Further to Hy-Drive's public statement on February 22, 2006, Hy-Drive advises of the following developments:
1. On May 10, 2006, Hy-Drive Technologies Ltd. ("Hy-Drive"), Dynamic Fuel Systems Inc. ("Dynamic"), Greenbriar Holdings Limited ("Greenbriar") and Global Tech Environmental Products Inc. ("Global Tech") (hereinafter "Plaintiffs") attended before Madam Justice Mesbur of the Ontario Superior Court of Justice to have the key parts of the interim injunction, granted December 15, 2005 by Mr. Justice Campbell against Canadian Hydrogen Energy Company Ltd. (CHEC") (hereinafter "Defendants"), continued in its present form until the resolution of the Plaintiffs' action at trial.
2. The interim injunction of December 15, 2005, precluded CHEC from:
(1) Disposing, assigning, transferring or otherwise encumbering any
of its assets, utilizing any patent applications and/or
registrations, trade mark applications and/or registrations or
agreements prior to this date, manufacturing equipment, office
equipment (the "Assets") save and except the sale of inventory
and production of any hydrogen unit for use in association with
any combustion engine, provided CHEC maintain a complete
accounting of all sales and costs; and
(2) Disclosing to any third party any technology or confidential
information associated in any manner with the Assets.
3. Also heard before Madam Justice Mesbur was CHEC's motion to have the claims of Hy-Drive and Dynamic dismissed or stayed.
4. Despite CHEC's opposition to the Plaintiffs' motion, the Plaintiffs were entirely successful in having the all of the requested parts of the interim injunction continued until trial. The Endorsement of the Court provided, among other things, that:
(1) Pending the trial of the action or further order of the Court,
CHEC will not dispose of, assign, transfer or otherwise encumber
the assets listed in sub-paragraphs 9(1)-(6) of the statement of
claim (as described below), except the sale of inventory and
production of any hydrogen units for use in association with any
combustion engine, provided CHEC maintains a complete accounting
of all sales and costs;
(2) Pending the trial of the action or further order of the Court,
CHEC will not disclose to any third parties any technology or
confidential information associated in any manner with the assets
listed in paragraph (1) above; and
(3) CHEC's motion to strike Hy-Drive's and Dynamics claims were
denied by Madam Justice Mesbur. However, their claims were stayed
pending further court order to permit the claims to proceed.
5. The assets listed in paragraphs 4(1)-(6) of the statement of claim include:
(1) Canadian Patent Application No's 2,278,917; 2,244,022 and
2,349,508;
(2) United States Patent Application No.'s 09/796,627 and
10/162,367;
(3) United States Patent No. 6,209,493;
(4) PCT Application No's PCT/CA02/00809 and PCT/CA99/00683;
(5) Canadian Trademark Application No. 1,098,146;
(6) Numerous agreements including distributorship agreements,
confidentiality agreements, on-disclosure agreements and the
like with third parties;
(7) Approximately $400,000.00 - $500,000.00 in inventory and
materials;
(8) Office equipment; and
(9) Manufacturing equipment and tools.
6. The Plaintiffs have decided to voluntarily abandon parts of their initial application preventing CHEC from utilizing and or making use of any of the assets and from advertising, marketing, soliciting or otherwise attracting investors and or investments from any entity based upon the alleged business and or Assets of CHEC, because the Plaintiffs were satisfied with the key parts of the interim order they sought to continue.
7. While the issue of costs is to be left to the trial judge, Madam Justice Mesbur awarded CHEC $1,000 in modest costs to the Defendants because the stay was granted.
8. The Plaintiffs have joined forces to promote the field of technology for hydrogen devices for use in association with internal combustion engines and to restrain CHEC from, among other things, exploiting assets which are alleged to have been unlawfully acquired from Global Tech.
9. The Plaintiffs have and continue to deny all of the allegations of CHEC in its unsuccessful defense of the Plaintiffs' application for an interim injunction.
10. Hy-Drive remains vigilant in the protection of its valuable confidential information, technology and business and continues to enforce its rights against third parties.
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
This press release contains "forward-looking statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995 and applicable Canadian securities legislation. Forward-looking statements are subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of Hy-Drive to be materially different from those expressed or implied by such forward-looking statements, including but not limited to: risks related to the speculative nature of the hydrogen-based energy and power technology industry, which is affected by numerous factors beyond Hy-Drive's control; the existence of present and possible future government regulation; the significant and increasing competition that exists in the hydrogen-based energy and power technology industry; the early stage of Hy-Drive's business and therefore it is subject to the risks associated with early stage companies, including uncertainty of revenues, markets and profitability and the need to raise additional funding; the fact that Hy-Drive is a party to litigation involving claims against it for damages in substantial amounts, which, if decided unfavorably against Hy-Drive, would have a material adverse effect on Hy-Drive and its business, as well as those factors discussed in the section entitled "Risks and Uncertainties" in Hy-Drive's management's discussion and analysis for the year ended December 31st, 2005. Although Hy-Drive has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. Hy-Drive does not undertake to update any forward-looking statements that are 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.
For further information: Investor Relations: Hy-Drive Technologies Ltd., (905) 542-3024 ext 300, (905) 542-0820 fax or Glen Akselrod, Bristol Capital Ltd. or Tom Brown, President and CEO; Media Relations: Andre Fuochi, GCI Group, (416) 486-7227, afuochi@gcigroup.com