Hy-Drive Announces Proposed Private Placement of up to CDN $5 Million

/NOT FOR DISSEMINATION IN THE UNITED STATES OR THROUGH U.S. NEWSWIRE SERVICES/

Hy-Drive Technologies Ltd. (HGS-V)

MISSISSAUGA, ON, May 13 /CNW/ - Hy-Drive Technologies Ltd. ("Hy-Drive" or the "Company") today announced that it intends to undertake a brokered private placement of up to 16,666,667 units ("Units") at a price of Cdn$0.30 per Unit for gross proceeds of up to Cdn$5 million.

Each Unit will consist of one common share (a "Share") of the Company and one-half of one warrant (a "Warrant"). Each whole Warrant will be exercisable for one Share at a price of Cdn$0.46 per share for a period of five years.

Hy-Drive has engaged CapStone Investments to act as placement agent on a best efforts basis to a limited number of accredited or other qualified investors. The Company intends to use the net proceeds of the offering for working capital and general corporate purposes, research and development, capital expenditures and intellectual property protection.

Completion of the private placement is subject to the satisfaction of certain conditions such as the receipt of all necessary regulatory approvals, including that of the TSX Venture Exchange. There can be no assurance that the private placement will be completed or that, if completed, it will be on the terms currently contemplated.

Nothing contained in this press release shall be deemed an offer of securities for sale in the United States, which may not be offered or sold in the United States absent registration or an exemption from registration.

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.

Cautionary Note Regarding Forward-Looking Information

This news release contains "forward-looking information" within the meaning of applicable Canadian securities legislation. Forward-looking information includes, but is not limited to, information concerning Hy-Drive's proposed private placement and matters related thereto. Generally, forward-looking information 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", 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". Forward-looking information is based on the opinions and estimates of management at the date the information is made, and is based on a number of assumptions and subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking information. Many of these assumptions are based on factors and events that are not within the control of Hy-Drive and there is no assurance they will prove to be correct. Factors that could cause actual results to vary materially from results anticipated by such forward-looking information include risks associated with best efforts financing activities, including the ability to raise sufficient funds as well as receipt of all required regulatory and other approvals as well as market conditions and economic factors. In addition, completion of the proposed private placement may also be subject to risks associated with Hy-Drive's business, including, without limitation, factors relating to the marketing, development and commercialization of Hy-Drive existing and prospective product lines, changes in foreign exchange and interest rates, government regulation, environmental risks, capital expenditures, intellectual property, operating or technical difficulties, availability of skilled labour and equipment, and changes in project parameters as plans continue to be refined as well as those risk factors discussed in Hy-Drive's Management's Discussion and Analysis for the year ended December 31, 2009 at www.sedar.com. Although Hy-Drive has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking information, there may be other factors that cause actions, events or results not to be anticipated, estimated or intended. There can be no assurance that forward-looking information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information. Hy-Drive undertakes no obligation to update forward-looking information if circumstances or management's estimates or opinions should change except as required by applicable securities laws. The reader is cautioned not to place undue reliance on forward-looking information.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

%SEDAR: 00016984E

SOURCE HY-DRIVE TECHNOLOGIES LTD.

For further information: For further information: Fred M. Florence, COO & 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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