SOURCE: HydroFlo, Inc.

August 15, 2005 08:00 ET

HydroFlo Portfolio Company Customer Receives Letter of Intent for $210 Million Purchase

Wholly Owned Subsidiary MARTI Agrees to Provide Water Pitcher Filtration Systems to Meet Increasing Demand

RALEIGH, NC -- (MARKET WIRE) -- August 15, 2005 -- HydroFlo, Inc. (OTC BB: HYRF) today announced portfolio company Metals & Arsenic Removal Technology, Inc. (MARTI) received an agreement amendment with Essentially Yours Industries, Inc. (EYI) to provide the corporation with an undisclosed amount of water pitcher filtration systems to meet the demand received from recent transactions in China. The total value of the order is expected to exceed $210 million. As the demand for MARTI products grows, the contract will be reevaluated to ensure adequate product supply.

The Letter of Intent (LOI) includes an undisclosed number of patented Code Blue™ filtration systems to be supplied by MARTI throughout 2006 and 2007. These units will be privately labeled and will contain an exclusive formulation for EYI distribution.

The agreement covers sales over a 2-year period with the Guangzhou CEIEC Enterprise CO. LTD. (Guangzhou CEIEC), a subsidiary of The China National Electronics Import & Export Corporation (CEIEC). CEIEC, located in South China, is the largest exporter and importer of electronic products in China and was the first Chinese enterprise to establish sales and cooperative relations with foreign brand name enterprises such as Hitachi, Sharp, Mitsubishi, Panasonic, Siemens, Casio, Phillips, Hewlett-Packard, LG and Samsung. Currently, the CEIEC is under the direction of the Chinese government and has extensive business relations with nearly 100 countries and regions and imports/exports over $1 Billion in products every year.

The Code Blue™ portable water filtration system removes arsenic and other contaminants from drinking water to a negligible level. China's large rural population and poor infrastructure in those outlying regions have created a huge demand for the Code Blue™ system which will facilitate the removal of harmful toxins from water, making it safe for human consumption.

Under the terms of the LOI, Guangzhou CEIEC will acquire agency rights from EYI Industries to distribute the Code Blue™ filtration system throughout China, and will commit to the purchase of $210 million worth of product as per the following schedule:

Fiscal 2006 (US$42,000,000)
Quarter (Q1) = $700,000
Q2 = $2,800,000
Q3 = $14,000,000
Q4 = $24,500,000

Fiscal 2007 (US$168,000,000)
Q1 = $31,500,000
Q2 = $38,500,000
Q3 = $45,500,000
Q4 = $52,500,000
George Moore, Chief Operating Officer of MARTI explained his expectations for this agreement amendment, "MARTI management firmly believes that everyone in the world should be able to obtain clean water. With this and future additions in the EYI agreement MARTI will form the foundation which will allow both the EYI team and MARTI to provide access to quality water in all homes world wide. The opportunity to work with EYI with global goals to improve world health parallels our own goal to improve the human condition through quality. The Letter of Intent will ensure that people in Asia as well as the western hemisphere will be able to drink clean healthy water in their homes. This will be an excellent opportunity for all involved."

About EYI

EYI Industries Inc., through its subsidiary Essentially Yours Industries, Inc. (EYI), markets products that promote health and well-being. Recently, EYI launched a consumer product that removes arsenic and other contaminants to a negligible level from drinking water. The portable water filtration product's name is Code Blue™ and is exclusively provided to EYI. In addition, EYI sells dietary supplements and personal care products. EYI markets its products through an extensive network of Independent Business Associates. Their sales force is staffed by knowledgeable, experienced men and women and supported by comprehensive training programs.

Dennis L. Mast, CEO of HydroFlo stated, "I am pleased to see an order such as this one. I feel as though my strategic business objectives are beginning to be realized in that people all over the world will be protected from harmful contaminants in water."

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, 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, thereby improving the overall 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.

Contact Information

  • Contact:
    HydroFlo, Inc.
    Rebecca Morgan
    Investor Relations
    919-772-9925
    Email Contact

    or

    Essentially Yours Industries, Inc.
    Jennifer Trevitt,
    Investor Relations
    Tel: (604) 759-5017
    Email Contact