Mr. James Durward reports

NEWS RELEASE

Ndatalyze Corp. has executed a non-binding letter of intent (LOI) with Empire Hydrogen Energy Systems. Empire is a recipient of the Vancouver Island, Business Excellence "Green Business of the Year." This award recognizes Empire Hydrogen's contribution to reducing greenhouse gasses, smog causing diesel particulates and NOx. Empire Hydrogen's fuel enhancement system can be installed on any large diesel truck, bus or generator. Advanced electronics produce hydrogen and oxygen gasses from distilled water through electrolysis. When introduced to the intake manifold in a proprietary ratio the mixture results in less fuel consumption, less greenhouse gas, dramatically less smog producing diesel particulates and NOx, more power, cleaner pistons, and cleaner exhaust. Empire holds a number of patents and patents -- pending on key technologies. Empire has more than 200 units installed over a variety of applications, including long haul trucks, marine vessels and diesel-powered generators.

The LOI contemplates a combination of NDAT and Empire subject to numerous terms and conditions including:

1. A 30 day due-diligence period that anticipates a definitive combination agreement and during which period neither party will conduct any financings or other activities that would result in a change of control of either party;
2. Ndatalyze will provide $1-million at closing. Ndatalyze currently has approximately $600,000 in cash meaning a small financing would be required prior to closing. Terms and conditions of such financing are to be determined during the period;
3. Ndatalyze will spin out its YMI mental health operations to a private company owned by those Ndatalyze shareholders who are Ndatalyze shareholders immediately prior to closing. This would include those shareholders who participate in the financing referred to in clause (2) above. Postspinout, Ndatalyze shareholders will hold the same percentage ownership as they held in Ndatalyze immediately before the spinout. The YMI clinical study would proceed as previously announced;
4. Ndatalyze's carbon-dioxide-related operations will stay with the combined entity due to certain patent and trade secrets believed applicable to pressurized hydrogen-related developments;
5. Precombination Ndatalyze shareholders are expected to hold approximately 30 per cent of the combined entity, and 100 per cent of Ndatalyze's YMI mental health operations;
6. Current Ndatalyze directors will control the board of directors of the combined entity;
7. Certain low-cost-base shares may be subject to voluntary pooling and voting requirements;
8. Both Empire and Ndatalyze shareholder approvals are expected to be required.

All of that outlined herein is subject to change during the period and there is no guarantee that a definitive combination agreement will be reached. While Ndatalyze management believes that there is no change of control and no change of business, any combination would be subject to regulatory approval.

We seek Safe Harbor.