Fourth Quarter Ending December 31, 2008 Financial Results:

China Industrial Waste announced record revenue for its fourth quarter of $3.5 million, representing a 13.9% increase from $3.1 million recorded in the fourth quarter of 2007;

Gross profit in the fourth quarter of 2008 was $2.7 million, representing an 11.6% increase from $2.4 million in the fourth quarter of 2007, primarily attributable to the increase in higher margin service fee revenues;

Gross margins were 77% in the fourth quarter of 2008, compared to 78.6% in the fourth quarter of 2007;

Operating expenses were $1.5 million and operating income was $1.2 million in the fourth quarter of 2008, compared to $1.6 million in operating expenses and $0.8 million in operating income in the fourth quarter of 2007;

Net income for the quarter was $1.2 million, down 21.3% from net income of $1.5 million reported in the same year ago period. The decrease in net income was related to a significant decrease of price of copper and copper compounds which are sold as a product of recycling process;

Diluted earnings per share were $0.08 for the fourth quarter of 2008, compared to $0.12 in the fourth quarter of 2007, utilizing 14,873,279 shares and 13,220,843 shares respectively, with the increase in shares resulting from the fourth quarter private placement.

Year Ending December 31, 2008 Financial Results:

Increased service fees supported by a broader customer base and increased demand from existing customers were the principal drivers of this year over year growth. Service fees were $8.2 million and represented 61% of total revenue from the year ended December 31, 2008, compared to $5 million or 52.5% of total revenue for the year of 2007. Dongtai Water contributed about $0.5 million as a result of increased service fees vs. 0 in 2007 when it was in construction. Sales of cupric sulphate were $1.8 million or 13.5% of total revenue in 2008, which is slightly less than that of 2007. Sales of recycled products increased 25.6% to $3.4 million or 25.5% of total revenue in 2008, from $2.7 million or 28.5% of total revenue in 2007.

Gross profit was $9.2 million yielding gross margins of 69%, compared to $6.8 million in gross profit and a gross margin of 70.9% for fiscal year of 2007. The increase in gross profit was primarily attributable to the growth in revenue and stringent control of costs related to providing services, while margins were impacted by price decrease of copper or copper related products in late 2008 due to the global recession.

Operating expenses for fiscal year 2008 were $3.5 million, which represents a decrease of 1.6% from $3.6 million, compared to the same period in 2007. In 2007, the company settled certain legal proceedings and incurred an associated charge of about $0.9 million. Excluding this non-operating item, operating expenses for 2008 increased by $0.8 million compared to 2007, resulting from the business expansion, personnel addition, and increased investment in marketing activities and public market expenses.

Operating income totaled about $5.7 million, an 80.4% increase from the $3.2 million reported for fiscal year 2007. Operating margins were 42.6% and 33.1% for the fiscal year 2008 and 2007, respectively, and benefited from leverage in the business model and prudent cost controls as it relates to operating expenses.

The income tax was $0.66 million compared with 2007’s figure of 0, while the effective tax rate was 11% in 2008.

On December 31, 2008 the company had 15,262,035 shares outstanding.

Balance Sheet and Cash Flow Statement:

Cash and cash equivalents totaled $5.7 million on December 31, 2008 compared to $3.3 million on December 31, 2007. Trade account receivables increased to about $2.4 million on December 31, 2008, from $0.6 million on December 31, 2007 related primarily to revenue growth. Days of sales outstanding for 2008 were 66 days. Inventory was about $2.4 million on December 31, 2008 compared to $1.3 million on December 31, 2007, the majority of which consists of metals extracted during the recycling process. Due to a sharp decline in the market price of copper and copper related products, management determined it would be more advantageous to hold inventory until prices improved. Government subsidy was about $1 million and recorded as ‘other long-term liabilities’ in third quarter’s financial statement. According to US GAAP, subsidies are recognized over the useful lives of the related asset upon the completion and acceptance of the government subsidized project. Shareholders’ Equity on December 31, 2008 was $23.6 million, represented a book value of about $1.54 per share based on 15.3 million shares outstanding. Net cash provided by operating activities for fiscal 2008 was $4.9 million.

‘We are very pleased with our strong financial performance in 2008 in spite of the global recession with growth emanating from increased demand through a larger base of both existing and new customers, in addition to contributions from our municipal waste water treatment facility which came online in June 2008. 2008 was a key inflection point for our company as we successfully completed a $4 million private placement through the issuance of common equity and warrants to institutional and accredited investors,’ stated Jinqing Dong, chairman and chief executive officer of China Industrial Waste. ‘Our overall strategy to provide the most comprehensive suite of services available to an expanded customer base proved to be successful as evidenced by the 40.5% increase in revenues for 2008,’ Mr. Dong further elaborated.

Business Development:

Zhuorui Resource Recycling Co., Ltd. (Zhuorui), the company’s indirect majority-owned subsidiary, provides plasma arc melting, separation and purification of waste catalysts and treatment of industrial wastes. Valuable metals are extracted from the waste catalyst and sold while leftover slag is utilized to make cement. Zhuorui is in the final stage of the testing process and it is expected to come online in 2009 and be a meaningful contributor to future revenue growth.

‘The growth of the environmental protection industry in China remains robust and is supported by Chinese government which is implementing new policies and regulations to improve China’s overall environment, both under the 5-Year Plan and the recently passed $586 Billion Stimulus Plan, which includes the commissioning and construction of over a thousand new municipal wastewater treatment facilities throughout China in the coming few years. We continue to seek new BOT projects and have identified several new projects which could provide long-term and recurring revenue stream. We are excited about the company’s growth prospects in 2009, including new sludge treatment facility coming online and new product opportunities through our partnership with LIPP, as we view this particular component of wastewater management as being the most underserved currently. We are also seeing positive trends in the price of copper and copper compounds and we expect to reduce our inventories while capitalizing on high margin revenue during 2009. Backed by a dedicated management team, possessing strong operating and technical experience in waste treatment business, in addition to enhanced service and marketing efforts, we believe we are well positioned to capitalize on the significant long-term growth opportunity in the environmental protection industry,’ concluded Dong.

China Industrial Waste is a company engaged in collection, treatment, disposal, and recycling of industrial wastes.