SOURCE: HydroFlo, Inc.

May 01, 2007 15:57 ET

HydroFlo, Inc. Providing Monthly Updates to Shareholders

APEX, NC -- (MARKET WIRE) -- May 1, 2007 -- As part of an ongoing effort to keep its shareholders updated on company related issues, HydroFlo, Inc. (PINKSHEETS: HYRF) is posting an end-of-month newsletter at its website (http://www.hydroflo.us/news.htm). The following information was included in the April 2007 newsletter from the company's CEO.

Letter from HydroFlo Inc.'s Chief Executive Officer, George Moore - April 30, 2007

HydroFlo, Inc.:

HydroFlo, Inc. has recently become aware of an effort by an unrelated company, that it believes is affiliated with a past officer and director of HydroFlo, to induce a number of large HydroFlo shareholders to swap HydroFlo stock for shares of the unrelated company, using an undisclosed ratio. HydroFlo is not a party to these transactions nor has it had any prior knowledge of this or any related efforts by this company to induce a stock swap involving HydroFlo securities.

HydroFlo strongly advises that prior to entering into any arrangement with any third party related to HydroFlo shares, any such shareholder should consult with their own legal counsel as well as a registered representative who is licensed to advise individuals on matters related to securities.

HydroFlo, Inc. has signed a letter of intent with Virginia-based Ganga Enviro Systems to be followed by an exclusive distribution rights throughout the US, Canada and other possible selected regions for its SteriPure™ line of UV point-of-use purification systems. The SteriPure™ system uses advanced technology to both remove harmful contaminants and destroy pathogens in potable water without the use of chemicals. The microprocessor-based pitcher system employs ultraviolet technology coupled with advanced adsorption and filtration resins to provide clean and pure drinking water in any setting. The rechargeable, battery operated system utilizes a multicolored LED indicator to show the system status and quality of filtered water at a glance. The SteriPure™ system was formally introduced at the Water Quality Association sponsored Aquatech USA 2007 Trade Exhibition in Orlando, Florida on March 29, 2007. The new pitcher and filter system will be marketed through Ultra Choice Water, Inc. The first level of internal testing resulted in a greater than 99% reduction in bacteria.

Several members of HydroFlo, Inc. management staff have been scheduled to attend a series of advanced level courses related to SEC Reporting, MN&A Regulations, SX Articles, and SK items, as well as insider trading rules and regulations. The first of these courses was held in Boston, MA this month.

HydroFlo, Inc. and Shine Holding (SHDG-PK) today jointly agreed to cancel the PLUS™ distribution agreement signed on 10/10/2006. Shine Holdings, Inc. had previously executed a letter of intent with HydroFlo, Inc. (PINKSHEETS: HYRF), to begin distribution of HydroFlo's patented PLUS™ System through a newly formed Shine Holdings subsidiary, Pipeline Treatment Systems (PTS). The distribution agreement included both domestic and worldwide markets, and required a purchase commitment of 10 systems in 2007, with increasing numbers of systems over the following five year span of the agreement.

As of April 20, 2007, no systems had been sold by SHDG nor had there been any apparent substantive sales activity to support the expectation that SHDG would be able to meet their purchase commitment for deliveries in 2007. In addition, since signing the original agreement, Shine Holdings had altered their business model to pursue markets outside of wastewater treatment, specifically in the field of Endocrine Disrupting Compounds (EDCs), and aeration for various aquaculture applications.

As a result of these events, Shine Holdings had requested release from their obligations to HydroFlo under the agreement signed in October, 2006, and agreed to return all marketing and product literature provided by HydroFlo, Inc. Under these terms, HydroFlo has consented to this release under a "No Fault" clause in the contract, and released Shine Holdings from further financial obligations to HydroFlo.

Safety Scan Technology, Inc:

Safety Scan Technology's current market research continues to focus on regional manufacturing contacts. This valuable information will further focus marketing, application, and prototype testing processes.

Ultra Choice Water, Inc:

Advanced Water Recycle, Inc. (AWRI), has developed a proprietary carbon block filter with the ability to remove several heavy metals, cysts, and chlorine as well as a wide range of other volatile organic compounds. The filter, which has successfully passed a number of internal tests, and the first series of WQA (Water Quality Association) testing. It is now moving on to the next stages of testing and Certification. The filter should be available for marketing in 3Q07.

The block filter, which was has been in development for over 9 months, will be marketed through Ultra Choice Water, Inc., another HydroFlo portfolio company.

Advanced Water Recycle, Inc. is an engineering services company dedicated to research, integration and commercialization of various water improvement technologies and processes, both internal and external to the HydroFlo family.

Metals and Arsenic Removal Technology, Inc:

This month, MARTI representatives attended both the International Housewares show in Chicago March 11-13, and also the Water Quality Association's WQA Aquatech USA 2007, held in Orlando, March 27-31. Both events offered an opportunity to develop new industry contacts and view the latest technologies and trends in water filtration and purification. The GES SteriPure™ UV pitcher system was introduced at the WQA Aquatech show and received numerous accolades from show attendees. As previously reported, HydroFlo (corporate) has signed a letter of intent for exclusive distribution of the SteriPure™ system throughout the US and Canada. MARTI representatives had worked over the past seven months to evaluate the GES technology and its potential. MARTI continues to investigate new technologies, applications, markets and alliances for improvements in potable and industrial water quality."

HydroFlo Water Treatment, Inc:

HydroFlo Water Treatment, Inc. recently announced that a new odor control system is being recommended for installation at a facility in Western Pennsylvania. The system is to be installed within a lift station for a country club outside of Pittsburgh, PA and is expected to control odors and corrosion within the lift-station as well as downstream.

HydroFlo Water Treatment, Inc. announced this month that a HydroFlo PLUS™ system has been specified for installation in a Montreal, Canada subdivision for odor and corrosion control.

The engineering firm specified the HydroFlo Water Treatment PLUS™ system as the preferred technology for this new community over traditional, more costly methods. These traditional approaches frequently employ costly chemical addition and passive control systems, such as airspace biological treatment, for odor control but it was determined that the PLUS™ system would be more cost effective and reliable.

HydroFlo Water Treatment, Inc. also recently announced that a new odor control system is in the final design phase for installation at a facility in the Charlotte, NC area. The system is to be installed within a lift station for a new subdivision and is expected to control odors and corrosion within the lift station as well as downstream.

The final design using the HydroFlo Water Treatment PLUS™ system was specified as the preferred technology for this new facility by a regional engineering firm and by a private water treatment company rather than using more costly traditional approaches that frequently employ chemical addition and passive control systems, such as airspace biological treatment, for odor control but it was determined that the PLUS™ system was more cost effective and reliable and the operator would not have to store or feed potentially dangerous chemicals into the pipeline.

About HydroFlo, Inc.

HydroFlo, Inc. is headquartered in Apex, North Carolina. HydroFlo's core focus is to seek out synergistic acquisitions that will provide capital appreciation and income for its portfolio companies through the acquisition, development and commercialization of innovative technologies and processes that will improve the quality of water throughout the world by means of detection, treatment and removal of contaminants. For more information, please visit www.hydroflo.us.

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.