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Mar. 15, 1999
OTC-BB: DCHT
DCH TECHNOLOGY, INC.
27811 Avenue Hopkins #6
Valencia CA 91355
IR Phone 805-775-8120 ext.11
IR Email DCHTinvest@aol.com
Website dcht.com
Shares Outstanding: 11 million
Float: Approx. 3.6 million
Last Price 1.00 Mar. 11, 1999
52 wk. high 8 1/4 low .40
THE COMPANY
DCH Technology, Inc. is a manufacturer of hydrogen sensors, gas
detectors and process monitors, licensed from such major United
States National Laboratories as Sandia, Oak Ridge, National
Renewable Energy Laboratory and Canada's Simon Fraser
University. The current market for gas sensors is estimated at
US$2 billion today, and growing.
dch-technology.com
The 5-year sales projection for the Robust Hydrogen Sensor,
DCH's first commercial product, is $105 million in revenue and
$26 million in net profit. This forecast does not include sales
proceeds from the Universal Gas Detector, Thick Film Hydrogen
Sensor, Fiber Optic Hydrogen Sensor, or PEM Fuel cells, making
the total 5-year forecast very conservative in our opinion.
dch-technology.com
Current DCH customers for the Robust Hydrogen Sensor include
NASA, General Dynamics, General Electric, Ford, Westinghouse,
Allied Signal, Dow Corning, General Motors, Lockheed Martin
Defense Systems, The US Naval Medical Research Institute, and
many other international aerospace and defense companies.
BACKGROUND
The hydrogen economy is upon us. There is renewed attention on
global warming and air pollution in Washington. Words like fuel
cells and alternative energy are becoming belt-way buzzwords. On
Jan. 26, 1999, the Clinton Administration requested $4.05 Billion
for alternative and renewable energy technology development and
a $3.6 Billion tax incentive package for businesses and families to
use renewable energy products. This marks a dramatic expansion
of the United States Government's role in promoting and funding
renewable energy research and development.
DCH has been quietly preparing to provide the safety systems
necessary for this new industry. The recent explosions in the Ford
plant in Michigan and in the chemical plant in Pennsylvania are
grim reminders of the dangers of hydrogen and other gases.
Hydrogen sales in the US have increased dramatically at an
average annual rate of more than 25% during 1993-1997, including
the addition of seven on site plants to serve gasoline refineries.
Hydrogen is explosive when it reaches just 4% concentration in
air, therefore monitoring and measuring the gas in order to activate
safety control equipment or to sound an alarm is vital to avoid
hazardous situations, explosions and loss of life.
Only the DCH sensor is equipped to monitor building levels of
hydrogen in extreme industrial environments to signal an
increasing level of danger and the need for maintenance.
dch-technology.com
For nuclear safety, DCH is teamed with Westinghouse to retrofit
the Leningrad nuclear reactor with hydrogen sensors. DCH began
delivery on November 2, 1998. DCH and Westinghouse are in
discussions to team on further safety upgrades to nuclear facilities
throughout the world. dch-technology.com
DCH also expects to capture the vast untapped revenue potential of
the power transformer and semiconductor industries, and has taken
the first steps towards penetrating those highly lucrative markets.
dch-technology.com
HYDROGEN-POWERED FUEL CELLS
DCH is teamed with the US Dept. of Energy and the Los Alamos
National Lab to commercialize the PEM Fuel Cell. DCH will be
unveiling their Fuel Cell April 7th - 9th
at the 10th Annual National Hydrogen Association convention in
Tyson's Corner VA.
The total market for fuel cells in 1998 was $355 Million and is
projected to reach US $1.3 Billion annually by 2003, reflecting a
29.5% annual growth rate.
DCH believes their fuel cell will be ready for worldwide
distribution in mid 1999. Companies in Japan, Europe, and the US
are readying production lines to satisfy fuel cell markets worth
several billion dollars annually, over the next ten years.
Today, when investors think of fuel cells, they tend to think of
Ballard Power Systems, and their R&D work in developing fuel
cells to power electric vehicles.
While there are a number of interesting comparisons that can be
made between DCH and Ballard, Ballard is primarily developing
fuel cell power technology for large stationary power systems, and
secondarily for transportation; while DCH is focussing on the
smaller consumer sized design for "portable" or remote electric
power.
From the spring of 1995 to 1998, shares of Ballard Power soared
from $ 4.00 to $ 44.00 (adj. 3-for-1 stock split) on the Nasdaq and
Toronto Stock Exchanges. Ballard's current $2.1 Billion market
cap and share price levels are attributable to an alliance and large
investment by Daimler-Benz and Ford to make fuel cells for cars,
buses and trucks.
DCH believes that their sensor technology will play a key role in
that development. In a May 19, 1998 press release, David
Haberman, DCH Chairman and VP of technology and planning
stated,
"DCH's proprietary hydrogen and natural gas sensors provide fast,
accurate gas measurement that is necessary for both integrated
safety
and feedback control in refueling systems. The transportation
applications demand chemical selectivity to prevent false signals
and the
Robust Hydrogen Sensor and Universal Gas Sensor are both
designed
to provide high signal confidence. Based on our discussions with
Ford
and General Motors, we believe that the use of DCH equipment in
the
production of these vehicles, on-board these vehicles and in the
refueling infrastructure will be specified by both OEMs and the
evolving
regulations." dch-technology.com
DCH's advances in fuel cell technology and remote hydrogen
sensor applications are propelling this company to the forefront of
the rapidly growing gas detection and fuel cell industries at a time
when both industry and government are making multi billion dollar
commitments towards their implementation and commercialization.
DCH will be showcasing its prototype PEM fuel cells at the April
7th convention. DCH believes that their smaller portable fuel cells
are more economically viable and will be brought into commercial
development far sooner than the larger units being developed to
power electric vehicles and homes, thus giving DCH a major
competitive edge over Ballard and other fuel cell developers.
DCH will also be unveiling their Thick Film and Fiber Optic
Hydrogen Sensors and Universal Gas Detectors at the April 7th
event for the very first time.
DCH expects tremendous industry interest in their new sensors and
believes several new markets have opened for them as a result of
their latest R&D investments.
LATEST DEVELOPMENTS
Mar. 15, 1999 DCH tests first Carbon Monoxide gas monitor with
Embedded Artificial Intelligence. This revolutionary new sensor
will now permit integrators to install CO sensors into safety and
process monitors in over 200 industries worldwide. DCH has a
backlog of orders for this sensor and will begin full-scale
production this year.
biz.yahoo.com
Mar. 4, 1999 DCH and Allied Signal announced a multi year
strategic alliance to integrate DCH sensors into AlliedSignal
products for hydrogen energy and other systems.
biz.yahoo.com
Feb. 17, 1999 DCH Sensors have been selected by Antaeus
Corporation for use in its "smart'' bridge monitoring system, to be
used for corrosion detection associated with aging bridge
structures. The U.S. Government spent $5 Billion in 1998
maintaining and rehabilitating bridges.
biz.yahoo.com
Feb. 11, 1999 DCH and Freewing Aerial Robotics Corp., have
begun a development program to integrate Hydrogen PEM Fuel
Cells into the Freewing Tilt-Body Unmanned Aeronautical Vehicle
(UAV). UAV's are in demand in both military and the emerging
commercial marketplaces with total market demand estimated at
between $2 to $4 Billion.
sdcd.gsfc.nasa.gov
Feb. 9, 1999, DCHT shipped the first of it's new Deuterium Sensor
and Process Monitor Systems. Deuterium, a heavier variety of
hydrogen is used in both industrial and nuclear operations. This is
a major breakthrough for the telecommunications and
semiconductor industries, to name a few. DCH selected
AlliedSignal to fabricate these devices.
dch-technology.com
Feb. 5, 1999, Congressman John Peterson (PA-05) accepted an
invitation to give the keynote address at the NHA meeting. With
participants from 15 nations, the April 7th event is expected to be
the largest American meeting to address Hydrogen Energy as a
viable alternative for America's future energy needs.
house.gov
Jan 22, 1999, DCH announced the election of 20 year
Pennsylvania Congressman Bob Walker, the author of the $ 100
Million Hydrogen Future Act of 1996 to their Board of Directors.
Bob Walker is now the president of the Wexler Group, with
partner Anne Wexler who has been called one of the most
powerful lobbyists in all of Washington. Source
wexlergroup.com
Nov. 18, 1998, DCH Chairman Dave Haberman is appointed to the
Hydrogen Technical Advisory Panel (HTAP) to the U.S. Congress,
by Dept. of Energy Secretary Bill Richardson.
eren.doe.gov HTAP reports to
Congress on the Department of Energy's implementation and
appropriations pursuant to the Hydrogen Future Act; authored by
new DCH board member Bob Walker and signed into law in 1996.
DCH Chairman Dave Haberman is also the 1999 President of the
California Hydrogen Business Council, which is active in
promoting the growth of hydrogen and also coordinates with and
supports the goals of the National Hydrogen Association.
wmrs.edu
The DCH Technology story has not yet come to the attention of the
investment community and is therefore considered by us to be an
extremely undervalued stock with an unlimited upside potential.
SUMMARY
DCH is supplying hydrogen safety devices to a growing US $200
Million dollar market.
DCH is weeks away from entering the US $2 Billion dollar gas
sensor market.
DCH is weeks away from entering the projected US $1.3 Billion a
year Fuel Cell market.
DCH has No Debt.
DCH has superior management and an impeccable industry
reputation.
DCH is projecting 1999 revenue at $ 3.4 million in 1999, and over
$9 million in 2000.
By using stock to pay for services and R&D they have incurred No
Debt, positioning them for major earnings per share growth for the
next several years.
It is our opinion that DCHT priced below $ 4.00, is a major
undervalued asset on the verge of tremendous financial success
and will soon come to the attention of major investment houses and
brokerage firms.
Trading Strategy
For short-term traders with a high-risk tolerance, we believe that
buying DCHT below the $2.00 level, provides an extraordinary
low risk opportunity, with a short term upside potential to the
$3.50 to $ 4.50 resistance level within the next 12 months.
Long term investors with a high-risk tolerance can buy DCHT up
to $4.50 and holding for a retest of the 1998 highs of 8 1/4, within
the next 24 months.
As of Feb. 15, 1999
Related Industry Market Cap Comparison
BLDPF $2 Billion plus .
MKTY $140,000,000
PWRE $ 36,000,000
MHTX $ 40,000,000
DCHT $11,000,000
Note: Price projections are based on the multiples of comparable
companies in the fuel cell sector, as there is no basis for
comparison in the hydrogen and gas sensor industry.
Note: DCH Technology has targeted April 1, 1999 to become a
fully reporting company.
While it can not be guaranteed they will meet that target, the
indications are positive.
For more information contact:
Steven Oshinsky, GM
RAM Capital Management
ramcapitalmanagement.com
Email: RAMCapMgmt@aol.com
Fax: 561-394-9695
DISCLAIMER: The information and opinions in this report were
prepared by RAM Capital Management; an independent private
consultant. RAM does not undertake to advise you of changes in its
opinion or information. RAM and others associated with it may
make markets or specialize in, have positions in and effect
transactions in securities of companies mentioned and may also
perform or seek to perform investment banking services for those
companies. RAM and/or their affiliates or their employees have or
may have a long or short position or holding in the securities,
options on securities, or other related investments of issuers
mentioned herein. As of Feb 8, 1999, RAM has received
compensation for advisory services of 100,000 shares of DCH
Technology and a monthly advisory fee of $ 5,000. The
investments discussed or recommended in this report may be
unsuitable for investors depending on their specific investment
objectives and financial position. Where an investment is
denominated in a currency other than the investor's currency,
changes in rates of exchange may have an adverse effect on the
value, price of, or income derived from the investment. Past
performance is not necessarily a guide to future performance.
Income from investments may fluctuate. The price or value of the
investments, to which this report relates, either directly or
indirectly, may fall or rise against the interest of investors. Private
investors should obtain the advice of a qualified professional
about their investments. Do not use this report as the basis for an
investment in DCHT. Nothing herein shall be construed as
investment advice. Statements contained herein are made as
opinions and are not endorsed by the company. Nothing to the
contrary is implied or intended. In the opinion of RAM, only
accredited investors who have the financial capability to withstand
the entire loss of their investment should consider trading in or
investing in OTC BB securities. RAM assumes no liability from
the unauthorized posting or reprinting or downloading of this
report to or from any electronic or Internet related forum.
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