reserves. Depreciation is computed using the straight-line method. Office furniture and equipment are being depreciated on a straight-line method over estimated economic lives ranging from 3 to 5 years. Leasehold improvements, which relate to the Company's corporate office, are being amortized over the term of the lease of 10 years. Design, Construction, and Development Costs: When proven and probable reserves as defined by Industry Guide 7 exist, development costs are capitalized, and the property is a commercially minable property. Mine development costs incurred either to develop new ore deposits, expand the capacity of operating mines, or to develop mine areas substantially in advance of current production would be capitalized. Costs of start-up activities and costs incurred to maintain current production or to maintain assets on a standby basis are charged to operations as incurred. Costs of abandoned projects are charged to operations upon abandonment. All capitalized costs would be amortized using the units of production method over the estimated life of the ore body based on recoverable ounces to be mined from proven and probable reserves. Certain costs to design and construct mining and processing facilities may be incurred prior to establishing proven and probable reserves. As no proven and probable reserves have been established on any of the Company's properties, design, construction and development costs are not capitalized at any of the Company's properties, and accordingly, substantially all costs are expensed as incurred, resulting in the Company reporting larger losses than if such expenditures had been capitalized. Additionally, the Company does not have a corresponding depreciation or amortization of these costs going forward since these expenditures were expensed as incurred as opposed to being capitalized. As a result of these and other differences, the Company's financial statements may not be comparable to the financial statements of mining companies that have established reserves. |
Mining Properties Interests | Mineral property interests include acquired interests in development and exploration stage properties, which are considered tangible assets. The amount capitalized relating to a mineral property interest represents its fair value at the time of acquisition. When a property does not contain mineralized material that satisfies the definition of proven and probable reserves, such as with the San Jose de Gracía Property, capitalized costs and mineral property interests are amortized using the straight-line method once production begins. As of June 30, 2020, the mining interests have been in the pilot production stage and therefore, no amortization has been expensed. Mining properties consist of 33 mining concessions covering approximately 9,919 hectares at the San Jose de Gracía property (“SJG”), the basis of which are amortized on the unit of production method based on estimated recoverable resources. If it is determined that the deferred costs related to a property are not recoverable over its productive life, those costs will be written down to fair value as a charge to operations in the period in which the determination is made. The amounts at which mineral properties and the related costs are recorded do not necessarily reflect present or future values. Impairment of Assets: For operating mines, recoverability is measured by comparing the undiscounted future net cash flows to the net book value. When the net book value exceeds future net undiscounted cash flows, an impairment loss is measured and recorded based on the excess of the net book value over fair value. Fair value for operating mines is determined using a combined approach, which uses a discounted cash flow model for the existing operations and a market approach for the fair value assessment 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 related factors), production levels, operating costs, capital requirements and reclamation costs, all based on life-of-mine plans. The term "recoverable mineralized material" refers to the estimated amount of gold or other commodities that will be obtained after considering losses during processing and treatment of mineralized material. In estimating future cash flows, assets are grouped at the lowest level for which there are identifiable cash flows that are largely independent of future cash flows from other asset groups. The Company's estimates of future cash flows are based on numerous assumptions and it is possible that actual future cash flows will be significantly different than the estimates, as actual future quantities of recoverable minerals, gold, silver and other commodity prices, production levels and costs and capital are each subject to significant risks and uncertainties. The recoverability of the book value of each property will be assessed annually for indicators of impairment such as adverse changes to any of the following: ● estimated recoverable ounces of gold, silver or other precious minerals; ● estimated future commodity prices; ● estimated expected future operating costs, capital expenditures and reclamation expenditures. A write-down to fair value will be recorded when the expected future cash flow is less than the net book value of the property or when events or changes in the property indicate that carrying amounts are not recoverable. This analysis will be completed as needed, and at least annually. As of the date of this filing, no events have occurred that would require write-down of any assets. As of September 30, 2020 and December 31, 2019, no indications of impairment existed. |
Asset Retirement Obligation | As the Company is not obligated to remediate the mining properties, no Asset Retirement Obligation (“ARO”) has been established. Changes in regulations or laws, any instances of non-compliance with laws or regulations that result in fines, or any unforeseen environmental contamination could result in a material impact to the amounts charged to operations for reclamation and remediation. Significant judgments and estimates are made when estimating 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 environmental remediation work is highly subjective. Considering all of these factors that go into the determination of an ARO, the fair value of the AROs can materially change over time. |
Property Holding Costs | Holding costs to maintain a property on a care and maintenance basis are expensed in the period they are incurred. These costs include security and maintenance expenses, lease and claim fees and payments, and environmental monitoring and reporting costs. |
Exploration Costs | Exploration costs are charged to operations and expenses as incurred. Exploration, development, direct field costs and administrative costs are expensed in the period incurred. |
Transactions in and Translations of Foreign Currency | The functional currency for the subsidiaries of the Company is the Mexican Peso. As a result, the financial statements of the subsidiaries have been translated from Mexican Pesos into U.S. dollars using (i) yearend exchange rates for balance sheet accounts, and (ii) the weighted average exchange rate of the reporting period for all income statement accounts. Foreign currency translation gains and losses are reported as a separate component of stockholders’ equity and 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, 2020 and December 31, 2019 (Mexican Pesos per one U.S. dollar): Sept 30, 2020 Dec 31, 2019 Exchange Rate at Period End Pesos 22.07 18.86 Relevant exchange rates used in the preparation of the income statement portion of financial statements for the subsidiaries are as follows for the periods ended June 30, 2020 and June 30, 2019 (Mexican Pesos per one U.S. dollar): Sept 30, 2020 Sept 30, 2019 Weighted Average Exchange Rate for the Nine Months Ended Pesos 21.79 19.25 The Company recorded currency transaction gains (losses) of $(1,025,194) and $(108,126) for the nine months ended September 30, 2020 and 2019, respectively and $(685,509) and $(401,826) for the three months ended September 30, 2020 and 2019, respectively. |
Income Taxes | The Company accounts for income taxes under ASC 740 “Income Taxes” Income from the Company’s subsidiaries in México are taxed under applicable Mexican tax law. |
Use of Estimates | In order to prepare financial statements in conformity with accounting principles generally accepted in the United States, management must make estimates, judgments and assumptions that affect the amounts reported in the financial statements and determines whether contingent assets and liabilities, if any, are disclosed in the financial statements. The ultimate resolution of issues requiring these estimates and assumptions could differ significantly from resolution currently anticipated by management and on which the financial statements are based. |
Comprehensive Income (Loss) | ASC 220 “Comprehensive Income” |
Revenue Recognition | The Company follows ASC 606 “ Revenue from contracts with customers The amount of revenue recognized is initially recorded on a provisional basis based on the contract price and the estimated metal quantities based on assay data. The revenue is adjusted upon final settlement of the sale. The chief risk associated with the recognition of sales on a provisional basis is the fluctuations between the estimated quantities of precious metals base on the initial assay and the actual recovery from treatment and processing. As of September 30, 2020, there are $1,000,000 in customer deposit liabilities for payments received in advance expected to be settled in 2020. During the periods ended September 30, 2020 and 2019 there was $0 and $0 of revenue recognized during the period from customer deposit liabilities (deferred contract revenue) from prior periods, and $0 of customer deposits refunded to the customer on order cancellation. As of and for the periods ended September 30, 2020 and December 31, 2019, there are no contract costs or commissions deferred. We have elected to account for shipping and handling costs as fulfillment costs after the customer obtains control of the goods. |
Stock-Based Compensation | The Company accounts for stock options at fair value as prescribed in ASC 718. The Company estimates the fair value of each stock option at the grant date by using the Black-Scholes option-pricing model and provides for expense recognition over the service period, if any, of the stock option. |
Fair Value of Financial Instruments | The Company’s financial instruments consist of cash, receivables, payables, accrued expenses and long-term debt. The carrying amount of cash, receivables and payables approximates fair value because of the short-term nature of these items. The carrying amount of long-term debt approximates fair value due to the relationship between the interest rate on long-term debt and the Company’s incremental risk adjusted borrowing rate. |
Per Share Amounts | Earnings per share are calculated in accordance with ASC 260 “ Earnings per Share The Company had 3,391,835 warrants outstanding at September 30, 2020 which upon exercise, would result in the issuance of 3,391,835 shares of common stock. Of these warrants 2,166,527 were exercisable at $2.05 per share and 1,225,308 were exercisable at $.01 per share. The Company also had convertible debt instruments as of September 30, 2020 which, upon conversion at a valuations from $2.00 to $2.50 per share, would result in the issuance of 2,325,925 shares of stock. The Company had 2,166,527 warrants outstanding at December 31, 2019 exercisable at $2.50 per share, which upon exercise, would result in the issuance of 2,166,527 shares of common stock. The Company also had convertible debt instruments as of December 31, 2019 which would result in the issuance of 351,352 shares of stock. Three Month Ended Sept 30, 2020 Three Month Ended Sept 30, 2019 Nine Month Ended Sept 30, 2020 Nine Month Ended Sept 30, 2019 Net loss attributable to common shareholders $ (1,451,897 ) $ (740,657 ) $ (6,732,039 ) $ (2,099,201 ) Weighted average number of common shares outstanding, Basic 17,722,825 17,722,825 17,722,825 17,722,825 Diluted weighted average number of common shares outstanding, 17,722,825 17,722,825 17,722,825 17,722,825 Basic earnings (loss) per share $ (0.08 ) $ (0.04 ) $ (0.38 ) $ (0.12 ) Diluted earnings (loss) per share $ (0.08 ) $ (0.04 ) $ (0.38 ) $ (0.12 ) |
Related Party Transactions | FASB ASC 850, "Related Party Disclosures" requires companies to include in their financial statements, disclosures of material related party transactions. The Company discloses all material related party transactions. A party is considered to be related to the Company if the party directly or indirectly or through one or more intermediaries, controls, is controlled by, or is under common control with the Company. Related parties also include principal owners of the Company, its management, members of the immediate families of principal owners of the Company and its management and other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests. A party which can significantly influence the management or operating policies of the transacting parties or if it has an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests is also a related party. |
1. NATURE OF ACTIVITIES AND S_3
1. NATURE OF ACTIVITIES AND SIGNIFICANT ACCOUNTING POLICIES (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
Exchange Rates | Relevant exchange rates used in the preparation of the financial statements for the subsidiaries are as follows for the periods ended September 30, 2020 and December 31, 2019 (Mexican Pesos per one U.S. dollar): Sept 30, 2020 Dec 31, 2019 Exchange Rate at Period End Pesos 22.07 18.86 Relevant exchange rates used in the preparation of the income statement portion of financial statements for the subsidiaries are as follows for the periods ended June 30, 2020 and June 30, 2019 (Mexican Pesos per one U.S. dollar): Sept 30, 2020 Sept 30, 2019 Weighted Average Exchange Rate for the Nine Months Ended Pesos 21.79 19.25 |
Computation of Earnings (Loss) Per Share | Three Month Ended Sept 30, 2020 Three Month Ended Sept 30, 2019 Nine Month Ended Sept 30, 2020 Nine Month Ended Sept 30, 2019 Net loss attributable to common shareholders $ (1,451,897 ) $ (740,657 ) $ (6,732,039 ) $ (2,099,201 ) Weighted average number of common shares outstanding, Basic 17,722,825 17,722,825 17,722,825 17,722,825 Diluted weighted average number of common shares outstanding, 17,722,825 17,722,825 17,722,825 17,722,825 Basic earnings (loss) per share $ (0.08 ) $ (0.04 ) $ (0.38 ) $ (0.12 ) Diluted earnings (loss) per share $ (0.08 ) $ (0.04 ) $ (0.38 ) $ (0.12 ) |
2. INVENTORIES (Tables)
2. INVENTORIES (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Inventory Disclosure [Abstract] | |
Inventories | 2020 2019 Mined Tonnage, Gold-Silver Concentrates, and/or Gravity Tailings (Flotation Feed Material) $ 76,332 $ 523,089 Total Inventories $ 76,332 $ 523,089 |
3. PROPERTY AND EQUIPMENT (Tabl
3. PROPERTY AND EQUIPMENT (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | 2020 2019 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 (112,364 ) (109,927 ) Total Property $ 6,790 $ 9,227 |
4. MINING CONCESSIONS (Tables)
4. MINING CONCESSIONS (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Mining Concessions Abstract | |
Mining Properties | 2020 2019 San Jose de Gracia (“SJG”): $ 4,132,678 $ 4,132,678 Total Mining Concessions $ 4,132,678 $ 4,132,678 |
7. INCOME TAXES (Tables)
7. INCOME TAXES (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
Deferred Tax Assets | Deferred Tax Asset Related to: 2020 2019 Prior Year $ 13,780,490 $ 13,343,134 Tax Benefit for Current Year 950,226 437,356 Total Deferred Tax Asset 14,730,716 13,780,490 Less: Valuation Allowance (14,730,716 ) (13,780,490 ) Net Deferred Tax Asset $ — $ — |
Income Tax Provision | The income tax provision for the Company as of September 30, 2020 and 2019 differ from those computed using the statutory rates of 25% due to the following: 2020 2019 Tax Expense (Benefit) at Statutory Rates $ (1,665,910 ) $ (533,509 ) Other Permanent Differences 715,684 (207,779 ) Change in Valuation Allowance 950,226 741,288 Provision for (Benefit from) Income Taxes, Net $ — $ — |
8. STOCKHOLDERS' EQUITY (Tables
8. STOCKHOLDERS' EQUITY (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Stockholders' Equity Note [Abstract] | |
Series C Preferred Stock | Preferred Series C Carrying Value, December 31, 2018 $ 4,333,053 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, December 31, 2019 4,333,053 Issuances of 1,771 shares at Fair Value for anti-dilution — Bifurcation of Derivative Liability 4,427 Relative Fair Value of Warrants – Preferred Stock Discount — Accretion of Preferred Stock to Redemption Value — Carrying Value, September 30, 2020 $ 4,337,480 |
Warrant Activity | Number of Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Life (Years) Intrinsic Value Balance at December 31, 2018 2,166,527 $ 2.45 1.51 $ — Granted — $ — $ — Exercised — $ — $ — Forfeited — $ — $ — Balance at December 31, 2019 2,166,527 $ 2.45 0.51 $ — Granted 3,391,845 $ 1.31 4.89 $ — Exercised — $ — $ — Forfeited 2,166,527 $ 2.45 $ — Balance at September 30, 2020 3,391,845 $ 1.31 4.84 $ — Exercisable at September 30, 2020 3,391,845 $ 1.31 4.84 $ — |
10. COMMITMENTS AND CONTINGEN_2
10. COMMITMENTS AND CONTINGENCIES (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Lease Cost | Period Ended Sept 30, 2020 Operating Lease – Office Lease $ 63,060 Operating Lease – Ground Lease 64,568 Short Term Lease Costs 10,158 Variable Lease Costs — TOTAL $ 137,786 |
Weighted Average Remaining Lease Term and Weighted Average Discount Rate | Weighted Average Remaining Lease Term (Years) – Operating Leases 11.00 Weighted Average Discount Rate – Operating Leases 12.50% |
Future Minimum Lease Obligations | YEAR 2021 $ 174,459 2022 178,925 2023 123,773 2024 96,896 2025 99,803 Thereafter 787,682 Total $ 1,461,538 Less Imputed Interest (676,791 ) RIGHT OF USE LIABILITY $ 784,747 |
11. DERIVATIVE LIABILITIES (Tab
11. DERIVATIVE LIABILITIES (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Preferred Series C Stock | |
Valuation Assumption | 2020 2019 Annual volatility rate 162% 144% Risk free rate 0.13% 1.58% Remaining Term 1.75 years 0.5 years Fair Value of common stock $1.00 $0.47 |
Change in the Fair Value of the Derivative Liability | Period Ended 2020 2019 Fair value of derivative (stock), beginning of period/year $ 37,038 $ 402,909 Change in fair value of derivative 878,793 (365,871 ) Fair value of derivative on the date of extension 287,728 - Fair value of derivative(stock), end of period/year $ 1,203,559 $ 37,038 |
Preferred Series C Warrant | |
Valuation Assumption | 2020 2019 Annual volatility rate 162% 144% Risk free rate 0.13% 1.58% Remaining Term 1.75 years 0.5 years Fair Value of common stock $1.00 $0.47 |
Change in the Fair Value of the Derivative Liability | The below table represents the change in the fair value of the derivative liability during the period ended September 30, 2020 and year ended December 31, 2019. Period Ended 2020 2019 Fair value of derivative (warrants), beginning of period/year $ 49,066 $ 571,774 Change in fair value of derivative 865,984 (522,708 ) Fair value of derivative on the date of issuance 400,766 — Fair value of derivative(warrants), end of period/year $ 1,315,816 $ 49,066 |
Preferred Series D Warrant | |
Valuation Assumption | 2020 2019 Annual volatility rate 162% — Risk free rate 0.13% — Remaining Term 9.62 years — Fair Value of common stock $1.00 — |
Change in the Fair Value of the Derivative Liability | Period Ended 2020 2019 Fair value of derivative (warrants), beginning of period/year $ — $ — Change in fair value of derivative 811,990 — Fair value of derivative on the date of issuance 409,998 — Fair value of derivative(warrants), end of period/year $ 1,221,988 $ — |
12. NON-CONTROLLING INTEREST (T
12. NON-CONTROLLING INTEREST (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Noncontrolling Interest [Abstract] | |
Changes in Non-Controlling Interest | 2020 2019 Beginning balance $ (5,723,663 ) $ (5,611,528 ) Operating income (loss) (61,589 ) (62,511 ) Share of Other Comprehensive Income (loss) (11,669 ) (49,624 ) Elimination of Non-Controlling Interest (5,796,921 ) — Ending balance $ - $ (5,723,663 ) |
13. FAIR VALUE OF FINANCIAL I_2
13. FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurement | Fair Value Measurement at September 30, 2020 Using: Quoted Prices in Active Markets For Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets: None $ — $ — $ — $ — Totals $ — $ — $ — $ — Liabilities: Derivative Liabilities $ 3,741,363 — — 3,741,363 Totals $ 3,741,363 $ — $ — $ 3,741,363 Fair Value Measurement at December 31, 2019 Using: Assets: None $ — $ — $ — $ — Totals $ — $ — $ — $ — Liabilities: Derivative Liabilities $ 86,104 $ — $ — $ 86,104 Totals $ 86,104 $ — $ — $ 86,104 |
15. NOTES PAYABLE (Tables)
15. NOTES PAYABLE (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Notes Payable [Abstract] | |
Notes Payable | Balance December 31, 2018 $ 1,803,235 Exchange Rate Adjustment 73,314 Property Holding Taxes - Core Concessions 634,824 20% Down Payment (126,965 ) 2019 Principal Payments (111,977 ) Balance December 31, 2019 2,272,431 Exchange Rate Adjustment (334,572 ) 2020 Principal Payments (40,085 ) Balance September 30, 2020 $ 1,897,774 |
Maturities of Notes Payable | Year Ending September 30: 2021 $ 1,766,624 2022 123,467 2023 7,683 $ 1,897,774 |
1. NATURE OF ACTIVITIES AND S_4
1. NATURE OF ACTIVITIES AND SIGNIFICANT ACCOUNTING POLICIES (Details) | Sep. 30, 2020 | Dec. 31, 2019 | Sep. 30, 2019 |
Accounting Policies [Abstract] | |||
Current Exchange Rate | 22.07 | 18.86 | |
Weighted Average Exhange Rate for the Period | 21.79 | 19.25 |
1. NATURE OF ACTIVITIES AND S_5
1. NATURE OF ACTIVITIES AND SIGNIFICANT ACCOUNTING POLICIES (Details 1) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Accounting Policies [Abstract] | ||||
Net Loss Attributable to Common Shareholders | $ (1,408,567) | $ (831,301) | $ (6,663,638) | $ (2,134,035) |
Shares: | ||||
Weighted Average Number of Common Shares Outstanding, Basic | 17,722,825 | 17,722,825 | 17,722,825 | 17,722,825 |
Diluted Weighted Average Number of Common Shares Outstanding, Diluted | 17,722,825 | 17,722,825 | 17,722,825 | 17,722,825 |
Basic Earnings (Loss) Per Share | $ (.08) | $ (.04) | $ (.38) | $ (.12) |
Diluted Earnings (Loss) Per Share | $ (.08) | $ (.04) | $ (.38) | $ (.12) |
1. NATURE OF ACTIVITIES AND S_6
1. NATURE OF ACTIVITIES AND SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Accounting Policies [Abstract] | |||||
Investments in Affiliate | $ 70,000 | $ 70,000 | $ 70,000 | ||
IVA Receivable | 1,539,095 | 1,539,095 | 1,297,387 | ||
Inventories | 76,332 | 76,332 | $ 523,089 | ||
Currency Transaction Gains (Losses) | $ (685,509) | $ (401,826) | $ (1,025,194) | $ (108,126) |
2. INVENTORIES (Details)
2. INVENTORIES (Details) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 |
Inventory Disclosure [Abstract] | ||
Mined Tonnage, Gold-Silver Concentrates, and/or Gravity Tailings (Flotation Feed Material) | $ 76,332 | $ 523,089 |
Total Inventories | $ 76,332 | $ 523,089 |
3. PROPERTY AND EQUIPMENT (Deta
3. PROPERTY AND EQUIPMENT (Details) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 |
Property, Plant and Equipment [Abstract] | ||
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 | (112,364) | (109,927) |
Total Property | $ 6,790 | $ 9,227 |
3. PROPERTY AND EQUIPMENT (De_2
3. PROPERTY AND EQUIPMENT (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Property, Plant and Equipment [Abstract] | ||||
Depreciation Expense | $ 812 | $ 812 | $ 2,437 | $ 2,442 |
4. MINING CONCESSIONS (Details)
4. MINING CONCESSIONS (Details) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 |
Mining Concessions Abstract | ||
San Jose de Gracia ("SJG") Total Mining Concessions | $ 4,132,678 | $ 4,132,678 |
Total Mining Concessions | $ 4,132,678 | $ 4,132,678 |
4. MINING CONCESSIONS (Details
4. MINING CONCESSIONS (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Mining Concessions Abstract | ||||
Depletion Expense | $ 0 | $ 0 | $ 0 | $ 0 |
7. INCOME TAXES (Details)
7. INCOME TAXES (Details) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 |
Income Tax Disclosure [Abstract] | ||
Prior Year | $ 13,780,490 | $ 13,343,134 |
Tax (Expense) Benefit for Current Year | 950,226 | 437,356 |
Total Deferred Tax Asset | 14,730,716 | 13,780,490 |
Less: Valuation Allowance | (14,730,716) | (13,780,490) |
Net Deferred Tax Asset | $ 0 | $ 0 |
7. INCOME TAXES (Details 1)
7. INCOME TAXES (Details 1) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Income Tax Disclosure [Abstract] | ||||
Tax Expense (Benefit) at Statutory Rates | $ (1,665,910) | $ (533,509) | ||
Other Permanent Differences | 715,684 | (207,779) | ||
Change in Valuation Allowance | 950,226 | 741,288 | ||
Provision for (Benefit from) Income Taxes, Net | $ 0 | $ 0 | $ 0 | $ 0 |
7. INCOME TAXES (Details Narrat
7. INCOME TAXES (Details Narrative) | Sep. 30, 2020USD ($) |
Income Tax Disclosure [Abstract] | |
Net Operating Loss Carry-Forward | $ 58,500,000 |
8. STOCKHOLDERS' EQUITY (Detail
8. STOCKHOLDERS' EQUITY (Details) - Preferred Series C Stock - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2020 | |
Carrying Value, Beginning Balance | $ 4,333,053 | $ 4,333,053 |
Issuances at Fair Value, Net of Issuance Costs | 0 | 0 |
Bifurcation of Derivative Liability | 4,427 | 0 |
Relative Fair Value of Warrants - Preferred Stock Discount | 0 | 0 |
Accretion of Preferred Stock to Redemption Value | 0 | 0 |
Carrying Value, Ending Balance | $ 4,337,480 | $ 4,333,053 |
8. STOCKHOLDERS' EQUITY (Deta_2
8. STOCKHOLDERS' EQUITY (Details 1) - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
Stockholders' Equity Note [Abstract] | ||
Warrants, Outstanding, Beginning Balance | 2,166,527 | 2,166,527 |
Warrants, Granted | 3,391,845 | 0 |
Warrants, Exercised | 0 | 0 |
Warrants, Forfeited | 2,166,527 | 0 |
Warrants, Outstanding, Ending Balance | 3,391,545 | 2,166,527 |
Warrants, Outstanding, Exercisable | 3,391,545 | |
Weighted Average Exercise Price, Outstanding, Beginning Balance | $ 2.45 | $ 2.45 |
Weighted Average Exercise Price, Granted | 1.31 | .00 |
Weighted Average Exercise Price, Exercised | .00 | .00 |
Weighted Average Exercise Price, Forfeited | 2.45 | .00 |
Weighted Average Exercise Price, Outstanding, Ending Balance | 1.31 | $ 2.45 |
Weighted Average Exercise Price, Outstanding, Exercisable | $ 1.31 | |
Weighted Average Remaining Contractual Life, Outstanding, Beginning Balance | 6 months 4 days | 1 year 6 months 4 days |
Weighted Average Remaining Contractual Life, Granted | 4 years 10 months 20 days | |
Weighted Average Remaining Contractual Life, Outstanding, Ending Balance | 4 years 10 months 2 days | 6 months 4 days |
Weighted Average Remaining Contractual Life, Outstanding, Exercisable | 4 years 10 months 2 days | |
Intrinsic Value, Outstanding, Beginning Balance | $ 0 | $ 0 |
Intrinsic Value, Granted | 0 | 0 |
Intrinsic Value, Exercised | 0 | 0 |
Intrinsic Value, Forfeited | 0 | 0 |
Intrinsic Value, Ending Balance | 0 | $ 0 |
Intrinsic Value, Outstanding, Exercisable | $ 0 |
8. STOCKHOLDERS' EQUITY (Deta_3
8. STOCKHOLDERS' EQUITY (Details Narrative) - $ / shares | Sep. 30, 2020 | Dec. 31, 2019 |
Series C, Par Value | $ 0.0001 | $ 0.0001 |
Series C, Shares Authorized | 1,734,992 | 1,733,221 |
Series C, Shares Issued | 1,734,992 | 1,733,221 |
Series C, Shares Outstanding | 1,734,992 | 1,733,221 |
Common Stock, Par Value | $ 0.0001 | $ 0.0001 |
Common Stock, Shares Authorized | 40,000,000 | 25,000,000 |
Common Stock, Shares Issued | 17,722,825 | 17,722,825 |
Common Stock, Shares Outstanding | 17,722,825 | 17,722,825 |
Treasury Stock | 616,480 | 778,980 |
Preferred Stock Series A | ||
Preferred Stock, Par Value | $ 0.0001 | $ 0.0001 |
Preferred Stock, Shares Authorized | 1,000 | 1,000 |
Preferred Stock, Shares Issued | 1,000 | 1,000 |
Preferred Stock, Shares Outstanding | 1,000 | 1,000 |
Preferred Stock Series D | ||
Preferred Stock, Par Value | $ 0.0001 | $ 0.0001 |
Preferred Stock, Shares Authorized | 3,000,000 | 3,000,000 |
Preferred Stock, Shares Issued | 0 | 0 |
Preferred Stock, Shares Outstanding | 0 | 0 |
10. COMMITMENTS AND CONTINGEN_3
10. COMMITMENTS AND CONTINGENCIES (Details) | 9 Months Ended |
Sep. 30, 2020USD ($) | |
Short Term Lease Costs | $ 10,158 |
Variable Lease Costs | 0 |
Total | 137,786 |
Office Lease | |
Operating Lease | 63,060 |
Ground Lease | |
Operating Lease | $ 64,568 |
10. COMMITMENTS AND CONTINGEN_4
10. COMMITMENTS AND CONTINGENCIES (Details 1) | Sep. 30, 2020 |
Commitments and Contingencies Disclosure [Abstract] | |
Weighted Average Remaining Lease Term (Years) - Operating Leases | 11 years |
Weighted Average Discount Rate - Operating Leases | 12.50% |
10. COMMITMENTS AND CONTINGEN_5
10. COMMITMENTS AND CONTINGENCIES (Details 2) | Sep. 30, 2020USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2021 | $ 174,459 |
2022 | 178,925 |
2023 | 123,773 |
2024 | 96,896 |
2025 | 99,803 |
Thereafter | 787,682 |
Total | 1,461,538 |
Less Imputed Interest | (676,791) |
RIGHT OF USE LIABILITY | $ 784,747 |
11. DERIVATIVE LIABILITIES (Det
11. DERIVATIVE LIABILITIES (Details) - $ / shares | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
Preferred Series C Stock | ||
Annual Volatility Rate | 162.00% | 144.00% |
Risk Free Rate | 0.13% | 1.58% |
Remaining Term | 1 year 9 months | 6 months |
Fair Value of Common Stock | $ 1 | $ .47 |
Preferred Series C Warrant | ||
Annual Volatility Rate | 162.00% | 144.00% |
Risk Free Rate | 0.13% | 1.58% |
Remaining Term | 1 year 9 months | 6 months |
Fair Value of Common Stock | $ 1 | $ 0.47 |
Preferred Series D Warrant | ||
Annual Volatility Rate | 162.00% | 0.00% |
Risk Free Rate | 0.13% | 0.00% |
Remaining Term | 9 years 7 months 13 days | 0 years |
Fair Value of Common Stock | $ 1 | $ .00 |
11. DERIVATIVE LIABILITIES (D_2
11. DERIVATIVE LIABILITIES (Details 1) - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
Preferred Series C Stock | ||
Fair Value of Derivative, Beginning Balance | $ 37,038 | $ 402,909 |
Change in Fair Value of Derivative | 878,793 | (365,871) |
Fair Value of Derivative on the Date of Extension | 287,728 | 0 |
Fair Value of Derivative, Ending Balance | 1,203,559 | 37,038 |
Preferred Series C Warrant | ||
Fair Value of Derivative, Beginning Balance | 49,066 | 571,774 |
Change in Fair Value of Derivative | 865,794 | (522,708) |
Fair Value of Derivative on the Date of Issuance | 400,766 | 0 |
Fair Value of Derivative, Ending Balance | 1,315,816 | 49,066 |
Preferred Series D Warrant | ||
Fair Value of Derivative, Beginning Balance | 0 | 0 |
Change in Fair Value of Derivative | 811,990 | 0 |
Fair Value of Derivative on the Date of Issuance | 409,998 | 0 |
Fair Value of Derivative, Ending Balance | $ 1,221,988 | $ 0 |
12. NON-CONTROLLING INTEREST (D
12. NON-CONTROLLING INTEREST (Details) - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
Noncontrolling Interest [Abstract] | ||
Non-Controlling Interest, Beginning Balance | $ (5,723,663) | $ (5,611,528) |
Operating Income (Loss) | (61,589) | (62,511) |
Share of Other Comprehensive Income (Loss) | (11,669) | (49,624) |
Elimination of Non-Controlling Interest | (5,796,921) | 0 |
Non-Controlling Interest, Ending Balance | $ 0 | $ (5,723,663) |
13. FAIR VALUE OF FINANCIAL I_3
13. FAIR VALUE OF FINANCIAL INSTRUMENTS (Details) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 |
Assets: | ||
Total Assets | $ 0 | $ 0 |
Liabilities: | ||
Derivative Liabilities | 3,741,363 | 86,104 |
Total Liabilities | 3,741,363 | 86,104 |
Level 1 | ||
Assets: | ||
Total Assets | 0 | 0 |
Liabilities: | ||
Derivative Liabilities | 0 | 0 |
Total Liabilities | 0 | 0 |
Level 2 | ||
Assets: | ||
Total Assets | 0 | 0 |
Liabilities: | ||
Derivative Liabilities | 0 | 0 |
Total Liabilities | 0 | 0 |
Level 3 | ||
Assets: | ||
Total Assets | 0 | 0 |
Liabilities: | ||
Derivative Liabilities | 3,741,363 | 86,104 |
Total Liabilities | $ 3,741,363 | $ 86,104 |
14. REVENUE CONCENTRATION (Deta
14. REVENUE CONCENTRATION (Details Narrative) | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Two Customers | Revenue | |||
Concentration Risk | 100.00% | ||
One Customer | Revenue | |||
Concentration Risk | 100.00% | ||
One Customer | Accounts Receivable | |||
Concentration Risk | 100.00% | ||
Three Customers | Accounts Receivable | |||
Concentration Risk | 100.00% |
15. NOTES PAYABLE (Details)
15. NOTES PAYABLE (Details) - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
Notes Payable [Abstract] | ||
Property Holding Taxes, Beginning Balance | $ 2,272,431 | $ 1,803,235 |
Exchange Rate Adjustment | (334,572) | 73,314 |
Property Holding Taxes - Core Concessions | 634,824 | |
20% Down Payment | (126,965) | |
Principal Payments | (40,085) | (111,977) |
Property Holding Taxes, Ending Balance | $ 1,897,774 | $ 2,272,431 |
15. NOTES PAYABLE (Details 1)
15. NOTES PAYABLE (Details 1) | Sep. 30, 2020USD ($) |
Notes Payable [Abstract] | |
2021 | $ 1,766,624 |
2022 | 123,467 |
2023 | 7,683 |
Total | $ 1,897,774 |