Technology MarketWatch Journal

Feature article July 19, 2019:

dynaCERT Inc. Carbon Emission Reduction Technology -- Major Growth Trajectory

dynaCERT Inc.

(TSX-V: DYA) (OTCQB: DYFSF) (Frankfurt: DMJ)

Shares Outstanding: ~288 million

Recently Traded: ~CDN$0.48/share (TSX-V: DYA)

Current Market Capitalization: ~$138 million Canadian

dynaCERT is at the fore of the war on NOx
dynaCERT’s HydraGEN^TM technology is proven through the German Government to reduce harmful emission in diesel transport trucks; NOx reductions of 88%, CO of 50% and particulate matter of 75%, all while increasing fuel-savings up to ~20%, providing better torque, and lowering maintenance costs -- results which are unmatched by any other current technology. NOx is extremely hazardous to people's health and to the environment, contributing to the formation of smog and acid rain, as well as deteriorating the earth's protective tropospheric ozone.

HG1 4.5T Unit & HG1 2.5T Unit targets diesel truck market & buses (class 6 - 8 engines).
HG2 Unit targets refrigeration container & light truck market; dynaCERT's HG2 unit is set to hit dealers soon targeting initially refrigerated trailers. The HG-2 unit is smaller than the HG-1 units and conceivably can be expanded to service smaller trucks, buses and smaller trucks commonly found outside of North America, such as in European countries and in India.
HG3 Unit targets large stationary power generator, marine, & rail market. (HG3 unit; 6,000hp - 30,000hp engines).
Carbon Credits -- dynaCERT has initiated the world-wide process of Carbon Credit applications for its HG Technology and engaged International Environmental Partners Limited of the UK to assist the Company in this regard.
Targeting 'off-grid' energy solutions; dynaCERT is leveraging its unique hydrogen production technology by marrying it with inputs from renewable energies (e.g. solar) to generate sustainable quantities of hydrogen to power fuel cell power stations (this program is currently in R&D with costs subsidized by grants).

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CEO interview on Bloomberg BNN:

Jim Payne, president and CEO of dynaCERT, discusses how the company's carbon-cutting technology is being used in diesel engines used for trucking, marine shipping and mining. Click here to view the April 23, 2019 interview in the segment 'Power Shift: Canadian technology used to cut diesel engine emissions'

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dynaCERT's HG technology was recently featured in Western Canada Highway News Letter - click to view [PDF].

"The major benefit for me is that I'm using less fuel, 3 L less per operating hour according to my Geotab, which is a 15.6% reduction for me. Also, while driving, the engine feels a lot cleaner, and rattles less. I like the way it runs, and it sounds smoother." - David Imhof, owner/operator

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CEO INTERVIEW:

Jay Taylor of Hard Money Advisors interviews Jim Payne, dynaCERT's CEO, regarding developments. Click here to listen to the February 5, 2019 interview which begins starting at the 17:30 minute mark. In the interview dynaCERT's CEO discusses how accelerated growth this 2019 will see the Company become cash flow positive, and more.

Valuation Commentary: dynaCERT Inc. (TSX-V: DYA) (OTCQB: DYFSF) (Frankfurt: DMJ) shares appear at the beginning of a major upside move as the market has only started to price in the reality of the magnitude developing for its HG technology. A move toward a $1billion+ market cap in 2019 is not unreasonable, especially considering the Company's advances in establishing its technology for tracking and trading carbon credits (see related March 26, 2019 news release entitled "dynaCERT Initiates Carbon Credit Applications for its HydraGEN™ Technology").

dynaCERT Inc. currently has a market cap of only ~C$138 million, miniscule compared to where the Company is headed; DYA.V’s valuation appears poised to rise dramatically as its HydraGEN^TM (HG) technology is increasingly being recognized globally as the single most effective and practical piece of equipment businesses and governments can adopt to meaningfully reduce greenhouse gases. In the later part of 2018 dynaCERT announced the results of official European TUV testing of it’s HG units, verifying emission reduction in NOx of ~55%+, CO of 50%, and particulate matter of 75%, all while saving fuel. TUV is facilitated by the Federal Motor Transport Authority in Germany which does testing in the EU, nothing can be installed on a vehicle without its testing and the subsequent ABE certification license -- dynaCERT is expected to receive ABE certification soon, this will provide a significant catalyst for sales.

Note: The head of TUV testing in Germany was so impressed with dynaCERT's results that he quit his job to join dynaCERT. See related July 10, 2019 news release "TÜV Süd, Lahr Germany, Head Engineer Resigns to Join dynaCERT GmbH and dynaCERT’s HydraGEN(TM) Wins Gold Award from ESQR in Germany".

So impressive is the HydraGEN^TM technology dynaCERT won the 2019 German Innovation Awards prize for Energy Solutions, additionally, dynaCERT is the Gold Award from ESQR in Germany, and the Gold Medal winner of the prestigious 2018 Edison Award for Best New Product. Recent news such as the January 16, 2019 news of the Company achieving a milestone from the Government of India involving sizable initial orders from two of twenty nine government states, the December 20, 2018 decision by the government of Austria to proceed with a plan to equip all state-owned diesel-powered vehicles with HydraGEN^TM Technology, and the launching of HG technology for the mining industry with orders to service extra-large industrial equipment are examples of demand for the pragmatic greenhouse gas emission reduction solutions dynaCERT offers. They are the type of announcements this publication is anticipating to play-out with increasing frequency throughout 2019 from an array of institutions globally taking action on pollution.

Validation through both on-road and accredited 3rd party testing of dynaCERT’s HydraGEN™ Technology have produced results of;

1) Up to 19.2% reduction in Fuel Consumption
2) Up to 88.7% reduction in NOx emissions
3) Up to 46.7% reduction in CO emissions
4) Up to 9.6% reduction in CO2 emissions
5) Up to 57.1% reduction in THC emissions
6) Up to 55.3% reduction in particulate matter (no black smoke)
7) Increased engine power and torque
8) Extended engine and oil life (lower maintenance costs).

Technology that pays for itself: Noteworthy excerpt from Sept. 24, 2018 release regarding results, "While the dynamometer test showed a 8.9% fuel savings, separately, during the on-road break-in period after the baseline test, the on-board diagnostic (OBD) record of the 2018 MAN TGX 18-460 long haul truck with an HG1-45B showed a 20.1% average fuel savings for the 188 hours of tests, travelling through the mountainous terrain of southern Germany in a heavy load commercial operation."

Currently engineers and senior management of dynaCERT Inc. are in ongoing communication with OEMs Mercedes, VW, ManTruck, Volvo, Freightliner and others. There is serious interest in dynaCERT’s HG technology as new European regulations VECTO for emissions reduction came into effect on January 1, 2019 requiring all truck manufacturers to provide full emission testing on every new vehicle model in various load and road configurations. These tests then become the baseline from which each vehicle sold in Europe built in later years must improve upon.

As the trajectory for HG unit sales accelerates it won't take long for the economics to flourish, especially considering the healthy gross profit margins per unit and the fact there is a market with desperate need globally for millions of HG1 and HG2 units, capable of drastically cutting greenhouse gas emissions from diesel engines. Diesel engines are the lifeblood of all economies, and the size of the market potential is enormous -- there are 60 million diesel-powered trucks, trailers and equipment in North America alone and one billion diesel engines operating worldwide on all types of diesel equipment.

Recent development of significance: This Summer-2019 dynaCERT announced that it has received a purchase order with a deposit for 100 HG1 units destined for trucking in Mexico from a major service provider for its client, Alliance, which supplies trucking equipment to one of the largest federation of labour unions in Mexico. Alliance has a market of over 1,000,000 diesel-operated vehicles in Mexico. Additionally, associated with the order, dynaCERT signed an MOU whereby the first 10,000 units destined for Mexico are expected to be assembled by dynaCERT in its Toronto facilities, and dynaCERT will begin negotiations for the establishment an assembly facility in Mexico. Initially this new facility will service further Mexican demand for up to 1 million more HG units (see related July 2, 2019 news release here). The level of interest in the industry for dynaCERT’s HG technology is clearly increasing and we believe this will translate into a significant increase in share price as the investment community’s awareness and appreciation of the opportunity develops over the coming month

dynaCERT at the forefront of future carbon credits monetization

Synopsis of HG technology and its Smart-ECU controller: dynaCERT’s technology is packaged into a small compartment that fits on the side of a truck. dynaCERT calls their units ‘HydraGEN’ (TM) or ‘HG’ for short. The unit interfaces with the truck engine’s computer and uses electrolysis to turn distilled water into pure (elemental) H2 & pure O2 gases (individually), produced and injected on demand to enhance the burn, drastically cutting harmful emissions, all while lowering fuel costs. This whole process is controlled by a smart-ECU (the brains of the unit) which can record the fuel savings and emission reductions while in operation, and provide an audit trail, essentially a greenhouse gas tracking system with the ability to account for future carbon credits. David Bridge, one of the original developers from Virgin Mobile, and also formerly of Research in Motion (known for the Blackberry), is the brains behind dynaCERT’s Smart-ECU. The CERT in dynaCERT stands for “Combustion Emission Reduction Technology”.

With the ability to verify and log emission savings, dynaCERT is currently working with a group in the UK, experts on carbon credits, and is in the process of having the technology certified for carbon credits. Carbon credits are a huge commodity worldwide that is only just starting to catch on in North America. The plan is for dynaCERT’s Smart-ECU to monitor and eventually monetize carbon credits. dynaCERT has several related worldwide patents its CEO believes carbon credits will eventually be huge for both dynaCERT and the end users.

See related March 26, 2019 news release entitled "dynaCERT Initiates Carbon Credit Applications for its HydraGEN™ Technology".

Excerpt:

dynaCERT Initiates Carbon Credit Applications for its HydraGEN™ Technology

TORONTO, March 26, 2019 (GLOBE NEWSWIRE) -- dynaCERT Inc. (TSX VENTURE: DYA) (OTCQB: DYFSF) (FRA: DMJ) ("dynaCERT" or the "Company") is pleased to announce that it has initiated the world-wide process of Carbon Credit applications for its HydraGEN™ Technology and engaged International Environmental Partners Limited of the UK to assist the Company in this regard.

By reducing fuel consumption in diesel engines while at the same time reducing carbon emissions and other pollutants, the HydraGEN™ Technology can become very lucrative with the global market acceptance of carbon credits. For example, it is estimated that a Class 8 Truck travelling long haul routes can generate up to €$1500 per year (Cdn $2278/year) in carbon credits based on the current market price of €15/tonne of CO2. dynaCERT’s goal is to create a world-wide programme to enable any earned carbon credits to be shared with end-users of its HydraGEN™ Technology under a contractual subscription programme. To our knowledge, the only existing methodology today to measure and track carbon credits from diesel engines is dynaCERT’s HydraGEN™ Technology and our SMART ECU2 electronics and algorithms.

The first three steps of dynaCERT’s ground-breaking and innovative carbon credit monetizing programme have already been initiated and are as follows:

1- dynaCERT has created innovative proprietary software algorithms in its patent pending SMART ECU2 to track the creation of carbon credits, such as its “Systems and Methods for Tracking Greenhouse Gas Emissions Associated with an Entity” patent pending (see Press Release dated October 5, 2017). An International Patent application has also been filed. Mr. David Bridge leads the charge at dynaCERT in these accomplishments and continues to develop new electronic advancements related to our HydraGEN™ Technology.

2- dynaCERT has nominated to its advisory board successful FinTech entrepreneur Brian Semkiw, P. Eng. and has more recently engaged his organization to further develop software that will enable the tracking of carbon credits generated by dynaCERT’s HydraGEN™ Technology. In addition, Mr. Semkiw will oversee that such carbon credits be validated, audited and digitally accepted in international markets. (see Press Release dated March 1, 2018). Mr. Semkiw’s company, 3rdGP, is the world’s first third generation processing payments company with emphasis on Blockchain and IOT payments processing solutions.

3- dynaCERT today has entered into a contractual agreement with International Environmental Partners Inc. of the UK and its President, Ms. Monika Wojcik, to manage two key dynaCERT applications in the certification of the carbon reductions generated by its HydraGEN™ Technology: (a) VERRA a highly recognized international certification organization based in Washington, DC for trading in the European marketplace where the trading of carbon credits is very active and which was been established as a major initiative of the Kyoto Protocol in 1997; and, (b) the Clean Development Mechanism (CDM) for developing countries which has been administered globally since April 6, 2007 by the United Nations offices in Bonn, Germany, and which bases its criteria as a result of an EU Directive 92/57/EEC (OJ L245, 26.8.92) in the Kyoto Protocol (see Press Release dated June 7, 2018).

Ms. Monika Wojcik is a financial and environmental markets trader, sustainability advisor and passionate advocate for countering climate change and global warming. She advises global corporate clients and governments on carbon emission offsets, sustainability, and clean technology improvements and implementations. Before founding International Environmental Partners she has worked as a broker and trader for CF Partners and FXCM.

International Environmental Partners is a carbon credit advisory and trading house with global outreach.

Ms Wojcik stated, “I am delighted to be able to help dynaCERT add the environmental product offerings to its HydraGEN™ Technology. The attractiveness of carbon products and sustainability benefits will be effective to drive decarbonization in the regions and sectors that are underrepresented and of an urgent need to improve air pollution.”

Mr. Brian Semkiw added, “We are pleased to be working with International Environmental Partners as we apply their deep knowledge of carbon credit certification to the digital process of tokenization leading to monetization of the carbon credits resulting from dynaCERT’s HydraGEN™ Technology.”

Jim Payne, President & CEO of dynaCERT commented, “Our success in gathering this combination of world experts is a major milestone achievement and aligns with our Company’s long term goal of becoming the global leader of monitoring and monetizing of diesel engine carbon credits. This goal was initiated with the development and filing of our global patent applications for our SMART ECU2 with its advanced tracking and verification capabilities and is now progressing swiftly to a genuine forthcoming accomplishment.”

...click here for full copy from source

a) b) c)

Figure 1. New Pit Group Certified HG1 Unit (a - left above) installed on diesel truck, (b - center above) in polymer case, (c - right above) rugged case. As with any young technology there have been hiccups; marketplace resistance, certification, supplier issues, refinements, improvements, upgrades, etc... it appears all major hurdles are now behind dynaCERT. The Company's product evolution positions it as having something no one else in the marketplace comes close to in terms of competition or efficacy, uniquely positioning the Company for global sales growth at a time the world is increasingly aware of the need for solutions.

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The future is extremely bright for dynaCERT as the level of enthusiasm is building globally for an immediate solution to greenhouse gas related climate change and the dire need for clean breathable air.

View video overview of dynaCERT's technology -- there are literally hundreds of millions of diesel engines globally that are candidates for this technology: Running time 3 min. 50 sec.

Fig. 2 dynaCERT leveraging its gold Edison Award at Truck World exhibition.

The following URL to July 2, 2019 news rlease provides insight into milestones and sales into Mexico: "dynaCERT Receives Initial Purchase Order for 100 HydraGEN™ Units Destined for Mexico"

The following excerpt is from the Company's January 16, 2019 release "dynaCERT Achieves Milestone from Government of India":

iCAT Certification for India

dynaCERT has received notification of certification for India and South Asia markets from the International Centre for Automotive Technology (iCAT) for the use of its HydraGEN™ Technology on diesel powered vehicles and equipment to reduce carbon emissions and fuel consumption.

As reported in the MD&A dated June 30, 2018, and September 30, 2018, iCAT has conducted Phase Three testing of the HydraGEN™ Technology. iCAT, a division of NATRiP Implementation Society NATIS Government of India, was established in 2006 at Manesar, Haryana, India. iCAT is a certifying partner with TUV Nord who conducted the homologation testing for dynaCERT in Germany.

Robert Maier, dynaCERT COO and Chief Engineer states: “Over the past 18 months we have worked hard with local partners and the Canadian High Commission office in New Delhi to bring our proven HydraGEN™ Technology to the Indian market. Our HG1 carbon reduction system will reduce the horrific air pollution in the major centers and the countryside as we implement units on all manner of diesel engines used in trucks, buses, generators, construction equipment, fishing vessels and other power plants.”

Orders From Two of Twenty Nine Government States

dynaCERT has received a Letter of Intent from Rajasthan State Road Transport Corporation (RSRTC) (please see web site http://transport.rajasthan.gov.in/rsrtc/), through its state partner Shah Transport Company, for the order for two HG145B units and, upon demonstration, an initial bulk order of 1,000 HydraGEN™ HG145B units to be installed on buses and service trucks. RSRTC is the largest provider of intercity bus transportation in the state of Rajasthan, India, headquartered in Jaipur. RSRTC has been established by the Government of Rajasthan on 1 October 1964 under the Road Transport Act 1950. RSRTC has incorporated Ordinary, Express, Deluxe, A.G. Gandhi Rath, A.C., A.G. Sleeper, Volvo-Mercedes, Volvo-Pantry, Volvo-LCD, Volvo-LCD-Pantry bus services in fleets for all categories of passengers. It has 5,000 buses in its fleet and 56 service depots across the state.

dynaCERT has also received a separate Letter of Intent from Uttarakhand Transport Corporation (UTC) (see web site http://utc.uk.gov.in/) for the initial order for two HG145B units and, upon demonstration, the further delivery of 1,200 HydraGEN™ HG145B units to be installed on UTC buses. UTC is a public sector passenger road transport corporation providing services in the state of Uttarakhand, India and other adjoining states in North India. With a substantial fleet size of buses that operate over 350,000 kilometers and serve the travel needs of over 100,000 people every day, UTC provides an adequate, economical & efficiently coordinated road transport service to the residents of the state.

...click here for full copy from source

Note: The India bus market is particularly noteworthy as the overall potential is enormous; the total number of buses in India alone exceeds one-half million diesel-powered vehicles. dynaCERT recently hosted hundreds of executives from the All India Motor Transport Congress (AIMTC), whose members manage over 10 million trucks and 5 million buses in the India market.

The following excerpt is from the Company's September 24, 2018 Corporate Update:

European CO2 Regulations
The European regulations VECTO for CO2 reduction come into effect on January 1, 2019 (http://data.europa.eu/eli/reg/2017/2400/oj). This regulation will require all truck manufacturers to provide full emission testing on every new vehicle model in various load and road configurations. These tests then become the baseline from which each vehicle sold in Europe built after January 1, 2025 must achieve a 15% reduction in CO2. A further 5% reduction requirement is to be achieved by 2030. Vehicles that do not achieve these CO2 reductions will lose their regulatory approvals.

As shown in the press release dated September 17, 2018, TUV tests were conducted under the requirement for Homologation to obtain an Allgemeinebetriebserlaubnis (ABE), the German Transport regulatory license that is required for any equipment used on on-road vehicles in Europe. dynaCERT first contacted TUV 15 months ago. As the HydraGEN™ is the First-to-Market on-demand hydrogen delivery system, there was no protocol at that time, TUV had to develop a brand new testing protocol for the HydraGEN™ Technology evaluation for Homologation. At such time, the Senior Engineer of TUV-SUD stated, “There does not exist equipment such as the HydraGEN™ Technology in the European market. dynaCERT’s HG1 is a Revolutionary Product coming into the European market at a time where this technology is urgently needed to help achieve current Paris Accord commitments and the very strict future European CO2 requirements.”

The Head of Emissions Testing and Validation released the Test Data Results to management participating at the IAA. He stated emphatically, “We understandably struggled to justify how and why the HydraGEN™ unit performs as this is simply new to our marketplace. This is a real and effective product.” While the dynamometer test showed a 8.9% fuel savings, separately, during the on-road break-in period after the baseline test, the on-board diagnostic (OBD) record of the 2018 MAN TGX 18-460 long haul truck with an HG1-45B showed a 20.1% average fuel savings for the 188 hours of tests, travelling through the mountainous terrain of southern Germany in a heavy load commercial operation.

The current status of the Homologation ABE application is that all required testing has been completed and the HydraGEN™ technology has passed all test points. Final reporting of the results has been submitted to TUV-NORD which will compile an overview report and submit such report to the Government Transport Ministry (Kraftfahrtbundesamt KBA) for final review prior to ABE certification. Once the ABE is issued, dynaCERT GmbH will be authorized to sell HydraGEN™ units for use on vehicles across Europe.

Robert Maier COO & Chief Engineer, states: “The successful German test results add credence for our HydraGEN™ Technology. The positive response at the IAA increases our confidence in the viability and future demand for our product. The strict European regulations that are coming into place for CO2 reductions will drive the necessity for a innovative solution for which our HydraGEN™ Technology will play a predominant role.”.

...click here for full copy from source

Note: Multiple jurisdictional initiatives are gearing-up to slash commercial truck emissions in USA and Canada too (e.g. see related December-2018 news story “Premier Doug Ford aims to cut truck emissions with commercial 'Drive Clean' push" which specifically names dynaCERT as a primary beneficiary). Also of note: The Environmental Protection Agency on November 13, 2018 announced plans to place more stringent restrictions on pollution from heavy-duty trucks, in a move that won the Trump administration rare praise from environmental groups. Nearly two decades have passed since the EPA last updated its standards for emissions of nitrogen oxide, or NOx, that govern the nation’s heavy-duty trucking fleet. Two years ago, 20 state and local air regulators, backed by public health groups, petitioned the agency to revamp its regulations of NOx, citing adverse effects on health and air quality. Source: EPA website – Noteworthy as dynaCERT has proven emission reduction in NOx of 88%, CO of 50%, and particulate matter of 75% in heavy-duty trucks.

The following excerpt is from the Company's September 17, 2018 Corporate Update:

Global Installations
Several HG1-45B units have been shipped and are being installed in Bangladesh, Brazil and India.

Of significant note is dynaCERT’s Dealer in South Asia that has had many meetings in West Bengal and Bangladesh with authorities to begin verification trials on buses, transports, power generators and fishing vessels and with a view to implementing large orders backed by Export Development Corporation (EDC). EDC is a crown corporation owned by the Government of Canada and whose mandate is to foster international trade by supporting Canadian businesses to sell their products internationally throughout the world. As these installations are on older diesel technology engines that are typically Euro2 rated, the end-users are reporting to dynaCERT reductions in fuel consumption and improvements in engine power within a week of the start of use.

dynaCERT’s Dealer in Brazil has met with local authorities whose mandates are strongly focused on carbon emission reductions. Several units shipped last month to Brazil are now installed on different machinery and transports. Of particular note is one logging truck operating at 10 kilometres per hour for a distance of only 50 kilometres per day hauling heavy loads, 40 tonnes of logs, which is already experiencing fuel savings.

The first of its kind, the HG1-45-4C unit, is to be installed onto a 1.5-megawatt generator in the Middle East. It is currently in transit from Dubai to its final destination in a remote desert where it will be installed onto one of 12 diesel generators. The customer of dynaCERT’s Middle East Dealer, a very large industrial equipment manufacturer and operator, runs over 500 power plants in the region. This model HG1-45-4C unit is expected to be used throughout the Middle East on generators that power the requirements of small villages and oil-refining plants. Dyna CERT has been advised that every jurisdiction in the region is seeking cost effective and sustainable solutions, their primary focus being Carbon Emissions Reduction.

Development of dynaCERT’s large engine HG-145-6C unit has passed through functional testing. The HG1-45-6C is targeted and appropriate for engines of 80 to 100 litres in size for commercial mining machinery, such as the CAT 797F Large-Haul ore truck. dynaCERT is now ready to ship its first of such units to a large gold mining operation in Northern Quebec.

The first-of-type, the HG1-45-F unit, is installed onto a large combine in Western Canada for this year’s annual harvest. This HG1-45-F unit is expected to operate 24 hours per day for the next 2 months.

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Expanding into the potentially lucrative marine sector: In April-2018 dynaCERT announced it is pursuing Marine Classification Society Type Approval for its HydraGEN™ Technology through Lloyd’s Register. Type Approval for hydrogen-on-demand systems does not currently exist for vessels. The turn around time for approval is expected to be near 1 year. In the interim, targets for valuation of dynaCERT Inc. surrounding its HG-1 units for trucking alone, assuming only nominal adoption of the technology point to significantly higher share price for DYA.V, and once marine classification approval is obtained dynaCERT will be well positioned to excel in the marine sector too. The math on sales potential is staggering; example: to outfit just one container ship could easily generate close to $1 million in sales (as opposed to something in the trucking market which is short of $10,000/ unit.) and there are >90,000 commercial cargo ships alone operating world-wide. From a pollution standpoint; just one container ship puts out the equivalent emissions of 50 million cars per annum [click to view related link]. The Company also eventually plans to expand into the large power generation market and rail market.

Figure 3 (above). dynaCERT HG-1 unit on a Loblaw truck. The independent testing firm PIT Group has verified a 5.9% improvement in fuel economy and between 46.1% to 50% reduction in carbon monoxide, total hydrocarbons and NOx in straight line conditions. There are units now on the road yielding upwards of 19.2% fuel savings in real world conditions. These results simply cannot be ignored by such a major industry as trucking -- besides the motivation of good corporate citizenry, or talk in some jurisdiction of potential environmental legislation compelling action, certainly the ROI from improved fuel economy and maintenance cost savings provides more than enough economic incentive to acquire this product.

dynaCERT to gain significant traction in sales & profits

In North America dynaCERT has reported global installations of its new HG1-45 models for diesel truck engines are “advancing very successfully”, mainly from small operations. The larger industry participants have been in a wait-and-see pattern, looking for another major to make the first move. Some very significant names (Loblaw, The Beer Store, IFS Logistics Freight Systems) have used dynaCERT’s HG-1 technology, mostly on a pilot-basis, and the reviews circulating within the industry from users are universally spectacular. This new technology is now percolating in a major way within the transportation sector, which appears only at the beginning of a massive adoption curve; these initial pilots/sales are expected to translate into strong expansion across entire fleets. What is different now is the truly global scale of the interest being generated of late, especially in places such as India which have major issues with air pollution. Real-world results to date are highly encouraging as clients attest to significant savings in fuel costs and reduction of harmful greenhouse gas emissions; e.g. User reports that its Class 8 trucks operating in the Toronto-Florida route achieving up to 17% fuel savings and 66% DEF reduction (source May 29, 2018 release).

Figure 4. Example of branding 'DRIVING CHANGE FOR A BETTER FUTURE' gleamed from dynaCERT's company home page ( www.dynacert.com).

dynaCERT's marketing and business council includes the former President of Cummins Diesel Canada and the former President & CEO of MEGA Brands joined dynaCERT. Both gentlemen joined dynaCERT in an advisory capacity ~mid-2017. The connections and pull within the industry these two individuals alone have are impressive. Entering 2018 their recommendations have begun being implemented and are expected to translate into significantly increased market awareness within the industry.

The January-2019 addition of Mr. Frank Klees to dynaCERT's advisory board is expected to help accelerate adoption of HG technology in the commercial sector within Canada. Mr. Klees was a Progressive Conservative Member of the Legislative Assembly of Ontario from 1995 to 2014 where he held numerous important positions including Minister of Transportation, Minister of Tourism, Chief Government Whip, Deputy House Leader, Vice Chair of the Select Committee on the Proposed Transaction of the TMX Group and the London Stock Exchange Group.

dynaCERT has two HG-1 lines; 1) an all-new HG1 4.5T Unit (which was officially launched at TruckWorld this April-2018) for 10 to 15 litre turbo diesel engines such as for the Class 6-8 truck market, off-road equipment & power generator market, and 2) its original HG1 2.5T Unit for 5-10 litre turbo diesel engines which lends itself mainly to smaller trucks such as used in many overseas countries such as India and smaller diesel-powered machinery. The HG units use a smart-ECU to interface with a trucks diesel engine computer and regulates the injection on-demand of pure elemental hydrogen and oxygen (produced by the HG unit).

dynaCERT's HG2 HydraGEN™ technology, which is set to be launched soon, has a market that is multiples larger than for the HG1 product. The HG2 series are smaller in size and are targeted for the refrigerated trailer market (refer units) with engines up to ~2.5 L displacement. The HG2 units are also applicable to mobile construction equipment, class 2 – 5 delivery trucks and smaller stationary generators. This market size represents approximately 20 million applications in North America and similar sized market opportunities in each of the European and Asian markets. Each refer unit has a 4 cylinder diesel engine inside them that runs 24/7 to produce the refrigeration. Independent, PIT Group, testing of the refer HG-2 units are highly favorable, see related November 20, 2017 Company release "dynaCERT Releases Verification of its Advances in Reefer Engine Performance"; results confirmed: Fuel Consumption from 4.6 lb/hr to 3.5 lb/hr or 25% reduction, NOx from 150.5g/hr to 105.8g/hr or 30% reduction, Carbon Monoxide (CO) from 156.9g/hr to 77.5g/hr or 51% reduction, Carbon Dioxide (CO2) from 1713.2g/hr to 952.8g/hr or 44% reduction.

Production and Growing Capacity - Production of the different HG1 series models is underway with the current capacity to build HG1 units at 6,000 units per month. Production of the HG2 series models is soon to be operational and dynaCERT is expecting to receive the specialized robotic laser-welding equipment that is being manufactured in Germany to facilitate production. Future capacity to produce HG2 units is planned to reach 10,000 units per month. Additionally, in a deal negotiated for HG sales into Mexico the Company stated "Pursuant to the MOU, the first 10,000 units destined for Mexico are expected to be assembled by dynaCERT in its Toronto facilities, ensuring timely delivery and meeting the Company’s high quality control for deliveries to Mexican end-users of its HydraGEN™ Technology. Under the MOU, dynaCERT will immediately begin to negotiate with KarbonKleen, Alliance and its principals in Mexico to establish an assembly facility in Mexico. Initially this new facility will service further Mexican demand for up to 1 million more HydraGEN™ units and provide increased employment in Mexico."

Dealers and Agents – Extensive Network - The Company currently has numerous dealers and agents servicing countries globaly including Canada, USA, Mexico, Germany, Belgium, Austria, Switzerland, Israel, Brazil, United Arab Emirates, Saudi Arabia, Dubai, Egypt, Kuwait, Bahrain, Oman, Qatar, Bangladesh, Bhutan, India, Myanmar, Nepal, Pakistan, Sri Lanka, and UK (see dealer page at dynaCERT here).

Initiatives and mandates to reduce harmful emissions are coming into place in numerous countries that will directly benefit dynaCERT near-term.

In November-2017 dynaCERT received 3rd -party validation from the highly accredited PIT Group, considered the gold standard in automotive technology testing; testing verified that the HydraGEN™ HG1 unit reduced emissions of CO by 48.1%, THC by 50.0%, and NOx by 46.1%, all of which exceeded the dynaCERT's own estimates. Also in the PIT Group testing a ~6% fuel savings was verified on a long straight flat run; fuel consumption was reduced by 5.9% when the test truck was run at a constant speed of 105 kilometres/hour for 100 kilometers on a flat track. Important to note is that dynaCERT has been able to verify even higher fuel savings in dynamic conditions (e.g. simulating city and hilly environments); the HG technology has the ability to alter the flows of H2O2 and control reductions in fuel consumption as high as 19.2% (as verified by independent scientists from the Automotive Centre of Excellence (AEC) at the University of Ontario Institute of Technology). Independent scientists from the Automotive Centre of Excellence (AEC) at the University of Ontario Institute of Technology, were engaged by dynaCERT in cooperation with the government to verify what the Company has already demonstrated on diesel engines in the field; a proven reduction of toxic gasses within the emissions by 30% to 40% all while improving fuel economy of ~10% to 15%. The lab was also tasked with helping to establishing the carbon-credits that businesses qualify for by purchasing and employing the technology.

Former Cummins Eastern Canada President, Mike Christodoulou (a member of dynaCERT's Advisory Board) stated, "I spoke directly with PIT Group representatives who claimed they had not seen these kinds of numbers in previously tested aftermarket technologies and that dynaCERT's results would be envied by other fuel improvement and carbon reducing technology providers."