HydraLogic Completes Private Placement of Units



    /NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES NOR FOR DISSEMINATION IN
    THE UNITED STATES/

    BARRIE, ON, Aug. 20 /CNW/ - HydraLogic Systems Inc. (HLS:TSX.V) today
announced that on August 15, 2007 it completed a private placement of
5,375,000 units. Each Unit consisted of one common share, 1/2 of a Class G
Common Share purchase warrant and 1/2 of a Class H Common Share purchase
warrant for total proceeds of $1,612,500.00. Each whole Class G Warrant
entitled the Purchaser to purchase one Common Share at a price of $0.50 for a
period of 24 months and each whole Class H Warrant entitled the Purchaser to
purchase one Common Share at a price of $0.80 for a period of 24 months. All
of the securities issued under the private placement are subject to a 4-month
hold process.
    Capstone Investments acted as Agents of the Company in this offering and
received a commission of 5 percent of which 2.5 percent of their gross
proceeds were allocated in the form of Units of the Company under the same
terms and conditions of the Offering outlined above.
    The Unit offering proceeds are intended to partially repay the bridge
loan undertaken by the Company in December, 2006 and to address near term
growth opportunities in support of the Company's Bug Defence business
division.
    The entire offering was undertaken by CCM Master Qualified Fund Ltd.
("CCM"), an investment fund managed by Coghill Capital Management, LLC of
Chicago, Illinois. CCM has agreed to subscribe for a further 8,333,332 units
of the Company under the same terms of the initial offering subject to the
Company obtaining requisite shareholder approval. Approval may take the form
of a written consent signed by 50 % of the Company's shareholders or by
ordinary resolution passed at a general meeting.
    "The recent private placement and near term completion of a second
offering of $2,500,000 would, if completed, support our current growth
momentum, retire the bridge loan debt in full and free up nearly $11,000,000
of the Company's capital assets in support of a new traditional banking
partnership". stated Michael Beckley, President and Chief Executive Officer of
HydraLogic.

    About HydraLogic Systems Inc:

    HydraLogic is an innovator of engineered misting systems and proprietary
environmental chemistries with reoccurring revenue distribution platforms. The
company strives to be market leaders in providing technologies, through turn
key distribution and service models into the multi-billion dollar pest and
odour control industries as Bug DeFence and HLS Ecolo respectively.
    HydraLogic Systems is traded on the TSX Venture exchange - symbol: HLS.

    Forward Looking Statements

    This press release contains certain "forward looking statements". These
statements relate to future events or future performance and reflect
expectations and belief regarding growth, results of operations, performance,
business prospects, opportunities or industry performance and trends. These
forward looking statements reflect current internal projections, expectations
or beliefs and are based on information currently available. A number of
factors could cause actual events or results to differ materially from the
results discussed in the forward looking statements. Although it is believed
that the forward looking statements contained in this press release are based
upon reasonable assumptions, investors cannot be assured that actual results
will be consistent with these forward looking statements. These forward
looking statements are made as of the date of this press release, and
HydraLogic Systems Inc. assumes no obligation to update or revise them to
reflect new events or circumstances, except as required pursuant to applicable
laws.

    The TSX Venture Exchange does not accept responsibility for the adequacy
    or accuracy of this news release.





For further information:

For further information: Glen Akselrod, Bristol Capital Ltd., (905)
326-1888, glen@bristolir.com

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