HydraLogic Reports Second Quarter 2007 Results

    TORONTO, Sept. 4 /CNW/ - HydraLogic Systems Inc. ("HydraLogic" or the
"Company") (TSX.V: HLS) today announced its financial operating results for
the three month and six month periods ending June 30, 2007, as follows:

    Information in table is in thousands     Three-Month        Six-Month
     CDN $ except per share data               Period             Period
    Period ended June 30                     2007     2006     2007     2006
    Revenue                               $ 2,099  $ 1,321  $ 3,557  $ 2,606
    Gross Profit                            1,158      561    1,954    1,158
    EBITDA                                   (374)    (610)    (929)  (1,072)
    Net Loss                                 (563)    (715)  (1,308)  (1,242)
    Basic and diluted Loss per Share        (0.02)   (0.02)   (0.04)   (0.04)

    Second Quarter 2007 Highlights:

    -   The June 2007 quarter revenues of $2,099,189 are up 59% on a quarter
        to quarter comparison and 36% on a six month comparative basis.

    -   Gross Profit Margin increased to 55% from 42%, on a quarter to
        quarter comparison, for a net gain of $597,000 and increased to 55%
        from 44%, on a six month comparative basis, for a net gain of

    -   The current quarter is showing a stronger EBITDA trend with an
        improvement of $236,000, quarter over quarter, and $143,000 for the
        six month comparative.

    "We saw revenues ramp up in the latter part of the quarter with the
purchase of the assets and operations of Third Coast Mosquito Control" stated
Michael Beckley, Chief Executive Officer of HydraLogic. "The month of June
also marked the start of a great mosquito and odour control season which we
anticipate will reflect well in our reporting of the Company's Q3 financial
results. We maintain a steady course in revenue acceleration and we continue
to increase operating efficiency with the objective of reaching near term
profitability" added Mr. Beckley.

    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.

For further information:

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

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