Forward discounting metrics dictate the share price of dynaCERT trade substantially upwards to reflect the high-growth scenario the CEO confirms is underway

DynaCERT Inc.'s (TSX-V: DYA) (OTC: DYFSF) CEO has issued insight on new Company manufacturing targets and anticipated sales in an interview earlier this month; the CEO states the Company is hiring and building-out to meet demand, and aiming to manufacture at a rate of 2000 units per month by the end of Q1-2016. We note that recent press release from the Company affirms activities. Assuming 2000 units are achieved as expected, Market Equities Research Group calculates the dynaCERT is projected to be generating $13.5 million per month in revenues, resulting in $8.1 million per month positive gross margin cash flow for the Company. The company will also possess the ability to TRIPLE this output (and resulting revenues and profit margins) by adding additional shifts. Additionally the CEO believes that its ability to meet demand will be eclipsed and is considering outsourcing at that point.

In short, dynaCERT Inc. (TSX-V: DYA) (OTC: DYFSF) will not remain a penny stock long with numbers that the CEO stated he expects to be occurring. Analysis by Jay Taylor of Hard Money Advisors, with whom the interview was conducted, has recently initiated coverage on dynaCERT Inc. with a 'Buy' recommendation also recommending a US$1/share (~$1.40 Canadian) near-term price target.

Background

dynaCERT Inc. engineers, manufactures, and distributes transportable hydrogen generators that are proven to improve fuel economy ~15% and reduce toxic gasses within the emissions by 35% to 40% on diesel transport trucks (this market sector is enormous and immediate for dynaCERT). Unlike conventional methods for emission control that treat the gasses after the burn (e.g. urea tanks on diesel transport that cause reduced fuel milage), dynaCERT's technology treats the issue prior to the burn, creating a more efficient flame that results in less carbon build-up and increased fuel economy. dynaCERT is initially targeting the diesel truck market and is currently on track to open its new production facilities by the end of Q1-2016 for its 3 L/min. Hydrogen units. The Company is in development of a unit for the automotive car & light truck market, and is actively targeting the large stationary power generator sector via a unit (up to 300 L/min. Hydrogen unit) currently in Phase-2 with a power generator utility company in the Caribbean. Successful test results from the power generation test unit are expected to springboard dynaCERT toward sales in the large power generation, marine, and rail market.

  

- dynaCERT Inc. shares outstanding:  ~209.5 million (as of January 28, 2015)   - Market Capitalization: ~31.4 million (trading at 15 cents Canadian for DYA.V)   - Corporate website:  http://dynacert.com   - SEDAR Filings : http://sedar.com/DisplayProfile.do?lang=EN&issuerType=03&issuerNo=00020269   Recent Company News:   - January 28, 2016 "dynaCERT Capitalized for Objectives and Hiring Skilled Staff to Meet with the Ongoing Demands in Research and Development, Assembly and Installations."

Analysis of salient driving factors behind demand

The trucking industry is looking for solutions to fuel savings and reduced emissions. The industry needs to clean up and will be incentivized by either ‘the carrot or the stick’.

 
'The Carrot'; Reward from Savings on Fuel Costs, less downtime, and Positive Image from Good Corporate Citizenry

 
dynaCERT Inc.’s H2/O2 HydraGen technology makes it worthwhile for trucking fleets to make the capital investment as:

1. Payback from fuel savings: dynaCERT’s Phase-2 testing has some trucks in the field returning with in excess of 17.5% improved fuel economy, representing only a less than 7-month payback on an investment at current pricing for many;

2. Payback from reduced downtime: Payback in the form of reduced downtime is experienced as carbon fouling issues are minimized/eliminated; a cleaner and more efficient diesel burn is attained from dynaCERT's H2/O2 timed injection technology; and

3. Perception of good corporate citizenry: The image of good corporate social responsibility is ‘priceless’; the public/consumers see an end user of dynaCERT's technology actively contributing to a healthier planet as a corporation by reducing toxic gasses within emissions by 30 – 40%.

'The Stick';
In mid-2015 U.S. regulators proposed a 24 per cent improvement in fuel efficiency for heavy trucks over the next decade as part of the Obama administration's plan to reduce greenhouse gas emissions, since then emission pledges by both U.S. and Canadian governments made at the Climate-Change Talks in Paris this past December-2015 will require an acceleration on regulations targeting the trucking industry.

 
Size of the immediate market for dynaCERT's HydraGen^TM diesel truck market alone;

 
There are ~3 million class-8 semi-trailer trucks in the United States, according to estimates by the American Trucking Association. Globally, there are tens-of-million diesel trucks worldwide. In the U.S. alone, in excess of 50 billion gallons of fuel are consumed annually by trucks used for business purposes, with over 70% being diesel fuel. In recent years the U.S. trucking industry has spent in excess of $150 billion/year buying diesel fuel. Diesel fuel is often the second highest expense for motor carriers after labor and can be as much as 20% of total operating costs.

 
The trucking industry is just the beginning;

There are millions of buses, millions of pieces of heavy machinery, hundreds of thousands commercial cargo ships, plus rail, and thousands of large-scale power generation units -- all highly susceptible to carbon fouling and toxic emissions, and are looking for solutions that include fuel savings.

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Insight from dynaCERT's CEO in recent interview confirms high-growth technology scenario underway

Analyst Jay Taylor of Hard Money Advisors has recently initiated coverage on dynaCERT Inc. with a 'Buy' recommendation and US$1/share (~$1.40 Canadian) near-term price target (click here to view his December-2015 advisory in full). Additionally, this January-2016 the analyst interviewed dynaCERT's CEO, President, and Director, Jim Payne about the opportunity and developments within dynaCERT that will of interest to shareholders; the 30 minute Q1-2016 audio interview may be listened to at http://jaytaylormedia.com/media/taylor20160112-2.mp3 online. In the interview Mr. Payne discussed many facets of the Company's fuel and emission reduction technology, the demand for the many solutions dynaCERT provides, and how the Company is actively proceeding to capitalize on the opportunity.
 

In the interview Mr. Payne confirmed the Company is in the final stages of 3rd-party accreditation for its new-generation carbon emission reduction and fuel-saving units for the trucking industry with final accreditation expected to be in hand by the end of Q1-2016. It is believed accreditation will act as a catalyst for significant growth for the Company and signify a transition from initial commercialization to sales phase -- the Company has received numerous expression of intent. Initial feedback from the first install from the first purchase order of 50 units that are currently being installed is impressive; "How quickly can I get 350 [more] units?" was stated by the first install recipient.

Further in the interview Payne states "The trucking industry is certainly our low-hanging fruit, it is what is going to capitalize the Company and give us the revenue stream and capital to move things forward in all these other areas. By the end of the first quarter our ultimate goal is that we are putting out 2000 units per month with the capacity from there to increase to 4,000 or 6,000 per month by just putting in a second and third shift."  Jay Taylor inquired on expected margins on 10,000 units to which Mr. Payne replied "If we put out 10,000 units our sales at that point are ~US$67,500,000 and we are basically working on 60% gross margin profit."  However such a number is minuscule to what appears to be shaping up, and would represent output form just part of one shift over one year, Mr. Payne stated things are are looking much bigger "I do believe this is going to outgrow our capacity or our desire to do the manufacturing -- we are already in talks with some of the largest auto part manufacturers in North America that have a very strong appetite for manufacturing for us."

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