Hy-Drive to use proceeds to meet sales demand of hydrogen generating systems (HGS) TSX Venture Exchange symbol: HGS MISSISSAUGA, ON, May 25 /CNW/ - Hy-Drive Technologies Ltd. (TSX-V: HGS) today announced that Martinrea International Inc. (TSX: MRE), a leading automotive parts supplier, has exercised 1.6 million warrants to acquire common shares of the Company, comprised of 600,000 warrants with an exercise price of $0.80 and 1,000,000 warrants with an exercise price of $1.30, for total proceeds to the Company of $1,780,000. A portion of the warrants when granted had a term of two years, but were callable if the market price of the Company's common shares traded above the strike price of the warrants by $2.00 for a period of twenty consecutive trading days, which has occurred. The proceeds will be used for general corporate and working capital purposes and to further ramp up production to satisfy North American and International sales of its G2 hydrogen generating systems (HGS). Martinrea International Inc. continues to hold 400,000 Hy-Drive warrants at an exercise price of $1.90. "Our partnership with Martinrea International in the automobile industry underscores the validity and importance of our groundbreaking hydrogen enhanced combustion technology. This is the next 'big thing' in the internal combustion world because it makes great economic sense. As oil and gas prices continue to escalate consumers are looking for solutions." said Tom Brown, President & CEO of Hy-Drive Technologies Ltd. "We are collaborating and working together to bring this revolutionary new technology to market, which will dramatically improve fuel efficiency while reducing harmful exhaust emissions. Our hydrogen enhanced combustion technology works with any combustion engine, providing an interim solution to soaring fuel prices." The Hy-Drive G2 system works by injecting small amounts of hydrogen gas into the combustion chamber of a regular internal combustion engine. This creates an enriched air mixture and a more complete and faster burn which results in reduced emissions, improved fuel efficiency and more engine torque. The product is easy to install and works with any internal combustion engine, all types of fuel and in almost any climate making a versatile solution for any truck or commercial vehicle. About Hy-Drive Hy-Drive is an energy technology firm that has developed a proprietary, patented hydrogen generating system. The Hy-Drive system generates and injects hydrogen gas into a regular internal combustion engine, enhancing the combustion process by allowing fuel to burn more efficiently and completely. In previous extensive customer trials and tests, the Hy-Drive system has demonstrated significant performance enhancements, including reduced emissions, increased torque/horsepower, fuel savings and extended engine life. These benefits, specifically fuel economy and reduced emissions, provide customers with greater productivity overall, as their engines operate more efficiently, with improved cycle times and less carbon build-up. For further information, 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