HydraLogic Systems Inc. announces completion of US$2,000,000 financing

HydraLogic Systems Inc. ("HydraLogic" or the "Company") (TSX.V: HLS - OTC Pink Sheet: HYSYF) announced today that it has completed a US$2,000,000 financing of the Company (the "Financing") by entering into an investment agreement (the "Investment Agreement") with CCM Master Qualified Fund, Ltd. ("CCM") pursuant to which CCM invested US $2,000,000 in the Company in exchange for a secured convertible promissory note (the "Promissory Note") and 18,181,818 common share purchase warrants of the Company ("Warrants"). Each Warrant entitles CCM to purchase one common share in the capital of the Company (a "Common Share") at a price of US$0.11 per Common Share for a period of two years from the date of the Warrants. In addition, in the event there is a Change of Control (as defined in the Investment Agreement) of the Company, CCM, which is a principal shareholder of the Company, will have the right to convert the principle amount outstanding under the Promissory Note into Common Shares of the Company at a price of US $0.11 per Common Share.

The Promissory Note and Warrants issued pursuant to the Financing are subject to a four-month hold period which expires on January 6, 2009, as required by the TSX Venture Exchange and under Canadian securities regulations.

The Financing was completed to significantly improve HydraLogic's financial position. A portion of the proceeds from the Financing will be used to pay out certain outstanding share price guarantee obligations in the aggregate amount of US$1,124,919 payable to each of M-Nix Systems of Broward County LLC and Third Coast Insect Control Inc. under certain purchase agreements previously entered into with the Company. The remainder of the proceeds from the Financing will be used for general corporate purposes.

"We are extremely pleased to have completed this transaction" said Michael Beckley, President and Chief Executive Officer of HydraLogic. "This transaction puts HydraLogic in a much stronger financial position for the fourth quarter of 2008 and the beginning of 2009."

About HydraLogic Systems Inc.

HydraLogic is an innovator of engineered misting systems and proprietary environmental chemistries with reoccurring revenue distribution platforms. The company strives to be market leaders in providing technologies, though turnkey distribution and service models into the multi-billion dollar mosquito and odour control industries as Bug DeFence and HLS Ecolo respectively.

HydraLogic Systems is traded on the TSX Venture exchange - symbol: HLS.

Forward Looking Statements

This press release contains certain "forward looking statements". These statements relate to future events or future performance and reflect expectations and belief regarding growth, results of operations, performance, business prospects, opportunities or industry performance and trends. These forward looking statements reflect current internal projections, expectations or beliefs and are based on information currently available. A number of factors could cause actual events or results to differ materially from the results discussed in the forward looking statements. Although it is believed that the forward looking statements contained in this press release are based upon reasonable assumptions, investors cannot be assured that actual results will be consistent with these forward looking statements. These forward looking statements are made as of the date of this press release, and HydraLogic Systems Inc. assumes no obligation to update or revise them to reflect new events or circumstances, except as required pursuant to applicable securities laws.