dynacerts hydrogen generator for trucks
TRANSCRIPT
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Fall 2014
Jim Payne
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This Presentation/Document is based upon information supplied by the management of dynaCERT Inc. ("dynaCERT" or the "Company" ) and is being furnishedon a strictly confidential basis, solely for use by prospective investors.
Each recipient of this presentation/document agrees that all of the information contained herein is confidential and is not to be used for any purposes
whatsoever except to assist the recipient in evaluating the Company. Each recipient agrees to keep the information contained herein in strict confidenceand, neither directly nor indirectly, to reproduce or transmit in any form or by any means any of the information contained herein or to disclose suchinformation to any person, firm, or corporation without the prior written consent of the Company.
dynaCERT Inc. expressly disclaims any and all liability for any representation or warranties, expressed or implied, contained in this presentation/document orfor omissions from it. Only those particular representations and warranties that may be made in a definitive agreement respecting any proposedtransaction, if and when executed, shall have legal effect.
This presentation/document contains forward-looking statements reflecting dynaCERTscurrent forecast of certain aspects of the Company's future. It is basedon current information that has been assessed, but which by its nature is dynamic and subject to rapid and even abrupt changes. Forward-lookingstatements may include, without limitation, statements regarding growth projections, including financial forecasts and the projected rollout of theCompany's products.
dynaCERTsactual results could differ materially from those stated or implied by the Company's forward-looking statements due to risks and uncertaintiesassociated with its business, including, but not limited to:
The requirement for significant financing to develop and market its technology;
The ability to establish and maintain arrangements with industry recognized strategic partners;
Market acceptance of the Company's technology and products;
Competition in all aspects of its business;
The effect of general economic, credit and capital market conditions on its business;
The ability to complete product development milestones and progress towards commercialization of product within the contemplated timetable;
The ability to attract and keep highly qualified staff and management; and
Changes in product profit margins due to pricing changes driven by variations in customer demand, competition, or unforeseen factors.
The Company's forward-looking statements should be considered in the context of these and other risk factors.
All future written and oral forward-looking statements made by the Company on its behalf are also subject to these factors. The Company undertakes noobligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
Securities laws vary between Canadian provinces and investors should seek independent legal advice regarding compliance with applicable securities laws inconnection with any investment in the Company.
The securities of the Company are not registered under United States securities laws.
This presentation/document is not a prospectus or a public offering in any jurisdiction.
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A Cutting Edge Technology Company Positioned for
DynamicGrowth and aSolid ROI
The Benefits of our Technology
Reduced Fuel Consumption
Reduced Emissions
Reduced Maintenance
Reduced Downtime
Increased Engine Oil Life
Increased Torque
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Market Characteristics162,000,000 shares on the market of which 70% are closely held
Trades on the TSX:V (DYA)
Jim PaynePres.& CEOBoard of Directors
Gord Barr CPA,CA, Bsc (AGR)CFO
Peter RossProduct Development
Michael ElwoodMarketing, Sales,Brand Development
Board of Directors
Wayne Hoffman, Dr. Elliot Strashin,
Larry Cyna, Ron Perry, Dr. Richard Lu
Engineering Team Michael Barr, ChemicalCorbin Bruce, Mechanical
Corporate Secretary Yumey Fernandez
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Started as Dynamic Fuel Systems Inc.
JetStar unit produced HHO (Browns gas)
Small sales generated
2010 engine testing revealed separate gasesprovide unique characteristics
Developed Patent Pending system that separates
hydrogen and oxygen
Field trials with Pepsi on Detroit Diesel Series 60engine through 2012 produced POSITIVE RESULTS
REFOCUSED AND STRENGTHENED BUSINESS MODEL
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Rising Fuel Prices & GHG Emissions
Global Problem
Shipping & transportation sectors highly vulnerable
2010 Clinton Global Initiative - World Health OrganizationCommitment to reduce carbon emissions and pollution
Transportation sector consumes 40% of total energy [1,2] Combustion engines represent over 40% of GHG Emissions[1,3]
CO2Black Carbon
Particulate MatterNitrous oxides
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HydraGen
Enhances ombustion
Supplies engine with pure
hydrogen and oxygen gases
Generates a faster and morecomplete combustion [4,7,8]
Increases fuel economy [4,7,8]
Reduces emissions [4,6-8]
Dramatic Fuel Improvements
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Why it WORKS
9X flame speed vs diesel
Stabilizes flame
Remove emissions atROOT CAUSE
Complete combustionburns more diesel
Counteracts efficiency
reducing, governmentimposed solutions- EGR, SCR, DPF
HydraGen lets
DIESEL DO DIESEL
LEAN BURN = LESS FUEL
More oxygenTurbochargerSupercharger
More high pressure steam
Improved cylindertemperature regulation
[4-9]
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Increasing
Fuel Economy
Lowering
Emissions
HydraGen
Our Technological Solution
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Reactor, plumbing and gasket materials upgraded Weather tight housing with vibration dampeners
40% weight reduction
New level sensors
Unit easily maintained and serviced
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Brains of the HydraGen
Electronically optimized gas injection
In-cab tablet display
Wi-Fi, GPS and remote access
Displays key operational parameters
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Heavy dutyDetroit DieselSeries 12.7L
Pepsi BeveragesCompany HydraGen
August 2011
CARB executiveorder (D-697)
grantedMay 2012
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Milestones
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Impact of HydraGen
on Fuel Economy
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5
6
7
8
9
10
0 1 2 3 4 5
F
u
E
o
m
y
M
P
G
Week
HydraGen
No HydraGen
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International Market
Tighter configurationLess Room between caband trailer
North American Market
Lots of room for installUnit size can be larger
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Market Growth
Global Oil Consumption
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Current Market Focus
On-Road
Class 6 8 enginesTractor-trailers and buses
Power Generation
6000hp 30,000hp engines Widely used in remote locations Provides simple transition to Marine/Rail
Increase Profitable Market ShareAccelerate Market Penetration in Two Primary Sectors
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Current Market Penetration
On-Road
Global market is large, dynamic and mature
Continue work with Large Trucking Fleets to further establish our technology
Develop distribution agreements in overseas markets
Establish testing opportunities with OEM for use with EGR systems
Agreements, and ongoing testing with Pepsi Co., Schneider, TTSI and Navistar
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Potential Market Penetration
Power Generation
Consume tonnes of fuel (diesel Heavy Fuel Oil) per day
Significant emitters of GHG (CO2, Sulphur, Black Carbon, Nitrous Oxides) Increased environmental restrictions beginning to take effect
Applying Our technology
Significant fuel savings = $$$
Significant reduction in GHG emissions = $$$ Reduced downtime for maintenance = $$$
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Annual Profit Projection
HydraGen
lets
DIESEL DO DIESEL 19
UNIT SALES - HYDRAGENS 1,000 3,000 5,000 10,000 15,000 20,000 40,000 60,000
Dealer Price 6,750$ 6,750$ 6,750$ 6,750$ 6,750$ 6,750$ 6,750$ 6,750$
Mfg. Cost 2,200$ 2,200$ 2,200$ 2,200$ 2,200$ 2,200$ 2,200$ 2,200$
Sales 6,750,000$ 20,250,000$ 33,750,000$ 67,500,000$ 101,250,000$ 135,000,000$ 270,000,000$ 405,000,000$
Cost of Sales:
Manufacturing 2,200,000 6,600,000 11,000,000 22,000,000 33,000,000 44,000,000 88,000,000 132,000,000
Selling Commission 506,250 1,518,750 2,531,250 5,062,500 7,593,750 10,125,000 20,250,000 30,375,000
Total Cost of Sales 2,706,250 8,118,750 13,531,250 27,062,500 40,593,750 54,125,000 108,250,000 162,375,000
Gross Profit 4,043,750 12,131,250 20,218,750 40,437,500 60,656,250 80,875,000 161,750,000 242,625,000
Total Expenses 2,575,000 2,845,000 3,115,000 3,790,000 4,465,000 5,140,000 7,840,000 10,540,000
Net Pretax Gain/( Loss) 1,468,750 9,286,250 17,103,750 36,647,500 56,191,250 75,735,000 153,910,000 232,085,000
Tax Provision - 25% 367,188 2,321,563 4,275,938 9,161,875 14,047,813 18,933,750 38,477,500 58,021,250
Net Profit 1,101,563$ 6,964,688$ 12,827,813$ 27,485,625$ 42,143,438$ 56,801,250$ 115,432,500$ 174,063,750$
Earning Per Share
162,500,000 O/S - 0.007 0.043 0.079 0.169 0.259 0.350 0.710 1.071
0.17$ 1.07$ 1.97$ 4.23$ 6.48$ 8.74$ 17.76$ 26.78$
TRUCKS ONLY
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Annual Profit Projection
HydraGen
lets
DIESEL DO DIESEL 20
10 30 100 300 500 1,000 1,500 2,000
500,000$ 500,000$ 500,000$ 500,000$ 500,000$ 500,000$ 500,000$ 500,000$
125,000$ 125,000$ 125,000$ 125,000$ 125,000$ 125,000$ 125,000$ 125,000$
2013 2012
(ACTUAL) (ACTUAL)
Sales 20,644$ 32,500$ 5,000,000$ 15,000,000$ 50,000,000$ 150,000,000$ 250,000,000$ 500,000,000$ 750,000,000$ 1,000,000,000$
Cost of Sales:
Manufacturing 37,199 26,756 1,250,000 3,750,000 12,500,000 37,500,000 62,500,000 125,000,000 187,500,000 250,000,000
Selling Commission - - 375,000 1,125,000 3,750,000 11,250,000 18,750,000 37,500,000 56,250,000 75,000,000
Total Cost of Sales 37,199 26,756 1,625,000 4,875,000 16,250,000 48,750,000 81,250,000 162,500,000 243,750,000 325,000,000
Gross Profit (16,555) 5,744 3,375,000 10,125,000 33,750,000 101,250,000 168,750,000 337,500,000 506,250,000 675,000,000
Expenses:
Wages and consulting fees 1,031,642 838,190 1,300,000 1,300,000 1,300,000 1,300,000 1,300,000 1,300,000 1,300,000 1,300,000
Professional fees 248,131 249,062 300,000 300,000 300,000 300,000 300,000 300,000 300,000 300,000
Selling, general and administrative 225,436 200,668 250,000 250,000 250,000 250,000 250,000 250,000 250,000 250,000
Research and Development 134,850 268,268 300,000 300,000 300,000 300,000 300,000 300,000 300,000 300,000
Amortization 51,354 19,117 70,000 70,000 70,000 70,000 70,000 70,000 70,000 70,000
Interest 191,723 207,658 220,000 220,000 220,000 220,000 220,000 220,000 220,000 220,000
Foreign Exchange 78,911 (74,336) - - - - - - - -
ADMIN ADDITIONS-2% - - 100,000 300,000 1,000,000 3,000,000 5,000,000 10,000,000 15,000,000 20,000,000
Total Expenses 1,962,047 1,708,627 2,540,000 2,740,000 3,440,000 5,440,000 7,440,000 12,440,000 17,440,000 22,440,000
Net Pretax Gain/( Loss) (1,978,602)$ (1,702,883)$ 835,000 7,385,000 30,310,000 95,810,000 161,310,000 325,060,000 488,810,000 652,560,000
Tax Provision - 25% Tax Provision - 25% 208,750 2,954,000 12,124,000 38,324,000 64,524,000 130,024,000 195,524,000 261,024,000
Net Profit Net Profit 626,250$ 4,431,000$ 18,186,000$ 57,486,000$ 96,786,000$ 195,036,000$ 293,286,000$ 391,536,000$
162,500,000 o/s $0.004 $0.027 $0.112 $0.354 $0.596 $1.200 $1.805 $2.409
$0.10 $0.68 $2.80 $8.84 $14.89 $30.01 $45.12 $60.24
Mfg. Cost
Stock Price - 25x
Earning Per Share -
POWER GENERATORS (ONLY)
UNIT SALES - HYDRAGENS
Dealer Price
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dynaCERTcreates winning situations throughstrategic global sales and marketing partnerships
dynaCERTspartners maintain global relationshipswith large fleet operators, government agenciesand utility providers
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Design and
Testing
Manufacturing
and Assembly
Distribution
and Sales
Installation and
Maintenance
Performance
Monitoring and
Improvement
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Corporate Growth
We have the right people
The right investments Partnerships providing endless possibilities
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Road proven technology
Working with Fleets to:
Reduce Fuel Costs
Reduce Emissions
Reduce Maintenance Costs
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1 Kokjohn, S., Hanson, R., Splitter, D., & Reitz, P. (2010). 2010 Climate Leadership Challenge. InThe CORE concept for economic andenvironmental sustainability of mobile and stationary sources of power Generation. Wisconsin
2 US Energy Information Administration. How much energy is consumed in the world by each sector?(2014). Washington.
3 US Energy Information Administration. Emissions of GreenHouse Gases in U.S.(2011). Washington.
4 Masood, M., Ishrat, M., & Reddy, A. (2006). Computational combustion and emission analysis of hydrogendiesel blends with experimentalverification. International Journal of Hydrogen Energy,32, 2539-2547. (2006, December 26). Retrieved September 13, 2014.
5 Aspden, A., Day, M., & Bell, J. (2011). Turbulenceflame interactions in lean premixed hydrogen: Transition to the distributed burningregime.Journal of Fluid Mechanics,287-320. Retrieved September 17, 2014.
6 Lilik, G., Zhang, H., Herreros, J., Haworth, D., & Boehman, A. (2010). Hydrogen assisted diesel combustion. International Journal ofHydrogen Energy,35, 4382-4398.
7 Bose, P., & Maji, D. (2009). An experimental investigation on engine performance and emissions of a single cylinder diesel engine usinghydrogen as inducted fuel and diesel as injected fuel with exhaust gas recirculation. International Journal of Hydrogen Energy,4847-4854.Retrieved September 12, 2014.
8 Premkartikkumar, S., Annamalai, K., & Pradeepkumar, A. (2011). USING HYDROGEN AS A FUEL IN AUTOMOTIVE ENGINES - ANINVESTIGATION. INTERNATIONAL JOURNAL OF INNOVATIVE TECHNOLOGY AND RESEARCH,1(1).
9 Momin, G. (2014). Emission Control Using Hydrogen As An Additive With Diesel. IOSR Journal of Engineering,4(1), 26-31.
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