HydraLogic Systems Inc.

HydraLogic Systems Inc.

May 31, 2006 08:20 ET

HydraLogic Announces Successful Completion of Private Placement of Common Shares and Extension of Expiry Date of Class C Share Purchase Warrants

BARRIE, ONTARIO--(CCNMatthews - May 31, 2006) -


HydraLogic Systems Inc. (TSX VENTURE:HLS) announced today that it has successfully completed its previously announced private placement of 2,448,000 common shares, at a price of $0.75 per share, for total proceeds of $1,836,000. All of the securities issued under the private placement are subject to a 4-month hold period.

Kingsdale Capital Markets Inc. acted as agent of the Company in this offering and received a commission of 7% of the gross proceeds and broker warrants entitling it to purchase 10% of the number of common shares sold at a price of $0.75 per share for a period of two years.

The proceeds of the offering are intended to be used to fund the pending asset acquisition by the Company of Bayou City Mosquito Control Systems, Ltd. of Houston, Texas, and for general corporate purposes.

The Company also announced that it has extended the expiry date of its Class C Share Purchase Warrants from June 30, 2006 to November 30, 2006. There are 1,726,250 Class C Share Purchase Warrants outstanding, each of which is exercisable into a common share of the Company at $1.25 per common share.

About HydraLogic Systems Inc. - www.hydralogic.ca

HydraLogic Systems Inc. is an environmental technology company that is focused on the replacement of harmful polluting chemicals with non-toxic organic solutions. Its technologies are being commercialized through distribution partnerships with leading regional, national and international companies with clientele in the waste management, pest control and agricultural products industries.

This press release may contain forward-looking statements and involve known and unknown risks, uncertainties and other factors that may cause the Company's actual results, performance or achievements to be materially different from the results, performance or achievements expressed or implied by the forward-looking statement. Factors that impact such forward-looking statements include, a month others, changes in general economic conditions, interest rates, government regulations and competition. The Company disclaims any intention or obligation to update or revise and forward-looking statements unless required by applicable law.

The TSX VENTURE EXCHANGE has neither approved nor disapproved the contents of this press release.

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