PWDY Products Target Opportunity Created by a Convergence of Fundamental U.S. Economic Market Dynamics

Select Stock Trading Data
Recent Stock Price $0.0126
Shares Outstanding: 195.42 million
Float 28.77 million
Recent Market Cap: $2.46 million
52 Week Range: $.007 – $0.20
Exchange: OTCBB
Ticker: PWDY
URL: http://www.powerdyneinternational.com/
Data sourced from Yahoo! Finance; otcbb.com; Company filings

Powerdyne International, Inc (www.PowerdyneInternational.com) is a development stage manufacturing company
that builds and leases electrical generation equipment including its own portable electrical power generation
equipment called PDIGenset (which is patent trademark pending). PDIGensets are designed to be installed at
virtually any location. The genset is leased and maintained by PDI. Although the company’s target customer will
typically use its PDIGenset to produce its own primary electrical power, the genset is designed to be useful in any
situation where reliable power is needed. PDI is founded with the objective to produce primary electrical power
using proprietary technology to power electrical generation equipment which makes electricity cheaper than existing
means of producing primary electric power. PDI expects that the difference between its cost of generating electricity
over its customer’s current cost will result in substantial savings to the customer.
PWDY’s initial product is the PDIGenset (patent pending) which is a self-contained generator that is powered by a
modified radial air cooled engine to drive a minimum of a 1-megawatt generator. The entire unit, which runs on
natural gas or propane, is compact, lightweight and clean burning. As a result, the unit will produce extremely low
emissions and is designed to be extremely energy-efficient. PWDY has recently completed a fully operational
factory Series 2 prototype, which has been tested and is ready as a demonstration unit. This unit is available for any
prospective customers to view in full operational capacity. In addition, the Series 2 prototype is ready to be
manufactured for customers upon placement of customer orders.
PWDY plans to manufacture, install, maintain and lease its own portable electrical power equipment. The Company
plans to manufacture portable electrical power equipment intended to be installed at client locations. The Company
will own, maintain and lease the equipment to the customer who will use it to produce its own supplemental
electrical power. The Company’s products are intended to be portable, easy-to-use units that can be conveniently
redeployed in various locations around the world. The Company’s units can also be assembled and combined to
produce power centers providing up to 50 megawatts of power. The Company’s headquarters are located in
Warwick, Rhode Island and operates a manufacturing facility in Massachusetts. The Company will market its
products in locations where inexpensive electrical power is needed and clean energy powered electrical equipment is
needed and/or required.
As forecast in the U.S. Energy Information Administration’s (EIA) recently released Annual Energy Outlooki
,
factors such as economic structural changes, higher electricity prices, mandated environmentally friendly standards,
and improved efficiencies are expected to slow the rate of growth in electricity consumption. However, from 2012
to 2040, the EIA still expects an increase of 28% in electricity use which is forecast to grow from 1.8% of GDP
currently to 2.4% of GDP in 2040.

While it seems reasonable to expect that electricity demand will create market opportunity for PWDY products, it’s
also important to consider what may happen to price and demand for the fuels that power those products. The
following conclusions from the EIA report address the outlook for natural gas in particular:
– “Growing domestic production of natural gas and oil continues to reshape the U.S. energy economy…
– With continued growth in shale gas production, natural gas becomes the largest source of U.S. electric
power generation, surpassing coal by 2035, and boosting production and natural gas consumption in
manufacturing.
– Strong growth in domestic natural gas production supports increased exports of both pipeline and liquefied
natural gas. With strong growth in domestic oil and gas production, U.S. dependence on imported fuels
falls sharply…”
While an increase in the use of, and demand for, natural gas for electricity generation, transportation and industrial
uses would seem to imply that prices must increase, the EIA cites massive expected increases in shale gas
production as a driver for keeping prices low. With 2012 U.S. dry natural gas production estimated at
approximately 25 trillion cubic feet in 2012, the EIA expects U.S. production to surpass 100 trillion cubic feet by
2040, with shale gas accounting for approximately half of that production resulting in modest expected increases in
natural gas prices enabling the U.S. to remain a net exporter of petroleum products.
With both increasing electricity demand and stable fuel prices as positive macro trends for PWDY products, the
Company also is targeting a market in which changing fundamentals create opportunity as well. As characterized by
David Crane, CEO of NRG Energy (NYSE: NRG), which generates 47,000 megawatts from solar, wind, fossil and
nuclear sources – enough to support almost 40 million homes, changes in power production and consumption driven
by distributed generation in particular represent “a mortal threat to the existing utility system.”
Quoted in a recent Blooomberg Businessweekii article, “Why the U.S. Power Grid’s Days Are Numbered”, that
characterizes the grid as a system of 2,700 miles of power lines connecting 3,200 utilities to their customers across
the U.S. as a century plus old model that is “doomed to obsolescence”, Crane cites the development of green energy,
information technologies, inexpensive natural gas and politics as drivers of what he sees as a changing power
infrastructure.
As noted in a Bloombergiii article, “NRG Skirts Utilities Taking Solar Panels to U.S. Rooftop”, changes to the way
power is generated, distributed, and consumed, as well as the rise of distributed generation technologies such as
solar, force Duke Energy’s (NYSE: DUK) Jim Rogers, CEO of the country’s largest utility, to concede:
“It is obviously a potential threat to us over the long term…There’s been a huge effort to build solar on the
rooftop, both residential and commercial. All of this is leading to a disintermediation of us from our
customers…If the cost of solar panels keeps coming down, installation costs come down and if they
combine solar with battery technology and a power management system, then we have someone just using
us for backup.”
As a manufacturer of portable, scalable electricity generators powered by natural gas (as well as other fuels), PWDY
is targeting a market in which large scale economic trends are creating significant opportunity for alternative sources
of electricity generation to be consumed by a wide range of potential municipal, industrial and commercial clients
such as the recently announced opportunity with Silver City Aluminum Company, for which PWDY is completing a
study on a potential PDIGenset installation.

Patrick Murphy Bio:

Patrick J. Murphy is the owner of Murphy Analytics LLC, a provider of sponsored research coverage on smallcap
stocks. Mr. Murphy has nearly 20 years of capital markets experience providing institutional investment and
transaction analysis across a range of asset classes including microcap equities, commercial real estate debt and
equity, municipal derivatives and public finance, venture capital, fixed income, CMBS and mortgage REIT’s. Mr.
Murphy is an alumnus of the University of Notre Dame (1991), with an undergraduate degree in Economics, and
earned a Masters Degree in Finance from St. Louis University in 1997. Mr. Murphy is a CFA Charterholder and a
member of the CFA Society of St. Louis.

Patrick Murphy Disclaimer:

Readers are advised that the above article is solely for information purposes and should not to be construed as an
offer to sell or the solicitation of an offer to buy any security. The views expressed herein are based upon the
author’s analysis of the issuer’s public disclosures, and assumes both their accuracy and completeness. The opinions
and statements included herein are based on sources (including the companies discussed and public sources)
believed to be reliable and in good faith, but no representation or warranty, express or implied, is made as to their
accuracy, completeness or correctness. The author has not independently verified the information contained herein.
This information is not intended to be used as the sole basis of any investment decisions, nor should it be construed
as advice designed to meet the investment needs of any particular investor. You should review a complete
information package on all companies, which should include, but not be limited to, the Company’s annual report,
quarterly reports, press releases and all regulatory filings. The foregoing discussion contains statements which are
based on current expectations, estimates and projections, and differences from such expectations, estimates and
projections can be expected. The author, Patrick Murphy, was compensated $1,000 by the Company for writing
this article. Murphy does not own shares of any of the companies mentioned in this article. Mr. Murphy’s research
firm, Murphy Analytics, may be engaged for the provision of a research report on the Company in the future.

i
http://www.eia.gov/forecasts/aeo/er/index.cfm
ii
http://www.businessweek.com/articles/2013-08-22/homegrown-green-energy-is-making-power-utilities-irrelevant
by Chris Martin, Mark Chediak, and Ken Wells
iii
http://www.bloomberg.com/news/2013-03-24/nrg-skirts-utilities-taking-solar-panels-to-u-s-rooftop.html
by Christopher Martin and Naureen S. Malik

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