N-Viro International retained the assistance of Mr. Yee D. Shek, as N-Viro Marketing Director/Asia, ydshek@nviro.com, to assist the company in marketing our technology in China. Mr. Shek worked directly with Hong Heng Energy to establish a Joint Venture Agreement between the companies. Ultimately Mr. Shek will work directly with Hong Heng Energy and N-Viro International to develop and build multiple N-Viro process facilities under our Joint Venture Agreement.

China, with both the world's largest population and largest increasing energy demand, in March 2011 adopted its twelfth five-year plan. A five-year plan sets forth a comprehensive statement of the priorities and policies that will be the focus of that period.

In this most current five-year plan, China has among many things embarked on an ambitious focus to reduce pollution, increase energy efficiency, and to ensure a reliable and clean energy supply. Specifically, China has identified and targeted seven strategic emerging industries to be drivers for China's future economic development, and seeks to grow these industries as a percentage of GDP from 5% to 15% by 2020. Among these seven targeted industries are green energy and alternative energy. In support of these initiatives, China plans to produce 15% of its energy needs through non-fossil fuels, and has earmarked financial support to encourage development in a wide variety of green energy technologies, including waste and/or resource recycling and energy recovery. Included in these investments are planned expenditures on 334 Billion RMB ($51 Billion US Dollars) on wastewater projects, with an expanded emphasis on sludge treatment.

Timothy R. Kasmoch, CEO and President of N-Viro International said, "We are honored to have this valuable opportunity for project development and new revenue opportunity for the company. The N-Viro International technology patents are competitive, robust and efficient ways to create alternative energy. We are looking forward to rapid growth in China. Having Mr. Yee D. Shek on our team and being able to partner with the Hong Heng Energy Co., LTD demonstrates the value our company offers a world market"

Dan-Viro operates the Tel Aviv N-Viro processing facility through an agreement with N-Viro International. The new facility was commissioned in 2011 and has been in full scale operation since January 2012. Dan-Viro is owned by CRM Military & Civilian Technologies and Global Environmental Solutions (GES).

Dan-Viro representatives welcomed N-Viro International for a tour and inspection of the facility following the first seven months of full operation. The overall system designed will need to make minor improvements to optimize performance as process capacity is amplified. The Shafdan Wastewater Treatment Plant is the largest in Israel. The original intent was for the Dan-Viro facility to divert 15% of Shafdan's sewage sludge from entering the Mediterranean Sea. However, the plant has already increased production to treat up to 40% of the sludge. Annualizing current production levels would equal nearly 70,000 metric tons processed and N-Viro International collects fixed dollar payments based on production.

The visit to Israel resulted in an agreement with Dan-Viro to move forward with process improvements to enhance performance as capacity has increased, and, to provide facility cost estimates to potential customers in Israel and other countries. The outcome of the meeting with an Israeli electric company included a plan to continue communications on the development of N-Viro Fuel™, with the specific intent to examine test protocols and boiler test results as the data from the 20% test burn in western Pennsylvania is completed. The Company expects the 20% test to be complete in 2013.

Timothy R. Kasmoch, CEO and President of N-Viro International said, "We have a wonderful working relationship with this international community and feel certain that the benefits of the N-Viro process will continue to ease the pollution in the Mediterranean Sea going forward. The unsurpassed quality, versatility and simplicity of the process are why N-Viro International has been around for over 20 years providing workable solutions to some of the world's most pressing problems."

Pictured from left to right: Lieutenant Michael Quisao, Public Affairs Officer at the US Navy, Carla Lucchino, Assistant for Administration for the Department of the Navy, Timothy R. Kasmoch, CEO and President N-Viro International Corporation

TOLEDO OHIO - August 22, 2012 - N-Viro International Corporation ( NVIC:PK ) met with representatives of the United States Navy to explore potential synergies for advancement of the Company's patented alternative energy technology. The meeting was scheduled in advance of activities celebrating Navy Week in Toledo, Ohio.

Carla Lucchino, the Assistant for Administration for the Department of the Navy encouraged the management of N-Viro International to seek opportunities to advance the alternative fuel product with the Navy. The Navy's goal is to increase energy security by reducing dependence on fossil fuels and using domestically produced and locally sourced alternative resources.

The Department of Defense is investigating a wide range of innovative technologies to improve efficiency at fixed and forward bases. The department has supported commercial development efforts in the past with its broad range of strengths to help accelerate clean energy development and commercial applications.

N-Viro International Corporation would like to thank the Navy for the continuing support of business and technology innovation. The future of naval innovation is in good hands. Thank you for the engaging conversation and support for Toledo businesses.

About N-Viro International

N-Viro International Corporation is a leader in the conversion of organic materials generated from industrial, agricultural and municipal sources. The Company's proprietary technologies, unique services and materials handling expertise are combined to offer turnkey solutions in both soil enrichment and alternative fuel development. The Company generates revenues derived from fees that are collected for accepting municipal biosolids and from the processing facilities in the United States and at several international sites that are either wholly owned or operated through licensing agreements.

N-Viro maintains a Company website and a Company blog site where interested parties can follow the progress of the Company. N-Viro will continue to post current news on the Company website and a discussion forum on the Company blog site.

President and CEO, Timothy R. Kasmoch, commented on the purchase order extension saying, "We are pleased to continue the five year relationship with Toho Water Authority and will continue to do our best to deliver quality services to the Authority as we have done for the past five years."

About N-Viro International

N-Viro International Corporation is a leader in the conversion of organic materials generated from industrial, agricultural and municipal sources. The Company's proprietary technologies, unique services and materials handling expertise are combined to offer turnkey solutions in both soil enrichment and alternative fuel development. The Company generates revenues derived from fees that are collected for accepting municipal biosolids and from the processing facilities in the United States and at several international sites that are either wholly owned or operated through licensing agreements.

N-Viro will continue to post press releases and current news on the company website and a discussion forum on the company blog site. We encourage stockholders and interested parties to monitor the site on a regular basis.

N-Viro International Website and N-Viro International Blog

Special Cautionary Note Regarding Forward‐Looking Statements

The Company cautions that words used in this document such as "expects," "hopes", "anticipates," "believes" and "may," as well as similar words and expressions used herein, identify and refer to statements describing events that may or may not occur in the future. These forward‐looking statements and the matters to which they refer are subject to considerable uncertainty that may cause actual results to differ materially from those described herein. For example, while the Company expects business expansion projects to begin in an estimated time frame, such expectations are subject to adverse economic conditions and other factors outside of the Company's control. Further, the Company's ability to increase capabilities and expand capacity is subject to the ability of the Company or its partners to access sufficient capital to pay for this expansion, which will further depend on, among other factors, market acceptance. The Company's ability to achieve profitability of these projects could be negatively impacted if there is a lack of an adequate supply of waste or expenses increase above the Company's expectations ‐ including fuel and transportation costs, labor costs and costs relating to the treatment and processing of the biosolids and creation of the N‐Viro Soil or N‐Viro Fuel. In addition, while the Company believes that trends in "greener" energy solutions are moving in favor of the Company's technology, such trends may not continue or may never result in increased sales or profits to the Company because of the availability of competing products and other alternative energy source. All of these factors, and other factors, will affect the profitability of the Company. Additional information about these and other factors that may adversely affect these forward‐looking statements are contained in the Company's reports, including its Annual Report on Form 10‐K for the year ended December 31, 2011 and other filings with the Securities and Exchange Commission. The Company assumes no obligation to update forward‐looking statements to reflect actual results, changes in assumptions or changes in other factors affecting forward‐looking information except to the extent required by applicable securities laws. ###

The Agreement acknowledges the success of the previous 10% N-Viro Fuel™ test conducted in September 2011, and upon the completion of this 20% substitution test and reasonable mutual consent the test was successful, the parties will agree to evaluate the full-scale commercialization of a permanent N-Viro Fuel™ facility. The Agreement identifies parameters for commercialization of the N-Viro Fuel™ technology and incentivizes the power generator's investment by entering into a twenty year N-Viro Fuel™ purchase agreement. The Agreement provides early termination by either party with penalty or mutual termination without penalty. The parties anticipate completion of this 20% test by the end of 2012.