US Energy Initiative Receives $200,000 Payment for CAVD Sub-License from Internal Hydro International.

TAMPA, Fla. -- US Energy Initiatives Corporation (OTCBB:HYFS) ("US Energy" or the "Company"), manufacturer of a patent dual fuel diesel to natural gas conversion technology, today announced receipt of a second installment from Internal Hydro International, Inc. (OTCBB:IHDR) ("Hydro") relating to sub-licensing rights for the Catalytic Activated Vacuum Distillation (CAVD) technology. A final payment due relating to the licensing of two US states is payable in approximately ten days.

The sub-license agreement was entered prior to the acquisition of the CAVD technology by US Energy. Under the terms of the sub-license Internal Hydro has agreed to enter into a definitive agreement, pursuant to which it shall pay a one-time license fee of $500,000 for exclusive rights to deploy the CAVD technology in the European Union. A $100,000 down payment on the initial licensing fee has been paid by Internal Hydro. The payment received today marks the second of three payments relating to one-time licensing fees for the States of Minnesota and Iowa. The agreement will also provide for HYFS to be paid a royalty of $100,000 for each European country in which Internal Hydro intends to establish an operational CAVD plant. In addition, Internal Hydro will pay HYFS a one-time license fee of $250,000 per state for rights to deploy the technology as well as a royalty stream equal to 5% of gross revenue per plant excluding carbon credits and tire tipping fees. Further, Internal Hydro will maintain the right of first refusal to Tennessee, Illinois, Louisiana and Minnesota at a predetermined license arrangement of $250,000 per state.

"We are pleased to be joining forces with Internal Hydro," said HYFS CEO Mark Clancy. "The revenues we're deriving from the licensing fees as well as our anticipation for the royalty stream from operating plans will allow us at HYFS to develop our signature biofuel. In effect, we have turned a necessary expense into a profit center. The team at Internal Hydro will be focusing on the CAVD technology together with their own unique and promising energy initiative. There are a number of synergies between HYFS and Internal Hydro that we will be investigating during the coming months," concluded Mr. Clancy.

About HYFS - US Energy Initiatives Corporation, (OTCBB:HYFS), formed in 1996, delivers its patent dual-fuel diesel to natural gas conversion technology and resells a portfolio of gasoline to natural gas and propane conversion systems. The Company's primary facility is a 12,000 square foot state-of-the-art systems development and emission testing lab in Atlanta, Georgia. The Company's current clients include General Motors (NYSE:GM), http://www.gm.com; United Parcel Service (NYSE:UPS), http://www.ups.com; US Postal Service; Dallas County School System, Portland, Oregon School System; Oklahoma Natural Gas and a host of private purchasers. For more information contact CEO Mark Clancy at the Company's corporate headquarters @ 813-287-5787 or visit the Company's web site at http://www.usenergyic.com

Internal Hydro International, Inc. is an alternative energy company that developed a clean energy power system, the Energy Commander Systems, which utilizes a patented technology using waste water, fluid or gas flow from any source where flow pressure is present, and yet wasted, to create electricity. Internal Hydro has grown into a multi-national enterprise with international contracts spanning over three continents. Internal Hydro is well positioned to gain major market share and dominate the niche of hydro energy and expansion into other renewable energy areas in the fragmented alternative energy marketplace. For more information, please visit the company's Web site at http://www.InternalHydro.com.

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