November 2 , 2007
Minutes of Annual Shareholders Meeting of HydroFlo, Inc.
The shareholders of HydroFlo, Inc., held an annual meeting on October 26, 2007 at 3:00 pm, at the corporate offices of HydroFlo, Inc. located at 2501 Reliance Ave., Apex, North Carolina.
Call to order
The Chairman of the Board, George A. Moore, called the meeting to order and announced that a quorum was present and that the meeting was held pursuant to a written notice of meeting given to all shareholders of the corporation. A copy of this notice was inserted in the minute book immediately preceding the minutes of this meeting. The corporate secretary Deanna Britt served as Secretary of the meeting.
Attendees
The shareholders present at the meeting, in person or by proxy, represented a majority vote of the stock holders.
Open issues - Proposals
The chairperson then announced the following proposals up for approval:
Proposal 1 - the amendment of the company’s articles of incorporation to change the company’s name. All shareholders were in favor of this proposal. It received adequate votes for passage and was approved.
Proposal 2 – the approval of appointment of independent auditors. All shareholders were in favor of this proposal. It received adequate votes for passage and was approved.
Proposal 3 – the approval of a reverse stock split. Not all shareholders were in favor of this proposal however it received adequate votes for passage and was approved.
Company Update
The chairperson then announced the following updates regarding the company’s business transactions:
Sales – HydroFlo Water Treatment, Inc. currently has 50 open proposals with 15 projected to close within the next 90 days. Three proposals are in the production phase. Another three are in the design phase and should close in November. We expect greater than 70% of the 15 to close by December. Their value is greater than $800,000.00.
Ultra Choice Water and MARTI are advancing with sales from existing customers and expanding with new customers. Ultra Choice Water will begin selling the Steri-Pure Pitcher System after the first of the year, with marketing starting in December.
MARTI is projecting sales to increase during the 2 nd quarter and within the next year be back in the black.
Safety Scan Technology, Inc. is not set to come out of the beta phase for another 6 to 8 months. It is projected to be the biggest “bread winner” for the company.
Comments & Questions
After reviewing business projections, the chairperson opened the floor for questions and comments.
Question 1 – more details were requested on the two reverse splits projected by 12/31. The response: “honestly we will go thru one reverse split not two. With that we are looking to get in the 0.25 to 0.50 cent price range per share.
Question 2 – information was requested on when the financials will be released and what was the delay in getting them out. The response: “financials should be out within the next month. The reason for the delay is that we’ve had to go thru a forensic restructure of the prior year’s financials.”
Question 3 – an update on the current status of the class action suit was requested. The response: “at this time we are continuing to work toward an out- of- court settlement. We are hoping to be able to comment further on the situation within the next couple of weeks.”
Question 4 – information was requested on the validity of a rumor regarding HydroFlo selling the rights to Code Blue. An update was also requested on Code Blue, EYII and possible sales to China. The response: “Any statements regarding HydroFlo selling the rights to Code Blue to anyone are false. In regards to selling to China, it is unclear why our filter failed one of the thirty-one earlier tests, however we are working to resolve the remaining issue.”
Question 5 – can the Steri-Pure pitcher be marketed to China? The response: We are exploring this issue. The current SteriPure formulation does not remove arsenic, however, so it would not be a replacement for CodeBlue.
* Paul Ogle, VP / General Manager of MARTI presented the prototype of the Steri-Pure Pitcher System. He explained the how the pitcher system works, “basically the pitcher works like any other pour thru pitcher (i.e. Brita) but with a UV light”. Currently, the effectively removes heavy metals, however it is not designed to remove arsenic.
* Mr. Ogle also briefly discussed marketing plans for the system. With exclusive distribution rights in Canada and in the US, MARTI plans to distribute the system direct and also thru Ultra Choice Water. MARTI also continues to explore other distribution outlets as well.
Adjournment
There being no further business to come before the meeting, on motion duly made, seconded, and adopted, the meeting was adjourned at 4:15pm.
Minutes submitted by: Deanna Britt, Corporate Secretary
Minutes approved by: George Moore, President/Chairman of the Board.
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