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| Stockholders' Equity | NOTE 10 - STOCKHOLDERS’ EQUITY The total number of shares of all classes of capital stock authorized for issuance by the Company is 60,001,000 shares, consisting of (i) 20,001,000 shares of Preferred Stock, par value $0.0001 per share (“Preferred Stock”), of which 1,734,992 are designated as Series C Preferred Stock, 3,000,000 shares are designated as Series D Preferred Stock, and 1,552,795 shares are designated as Series E Preferred Stock; and (ii) 40,000,000 shares of Common Stock, par value $0.01 per share (“Common Stock”). As of June 30, 2026, 13,713,213 shares of Preferred Stock remain un-designated. Series C Senior Convertible Preferred Stock As of June 30, 2026 and December 31, 2025 there were 1,734,992 shares of Series C Preferred Stock outstanding. As of June 30, 2026, the Series C Preferred Stock is convertible to Common Stock at $1.95 per share or redeemable in cash at the shareholder’s option and include anti-dilution protection. The Series C Preferred Stock may receive a 4% per annum dividend, payable if available, and in arrears, calculated at 4% of $4,337,480 payable annually on June 30. As of June 30, 2026, dividends for the years 2016 to 2026 totaling $1,747,783 were in arrears.
Because the Series C Preferred Stock is mandatorily redeemable by the Company at the election of the holder upon maturity, it is classified as “temporary equity” on the consolidated balance sheet. Series D Senior Convertible Preferred Stock Financing Agreement with Golden Post Rail, LLC, and with Shareholders of DynaResource, Inc. On May 14, 2020, the Company closed a financing agreement with certain shareholders totaling $4,020,000, which was convertible into Series D Preferred Stock. In connection with this financing, the noteholders also received the 2020 Warrants, as outlined in Note 6, to purchase an aggregate of 1,260,633 shares of the Company’s Common Stock at an exercise price of $0.01 a share.
On October 7, 2021, the Company paid $2,500,000 to repurchase one note. The remaining ten noteholders elected to convert their notes totaling $1,520,000 into Series D Preferred Stock at $2.00 per share. Concurrently with the note conversion the noteholders exercised 368,468 of the 2020 Warrants to purchase 368,468 shares of the Company’s Common Stock at $0.01 per share. On October 18, 2021, the Company issued 760,000 shares of Series D Preferred Stock. The Series D Preferred Stock may receive a 4% per annum dividend, payable if available, and in arrears, calculated at 4.0% of $1,520,000 payable annually on October 18. As of June 30, 2026 dividends for the years 2022 to 2025 totaling $243,200 were in arrears. Because the Series D Preferred is mandatorily redeemable by the Company at the election of the holder upon maturity, it is classified as “temporary equity” on the consolidated balance sheet. Deemed dividends on the Series C Preferred Stock and Series D Preferred Stock for the six months ended June 30, 2026 and 2025, were $117,150 and $117,150 respectively. As these dividends have not been declared by the Company, they are required to be presented as an adjustment “below” the net income (loss) line on the accompanying unaudited condensed interim consolidated statements of income. Series E Convertible Preferred Stock As of June 30, 2026 and December 31, 2025, there were 1,552,795 Series E Preferred Stock outstanding. The Series E Preferred Stocks is convertible on a one-for-one basis into shares of Common Stock, subject to equitable adjustment. They are eligible to receive the equivalent of any Common Stock dividend declared but carry no preferred dividend rights and are not redeemable for cash. Preferred Stock (Undesignated) In addition to the 1,734,992 shares designated as Series C Preferred Stock, the 3,000,000 shares designated as Series D Preferred Stock, and 1,552,795 such shares designated as Series E Preferred Stock, the Company is authorized to issue an additional 13,713,213 shares of Preferred Stock, each having a par value of $0.0001 per share. The Board of Directors has authority to issue Preferred Stock from time to time in one or more series and, with respect to each series, to fix and determine by resolution the designations, powers, preferences, rights, qualifications, limitations, and restrictions of such series. As of June 30, 2026 and December 31, 2025, there were no other shares of Preferred Stock outstanding. The shares of each series of Preferred Stock may vary from the shares of any other series thereof in any or all these rights and terms. The Board of Directors may increase the number of shares designated for any existing series by resolution, adding authorized but unissued and undesignated shares to that series. Unless otherwise provided in a particular Preferred Stock designation, the Board of Directors may also decrease the number of shares designated for any existing series by resolution, returning such shares to the pool of authorized, unissued and undesignated Preferred Stock. Common Stock The Company is authorized to issue 40,000,000 shares of Common Stock, par value $0.01 per share. These shares carry full voting rights. As of June 30, 2026, and December 31, 2025, there were 30,149,059 and 29,315,726, respectively, shares of common stock outstanding. No dividends were declared or paid during the six months ended June 30, 2026 and 2025. Preferred Rights The Company issued “Preferred Rights” and received proceeds of $784,500 for these rights. This amount is reflected as “Preferred Rights” within stockholders’ equity in the accompanying condensed interim consolidated balance sheets. As of June 30, 2026, $744,500 had been repaid, leaving a balance of $40,000 as of June 30, 2026 and December 31, 2025. Stock Issuances On May 26, 2026 the Company issued 833,333 shares of Common Stock to Ocean Partners UK for $1,000,000 cash consideration. Treasury Stock There were no treasury stock transactions during the six months ended June 30, 2026, or during the year ended December 31, 2025. There were 37,180 shares of treasury stock outstanding as of June 30, 2026 and December 31, 2025. Warrants As of June 30, 2026, the Company had outstanding warrants to purchase 892,165 shares of Common Stock. These warrants were issued as part of the 2020 financing transaction involving notes convertible into Series D Preferred Stock.
A derivative liability was recognized upon the issuance of the 2020 Warrants. As of June 30, 2026, the derivative liability totaled $356,857, and $1,249,030 as of December 31, 2025. See Note 6.
Options
As of June 30, 2026, the Company had outstanding options to purchase an aggregate of 1,150,000 shares of Common Stock, issued to Directors and Executive Officers as compensation:
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