Hy-Drive Announces Financial Results for the Three Month Period Ended March 31, 2009



    MISSISSAUGA, ON, April 15 /CNW/ - Hy-Drive Technologies Ltd. today
announced its financial results for the three month period ended March 31,
2009. This release also covers Financial Statements for the Company and an
accompanying MD&A released at www.sedar.com.

    
    Highlights for the three month period ended March 31, 2009:

    Unaudited Consolidated Statements of Operations and Deficit
    For the Three months ended March 31.
    -------------------------------------------------------------------------
                                                       2009            2008
    -------------------------------------------------------------------------

    Expenses
      General and administrative                    375,122         601,964
      Sales and marketing                             1,091          43,034
      Research and development                      309,266         794,695
      Inventory write-off                            38,445               -
      Stock-based compensation                       39,183         167,992
      Amortization - property, plant and
       equipment                                     64,548         100,703
      Amortization - intellectual property           36,991          35,454
    -------------------------------------------------------------------------
                                              $     864,646   $   1,743,842
    -------------------------------------------------------------------------

    Net loss before undernoted items          $    (864,646)  $  (1,743,842)

    Interest and other income                        (8,847)        213,518
    -------------------------------------------------------------------------
    Net loss                                  $    (873,493)  $  (1,530,324)

    Deficit, beginning of period              $ (47,390,153)  $ (41,521,748)
    -------------------------------------------------------------------------
    Deficit, end of period                    $ (48,263,646)  $ (43,052,072)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Basic and fully diluted loss per share    $       (0.01)  $       (0.03)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Weighted average number of shares
     outstanding                              $  61,358,723   $  61,190,390
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

    The following outlines the key events during the three months ended March
31, 2009 and up to the date of this MD&A in the development of the Company,
the HGS(TM) product and the Class 8 truck market:

    
    -   The Company has continued to invest in testing the reliability and
        performance of its HGS(TM) and all its component parts. Hy-Drive
        commenced building initial units of the HGS(TM) incorporating all
        that it has learned in its development and testing in the past year.
        These units will be used for on-road testing in the IPT program and
        for validation testing.

    -   In 2008 Hy-Drive announced a non-binding Memorandum of Understanding
        ("MOU") with an arms length developer of enhancements for diesel
        engines to acquire intellectual property assets (the "IP Assets").
        Those IP Assets, with further development, will enhance the control
        system of Hy-Drive's HGS(TM) product. In the first quarter Hy-Drive
        has worked closely with the vendor on those enhancements. The
        acquisition of the IP Assets remains subject to receipt of all
        regulatory approvals, including that of the TSX Venture Exchange, as
        well as the parties entering into a definitive agreement, which is in
        process.

    -   Third party efficacy performance verification is planned throughout
        the remainder of 2009 and beyond.

    -   Hy-Drive re-initiated testing on Class 8 size engines through its IPT
        Program. Engines in this size class are used in many other
        applications, including construction equipment and stationary
        equipment.

    -   The Company implemented a program of cash conservation in 2008 that
        is carrying forward into 2009. This includes controls over production
        and inventory, consulting, capital expenditures, marketing
        initiatives, and general and administrative expenditures. These
        positive initiatives effected a reduction in the monthly operating
        costs of the Company. Total cash and short-term investments used in
        operating activities was $700,593 for the three months ended
        March 31, 2009 compared to $1,736,799 for the three months ended
        March 31, 2008.

    -   Net loss for the three months ended March 31, 2009 and 2008 was
        $873,493 ($0.01 per share) and $1,530,324 ($0.03 per share)
        respectively.

    -   The Company reports cash, cash equivalents and short-term investments
        of $7,945,962 as at March 31, 2009, compared to $9,235,324 as at
        December 31, 2008; a reduction of $1,288,362 in the quarter.

    -   The Company received notice of an action brought against it by a
        company with a foreign distribution agreement for the HGS(TM). The
        Company and its counsel believe the action is without merit and a
        motion was filed requesting that the plaintiff post costs prior to
        further action being taken. Hy-Drive will defend the action.

    -   Management recognizes that the recent economic downturn presents
        risks to the trucking industry. However, management believes that its
        product will provide sufficient economic benefit to prospective
        trucking customers for them to purchase the HGS(TM). Industry
        statistics indicate that sales of Class 8 trucks have severely
        declined in the first quarter. This represents an enhanced
        opportunity for Hy-Drive because our HGS(TM) unit is most effective
        with older truck engines, which are not being replaced at prior
        rates.

    -   During the first quarter 450,000 options were exercised at $0.11 per
        share representing cash proceeds to the company of $49,500.

    -   In 2007 Hy-Drive entered into a contract to acquire 1200 units of a
        complementary product to its HGS(TM) at a reduced price of USD$599
        per unit based upon anticipated volume purchases. Penalties were
        applicable for lower volume purchases. During 2008 the Company
        determined that the commitment would not be met and accrued for the
        commitment. Subsequent to the end of the quarter the company agreed
        to settle the contract by payment and return of unutilized units.
        Hy-Drive intents to continue its relationship with the supplier for
        use of the supplier's product in conjunction with the HGS(TM) unit on
        a referral fee basis, the details of which are still to be finalized.
    

    Cautionary Note Regarding Forward-Looking Statements:

    This MD&A contains certain forward-looking statements that are based upon
current expectations, which involve risks and uncertainties associated with
the Company's business, and the economic environment in which the business
operates. Forward-looking statements contained in this MD&A that are not
statements of historical fact may be deemed to be forward-looking statements
including but not limited to, statements about future development of
Hy-Drive's products, commercial production in 2009, future working capital
requirements, and validation of Hy-Drive's products, and can be identified by
the use of forward-looking terminology such as "plans", "expects", or "does
not expect", "is expected", "budget", "scheduled", "estimates", "forecasts",
"intends", "anticipates", or "does not anticipate", "thinks", or "believes" or
variations of such words and phrases or statements that certain actions,
events or results "may", "could", "would", "might", or "will be taken",
"occur", or "be achieved" and similar expressions to the extent that they
relate to the Company or its management. These forward-looking statements are
not historical facts, but reflect the Company's current expectations regarding
future results or events. These forward-looking statements are subject to a
number of risks and uncertainties that could cause actual results or events to
differ materially from current expectations, including the matters discussed
in the section "Risks and Uncertainties" below.
    Although Hy-Drive has attempted to identify important factors that could
cause actual results to differ materially from those contained in
forward-looking information, there may be other factors that cause results not
to be as anticipated, estimated or intended. There can be no assurance that
such information will prove to be accurate, as actual results and future
events could differ materially from those anticipated in such information.
Accordingly, readers should not place undue reliance on forward-looking
information.  Hy-Drive does not undertake to update any forward-looking
information that is incorporated by reference herein, except in accordance
with applicable securities laws.

    About Hy-Drive

    Hy-Drive is a technology firm that has developed a proprietary, patented
hydrogen generating system. Hy-Drive's Hydrogen Generating System ("HGS(TM)")
generates and injects hydrogen gas into a regular internal combustion engine,
enhancing the combustion process by allowing fuel to burn more efficiently and
completely. For more information, please visit www.hy-drive.com.

    
    The TSX Venture Exchange has in no way passed upon the merits of the
    proposed transaction and has neither approved nor disapproved the
    contents of this press release. The TSX Venture Exchange does not
    accept responsibility for the adequacy or accuracy of this release.
    
    %SEDAR: 00016984E




For further information:

For further information: Hugo T. Sorensen, President & CEO, Hy-Drive
Technologies Ltd., Tel: (905) 542-3024, ext. 222, hsorensen@hy-drive.com; Fred
M. Florence, Vice President & CFO, Hy-Drive Technologies Ltd., Tel: (905)
542-3024 ext. 257, fflorence@hy-drive.com

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HY-DRIVE TECHNOLOGIES LTD.

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