Original-Research: dynaCERT Inc - von GBC AG

Einstufung von GBC AG zu dynaCERT Inc

Unternehmen: dynaCERT Inc
ISIN: CA26780A1084

Anlass der Studie: Managementinterview
Empfehlung: BUY
Kursziel: 2.00 CAD
Kursziel auf Sicht von: 31.12.2020
Letzte Ratingänderung: -
Analyst: Julien Desrosiers, Matthias Greiffenberger

dynaCERT Inc. manufactures and distributes Carbon Emission Reduction
Technology for use with internal combustion engines. As part of the growing
global hydrogen economy, their patented technology creates hydrogen and
oxygen on-demand through a unique electrolysis system and supplies these
gases through the air intake to enhance combustion, resulting in lower
carbon emissions and greater fuel efficiency. The technology is designed
for use with many types and sizes of diesel engines used in on-road
vehicles, reefer trailers, off-road construction, power generation, mining
and forestry equipment, marine vessels and railroad locomotives.

GBC AG: dynaCERT published important press releases in the past weeks. Can
you tell us a little more about the recent developments?

Jim Payne: All the recent Press Releases point to our successful launching
of our marketing expansion for the first Quarter of 2020. In Europe, we
were all waiting for two years for KBA Homologation, but it has been
well-worth the wait. Results have been spectacular.

Now that we have the ABE from KBA, we have turned the corner and there is
no going back. We are now poised to developing expanded sales support in
2020 and that means in many jurisdictions globally, and especially in
Europe, North America and Mexico. And the timing is perfect. Every Nation
in the world is looking for economically feasible ways to reduce pollution,
and we have a solution that applies to all diesel engines globally.

All this is a big job and requires many resources. We are now very
well-capitalized to implement our international sales and marketing

GBC AG: How will the partnership with Mosolf affect your sales strategy in

Jim Payne: Mosolf has great capabilities and is committed to penetrating
many European markets.

In trucking Mosolf is featuring our HydraGEN Technology in showrooms across
Germany and will be in France, Belgium, Poland a Czech Republic soon.
Mosolf is also introducing our technology to shipping on the Rhine and the
Mediterranean in 2020, with Municipalities and Governments as well.

What is remarkable about Mosolf is that they understand their markets
particularly well and they embrace the importance of the need across Europe
for solutions to carbon pollution.

GBC AG: Can we expect Mosolf to publish their results anytime next year?

Jim Payne: I am sure that Mosolf is going to want to reap the benefits of
early adoption in Europe, as so many others are also indicating. They are
among the very first to ever introduce our technology in Europe and they
deserve to share in all the kudos that comes with publishing their own
results. As they are a private firm, dynaCERT cannot predict when nor how
their results will be released.

GBC AG: Your recent development has been focused on Europe but you are also
pursuing other markets in parallel. How is the Mexican operation going? And

Jim Payne: In Mexico, our preferred service provider, KarbonKleen, has been
extremely successful recently. Mexico is a huge market for our particular
pollution solutions and their diesel operators and drivers truly appreciate
what our product can do.

KarbonKleen’s clients in Mexico operate approximately 1 Million trucks. As
they successfully reach out to their clients, I believe it can develop into
a line-up of orders if we do our job right. That is why we are in
negotiations to look at the feasibility of adding an assembly plant for
assembling our HydraGEN Technology in Mexico to accommodate their needs one
day. KarbonKleen has delivered on all fronts and continues to march in more
clients every week that are adopting our technology.

In India we were invited to meet with top government officials over the
Christmas Holidays and have postponed this possibly in January. The market
in India understand the necessity of reducing diesel pollution,
particularly in cities such as Mumbai and Delhi, but also in every corner
of the country.

GBC AG: Did you already started delivering products? How are your client’s
reaction to the use of HydraGen? What comments are you receiving from the
end users?

Jim Payne: Yes, we are delivering products daily.

We have delivered our first major order to Germany, along with shipping
orders to USA, Mexico, Canada, Austria and India, Dubai, Saudi Arabia,
Chile and Brazil.

Our products can deliver up to 19% fuel savings and up to 88% NOx
reductions as well as up to 50% CO2 emission reductions. This is so
important to not only our clients and end-users of our HydraGEN Technology
but also for their customers. Everyone in the world wants fuel savings and
cleaner air. That’s what we do!

We have announced an MOU in Germany for 1000 Units and started shipping
there already.

Previously we also announced sales of 400 Units through KarbonKleen, 150 of
which have been delivered and destined to be installed in Mexico. Some of
these are also installed on major trucking fleets in Canada.

GBC AG: In the recent weeks you added two great investors, Eric Sprott and
Dr. Jörg Mosolf. How important is it for you to get the backing of such
individuals on both continents?

Jim Payne: Our investors and shareholders are who we work for at dynaCERT.
To see such commitment and support from our key investors is very
encouraging. Moreover, as we grow in 2020, we all realize that we will need
very strong partners for our lofty goals of international expansion. So, we
welcome both Mr. Sprott and Dr. Mosolf with open arms. Dr. Mosolf has also
recently been appointed to our Advisory Board, so that speaks for itself.
It means significant mutual respect on all sides and collaboration on sales
and after-sales support.

GBC AG: What are the next steps for dynaCERT?

Jim Payne: There is one key element going into the first half of 2020:
Investors want to see evidence of sales and distribution. That is our first
focus. We know it is important to the financial markets, but it’s also key
to building an international company like ours. We know what investors want
and we are listening to them. We have moved on from an R&D business to a
fully commercialized international company.

In that regard, we are adding new dealers in many jurisdictions to expand
our broad reach in Europe as well as on many continents. As well, our
marketing support and targeted advertising is intensifying in Q1 2020. Our
product literature has been translated in numerous languages and we have
dealers coming in with orders in mining internationally.

GBC AG: Finally, could you expand on the carbon credit computation
technology and more specifically what kind of an opportunity it represents
for dynaCERT?

Jim Payne: Our proprietary new HydraLytica Technology, along with our
recent family of patents related to telematics and our Smart ECU, can now
measure the carbon savings and NOx savings, along with other reductions of
greenhouse gasses, of diesel engines. It can do so with the accuracy and
reliability that certifiers of Carbon Credits will require. A typical Class
8 truck in North America can generate over $1,500 of carbon credits at
today’s price of $60 per tonne. Imagine the opportunity when just hundreds
of thousands of trucks are driving around the world. That is why we are
committing resources to what we believe is imperative to the fight against
climate change.

GBC AG: What is your vision regarding dynaCERT for the next 3 to 5 years?

Jim Payne: International growth in many vertical markets. There are over 1
Billion diesel engines in use throughout the world. Think of our company as
having a large matrix of markets to be served: Trucking, Generators,
Mining, Shipping, Rail and Construction Equipment. All these markets
operate in many jurisdictions, so each market application in each
jurisdiction, each country, globally, is a vertical forming part of a
matrix. On top of all that, we are working on developing our Carbon Credits
programme. We will be cooperating world-wide with small and large
operators, governments and OEM manufacturers…One diesel engine at a time!

To accomplish all this, we will be signing-up leaders and partners. For
instance, we are looking at assembling in Mexico, Europe and one day in
Asia, in all cases, with some sort of cooperation with industry leaders.

But most of all, while our technology has been applied to larger and larger
diesel engines, we are also looking at other fuels and other applications
of our hydrogen-on-demand. The scientific capabilities are multiple, and if
you ask me about 5 years from now, I wouldn’t be surprised to see our
HydraGEN Technology expanding into other fuels as we continue to learn and
commit to R&D in HydraGEN Technology injection systems.

GBC: Mr. Payne, thank you for your time.

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Date and time of completion of this research: 18/12/2019 (09:45 am)
Date and time of first distribution: 18/12/2019 (12:00)
Target price valid until: max. 31/12/2020

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