HydraLogic Reports Record Revenues and Profitability from Second Quarter 2008 Financial Results

    TORONTO, Aug. 7 /CNW/ - HydraLogic Systems Inc. ("HydraLogic" or the
"Company") (TSX.V: HLS - OTC Pink Sheet: HYSYF) today announced the Company's
financial operating results for the three months ending June 30, 2008; as

                   JUNE QUARTERLY HIGHLIGHTS - 2008 & 2007
    Information in table is thousands CDN $               Three-Month Period
    Period ended June 30th                                     2008     2007
    Revenue                                                   2,289    2,099
    Gross Profit                                              1,338    1,158
    EBITDA                                                      177     (471)
    Earnings (Loss)                                             131     (563)

    Second Quarter 2008 Highlights:

    -   Best historical quarterly revenues of $2,288,878 and the Company's
        first profitable quarter at $131,100 in net income.

    -   An improvement of $694,287 in net income over the loss of $563,187 in
        the three months ended June 2007.

    -   In the six months ending June 30, 2008 revenues have increased by
        $484,000, EBITDA improved by $870,000 and net income has improved
        $1,122,000 over the same period in 2007.

    "We are happy to report to our shareholders that the Company achieved a
financial performance milestone and a momentous turning point in our operating
history during the second quarter of 2008," stated Michael Beckley, President
and Chief Executive Officer of HydraLogic Systems Inc. "The shift in improved
income of over $1.1 M on $484,000 of increased revenue, over the same six
month period in 2007, demonstrates the extent of managements success from
reducing operating costs, consolidating operations and maintaining steady
growth within its core business areas of influence."
    "Over the next two quarters we will continue to focus on growing sales
while seeking additional improvements in operating efficiency in order to
transition the Company into positive cash flow and profitable earnings for the
full calendar year. The number and size of odour control product orders per
quarter are increasing and our Bug Defence Home Services business in Texas and
Florida continues to be a model of success in whole home property protection.
From this success, we plan to start fulfilling requests for franchise type
territory licensing by Q1 2009." At the same time, we are gearing up to bring
significant scale into the business in 2009 with the launch of our first in
class line of personal mosquito control devices and green repellent solutions.
The new consumer mosquito control product lines are expected to be launched
and sold through various national retail locations throughout the
United States.

    About HydraLogic Systems:

    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, though turn
key distribution and service models into the multi-billion dollar mosquito 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
securities laws.

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

    %SEDAR: 00020350E

For further information:

For further information: Michael Beckley, President & CEO, (705)
735-9535 ext 25, beckley@hydralogic.com

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