(Sponsored)
Things You Need to Know
- dynaCERT’s 27 patents and global certifications for HydraGEN™ provide a strong market advantage by significantly reducing engine emissions.
- The projected $1.1 trillion carbon credit market by 2050 offers substantial revenue opportunities for dynaCERT’s emission-reducing technology.
- Acquisitions like the stake in Cipher Neutron and key leadership appointments enhance dynaCERT’s market position and growth prospects in the hydrogen economy.
Thesis
dynaCERT’s innovation in carbon emissions technology presents a compelling opportunity in the renewable energy space by reducing the greenhouse gases emitted by more than 1.3 billion internal combustion engines globally. The HydraGEN™ unit significantly cuts NOx, CO, and CO2 emissions while enhancing engine efficiency and durability, offering cost savings and the potential for generating revenue through carbon credits. With governments tightening emissions regulations and the carbon credit market projected to reach $1.1 trillion annually by 2050, dynaCERT is well-positioned to capitalize on these trends.
Moreover, dynaCERT’s extensive investment in R&D, securing 27 world patents, and achieving global certifications underscores its competitive edge. The company’s strategic market approach, robust dealer network, and innovative subscription-based analytics platform, HydraLytica, further strengthen its business model. With a seasoned leadership team and imminent validation from Verra’s Verified Carbon Standard, dynaCERT is poised to drive substantial environmental and economic benefits, making it an attractive investment for those seeking financial returns and sustainable impact.
Business Catalysts
- Sustainable marketplace: There are over 1.3 billion internal combustion engines (ICE) worldwide and 100 million new engines are created annually. dynaCERT offers HydraGEN™ models for nearly every type of ICE providing it with an abundant and long-lasting market opportunity that is expected to sustain itself for several decades.
- Carbon Credit Market Growth: The projected $1.1 trillion annual carbon credit market by 2050 enhances the revenue potential for dynaCERT’s technology, which helps generate valuable carbon credits for customers.
- Technological Advancements and Patents: dynaCERT’s investment in R&D, with 27 world patents and global certifications, provides a competitive edge. Competitors will have a difficult time penetrating the market if they cannot replicate HydraGEN™ performance results.
Financial Overview
dynaCERT’s second quarter was marked by investments in product development and innovation. The company made its HG1 HydraGEN™ model more robust by reducing the number of parts from 300 to under 210 and enhancing its ability to perform in extreme temperatures/climates. dynaCERT is also in the process of developing a double-HG1 unit to accommodate the “Road Train” market while expanding its larger-engine HGC HydraGEN™ series (HGC4 and HG6C) for heavy mining vehicles and construction equipment. Lastly, the company launched its HydraLytica platform to allow customers to track their carbon emission savings and engine performance.
Though the company did not record any revenue in the previous quarter, we believe that dynaCERT is poised to create organic cash flows in the short run that will sustain its operations moving forward. That, and the combination of a $2.5 million private placement, plus $134.1 thousand in cash will allow it to execute without capital constraint in the near term.
Points of Criticism
- Fluctuating financials make the business less predictable and thus more difficult to invest in with certainty. dynaCERT should look to stabilize its sales growth to strengthen investor confidence and ensure more consistent revenue streams.
- Large operating losses and small cash reserves force the company to continually seek out new financing agreements. If dynaCERT can reduce its burn rate by increasing revenue or minimizing costs, the business is likely to be more sustainable and less dilutive to shareholders.
- dynaCERT must contend with a variety of alternatives in the hydrogen energy and hybrid/electric vehicle markets. Though its HydraGEN™ technology produces exceptional results, the company must compete constantly in a highly saturated business environment.
Notable Updates in Q2 2024
- 16/07/2024: dynaCERT Inc. has announced that its portfolio company, Cipher Neutron Inc., has received an Advanced Contract Award Notification (ACAN) to design and build two 250-kilowatt electrolyser stacks for Simon Fraser University’s Clean Hydrogen Hub, marking a significant advancement in green hydrogen technology. This collaboration aims to explore scalable, low-cost hydrogen production using Cipher Neutron’s innovative AEM Electrolyser technology, fostering advancements in renewable energy research and solidifying their leadership in the sustainable energy sector.
- 03/07/2024: dynaCERT completed an oversubscribed non-brokered private placement, raising a total of CAD 3,000,000 through the issuance of 20,000,000 units at CAD 0.15 per unit. The proceeds will be used to finance the sales of their HydraGEN™ Technology Products across various sectors, including mining, oil & gas, transportation, and generators, as well as for working capital and corporate purposes.
- 27/06/2024: dynaCERT received a follow-up order for 84 HG1 HydraGEN™ units from Simply Green Distributors, intended for a leading Canadian oil and gas drilling contractor. This order, following a previous order of 18 units, comes after a successful trial and aims to improve fuel efficiency and reduce emissions in drilling rigs.
- 11/06/2024: dynaCERT acquired a 15% equity stake in Cipher Neutron Inc., a leading company in Anion Exchange Membrane (AEM) electrolysis technology for green hydrogen production. This strategic acquisition aligns with dynaCERT’s mission to be a leader in the hydrogen economy and is expected to enhance shareholder value by leveraging Cipher Neutron’s innovative and scalable green hydrogen solutions.
- 16/05/2024: dynaCERT launched a $2.5 million non-brokered private placement of equity, offering up to 16,666,667 units at $0.15 per unit. The proceeds will be used to finance the sales of their HydraGEN™ technology products, working capital, debt repayment, general corporate purposes, and to settle advisory and finder’s fees.
- 13/05/2024: dynaCERT appointed Bernd Krueper as President and Director, bringing over 30 years of international leadership experience in the automotive and sustainable energy sectors. Mr. Krueper aims to drive global expansion, increase sales, and advance the company’s hydrogen technology initiatives, working closely with CEO Jim Payne and the Board of Directors to enhance dynaCERT’s market influence and profitability.
- 03/05/2024: dynaCERT appointed Dr. James Damien Tansey, an expert in carbon markets and clean technology with extensive experience in environmental sciences and social innovation, as a director of the company. Dr. Tansey will support dynaCERT’s carbon credit program and help advance its hydrogen technology initiatives globally.
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