Hy-Drive Technologies Ltd. ("Hy-Drive") (TSX-V: HGS) today announced its financial results for the three month period ended June 30, 2006. This release also covers Financial Statements for the Company and an accompanying MDA released at www.sedar.com. Commented Andy Harmon, Hy-Drive's CFO, "While our financial performance fell short of our internal projections this was, in large measure, attributable to our conscience decision to slow our HGS production lines, while we resolved quality and reliability concerns. This has now been accomplished, and the Company has restored its production rate to planned capacities, which should realise equivalent gain in revenues. The quarter also included important advances in the expansion of our global distributor network, together with the strengthening of our management team, inclusive of the addition of John Wright, Chief Operating Officer, important steps in the continuing success of our commercialisation process."
Q2 Highlights
HGS - G2
Ramped to full production rate, early production verification testing identified certain quality and reliability concerns in a minority of the units. Engineering investigation completed and corrective action implemented. Production rates restored to full capacity.
HGS - G3
The initial design of the product is now complete, in support of prototype build, qualification/validation testing, and detailed technical reviews, all scheduled to complete by September. Successful completion of these milestones will trigger a production release of the design, in support of a commercial roll-out prior to year end. The G3 will emulate the functions of the G2, while offering valuable enhancements, together with a significant, projected reduction in manufacturing cycle.
Product Distribution
The Hy-Drive product commercialization strategy is based upon the establishment of a network of master distributorships, providing the company preferred access to various geographical regions and/or market sectors (or "verticals"). To date, the company has 2 significant agreements of this type in place and fully functional, comprising North America - (USA and Canada) Road Transportation (IntraLink) and Asia-Pacific (Sparta). It is now in active negotiation with other potential distributors, intended to extend its reach to the European Union, and Mining sector, and plans to make detailed announcements in these areas presently.
Strategic Relationships
Hy-Drive currently maintains 2 such relationships, with Martinrea and Gaskatel. The former provides access to a wealth of automotive design, production and testing expertise, and the latter, the knowledge of the underlying electro-chemistry that forms the backbone of our HGS product line. As the commercialization process advances, we are working on adding additional partner(s), who will provide those resources important in monitoring and maintaining a large, global population of HGS systems.
Research and Development
The company maintains a significant, multi-faceted R&D program, which may be decomposed into 4 fundamental thrusts: HGS Technology Growth; Systems Engineering; Verification & Validation; and Core Sciences.
In the current period, under the Technology Growth/Systems Engineering classifications, the company has completed the conceptual development of a highly compact electrolyzer, which has practical benefit to both current designs, and enables the design of next generation products, targeted at space constricted platforms. At the systems level, we have launched programs both to improve our understanding of the HGS interaction with other engine control loops, and refine our ability to obtain real-time performance data from operating systems.
Financial Review
The following table sets out selected financial data relating to the Company for the 3 and 6 months ended June 30, 2006 and 2005.
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Highlights
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for the 3 months ended for the six months ended
30-Jun-06 30-Jun-05 30-Jun-06 30-Jun-05
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Revenues $ 342,767 - $ 464,969 $ 10,600
Net Loss (1,188,449) (936,651) (2,626,349) (1,488,000)
Loss per share (0.02) (0.03) (0.05) (0.04)
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Total Assets 9,524,251 4,818,405
Total Liabilities 1,052,642 665,494
Total Cash and Cash
Equivalents 4,411,752 3,158,474
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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
For further information: Investor Relations: Glen Akselrod, Bristol Capital Ltd., Tel: (905) 326-1888, glen@bristolir.com; OR Tom Brown, Hy-Drive Technologies Ltd, Tel: (905) 542-3024, ext. 300, tombrown@hy-drive.com