HydraLogic Systems Inc.
TSX VENTURE : HLS

HydraLogic Systems Inc.
Ecolo Odor Control Systems

July 22, 2005 08:30 ET

HydraLogic To Acquire Sager Industries Limited

TORONTO, ONTARIO--(CCNMatthews - July 22, 2005) -

Company expects CDN$4 million of incremental revenue & profitability in fiscal 2006

HydraLogic Systems Inc. (TSX VENTURE:HLS) today announced that it has signed a letter of intent to acquire all issued and outstanding shares of privately owned Sager Industries Limited from the Sager family. Sager Industries Limited operates as Ecolo Odor Control Systems Worldwide ("Ecolo") www.ecolo.com and NuTech Environmental Corporation ("Nutech") www.nutechenvironmental.com.

Founded in 1975, Ecolo currently operates from its manufacturing and distribution center in Toronto where it ships product to distributors in over 40 countries including China, Taiwan, Australia, the United States and throughout Europe. Ecolo has developed over 30 distinct proprietary chemical formulations that are used for odor control in a wide variety of applications ranging from hotels and sports facilities to sewage treatment plants, industrial and agricultural sites. These products are blended from essential oils derived from plant extracts and are non-toxic, CFC-free and ozone friendly.

The transaction is subject to the completion of due diligence, regulatory approvals and satisfactory financing. HydraLogic expects Ecolo to contribute revenues of approximately $4 million, and within the next twelve months the Company expects the combined companies to be profitable and generate positive earnings per share.

Upon the completion of the transaction, Mr. Calvin Sager, Founder and President of Sager Industries, will join HydraLogic's management team to assist with the transition and integration of the acquisition and will be appointed to the HydraLogic Board of Directors.

"Ecolo has a global reputation for providing an unparalleled product and service. The acquisition of Ecolo accelerates HydraLogic's aggressive path for growth and profitability without sacrificing our respect for the environment and nature's own processes. Now HydraLogic will have access to Ecolo's world wide distribution network and Ecolo's 65 international representatives will be in a position to increase their revenue with the addition of our equally innovative products and solutions." said Michael Beckley, President & CEO of HydraLogic Systems Inc.

"For 30 years Ecolo has provided safe and extremely effective remedies to organic odour problems. Ecolo is ideally positioned to be the world leader in odor control solutions and I am confident that HydraLogic is the company to take our family business to the next level. I look forward to working with the management of HydraLogic to ensure a smooth and successful integration of Ecolo into the HydraLogic fold." remarked Mr. Sager.

About HydraLogic

HydraLogic Systems Inc. is an environmental technology company that is focused on the replacement of harmful polluting chemicals with non-toxic environmentally responsible 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.

About Ecolo Odor Control Systems

Established in 1975, Ecolo designs, installs and maintains automatic odor control solutions for various environments such as sport stadiums, sewage treatment plants, landfill sites and commercial and residential buildings. Ecolo's airSolutions® are natural, and therefore 100 percent environmentally safe as they are blended from essential oils derived from plant extracts. Ecolo airSolutions® have been certified safe and non-toxic by government health departments around the World as well as by leading independent laboratories.

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, among others, changes in general economic conditions, interest rates, government regulations, and competition. The Company disclaims any intention or obligation to update or revise any 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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