According to a press release dated February 8, 2008, a hearing will be held on April 10, 2008 at 10:30 a.m., before the Honorable James C. Fox, United States District Judge, at the United States District Court for the Eastern District of North Carolina, Courtroom #1, Alton Lennon Federal Building, 2 Princess Street, Wilmington, NC 28401 for the purpose of determining: (1) whether the Class should be certified, for the purposes of settlement, pursuant to Rule 23 of the Federal Rules of Civil Procedure, consisting of all persons who acquired any common stock of HydroFlo during the period from July 18, 2005 through and including October 26, 2005, and were damaged thereby. Excluded from the Class are the Defendants and all current and former officers and directors of Defendants, and the members of their immediate families and Defendants' legal representatives, heirs, predecessors, successors and assigns and any entity in which any Defendant has or had a controlling interest or is a parent or subsidiary of or is controlled by HydroFlo, and any persons who have separately filed actions against one or more of the Defendants based in whole or in part on any claim arising out of or relating to any of the acts, omissions, misrepresentations, facts, events, matters, transactions or occurrences referred to in the Action or otherwise alleged, asserted or contended in the Action; (2) whether the proposed settlement (the "Settlement") of this Action for $425,000 in cash plus accrued interest (the "Settlement Fund") should be approved by the Court as fair, reasonable, and adequate; (3) whether the Plan of Allocation is fair, reasonable, and adequate and therefore should be approved; (4) whether the motion of Lead Plaintiffs' Counsel for an award of attorneys' fees and reimbursement of expenses should be approved and an award to Lead Plaintiffs should be granted; and (5) whether this Action should be dismissed with prejudice.
After the consolidated complaint was filed on April 13, 2006, all but one of the named defendants filed their response. The remaining individual chose to file a motion to dismiss the complaint which was denied in part. Said individual filed his answer on January 5, 2007. On May 2, 2007, the Court entered the Order granting the motion to appoint Ronald A. Schindeler, Robert G. Cole, Jamie Slaughterbeck and William Schutter are appointed lead plaintiffs for the proposed class. The Rosen Law Firm is appointed as Lead Counsel and the law firm of Wilson & Coffey, LLP is appointed as Liaison Counsel. On November 27, 2007, a Notice of Settlement Stipulation and Agreement was filed.
The original complaint charges that the defendants HydroFlo and certain of its officers and directors violated sections 10(b) and 20(a) of the Exchange Act by issuing a series of false and misleading press releases to the market during the Class Period. Specifically, the complaint alleges that HydroFlo issued several materially false and misleading press releases concerning the Company's Metals & Arsenic Removal Technology, Inc. (MARTI) and Advance Water Recycle Inc., (AWRI) wholly owned portfolio companies. The complaint charges that the defendants misrepresented the type, terms, amendments, demand, and revenue projections from certain agreements between MARTI and EYI Industries and its subsidiaries during the Class Period. In addition, the complaint alleges that defendants misrepresented the existence and nature of certain agreements with government entities involved in the Hurricane Katrina relief effort. As a result of the Company's materially false and misleading statements to the market, according to the complaint, the price of HydroFlo stock was artificially inflated in the Class Period.