Hy-Drive Announces Financial Results for 3rd Quarter 2010

MISSISSAUGA, ON, Nov. 30 /CNW/ - Hy-Drive Technologies Ltd. today announced its financial results for the three-months and nine months period ended September 30, 2010.  This release also covers Financial Statements for the Company and an accompanying MD&A released at www.sedar.com.

Highlights for the three-months and nine-months period ended September 30, 2010:

The following outlines the key events during the three-months ended September 30, 2010 and up to the date of this MD&A in the development of the Company and the commercialization of the HGS product for the Class 8 truck and mining markets:

The following table summarizes the Company's operating results for the three-months and nine-months ended September 30, 2010:

	Three Months ended Sept-30		Nine Months ended Sept-30
	(unaudited)		(unaudited)
	2010	2009	2010	2009
	$	$	$	$
General and administration	400,529	379,773	1,442,394	1,259,588
Sales and marketing	205,537	1,800	637,837	4,091
Research and development	476,563	516,560	1,127,434	1,123,638
Inventory write-off	-	120,742	-	322,963
Warranty costs	-	-	(21,764)	66,218
Stock-based compensation	32,982	22,449	37,665	106,428
Amortization - property and equipment	20,354	22,183	75,961	150,333
Amortization - development costs	240,069	-	722,214	-
Amortization - intellectual property	42,653	38,632	124,664	113,424
Total Expenses	1,418,687	1,102,139	4,146,405	3,146,683
Interest and other income	11,033	5,142	19,983	50,875
Gain or (loss) on foreign exchange	8,073	31,654	13,096	6,726
Net gain or loss for the period	(1,399,581)	(1,065,343)	(4,113,326)	(3,089,082)
Loss per share	(0.02)	(0.02)	(0.06)	(0.05)

The following outlines the key events during the three-months ended September 30, 2010 and up to the date of this MD&A in the development of the Company and the commercialization of the HGS product for the Class 8 truck and mining markets:

• On September 22, 2010, the Executive Chairman, Mr. Dan Doucette, announced the appointment of Mr. Robert Bucher as Chief Executive Officer and President. Mr. Bucher has many years of experience in the technology sector, which he will bring to bear to realize the full potential of Hy-Drive's unique, patented and patent pending technologies. Pursuant to the Company's stock option plan, Mr. Bucher was issued options to purchase 1,000,000 common shares at $1.00 per share, which vest in four different tranches and expire ten years after the date of the grant. The first tranche of 250,000 options vested immediately; the second, third and fourth tranches are all subject to performance conditions.
• Hy-Drive built seven Beta units newly designed for mining/off-road use, referred to as the M3. The initial units are being used for under ground mining qualification testing, a necessary step towards deployment of the M3 as part of the previously announced MTI order. The stringent testing process includes humidity, salt spray, steam cleaning, mechanical shock, temperature and altitude, and vibration. This testing is expected to be completed in December 2010. When complete the M3 will be targeted at global markets such as under ground mining where major emissions reduction is evolving into a regulatory safety requirement. 
• Hy-Drive's Australian sales agent, Sparta Capital Ltd. ("Sparta") continued to monitor a sales trial with a leading Australian fleet. Management thinks Australia represents an excellent market for its HGS product because of higher diesel costs, significant numbers of CAT engines in use in Class 8 vehicles and emissions regulations lagging North America and the EU. Also, the HGS will work on Caterpillar engines sold prior to 2010 in Australia, thus presenting a much larger market opportunity for sales.
• During the quarter, Hy-Drive continued its Direct marketing mail campaign that were aimed at fleets of varying sizes that own Class 8 trucks with Caterpillar engines of the type on which the HGS was third party validated. During the quarter, two additional fleets signed up for trials ranging from one to five HGS units.  Subsequent to the quarter, two fleets commenced trials with installation dates in October. Trials are being monitored on a regular basis and followed up to turn prospects into customers. In total, including Australia, there are 27 HGS units on trials at various fleets at the MD&A date.
• At the end of the quarter, Hy-Drive discontinued its marketing services contracts with BKV and its sales agency arrangement with IntraLink & Associates. The Company is re-examining its channels to the market and its overall global marketing strategies.
• Total cash and short-term investments used in operating activities was $1,762,018 and $4,207,106 for the three-months and nine-months ended September 30, 2010 (2009 - $1,351,640 and $3,409,313). During the quarter Hy-Drive increased its spending on marketing and inventory production to support the sale of its HGS product.
• Net loss for the three-months and nine-months ended September 30, 2010 was $1,399,581 and $4,113,326 (net losses of $0.02 and $.06 per share respectively) (Net losses in 2009 were $1,065,343 and $3,089,082 (net losses of $0.02 and .05 per share respectively)).
• The Company reports cash, cash equivalents and short-term investments of $3,926,955 as at September 30, 2010, compared to $4,268,265 as at December 31, 2009; an decrease of $341,310 in the nine-months. During the nine month period the Company completed a Private Placement for net proceeds of $4,029,210.

About Hy-Drive

Hy-Drive is a technology company headquartered in Mississauga, Ontario, Canada. The Company has invested in the research and development of hydrogen and control technology resulting in a proprietary, patented and patent-pending hydrogen generating system ("HGS®") and advancement in multi-fuel universal combustion controls. Hy-Drive's HGS enriches the fuel-air charge of an internal combustion engine with hydrogen produced through electrolysis and uses its proprietary software controls to improve combustion of the fuel-air mixture. The result is improved fuel economy and reduced opacity (particulates). For more information, please visit 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 press release and 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 2010, 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.

%SEDAR: 00016984E

For further information:

Robert H. Bucher, P.Eng
President & CEO
Tel:  [phone] x222
Email: [email protected]