HQ Sustainable Maritime Announces Record Results for the Fourth Quarter and Full Year 2007

SEATTLE, WA, Mar 31 (MARKET WIRE) --
HQ Sustainable Maritime Industries, Inc. (AMEX: HQS) ("HQS" or the
"Company"), a vertically integrated aquatic product producer, processor and
distributor of toxin free tilapia and other aquatic products, and producer of
Marine-bio and healthcare products with operations in the People's Republic of
China ("PRC"), today announced its financial results for the quarter and
fiscal year ended December 31, 2007.

Fourth Quarter 2007 Highlights

-- Sales were $17.7 million, up 46% from the fourth quarter of 2006
-- Gross profit was $8.7 million, an increase of 61.4% from the fourth
quarter of 2006
-- Gross profit margin was 49.1%, up from 44.5% in the fourth quarter of
2006
-- Operating income grew 95% year-over-year to $4.8 million
-- EBITDA was $5.1 million, an increase of 84% from the fourth quarter of
2006
-- Net income available to shareholders was $1.76 million, up 100.0% from
the fourth quarter of 2006
-- Became the first major tilapia producer in the world certified by the
Aquaculture Certification Council ("ACC") as having achieved Best
Aquaculture Practices ("BAP")
-- Certified plant HACCP program by the US Department of Commerce, the
only Hainan plant to be thus certified

Full Fiscal Year 2007 Highlights

-- Sales were $55.0 million, an increase of 41% from 2006
-- Gross profit was $25.5 million, an increase of 49% from 2006
-- Gross profit margin was 46.5%in 2007, up from 43.9% in 2006
-- Operating Income was $12.9 million, an increase of 82% from 2006
-- EBITDA was $14.1 million, an increase of 75.0% from 2006
-- Net income available to shareholders was $4.5 million, or $0.543 per
diluted weighted number of shares, up from $0.9 million, or $0.145 per
diluted weighted number of shares, in 2006
-- The Company completed a secondary offering of 3,450,000 shares for net
proceeds of $23.8 million in December 2007

Fourth Quarter 2007 Results

"Both of our business segments, aquaculture products and Marine-bio
products, had
record sales in 2007. It was an important year for HQS, not just in terms of
financial performance but also for advances in implementation of our
business strategies," said Mr. Norbert Sporns, Chairman and CEO of HQ
Sustainable
Maritime Industries, Inc. "The successful completion of our follow-on offering
allowed us to begin expansion of our aquaculture products processing plant and
continueconstruction of a feed mill. Our tilapia products received a major
certification from the ACC in December 2007, which widely broadens our range
of potential new customers. We continue to develop new markets for our
branded aquaculture products, targeting major retail and food service chains
throughout the world. Our Marine-bio products are increasingly popular in China
and
other parts of Asia."

HQS' sales in the fourth quarter of 2007 were $17.7 million, an increase
of46.0% year-over-year from $12.1 million in the fourth quarter of 2006.
Thisincrease was mostly due to increased sales of branded tilapia products to
retail and food service chains.

Gross profit in the fourth quarter of 2007 was $8.7 million, an increase
of61.4% year-over-year from $5.4 million in the fourth quarter of 2006.
Grossprofit margin was 49.1%, up from 44.5% in the fourth quarter of 2006.

Operating expenses in the fourth quarter of 2007 were $3.9 million, an
increase of 34.5% from $2.9 million in the fourth quarter of 2006. The
increase in fourth quarter of 2007 operating expenses was mainly due to an
increase in overall sales volume. Bad debt in the fourth quarter of 2007 was
an estimated $580,000, compared to bad debt recovery of $470,000 in the
fourth quarter of 2006.

Operating income in the fourth quarter of 2007 was $4.8 million, an increase
of 95.0% from $2.5 million in the fourth quarter of 2006. Operating margin was
27.1% in the fourth quarter of 2007, up from 20.3% in the fourth quarter of
2006.

EBITDA was $5.1 million in the fourth quarter of 2007, an increase of
84.0%from $2.8 million in the fourth quarter of 2006.

Net income available to shareholders was $1.76 million in the fourth quarter
of
2007, an increase of 100.0% from the fourth quarter of 2006. Net margin was
10.0% in the fourth quarter of 2007, up from 7.3% in the fourth quarter of 2006.

The weighted average number of diluted shares for the fourth quarter of 2007
was 8,989,469 (this includes the shares from the follow-on offering in
December 2007).

Full Year 2007 Results

For 2007, sales reached $55.0 million, up 40.6% from $39.1 million in
2006.Revenue from the aquaculture segment was $36.2 million, an increase of
52.4%
from $23.8 million in 2006. Revenue from the Marine-bio segment was $18.7
million, an increase of 22.3% from $15.3 million in 2006. Gross profit for
2007 was $25.5 million, an increase of 48.7% from $17.2 million in 2006. Gross
margin improved to 46.5% in 2007 from 43.9% in 2006. Operating income for 2007
was $12.8 million, up 82.5% from $7.0 million in 2006. Operating margin was
23.4% in 2007, compared to 18.0% in 2006. EBITDA was $14.1 million in 2007, an
increase of 75.0% from $8.1 million in 2006. Net income available to
shareholders for 2007 was $4.5 million, an increase of $3.6 million from $0.9
million in 2006. The margin of net income available to shareholders to sales was
8.2% in 2007, up from 2.2% in 2006. Net income available to shareholders was
$0.543 per diluted weighted number of shares in 2007, up from $0.145 per diluted
weighted number of shares in 2006.

Financial Condition

As of December 31, 2007, cash and cash equivalents totaled $47.0 million, up
from
$11.4 million as of December 31, 2006. The Company had working capital of $61.6
million, up from $22.1 million at the end of 2006. Current liabilities were
$11.9 million as of December 31, 2007 and the Company's long term debt
consisted of $3.7 million of convertible promissory notes outstanding, excluding
the
current portion. Shareholders' equity was $68.8 million as of December 31, 2007,
a
132.3% increase from $29.6 of December 31, 2006. Cash flow generated from
operating activities was $9.3 million, compared to cash flow used in operating
activities of $489,000 in 2006.

During the year ended December 31, 2007, the Company issued 5,094,461 shares
for
net cash proceeds of $28,570,475. The Company intends to use approximately
$13.0 million to enlarge its processing plant, approximately $5.0 million to
complete
construction of an organic feed mill, and the remaining amount for general
corporate purposes, including working capital.

The Company's weighted average number of outstanding shares rose in 2007
because of the follow-on offering and exercise of warrants related to
promissory notes issued in 2006. The number of outstanding shares as of
December 31, 2007 was 11,511,317.

Outlook for 2008

HQS anticipates growing demand for its aquaculture products. The Company
will
grow by expanding the number of local farmers with which it has cooperative
tilapia growing agreements. The feed mill that currently is under
construction, that is expected to be completed by the third quarter of 2008,
will
supply fish farmers with high quality feed. The aquaculture products processing
plant
will be enlarged through additional construction that will increase processing
capacity from 20,000 metric tons to 30,000 metric tons of aquaculture products
per year. The Company will continue to implement its strategy of being a
vertically integrated producer, processor and distributor of high quality
products.

"Consumers throughout the world appreciate the high quality of HQS products.
Our Seattle office will continue to develop direct sales of aquaculture
products to major retail and food service chains in North America and Europe.
The Company's branding efforts will focus on promoting the TILOVEYA(R) brand and
the Company's toxin-free approach to raising tilapia. We will expand our sales
of
Marine-bio products, shark cartilage capsules and liver oil products, to areas
in
Asia outside of China. Chinese government certification is being sought for
manufacturing and selling of additional products including a collagen cream
manufactured from Tilapia scales and skin and a calcium supplement product made
from Tilapia bones," said Mr. Sporns.

Recent Events

In December 2007, the Aquaculture Certification Council, Inc. (ACC)
certified
that the Company's tilapia processing standards met Best Aquaculture Practices
(BAP). HQS became the first major tilapia producer in the world to receive
this certification, which qualified the Company to become a vender to a
number of new potential customers.

In January 2008, the Company received Chinese government organic
certification
for its tilapia production, processing, labeling, marketing and management
system.
Chinese organic standards improve on standards in other parts of the world
because they require a 'management system' that addresses product management
by producers, processors and handlers.

Use of Non-GAAP Financial Information

This press release includes certain financial information (EBITDA), which is
not presented in accordance with GAAP. EBITDA was derived by taking earnings
before financing costs, taxes, depreciation and amortization. The Company's
management believes that this non-GAAP measure provides investors with a better
understanding of the Company's historical results from its core business
operations. The non-GAAP information is not meant to be considered in
isolation or as a substitute for GAAP financials. The non-GAAP financial
information that the Company provides also may differ from the non-GAAP
information provided by other companies. A table included at the end of the
attached financial tables provides a reconciliation of the non-GAAP
financial information to the nearest GAAP measure.

Conference Call

HQ Sustainable Maritime Industries, Inc. management will host a conference
call at
11:00 a.m. Pacific Time on Monday, March 31, 2008 to discuss financial results
for the quarter and year ended December 31, 2007. The conference call will
include Mr. Norbert Sporns, Chairman and Chief Executive Officer; and Mr.
Jean-Pierre Dallaire, CFO. To participate in the live conference call, please
dial the following number five to ten minutes prior to the scheduled conference
call time: (888) 339-2688. International callers should call (617) 847-3007. The
Conference Pass Code is 348 672 36. If you are unable to participate in the
call at that time, replay of the conference call will be available from 1:00
p.m. Pacific Time on March 31 through Monday, April 14. To access the
replay, call (888) 286-8010. International callers should call (617) 801-6888.
The
Conference Pass Code is 946 809 97.

About HQ Sustainable Maritime Industries, Inc.

HQ Sustainable Maritime Industries, Inc. is a vertically integrated
aquaculture and
aquatic product processing company, with operations based in the province of
Hainan, the People's Republic of China. Aquaculture production, processing and
distribution take place through its operating subsidiary, Hainan Quebec Ocean
Fishing Co. Ltd. HQS practices co-operative sustainable, all-natural toxin-free
aquaculture, using nutraceutically enriched feeds and conducting fish
processing production of value added products, marketing and sales. The
company is dedicated to sustainable toxin-free methods giving its customers
the purest products possible. The Company holds HACCP certification from the
U.S.D.C. and EU Code assignment of quality, permitting its products to be
sold in international markets. The processing plant and the Company's
operationshave been certified by the Aquaculture Certification Council (ACC) as
demonstrating Best Aquaculture practices (BAP) by the Global Aquaculture
Alliance
(GAA) The Company's Marine-bio and healthcare products are produced subject
to stringent laboratory tests certified by the China Ministry of Health, and
sold through Jiahua Marine-bio-Product Company Limited., which is HACCP and GMP
certified. Corporate headquarters are in Seattle, and operational offices
are in Wenchang City in Hainan Province. The Company's website is:
http://www.hqfish.com

Safe Harbor Statement

Certain statements in this press release that are not historical facts are
"forward-looking statements" within the meaning of the Private Securities
Litigation
Reform Act of 1995. Such statements may be identified by the use of words
such as "anticipate," "believe," "expect," "future," "may," "will," "would,"
"should," "plan," "projected," "intend," and similar expressions. Such
forward-looking statements involve known and unknown risks, uncertainties and
other factors that may cause the actual results, performance or achievements of
HQ
Sustainable Maritime Industries, Inc. (the Company) to be materially different
from those expressed or implied by such forward-looking statements. The
Company's future operating results are dependent upon many factors, including
but not limited to the Company's ability to: (i) obtain sufficient capital or a
strategic business arrangement to fund its expansion plans; (ii) build the
management and human resources and infrastructure necessary to support the
growth of its business; (iii) competitive factors and developments beyond the
Company'scontrol; and (iv) other risk factors discussed in the Company's
periodic filings
with the Securities and Exchange Commission, which are available for review at
www.sec.gov under "Search for Company Filings."

HQ SUSTAINABLE MARITIME INDUSTRIES, INC
(INCORPORATED IN THE STATE OF DELAWARE
WITH LIMITED LIABILITY)
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
FOR THE YEARS ENDED DECEMBER 31, 2007 AND 2006

2007 2006
============ ============
Sales $ 54,970,211 $ 39,095,403
Cost of sales 29,426,918 21,917,345
============ ============
Gross profit 25,543,293 17,178,058
Selling and distribution expenses 841,263 591,376
Marketing and advertising 5,162,299 4,547,615
General and administrative expenses 4,800,361 4,673,679
Depreciation and amortization 1,217,284 1,029,672
Provision for/(Recovery of) doubtful accounts 672,086 (706,514)
============ ============
Income from operations 12,850,000 7,042,230
Finance costs 5,857,117 5,183,567
Other (income)/expense (42,491) 16,731
============ ============
Income before income taxes 7,035,374 1,841,932
Income taxes
Current 2,548,812 825,418
Deferred -- 142,550
------------ ------------
Net income attributable to shareholders 4,486,562 873,964

OTHER COMPREHENSIVE INCOME
Foreign currency translation income 2,977,694 1,113,115
------------ ------------
COMPREHENSIVE INCOME $ 7,464,256 $ 1,987,079
============ ============

NET INCOME PER SHARE
Basic (After reverse split) $ 0.587 $ 0.145
============ ============
Diluted (After reverse split) $ 0.543 $ 0.145
============ ============

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING
Basic (After reverse split) 7,635,124 $ 6,028,935
============ ============
Diluted (After reserve split) 8,989,469 $ 6,037,325
============ ============

HQ SUSTAINABLE MARITIME INDUSTRIES, INC
(INCORPORATED IN THE STATE OF DELAWARE
WITH LIMITED LIABILITY)
CONSOLIDATED BALANCE SHEETS
FOR THE YEARS ENDED DECEMBER 31, 2007 AND 2006

2007 2006
============ ============
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 46,959,908 $ 11,389,375
Trade receivables 25,234,502 17,957,521
Inventories 877,716 708,858
Prepayments 350,116 384,693
Future income taxes 26,097 --
------------ ------------
TOTAL CURRENT ASSETS 73,448,339 30,440,447
============ ============

PROPERTY, PLANT AND EQUIPMENT, NET 7,716,615 7,619,606

CONSTRUCTION IN PROGRESS 949,728 1,196,453

INTANGIBLE ASSETS 1,254,002 473,200
------------ ------------
9,920,345 9,289,259
OTHER ASSETS
Deferred taxes 873,865 817,577
Deferred expenses 84,317 1,305,197
------------ ------------
958,182 2,122,774
------------ ------------

------------ ------------
TOTAL ASSETS $ 84,326,866 $ 41,852,480
============ ============

HQ SUSTAINABLE MARITIME INDUSTRIES, INC
(INCORPORATED IN THE STATE OF DELAWARE
WITH LIMITED LIABILITY)
CONSOLIDATED BALANCE SHEETS
FOR THE YEARS ENDED DECEMBER 31, 2007 AND 2006

2007 2006
============= ============
LIABILITIES AND STOCKHOLDER'S EQUITY
CURRENT LIABILTIES:
Accounts payable and accrued liabilities $ 8,935,928 $ 3,822,510
Bank loans -- 1,255,203
Taxes payable 956,289 175,160
Due to related parties -- 198,553
Due to directors 1,544,350 1,698,265
Current portion of promissory notes 461,284 1,227,672
------------- ------------
TOTAL CURRENT LIABILITIES 11,897,851 8,377,363

OTHER LIABILITIES
Convertible promissory notes, net of discount 3,653,352 3,869,382

------------- ------------
TOTAL LIABLITIES 15,551,203 12,246,745

SHAREHOLDERS' EQUITY
Preferred stock, $0.001 par value, 10,000,000
shares authorized, 100,000 shares issued and
outstanding 100 100
Common stock, $0.001 par value, 200,000,000
shares authorized, 11,511,317 and 6,416,856
shares issued and outstanding as of December
31, 2007 and December 31, 2006 respectively 11,511 6,417
Additional paid-in capital 57,142,204 25,441,626
Accumulated other comprehensive income 4,590,060 1,612,366
Retained earnings/(deficit) 2,373,825 (683,846)
Appropriation of retained earnings
(reserves) 4,657,963 3,229,072

------------- ------------
TOTAL SHAREHOLDERS' EQUITY 68,775,663 29,605,735

------------- ------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 84,326,866 $ 41,852,480
============= ============

HQ SUSTAINABLE MARITIME INDUSTRIES, INC. AND SUBSIDIARIES
(INCORPORATED IN THE STATE OF DELAWARE
WITH LIMITED LIABILITY)
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2007 AND 2006

2007 2006
------------- -------------
OPERATING ACTIVITIES
Net income $ 4,486,562 $ 873,964
Non-cash items:
Depreciation and amortization 1,217,284 1,029,672
Loss on disposal of fixed assets 53,603
Write off of fixed assets 41,637 --
Financial and other non cash services 5,164,795 5,919,549
Deferred income taxes 109,046

Change in non-cash working capital items:
Inventories (168,858) (151,394)
Trade receivables, net of provisions (7,276,981) (9,407,163)
Prepayments 34,577 (252,829)
Tax recoverable -- 185,429
Accounts payable and accrued expenses 5,113,418 1,205,064
Taxes payable 624,860 --
------------- -------------

Cash flow generated from / (used in)
operating activities 9,290,897 (488,662)
------------- -------------

INVESTING ACTIVITIES
Acquisition of property, plant and equipment (902,981) (65,337)
Sales proceeds of disposal of fixed assets 157,435 --
Construction in progress (634,905) (1,196,453)
Acquisition of intangible assets (550,000)
Acquisition of deferred expenses (983,060)
------------- -------------

Cash flow used in investing activities (1,380,451) (2,794,850)
------------- -------------

FINANCING ACTIVITIES
Cash proceeds from issuance of common stock 28,570,475
Convertible promissory notes issued, net of
cash repayments 9,112,554
Due (to)/from directors (153,915) 347,726
Repayment to related parties (198,553) (62,968)
Bank loan payments (1,255,203) (471,061)

------------- -------------
Cash flow generated from financing activities 26,962,804 8,926,251
------------- -------------

NET CHANGE IN CASH AND CASH EQUIVALENTS 34,873,250 5,642,739
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND
CASH EQUIVALENTS 697,283 606,477
Cash and cash equivalents, beginning of year 11,389,375 5,140,159
------------- -------------

Cash and cash equivalents, end of year $ 46,959,908 $ 11,389,375
============= =============

SUPPLEMENTARY CASH FLOWS DISCLOSURES
Interest paid 17,478
============= =============
Taxes paid 1,155,429 430,643
============= =============

SUPPLEMENTARY DISCLOSURE OF NON-CASH
INVESTING AND FINANCING ACTIVITIES
Common shares issued for services $ 173,000 $ 195,000
============= =============
Reclassification of Construction in
Progress to Land Use Rights $ 964,002 $
============= =============

HQ SUSTAINABLE MARITIME INDUSTRIES, INC. AND SUBSIDIARIES
(INCORPORATED IN THE STATE OF DELAWARE WITH LIMITED LIABILITY)
RECONCILIATION OF NON-GAAP FINANCIAL DATA

Three Months Ended 12 Months Ended
December 31 December 31
2007 2006 2007 2006
------------ ------------ ------------ ------------
Net income attributable
to shareholders 1,767,170 876,973 4,486,562 873,964
Income taxes 924,428 201,317 2,548,812 967,968
Financing costs 2,155,082 1,402,383 5,857,117 5,183,567
Depreciation and
amortization 275,902 293,394 1,217,284 1,029,672
------------ ------------ ------------ ------------
EBITDA $ 5,122,582 $ 2,774,067 $ 14,109,775 $ 8,055,171
============ ============ ============ ============

Contacts:

HQ Sustainable Maritime Industries
Norbert Sporns
Chief Executive Officer
Phone: 206 621-9888
Email: Email Contact

CCG Elite Investor Relations
Crocker Coulson
President
Phone: 646 213-1915
Email: Email Contact

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