Mr. Jim Payne reports

DYNACERT PROVIDES CORPORATE UPDATE

DynaCERT Inc. has provided some updates to previously issued press releases to publicly clarify information requested by shareholders from time to time.

Corporate updates

In the corporate press release dated Feb. 6, 2017, the company announced receipt of orders for 276 HydraGEN units. The initial shipment of these units was delivered by the end of March to the client. These initial units had the company's ECU1 controller. During the following months, it was determined that the ECU1 design was faulty, and these units required replacement. In the corporate press release dated March 28, 2017, the company announced new purchase orders for 430 HydraGEN units. Due to the faulty ECU1 noted above, the status of unit sales was under negotiations up until recently. The financial statements of the company dated Dec. 21, 2017, were restated to reflect the state of those continuing negotiations between the company and such clients.

The company now expects that any resolution would have to include the new improved HG145 models introduced in 2018, as well as the Smart ECU2 (please see the press release dated Dec. 19, 2018). The company is awaiting delivery instructions from certain clients with unfulfilled orders pursuant to the Feb. 6, 2017, press release. The company considers 400 units of those orders announced in the March 28, 2017, press release to be cancelled and continues to negotiate with such clients.

In the corporate press release dated May 11, 2017, the company announced a collaboration with Northwest Territory Power Corp. (NTPC) in a fuel and emission savings pilot project. As reported in the corporate press release dated March 2, 2018, discussions were held to advance the trial using the upgraded HG1 units. However, that project did not meet the projected savings due to the ECU1 units that were included in the original units shipped. NTPC elected not to continue piloting the HydraGEN technology at this time and agreed to review the HydraGEN technology at a later date when there are more HydraGEN units operating in the field achieving the expected pilot plant fuel and emission saving.

In the corporate press release dated June 8, 2017, the company announced that Michael Christodoulou has joined the company's advisory board. The position carries no cash compensation, nor any financial commitments by the company. Members of the advisory board provide industry experience on all aspects of the company's business, including sales strategies and market contacts, technical advice and commercialization guidance.

In the corporate press release dated July 28, 2017, the company announced that Marc Bertrand has joined the company's advisory board. The position carries no annual compensation. The position carries no cash compensation, nor any financial commitments by the company. Members of the advisory board provide industry experience on all aspects of the company's business, including sales strategies and market contacts, technical advice, and commercialization guidance.

In the corporate press release dated Aug. 3, 2017, the company announced that Shmuel Farhi has joined the company's advisory board. The position carries no cash compensation, nor any financial commitments by the company. Members of the advisory board provide industry experience on all aspects of the company's business, including sales strategies and market contacts, technical advice, and commercialization guidance.

Management's discussion and analysis of the company's financial quarter ended June 30, 2017, reported that the company has retained legal counsel and put the initial supplier of the ECU1 on notice to recover liabilities associated with loss due to the defective ECU1. There were significant challenges in the second quarter of 2017 related to the electrical components (ECU1), which the company tackled to rectify without success. This led to the development of the Smart ECU2 controller. The company also provided an update on the lawsuit in the Sept. 30, 2017, management's discussion and analysis filed on SEDAR. Counsel for the company and the defendant are currently in discussions to prepare for discoveries, which is the next step in the proceedings.

In the corporate press release dated Nov. 2, 2017, the company announced a conference with the All India Motor Transport Congress that was held in Toronto, Ont. As reported in the corporate press release dated Dec. 4, 2017, there was keen interest in the emission reductions offered by the HydraGEN technology. Although the group represented fleets of nearly 10 million trucks and buses, there was no commitment for HydraGEN units obtained during the conference. It was, however, agreed that a visit by DynaCERT management would facilitate orders in the near future.

In the corporate press release dated Dec. 21, 2017, the company announced that it had received an order for 520 HydraGEN HG1 units from DynaCERT's dealer Hoer&Hoer GreenTech (now named H2GreenTech). The initial units shipped to Germany for use on diesel-powered generators were actually powered by palm oil, a form of biodiesel, which the company had not tested before. While the carbon emissions recorded show significant reductions with the HydraGEN units, the testing did not achieve the expected performance in fuel savings. Upon receipt of the successful TUV test results in Germany, the dealer has continued seeking new opportunities in Europe. One such opportunity is a trial with Atlas Copco on a large-scale mobile diesel-powered compressor station.

In the corporate press release dated April 10, 2018, the company announced that Maheboob Rahemtulla Nagii has joined the company's advisory board. The position carries no cash compensation, nor any financial commitments by the company. Members of the advisory board provide industry experience on all aspects of the company's business, including sales strategies and market contacts, technical advice, and commercialization guidance.

In the corporate press release dated April 20, 2018, the company announced that it is pursuing the Marine Classification Society type approval for the HydraGEN technology. Phase 1 of this effort was completed in the fall of 2018. Phase 2 testing on a marine diesel engine with a HG1-45M marine model is awaiting availability of the test engine facility in Nova Scotia.

In the corporate press release dated May 11, 2018, the company announced that its dealer in Dubai ordered six HG145 units. Please see Mobile Crane report on the company's website for details of an example of the trials under way in the region. In the corporate press release dated June 7, 2018, the company announced that a new order from Dubai was received for a specialized HydraGEN unit. This unit is now in operation in the centre of a diesel power generation cell connected to one of the many 1.2-megawatt generators in the cell. DynaCERT engineers are supporting this initiative with periodic site visits and in situ upgrades due to the remoteness of the site with very limited communication capabilities. The generator trial is expected to be completed in second quarter 2019.

In the corporate press release dated June 7, 2018, the company announced that it has received delivery of the specialized laser welding equipment for the manufacturing of the HG2 unit, having a value of approximately $300,000. The laser welder is used to completely seal the HG2 reactor and its integrated tanks to prevent any leakage of fluid, thereby making the reactor more robust and less expensive than the HG1 reactor. Subsequent to delivery, it was determined that the HG2 model reactor, as initially designed by DynaCERT engineers, could not perform long term in all climatic conditions. A redesign of the HG2 unit is under way with a new prototype being completed and in testing phase to confirm its reliability prior to commercial launch. The company now estimates that commercial deliveries will begin in second quarter 2019. It is still planned that the new welding equipment will be utilized in the new design.

In the corporate press release dated June 21, 2018, the company announced that it received new orders for the intercity bus market in India. Shipments have been made to fulfill this order, but installations were delayed by the client due to the annual rainy season floods that occurred in Mumbai and its surrounding region, where the customer base is located. Subsequently, the client has elected to develop the fishing vessel market on the east and west coast of India, where there are tens of thousands of vessels operating. Initial testing is showing up to 20 to 25 per cent in fuel savings.

In the corporate press release dated Aug. 16, 2018, the company provided an update on the European homologation. While all independent testing, documentation and forms have been completed and these have been submitted to the government for review and approval, DynaCERT has not yet received the official notice of approval (ABE) from the Kraftfahrtbundesamt (KBA) that would provide the general operating permit to DynaCERT GmbH, which stipulates the terms of the licence authorization to sell units onto transport vehicles in Europe. The company has received the ABE from the KBA for the Smart ECU2, which is used in all of the HydraGEN HG1 units.

In the corporate press release dated Sept. 24, 2018, the company announced that it had opened the European market for HydraGEN technology at the 2018 IAA transportation trade show in Hannover, Germany. There were many different discussions with transport original equipment manufacturers (OEMs), some of the OEM dealers in the region, other related equipment suppliers and non-transportation OEMs. These discussions have in part succeeded in further discussions and initiations of non-disclosure agreements that will allow the company's team of engineers to exchange information with others to advance sales into new markets. Management and the sales team travelled back to Europe for two days of industrial meetings in Munich followed by two days of negotiations with the Austrian provincial government in Carinthia. (See press release dated Dec. 20, 2018.)

About DynaCERT Inc.

DynaCERT manufactures, distributes and installs carbon emission reduction technology for use with internal combustion engines. As part of the growing global hydrogen economy, its patent-pending technology creates hydrogen and oxygen on demand through electrolysis, and supplies these through the air intake to enhance combustion, resulting in lower carbon emissions and greater fuel efficiency. Its technology is designed for use with all types and sizes of diesel engines used in on-road vehicles, reefer trailers, off-road construction, power generation, mining and forestry equipment, marine vessels, and railway locomotives.

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