SOURCE: HydroFlo, Inc.

September 06, 2005 08:00 ET

MARTI Signs Agreement With Chinese Manufacturer

WAL Pitcher & Filter Contract Terminated

RALEIGH, NC -- (MARKET WIRE) -- September 6, 2005 -- Metals & Arsenic Removal Technology, Inc. (MARTI), a portfolio company of HydroFlo, Inc. (OTC BB: HYRF), today announced a new contractual agreement with a major international plastics injection molding firm for production of MARTI pitcher and filtration units. These units will initially be manufactured in a highly automated, 100,000 square meter facility located near Shanghai, in amounts of up to 1,200 pitchers and 4,000 filters daily.

This manufacturer will help MARTI fulfill the large backlog of orders recently received through MARTI's current distribution channel. They will also ensure ongoing production capacity to meet projected orders through 2007 and beyond. The Chinese manufacturing facility is also favorably located logistically to cost effectively meet the growing Indo-China market and recently identified distributors throughout the Pacific Rim.

Based partly on production limitations, accelerating product demand and regional distribution considerations, MARTI and WAL S.A. (WAL), in a mutual agreement, have agreed to terminate their pitcher and filter production contract as of July 27, 2005. MARTI will continue to distribute the current inventory of WAL products per contract termination agreements. Production has already been shifted to the Asian operations, with new product coming on line in late September.

Chief Operating Officer of MARTI, George Moore, commented that the shift in manufacturing supply chain logistics, though difficult, became necessary to meet the exponential demand, and evolving MARTI marketing strategy explaining, "I am delighted to be able to produce pitchers and filters in such volumes that not only can we fulfill a projection of over $210 million worth of product sales, but we will now have the production capacity to develop our own branded products which will be available to a wider geographical market."

HydroFlo ( is a Business Development Company, as defined by the Investment Act of 1940. Headquartered in Raleigh, North Carolina, HydroFlo's core focus is to seek out synergistic acquisitions that will provide capital appreciation and income from its portfolio companies. The mission of HydroFlo, Inc. is to acquire and develop innovative technologies and businesses that will improve the quality of water throughout the world by means of detection, treatment, and removal of contaminants. By so doing, our most precious resource can be rendered safe and abundantly available for all future generations, and thereby, improve the quality of life on Earth.

Forward-Looking Statements

Statements regarding financial matters in this press release other than historical facts are "forward-looking statements" within the meaning of section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934, and as that term is defined in the Private Securities Litigation Reform Act of 1995. The company intends that such statements about the Company's future expectations, including future revenues and earnings, and all other forward-looking statements be subject to the safe harbors created thereby. Since these statements (future operational results and sales) involve risks and uncertainties and are subject to change at any time, the Company's actual results may differ materially from expected results.

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