E nvi r o n men ta l P r o d uc ts & Tec h nolo g i es Cor por a t ion

February 2001 – EPTC unveiled its new 8’ by 24’ Aerobic Bioreactor to 2001 World Ag Expo visitors, the first public viewing of the “industrial strength” Model 824 aerobic bioreactor. EPTC's President, Marvin Mears states that the primary purpose of the aerobic bioreactor is to process the solids portion of organic waste streams. EPTC’s bioreactor incorporates all the knowledge gained from the operation of three field- tested units over the past two years. EPTC operated pilot projects that tested Model 618 units on actual dairies located in both California and Utah. This is the first Model 824 with the capacity to handle 20 to 25 tons of material, based on material density. This bioreactor has several new features. The tank has two steel forged rings to provide a

smooth rotation and provide additional strength to the tank when loaded. A segmented sprocket, chain drive, gearbox, and motor provide smooth movement of the tank assembly. The system employs a new oxygen system and rotary compressor to supply conditioned oxygen to the center of the organic materials being processed.

The now highly affordable technology is the result of the investment of millions of dollars and knowledge gained from approximately five years of extensive research and development activities. The company has chosen to focus its initial marketing efforts on the animal waste and food waste industry sectors.

Vol u m e 1 , I s s u e

EPTC’S NEW 8’ X 24’ AEROBIC BIOREACTOR

February 2002

“The significant problems we face

cannot be solved at the same level of

thinking we were at when we created

them.”

Albert Einstein

I N S I D E T H I S I S S U E :

CA Methane Program 2

FAN OEM Agreement 2

Ancillary Equipment 2

6-ft x 18-ft Pilot Project 3

Product Flexibility 3

EPTC Control Systems 4

Organics Conference 4

E P T . . . T H E Y E A R I N R E V I E W

IN MEMORI AM July, 2001 - EPTC lost a dear friend and supporter, Mr. Neil T. Chau who passed away in July.

Mr. Chau was the Managing Member and Chief Investment Officer of Encore Capital Management, L.L.C. Mr. Chau's career included serving as the Senior Manager and First Vice

President of Yasuda Trust with responsibility for directing all corporate finance activities and managing over $3.7 billion in loans and commitments to corporate clients.

Mr. Chau was also formerly with the Bank of New York and on the Board of Directors

of the Hanoi International School. Mr. Chau, along with his brother Jim Chau, played a major role in EPTC’s development, and hispresence on this planetwill be sorely missed.

EPTC’s 8’ by 24’ Aerobic Bioreactor at 2001 World Ag Expo. Assembled at Kennedy Tank Manufacturing

Turning around impacted areas of our environment

EPT . . . the ye ar in re v ie w

September 2001 – The “Money for Methane” program is funded by the California Energy Commission to develop manure methane power production projects onCalifornia dairies. This program is being administered by the Western United Resource Development, Incorporated Buy-down grants and electricity generation incentive payments will be used to assist dairies in the design and construction of the digestion systems, forpurchase of equipment for the biogas electricity systems, and to provide technical assistance

to dairies that have installed biogas systems under the program. The California Energy Commission, acting under authority of Legislative Enactment SB5X (Section 5(b)(5)(C)(i))has appropriated and intendsto encumber $9,640,000for this program. EPTC is submitting an application for the Ed Counts, Plane View Dairy, located in Chino, California. The Plane View Dairy will be utilizing state-of-the-art anaerobic digester technology integrated with a VISi LOCOST dual-fuel co-generation system.

The gen-set will be one of the very first internal combustion systems utilizing biodiesel as a back-up fuel to enhancethe methane. Biodiesel is made of 100% organic materials.

signal source to remotely control the operation of each device.

Additionally, EPTC reviewed major manufacturers of off-the-shelf components that provided similar capabilities and would enable reliable and cost-effective material

August – December 2001 – When first we demonstrated the EPTC Aerobic Bioreactor to banks and leasing companies, they were impressed with the technology but wanted to finance a solution.

The services of two engineering firms with job shop capabilityworked to design and quote the fabrication of a feeder system, conveyors and holding tank, and to provide the input

handling. As a result of these efforts,complete ancillarycomponents of the EPTC system can now be quoted in response to our customers’specific needs andproject requirements.

Pa ge 2

EP TC ENT E R S I NTO O E M AG RE EM E N T W I TH F A N , U S A , I N C .

California's Dairy Power Production Program … MONEY FOR METHANE

E P T C D E V E L O P S A N D R E V IE W S SUPPORT AN CILLAR Y EQUIPMENT

the material through a stainless steel screen, and 2) provides a consistent particle size for the bacteria to digest. After the FAN completes its process, material is conveyed through an input loader tank to the reactor. EPTC’s agreement with FAN gives EPTC access to field support, training, spare parts and insight into the latest separator technology

developments. FAN, headquartered in Germany, has more than 2,000 systems installed worldwide.

July 2001 – EPTC entered into an OEM agreement involvingthe FAN Separator, the premier manufacturer of the FAN PressScrew Separator. Using the FAN separator in the preparation of organics entering the EPTC Aerobic Bioreactor performs two functions; namely, 1) it reduces the moisture content to a consistent 65-67% moisture content by squeezing

* EPTC Completes

Engineering Design of its Aerobic

Bioreactor.

* EPTC Operates

Aerobic Bioreactor

As A Complete Functioning Process

Money For Methane

Industrial Strength Conveyors

FAN Press Screw Separator

O2N2 SITE Gas Systems PSA Oxygen Generator and Rexnord Tank Drive System

VISi LOCOST SYSTEM Dual Fuel Co-Generation System

AquaStore DigesterTanks

Vaughan Mixer Pumps

EPT . . . the year in revie w

May-August 2001 – The purpose of the Plane View Dairy project has been to develop the ancillary machinery to pump, separate, load, convey, store and unload the aerobic bioreactor on a continuous basis. Scrap materials were used to fabricate the various components needed to accomplish each and all of these specific functions. After all the components were in-place and operational the system was run for approximately 60 days with minimal problems. Opera-tional difficulties, when they did occur, were the results of old and tired components, but not the process. During the testing program, manure was processed from three sources, crusted

material from the lagoon, flushed manure from the feed apron and scraped material from the corrals.

Each of the feeder materials presented different challenges due to relative moisture content. During the project, EPTC has made some major breakthroughs addressing key issues of EC (salts) in the both solids and liquid waste streams. Salts are a major problem in the Chino Basin.

EPTC then invited both local job shops and off-the-shelf manufacturers with engineering capabilities to design and/

or estimate replacement components for each step of the material process handling.

This having been completed, the company can now quote a complete process with supporting equipment.

September-November 2001 – EPTC signs confidentiality agreements with four of the leading bacteria, enzymes and polymer manufacturing companies. The agreements stage the production support for key bacteria, enzymes and polymers, which will be used in custom recipe blends for both the aerobic and anaerobic processes.

Page 3

T H E S Y S T E M S U M M E D U P

6 ’ BY 18’ PILOT PROJEC T – PLA NE VIEW DAI RY, CHINO , CAL IFORNIA

E P T C F OR G E S A L L I A N C E S W I T H B A C T E R I A, E N ZY M E A N D P O LY M E R M A N U F A C T U R E R S

Laboratory of compost testing, Woods End Research Labora-tory. They gave us high marks except for electro-conductivity. EC is a measure of saltiness and ours was off the top of the chart at 30+. We felt blind-sided because no one mentioned this to us previously and we found no references to it in the literature. We continue to find widespread ignorance on this topic. The necessity of controlling or adjusting EC led us to the subjects of quality control, pre-treatment and post-treatment of materials. This includedprocessing and handling machinery as well as treatmenttechniques. We have examined

enzymes, polymers, effective micro organisms (EM), and so on with remarkable results. We can adjust EC from our saltiest output of 30+ to below 6, a level tolerable to plant life.

This is a major breakthrough in the understanding ofcompost production by anystandard, and we in our tenacity happen to lead the way in the industry. Our machines will be fitted with the finest system of peripheral processorscapable of pre-treating andpost-treating animal wastes so our composts will be safe and suitable for virtually anyagricultural application.

August 2001 – A year has passed since we released our new 8’x24’ machine at the 2001 World Ag Expo. We displayed a wonderful, sweet smelling, fine-textured compost almost fresh from that machine, and visitors to our booth were very impressed. We planned to sell machines and moving solidly into the composting market. We were exuberant. Our journey to produce a machine of quality, however, had only just begun. How many travelers set out on a path that seems to have a predictable end only to find there is another mountain pass to ascend, another ocean to sail, or continent to cross. We took our excellent compost to the UL

EPTC Signs Confidentiality

Agreements With Four Different

Firms – All Companies are

involved in Bacteria, Enzymes

& Polymers

EPTC pilot system at Ed Counts dairy farm.

Scanning elec-tron micrograph of thermophilic Bacillus

EPTC Assigned U.S. Patent for Aerobic Bioreactor

* EPTC Pilot

Project on 2,000

Head Dairy Farm

in Chino, CA

* Completes Anaerobic Digester

Development

Agreement with

Utah State University

* Completes

Compost/Plant

Uptake Research

with California

5372 North Sterling Center Drive Westlake Village, CA 91361

Main Office: 818.865.2205 Office Fax: 818.865.2210

Environmental Products & Technologies Corporation

Delbecq of the University of Wisconsin. The NGT method is an intensive experience that provides a rich and robust opportunity for the participants to explore issues and reach consensus. The focus of thisworkshop was to address thequestion: What are the mostsignificant barriers that may inhibit the Chino Basin Organics Management concept from being implemented? Phase two of the NWRI program saw the convening of the Chino Basin Organics Management Confer-

April-June 2001 – The Inland Empire Utilities Agency (IEUA) commissioned a draft business plan and tech-nical feasibility study that would describe and offer recommendations regarding an organics management strategy, including products, markets, fail-safe options for organics, and a recommended action plan. The plan is to address all the concerns and issues related to organics management. The Southern California Alliance of Publicly Owned Treatment Works, in collaboration with the IEUA, requested theNational Water Research Institute (NWRI) to conduct atwo-phase program that would allow the concerned parties to reach consensus in a positive environment. The firstphase was a nominal group technique (NGT) workshop based on the work of Andre

ence on June 15, 2001. The event presented the major barriers and strate-gies to overcome the bar-riers identified during the workshop. NGT work-shop participants joined with other experts on 10 task groups that created an expanded version of the 10 priority barrier write-ups. These detail and enhance the original workshop reports and

coalesce it into an action plan/strategy to overcome thebarriers identified duringthe workshop. EPTC’s CEO & President Marvin Mears presented barrier #8 and John Graham, Chief Knowledge Officer, presented barrier #10 which briefly addressed these concerns.

To View Reports: http://www.ieua.org/o/organcen/omc.htm

THE CHINO BASIN ORGANICS MANAGEMENT CONFERENCE

Information Request:

By E-Mail: informed@eptcorp.com

A HISTORY OF THE CHINO BASIN ORGANICS MANAGEMENT STRATEGY Three years ago, the five member agencies of the Santa Ana Watershed Project Authority — Orange County Water District, Western Municipal Water District, Eastern Municipal Water District, San Bernardino Valley Municipal Water District, and the Inland Empire Utilities Agency (IEUA)—launched a program, in cooperation with other local, state, and federal organizations, for the purpose of developing a water resources plan. The purpose of the water resources plan was to implement water recycling, water quality management, and a watershed plan that included dairy cleanup and organic materials conservation, h a b i t a t e n h a n c e m e n t f o r endangered species, salinity management, and recreation development of the Santa Ana River system. One of the key elements of this plan is the management of organic materials generated from the many animal and agricultural practices within the Chino Groundwater Basin. The challenges presented by this critical aspect of the plan have been the focus of attention by the IEUA for a number of years.

The 2001 Chino Organics Management Conference / National Water Research Institute’s Participants

Turning around impacted areas of our environment

www.eptcorp.com

EPTC PREPARES TO INTRODUCE NEW MEASUREMENT AND AUTOMATION CONTROL SYSTEMS July-September 2001 – EPTC prepares to unveil its third-generation automated monitoring and control systems for both its Aerobic Bioreactor and Anaerobic digester / Co-Generation System. The control systems will allow constant measurement and automation of EPTC’s process and event-driven activities. The control systems are accessible via the Internet. To ensure technological excellence and dependability, EPTC has teamed with the world’s leader in both measurement and automation product support and called upon the expertise of a variety of field experienced programming specialists.

Control Display Panel – Aerobic Bioreactor

Control Display Panel – Anaerobic Digester