Hy-Drive Announces Plan to Install 100 HGS Units by Year End through IPT Partnership Program and Provides General Update

    Product Roll-Out Plan Incorporates Company Corporate Strategy and
    Transition Committee's Previously Announced Goals and Recommendations

    TORONTO, Oct. 16 /CNW/ - Hy-Drive Technologies Ltd. (TSX-V: HGS) today
released an update on a number of steps taken since our last News Release.
    The Company has launched its Integrated Product Team (IPT) Partnership
Program under which it plans to install 100 Hydrogen Generation System (HGS)
units of its Clean Burn Technology(TM) on selected partner trucks by year-end.
The IPT program has been initiated to maintain an existing market penetration
momentum and generate a controlled case study to serve as a verifiable
reference. The program will involve a series of existing customer fleet
operators already familiar with the company and technology, as well as a
number of new IPT partners.
    Under the program, each unit installed will be equipped with a
PeopleNet(TM) system. This system is capable of tracking mileage to the tenth
of a gallon and controlling the data for variables such as excess idle times,
truck speed, and elevated RPM's. Monitored results will provide the Company
with a significant level of statistically verifiable field data on HGS
performance and will complement other ongoing lab testing work as part of the
previously announced overall product review. This should allow the Company to
validate HGS product performance on various engine types, thus setting the
stage for a larger product rollout strategy.
    As a general update, the Company has completed 83% of the previously
announced required swap-out and expects to complete the balance before
November 30, 2007. In addition, the Company through its executive recruiting
firm has compiled a short list of qualified candidates for consideration to
fill the CEO position upon the expected retirement of Tom Brown at the end of
2007, as previously announced.
    Furthermore, in order to ensure that current Company spending reflects
the recently revised, and Board approved fourth quarter 2007 and first quarter
2008 business plan, the Company has implemented a number of cost reduction
measures. These measures are designed to reduce costs by approximately
$200,000 per month on a steady-state basis when the cuts are fully
    "The formal launch of our IPT Partnerships is a key milestone in our
restructuring program and our response to growing customer demand," stated Tom
Brown, CEO of Hy-Drive Technologies. "We have decided to methodically deploy a
host of units into various truck types operated by some of our valuable
partners. We want to ensure through our IPT partnership program that our
continued emergence into the market with our HGS in scale will have a
significant statistically credible data-set with verified performance metrics.
This should allow us to convert current and future prospects into customers
without having to undergo long term customer product review periods typically
experienced by new emerging technology companies. We will utilize results from
these case studies to ensure that our future response to the market is
targeted and focused.
    "Our cost reduction efforts reflect a re-focused streamlined organization
and our desire to significantly reduce our monthly burn rate," continued Mr.
Brown. "We believe the cuts implemented should have minimal impact on our
timelines or our ability to meet full product roll-out schedules and full
commercialization goals."
    "The installation and monitoring of 100 HGS units represents the largest
historical deployment in any one quarter for Hy-Drive," stated Grove Bennett,
Vice President of Marketing and Sales for Hy-Drive. "Our partners are
embracing the true spirit of an IPT Partnership and value the collaborative
approach Hy-Drive has adopted in shaping the future direction of the HGS and
the Clean Burn Technology(TM). We believe this deployment allows us to meet
customer demand for the product in a manner that is consistent with our
collective desire to fine tune our application protocols. These systems will
be installed on trucks across several large fleet customers and IPT Partners.
Upon success and completion of the program we anticipate that customer case
studies will convert to sales revenue and provide the basis for additional
growth and unit sales into this group as well as a much broader current and
prospective client base."

    About Hy-Drive

    Hy-Drive is an energy technology firm that has developed a proprietary,
patented hydrogen generating system. The Hy-Drive system 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 further information, visit www.hy-drive.com.

    Cautionary Note Regarding Forward-Looking Statements

    Certain statements contained in this press release may constitute
forward-looking statements. Such statements reflect Hy-Drive's current views
with respect to future events and are subject to certain risks, uncertainties
and assumptions. Many factors could cause Hy-Drive's actual results,
performance or achievements to be materially different from any future
results, performance or achievements that may be expressed or implied by such
forward-looking statements, including among other things, those which are
discussed under the headings "Risk Factors" and elsewhere in documents that
Hy-Drive files from time to time with securities regulatory authorities.
Should one or more of these risks or uncertainties materialize, or should
assumptions underlying the forward-looking statements prove incorrect, actual
results may vary materially from those described herein as intended, planned,
anticipated, believed, estimated or expected. Hy-Drive does not intend, and
does not assume any obligation, to update these forward-looking statements.

    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: Investor Relations: Glen Akselrod, Bristol
Capital Ltd., Tel: (905) 326-1888, glen@bristolir.com; Corporate Information:
Shannon Brander, VP, Administration, Tel: (905) 542-3024 x 234,

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