TORONTO - June 30, 2022 (Investorideas.com Newswire) dynaCERT Inc. (TSX: DYA) (OTCQX: DYFSF) (FRA: DMJ) ("dynaCERT" or the "Company") is pleased to announce the results of the annual and special meeting of its shareholders, which was completed today (the "Meeting"). The Meeting was held virtually via TSX Trust Company's virtual meeting platform. A total of 107,783,677 common shares of the Company (each, a "Common Share"), representing 28.25% of the total Common Shares outstanding, were represented in person or by proxy at the Meeting. dynaCERT’s shareholders voted in favor of all items of business put forward at the Meeting, being the election of all nominated directors and the re‐appointment of BDO Canada LLP as the auditors of the Company.
The votes in respect of each of these items were held via ballot, the results of which were as follows:
Completion of Review
On April 4, 2022, the Company announced that the Company's audit committee had engaged independent legal counsel to assist them in examining the validity, legal standing, enforceability, and potential future recoverability of certain related party and other transactions as disclosed in note 24 of the Company's audited financial statements in respect of the financial year ended December 31, 2021. The review by the Audit Committee is now complete and the following is a summary of some of the findings and conclusions of the review. The Audit Committee, in consultation with its independent counsel, conducted a detailed review of each of the items referenced in the aforementioned note 24. This process included reviews of all documents, communications, correspondence, resolutions and supporting materials relating to each item, in addition to conversations between the Audit Committee's counsel and members of the Company's management. The Company is reporting on the following salient points from the Audit Committee's findings:
(a) Related Party Transactions
(b) Other Transactions
Having reviewed the Audit Committee's findings at the Board level, the Company has noted certain procedural errors in connection with some of the transactions reviewed and has concluded that certain weaknesses in the Company's internal controls have become apparent. These include the following:
1. In connection with option and warrant exercises by officers/ directors/employees of the Company), certain Treasury Orders were signed and issued without full payment for underlying shares, as payment was evidenced by loans.
2. Certain loans were extended to optionees/warrant holders (who are officers/ directors/employees of the Company) without prompt reporting to the Board and CFO at the time of such loans and without adequate loan / security documentation, though such loans were subsequently ratified by the Board.
3. Reporting of such share issuances and loans and related party transactions to the CFO and Audit Committee was only after such transactions were given effect to.
4. The Board had adopted a resolution in respect of related party transactions that was weak insofar as it delegated approval for transactions that are not material (below $250,000 (which is the threshold for materiality used in the Company's financial statements)) to the Investment Committee.
5. Certain select transactions were entered into based upon discussions among Board members where Board approval could have been better documented.
Having reviewed the findings of the Audit Committee and considering the internal control weaknesses noted thereby, the Company has adopted the following remedial measures:
1. The Company has ceased the process of allowing option exercises without full payment of the exercise price in cash.
2. The Company has requested repayment of all option and warrant loans based upon either:
3. The Company is communicating with applicable regulatory authorities regarding the administration of the Company's stock option plan.
4. The Company is reviewing and refining its process for the issuance of securities in consultation with its corporate legal counsel in connection with all future issuances of securities, which includes a prohibition on the issuance of shares without full payment in cash.
5. The Board and the CFO will be provided with notification of all issuances and proposed issuance of securities (including confirmation of full (cash) payment of exercise/issuance prices).
6. Board approval will be required for all related party transactions and other transactions that are not within the ordinary course of the Company's business and the prior resolution allowing for Investment Committee approval below a certain materiality threshold has been amended and replaced accordingly.
7. Any material impairments of related party transactions require approval from the Audit Committee and the Board of Directors.
8. The Company is reviewing its internal control documentation with its internal control consultant and will take such additional actions as are necessary or desirable to remedy the identified weaknesses.
9. Galaxy Power and the Company will be entering into an agreement to provide an anti-dilution covenant, whereby Galaxy Power will confirm its verbal commitment that the Company's 20% interest shall not be diluted through any preliminary financing activities of Galaxy Power.
About dynaCERT Inc.
dynaCERT Inc. manufactures and distributes Carbon Emission Reduction Technology for use with internal combustion engines. As part of the growing global hydrogen economy, our patented technology creates hydrogen and oxygen on-demand through a unique electrolysis system and supplies these gases through the air intake to enhance combustion, resulting in lower carbon emissions and greater fuel efficiency. Our technology is designed for use with many types and sizes of diesel engines used in on-road vehicles, refrigerated trailers, off-road construction, power generation, mining and forestry equipment, marine vessels and railroad locomotives. Website: www.dynaCERT.com.
Except for statements of historical fact, this news release contains certain "forward-looking information" within the meaning of applicable securities law. Forward-looking information is frequently characterized by words such as "plan", "expect", "project", "intend", "believe", "anticipate", "estimate" and other similar words, or statements that certain events or conditions "may" or "will" occur. In particular, forward-looking information in this press release includes, but is not limited to completion of the Offering, satisfaction of TSX listing conditions and regulatory approvals. Although we believe that the expectations reflected in the forward-looking information are reasonable, there can be no assurance that such expectations will prove to be correct. We cannot guarantee future results, performance of achievements. Consequently, there is no representation that the actual results achieved will be the same, in whole or in part, as those set out in the forward-looking information.
Forward-looking information is based on the opinions and estimates of management at the date the statements are made and are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those anticipated in the forward-looking information. Some of the risks and other factors that could cause the results to differ materially from those expressed in the forward-looking information include, but are not limited to: uncertainty as to whether our strategies and business plans will yield the expected benefits; availability and cost of capital; the ability to identify and develop and achieve commercial success for new products and technologies; the level of expenditures necessary to maintain and improve the quality of products and services; changes in technology and changes in laws and regulations; the uncertainty of the emerging hydrogen economy; including the hydrogen economy moving at a pace not anticipated; our ability to secure and maintain strategic relationships and distribution agreements; and the other risk factors disclosed under our profile on SEDAR at www.sedar.com. Readers are cautioned that this list of risk factors should not be construed as exhaustive.
The forward-looking information contained in this news release is expressly qualified by this cautionary statement. We undertake no duty to update any of the forward-looking information to conform such information to actual results or to changes in our expectations except as otherwise required by applicable securities legislation. Readers are cautioned not to place undue reliance on forward-looking information.
Neither The Toronto Stock Exchange nor its Regulation Services Provider (as that term is defined in the policies of the The Toronto Stock Exchange) accepts responsibility for the adequacy or accuracy of the release.
On Behalf of the Board
Murray James Payne, CEO
For more information, please contact:
Jim Payne, CEO & President
#101 - 501 Alliance Avenue
Toronto, Ontario M6N 2J1
+1 (416) 766-9691 x 2
+1 (416) 766-9691 x 1
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