Hy-Drive Technologies Announces Second Quarter 2007 Results

    Focus Continues on Commercialization and Product Enhancement

    TSX Venture Exchange symbol: HGS

    MISSISSAUGA, ON, Aug. 29 /CNW/ - Hy-Drive Technologies Ltd. ("Hy-Drive")
(TSX-V: HGS) today announced its financial results for the three and six month
period ended June 30, 2007. This release also covers Financial Statements for
the Company and an accompanying MDA released earlier at www.sedar.com.

    Second Quarter 2007 Highlights

    During the period, the Company completed the following in its process of
bringing its technologies and solutions to commercial fruition.

    -  We announced that Noravex AS of Norway and Hy-Drive concluded a
       marketing and distribution agreement for four key European markets.

    -  We announced an expansion of the existing technology and distribution
       partnership with Mining Technologies International (MTI) which expands
       MTI's rights to represent Hy-Drive's Clean Burn Technology(TM) in the
       mining market in the European Union, Switzerland, Norway, Russia and
       the Commonwealth of Independent States.

    -  Subsequent to the quarter end, we announced that we had reached a
       settlement with Canadian Hydrogen Energy Company Ltd. (CHEC) with
       respect to a number of lawsuits. The no-cost, no-fault settlement
       agreement brings resolution to the lawsuits which involved the

    -  Subsequent to the quarter end, we announced that the Company had
       discovered a correctable design flaw in its Hydrogen Generating System
       ("HGS") manufactured prior to June 2007. The design flaw was
       discovered and corrected in a small percentage of shipped units.

    -  Subsequent to the quarter end, we announced that the Board of
       Directors has formed a Special Committee ("Corporate Strategy and
       Transition Committee"). That Committee will conduct a review of
       corporate structure / management, general sales and marketing strategy
       and oversee a third-party review of the status of the Company's
       product line.

    The Company recorded a loss of $7,166,475 ($0.12 per share) in the second
quarter of 2007 versus a loss of $1,188,449 ($0.02 per share) in the second
quarter of 2006, and a loss of $1,966,927 ($0.03 per share) in the first
quarter of 2007.
    The Company reported cash and cash equivalents and short term investments
of $21,819,098 as at June 30, 2007 compared to $16,523,511 at December 31,
2006 and $24,104,038 as at March 31, 2007.

    Financial Review

    The following table sets out selected financial data relating to the
Company for the three months and six months ended June 30, 2007 and 2006.


    Results of Operations/Financial Position as at June 30, 2007 and 2006:

                             Three months ending           Six months ending
                           June 30,      June 30,      June 30,      June 30,
                              2007          2006          2007          2006
    Revenues           $         -   $   342,767   $    98,743   $   464,969
    Cost of sales                -       204,209        47,470       355,488
    Gross profit       $         -   $   138,558   $    51,273   $   109,482
    Expenses             7,363,568     1,388,078     9,623,934     2,821,762
    Interest and
     other income          197,094        61,071       439,258        85,932
    Net loss           $(7,166,475)  $(1,188,449)  $(9,133,402)  $(2,626,348)
    Basic and diluted
     loss per share    $     (0.12)  $     (0.02)  $     (0.15)  $     (0.05)

    The Company did not record any revenues during the three months ended
June 30, 2007 as the Company continues development of its HGS-G3. During the
second quarter of 2007, the Company recorded a provision against its inventory
in the amount of $3,250,419, recorded a stock-based compensation expense of
$1,380,787, and recorded a reserve of $572,598 to correct all inventory
affected by a design flaw discovered and corrected in the Company's product.


    Hy-Drive's R&D investments during the second quarter of 2007 continue to
support the Company's commercialization program. These investments ensure that
various products emanating from the core technology are designed and developed
in an environment that has access to the pertinent underlying sciences and
technologies. This encompasses Company sponsored experimental development and
prototyping, accelerated life and stress testing, investigation/proving of new
processes, and the registering of new intellectual property. These steps will
allow customers to receive maximum advantage from HGS usage, and to permit the
Company to expand HGS based solutions across multiple vertical markets both
nationally and internationally.

    About Hy-Drive

    Hy-Drive is an energy technology firm that has developed a proprietary,
patented hydrogen generating system. Hy-Drive's Clean Air Operating System(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 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; Tom Brown, President
and CEO, Hy-Drive Technologies Ltd, Tel: (905) 542-3024, ext. 300,
tombrown@hy-drive.com; Tom Wallace, Interim CFO, Hy-Drive Technologies Ltd,
Tel: (905) 542-3024, twallace@hy-drive.com

Organization Profile


More on this organization

Custom Packages

Browse our custom packages or build your own to meet your unique communications needs.

Start today.

CNW Membership

Fill out a CNW membership form or contact us at 1 (877) 269-7890

Learn about CNW services

Request more information about CNW products and services or call us at 1 (877) 269-7890