SOURCE: HydroFlo, Inc.

July 18, 2005 08:40 ET

HydroFlo Forms Fifth Portfolio Company

RALEIGH, NC -- (MARKET WIRE) -- July 18, 2005 -- HydroFlo, Inc. (OTC BB: HYRF) today announced the newest addition to its portfolio of businesses, Advanced Water Recycle, Inc. (AWRI). The latest corporation will combine resources from each of HydroFlo's current portfolio companies to provide customers with water recycling and reuse.

AWRI will initially concentrate sales efforts of its technologies across the United States coast lines and all ports. To achieve the acceptable levels of contaminant free water in compliance with Federal Environmental Protection Agency (EPA) standards, AWRI will utilize multiple aspects of each of HydroFlo's current portfolio companies. AWRI will make use of HydroFlo Water Treatment's aeration and new HDAF units to offer the proper ventilation and conditions for the pretreatment of wastewater. Metals and Arsenic Removal Technology will provide its ARTI-64TM technology and other purification methods to assist with the final purification of the water. Safety Scan Technology will offer water testing equipment for the various stages of the process. Ultra Choice Water will offer financing to assist in the payment process for customers. The combined technologies will turn untreated storm water, ground water, water run-off, sewage, wastewater and any pretreated water into potable drinking water.

A coastal region of North Carolina has fostered the initial interest for AWRI services. This particular request is to start treatment of 70 million gallons of water per day for the next 10 years. This has propelled HydroFlo to take action and offer the necessary services to assist the region with their treatment difficulties. The Florida Senate Bill 444 (http://www.flsenate.gov/Session/index.cfm?Mode=Bills&SubMenu=1&Tab=session&BI_Mode=ViewBillInfo&BillNum=0444&Chamber=Senate&Year=2005&Title=-%3eBill%20Info:S%200444-%3eSession%202005) has also provided an area of need for water treatment by offering a funding level allotment of $100 million annually.

Based on recent U.S. EPA (http://www.groundwater.org/gi/GWBASICS2.pdf) studies, Americans drink more than 1 billion gallons of tap water per day. Over 98% of that water is groundwater. HydroFlo management conceded that statistics like these are overwhelmingly in support of creating a more efficient method to treat wastewater. Dennis L. Mast, CEO of HydroFlo, commented, "I am pleased to finally put a company name to the process I have envisioned and strived to create for over a decade. With North Carolina coastal region's recent request for suitable water treatment and the passing of the latest Florida Senate Bill (444), the time has come for this company to provide this essential service. We look forward to establishing open lines of communication with government agencies that have this need. We also excitedly anticipate expanding the business of this company to add value to the HydroFlo investment portfolio."

About HydroFlo

HydroFlo (http://www.hydroflo.us) 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 is to locate, develop, and fund innovative technologies and businesses and utilize these acquisitions to make pure water available to the world by means of disinfection, purification, and removal of contaminants. It is our belief that water can overcome hunger, disease, poverty, and improve the overall quality of life on Earth.

Its portfolio investment companies include: HydroFlo Water Treatment, Inc., www.hydroflo-inc.com, a business providing pre-treatment of wastewater by use of the PLUS pre-treatment system which provides a treatment process at the municipal pumping stations prior to the wastewater reaching a treatment plant; Metals & Arsenic Removal Technology, Inc., www.martiinc.com, a business providing proprietary and innovative methods and services for the removal of arsenic from drinking water to meet the current EPA requirements of less than 10 parts per billion in drinking water by January 2006; Safety Scan Technology, Inc., www.safety-scan.com, a business that provides methods and equipment for the noninvasive testing of municipal, industrial, and potable water to insure safety; and Ultra Choice Water, Inc., a business that distributes and finances water treatment systems to households and businesses throughout the world.

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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