Classification of GBC AG to dynaCERT Inc.

dynaCERT Enters 2025 with Renewed Momentum Amid Strengthening Market Fit and Carbon Credit Tailwind

dynaCERT enters 2025 with building momentum and a significantly improved commercial position. The global regulatory environment continues to tighten around emissions and fuel efficiency, and dynaCERT’s proprietary hydrogen-on-demand technology is increasingly seen as a viable and scalable retrofit solution. The approval of the company’s carbon credit methodology by Verra marks a turning point, providing the foundation for a complementary revenue stream that aligns with global sustainability goals. Together with strengthening product-market fit and renewed investor confidence reflected in recent financings, the company appears poised to accelerate along its commercialization path.

FY2024 revenues came in at CAD 1.60 million, significantly below our initial forecast of CAD 2.40 million. Despite this shortfall, top-line growth remains robust compared to FY2023, with revenue more than tripling year-over-year (FY2023: CAD 0.45 million). The discrepancy versus our projection appears to be timing-related rather than structural. Although Q4 did not deliver the level of acceleration we expected, the company’s pipeline development, particularly with repeat orders in energy and mining sectors, supports the assumption that demand is not fundamentally impaired. The sales model continues to exhibit lumpy, project-based characteristics, which introduces volatility into quarter-to-quarter revenues. From a regional perspective, Canada remains the dominant market, with initial traction being established in Europe and Latin America through expanded dealer activity. We note, however, that meaningful international ramp-up is still in early stages. The homologation approval in Europe and strengthening of the German subsidiary’s operational team are important enablers but have not yet translated into significant sales volumes.

One of the most significant medium-term catalysts remains the successful monetization of carbon credits through Verra-certified methodologies. dynaCERT has achieved a milestone here: Verra approved its new methodology in late 2024, and the company is now progressing with its Project Design Document. This validates one of the central tenets of our original thesis—the creation of an annuity-like, margin-accretive revenue stream through emissions tracking and credit issuance using HydraLytica™.

We continue to exclude carbon credit monetization from our short-term base case but recognize its potential to meaningfully shift the margin and cash flow profile as early as FY2026. The operational link between HydraGEN™ installations and credit generation—via HydraLytica’s data pipeline—remains a key differentiator.

Despite the weaker-than-expected results in FY2024, we are maintaining our FY2025 revenue forecast of CAD 12 million, supported by visible traction in core markets and strategic deployments in high-volume verticals like mining and transportation. We will monitor Q1 2025 sales activity closely and may revise projections should order conversion rates lag further. Importantly, the demand-side fundamentals remain strong, particularly under increasingly stringent emissions regulations in North America and Europe.

Our DCF-derived price target of CAD 0.75 remains unchanged at this time. While execution risk is elevated, particularly with respect to liquidity management and sales cycle length, the potential upside from scaling hardware and software revenues and unlocking carbon credit flows remains substantial.

We reaffirm our Buy rating on dynaCERT Inc., recognizing the short-term financial volatility but maintaining confidence in the long-term equity story. The commercial viability of HydraGEN™, validated both technically and now in early adoption curves, coupled with the tailwind of carbon monetization, supports a high-risk, high-reward profile. Continued progress on scaling sales, streamlining cost structures, and closing strategic financings will be pivotal in validating the company’s inflection point narrative over the next 12 months.