June 2004

USA Biomass Corporation Seals Two-Year Waste Hauling Contract
Annual Contract REvenues Expected to Exceed $1,000,000

Orange, CA— USA Biomass Corporation has entered into a two-year contract with Lake Arrowhead Forest Products, Inc. (LAFP) to transport wood chips from Lake Arrowhead, which is located in the San Bernardino Mountains to the Bakersfield, California area. The contract is expected to yield in excess of $1,000,000 in annual revenues to USA Biomass.

Over the past few years, a severe bark beetle infestation has killed a large number of trees in the area. As a result, San Bernardino County has contracted with LAFP to cut down and remove as many dead trees as possible before seasonal fires (fire season commences in May) decimate the remaining healthy trees in the area. Once the wood chips are hauled to the Bakersfield area, the wood chips will be sold as composting material and/or used for a cogeneration plant providing electricity to the local area.