MISSISSAUGA, ON, Nov. 18 /PRNewswire-FirstCall/ -- Hy-Drive Technologies Ltd. today announced its financial results for the three and six month period ended September 30, 2009. This release also covers Financial Statements for the Company and an accompanying MD&A released at http://www.sedar.com/.

Highlights for the three month period ended September 30, 2009:

The following outlines the key events during the three months ended September 30, 2009 and up to November 17, 2009, the date of this MD&A, in the development of the Company, the HGS(R) product, the mining product and the Class 8 truck market:

Interim Consolidated Balance Sheet as at September 30, 2009 ------------------------------------------------------------------------- September 30, December 31, 2009 2008 Note (unaudited) (audited) ------------------------------------------------------------------------- ASSETS Current assets Cash and cash equivalents $ 63,241 $ 2,193,612 Short-term investments 4,355,598 7,041,712 Inventory 745,202 544,449 Prepaid expenses and other assets 225,042 155,977 ------------------------------------------------------------------------- $ 5,389,083 $ 9,935,750 Property, plant and equipment $ 315,128 $ 474,004 Patents and trademarks 818,843 870,052 Development costs 6 4,452,948 3,049,947 Profit participation interest 299,623 299,623 ------------------------------------------------------------------------- $ 11,275,625 $ 14,629,376 ------------------------------------------------------------------------- ------------------------------------------------------------------------- LIABILITIES Current liabilities Accounts payable and accrued liabilities $ 1,055,573 $ 1,476,170 ------------------------------------------------------------------------- SHAREHOLDERS'' EQUITY Capital stock 8 $ 55,594,987 $ 55,527,647 Contributed surplus 9 5,104,300 5,015,712 Deficit (50,479,235) (47,390,153) ------------------------------------------------------------------------- $ 10,220,052 $ 13,153,206 ------------------------------------------------------------------------- $ 11,275,625 $ 14,629,376 ------------------------------------------------------------------------- -------------------------------------------------------------------------

The following outlines the key events during the three months ended September 30, 2009 and up to the date of the MD&A in the development of the Company, the HGS(R) product, the mining product and the Class 8 truck market:

- In July 2009, Professional Services Industries, Inc. (PSI) completed third party validation testing of the HGS(R). PSI followed the Joint SAE/TMC Fuel Consumption Test Procedure, Type II, SAE J1321 (Oct 86) to validate and certify the results. The tests were conducted over three days on Class 8 highway tractors with Caterpillar engines equipped with HGS(R) units. PSI''s testing concluded that the use of the HGS(R) resulted in an overall reduction in fuel consumption of 10.47% and reduced opacity by 39.5%. - Subsequent to the end of the quarter, the Company entered into a definitive agreement (the "Agreement") with an arms length third party to acquire intellectual property assets (the "IP Asset") and for the development of enhancements for the HGS(R) (the "Modules"). This Agreement provides Hy-Drive an expanded market for the HGS(R) technology. The Company acquires the ownership and exclusive right to use the IP Asset and Modules with a wider range of vehicles than originally included in the MOU. It now includes Class 4 and pick-up trucks, and other applications including in respect of mining, forestry, construction, and industrial market places, as well as in light duty truck and other sectors. The details of the Agreement are set out in the Press Release issued November 17, 2009 and in the Capital Commitments Section in the MD&A. The Agreement concludes the transaction first disclosed in a press release dated October 30, 2008, wherein the Company announced a non-binding Memorandum of Understanding (the "MOU") to acquire the IP Asset and Modules by the issuance of common shares and warrants and for cash consideration as detailed in Note 13 to the Consolidate Financial Statements. Development of Modules to enhance the HGS(R) progressed after the signing of the MOU and prior to completion of the Agreement. The resulting enhancement to the HGS(R) contributed to the successful third party PSI validation mentioned above and confirmed Management''s belief that this acquisition and development work give the Company a unique product and a competitive advantage in its market place. Management believes that the expanded vehicle range available with the enhancements, and under development, opens another potential market for the HGS(R) in the United States. Many State and Municipal owned fleets or companies contracting to them, operating all Classes of trucks, are mandated to reduce their emissions. Management believes the HGS(R) will be a viable alternative to other retrofit emissions reduction technologies currently on offer to those fleets, and one that also offers fuel consumption reductions. - In August 2009, the Company announced receipt of an order for 100 HGS(R) units from Mining Technologies International, Inc. The order was valued at $1,200,000; it is to be fulfilled with a combination of units designed specifically for a mining application plus units intended for normal on road use. Timing for fulfillment of the order is not finalized. Subsequent to quarter end, the Company received the first payment in advance of shipment for $200,000. - In September 2009, the Company announced completion of the audit by Canada Revenue Agency (CRA) of the Company''s claim for Scientific Research and Experimental Development (SRED) Credits for fiscal years 2005, 2006 and 2007. In addition to the Federal Tax Credits, the audit qualifies the Company to received cash payments from the Government of Ontario as part of its refundable Ontario Investment Tax Credit (OITC) program. Subsequent to quarter end, the Company received $591,503. - Subsequent to the third quarter, the Company entered into an agreement with an agency, BKV, Inc. ("BKV"), to implement a marketing and sales plan for the HGS(R) system. BKV will assist Hy-Drive to achieve the commercialization of the HGS(R) in North America. BKV is an integrated marketing communications company with particular experience in direct and interactive business-to-business marketing, including in the truck aftermarket segment. They number many Fortune 500 companies in their customer base. - In 2008, the Company wrote down a Loan Receivable and accrued interest of $513,333 due from an arms length party, which went into bankruptcy. The Estate Trustee advised the Company that realizations may result in full recovery of the Loan Receivable, for which the Company held security. The outcome is subject to Taxation of the Estate by the Courts. - In anticipation of increased demand and production requirements, the Company initiated exploratory discussions with companies specializing in outsource manufacturing. Management believes that significant cost savings can be realized in the manufacturing process. - In conjunction with the Company''s sales and marketing efforts, the Company commenced discussions with several parties to provide purchase finance or lease alternatives for prospective customers. - The Company continued internal testing of the reliability and performance of its HGS(R) and component parts. That testing was both in-lab and on-road and related to Thermal Ranges (-40C to +50C), Vibration Testing, Salt-Spray Testing, Altitude Testing, Electromagnetic Interference and Conduction Testing (EMI/EMC), and Shock Testing. Reliability Demonstration Test results for the current HGS(R) design show it meets performance requirements for a minimum of 9000 hours of operational hours. - Hy-Drive HGS(R) units available for sale incorporate the latest refinements developed over the past year. The Company has a trial programme with several prospects, using the latest HGS(R) technology, to confirm its efficacy on the road prior to purchase. HGS(R) systems are being installed on trucks with Caterpillar engines. - The Company implemented a program of cash conservation in 2008 that is carried forward into 2009. Total cash and short-term investments used in operating activities was $1,351,640 and $3,409,313 for the three months and nine months ended September 30, 2009 (2008 - $1,341,816 and $4,398,167). - Net loss for the three months and nine months ended September 30, 2009 was $1,065,343 and $3,089,082 ($0.02 and $0.05 per share respectively) (2008 - $2,522,498 and $5,816,263 ($0.04 and $0.10 per share respectively)). - The Company reports cash, cash equivalents and short-term investments of $4,418,839 as at September 30, 2009, compared to $9,235,324 as at December 31, 2008; a reduction of $4,816,485 in the nine months. - The Company received notice of an action brought against it by a company with a foreign distribution agreement for the HGS(R). The Company and its counsel believe the action is without merit. Hy-Drive has filed a defence in the action and the matter is proceeding. - Management recognizes that the economic downturn presents risks to the trucking industry. However, management believes that its product will provide sufficient economic benefit to prospective trucking customers for them to purchase the HGS(R). Industry statistics indicated that sales of Class 8 trucks continued to decline in the third quarter of 2009. This represents an enhanced opportunity for Hy-Drive because our HGS(R) unit is most effective on engines built before 2006, which are not being replaced at prior rates. - Management recognizes the risk the current economic climate presents to the Company if prospective purchasers of our HGS(R) product are not able to finance the acquisition of our product in spite of the value proposition that it represents. - Management believes that the growing importance of sustainability and carbon trading in North America, Europe and elsewhere, combined with the current business climate, will create an increase in interest in, and the value of, our HGS(R) product and the Company. Our HGS(R) should create sustainable carbon credits that our customers or the Company will be able to market and further increase the value proposition of purchasing our product. About Hy-Drive

Hy-Drive is a technology firm that has developed a proprietary, patented hydrogen generating system. Hy-Drive''s Hydrogen Generating System ("HGS(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 http://www.hy-drive.com/.

Cautionary Note Regarding Forward-Looking Statements:

This press release contains certain forward-looking statements that are based upon current expectations, which involve risks and uncertainties associated with the Company''s business, and the economic environment in which the business operates. Forward-looking statements contained in this MD&A that are not statements of historical fact may be deemed to be forward-looking statements including but not limited to, statements about future development of Hy-Drive''s products, commercial production in 2009, future working capital requirements, and validation of Hy-Drive''s products, and can be identified by the use of forward-looking terminology such as "plans", "expects", or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates", or "does not anticipate", "thinks", or "believes" or variations of such words and phrases or statements that certain actions, events or results "may", "could", "would", "might", or "will be taken", "occur", or "be achieved" and similar expressions to the extent that they relate to the Company or its management. These forward-looking statements are not historical facts, but reflect the Company''s current expectations regarding future results or events. These forward-looking statements are subject to a number of risks and uncertainties that could cause actual results or events to differ materially from current expectations, including the matters discussed in the section "Risks and Uncertainties" below.

Although Hy-Drive has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information. Accordingly, readers should not place undue reliance on forward-looking information. Hy-Drive does not undertake to update any forward-looking information that is incorporated by reference herein, except in accordance with applicable securities laws.

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.

Hy-Drive Technologies Ltd.

CONTACT: Hugo T. Sorensen, President & CEO, Hy-Drive Technologies Ltd.,
Tel: (905) 542-3024, ext. 222, hsorensen@hy-drive.com; Fred M. Florence, Vice
President & CFO, Hy-Drive Technologies Ltd., Tel: (905) 542-3024 ext. 257,
fflorence@hy-drive.com