Letter from HydroFlo Inc George Moore Chief Executive Officer HydroFlo Inc. 2501 Reliance Avenue Apex, NC 27539
September 26, 2007
HydroFlo, Inc. Update to Stockholders from George A. Moore, CEO:
HydroFlo Issues Business Update Over the next few weeks HydroFlo, Inc. (HYRF.PK) will begin issuing previously unreleased financials, beginning with the September 2005 10Q, and finishing when up-to-date. The completion of these and other internal business activities will allow HydroFlo to apply for a return to the over-the-counter (OTC) markets as a listed security. Our accountants, an independent auditor, and our legal counsel are in the process of completing and reviewing these final fully-audited financials for HydroFlo Inc. and its portfolio companies. We expect these to be released by fiscal quarters over the next few weeks as these final reviews are completed.
With the financials soon to be published and HydroFlo Inc. reporting as a Section 1934 Act company we will discontinue the periodic newsletter reports of the past year. News after we return to the boards will be in the form of traditional public press releases.
Safety Scan Technology Inc. Development efforts have advanced on Safety Scan Technology?s Phase-1 Prototype. Key operational competencies have been finalized and updated plans are under review for improved display capabilities and computational speed. This improved performance will also aid in future market entrance.
Ultra Choice Water Inc.: As the HydroFlo requested refinements and testing on the SteriPure II pitcher system near completion, Ultra Choice Water has begun planning for the addition of this product to their inventory and web marketing program. Production units for the new UV pitcher should be available in volume during the first half of 2008, pending approval of the production prototypes and no additional unforeseen delays. Metals and Arsenic Removal Technology, Inc.: Metals and Arsenic Removal Technology, Inc (MARTI) received the initial independent test results for tests completed by the China National Centre for Quality Supervision and Test of Processed Food organization (NCQST). This organization is responsible for a broad spectrum of testing and certification for products submitted for sales within the Chinese market. Certification is a prerequisite step for all firms that wish to sell food and consumer health-related products domestically. The test was originally commissioned by CEIEC, a large Chinese conglomerate, for the planned sale throughout mainland China of the CodeBlue? point-of-use pitcher system, marketed exclusively by one of MARTI?s distributors.
The test results confirmed that the CodeBlue? system met or exceeded all of the original design performance parameters, which included four (4) tests for ?Sensory Properties? (Color, Odor, Taste, etc.), twenty-four (24) tests for ?Chemical Indicators? (Arsenic, Mercury, Lead, etc.), and three (3) tests for microbes (Bacteria, etc.). Though not designed for biologically unsafe water, one of the three microbe tests indicated results outside of specified limits. The source of these microbes is currently unknown without further analysis.
The filters tested had been provided to CEIEC in October, 2006, however, the tests were not conducted until May of 2007, based on information provided with the test summary. MARTI?s distributor has requested assistance in resolving the discrepancy in this one test, however, no additional information on the storage, handling, or processing of these filters through the Chinese test protocol has been made available to date. Resolution of this test will require this additional information, further analysis and the combined efforts of MARTI?s distributor and their client, CEIEC, to determine the next steps in commissioning this system for sale throughout mainland China.
HydroFlo Water Treatment Inc.: During September, HydroFlo representatives responded to a number of RFQs across several industries throughout the country. Included in the proposals are a large malting facility in the Northwestern region for a PLUS? system, a poultry processing plant in the Southeast, and municipal water treatment plants in the West and Northwest regions. As additional PLUS? systems come on-line, HydroFlo is getting the benefit of a growing referral business in a number of areas.
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