UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D.C.  20549
                                 FORM 10-K

(MARK ONE)
    X                ANNUAL REPORT UNDER SECTION 13 OR 15(D)
                     OF THE SECURITIES EXCHANGE ACT OF 1934
                   FOR THE FISCAL YEAR ENDED DECEMBER 31, 2010
                                       OR
                  TRANSITION  REPORT  PURSUANT  TO  SECTION  13  OR  15(D)
                     OF THE SECURITIES EXCHANGE ACT OF 1934
           FOR THE TRANSITION PERIOD FROM ____________ TO ____________

                        COMMISSION FILE NUMBER:  0-21802

                                [GRAPHIC OMITTED]

                        N-VIRO INTERNATIONAL CORPORATION
                (Exact name of registrant as specified in its charter)

              DELAWARE                                   34-1741211
     (STATE OR OTHER JURISDICTION OF         (I.R.S. EMPLOYER IDENTIFICATION NO.
      INCORPORATION OR ORGANIZATION)

                        3450 W. CENTRAL AVENUE, SUITE 328
                     TOLEDO, OHIO                            43606
           (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)         (ZIP CODE)

        REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE:    (419) 535-6374

  SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE EXCHANGE ACT:    None

  SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:  Common Stock, par
                                                           value $.01 per share


Indicate  by  check  mark  if the registrant is a well-known seasoned issuer, as
defined  in  Rule  405  of  the  Securities  Act.   Yes     No  X

Indicate  by  check  mark  if  the  registrant  is  not required to file reports
pursuant  to  Section  13  or  15(d)  of  the  Exchange  Act.  Yes     No  X

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding  12  months  (or  for such shorter period that the registrant was
required  to  file  such  reports),  and  (2)  has  been  subject to such filing
requirements  for  at  least  the  past  90  days.  Yes X      No

Indicate  by  check mark whether the registrant has submitted electronically and
posted  on  its corporate Web site, if any, every Interactive Data File required
to  be  submitted and posted pursuant to Rule 405 of Regulation S-T (Sec.232.405
of this chapter) during the preceding 12 months (or for such shorter period that
the  registrant  was  required  to  submit and post such files).      Yes     No

Indicate  by  check mark if disclosure of delinquent filers pursuant to Item 405
of  Regulation  S-K  (229.405 of this chapter) is not contained herein, and will
not  be contained, to the best of registrant's knowledge, in definitive proxy or
information  statements  incorporated by reference in Part III of this Form 10-K
or  any  amendment  to  this  Form  10-K.  [  ]

Indicate  by  check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company.  See
the  definitions  of "large accelerated filer", "accelerated filer" and "smaller
reporting  company"  in  Rule  12b-2  of  the  Exchange  Act.

Large  accelerated  filer
Accelerated  filer
Non-accelerated  filer
Smaller  reporting  company  X

Indicate  by check mark whether the registrant is a shell company (as defined in
Rule  12b-2  of  the  Exchange  Act).

Yes     No  X

State the aggregate market value of the voting and non-voting common equity held
by  non-affiliates computed by reference to the price at which the common equity
was  last  sold, or the average bid and asked price of such common equity, as of
the  last business day of the registrant's most recently completed second fiscal
quarter:   $13,516,000.

The  number  of shares of Common Stock of the registrant outstanding as of March
21,  2011  was  5,938,714.

                      DOCUMENTS INCORPORATED BY REFERENCE
None

<PAGE>

                                    INDEX

                                                                           PAGE
                                                                           ----

                                     PART I

Item 1.     Business                                                          2

Item 1A.    Risk Factors                                                      8

Item 2.     Properties                                                       11

Item 3.     Legal Proceedings                                                12

Item 4.     (Removed and Reserved)                                           12

                                    PART II

Item 5.     Market for Registrant's Common Equity, Related
     Stockholder Matters and Issuer Purchases of Equity Securities           13

Item 6.     Selected Financial Data                                          13

Item 7.     Management's Discussion and Analysis of Financial
     Condition and Results of Operations                                     13

Item 7A.    Quantitative and Qualitative Disclosures About Market Risk       19

Item 8.     Financial Statements and Supplementary Data                      20

Item 9.     Changes in and Disagreements with Accountants
     on Accounting and Financial Disclosure                                  24

Item 9A.    Controls and Procedures                                          24

Item 9B.    Other Information                                                25

                                    PART III

Item 10.     Directors, Executive Officers and Corporate Governance          26

Item 11.     Executive Compensation                                          32

Item 12.     Security Ownership of Certain Beneficial Owners
     and Management and Related Stockholder Matters                          36

Item 13.     Certain Relationships and Related Transactions, and
     Director Independence                                                   38

Item 14.     Principal Accountant Fees and Services                          38


                                    PART IV

Item 15.     Exhibits, Financial Statement Schedules                         40

<PAGE>


                                     PART I

CAUTIONARY  STATEMENT  WITH  RESPECT  TO  FORWARD-LOOKING  STATEMENTS

     This  annual  report  on  Form  10-K  contains  statements  that  are
forward-looking.  We caution that words used in this document such as "expects,"
"anticipates," "believes," "may," and "optimistic," 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  be materially different from those described herein.
There  are numerous factors that could cause actual results to be different than
those anticipated or predicted by us, including: (i) a deterioration in economic
conditions in general; (ii) a decrease in demand for our products or services in
particular;  (iii)  our  loss  of  a  key employee or employees; (iv) regulatory
changes,  including  changes  in  environmental  regulations,  that  may have an
adverse  affect on the demand for our products or services; (v) increases in our
operating  expenses  resulting  from  increased costs of labor and/or consulting
services; (vi) our inability to exploit existing or secure additional sources of
revenues  or  capital  to  fund  operations;  (vii) a failure to collect upon or
otherwise  secure  the  benefits  of existing contractual commitments with third
parties,  including our customers; and (viii) other factors and risks identified
in  this  Form  10-K,  including  under  the  caption  "Risk Factors." This list
provides  examples  of  factors  that  could  affect  the  results  described by
forward-looking  statements  contained  in this Form 10-K; however, this list is
not  exhaustive.  Many  other  factors  could  impact  our  business  and  it is
impossible  to  predict with any accuracy which factors could result in negative
impacts.  Although  we  believe that the forward-looking statements contained in
this Form 10-K are reasonable, we cannot provide you with any guarantee that the
anticipated results will not be adverse and that the anticipated results will be
achieved.  All  forward-looking  statements  in  this  Form  10-K  are expressly
qualified  in  their  entirety  by  the  cautionary statements contained in this
section and you are cautioned not to place undue reliance on the forward-looking
statements  contained  in this Form 10-K. In addition to the risks listed above,
other  risks  may  arise in the future, and we disclaim any obligation to update
information  contained  in  any  forward-looking  statement.

ITEM 1.     BUSINESS

GENERAL

     We were incorporated in Delaware in April 1993, and became a public company
in  October  1993.  We  own  and  sometimes license various N-Viro processes and
patented  technologies  to  treat  and  recycle wastewater and other bio-organic
wastes,  utilizing  certain  alkaline  and  mineral  by-products produced by the
cement,  lime,  electrical generation and other industries.  To date, the N-Viro
Process  has  been  commercially utilized for the recycling of wastewater sludge
from  municipal  wastewater  treatment facilities.  All N-Viro products produced
according to the N-Viro Process specifications, are "exceptional quality" sludge
products  under  the  40  CFR  Part 503 Sludge Regulations promulgated under the
Clean  Water  Act  of  1987  (the  "Part  503  Regs").

     Our  current  business  strategy is to market our N-Viro FuelTM technology,
which  produces  a renewable alternative fuel product out of certain bio-organic
wastes.  This  N-Viro  Fuel process has been acknowledged by the USEPA as a fuel
product  that  can  be  used  to  produce  alternative energy.  In this business
strategy,  the  primary  focus  is to identify allies, public and private, which
will  allow  the  opportunity  for  N-Viro to build, own and operate N-Viro Fuel
facilities  either  on  its  own  or  in  concert  with  others.

     Presently,  we  operate  two  biosolids  processing  facilities  located in
Toledo, Ohio and Volusia County, Florida.  These two facilities each produce the
N-Viro  SoilTM  agricultural  product,  and  have  provided  us with working and
development  capital.  Our  goal  is to continue to operate these facilities and
aggressively  market  our  N-Viro Fuel technology.  These patented processes are
best  suited  for  current  and  future demands, satisfying both waste treatment
needs  as  well  as  domestic  and international directives for clean, renewable
alternative  fuel  sources.

THE  N-VIRO  PROCESS

     The  N-Viro Soil Process involves mixing wastewater residuals (sludge) with
an  alkaline admixture and then subjecting the mixture to a controlled period of
storage,  mechanical  turning  and  accelerated  drying.  The  N-Viro  Process
stabilizes and pasteurizes the wastewater residuals, reduces odors to acceptable
levels,  neutralizes  or  immobilizes  various constituents and generates N-Viro
Soil  ,  a  product  which  has  a  granular  appearance similar to soil and has
multiple agricultural uses.  N-Viro and its licensees have successfully marketed
and  distributed  all  N-Viro  Soil  product  produced  for  beneficial  reuse.

     The  alkaline  products used in all N-Viro Processes consist of by-products
from  the  cement or lime industry and certain fly ashes from coal-fired systems
used  in  electric  power  generation.  The  particular  admixture  that is used
usually  depends  upon  economics  and  availability in local markets.  We are a
distributor  of  alkaline  admixtures for others.  We also work with established
by-product  marketers to identify and utilize available materials.  We generally
charge  a  mark-up  over our cost for alkaline admixtures sold to third parties.

     Our original N-Viro Process was enhanced in the 1990's with the addition of
advanced  mechanical drying known as the N-Viro BioDry process.  BioDry had been
successfully  implemented  in  five  plants  operating  in  Canada.

N-VIRO  FUEL(TM)

     N-Viro  Fuel  is  a  relatively new and patented biomass alternative energy
fuel  process  that  produces  a  product  that  has  physical  and  chemical
characteristics  similar  to  certain  coals  and  is  created  from  municipal
biosolids,  collectable  animal manure, pulp and paper sludge and possibly other
organic  wastes.  N-Viro  Fuel is manufactured by blending the waste material(s)
with  one  or more alkaline products, followed by thorough drying of the mixture
using  a  thermal  evaporative  process.  The  resulting  product  can be easily
blended  with  coal, waste coal, petroleum coke and/or other biomass-type fuels,
and burned as a partial fuel substitute in combustion power plants.  N-Viro Fuel
has  satisfied initial guidelines set forth by the U.S. Environmental Protection
Agency  (EPA) to qualify as an alternative energy source that may be utilized in
commercial  power  generation  subject  to  state  permitting.  The  N-Viro Fuel
technology,  utilizing an alkaline/heat process to produce a fuel product, still
satisfies  all  requirements  of  the USEPA 40 CFR part 503 regulations and is a
safe  product  usable  for  agriculture  as  well  as  for  energy  production.

     Our  N-Viro  Fuel  technology  can  convert  waste products presently being
landfilled  or land applied into safe, beneficial and renewable long-term energy
solutions  as  part  of a renewable-energy economy.  Attaining this status means
that  N-Viro  Fuel  technology  is now a likely candidate to qualify for certain
economic  incentives that may be granted to alternative energy technologies, and
a  catalyst  for  obtaining  permits more efficiently in each state.  We plan to
accelerate  our  development  efforts as this designation is an important factor
for  our  potential  energy  partners.

N-VIRO  PROCESS  FACILITIES

     Our  first  N-Viro  processing  facility is located in Toledo, Ohio and has
been  managed  by  us  through  a contract management agreement with the City of
Toledo  since  our  inception.  Revenue generated from and related to the Toledo
operation  accounted  for  about  22%  of our total revenue in 2010.  Under this
contract, we process Toledo's wastewater biosolids and sell the resulting N-Viro
Soil  product to the agricultural market throughout Northwest Ohio.  The current
contract  has  been  extended  several times, including 2004, 2009, and twice in
2010.  The  current extension runs until September 30, 2011, and is presently in
its twenty-second year of operation.  We consider our relationship with the City
of Toledo to be satisfactory.  However, there can be no assurances that the City
will  continue  to extend on a short-term basis or sign a new long-term contract
with  us  beyond  September  30,  2011.

     Florida  N-Viro,  LP, a wholly-owned subsidiary we fully acquired effective
January  1,  2007,  has been in continuous operation since 1995 in Florida.  The
Florida  facility  is located in Volusia County and presently processes regional
biosolids  for  multiple  communities  and  maintains contracts with the City of
Altamonte  Springs, the City of Oviedo, Seminole County, the City of Palm Coast,
the  City  of  Port Orange, the Tohopekaliga Water Authority and Volusia County.
Additionally,  the  company  works  with  other  regional  biosolids  management
companies  and  has worked with other municipalities with short-term and interim
agreements.

     Florida  N-Viro  derives  revenue  from  several  sources.  Each  municipal
customer  compensates  N-Viro  for  the  processing  of  their  waste materials.
Florida  N-Viro  also  receives  revenue  from  utilizing  the alkaline products
produced  by  regional  power  utilities, including Cedar Bay Generating, thru a
supply  agreement  with  Headwaters  Corporation  and  Jacksonville  Electric
Authority.  We  have  also been successful in marketing our N-Viro Soil to local
agricultural  markets.

     Our  Volusia  County  facility  operates under and is regulated by a permit
issued by the Florida Department of Environmental Quality.  We believe we have a
satisfactory  operating  history  and  positive relationship with the regulatory
agencies.  We  lease the processing facility from Volusia County and renewed our
five  year  contract  and  lease  agreement for the third time in 2010.  Florida
N-Viro  represented  74%  of  our total revenue in 2010, and this percentage and
total  revenues  have  been escalating using N-Viro's regional processing model.

SALES  AND  MARKETING  OF  N-VIRO  PROCESS

     We market our technologies principally through internal sales efforts.  All
domestic sales and marketing are controlled by management.  The primary focus of
our  marketing  efforts is towards the full commercialization of our N-Viro Fuel
technologies.

     The  N-Viro Fuel market requires us to work within two different and unique
regulatory  segments.  First,  our N-Viro Fuel facilities must satisfy biosolids
permit  requirements  for the 40 CFR Part 503 regulations.  Second, the finished
fuel  product must comply with each individual power generator's emission permit
requirements.  To  accomplish  this requirement to satisfy air permitting in the
power generation facilities, N-Viro has procured, permitted, constructed and now
operates  a  mobile  facility  to produce N-Viro Fuel on a commercial full-scale
basis.  We  will  use  this  facility  to  demonstrate  the effectiveness of our
process  at  discrete  locations  with  the  purpose of meeting the requirements
necessary  to  ultimately  permit,  build, own and operate permanent N-Viro Fuel
processing  facilities.  We can provide no assurance in our ability to negotiate
long-term  arrangements  from  the  mobile  facility's  performance.

INTERNATIONAL  SALES  AND  MARKETING

     In  certain  countries  outside  the  United States, we sell or license the
N-Viro  Process  through  agents.  In  their  respective territories, the agents
market  licenses  for  the  N-Viro  Processes, serve as distributors of alkaline
admixture,  oversee  quality control of the installed N-Viro facilities, enforce
the  terms  of the license agreements with licensees and market N-Viro Soil.  In
general,  the  agents  have paid one-time, up-front fees to us for the rights to
market  or  use  the N-Viro Process in their respective territories.  Typically,
the  agreements  with  the  agents  provide  for  us to receive a portion of the
up-front  license fees, ongoing royalty fees paid by the licensees, a portion of
the proceeds from the distribution and resale of alkaline admixture and the sale
of N-Viro Soil.  Agents have total responsibility and control over the marketing
and  contracts  for N-Viro technology, subject only to license models or minimum
agreements  with  us.

The  following  table  sets  forth our Agents and the territorial rights of each
Agent:

Agent                                Territory
-------------------                  --------------------------------
VC  Energy  I,  LLC                  China,  Indiana  and  Texas
CRM  Technologies                    Israel,  Greece  and  Eastern  Europe


EARNINGS  VARIATION  DUE TO BUSINESS CYCLES AND SEASONAL FACTORS.  Our operating
results  can  experience  quarterly or annual variations due to business cycles,
seasonality  and  other  factors.  During  the  last  fiscal  quarter  of  2010,
approximately  97%  of  our  revenue was from management-run operations, 3% from
other domestic third party agreements and 0% from foreign agreements or research
and  development grants.  Sales of the N-Viro technology are affected by general
fluctuations  in  the  business  cycles  in  the  United  States  and worldwide,
instability of economic conditions and interest rates, as well as other factors.

     RISKS OF DOING BUSINESS IN OTHER COUNTRIES.  We conduct a very small amount
of  business  in markets outside the United States, and expect to continue to do
so.  In addition to the risk of currency fluctuations, the risks associated with
conducting  business  outside  the  United States include: social, political and
economic instability; slower payment of invoices; underdeveloped infrastructure;
underdeveloped legal systems; and nationalization.  We have not entered into any
currency  swap  agreements which may reduce these risks.  We may enter into such
agreements  in the future if it is deemed necessary to do so.  We cannot predict
the  full  impact  of  this  economic  instability, but it could have a material
adverse  effect  on  revenues  and  profits.

RESEARCH  AND  DEVELOPMENT

     We  continue  to  investigate  methods  to shorten drying time, improve the
N-Viro  Fuel  process,  substitute  various  other materials for use as alkaline
admixtures,  and  improve  the  quality  and  attractiveness of N-Viro Fuel to a
variety  of  end-users.  We  see  opportunities to improve the efficiency of our
process  through  the  utilization  of  alterative heat sources such as methane,
waste  heat  solid fuel and gasification technologies, as viable alternatives to
the  use  of  natural  gas  for  process  drying.

     In  2007  we  performed a full scale test of the N-Viro Fuel product at the
T.B.  Simon Power Plant located on the campus of Michigan State University.  The
successful  results  of this first full test encouraged us to focus primarily on
the  development  of  the  N-Viro  Fuel  technology.

PATENTS  AND  PROPRIETARY  RIGHTS

     We  have  several  patents  and  licenses  relating  to  the  treatment and
processing  of  biosolids.  While  there  is  no one single patent that is alone
material to our business, we believe that our aggregate patents are important to
our  prospects  for  future  success.  However, we cannot be certain that future
patent  applications will successfully be issued as patents, or that any already
issued  patents  will give us a competitive advantage.  It is also possible that
our  patents  could be successfully challenged or circumvented by competitors or
other  parties.  In  addition,  we cannot assure that our treatment processes do
not  infringe  on patents held by third-parties or their proprietary rights.  We
are  aware  of  no  such  infringement,  however.

     We  hold  several  patents  relating  to  N-Viro  Fuel.  In the N-Viro Fuel
process,  waste  products, which can include domestic sewage sludge, manures and
other  materials,  are  treated  with mineral by-products, dried by a mechanical
dryer,  and converted into a renewable fuel that can be used as a substitute for
coal in coal-fired boilers and kilns.  We are actively marketing the N-Viro Fuel
process  in  response to the national policy encouraging both alternative energy
generation  as  well as attaining the highest and best reuse of waste materials.

     Some  early  N-Viro  patents were developed jointly with the former Medical
College of Ohio, now under the name of the University of Toledo ("UT").  Because
of  the  joint  development  of  early  N-Viro  patents  with  UT, we agreed the
licensing  of  these early patents would generate a royalty payable by us to UT.
We  also  agreed  with UT that claims to the traditional N-Viro Soil process was
one-quarter  of  one  percent  (1/4%)  of technical revenues until expiration of
those  patents.  UT  rights  to  BioBlend  and certain other N-Viro technologies
range from 2% to 4% of technical revenues derived from these newer technologies.
Cumulative  royalties  paid  to  UT through December 31, 2010 were approximately
$65,000,  and no amount was expensed during 2010, 2009 or 2008.  UT has no claim
to  the  N-Viro  Fuel  technologies  or  process.

     In  addition,  we  make use of our trade secrets or "know-how" developed in
the  course  of  our experience in the marketing of our services.  To the extent
that  we  rely  upon  trade  secrets, unpatented know-how and the development of
improvements  in  establishing  and  maintaining  a competitive advantage in the
market  for  our  services,  we  can  provide no assurance that such proprietary
technology  will  remain  a  trade  secret  or  that  others  will  not  develop
substantially  equivalent or superior technologies to compete with our services.

INDUSTRY  OVERVIEW

     Under  the  Part  503  Regulations,  landfills,  surface  disposal  and
incineration  remain permissible sludge management alternatives.  However, these
conventional  disposal  options have become subject to more stringent regulatory
standards.  The  vast  majority  of states have enacted site restrictions and/or
other  management  practices  governing  the  disposal of sludge in landfills or
surface  disposal.  Amendments  to  the Clean Air Act governing incineration and
disposal  of  residual  ash  also  impose  stricter  air  emission standards for
incineration in general, and the Part 503 Regulations impose additional specific
pollutant  limits  for  sludge  to  be  incinerated  and  for  the resulting air
emissions.

     Surface  disposal  of  sludge involves the placement of sludge on the land,
often  at  a  dedicated  site  for  disposal purposes.  The Part 503 Regulations
subject  surface  disposal  to  increased  regulation  by requiring, among other
things,  run-off and leachate collection systems, methane monitoring systems and
monitoring of, and limits on, pollutant levels.  In addition, sludge placed in a
surface  disposal site are often required to meet certain standards with respect
to pathogen levels relating to coliform or salmonella bacteria counts ("Class B"
pathogen  levels),  levels  of  various  pollutants,  including  metals,  and
elimination  of  attractiveness  to  pests,  such  as  insects  and  rodents.

     Land  application  for beneficial use involves the application of sludge or
sludge-based  products,  for  non-disposal  purposes,  including  agricultural,
silvicultural  and  horticultural uses and for land reclamation.  Under the Part
503  Regulations,  N-Viro  Soil  is  a  product  that  meets  certain  stringent
standards.  "Class  A" pathogen levels", levels of various pollutants, including
metals, and elimination of attractiveness to pests, such as insects and rodents,
are  considered  by  the  EPA to be "exceptional quality" products.  The Class A
pathogen  levels  are  significantly  more  stringent  than the Class B pathogen
levels.

     "Exceptional  quality"  products are treated by the USEPA as safe products,
thereby  exempting  these  products from many federal restrictions on their use.
All N-Viro products that are produced according to N-Viro Process specifications
meet  the  pollutant  concentration  limits and other standards set forth in the
Part  503 Regulations, and therefore qualify as an "exceptional quality" product
that  exceeds  the  USEPA's  standards  for  unrestricted  use.

COMPETITION

     We  are in direct and indirect competition with other businesses, including
disposal  and  other  wastewater  sludge treatment businesses, some of which are
larger  and  more  firmly  established  and  may  have  greater  marketing  and
development  budgets  and  capital resources than us.  There can be no assurance
that  we will be able to maintain a competitive position in the sludge treatment
industry.

     We  compete against companies in a highly competitive market and have fewer
resources  than  many  of  those  companies.  Our  business  competes within and
outside  the  United  States principally on the basis of pricing, reliability of
our  services  provided,  product quality, specifications and technical support.
Competitive  pressures  and other factors could cause us to lose market share or
could  result  in  decreases  in  prices,  either of which could have a material
adverse  effect  on  our  financial  position  and  results  of  operation.

ENVIRONMENTAL  REGULATION

     Various  environmental protection laws have been enacted and amended during
recent  decades  in  response  to  public  concern  over  the  environment.  Our
operations and those of our licensees are subject to these evolving laws and the
implementing regulations.  The primary United States environmental laws which we
believe  may  be  applicable  to  the N-Viro Process and the land application of
N-Viro  SoilTM  include  Resource  Conservation  and  Recovery Act ("RCRA"), the
Federal  Water  Pollution  Control  Act  of  1972  ("Clean  Water  Act"),  the
Comprehensive  Environmental  Response,  Compensation,  and  Liability  Act,
("CERCLA")  and  the  Pollution  Prevention  Act  of  1990  ("PPA").  These laws
regulate  the  management  and  disposal  of  wastes,  control  the discharge of
pollutants  into  the  water,  provide  for the investigation and remediation of
contaminated land and groundwater resources and establish a pollution prevention
program.  In  addition, various states have implemented environmental protection
laws  that are similar to the applicable federal laws.  States also may require,
among  other  things,  permits to construct N-Viro facilities and to sell and/or
use  N-Viro  SoilTM.  There  can  be  no assurance that any such permits will be
issued.

     The  Part  503  Regulations.  Historically,  sludge management has involved
either  disposal,  principally  by  landfilling, incineration, ocean dumping and
surface disposal, or land application for beneficial use.  Sewage sludge and the
use  and disposal thereof are regulated under the Clean Water Act.  In 1993, the
U.S.  Environmental Protection Agency ("EPA") published the Part 503 Regulations
under the Clean Water Act, implementing the EPA's "exceptional quality" program.
These  regulations  establish  sludge  use  and disposal standards applicable to
public  and  privately-owned  wastewater  treatment plants in the United States,
including  publicly-owned  treatment  works, or POTWs.  Under the Part 503 Regs,
sludge  products  that  meet  certain  stringent  standards are considered to be
"exceptional  quality"  ("Class  A") products and are not subject to any federal
restrictions  on  agricultural  use  or  land  application.  N-Viro  Soil  is an
"exceptional  quality"  product.  Lower  quality  sludge products are subject to
federal  restrictions  governing,  among  other  items, the type and location of
application, the volume of application and the cumulative application levels for
certain  pollutants.  Agricultural application of these lower quality sludges in
bulk amounts also requires an EPA permit.  Agricultural and land applications of
all  sludge  and  sludge products, including N-Viro Soil  and other "exceptional
quality"  products,  are typically subject to state and local regulation and, in
most  cases,  require  a  permit.

     In order to ensure compliance with the Part 503 Regs, we review the results
of  regular  testing of sludge required by the EPA to be conducted by wastewater
treatment  plants,  and it tests N-Viro Soil  produced at N-Viro facilities on a
regular  basis.  In  general, we do not license or permit the ongoing use of the
N-Viro  Process  to  treat  any  sludge  that  may  not  be  processed  into  an
"exceptional quality" sludge product.  Although N-Viro Soil  exceeds the current
federal  standards imposed by the EPA for unrestricted agricultural use and land
application,  state  and  local authorities are authorized under the Clean Water
Act  to  impose  more  stringent requirements than those promulgated by the EPA.
Most  states  require  permits  for  land application of sludge and sludge based
products  and several states have regulations for certain pollutants that impose
more  stringent  numerical  concentration  limits  than  the  federal  rules.

     The  Resource  Conservation and Recovery Act.  RCRA regulates all phases of
hazardous  waste  generation,  management  and  disposal.  Waste  is  subject to
regulation  as  a hazardous waste under RCRA if it is a solid waste specifically
listed  as  a  hazardous  waste  by  the  EPA  or  exhibits  a defined hazardous
characteristic.  Although  domestic  sewage  and mixtures of domestic sewage and
other  wastes  that  pass  through  a  sewer  system  to a POTW are specifically
exempted  from  the  definition  of  solid  waste, once treated by the POTW, the
sewage  sludge  is  considered  a  solid  waste.  Although  neither the alkaline
admixture  nor  wastewater  sludge  used  in the N-Viro Process are regulated as
hazardous  waste  under  RCRA,  states  may  impose  restrictions  that are more
stringent  than federal regulations.  Accordingly, the raw materials used in the
N-Viro  Process  may  be  regulated  under  some  state  hazardous waste laws as
"special wastes," in which case specific storage and record keeping requirements
may  apply.

     The Comprehensive Environmental Response, Compensation and Liability Act of
1980.  CERCLA  imposes  strict,  joint  and  several  liability  upon owners and
operators  of  facilities  where a release of hazardous substances has occurred,
upon  parties  who generated hazardous substances into the environment that were
released at such facilities and upon parties who arranged for the transportation
of hazardous substances to such facilities.  We believe the N-Viro Process poses
little  risk  of  releasing  hazardous  substances  into  the  environment  that
presently  could  result  in  liability  under  CERCLA.

     Other Environmental Laws.  The Pollution Prevention Act of 1990 establishes
pollution  prevention as a national objective, naming it a primary goal wherever
feasible.  The  act  states  that where pollution cannot be prevented, materials
should  be  recycled  in  an  environmentally  safe manner.  We believe that the
N-Viro  Process  contributes to pollution prevention by providing an alternative
to  disposal.

     State  Regulations.  State regulations typically require an N-Viro facility
to  obtain  a  permit for the sale of N-Viro Soil  for agricultural use, and may
require  a  site-specific  permit  by the user of N-Viro Soil .  In addition, in
some  jurisdictions,  state  and/or  local  authorities  have  imposed  permit
requirements  for,  or have prohibited, the land application or agricultural use
of sludge products, including "exceptional quality" sludge products.  Certain of
our  licensees  operate in jurisdictions that require permits and have been able
to  obtain them for the N-Viro product.  There can be no assurance that any such
permits  will  be issued or that any further attempts to require permits for, or
to  prohibit,  the  land application or agricultural use of sludge products will
not  be  successful.

     In addition, many states enforce landfilling restrictions for non-hazardous
sludge.  These  regulations  typically  require  a  permit to sell or use sludge
products  as  landfill  cover  material.  There  can be no assurance that N-Viro
facilities  or  landfill  operators  will  be  able  to obtain required permits.

     Environmental  impact  studies  may  be  required  in  connection  with the
development  of  future  N-Viro  facilities.  Such  studies  are  generally time
consuming  and  may  create  delays  in  the construction process.  In addition,
unfavorable  conclusions reached in connection with such a study could result in
termination  of or expensive alterations to the N-Viro facility being developed.

     The costs of compliance are typically borne by our licensees, except in the
case  of  direct  sludge  processing into a facility.  Normally this cost is not
material  to  us  in  relation  to  the  total  contract  revenue.

EMPLOYEES

     As  of  December  31, 2010, we had 34 employees.  Six of our employees were
engaged  in  sales  and  marketing; three were in finance and administration and
twenty-five were in operations.  We consider our relationship with our employees
to  be  satisfactory.

     We are a party to a collective bargaining agreement (the "Labor Agreement")
covering  two  employees  of  National  N-Viro  Tech,  Inc.,  our  wholly-owned
subsidiary.  The  employees  that are covered by the Labor Agreement work at the
Toledo,  Ohio N-Viro facility, which is operated by us for the City of Toledo on
a  contract  management basis.  These employees are members of the International
Brotherhood  of  Teamsters, Chauffeurs, Warehouseman and Helpers Local Union No.
20,  and  we consider our relationship with the organization to be satisfactory.

CURRENT  DEVELOPMENTS

     We  are  currently  in discussions with several companies in the cement and
fuel/power  generation  industries  for the development and commercialization of
the  patented  N-Viro  Fuel  technology.  There  can  be no assurance that these
discussions  will  be  successful.  We  continue  to focus on the development of
regional biosolids processing facilities.  Currently we are in negotiations with
several  privatization  firms  to  permit  and  develop  independent,  regional
facilities.

     In  response  to the City of Toledo's 2010 Request for Qualifications (RFQ)
issued to identify the waste process to use for the next 10-20 years, our N-Viro
Fuel  process  was  "short  listed"  and the City of Toledo issued a Request for
Proposals  (RFP).  In  response  to  the  RFP, we have joined with two strategic
partners  for  this  project  and  formally  proposed a long-term arrangement to
process  all  of  Toledo  sludge  into  N-Viro  Fuel.

SECURITIES AND EXCHANGE COMMISSION

     As  a  public company, we are required to file periodic reports, as well as
other  information,  with  the  Securities  and Exchange Commission (SEC) within
established  deadlines.  Any  document  we  file  with  the SEC may be viewed or
copied  at  the  SEC's  Public Reference Room at 100 F Street, N.E., Washington,
D.C.  20549.  Additional  information regarding the Public Reference Room can be
obtained  by  calling  the  SEC  at  (800)  SEC-0330.  Our  SEC filings are also
available  to  the  public  through  the  SEC's web site located at www.sec.gov.

     We  maintain  a corporate Web site at www.nviro.com, on which investors may
access  free of charge our annual report on Form 10-K, quarterly reports on Form
10-Q  and amendments to those reports as soon as is reasonably practicable after
furnishing such material with the SEC.  In addition, we will voluntarily provide
electronic  or  paper copies of our filings free of charge upon request to James
K.  McHugh,  our  Chief  Financial  Officer,  at (419) 535-6374 or via e-mail to
jmchugh@nviro.com.

ITEM 1A.     RISK FACTORS

WE HAVE A HISTORY OF LOSSES AND THERE CAN BE NO ASSURANCES REGARDING IF AND WHEN
WE  WILL  ACHIEVE  PROFITABILITY.  IF  WE  ARE  UNABLE  TO  ACHIEVE  PROFITABLE
OPERATIONS,  WE MAY NEED TO RAISE ADDITIONAL CAPITAL TO CONTINUE OUR OPERATIONS,
WHICH MAY NOT BE AVAILABLE ON COMMERCIALLY REASONABLE TERMS OR AT ALL, AND WHICH
MAY  DILUTE  OUR  STOCKHOLDERS.

     Since  2000,  we  have  experienced  net  losses  and  we  have  not  been
consistently  profitable  on  an annual basis.  For the years ended December 31,
2010  and  2009,  we  incurred  net  losses  of  $3.0  million and $2.4 million,
respectively.  We  believe  our  history  of  net losses is primarily due to our
inability  to  add  enough new sources of revenue to replace decreasing business
from  existing  sources  of  revenue  and, more recently, through a shift of our
business  toward  lower  margin  products  and services.  Further, for the years
ended  December  31,  2010  and  2009,  we experienced much higher than expected
expenditures  for  stock-related fees and compensation in excess of our increase
in  gross  revenue.  To  achieve  profitability,  we  must  accomplish  numerous
objectives,  including  growth  in our business, the development of new products
and commercial relationships, and decreasing our costs.  We can not foresee with
any certainty whether we will be able to achieve these objectives in the future.
Accordingly,  we  may  not  generate  sufficient  net  revenue  to  achieve
profitability.

FAILURE  TO  MAINTAIN  EFFECTIVE INTERNAL CONTROLS COULD HAVE A MATERIAL ADVERSE
EFFECT  ON  OUR  BUSINESS,  OPERATING  RESULTS  AND  STOCK  PRICE.

     We  have  evaluated  and  will  continue  to  evaluate our internal control
procedures  in  order  to  satisfy  the  requirements  of  Section  404  of  the
Sarbanes-Oxley Act, which requires an annual management assessment of the design
and  effectiveness  of  our internal controls over financial reporting.  We have
previously  identified  a  material  weakness  in  our  internal  controls  over
financial  reporting  due  to  a  lack  of personnel to sufficiently monitor and
process transactions.  Due to our continuing lack of financial resources to hire
and  train  accounting  and  financial  personnel, we have not yet remedied this
material  weakness.  While  we are not aware of any material errors to date, our
inability  to  maintain  the adequate internal controls may result in a material
error  in  our  financial  statements.  Moreover,  effective  internal controls,
particularly  those  related  to  revenue  recognition,  are necessary for us to
produce  reliable  financial  reports  and  are  important  to  helping  prevent
financial  fraud.  If we experience a material error in our financial statements
or  if  we  cannot  provide  reliable  financial  reports  or prevent fraud, our
business  and operating results could be harmed, investors could lose confidence
in  our reported financial information, and the trading price of our stock could
drop  significantly.

COMPLIANCE  WITH ENVIRONMENTAL LAWS AND REGULATIONS MAY REDUCE, DELAY OR PREVENT
OUR  REALIZATION  OF  LICENSE  REVENUES.

     Our  licensees  and  their  operations  are  subject to increasingly strict
environmental laws and regulations, including laws and regulations governing the
emission,  discharge,  disposal  and  transportation  of  certain substances and
related  odor.  Wastewater  treatment  plants  and  other  plants  at  which our
biosolids  products or processes may be implemented are usually required to have
permits,  registrations and/or approvals from state and/or local governments for
the  operation  of  such  facilities.  Some of our licensee's facilities require
air,  wastewater,  storm  water,  biosolids  processing,  use or siting permits,
registrations  or  approvals.  These  licensees  may  not be able to maintain or
renew  their  current  permits  or  registrations  or  to  obtain new permits or
registrations.  The  process  of obtaining a required permit or registration can
be lengthy and expensive.  They may not be able to meet applicable regulatory or
permit  requirements,  and therefore may be subject to related legal or judicial
proceedings  that  could  have a materially adverse effect on our income derived
from  these  licensees.

     Any  of  the  permits,  registrations  or approvals noted above, or related
applications  may be subject to denial, revocation or modification, or challenge
by  a  third  party,  under  various  circumstances.  In  addition,  if  new
environmental  legislation or regulations are enacted or existing legislation or
regulations  are  amended  or  are  enforced differently, these licensees may be
required  to  obtain  additional,  or  modify  existing,  operating  permits,
registrations  or  approvals.

     Maintaining,  modifying  or  renewing  current  permits or registrations or
obtaining  new  permits  or registrations after new environmental legislation or
regulations  are  enacted  or existing legislation or regulations are amended or
enforced  differently may be subject to public opposition or challenge.  Much of
this  public opposition and challenge, as well as related complaints, relates to
odor  issues,  even  when our licensees are in compliance with odor requirements
and  even  though  the  licensees  have  worked hard to minimize odor from their
operations.  Public misperceptions about the business and any related odor could
influence  the governmental process for issuing such permits or registrations or
for  responding  to  any  such public opposition or challenge.  Community groups
could  pressure  local municipalities or state governments to implement laws and
regulations  which  could increase our licensees' costs of their operations that
in  turn  could have a material and adverse effect on our business and financial
condition.

OUR  ABILITY  TO GROW OUR REVENUES AND OPERATIONS MAY BE LIMITED BY COMPETITION.

     We  provide  a variety of technology and services relating to the treatment
of  wastewater  residuals.  We are in direct and indirect competition with other
businesses  that  provide  some  or  all of the same services including regional
residuals  management  companies  and  national  and  international  water  and
wastewater  operations/privatization  companies, technology suppliers, municipal
solid  waste  companies  and  farming operations.  Many of these competitors are
larger  and  have  significantly  greater  capital  resources.

     We derive a substantial portion of our revenue from services provided under
municipal  contracts,  and many of these are subject to competitive bidding.  We
also  intend  to  bid on additional municipal contracts, however, and may not be
the  successful  bidder.  In  addition, some of our contracts will expire in the
future  and  those  contracts  may  not  be  renewed  or  may be renewed on less
attractive  terms.  If  we  are not able to replace revenues from contracts lost
through competitive bidding or from the renegotiation of existing contracts with
other  revenues  within  a reasonable time period, the lost revenue could have a
material  and adverse effect on our business, financial condition and results of
operation.

OUR  CUSTOMER CONTRACTS MAY BE TERMINATED PRIOR TO THE EXPIRATION OF THEIR TERM.

     A  substantial  portion  of  our  revenue is derived from services provided
under  contracts  and  agreements  with  existing  licensees.  Some  of  these
contracts,  especially  those  contracts  with large municipalities, provide for
termination  of  the contract by the customer after giving relative short notice
(in  some  cases  as  little as ten days).  In addition, some of these contracts
contain  liquidated  damages clauses, which may or may not be enforceable in the
event  of  early termination of the contracts. If one or more of these contracts
are  terminated  prior  to  the  expiration  of its term, and we are not able to
replace  revenues  from  the  terminated  contract or receive liquidated damages
pursuant  to  the  terms of the contract, the lost revenue could have a material
and  adverse  effect  on  our  business,  financial  condition  and  results  of
operations.

A  SIGNIFICANT  AMOUNT  OF OUR BUSINESS COMES FROM A LIMITED NUMBER OF CUSTOMERS
AND  OUR REVENUE AND PROFITS COULD DECREASE SIGNIFICANTLY IF WE LOST ONE OR MORE
OF THEM AS CUSTOMERS.  FURTHER, THE AGREEMENT WITH OUR MOST SIGNIFICANT CUSTOMER
EXPIRES  IN SEPTEMBER 2011, AND OUR FAILURE TO RENEW THAT AGREEMENT ON FAVORABLE
TERMS  WOULD  LIKELY  HAVE  A MATERIAL ADVERSE EFFECT ON OUR BUSINESS, FINANCIAL
CONDITIONS  AND  RESULTS  OF  OPERATIONS.

     Our  business  depends  on  providing  services  to  a  limited  number  of
customers.  One  or  more  of  these customers may stop contracting for services
from us or may substantially reduce the amount of services we provide them.  Any
cancellation, deferral or significant reduction in the services we provide these
principal customers or a significant number of smaller customers could seriously
harm  our  business  and  financial condition.  For the years ended December 31,
2010  and  2009, our single largest customer accounted for approximately 22% and
32%,  respectively,  of  our  revenues and our top three customers accounted for
approximately  60%  and  65%, respectively, of our revenues.  Our agreement with
our  largest  customer  - which represented approximately 22% of our revenues in
2010  -  is  due  to  expire at the end of September 2011.  We are attempting to
negotiate  either  a renewal of that agreement or the issuance of a new contract
for a new facility, but we cannot assure you that we will be able to secure such
a  renewal/new agreement at all or on terms that are as favorable as the current
agreement.  Our  failure to renew that agreement on favorable terms would likely
have a material adverse effect on our business, financial conditions and results
of  operations.

THE  CURRENT ECONOMIC DOWNTURN MAY CAUSE US TO EXPERIENCE DELAYS OF PAYMENT FROM
OUR  CUSTOMERS.

     Our  accounts  receivable  are  derived  primarily  from municipal or local
governments.  Although our collection history has been good, from time to time a
customer  may not pay us on a timely basis because of adverse market conditions.
In  light  of  the  current  economic  downturn,  we  may experience larger than
expected  delays  in  receiving  payments on our accounts receivable.  Given our
history  of losses and our limited cash resources, any significant payment delay
by  one  of our customers, may force us to delay payment to our creditors, which
may  have a material and adverse effect on our business, financial condition and
results  of  operations.

WE  ARE  AFFECTED  BY  UNUSUALLY  ADVERSE  WEATHER  CONDITIONS.

     Our  present  business  is adversely affected by unusual weather conditions
and unseasonably heavy rainfall which can temporarily reduce the availability of
land  application  sites  in  close  proximity  to our operations.  In addition,
revenues  and  operational  results  are  adversely  affected  during  months of
inclement  weather  which  limits  the  amount  of  land application that can be
performed.  Long  periods  of  adverse  weather  could  have a material negative
effect  on  our business and financial condition.  For example, our Toledo, Ohio
operation  is  affected  by unusually adverse weather conditions by lowering the
demand  for  N-Viro  Soil(TM)  distribution to the local agricultural community.

FUEL  COST  VARIATION COULD ADVERSELY AFFECT OUR OPERATING RESULTS AND EXPENSES.

     The  price  and  supply  of  fuel  is unpredictable and fluctuates based on
events  outside  our  control, including demand for oil and gas, actions by OPEC
and  other  oil  and gas producers, and war in oil producing countries.  Because
fuel  is  needed  for  the  trucks  that  transport the processing materials and
supplies  for  our  operations and customers, price escalations or reductions in
the  supply  of  fuel  could increase our operating expenses and have a negative
impact on the results of operations.  We are not always able to pass through all
or  part  of  the  increased  fuel  costs due to the terms of certain customers'
contracts  and  the  inability  to negotiate such pass through costs in a timely
manner.

WE  ARE HIGHLY DEPENDENT ON THE SERVICES OF OUR MANAGEMENT TEAM, THE LOSS OF ANY
OF  WHOM  MAY  HAVE  A  MATERIAL  ADVERSE  EFFECT  ON OUR BUSINESS AND FINANCIAL
CONDITION.

     We recently entered into new employment agreements with our Chief Executive
Officer, Timothy Kasmoch, our Executive Vice President and Chief Counsel, Robert
Bohmer  and  our  Chief  Financial Officer, James McHugh, each of which contains
non-compete  and other provisions.  The laws of each state differ concerning the
enforceability  of non-competition agreements.  We cannot predict with certainty
whether  or  not  a  court  will  enforce  a  non-compete  covenant in any given
situation  based on the facts and circumstances at that time.  If one of our key
executive  officers  were  to leave our employ and the courts refused to enforce
the  non-compete  covenant,  we might be subject to increased competition, which
could  have  a  material  and  adverse  effect  on  our  business  and financial
condition.

OUR  INTELLECTUAL  PROPERTY  MAY  BE  MISAPPROPRIATED  OR  SUBJECT  TO CLAIMS OF
INFRINGEMENT.

     We  attempt  to  protect  our  intellectual  property  rights  through  a
combination  of  patent, trademark, and trade secret laws, as well as the use of
non-disclosure  and  licensing  agreements.  Our  failure  to obtain or maintain
adequate  protection  of  our  intellectual property rights for any reason could
have  a  material  adverse  effect  on  our  business  and  financial condition.

     Our competitors, many of whom have substantially greater resources and have
made  substantial investments in competing technologies, may have applied for or
obtained,  or may in the future apply for and obtain, patents that will prevent,
limit  or  otherwise  interfere  with  our  ability  to  offer  services.

     We  also  rely  on  unpatented proprietary technology.  It is possible that
others  will  independently  develop the same or similar technology or otherwise
obtain  access  to  our unpatented technology.  If we are unable to maintain the
proprietary  nature  of  our  technologies,  we  could  be  materially adversely
affected.

THERE  IS ONLY A LIMITED TRADING MARKET FOR OUR COMMON STOCK, AND IT IS POSSIBLE
THAT  YOU  MAY  NOT  BE  ABLE  TO  SELL  YOUR  SHARES  EASILY.

     There is currently only a limited trading market for our common stock.  Our
common  stock  trades  on  the OTCQB, which is one of the quotation services for
SEC-registered  and  reporting  companies  that  trade  over  the  counter ("OTC
Markets"),  under  the  symbol  "NVIC",  with limited trading volume.  We cannot
assure  you  that  a  trading  market  will  exist  for  our  common  stock.

WE HAVE NEVER PAID DIVIDENDS ON OUR SHARES OF COMMON STOCK.

     We  have not paid any cash dividends on our common stock heretofore, and we
have  no  present  intention  of  paying  any cash dividends for the foreseeable
future.  Any  determination  to  pay  dividends  in  the  future  will be at the
discretion  of  the  board  of  directors.

VOLATILITY  IN THE TRADING PRICE OF OUR COMMON STOCK COULD NEGATIVELY IMPACT THE
PRICE  OF  OUR COMMON STOCK, AND MAY ELIMINATE A SOURCE OF OUR POTENTIAL REVENUE
FROM  EXERCISES  OF  STOCK  OPTIONS  AND  STOCK  PURCHASE  WARRANTS.

     During  the  period from January 1, 2009 through March 21, 2011, our common
stock  closing price fluctuated between a high of $3.85 and a low of $1.20.  The
trading  price  of  our  common  stock  could be subject to wide fluctuations in
response  to  many  factors,  some  of  which  are beyond our control, including
general  economic  conditions,  the thinly-traded nature of our common stock and
the  outlook  of  analysts  and investors on our industry.  Further, significant
market  fluctuations, such as over the past six months, may adversely affect the
trading  price of our common stock.  Over the past several years, we have relied
on,  in  part,  exercises  of  stock  options by current and former officers and
directors  and  stock  purchase  warrants by investors for operating cash.  Wide
fluctuations  in  the  price  of  our  common stock or a stock price that is not
significantly above the exercise price of outstanding stock options or warrants,
would  likely  reduce  future  exercises of stock options or warrants, and which
would  reduce  or  eliminate  a  historic  source  of  cash  for our operations.

ITEM 2.     PROPERTIES

     Through April 2011, our executive and administrative offices are located in
Toledo,  Ohio,  under  a month to month lease.  We believe our relationship with
our lessor is satisfactory.  The total rental expense for this location included
in  the  statements  of operations for each of the years ended December 31, 2010
and  2009  is  approximately  $38,500  and $37,600, respectively.  We also lease
various  equipment  on  a  month-to-month  basis.  In March 2011, we signed a 68
month  lease  with  a new lessor in Toledo.  The total minimum rental commitment
for  the  year  ending  December  31, 2011 is approximately $15,600, for 2012 is
$37,400, for 2013 is $30,600 and for the years 2014 through 2016 is $40,800 each
year.

     In  October  2010,  the  Company  began  to lease the property in Emlenton,
Pennsylvania  under  a lease with A-C Valley Industrial Park, for one year.  The
total minimum rental commitment for the year ended December 31, 2011 is $18,000.
The total rental expense included in the statements of operations for the twelve
months  ended  December  31,  2010  is  $6,000.

     In  June  2009, the Company began to maintain an office in West Unity, Ohio
under  a lease with D&B Colon Leasing, LLC, for one year, which was extended for
a  one-year  term through May 2011.  The total minimum rental commitment for the
year  ended  December 31, 2011 is $12,500.  The total rental expense included in
the  statements  of operations for the twelve months ended December 31, 2010 and
2009  is  $30,000  and  $17,500,  respectively.

     The  Company  maintains  an  office in Daytona Beach under a lease with the
County  of  Volusia,  Florida,  which was renewed in March, 2009 for five years.
The  total  minimum  rental  commitment  for  the years ending December 31, 2011
through  2013  is  $48,000 each year, and for 2014 is $12,000.  The total rental
expense  included  in the statements of operations for each of the twelve months
ended  December  31,  2010  and  2009  is  $48,000.

     The  Company also leased other processing equipment at its Florida location
which began in February 2008 under a three-year lease.  The total minimum rental
commitment  for  the  year ending December 31, 2011 is $4,000.  The total rental
expense  included  in the statements of operations for each of the twelve months
ended  December  31,  2010 and 2009 is approximately $46,200.  In February 2011,
the  Company  purchased  the  equipment  through a financing arrangement with an
equipment  leasing  company.

     Through  January  2010, the Company also leased processing equipment at the
Florida  location  which  began  in  2006 under a four year contract.  The total
rental  expense  included  in the statements of operations for the twelve months
ended  December  31,  2010  and  2009  was  approximately  $3,000  and  $31,000,
respectively.  In  February  2010, the Company purchased the equipment through a
financing  arrangement  with  an  equipment  leasing  company.

     Management  believes  that  all of our properties are adequately covered by
insurance.

ITEM 3.     LEGAL PROCEEDINGS

     The  Company's  facility in Toledo, Ohio, utilizes patented technologies to
stabilize  and  disinfect  municipal  bio-solids pursuant to a permit to install
from  the  Ohio EPA that requires emissions be vented to a scrubber.  In July of
2008,  an inspection of the facility by local regulatory officials revealed that
the  scrubber  was not in operation.  In February of 2009, the Company agreed to
enter  into  an  administrative  consent  decree  with  the  Ohio  Environmental
Protection  Agency  ("Ohio  EPA")  that resolved, without any admission of fact,
violation,  or  liability,  Ohio  EPA's  claims  that  the  Company operated the
scrubber,  an  air  contaminant  source,  in violation of its permit to install.
Pursuant  to  the terms of the consent decree, the Company agreed to pay a civil
penalty  in  the  amount  of  $20,000.  The  entire  penalty was paid, in timely
installments  from  April  2009  to  April  2010.

     From  time to time we are involved in legal actions arising in the ordinary
course  of business.  With respect to these matters, we believe we have adequate
legal defenses and/or provided adequate accruals for related costs such that the
ultimate outcome will not have a material adverse effect on our future financial
position  or  results  of  operations.


ITEM  4.     (REMOVED  AND  RESERVED)


<PAGE>


                                    PART II

ITEM  5.     MARKET  FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS
AND  ISSUER  PURCHASES  OF  EQUITY  SECURITIES

MARKET INFORMATION

     Our  shares  of  Common  Stock are quoted on the OTCQB, which is one of the
quotation  services  for  SEC-registered and reporting companies that trade over
the  counter  ("OTC Markets"), under the symbol "NVIC".  The prices quoted below
reflect inter-dealer prices, without retail mark-up, mark-down or commission and
may not represent actual transactions.  The closing price range per share of the
Common  Stock  since  January  1,  2009,  was  as  follows:

<TABLE>
<CAPTION>

Quarter      High    Low
------------ -----   ----
<S>          <C>    <C>
First 2009   $2.85  $1.20
Second 2009  $2.70  $1.65
Third 2009   $2.75  $1.91
Fourth 2009  $2.80  $1.95
First 2010   $2.39  $3.85
Second 2010  $2.70  $3.30
Third 2010   $1.95  $3.10
Fourth 2010  $1.51  $3.25

</TABLE>


Our  stock  price  closed  at  $1.53  per  share  on  March  21,  2011.

HOLDERS

     As  of  March 21, 2011, the number of holders of record of our Common Stock
was  approximately  173.

DIVIDENDS

     We  have never paid dividends with respect to our Common Stock.  Payment of
dividends  is  within the discretion of our Board of Directors and would depend,
among other factors, on our earnings, capital requirements and our operating and
financial  condition.

RECENT  SALES  OF  UNREGISTERED  SECURITIES

     None


ITEM  6.     SELECTED  FINANCIAL  DATA

     As  a  smaller  reporting  company  we  are  not  required  to provide this
information  under  Item  301  of  Regulation  S-K.


ITEM  7.     MANAGEMENT'S  DISCUSSION  AND  ANALYSIS  OF FINANCIAL CONDITION AND
RESULTS  OF  OPERATIONS

OVERVIEW

     The  following  is  a discussion of our results of operations and financial
position for the periods described below, and should be read in conjunction with
our Financial Statements and Supplementary Data appearing elsewhere in this Form
10-K.  The  discussion  includes  various  forward-looking  statements about our
markets,  products,  services  and  our  results.  These statements are based on
certain  assumptions that we consider reasonable.  Our actual results may differ
materially  from  these  indicated  forward-looking  statements.  Please  see
"Cautionary  Statement  with  Respect  to  Forward-Looking  Comments"  and "Risk
Factors"  elsewhere  in  this  annual  report  on  Form  10-K.

     The  following  table sets forth, as a percentage of total revenues for the
periods  presented,  revenues  related  to  each  of  (i)  technology fees, (ii)
facility  management,  (iii)  products  and  services:

<TABLE>
<CAPTION>
               For the Year Ended December 31,
                        2010    2009
                       ------  ------
<S>                    <C>     <C>
Technology fees          0.1%    1.1%
Facility management     66.2%   68.4%
Products and services   33.7%   30.5%
                       ------  ------
Totals                 100.0%  100.0%
                       ======  ======
</TABLE>

     Technology  fee  revenue  is  defined  as: royalty revenue, which represent
ongoing  amounts received from licensees for continued use of the N-Viro Process
and  are  typically  based on volumes of sludge processed; license and territory
fees,  which  represent  non-recurring  payments for the right to use the N-Viro
Process  in  a specified geographic area or at a particular N-Viro facility; and
research  and  development  revenue,  which  represent payments from federal and
state  agencies  awarded  to us to fund ongoing site-specific research utilizing
the  N-Viro  technology.

     Facility management revenues are recognized under contracts where we manage
the  N-Viro  Process  ourselves  to  treat  sludge,  pursuant  to  a fixed price
contract.

     Product  and  service  revenue  is  defined as: alkaline admixture revenue,
which  represent  ongoing  payments  from  licensees  arising  from the sale and
distribution  of  alkaline  admixture  by  us  to N-Viro facilities; service fee
revenue  for  the management of alkaline admixture, which represent fees charged
by  us  to  manage  and  sell  the alkaline admixture on behalf of a third party
customer;  N-Viro  SoilTM  sales, which represent revenue received from sales of
N-Viro  Soil  sold  by us; commissions earned on sales of equipment to an N-Viro
facility; and rental of equipment to a licensee or agent; equipment sales, which
represent  the  price  charged  for  equipment  held  for  subsequent  sale.

     Our  policy  is to record the revenues payable to us pursuant to agency and
license  agreements  when  we  have fulfilled our obligations under the relevant
contract,  except  when it pertains to a foreign license agreement.  In the case
of  foreign licenses, revenue is recorded when cash is received and when we have
fulfilled  our  obligations  under  the  relevant  foreign  license  agreement.


<PAGE>

RESULTS  OF  OPERATIONS

     The  following  tables  set  forth,  for the periods presented, (i) certain
items  in  the  Combined  Statement of Operations, (ii) the percentage change of
each such item from period to period and (iii) each such item as a percentage of
total  revenues  in  each  period  presented.

<TABLE>
<CAPTION>

                                       Year Ended        Period to Period     Year Ended
                                       December 31,       Percentage         December 31,
                                         2010                Change              2009
                                       ----------         -------------      -----------
<S>                                    <C>                 <C>               <C>

(Dollars in thousands)
-------------------------------------
COMBINED STATEMENT OF
    OPERATIONS DATA:

Revenues. . . . . . . . . . . . . . .  $5,222              4.0%               $5,021

Cost of revenues. . . . . . . . . . .   4,218              7.8%                3,912
                                       ------                                --------

Gross profit. . . . . . . . . . . . .   1,004             (9.4%)               1,109

Operating expenses. . . . . . . . . .   3,767              5.1%                3,583
                                       ------                                --------

                                       (2,763)                *               (2,474)

Other income (expense). . . . . . . .  (  206)                *                   60
                                       ------                                --------

Loss before income tax expense. . . .  (2,969)                *               (2,414)

Federal and state income tax expense.       0                 *                    0
                                       ------                                --------

Net loss. . . . . . . . . . . . . . . $(2,969)                *              $(2,414)
                                       =======                                =======

</TABLE>


<TABLE>
<CAPTION>


PERCENTAGE OF REVENUES:
<S>                                    <C>                                    <C>
Revenues. . . . . . . . . . . . . . .  100.0%                                  100.0%

Cost of revenues. . . . . . . . . . .   80.8                                    77.9
                                       ------                                --------

Gross profit. . . . . . . . . . . . .   19.2                                    22.1

Operating expenses. . . . . . . . . .   72.2                                    71.4
                                       ------                                --------

                                       (53.0)                                  (49.3)

Other income (expense). . . . . . . .  ( 3.9)                                    1.2
                                       ------                                --------

Loss before income tax expense. . . .  (56.9)                                  (48.1)

Federal and state income tax expense.    0.0                                     0.0
                                       ------                                --------

Net loss. . . . . . . . . . . . . . .  (56.9%)                                 (48.1%)
                                       =======                                 ======

</TABLE>

*     Period  to  period percentage change comparisons have only been calculated
for  positive  numbers.

<PAGE>

COMPARISON  OF  YEAR  ENDED  DECEMBER 31, 2010 WITH YEAR ENDED DECEMBER 31, 2009

     Our  overall  revenue increased $201,000, or 4%, to $5,222,000 for the year
ended  December  31,  2010 from $5,021,000 for the year ended December 31, 2009.
The  net  increase  in  revenue  was  due  primarily  to  the  following:

     a)  Sales  of  alkaline  admixture  increased  $39,000 from the same period
ended  in 2009 - this increase was primarily the result of an increase in demand
with  our  Ohio-area  customers;

     b)  Revenue  from the service fees for the management of alkaline admixture
increased  $438,000  from  the  same  period  ended  in 2009 - this increase was
attributed  primarily  to  our  Florida-area customers, which increased $464,000
compared  to  the  same  period  in  2009;  and

     c)  Our processing revenue, including facility management revenue, showed a
net  decrease  of $245,000 over the same period ended in 2009.  Of the decrease,
our  Toledo  facility's  management revenue decreased $315,000, and, N-Viro Soil
sales  decreased  by  a  total of $249,000, primarily attributable to the Toledo
facility  as  less  product was available for sale from current and prior period
carryover  production.  Facility management revenue at our Florida operation for
the  year  ended  showed  an  increase  of  $342,000  over  2009;  and

     d)  Our  license fee revenue showed a net decrease of $30,000 over the same
period  ended  in  2009.

     Our  gross  profit  decreased  $105,000,  or 9%, to $1,004,000 for the year
ended  December  31,  2010  from $1,109,000 for the same period in 2009, and the
gross  profit  margin  decreased  to  19%  from  22%  for the same periods.  The
decrease  in gross profit margin is primarily due to the decrease in the overall
percentage  of  revenue  derived  from  facility  management revenue, as well as
higher  costs  of  trucking  the  N-Viro  Soil  product.  The  Toledo  operation
contributed $338,000 of gross profit on overall revenue of $1,150,000, which was
a  decrease  of  $238,000  of  gross  profit  over the same period in 2009.  The
Florida  operation  contributed  $646,000  of gross profit on overall revenue of
$3,859,000,  which  was  an  increase  of $140,000 of gross profit over the same
period  in  2009.  Gross  profit  on  the  sale  of the N-Viro Soil product also
contributed  materially  to  the decrease in gross profit margin, as the Company
realized  a  decrease  in  gross profit contributed by product sales of $281,000
from  2009  to  2010,  $211,000  of  it  from  the  Florida  operation.

     Our  operating  expenses  increased  $184,000, or 5%, to $3,767,000 for the
year  ended  December  31,  2010 from $3,583,000 for the year ended December 31,
2009.  The  increase  was  primarily  due to increases of $312,000 in consulting
fees and expenses, $57,000 in director costs, $28,000 in office-related expenses
and  $25,000  in litigation settlement expense, offset by a decrease of $235,000
in  payroll  and  related  costs.  Of  the  total  net  increase  of $134,000 in
consulting, director and payroll costs, $121,000 were non-cash costs relating to
the  issuances  of  stock  and  stock  options.  Therefore,  for  the year ended
December  31,  2010 actual cash outlays in these categories increased by a total
of  $13,000  over  the  same  period  in  2009.

     As  a  result  of  the  foregoing factors, we recorded an operating loss of
$2,763,000 for the year ended December 31, 2010 compared to an operating loss of
$2,474,000  for  the  year  ended  December 31, 2009, an increase in the loss of
$289,000.

     Our  net  nonoperating  income  (expense)  decreased  by  $266,000  to  net
nonoperating  expense  of $206,000 for the year ended December 31, 2010 from net
nonoperating  income of $60,000 for the year ended in 2009.  The decrease in net
nonoperating  income (expense) was primarily due to an increase of $140,000 from
the loss recorded on derivative securities issued whose value decreased from the
issuance  date,  a  decrease  of  $23,000  in  expense for the extinguishment of
certain  liabilities  no  longer  due during 2010, an increase of $84,000 on the
amortization  expense  for  debentures  issued and $19,000 in increased interest
expense.

     We  recorded  a net loss of $2,969,000 for the year ended December 31, 2010
compared  to  a  net  loss  of  $2,414,000 for the same period ended in 2009, an
increase  in  the  loss  of  $555,000.  Adding  back  non-cash  expenses such as
depreciation, amortization, stock and stock options charges and subtracting cash
out  for  capitalized  assets  and debt repayments, resulted in an adjusted cash
loss  (non-GAAP)  of  $445,000  for  the  year  ended in 2010.  Similar non-cash
expenses,  cash  out and debt repayments for the same period in 2009 resulted in
an  adjusted  cash loss (non-GAAP) of $206,000, an increase in the adjusted cash
loss  (non-GAAP)  of  $238,000  in  the  year  ended  in  2010  versus  2009.

     For  the  year ended December 31, 2010 and 2009, we have not recognized the
future  tax  benefit  of  current  or  prior period losses due to our history of
operating losses.  Accordingly, our effective tax rate for each period was zero.


LIQUIDITY  AND  CAPITAL  RESOURCES

     We had a working capital deficit of $932,000 at December 31, 2010, compared
to  working  capital of $57,000 at December 31, 2009, resulting in a decrease in
working  capital of $989,000.  Current assets at December 31, 2010 included cash
and  cash equivalents of $245,000 (including restricted cash of $207,000), which
is  an  increase  of $44,000 from December 31, 2009.  The net negative change in
working  capital from December 31, 2009 to 2010 was primarily from a decrease to
the  net  deferred  current  asset  of $344,000 for amortization of common stock
given  pursuant to consulting contracts entered into during 2009 and 2010 and an
increase  in the current liability of $668,000 for the convertible debentures to
now  classify  the  instruments  due  June 30, 2011 as short-term on the balance
sheet.

     In  2010  our  cash  flow  provided  by  operating activities was $4,000, a
decrease  of  $22,000  over  the  same  period  in  2009.  The components of the
decrease from 2009 in cash flow provided by operating activities was principally
due  to  an increase of $101,000 in trade accounts receivable and an increase in
the  net loss of $555,000, offset by a decrease of $89,000 in prepaid assets, an
increase  of  $221,000  in trade accounts payable, a decrease of $140,000 in the
market  price  of  derivatives issued, an increase of $121,000 in stock warrants
and stock options issued for fees and services and an increase in other non-cash
items  of  $62,000.

     We  have modified our business model and have been evolving away from sales
of  alkaline  admixture  and  royalty-based  revenue  agreements  that typically
generate  a  higher  gross  profit  margin, to long-term and sustainable revenue
based on integrated N-Viro technology and operations, but typically generating a
lower  gross  profit  margin.  From  2006  to  2010,  the percentage of combined
revenues  generated from our owned and operated facilities in Toledo and Volusia
County  was:  2006  - 46%;  2007 - 77%;  2008 - 94%; 2009 - 95%; 2010 - 96%.  We
believe  this  shift will allow us to enhance future revenue and profits through
growth,  efficiency  and  revenue  optimization.

     The normal collection period for accounts receivable is approximately 30-60
days  for  the  majority  of  customers.  This  is a result of the nature of the
license  contracts,  type  of customer and the amount of time required to obtain
the  information  to  prepare  the  billing.  For  2009 and throughout 2010, our
customers  slowed the overall payment rate on our outstanding receivables, which
in  turn  contributed  to  us  extending  payment  times  to  our vendors on our
payables.  We make no assurances that payments from our customers or payments to
our  vendors  will  become  shorter  and  this may have an adverse impact on our
continuing  operations.

     During  2010,  we  maintained  a  line of credit up to $400,000 at Comerica
Bank's  prime rate (3.25% at December 31, 2010) plus 0.75%, but in no event less
than  5.75%,  and  secured by a first lien on all our assets (except equipment),
with  Monroe  Bank + Trust (the "Bank"), with a maturity date of April 15, 2011.
Two  certificates  of  deposit  totaling  $140,893  from  the Bank are held as a
condition  of maintaining the line of credit.  In April 2010, the line of credit
was  renewed  through April 2011, and the previous borrowing base restriction of
80%  of  our  outstanding  trade  receivables  not over 90 days was removed.  At
December  31,  2010,  we  had  $36,000  of  borrowing  capacity under the credit
facility.

     During  2009 and 2010, we borrowed a total of $1,382,900 from seven lenders
to  purchase  processing  and  automotive equipment.  As of December 31, 2010, a
total  of  fourteen  term  notes  are  outstanding,  ranging  from 3.8% to 10.9%
interest  for  terms  ranging  three  to  five  years, monthly payments totaling
approximately  $30,000  and  all secured by equipment.  The total amount owed on
all  notes  as of December 31, 2010 was approximately $521,000 and all notes are
expected  to  be paid in full on the applicable maturity date, the last of which
is  in  October  2013.

     On May 18, 2009, we approved an offering of up to $1,000,000 of Convertible
Debentures  (the  "Debentures"),  convertible  at any time into our unregistered
common  stock  at  $2.00  per  share.  The  Debentures  are  issuable  in $5,000
denominations,  are  unsecured  and  have  a stated interest rate of 8%, payable
quarterly to holders of record.  We have timely paid all accrued interest due to
all  Debenture  holders  of  record as of each quarter-end date starting in July
2009.  At  any time, we may redeem all or a part of the Debentures at face value
plus  unpaid  interest.

     During  2010 we issued $55,000 of Debentures, and three investors converted
a total of $90,000 of Debentures into unregistered common stock.  The Debentures
mature  at  June  30,  2011,  and  as  of  December 31, 2010 we held $720,000 of
Debentures  exercisable  at  $2.00  per  share,  or  360,000  shares.

     In  July  2010,  we  executed a Purchase Agreement, License and Development
Agreement  and  Registration Rights Agreement (the "Agreements"), with VC Energy
I,  LLC,  or  VC  Energy.  Concurrently, we sold VC Energy 200,000 shares of our
unregistered  common  stock  at  a  price  of  $2.50 per share, issued VC Energy
200,000  warrants  exercisable at $2.75 per share, and granted them an option to
acquire  another  400,000  shares of our unregistered common stock at a price of
$2.50  per  share,  and  400,000  warrants  exercisable  at $2.75 per share.  In
September  2010,  we  executed  Amendment Number 1, effective September 15, 2010
(the  "Amendment")  to the Purchase Agreement.  The purpose of the Amendment was
to modify certain of the purchase terms in the Purchase Agreement, and VC Energy
exercised its option to purchase 200,000 shares of our common stock for $500,000
which  VC  Energy paid for by delivering its unsecured promissory note to us for
$500,000,  payable  in  installments  over  a  12  month  period, with the first
$200,000  of  such  installments  due  bi-weekly  between September 30, 2010 and
December  30,  2010  and  the  final  $300,000  due September 15, 2011.  We also
delivered 200,000 warrants to purchase shares of our common stock at an exercise
price  of  $2.50  per  share.  Under  the  Amendment, we transferred all 200,000
shares  and 200,000 warrants to an Escrow Agent, and the shares and warrants are
released  ratably to VC Energy as installments payments due us are received.  VC
Energy  paid all installments on time through December 2010 and the escrow agent
delivered  80,000  shares  and  80,000 warrants to VC Energy, with the remaining
shares  and warrants continuing to be held by the escrow agent.  In addition, VC
Energy's option to purchase the remaining 200,000 shares of our common stock was
extended  to  December 31, 2010, and then a second time to March 1, 2011, on the
same  terms  as the original Purchase Agreement.  VC Energy did not exercise the
purchase  option  for  the additional 200,000 shares on or before March 1, 2011.
More  details  were  provided  on  Form  8-K  filings  during  2010  and  2011.

     For  2011  we expect to improve operating results and have adequate cash or
access  to  cash  to  adequately fund operations and debt service by focusing on
existing  and  expected  new sources of revenue, especially from our N-Viro Fuel
technology,  and  cash  generated  from  equity  issuances  and  exercises  of
outstanding  warrants  and options.  We expect that market developments favoring
cleaner  burning renewable energy sources and ongoing discussions with companies
in  the fuel and wastewater industries could provide enhanced liquidity and have
a  positive  impact  on  future operations.  We continue to pursue opportunities
with  strategic  partners  for  the  development  and  commercialization  of the
patented  N-Viro  Fuel  technology.  In  addition,  we  are  focusing  on  the
development  of  regional  biosolids processing facilities, and are currently in
negotiations with potential partners to permit and develop independent, regional
facilities.

     There can be no assurance these discussions will be successful or result in
new  revenue  or  cash  funding sources for the company.  Our failure to achieve
improvements  in operating results, including through these potential sources of
revenue, or in our ability to adequately finance or secure additional sources of
funds  would likely have a material adverse effect on our continuing operations.

OFF-BALANCE  SHEET  ARRANGEMENTS

     At  December 31, 2010, we did not have any material commercial commitments,
including  guarantees  or  standby  repurchase obligations, or any relationships
with unconsolidated entities or financial partnerships, including entities often
referred  to  as  structured  finance  or  special  purpose entities or variable
interest  entities,  which  would  have  been  established  for  the  purpose of
facilitating  off-balance  sheet  arrangements  or other contractually narrow or
limited  purposes.

     From  time  to  time,  during  the  normal  course of business, we may make
certain  indemnities,  commitments and guarantees under which we may be required
to  make  payments  in  relation  to  certain  transactions.  These include: (i)
indemnities  to  vendors and service providers pertaining to claims based on our
negligence  or willful misconduct and (ii) indemnities involving the accuracy of
representations  and warranties in certain contracts.  Pursuant to Delaware law,
we  may  indemnify  certain  officers  and  directors  for  certain  events  or
occurrences  while the officer or director is, or was, serving at our request in
such capacity.  We also have director and officer insurance coverage that limits
our  exposure  and enables us to recover a portion of any future amounts that we
may  pay  for  indemnification  purposes.  We  believe  the applicable insurance
coverage  is  generally  adequate to cover any estimated potential liability for
which  we  may  provide  indemnification.  The  majority  of  these indemnities,
commitments  and  guarantees  do  not  provide for any limitation of the maximum
potential  for  future  payments  we  could  be  obligated to make.  We have not
recorded  any  liability for these indemnities, commitments and other guarantees
in  the  accompanying  Consolidated  Balance  Sheets.

CRITICAL  ACCOUNTING  POLICIES,  ESTIMATES  AND  ASSUMPTIONS

     In  preparing financial statements in conformity with accounting principles
generally  accepted  in  the  United  States,  management  makes  estimates  and
assumptions  that  affect  the  reported  amounts  of assets and liabilities and
disclosures  of  contingent  assets and liabilities at the date of the financial
statements,  as well as the reported amounts of revenues and expenses during the
reporting  period.  Actual  results  could  differ  from  those  estimates.  The
following  are  the significant estimates and assumptions made in preparation of
the  financial  statements:

          Non-domestic  license and territory fees - We do not recognize revenue
     on  any  non-domestic  license or territory fee contracts until the cash is
     received,  assuming  all other tests of revenue recognition are met. Canada
     is  excluded  from  this  definition  of  non-domestic.

          Allowance for Doubtful Accounts - We estimate losses for uncollectible
     accounts  based  on the aging of the accounts receivable and the evaluation
     and  the likelihood of success in collecting the receivable. The balance of
     the  allowance  at  December  31,  2010  and  2009  is $70,000 and $50,000,
     respectively.

          Property  and  Equipment/Long-Lived Assets - Property and equipment is
     reviewed  for  impairment.  The  carrying  amount  of  an  asset (group) is
     considered  impaired  if  it  exceeds  the  sum  of  our  estimate  of  the
     undiscounted future cash flows expected to result from the use and eventual
     disposition  of  the  asset  (group), excluding interest charges. Property,
     machinery  and  equipment are stated at cost less accumulated depreciation.
     We  believe the carrying amount is not impaired based upon estimated future
     cash  flows.

          Intangible  Assets - Intangible assets deemed to have indefinite lives
     are  tested  for  impairment  by comparing the fair value with its carrying
     value.  Significant  estimates  used  in  the  determination  of fair value
     include  estimates  of  future  cash  flows.  As  required  under  current
     accounting  standards, we test for impairment when events and circumstances
     indicate  that the assets might be impaired and the carrying value of those
     assets  may  not  be  recoverable.

          Income  Taxes - We assume the deductibility of certain costs in income
     tax filings and estimate the recovery of deferred income tax assets, all of
     which  is  fully  reserved.

          New  Accounting  Standards - The Financial Accounting Standards Board,
     or FASB, has issued the following new accounting and interpretations, which
     may  be  applicable  in  the  future  to  us:

               There  are  no  Accounting  Standards  Updates expected to have a
          significant effect on the Company's consolidated financial position or
          results  of  operations.

Actual  results  could differ materially from the estimates and assumptions that
we  use  in  the  preparation  of  our  financial  statements.


ITEM  7A.     QUANTITATIVE  AND  QUALITATIVE  DISCLOSURES  ABOUT  MARKET  RISK

     As  a  smaller  reporting  company  we  are  not  required  to provide this
information  under  Item  305  of  Regulation  S-K.


<PAGE>

ITEM  8.     FINANCIAL  STATEMENTS  AND  SUPPLEMENTARY  DATA






                         INDEX TO FINANCIAL STATEMENTS







                                                                            Page
                                                                            ----

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM                      F-1

FINANCIAL STATEMENTS
     CONSOLIDATED BALANCE SHEETS                                       F-2 - F-3
     CONSOLIDATED STATEMENTS OF OPERATIONS                                   F-4
     CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)               F-5
     CONSOLIDATED STATEMENTS OF CASH FLOWS                                   F-6
     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS                       F-7 - F-25



<PAGE>


REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM



Board of Directors
N-Viro International Corporation


We  have  audited  the  accompanying  consolidated  balance  sheets  of  N-Viro
International  Corporation  (a  Delaware  corporation)  and  Subsidiaries  as of
December  31,  2010  and  2009,  and  the  related  consolidated  statements  of
operations,  stockholders'  equity  (deficit), and cash flows for the years then
ended.  These  consolidated  financial  statements are the responsibility of the
Company's  management.  Our  responsibility  is  to  express an opinion on these
consolidated  financial  statements  based  on  our  audits.

We  conducted  our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and  perform  the  audit  to  obtain  reasonable  assurance  about  whether  the
consolidated financial statements are free of material misstatement. The Company
is  not  required  to  have,  nor  were  we  engaged to perform, an audit of its
internal  control  over financial reporting. Our audit included consideration of
internal  control  over  financial  reporting  as  a  basis  for designing audit
procedures that are appropriate in the circumstances, but not for the purpose of
expressing  an  opinion  on  the effectiveness of the company's internal control
over financial reporting. Accordingly, we express no such opinion. An audit also
includes  examining,  on  a  test  basis,  evidence  supporting  the amounts and
disclosures  in  the consolidated financial statements, assessing the accounting
principles  used  and  significant  estimates  made  by  management,  as well as
evaluating  the  overall  financial  statement presentation. We believe that our
audits  provide  a  reasonable  basis  for  our  opinion.

In  our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of N-Viro International
Corporation  and  Subsidiaries as of December 31, 2010 and 2009, and the results
of their operations and their cash flows for the years then ended, in conformity
with  accounting  principles generally accepted in the United States of America.


/s/  UHY LLP
------------
UHY LLP
Southfield, Michigan
March 31, 2011


<PAGE>
<TABLE>
<CAPTION>

                        N-VIRO INTERNATIONAL CORPORATION

                          CONSOLIDATED BALANCE SHEETS

                           December 31, 2010 and 2009
                           --------------------------




                                               2010        2009
                                            ----------  ----------
<S>                                         <C>         <C>
ASSETS
------------------------------------------

CURRENT ASSETS
 Cash and cash equivalents:
   Unrestricted                             $   37,112  $   61,380
   Restricted                                  207,465     140,161
 Receivables, net:
   Trade                                       780,844     597,035
   Related party - Mahoning Valley N-Viro       24,325      15,325
 Deferred costs - stock issued for services    622,086     966,354
 Prepaid expenses and other assets              80,994     108,138
                                            ----------  ----------
Total current assets                         1,752,826   1,888,393

PROPERTY AND EQUIPMENT, NET                  1,490,865   1,363,476

INTANGIBLE AND OTHER ASSETS, NET               159,304     211,457
                                            ----------  ----------


                                            $3,402,995  $3,463,326
                                            ==========  ==========
</TABLE>














   The accompanying notes are an integral part of these financial statements.

<PAGE>

<TABLE>
<CAPTION>

                              N-VIRO INTERNATIONAL CORPORATION

                                 CONSOLIDATED BALANCE SHEETS

                                 December 31, 2010 and 2009
                                 --------------------------





                                                                     2010           2009
                                                                 -------------  -------------
<S>                                                              <C>            <C>
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
---------------------------------------------------------------

CURRENT LIABILITIES
 Current maturities of long-term debt                            $    337,799   $    353,800
 Convertible debentures, net of discount                              667,674              -
 Line-of-credit                                                       364,000        325,000
 Accounts payable                                                   1,089,513        932,831
 Accrued liabilities                                                  226,062        219,910
                                                                 -------------  -------------
Total current liabilities                                           2,685,048      1,831,541

Long-term debt, less current maturities                               230,931        500,808
Fair value of warrant liability                                       744,476              -
Convertible debentures, net of discount                                     -        610,840
                                                                 -------------  -------------

Total liabilities                                                   3,660,455      2,943,189

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY (DEFICIT)
 Preferred stock, $.01 par value, Authorized - 2,000,000 shares
   Issued - -0- shares in 2010 and 2009                                     -              -
 Common stock, $.01 par value
   Authorized - 35,000,000 shares in 2010 and 25,000,000 in 2009
    Issued - 6,062,214 shares in 2010 and 5,269,553 shares in 2009     60,622         52,696
 Note receivable for common stock                                    (300,000)             -
 Additional paid-in capital                                        24,548,644     21,453,168
 Accumulated deficit                                              (23,881,836)   (20,300,837)
                                                                 -------------  -------------
                                                                      427,430      1,205,027

Less treasury stock, at cost, 123,500 shares                          684,890        684,890
                                                                 -------------  -------------
Total stockholders' equity (deficit)                                 (257,460)       520,137
                                                                 -------------  -------------

                                                                 $  3,402,995   $  3,463,326
                                                                 =============  =============
</TABLE>




   The accompanying notes are an integral part of these financial statements.

<PAGE>

<TABLE>
<CAPTION>

                             N-VIRO INTERNATIONAL CORPORATION

                           CONSOLIDATED STATEMENTS OF OPERATIONS

                          Years Ended December 31, 2010 and 2009
                          --------------------------------------


                                                                     2010          2009
                                                                 ------------  ------------
<S>                                                              <C>           <C>
REVENUES                                                         $ 5,222,146   $ 5,021,169

COST OF REVENUES                                                   4,217,773     3,912,310
                                                                 ------------  ------------

GROSS PROFIT                                                       1,004,373     1,108,859

OPERATING EXPENSES
   Selling, general and administrative                             3,767,262     3,582,979
                                                                 ------------  ------------

OPERATING LOSS                                                    (2,762,889)   (2,474,120)

OTHER INCOME (EXPENSE)
   Interest income                                                     1,110         1,354
   Gain on extinguishment of liabilities                             124,233       147,201
   Amortization of discount on convertible debentures               (108,335)      (24,315)
   Loss on market price increase of warrants issued                 (140,326)            -
   Interest expense                                                  (82,938)      (64,313)
                                                                 ------------  ------------
                                                                    (206,256)       59,927
                                                                 ------------  ------------

LOSS BEFORE INCOME TAXES                                          (2,969,145)   (2,414,193)

Federal and state income taxes                                             -             -
                                                                 ------------  ------------

NET LOSS                                                         $(2,969,145)  $(2,414,193)
                                                                 ============  ============


Basic and diluted loss per share                                 $     (0.55)  $     (0.51)
                                                                 ============  ============

Weighted average common shares outstanding - basic and diluted     5,396,018     4,688,928
                                                                 ============  ============
</TABLE>






   The accompanying notes are an integral part of these financial statements.

<TABLE>
<CAPTION>

                                                N-VIRO INTERNATIONAL CORPORATION

                                    CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)

                                             Years Ended December 31, 2010 and 2009

                                                                               Note        Additional
                                                      Shares of    Common  Receivable for    Paid-in     Accumulated    Treasury
                                                    Common Stock   Stock    Common Stock     Capital       Deficit       Stock
                                                    ------------  -------  --------------  -----------  -------------  ----------
<S>                                                 <C>           <C>      <C>             <C>          <C>            <C>
BALANCE JANUARY 1, 2009                                4,468,025  $44,680  $           -   $17,822,744  $(17,634,417)  $(684,890)

 Net loss                                                      -        -                            -    (2,414,193)          -
 Deemed dividend on extension of stock warrants                -        -                      252,227      (252,227)          -
 Share-based compensation expense                              -        -                    1,371,921             -           -
 Exercise of stock options                                21,400      214                       29,823             -           -
 Exercise of stock warrants                               13,672      137                       29,015             -           -
 Conversion of debentures to stock                         5,024       50                        9,999             -           -
 Discount on convertible debentures issued                     -        -                      183,897             -           -
 Issuance of common stock                                761,432    7,615                    1,753,542             -           -
                                                    ------------  -------                  -----------  -------------  ----------

BALANCE DECEMBER 31, 2009                              5,269,553   52,696              -    21,453,168   (20,300,837)   (684,890)

 Net loss                                                      -        -                            -    (2,969,145)          -
 Deemed dividend on extension of stock warrants                -        -                      611,854      (611,854)          -
 Issuance of common stock for cash and
                              Note Receivable - net      400,000    4,000       (300,000)      996,000             -           -
 Share-based compensation expense                              -        -                    1,031,770             -           -
 Exercise of stock options                                54,125      541                      101,306             -           -
 Exercise of stock warrants                               15,050      150                       27,640             -           -
 Conversion of debentures to stock                        45,136      451                       89,725             -           -
 Discount on convertible debentures issued                 2,750       28                       21,958             -           -
 Issuance of common stock                                275,600    2,756                      215,223             -           -
                                                    ------------  -------                  -----------  -------------  ----------

BALANCE DECEMBER 31, 2010                              6,062,214  $60,622  $    (300,000)  $24,548,644  $(23,881,836)  $(684,890)
                                                    ============  =======  ==============  ===========  =============  ==========

                                                       Total
                                                    ------------
<S>                                                 <C>
BALANCE JANUARY 1, 2009                             $  (451,883)

 Net loss                                            (2,414,193)
 Deemed dividend on extension of stock warrants               -
 Share-based compensation expense                     1,371,921
 Exercise of stock options                               30,037
 Exercise of stock warrants                              29,152
 Conversion of debentures to stock                       10,049
 Discount on convertible debentures issued              183,897
 Issuance of common stock                             1,761,157
                                                    ------------

BALANCE DECEMBER 31, 2009                               520,137

 Net loss                                            (2,969,145)
 Deemed dividend on extension of stock warrants               -
 Issuance of common stock for Note Receivable - net     700,000
 Share-based compensation expense                     1,031,770
 Exercise of stock options                              101,847
 Exercise of stock warrants                              27,790
 Conversion of debentures to stock                       90,176
 Discount on convertible debentures issued               21,986
 Issuance of common stock                               217,979
                                                    ------------

BALANCE DECEMBER 31, 2010                           $  (257,460)
                                                    ============
</TABLE>




   The accompanying notes are an integral part of these financial statements.


<PAGE>

<TABLE>
<CAPTION>

                             N-VIRO INTERNATIONAL CORPORATION

                           CONSOLIDATED STATEMENTS OF CASH FLOWS

                          Years Ended December 31, 2010 and 2009


                                                                     2010          2009
                                                                 ------------  ------------
<S>                                                              <C>           <C>

Cash Flows From Operating Activities
 Net loss                                                        $(2,969,145)  $(2,414,193)
  Adjustments to reconcile net loss to net
   cash from operating activities:
    Depreciation and amortization                                    449,122       467,990
    Amortization of discount and costs of debentures                 108,334        37,345
    Provision (reduction) for bad debts                               20,000             -
    Issuance of stock for debt and services                        1,103,153       793,646
    Issuance of stock options and warrants for services            1,183,270     1,371,962
    (Gain) loss on the sale of fixed assets                           (8,741)        1,161
    Increase in market price of warrants issued                      140,326             -
 Changes in Operating Assets and Liabilities
  Increase in trade receivables                                     (203,809)     (102,894)
  Decrease (increase) in prepaid expenses and other assets            33,148       (55,693)
  Increase (decrease) in accounts payable and accrued liabilities    148,263       (73,050)
                                                                 ------------  ------------
Net cash provided by (used in) operating activities                    3,921        26,274

Cash Flows From Investing Activities
  Proceeds from sale of property and equipment                        10,834         3,006
  Increases from restricted cash and cash equivalents                (67,305)       (1,348)
  Advances to related parties                                         (9,000)      (15,300)
  Purchases of property and equipment                               (532,454)      (17,360)
                                                                 ------------  ------------
Net cash used in investing activities                               (597,925)      (31,002)

Cash Flows From Financing Activities
  Private placements of stock                                        611,994             -
  Proceeds from convertible debentures issued                         55,000       765,000
  Issuance costs of convertible debentures issued                       (135)      (58,666)
  Borrowings under long-term obligations                             196,869       139,848
  Stock options exercised                                            101,873        30,037
  Stock warrants exercised                                            27,735        29,152
  Net borrowings (repayments) on line-of-credit                       39,000       (73,000)
  Principal payments on long-term obligations                       (462,600)     (781,132)
                                                                 ------------  ------------
Net cash provided by financing activities                            569,736        51,239
                                                                 ------------  ------------

Net Increase (Decrease) in Cash and Cash Equivalents                 (24,268)       46,511

Cash and Cash Equivalents - Beginning                                 61,380        14,869
                                                                 ------------  ------------

Cash and Cash Equivalents - Ending                               $    37,112   $    61,380
                                                                 ============  ============

Supplemental disclosure of cash flows information:
  Cash paid during the year for interest                         $   138,477   $   125,460
                                                                 ============  ============
</TABLE>



   The accompanying notes are an integral part of these financial statements.


<PAGE>

                        N-VIRO INTERNATIONAL CORPORATION

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                 FOR THE YEARS ENDED DECEMBER 31, 2010 AND 2009

NOTE 1.     OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The  following  is  a  summary  of  certain  accounting policies followed in the
preparation  of  these  financial statements.  The policies conform to generally
accepted  accounting  principles  and  have  been  consistently  applied  in the
preparation  of  the  financial  statements:

A.     Nature  of Business - The Company owns and licenses the N-Viro Process, a
patented  technology  to  treat  and  recycle  wastewater  sludges  and  other
bio-organic  wastes,  utilizing  certain  alkaline  by-products  produced by the
cement,  lime, electric utilities and other industries.  Revenue and the related
accounts  receivable  are  due  from  companies  acting as independent agents or
licensees,  principally  municipalities.

B.     Use  of Estimates - The preparation of financial statements in conformity
with  accounting  principles  generally accepted in the United States of America
requires  management  to make estimates and assumptions that affect the reported
amounts  of  assets  and  liabilities  and  disclosure  of contingent assets and
liabilities  as of the date of the financial statements and the reported amounts
of  revenues  and  expenses  during  the reporting period.  Actual results could
differ  from  those  estimates.

C.     Principles  of  Consolidation  -  The  consolidated  financial statements
include  the  accounts  of  the  Company and its wholly-owned subsidiaries.  All
significant  intercompany  accounts  and  transactions  have  been eliminated in
consolidation.

D.     Cash  and Cash Equivalents - The Company has cash on deposit primarily in
one  financial  institution  which, at times, may be in excess of FDIC insurance
limits.

For  purposes  of  the  statements  of  cash  flows,  the  Company considers all
certificates  of  deposit  with initial maturities of 90 days or less to be cash
equivalents.

Restricted  cash  consists  of:  two  certificates  of deposit and corresponding
accrued  interest  which  are  held  as  collateral  against  the  Company's
line-of-credit;  one  certificate  of deposit and corresponding accrued interest
which  is  held  as  collateral  with a performance bond on behalf of one of the
Company's  licensees;  one  certificate  of  deposit  and  corresponding accrued
interest  which  is  held  as  collateral on behalf of the Florida Department of
Agriculture  for  the  Company's  soil  distribution  license.

E.     Accounts  Receivable  - The Company extends unsecured credit to customers
under  normal  trade agreements, which require payment within 30 days.  Accounts
greater than 90 days past due amounted to $61,698 and $30,979 of receivables for
the  years ended December 31, 2010 and 2009, respectively.  The Company's policy
is  not to accrue and record interest income on past due trade receivables.  The
Company  does bill the customer finance charges on past due accounts and records
the interest income when collected.  Credit is generally granted on an unsecured
basis.  Periodic  credit  evaluations of customers are conducted and appropriate
allowances  are  established.

Management  estimates  an allowance for doubtful accounts, which was $70,000 and
$50,000  as  of December 31, 2010 and 2009, respectively.  The estimate is based
upon  management's  review  of  delinquent  accounts  and  an  assessment of the
Company's  historical  evidence  of  collections.


<PAGE>

                        N-VIRO INTERNATIONAL CORPORATION

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                 FOR THE YEARS ENDED DECEMBER 31, 2010 AND 2009

NOTE  1.     OPERATIONS  AND  SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES
(CONTINUED)

F.     Property  and Equipment - Property, machinery and equipment are stated at
cost less accumulated depreciation.  Depreciation has been computed primarily by
the  straight-line  method  over  the  estimated  useful  lives  of  the assets.
Generally,  useful  lives are five to fifteen years.  Leasehold improvements are
capitalized  and  amortized  over  the  lesser  of  the life of the lease or the
estimated  useful  life of the asset.  Depreciation expense amounted to $416,172
and  $431,007  in 2010 and 2009, respectively.  Management has reviewed property
and  equipment  for  impairment  when events and circumstances indicate that the
assets  might  be  impaired  and  the carrying values of those assets may not be
recoverable.  Management believes the carrying amount is not impaired based upon
estimated  future  cash  flows.

G.     Intangible  Assets  -  Patent  costs and territory rights are recorded at
cost  and then amortized by the straight-line method over their estimated useful
lives  (periods  ranging  from  one  and  one-half  to  seventeen  years;
weighted-average  amortization  periods  for  patents/related  intangibles  and
territory  rights  were  15.8  and  16.0  years  at  December 31, 2010 and 2009,
respectively).  Amortization expense amounted to $26,691 and $30,369 in 2010 and
2009, respectively.  Estimated amortization expense, based on these patent costs
and territory rights at December 31, 2010, for each of the ensuing five years is
as  follows:  2011 - $26,000;  2012 - $20,000;  2013 - $17,000;  2014 - $14,000;
2015  -  $13,000.  Management has reviewed intangible assets for impairment when
events  and  circumstances  indicate  that  the assets might be impaired and the
carrying  values  of  those  assets  may  not  be  recoverable.

The  Company has capitalized the cost of acquiring certain customer licenses and
contracts  as  part  of  the acquisition of Florida N-Viro on December 31, 2006.
Amortization  expense  amounted to $6,259 in 2010 and $6,613 in 2009.  Estimated
amortization  expense,  based  on  these  capitalized  license  and contracts at
December  31,  2010,  for  each of the ensuing five years is as follows:  2011 -
$2,000;  2012  -  $2,000;  2013  -  $2,000;  2014  -  $2,000;  2015  -  $1,000.

H.     Revenue  Recognition  -  Facility management revenue and royalty fees are
recognized  under  contracts  where  the Company or licensees utilize the N-Viro
Process  to  treat sludge, either pursuant to a fixed-price contract or based on
volumes  of  sludge processed.  Revenue is recognized as services are performed.

Alkaline  admixture  sales,  alkaline  admixture  management  service  revenue,
equipment  sales  and  N-Viro  SoilTM  revenue  are  recognized  upon  shipment.

License  and  territory fees are generated by selling the right to market or use
the  N-Viro Process in a specified territory.  The Company's policy is to record
revenue  for  the  license agreements when all material services relating to the
revenue  have  been  substantially performed, conditions related to the contract
have  been met and no material contingencies exist.  We do not recognize revenue
on  any  non-domestic  license  or  territory  fee  contracts  until the cash is
received,  assuming  all  other tests of revenue recognition are met.  Canada is
excluded from this definition of non-domestic.  Research and development revenue
is  recognized  as  work  is  performed  and billed to the contracting entity in
accordance  with  the  contract.

     The  Company  records  the  amount of shipping and handling costs billed to
customers  as  revenue.  The  cost  incurred  for shipping and handling has been
included  in  the  cost  of  sales.


<PAGE>

                        N-VIRO INTERNATIONAL CORPORATION

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                 FOR THE YEARS ENDED DECEMBER 31, 2010 AND 2009

NOTE  1.     OPERATIONS  AND  SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES
(CONTINUED)

I.     Loss  Per  Common  Share - Loss per common share has been computed on the
basis  of  the  weighted-average number of common shares outstanding during each
period  presented.  For  the years ended December 31, 2010 and 2009, the effects
of  2,273,300  and  1,279,825 stock options outstanding, respectively, 1,147,350
and  724,950  warrants  to  purchase common stock, respectively, and, debentures
that  are  convertible  to  360,000  and  377,500  shares  of  common  stock,
respectively,  are  excluded from the diluted per share calculation because they
would  be  antidilutive.

J.     Stock  Options  -  The  Company  records share-based compensation expense
using  a  fair-value  based  method  of measurement that results in compensation
costs  for  essentially  all  awards  of  stock-based compensation to employees.
Compensation  costs  are  recognized  over  the requisite period or periods that
services  are  rendered.

K.     New  Accounting  Standards  -  There  are no Accounting Standards Updates
expected  to  have  a significant effect on the Company's consolidated financial
position  or  results  of  operations.

L.     Income  Taxes  -  Deferred income tax assets and liabilities are computed
annually for differences between the financial statement and tax bases of assets
and  liabilities that will result in taxable or deductible amounts in the future
based  on  enacted  tax  laws  and  rates applicable to the periods in which the
differences  are  expected  to  affect taxable income.  Valuation allowances are
established  when necessary to reduce deferred tax assets to the amount expected
to  be  realized.  Income  tax  expense is the tax payable or refundable for the
current period plus or minus the change during the period in deferred tax assets
and  liabilities.

The accounting for uncertain tax positions requires the Company to evaluate each
income  tax  position using a two step process which includes a determination as
to  whether  it  is  more  likely  than not that the income tax position will be
sustained,  based  upon  technical  merit  and  upon  examination  by the taxing
authorities.  At  December  31,  2010  and  2009,  there  were  no uncertain tax
positions  that required accrual.  None of the Company's federal or state income
tax  returns  are  currently  under  examination by the Internal Revenue Service
("IRS")  or  state  authorities.  However,  fiscal  years  2008 and later remain
subject  to  examination  by  the  IRS  and  respective  states.

M.     Supplemental  Disclosure  of  Non-Cash  Activity:
<TABLE>
<CAPTION>

                                                                   2010       2009
                                                                ----------  --------
<S>                                                             <C>         <C>
Common Stock issued for commissions on debentures               $    5,500  $ 15,500
VC Energy - issuance of common stock warrants                      604,150         -
Dividend deemed on extension of outstanding stock warrants         611,854   252,227
SLD Consulting - value of stock issued on consulting agreement     334,400         -
SAMI - value of stock issued on public relations agreement         304,500         -
Conversion of debentures to Common Stock                            90,204     9,974
                                                                ----------  --------
                                                                $1,950,608  $277,701
                                                                ==========  ========
</TABLE>

N.     Segment  Information  -  During  2010,  the  Company  determined  that it
currently  operates in one segment based on the financial information upon which
the  chief operating decision maker regularly assesses performance and allocates
resources.  The  chief  operating decision maker is the Chief Executive Officer.


<PAGE>

                        N-VIRO INTERNATIONAL CORPORATION

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                 FOR THE YEARS ENDED DECEMBER 31, 2010 AND 2009

NOTE  2.     BALANCE  SHEET  DATA

PROPERTY  AND  EQUIPMENT  (AT  COST):
<TABLE>
<CAPTION>

                                      2010        2009
                                   ----------  ----------
<S>                                <C>         <C>
Leasehold improvements             $  121,411  $  122,979
Equipment                           3,296,751   2,763,211
Furniture, fixtures and computers      50,089      54,275
                                   ----------  ----------
                                    3,468,251   2,940,465
Less accumulated depreciation       1,977,386   1,576,989
                                   ----------  ----------

                                   $1,490,865  $1,363,476
                                   ==========  ==========
</TABLE>


DEFERRED  COSTS:

In  July  2009,  the  Company executed a Consulting Agreement, or the Agreement,
effective  July  14,  2009, with Investor Relations Services, Inc. of New Smyrna
Beach,  FL,  or  IRSI.  The  Company  appointed  IRSI as its non-exclusive stock
promotion  and  strategic communications counsel for a term of one year from the
date of the Agreement.  For its services, the Company issued IRSI 500,000 shares
of  the  Company's  unregistered  common  stock.  Pursuant to the Agreement, the
Company entered into a Designation and Appointment agreement with Summit Trading
Limited  of New Smyrna Beach, FL, to designate Summit Trading as the third party
appointee  to  be  paid  the shares of stock under the Consulting Agreement with
IRSI.  The  Company  accounted  for  this  transaction  by  recording a deferred
current  asset of $1,135,000 that was amortized ratably over the 12 month period
the  services  are  to  be  rendered.  The  cost  amortized  for the years ended
December  31, 2010 and 2009 was $704,800 and $520,200, respectively.  The amount
deferred  at  December  31,  2010  was  $-0-.

In  July  2009,  the  Company  executed  a  Finder's  Fee  and Non-Circumvention
Agreement  with  Summit  Trading  to  locate  possible  merger  and  acquisition
candidates  as  well as sources of financing for the Company for a period of one
year,  effective  July  20,  2009.  For  its services, the Company issued Summit
Trading  250,000 shares of the Company's unregistered common stock.  The Company
accounted for this transaction by recording a deferred current asset of $625,000
that  was  amortized  ratably  over  the  12 month period the services are to be
rendered.  The  cost amortized for the year ended December 31, 2010 and 2009 was
$351,600  and  $273,400, respectively.  The amount deferred at December 31, 2010
was  $-0-.

In  December  2010,  the Company executed a Financial Public Relations Agreement
with  Strategic Asset Management, Inc., or SAMI. The Company engaged SAMI as its
non-exclusive  financial public relations counsel for a term of three years. For
its  services,  the  Company  issued  SAMI  150,000  shares  of  the  Company's
unregistered  common  stock.  The Company expects to record a non-cash charge to
earnings  of  approximately  $305,000 ratably over a 36-month period starting in
December  2010.

In  December 2010, the Company executed a Consulting Agreement, with SLD Capital
Corporation,  or  SLD.  The  Company  engaged SLD to provide business consulting
services  for  a  term of eighteen months.  For its services, the Company issued
SLD  110,000  shares  of  the  Company's unregistered common stock.  The Company
expects  to  record  a  non-cash  charge  to  earnings of approximately $330,000
ratably  over  an  18-month  period  starting  in  December  2010.


<PAGE>

                        N-VIRO INTERNATIONAL CORPORATION

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                 FOR THE YEARS ENDED DECEMBER 31, 2010 AND 2009

NOTE  2.     BALANCE  SHEET  DATA  (CONTINUED)


The  following  is  a  summary  of  Deferred  Costs - capitalized stock value on
contracts,  net  as  of  December  31:
<TABLE>
<CAPTION>


                                                            2010      2009
                                                          --------  --------
<S>                                                       <C>       <C>
Deferred costs - Investor Relations, less accumulated
  amortization (2010 - $1,225,000;  2009 - $520,208)      $      -  $614,792

Deferred costs - Summit Trading, Ltd., less accumulated
  amortization (2010 - $625,000;  2009 - $273,438)               -   351,562

Deferred costs - SAMI, less accumulated
  amortization (2010 - $6,333;  2009 - $-0-)               449,667         -

Deferred costs - SLD Capital, less accumulated
  amortization (2010 - $12,585;  2009 - $-0-)              321,815         -
                                                          --------  --------

                                                          $771,482  $966,354
                                                          ========  ========
</TABLE>



INTANGIBLE  AND  OTHER  ASSETS:

The  following  is  a summary of intangible and other assets, net as of December
31:

<TABLE>
<CAPTION>


                                                            2010      2009
                                                          --------  --------
<S>                                                       <C>       <C>
Patents and related intangibles, less accumulated
  amortization (2010 - $294,327;  2009 - $320,905)        $ 99,926  $125,952

Territory rights, less accumulated amortization
  (2010 - $6,470;  2009 - $5,882)                            3,530     4,118

Customer list, less accumulated amortization
  (2010 - $53,646;  2009 - $47,975)                          9,109    14,780

Debenture issuance costs, less accumulated amortization
  (2010 - $44,925;  2009 - $13,031)                         16,742    43,136

Other                                                       29,997    23,471
                                                          --------  --------

                                                          $159,304  $211,457
                                                          ========  ========
</TABLE>


<PAGE>

                        N-VIRO INTERNATIONAL CORPORATION

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                 FOR THE YEARS ENDED DECEMBER 31, 2010 AND 2009


NOTE  2.     BALANCE  SHEET  DATA  (CONTINUED)

ACCRUED  LIABILITIES:
<TABLE>
<CAPTION>


                                         2010      2009
                                       --------  --------
<S>                                    <C>       <C>
Accrued payroll and employee benefits  $ 32,192  $ 26,768
Sales tax payable                       177,421   177,470
Interest payable                         16,449    15,672
                                       --------  --------

                                       $226,062  $219,910
                                       ========  ========
</TABLE>



NOTE  3.     PLEDGED  ASSETS,  LINE-OF-CREDIT  AND  LONG-TERM  DEBT

During  2010, the Company maintained a line of credit up to $400,000 at Comerica
Bank's  prime rate (3.25% at December 31, 2010) plus 0.75%, but in no event less
than  5.75%,  and  secured  by  a first lien on all the Company's assets (except
equipment), with Monroe Bank + Trust (the "Bank"), with a maturity date of April
15,  2011.  Two certificates of deposit totaling $140,893 from the Bank are held
as  a  condition  of maintaining the line of credit.  In April 2010, the line of
credit  was  renewed  through  April  2011,  and  the  previous  borrowing  base
restriction  of  80%  of the Company's outstanding trade receivables not over 90
days  was  removed.  At  December 31, 2010, the Company had $36,000 of borrowing
capacity  under  the  credit  facility.

Long-term debt at December 31, 2010 and 2009 is as follows:
<TABLE>
<CAPTION>


                                                2010        2009
                                             ----------  ----------
<S>                                          <C>         <C>
Notes payable - banks                        $  365,703  $  704,384
Notes payable - equipment vendors               203,027     150,224
Convertible debentures, net of discount of
  52,326 in 2010 and $144,160 in 2009           667,674     610,840
                                             ----------  ----------
                                              1,236,404   1,465,448
Less current maturities                       1,005,473     353,800
                                             ----------  ----------

                                             $  230,931  $1,111,648
                                             ==========  ==========
</TABLE>


During  2010,  the  Company  borrowed  a  total  of $159,542 from two lenders to
purchase  insurance  policies  for  general,  property and directors & officers'
insurance  coverage  during  the  year.  A  total of two term notes were issued,
ranging  from 5.75% to 6.25% interest for a term not more than one year, monthly
payments  totaling  $16,383  and  each  are unsecured.  The total amount owed on
these  notes  as  of December 31, 2010 was approximately $47,400 and these notes
are  expected  to  be  paid in full on the applicable maturity date, the last of
which  is  August  2011.

During  2009  and  2010,  the  Company borrowed a total of $1,382,900 from seven
lenders  to  purchase  processing  and automotive equipment.  As of December 31,
2010, a total of fourteen term notes are outstanding, ranging from 3.8% to 10.9%
interest  for  terms  ranging  three  to  five  years, monthly payments totaling
approximately  $30,000  and  all secured by equipment.  The total amount owed on
all  notes  as of December 31, 2010 was approximately $521,000 and all notes are
expected  to  be paid in full on the applicable maturity date, the last of which
is  in  October  2013.


<PAGE>

                        N-VIRO INTERNATIONAL CORPORATION

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                 FOR THE YEARS ENDED DECEMBER 31, 2010 AND 2009

NOTE  3.     PLEDGED  ASSETS,  LINE-OF-CREDIT  AND  LONG-TERM  DEBT  (CONTINUED)

In  2009  the  Company  approved  an offering of up to $1,000,000 of Convertible
Debentures  (the  "Debentures"),  convertible  at  any  time  into the Company's
unregistered  common  stock  at $2.00 per share.  The Debentures are issuable in
$5,000  denominations,  are  unsecured  and  have  a stated interest rate of 8%,
payable quarterly to holders of record.  The Company has timely paid all accrued
interest  due  to  all  Debenture  holders of record as of each quarter-end date
starting in July 2009.  At any time, the Company may redeem all or a part of the
Debentures  at  face  value  plus  unpaid  interest.

During 2009 the Company issued $765,000 of Debentures to a total of twenty three
accredited  investors,  and  one  investor  redeemed  $10,000 of Debentures into
unregistered  common  stock.  During  2010  the  Company  issued  $55,000  of
Debentures,  and three investors converted a total of $90,000 of Debentures into
unregistered  common  stock.  The  Debentures  mature at June 30, 2011 and as of
December  31,  2010,  the  Company  held  $720,000  of  Debentures.

Because  the  fair  market  value  of the Company's common stock (the underlying
security  in  the  Debentures) may have been above the conversion price of $2.00
per share at the date of issuance, the Company was required under GAAP to record
a  discount  given  for certain Debentures sold to date, which totaled $184,975.
The  discount  is  then  required  to  be amortized as a period expense over the
periods  the  Debentures  are  scheduled  to  be  outstanding, which averages 20
months.  For  the  years  ended December 31, 2010 and 2009, amortization expense
amounted  to  $108,000  and  $24,300,  respectively.

Approximate aggregate maturities of long-term debt for the years ending December
31  are  as follows:  2011 - $1,058,000;  2012 - $173,000;  2013 - $59,000; 2014
and  after  -  $1,000.


NOTE 4.     RELATED PARTY TRANSACTIONS

During  the  years  ended December 31, 2010 and 2009, the Company advanced funds
for  start-up  and  beginning  operating  capital  of  $9,000  and  $15,325,
respectively,  to their joint venture limited liability company, Mahoning Valley
N-Viro.  Mahoning Valley N-Viro is owned 50% by the Company and 50% by SouthSide
Environmental  Group  of  Struthers,  Ohio.

Also  during  2010  and  2009,  the  Company  paid  Terri Kasmoch, the spouse of
President  and  Chief Executive Officer Timothy Kasmoch, outside consulting fees
for  business  development,  web  site  and  company  media  marketing and stock
promotion  efforts  for  the  Company,  and  as an employee with the same duties
starting  in  the  4th  quarter  of  2010.

During  the  year ended December 31, 2010, the Company paid Thomas L. Kovacik, a
member  of  the  Board of Directors, a fee for consulting services.  The fee was
paid  with  10,000  stock  options  at  an  exercise  price of $3.53, which vest
immediately  and  are  exercisable  over  10 years.  To reflect the value of the
options,  the  Company recorded an expense of $31,421.  The fee was exclusive of
director  fees  and  expenses  paid  for  with  cash  and  stock  options.

The  following table summarizes these payments for 2010 and 2009 and the balance
to  each  of  any  monies  owed  as  of  December  31,  2010:

<TABLE>
<CAPTION>


  Payee              Year  Consulting fees   Gross Payroll    Total   Account payable balance at December 31
  -----------------  ----  ----------------  --------------  -------  --------------------------------------
  <S>                <C>   <C>               <C>             <C>      <C>
  Terri Kasmoch      2010  $         10,685  $       10,833  $21,518                                       -
  Terri Kasmoch      2009            11,000               -   11,000
  Thomas L. Kovacik  2010            31,421               -   31,421                                       -
</TABLE>


<PAGE>

                        N-VIRO INTERNATIONAL CORPORATION

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                 FOR THE YEARS ENDED DECEMBER 31, 2010 AND 2009

NOTE 5.     EQUITY TRANSACTIONS

In  January  2010,  the  Company  executed  a  Placement Agent Agreement, or the
Agreement,  with Burnham Hill Partners of New York, NY, or BHP.  The Company has
engaged  BHP  as  its placement agent in connection with the issuance of debt or
equity  securities  through a transaction exempt from registration for a term of
six months from the date of the Agreement.  For its services, the Company issued
BHP  10,000  shares of the Company's unregistered common stock.  The shares were
issued  in  a private transaction pursuant to an exemption under Section 4(2) of
the  Securities  Act  of  1933.  In  the  event  the Company secures a financing
placement  through  BHP,  the Company will issue common stock placement warrants
equal  to 8% of the number of common stock shares issued in the financing, for a
term  of  seven  years and be exercisable at 120% of the price paid per share by
the  investors.  The  Company  accounted  for  this  transaction  by recording a
deferred current asset of $30,000 that was amortized ratably over the subsequent
six  month  period  the  services  were  rendered  in  2010.

During 2010 we issued an additional $55,000 of Convertible Debentures, and three
investors  converted a total of $90,000 of existing Debentures into unregistered
common  stock.  The  amount  of  Debentures  outstanding  at the end of 2010 was
$720,000,  convertible  at  $2.00  per  share  or  360,000  shares.

In July 2010, the Company executed a Purchase Agreement, License and Development
Agreement  and  Registration Rights Agreement (the "Agreements"), with VC Energy
I, LLC of Las Vegas, NV, or VC Energy.  Concurrently, the Company sold VC Energy
200,000  shares  of  the Company's unregistered common stock at a price of $2.50
per share, issued VC Energy 200,000 warrants exercisable at $2.75 per share, and
also  granted  VC  Energy  an  option  to  acquire another 400,000 shares of the
Company's  unregistered  common stock at a price of $2.50 per share, and 400,000
warrants  exercisable  at  $2.75  per  share.

In  September 2010, the Company executed Amendment Number 1, effective September
15,  2010  (the  "Amendment")  to  the  Purchase  Agreement with VC Energy.  The
purpose  of  the  Amendment  was  to modify certain of the purchase terms in the
Purchase  Agreement,  and  VC  Energy  exercised  its option to purchase 200,000
shares  of  the  Company's common stock for $500,000 which VC Energy paid for by
delivering its unsecured promissory note to the Company for $500,000, payable in
installments  over  a  12  month  period,  with  the  first  $200,000  of  such
installments  due bi-weekly between September 30, 2010 and December 30, 2010 and
the  final  $300,000  due  September 15, 2011.  The promissory note provides for
acceleration  in  the  event  of  default  and a default interest rate of 8% per
annum.  The  Company  also  delivered 200,000 warrants to purchase shares of its
common  stock at an exercise price of $2.50 per share.  Under the Amendment, the
Company  will  transfer  all  200,000  shares  and 200,000 warrants to an Escrow
Agent,  and  the  shares  and  warrants will be released ratably to VC Energy as
installments  payments  due  the  Company  are  received.  VC  Energy  made  all
installment  payments  due through December 2010, and the escrow agent delivered
80,000  shares  and  80,000 warrants to VC Energy, with the remaining shares and
warrants  continuing  to  be held by the escrow agent.  In addition, VC Energy's
option  to  purchase  the remaining 200,000 shares of the Company's common stock
was  extended  to  December 31, 2010 and then a second time to March 1, 2011, on
the  same  terms as the original Purchase Agreement.  VC Energy did not exercise
the  purchase  option  for  the  additional 200,000 shares on or before March 1,
2011.  At  each  extension date, the Company recorded the difference in the fair
market  value  of the Company's common stock and the recorded price of the stock
warrants as a reduction to Accumulated Deficit and an increase to the Additional
Paid  In  Capital  accounts,  totaling  $611,854  in  2010.

In  both  the  VC Energy Agreements and the Amendment, the Company accounted for
the  warrants  issued  within  the  transaction  with  a provision that protects
holders  from  declines  in  the  stock  price  ("down-round"  provisions)  as a
derivative  security at fair value with future changes in fair value recorded in
earnings.  As  of  December  31,  2010,  the Company has recorded a liability of
$744,476  to  reflect  the  fair  value  of  the  warrants.  The Company will be
periodically  required  to  re-measure  the  fair  value  of the warrants at the
Balance  Sheet  date,  with adjustments in the value recorded through the income
statement  as  a  gain  or  loss.  During  the year ended December 31, 2010, the
Company recorded a loss of $140,326 on the revaluation from the two issuances of
the  warrants  to  the  end  of  the  period.

On  December  21, 2010, the Company issued 110,000 shares of unregistered Common
Stock  to SLD Capital Corporation ("SLD"), as compensation for services rendered
by SLD to the Company under a Consulting Agreement, effective as of December 10,
2010.  The  agreement  is for a term of eighteen months from the effective date.
More  details  of  this  Agreement  are  contained  in  Note  2.

Also  on  December  21, 2010,  the Company issued 150,000 shares of unregistered
Common  Stock to Strategic Asset Management, Inc., ("SAMI"), as compensation for
services  rendered  by  SAMI  to  the Company under a Financial Public Relations
Agreement,  effective  as  of December 15, 2010.  The agreement is for a term of
two years from the effective date.  More details of this Agreement are contained
in  Note  2.

In  addition  to its first stock option plan approved in 1993, the Company has a
stock option plan approved in May 2004, amended in June 2008 and again in August
2009  (the  "2004  Plan"), for directors and key employees under which 2,500,000
shares  of common stock may be issued.  The Company also has a stock option plan
approved  in  July 2010 (the "2010 Plan"), for directors and key employees under
which  5,000,000  shares of common stock may be issued.  Unless otherwise stated
in the stock option agreement, options are 20% vested on the date of grant, with
the  balance vesting 20% per year over the next four years, except for directors
whose  options  vest six months from the date of grant.  Options were granted in
2010 and 2009 from the 2004 Plan at the approximate market value of the stock at
date  of  grant,  as  defined  in  the  plan.

Pursuant  to  their  respective five-year employment agreements, in March 2010 a
total  of  890,000 stock options were granted to the three executive officers of
the  Company.  Twenty  percent  of the options vested immediately on the date of
grant, with the balance of the options to vest in equal annual installments over
the  next  four  years  on  the  anniversary  date of the original grant.  These
options  were  granted  pursuant to the 2004 Plan, are for a period of ten years
and  are intended as Incentive Stock Options.  To reflect the value of the stock
options  granted  for  the employment services provided, the Company is taking a
charge  to  earnings  totaling approximately $2,358,000 through March 2014.  For
the year ended December 31, 2010, this charge was $844,840.  More information on
these  equity  transactions  is  contained  in  this  Form  10-K  under Item 11,
"Executive  Compensation".

During  the  year  ended December 31, 2010, the Company granted additional stock
options  totaling  175,000 shares, exclusive of the officers:  90,000 options to
outside  directors, 10,000 options to an outside director acting in his capacity
as  a consultant and 75,000 options to three employees.  All options granted are
for  a  period  of  ten  years.

The  options  granted  to the directors became fully vested six months after the
date of grant, and were priced, pursuant to the 2004 Plan, at a weighted average
price  of  $3.08 for a total expense of approximately $209,000, expensed ratably
over  the  subsequent  six-month periods.  The options granted to the consultant
vested  immediately  and  were priced, pursuant to the 2004 Plan, at $3.53 for a
total  expense of approximately $31,400, expensed immediately.  More information
on  these  equity  transactions  is  contained  in this Form 10-K under Item 10,
"Directors,  Executive  Officers  and  Corporate  Governance".

The  options granted to the three employees vested twenty percent on the date of
grant, with the balance of the options to vest in equal annual installments over
the  next  four years on the anniversary date of the original grant.  All of the
options are exercisable at $1.89 per share and were granted pursuant to the 2004
Plan  and  are  intended  as  Incentive  Stock  Options.


<PAGE>

                        N-VIRO INTERNATIONAL CORPORATION

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                 FOR THE YEARS ENDED DECEMBER 31, 2010 AND 2009

NOTE 5.     EQUITY TRANSACTIONS (CONTINUED)

The following summarizes the stock options activity for the years ended December
31,  2010  and  2009:
<TABLE>
<CAPTION>

                                                             2010                    2009
                                                    ----------------------  ----------------------
                                                                 Weighted                Weighted
                                                                  Average                 Average
                                                                 Exercise                Exercise
                                                      Shares       Price      Shares       Price
                                                    -----------  ---------  -----------  ---------
<S>                                                 <C>          <C>        <C>          <C>
Outstanding, beginning of year                       1,279,825   $    2.24     746,025   $    2.28
Granted                                              1,065,000   $    3.16     634,000   $    2.18
Exercised                                              (54,125)  $    1.91     (21,400)  $    1.43
Expired during the year                                (17,400)  $    3.75     (78,800)  $    2.36
                                                    -----------  ---------  -----------  ---------
Outstanding, end of year                             2,273,300   $    2.67   1,279,825   $    2.24
                                                    ===========  =========  ===========  =========

Eligible for exercise at end of year                 1,501,300   $    2.41   1,222,325   $    2.24
                                                    ===========  =========  ===========  =========

Weighted average fair value per option for
  options granted during the year                   $     3.16              $     2.09
                                                    ===========             ===========

Options expected to vest over the life of the Plan   2,273,300               1,279,825
                                                    ===========             ===========
</TABLE>

The  Company  records  compensation  expense  for  stock  options  based  on the
estimated fair value of the options on the date of grant using the Black-Scholes
valuation  model.  The  Company  uses  historical  data  among  other factors to
estimate  the  expected  price  volatility,  the  expected  option  term and the
expected  forfeiture  rate.  The  risk-free  rate  is based on the U.S. Treasury
yield  curve in effect at the date of grant for the expected term of the option.

The following assumptions were used to estimate the fair value of options
granted:

<TABLE>
<CAPTION>

                             Year Ended December 31,
                              ----------------------
                                 2010        2009
                              ----------  ----------
<S>                           <C>         <C>
Expected dividend yield            0.00%       0.00%
Weighted average volatility        73.7%       79.4%
Risk free interest rate       2.5 - 3.6%  2.9 - 3.5%
Expected term (in years)              7          10
</TABLE>

In  October 2009, the Company approved a plan to extend to all holders of N-Viro
International Corporation warrants, a choice to extend their respective exercise
periods  if  they  complete  the transaction by December 31, 2009, by either (1)
exercising  at  least  1%  of  the  existing  number of warrants and receive the
balance  of  warrants with a 1-year extended date at the original exercise price
and date based on the original agreement, or, (2) choosing a 1:1 exercise of any
warrants  held  and  receive  a  new  warrant for a 5-year term at a new "strike
price"  of  $2.52  per  share on the new warrants issued, whereby the holders of
such  warrants  will  also  receive  the  balance  of their unexercised original
warrants  with  their  expiration  date  extended  for one additional year.  The
incremental  fair  value  associated  with  the  extension  of  the  warrant


<PAGE>

                        N-VIRO INTERNATIONAL CORPORATION

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                 FOR THE YEARS ENDED DECEMBER 31, 2010 AND 2009

NOTE  5.     EQUITY  TRANSACTIONS  (CONTINUED)

expiration  dates and issuance of replacement warrants has been determined using
the  Black-Scholes  model  and  has been recorded as a deemed dividend to common
stockholders  in  the  accompanying Statement of Stockholders' Equity (Deficit).
On  two  more  occasions during 2010, an automatic extension of time to exercise
their respective warrants was granted to all warrant holders of record, in March
and  in September.  All other terms of the warrant remained in place, other than
the  expiration  date.


NOTE  6.     REVENUE  AND  MAJOR  CUSTOMERS

Revenues  for  the  years ended December 31, 2010 and 2009 include revenues from
one  major  customer,  the  City  of  Toledo,  Ohio  (included  in  the facility
management,  and,  products  and  services  classifications),  which represented
approximately  22% for 2010 and 32% for 2009 of total consolidated revenue.  The
accounts  receivable  balance  due  (which  is  unsecured) from this customer at
December 31, 2010 and 2009 was approximately $68,000 and $188,000, respectively.
The  contract  with this customer is due to expire at the end of September 2011.
The Company is attempting to negotiate either a renewal of that agreement or the
issuance of a new contract for a new facility, but no assurance can be given the
Company  will  be able to secure such a renewal/new agreement at all or on terms
that  are as favorable as the current agreement.  The Company's failure to renew
this agreement on favorable terms would likely have a material adverse effect on
the  Company's  business,  financial  conditions  and  results  of  operations.

The Company's six largest customers billed through Florida N-Viro each represent
between  5%  -  20% of the consolidated revenue for the Company, or a collective
total  of  approximately  63% for these six customers for 2010 and 57% for 2009.
Florida  operations  accounted  for  approximately  74%  and 63% of consolidated
revenue  during  the  years ended December 31, 2010 and 2009, respectively.  The
accounts  receivable  balance  due  (which  are unsecured) for these six Florida
N-Viro  customers  at  December 31, 2010 and 2009 was approximately $328,000 and
$314,000,  respectively.

A substantial portion of the Company's revenue is derived from services provided
under  contracts  and  agreements  with  existing  licensees.  Some  of  these
contracts,  especially  those  contracts  with large municipalities, provide for
termination of the contract by the customer after giving relatively short notice
(in  some  cases  as  little as ten days).  In addition, some of these contracts
contain  liquidated  damages clauses, which may or may not be enforceable in the
event  of early termination of the contracts.  If one or more of these contracts
are  terminated prior to the expiration of its term, and the Company is not able
to  replace  revenues from the terminated contract or receive liquidated damages
pursuant  to  the  terms of the contract, the lost revenue could have a material
and  adverse  effect  on  its  business  and  financial  condition.


NOTE 7.     COMMITMENTS AND CONTINGENCIES

On  March  17,  2010,  the Company and Mr. Timothy R. Kasmoch, the President and
Chief  Executive  Officer,  entered into an Employment Agreement for a five-year
term.  Mr.  Kasmoch  is to receive an annual base salary of $150,000, subject to
an  annual  discretionary increase.  In addition, Mr. Kasmoch is eligible for an
annual  cash  bonus  and  was  granted  stock  options from the Company's Second
Amended  and  Restated  2004 Stock Option Plan.  Generally, the Agreement may be
terminated  by  the  Company  with  or  without cause or by the Employee for any
reason.

On  March  17,  2010,  the  Company and Mr. Robert W. Bohmer, the Executive Vice
President  and  General  Counsel,  entered  into  an  Employment Agreement for a
five-year  term.  Mr.  Bohmer  is  to receive an annual base salary of $150,000,
subject  to  an  annual  discretionary  increase.  In  addition,  Mr.  Bohmer is
eligible  for  an  annual  cash  bonus  and  was  granted stock options from the
Company's  Second  Amended  and Restated 2004 Stock Option Plan.  Generally, the
Agreement  may  be  terminated  by  the  Company with or without cause or by the
Employee  for  any  reason.

On  March  17,  2010,  the  Company and Mr. James K. McHugh, the Chief Financial
Officer,  Secretary  and  Treasurer,  entered into an Employment Agreement for a
five-year  term.  Mr.  McHugh  is  to receive an annual base salary of $125,000,
subject  to  an  annual  discretionary  increase.  In  addition,  Mr.  McHugh is
eligible  for  an  annual  cash  bonus  and  was  granted stock options from the
Company's  Second  Amended  and Restated 2004 Stock Option Plan.  Generally, the
Agreement  may  be  terminated  by  the  Company with or without cause or by the
Employee  for  any  reason.

<PAGE>

                        N-VIRO INTERNATIONAL CORPORATION

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                 FOR THE YEARS ENDED DECEMBER 31, 2010 AND 2009

NOTE 7.     COMMITMENTS AND CONTINGENCIES (CONTINUED)

Through  April  2011,  the  Company's  executive  and administrative offices are
located  in  Toledo,  Ohio,  under  a  month  to  month  lease,  and believe our
relationship with the lessor is satisfactory.  The total rental expense for this
location  included  in  the statements of operations for each of the years ended
December  31,  2010 and 2009 is approximately $38,500 and $37,600, respectively.
The  Company  also leases various equipment on a month-to-month basis.  In March
2011,  the  Company  signed  a  68 month lease with a new lessor in Toledo.  The
total  minimum  rental  commitment  for  the  year  ending  December 31, 2011 is
approximately  $15,600,  for  2012  is  $37,400, for 2013 is $30,600 and for the
years  2014  through  2016  is  $40,800  each  year.

In  October  2010, the Company began to lease property in Emlenton, Pennsylvania
under  a lease with A-C Valley Industrial Park, for one year.  The total minimum
rental  commitment  for  the year ended December 31, 2011 is $18,000.  The total
rental  expense  included  in the statements of operations for the twelve months
ended  December  31,  2010  is  $6,000.

In  June 2009, the Company began to maintain an office in West Unity, Ohio under
a  lease  with  D&B  Colon  Leasing, LLC, for one year, which was extended for a
one-year  term  through  May  2011.  The total minimum rental commitment for the
year  ended  December 31, 2011 is $12,500.  The total rental expense included in
the  statements  of operations for the twelve months ended December 31, 2010 and
2009  is  $30,000  and  $17,500,  respectively.

The  Company  maintains an office in Daytona Beach under a lease with the County
of Volusia, Florida, which was renewed in March, 2009 for five years.  The total
minimum rental commitment for the years ending December 31, 2011 through 2013 is
$48,000  each  year, and for 2014 is $12,000.  The total rental expense included
in the statements of operations for each of the twelve months ended December 31,
2010  and  2009  is  $48,000.

The Company also leased other processing equipment at its Florida location which
began  in  February  2008  under  a  three-year lease.  The total minimum rental
commitment  for  the  year ending December 31, 2011 is $4,000.  The total rental
expense  included  in the statements of operations for each of the twelve months
ended  December  31,  2010 and 2009 is approximately $46,200.  In February 2011,
the  Company  purchased  the  equipment  through a financing arrangement with an
equipment  leasing  company.

Through  January  2010,  the  Company  also  leased  processing equipment at the
Florida  location  which  began  in  2006 under a four year contract.  The total
rental  expense  included  in the statements of operations for the twelve months
ended  December  31,  2010  and  2009  was  approximately  $3,000  and  $31,000,
respectively.  In  February  2010, the Company purchased the equipment through a
financing  arrangement  with  an  equipment  leasing  company.

Management  believes that all of the Company's properties are adequately covered
by  insurance.

The Company operates in an environment with many financial risks, including, but
not  limited  to,  major  customer concentrations, customer contract termination
provisions,  competing  technologies,  infringement  and/or  misappropriation of
intellectual  property  rights,  the  highly competitive and, at times, seasonal
nature  of  the  industry  and  worldwide economic conditions.  Various federal,
state and governmental agencies are considering, and some have adopted, laws and
regulations  regarding environmental protection which could adversely affect the
business  activities of the Company.  The Company cannot predict what effect, if
any,  current  and future regulations may have on the operations of the Company.

     From  time to time the Company is involved in legal proceedings and subject
to  claims  which  may arise in the ordinary course of business.  The Company is
not  aware  of  any  legal  proceedings  or  material  claims  at  this  time.

<PAGE>

                        N-VIRO INTERNATIONAL CORPORATION

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                 FOR THE YEARS ENDED DECEMBER 31, 2010 AND 2009

NOTE 8.     INCOME TAX MATTERS

The composition of the deferred tax assets and liabilities at December 31, 2010
and 2009 is as follows:
<TABLE>
<CAPTION>


                                                      2010          2009
                                                  ------------  ------------
<S>                                               <C>           <C>
Gross deferred tax liabilities:
 Property and equipment and intangible assets     $   (72,800)  $   (99,800)
Gross deferred tax assets:
 Loss carryforwards                                 4,214,800     4,084,400
 Section 754 basis step up                            128,500       149,900
 Allowance for doubtful accounts                       23,800        17,000
 Other                                                    500         3,100

Less valuation allowance                           (4,294,800)   (4,154,600)
                                                  ------------  ------------

                                                  $         -   $         -
                                                  ============  ============
</TABLE>


The  income  tax  provisions  differ from the amount of income tax determined by
applying  the  U.S.  Federal  income  tax rate to pre-tax income from continuing
operations  for  the  years ended December 31, 2010 and 2009 and are as follows:
<TABLE>
<CAPTION>


                                                    2010          2009
                                                ------------  ------------
<S>                                             <C>           <C>
Computed "expected" tax expense (credit)        $(1,009,500)  $  (820,800)
State taxes, net of federal tax benefit                   -             -
(Decrease) increase in income taxes resulting
  from:
    Change in valuation allowance                   140,200    (1,701,200)
    Net operating loss carryfoward expiration       520,300     2,082,200
    Nondeductible stock options and warrants        351,800       440,000
    Other                                            (2,800)         (200)
                                                ------------  ------------

                                                $         -   $         -
                                                ============  ============
</TABLE>

The net operating losses available at December 31, 2010 to offset future taxable
income  total  approximately  $12,400,000 and expire principally in years 2012 -
2030.  Approximately  $685,000  will expire if not used to offset taxable income
for  the  2012  tax  year.


<PAGE>

                        N-VIRO INTERNATIONAL CORPORATION

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                 FOR THE YEARS ENDED DECEMBER 31, 2010 AND 2009

NOTE 9.     401(K) PLAN

     Until  2009,  the  Company  had  a  401(k)  plan covering substantially all
employees  which  provided  for  contributions  in  such amounts as the Board of
Directors  would  determine  annually.  Participating  employees  could  also
contribute  a  portion  of  their  annual  compensation.  There were no employer
contributions  for  the  years  ended  December 31, 2010 and 2009.  In 2009, the
Company terminated the plan and distributed all plan assets to the participants.

NOTE 10.

     The  Company has adopted the provisions of ASC 820, Fair Value Measurements
and  Disclosures ("ASC 820") related to nonfinancial assets and liabilities on a
prospective  basis.  ASC820  establishes  the  authoritative  definition of fair
value,  sets  out  a framework for measuring fair value and expands the required
disclosures  about fair value measurement.  The valuation techniques required by
ASC  820  are  based  on  observable and unobservable inputs using the following
three-tier  hierarchy:

-     Level 1 - Inputs are unadjusted quoted prices in active markets for
indentical assets or liabilities.

-     Level  2  - Inputs are quoted prices for similar assets and liabilities in
active markets, quoted prices for identical or similar assets and liabilities in
markets  that  are  not  active,  or  inputs  that  are observable for assets or
liabilities,  either  directly  or  indirectly,  through  market  corroboration.

-     Level 3 - Inputs are unobservable inputs based on the Company's own
assumptions.

     The following table summarizes the basis used to measure assets and
liabilities at fair value on a recurring basis in the balance sheet:

<TABLE>
<CAPTION>


                            as of December 31, 2010
          ----------------------------------------------------------
                  Level 1           Level 2    Level 3      Total
          ------------------------  --------  ----------  ----------
<S>       <C>                       <C>       <C>         <C>
Warrants  $                      -  $      -  ($744,476)  ($744,476)

</TABLE>


NOTE 11.     SUBSEQUENT EVENTS

     The  Company  has  performed  a  review of events subsequent to the balance
sheet  date  and  no  matters  required  disclosure.


<PAGE>

ITEM  9.     CHANGES  IN  AND  DISAGREEMENTS  WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL  DISCLOSURE

     None


ITEM  9A.     CONTROLS  AND  PROCEDURES

EVALUATION  OF  DISCLOSURE  CONTROLS  AND  PROCEDURES

     We  maintain  disclosure  controls  and  procedures  (as  defined  in  Rule
13a-15(e)  and  15d-15(e)  under  the  Securities Exchange Act of 1934) that are
designed to ensure that information required to be disclosed in our Exchange Act
reports  is recorded, processed, summarized and reported within the time periods
specified  in  the  Commission's  rules  and forms, and that such information is
accumulated  and  communicated  to  our  management,  including  our  principal
executive  officer  and  principal  financial  officer, as appropriate, to allow
timely  decisions  regarding  required disclosures.  In designing and evaluating
the  disclosure controls and procedures, management recognized that any controls
and  procedures,  no  matter  how  well  designed and operated, can provide only
reasonable  assurance  of  achieving  the  desired  control  objectives.

     As  of the end of the period covered by this report, management carried out
an evaluation, under the supervision and with the participation of our principal
executive  officer  and  principal financial officer, of our disclosure controls
and  procedures (as defined in Rule 13a-15(e) and Rule 15d-15(e) of the Exchange
Act).  Based  upon the evaluation, our principal executive officer and principal
financial officer concluded that our disclosure controls and procedures were not
effective  at  a  reasonable  assurance  level to ensure that information we are
required  to  disclose  in the reports that we file or submit under the Exchange
Act  is  recorded,  processed,  summarized and reported, within the time periods
specified  in  the  SEC's  rules  and forms.  Our history of losses has severely
limited  our  budget to hire and train enough accounting and financial personnel
needed  to  adequately  provide this function.  Consequently, we lack sufficient
technical  expertise,  reporting  standards  and written policies and procedures
regarding  disclosure  controls  and  procedures.

     Because  of  the inherent limitations in all disclosure control systems, no
evaluation  of  controls  can provide absolute assurance that all control issues
and  instances  of fraud, if any, will be or have been detected.  These inherent
limitations  include  the  realities  that  judgments  in decision-making can be
faulty  and  that  breakdowns  can  occur  because  of  simple error or mistake.
Additionally,  disclosure controls can be circumvented by the individual acts of
some  persons,  by collusion of two or more people and/or by management override
of such controls.  The design of any system of disclosure controls also is based
in  part  upon  certain  assumptions  about the likelihood of future events, and
there  can  be no assurance that any design will succeed in achieving its stated
goals under all potential future conditions.  Over time, disclosure controls and
procedures  may  become  inadequate because of changes in conditions, and/or the
degree  of  compliance  with the policies and procedures may deteriorate.  Also,
misstatements  due  to  error  or  fraud  may  occur  and  not  be  detected.

MANAGEMENT'S  ANNUAL  REPORT  ON  INTERNAL  CONTROL  OVER  FINANCIAL  REPORTING

     Our  management  is  responsible  for establishing and maintaining adequate
internal  control over financial reporting.  Our internal control over financial
reporting  is designed to provide reasonable assurance regarding the reliability
of  financial reporting and the preparation of consolidated financial statements
for  external  purposes  in  accordance  with  generally  accepted  accounting
principles.

     Under  the  supervision  and  with  the  participation  of  our management,
including  our  principal  executive officer and principal financial officer, we
conducted  an  evaluation  of  the  effectiveness  of  our internal control over
financial  reporting  based  on  the  framework  established by the Committee of
Sponsoring  Organizations  of  the  Treadway  Commission  (COSO) as set forth in
Internal Control - Integrated Framework.  Based on our evaluation, our principal
executive  officer  and  our  principal  financial  officer  concluded  that our
internal controls over financial reporting were not effective as of December 31,
2010  for  the  reasons  described  below.

     We lack personnel in accounting and financial staff to sufficiently monitor
and  process  financial  transactions  in  an  efficient and timely manner.  Our
history  of  losses  has  severely  limited  our budget to hire and train enough
accounting  and  financial personnel needed to adequately provide this function.
Consequently,  we lacked sufficient technical expertise, reporting standards and
written  policies  and procedures.  Specifically, controls were not effective to
ensure  that  significant  non-routine  transactions,  accounting estimates, and
other  adjustments  were  appropriately  reviewed,  analyzed  and  monitored  by
competent  accounting  staff  on  a  timely  basis.

     We  continue  to  develop  and  implement a remediation plan to address the
material  weakness.  To  date, our remediation efforts have included adoption of
an  expense  reimbursement policy and the hiring of an employee to assist in the
financial  area  of  our  business.  However,  due  to  our  continuing  lack of
financial  resources  to  hire  and train accounting and financial personnel, we
have  not  yet  fully  remedied  this  material  weakness.

     During  the quarter ended December 31, 2010, there were no material changes
in  the Company's internal control over financial reporting that have materially
affected,  or are reasonably likely to materially affect, the Company's internal
control  over  financial  reporting.

     While  we  are  not  aware of any material errors to date, our inability to
maintain  the  adequate  internal controls may result in a material error in our
financial  statements.  Further,  because  of its inherent limitations, internal
controls  over  financial reporting may not prevent or detect misstatements.  It
should be noted that any system of controls, however well designed and operated,
can  provide only reasonable, and not absolute, assurance that the objectives of
the  system will be met.  In addition, the design of any control system is based
in  part  upon certain assumptions about the likelihood of future events.  Also,
projections  of any evaluation of effectiveness to future periods are subject to
the  risk  that controls may become inadequate because of changes in conditions,
or  that  the  degree  of  compliance  with  the  policies  or  procedures  may
deteriorate.

     This  annual  report does not include an audit or attestation report of our
registered  public accounting firm regarding our internal control over financial
reporting  because  the  attestation  report  requirement  has  been removed for
"smaller  reporting  companies"  under  the  Dodd-Frank  Wall  Street Reform and
Consumer  Protection  Act  of  2010.


ITEM  9B.     OTHER  INFORMATION

     None


<PAGE>


                                    PART III

ITEM  10.     DIRECTORS,  EXECUTIVE  OFFICERS  AND  CORPORATE  GOVERNANCE

                            DIRECTORS OF THE COMPANY

     The  Board  is  currently composed of four Class I Directors: Carl Richard,
Joseph  H.  Scheib,  Mark  D.  Hagans  and  Joan  B.  Wills;  and three Class II
Directors:  James  H.  Hartung,  Timothy R. Kasmoch and Thomas L. Kovacik (whose
terms will expire upon the election and qualification of directors at the annual
meetings  of  stockholders  to be held in 2011 and 2012, respectively).  At each
annual meeting of stockholders, directors will be elected for a full term of two
years  to  succeed  those  directors  whose  terms  are  expiring.

     The  following  table  sets  forth  the  names  and  ages of our directors.

<TABLE>
<CAPTION>

Name                Age                         Position
<S>                 <C>  <C>
------------------  ---  --------------------------------------------------------
Mark D. Hagans       44  Class I Director*
James H. Hartung     68  Class II Director, Chairman of the Board
Timothy R. Kasmoch   49  Class II Director, President and Chief Executive Officer
Thomas L. Kovacik    63  Class II Director
Carl Richard         84  Class I Director*
Joseph H. Scheib     54  Class I Director*
Joan B. Wills        58  Class I Director*

</TABLE>
_____________
* Directors currently nominated for re-election.

MARK  D.  HAGANS is an attorney and partner with the law firm of Plassman, Rupp,
Short  &  Hagans,  of  Archbold,  Ohio, and his practice focuses on corporation,
taxation  and  banking  law.  Mr. Hagans serves on numerous Boards of directors,
including  the  Fulton  County Health Center, where he is presently chair of the
Finance  Committee.  Mr.  Hagans  earned  his  law degree from the University of
Toledo.  Mr.  Hagans  has  served  as  our director since December 2006 and is a
member  of  the  Board's Audit, Finance and Technology Committees.  Mr. Hagans's
experience  as  a lawyer and businessman enables him to bring valuable resources
to  the  Board.

JAMES  H.  HARTUNG  is  the  former President and Chief Executive Officer of the
Toledo-Lucas  County  (Ohio)  Port Authority, a position he held from 1994 until
2008.  Mr. Hartung has served as our Director since January 2006 and is a member
of  the  Board's  Compensation and Nominating Committees.  Mr. Hartung presently
also  serves  as  the Chairman of the Board/Executive Vice-President at Seasnake
World  Wide  Marketing  LLC,  a  marketing  concern commercializing the Seasnake
shipping  system  for  the marine transportation of liquid, dry bulk, break-bulk
and  inter-modal  container  cargo;  and  Senior  Associate  at James A. Poure &
Associates,  which  provides  diverse management consultant services to small to
medium  size business, family owned business and entrepreneurial start-ups.  Mr.
Hartung's  qualifications  to  serve as a director and our Chairman of the Board
consist  of  several  years  experience  as  a businessman, as an organizational
leader  and  community  organizer,  and  in  dealings  with local government and
related  agencies  that  enable  him  to  bring  valuable insights to the Board.

TIMOTHY  R.  KASMOCH  has  been  our President and Chief Executive Officer since
February  2006  and  a  director  since  January 2006.  Until April 1, 2007, Mr.
Kasmoch  was  also  President  and  CEO  of  Tri-State  Garden  Supply,  d/b/a
Gardenscape,  a  bagger  and  distributor of lawn and garden products, which has
provided  trucking  services  to our Company.  Mr. Kasmoch is a graduate of Penn
State University.  Mr. Kasmoch is a member of the Board's Finance and Technology
Committees.  Mr.  Kasmoch's qualifications to serve as a director of the Company
consist  of  his  experience in the soil and distribution business as well as an
extensive  knowledge of the transportation and trucking industry.  Mr. Kasmoch's
strength  is  in  strategic  planning  and  he  possesses  a  broad, fundamental
understanding of the business drivers affecting us.  He is the only "insider" on
the  Board.

THOMAS  L. KOVACIK is the Executive Director of Transportation Advocacy Group of
Northwest  Ohio  ("TAGNO"), a strategic planning organization working with local
and Ohio transportation and economic development officials, and the President of
Kovacik  Consulting,  a business consulting company.  Mr. Kovacik was previously
employed by us from 1992 to 1995 as President of Great Lakes N-Viro, at the time
one  of  our  divisions.  Mr. Kovacik has also held various positions with local
government,  utilities  and environmental companies, and earned a masters degree
from  Bowling Green State University in Geochemistry.  Mr. Kovacik has served as
our  Director  since  December 2006, and is a member of the Board's Compensation
and  Technology Committees.  Mr. Kovacik's qualifications to serve as a director
of  the  Company  consist of his experience in the environmental, government and
utilities  industries, and his prior position with us as a divisional president.
His  strength in strategic planning and transactional experience offers a unique
perspective  to  the  Board.

CARL  RICHARD  is  the former Executive Vice-President of P.R. Transportation, a
trucking  company  located  in  Toledo,  Ohio,  and  was a consultant to us from
January  2006  to  April  2007.  Mr.  Richard  served  as Vice-President of C.A.
Transportation  from  1988  through  2000  and  as  Vice-President  of  R.O.S.S.
Investments, a real estate holding company, from 1980 through 2000.  Mr. Richard
has  served  as  our director since December 2004 and is a member of the Board's
Nominating  Committee.  Mr.  Richard's  qualifications to serve as a director of
the  Company  consist  of  his  extensive  experience  in the transportation and
trucking  industry.

JOSEPH  H.  SCHEIB  is a Certified Public Accountant and was the Chief Financial
Officer  of  Broad  Street  Software  Group, a comprehensive software technology
company located in Edenton, North Carolina, a position he held until 2010.  From
May  2000  until  February  2003,  Mr.  Scheib  was  the  Financial  Operation
Principal/Compliance  Officer  of  Triangle  Securities,  LLC  of Raleigh, North
Carolina,  an  asset  management,  brokerage  and  investment banking firm.  Mr.
Scheib  is  a  graduate of East Carolina University with a degree in accounting.
Mr.  Scheib  has  served as our Director since December 2004, and is a member of
the  Board's  Audit,  Finance  and  Nominating  Committees.  Mr.  Scheib's
qualifications  to  serve  as  a  director  of the Company consist of his strong
financial and asset management experience and serving the Company in a financial
oversight  role  as  the  Chair  of  the  Audit  Committee.  Given his extensive
knowledge  and  experience  in  finance, Mr. Scheib has been determined to be an
audit  committee  financial  expert  by  the  board.

JOAN  B. WILLS is currently legal counsel for The Narragansett Bay Commission, a
regional sewer authority located in Providence, Rhode Island, a position she has
held  since  2008.  Also,  Ms. Wills is currently Co-Trustee of the Cooke Family
Trust,  an  owner  of  more  than  5% of N-Viro International Corporation common
stock.  From  2006  until  2008,  Ms.  Wills provided legal counsel to the Rhode
Island  Office  of  Legislative  Counsel,  an  agency  involved  in drafting new
legislation  and  amendments to the State of Rhode Island.  Ms. Wills has been a
practicing  attorney  at  various  points in her career, and holds a Bachelor of
Arts  degree  from  the  University  of  Rhode Island and a Juris Doctorate from
Suffolk  University  Law School in Boston.  Ms. Wills has served as our Director
since  August  2009  and  is a member of the Compensation Committee.  Ms. Wills'
qualifications  to  serve as a director of the Company consist of her experience
as  an  attorney  in  the  utilities  industry.

KEY  RELATIONSHIPS

     Joan  Wills  is currently Co-Trustee of the Cooke Family Trust, an owner of
more  than  5%  of  our  common  stock.


                     CORPORATE GOVERNANCE AND BOARD MATTERS

OUR  BOARD  OF  DIRECTORS

     Our  business,  property and affairs are managed under the direction of our
Board.  We  have  determined  that  the  Company's  interests are best served by
having  a  Chairman  of  the  Board  who is independent of the management of the
Company because it is our view this inherently strengthens board independence in
dealing  with  issues  that  closely  involve  management.  Our  Chief Executive
Officer  has  responsibility  for  setting  our  strategic  direction  and  the
day-to-day  leadership  and  performance,  while the Chairman of the Board has a
greater  focus on long-range Company goals and plans and governance of our Board
of  Directors.  This  balance  between  the two positions enables Mr. Kasmoch to
focus  on  the  operational and strategic challenges we presently face, with Mr.
Hartung  providing  board  leadership  on  matters  of governance and management
oversight.

     Our  Board,  as  a  whole,  has  the  responsibility  for risk oversight of
management.  The  role of our Board of Directors is to oversee the President and
Chief  Executive  Officer,  the Executive Vice President and the Chief Financial
Officer  in  the  operation of the Company, including management's establishment
and  implementation  of appropriate practices and policies with respect to areas
of potentially significant risk to us.  Our Board considers risks to the Company
as  part  of  the  strategic  planning process and thorough review of compliance
issues  in  committees  of  our  Board, as appropriate.  While the Board has the
ultimate  oversight  responsibility  for  such  risk management process, various
committees  of  the  Board are structured to oversee specific risks in the areas
covered  by  their  respective  assignments  such as audits or compensation.  In
addition,  our Board may retain, on such terms as determined by the Board and in
its  sole  discretion,  independent  legal,  financial and other consultants and
advisors  to  advise  and  assist  the  Board  in  fulfilling  its  oversight
responsibilities.  Currently,  there  are  no  such  consultants in any category
assisting  or  advising  the  Company.

     Management  is responsible for N-Viro's day-to-day risk management, and the
entire  Board's  role  is  to engage in informed oversight.  Our Chief Executive
Officer  is  a member of the Board of Directors, and our Chief Financial Officer
and  Executive  Vice  President/General Counsel regularly attend Board meetings,
which  helps  facilitate  discussions  regarding  risk between the Board and our
senior  management,  as  well  as  the  exchange  of risk-related information or
concerns  between  the  Board and the senior management.  The Board believes Mr.
Kasmoch's  service  as  Chief  Executive Officer and on the Board is appropriate
because it bridges a critical gap between our management and the Board, enabling
the  Board  to  benefit  from management's perspective on our business while the
Board  performs  its  oversight  function.

     The  Company's  philosophy  about  diversity  among  its  Board  members is
discussed  below  under  "Nominating  Committee."

MEETINGS  OF  THE  BOARD  OF  DIRECTORS

     Our  Board  held  eight  meetings  during  2010,  consisting of one regular
meeting  and  seven  special  meetings.  Each  director  attended  100%  of  the
aggregate  number  of meetings held by the Board of Directors and the Committees
of  the  Board of Directors on which he served.  It is the policy of the Company
that the members of the Board attend our annual stockholder meeting.  Failure to
attend  annual meetings without good reason is a factor the Nominating Committee
and  Board  will  consider in determining whether or not to renominate a current
Board  member.  All  members  of the Board serving at the time attended the 2010
Annual  Meeting,  except  Mr.  Scheib.

SHAREHOLDER  COMMUNICATIONS  WITH  THE  BOARD

     We  encourage  stockholder communications with directors.  Stockholders may
communicate  with  a  particular  director, all directors or the Chairman of the
Board  by  mail or courier addressed to him or the entire Board in care of James
K.  McHugh,  Corporate  Secretary,  N-Viro  International Corporation, 3450 West
Central  Avenue, Suite #328, Toledo, OH  43606.  All correspondence should be in
a  sealed  envelope  marked "Confidential" and will be forwarded unopened to the
director  as  appropriate.

BOARD  INDEPENDENCE

     Although  we  are  not  subject  to  the  listing requirements of any stock
exchange, we are committed to a board in which a majority of our members consist
of  independent  directors,  as  defined  under the NASDAQ rules.  The Board has
reviewed  the  independence  of  its  members, applying the NASDAQ standards and
considering  other  commercial,  legal,  accounting  and  familial relationships
between  the  directors  and  us.  The  Board  has  determined  that  all of the
directors  and  director nominees are independent other than Mr. Kasmoch, who is
not  an  independent  director  by  virtue  of his current position as our Chief
Executive  Officer.

CODE  OF  ETHICS

     We  have  adopted a Code of Ethics which covers the Chief Executive Officer
and  Chief  Financial  Officer, which is administered and monitored by the Audit
Committee  of  the  Board.  A  copy of the Code of Ethics is attached as Exhibit
14.1  to  this  Annual Report on Form 10-K for the year ended December 31, 2010,
and  is  posted  on  our  web  site  at  www.nviro.com.
                                         -------------

COMMITTEES  OF  THE  BOARD  OF  DIRECTORS

     The  Board has the following standing committees:  the Audit Committee, the
Compensation  Committee, the Finance Committee, the Nominating Committee and the
Technology  Committee.  The  composition  and  function of each Committee is set
forth  below:
<TABLE>
<CAPTION>


DIRECTOR            AUDIT  COMPENSATION  NOMINATING  FINANCE  TECHNOLOGY
------------------  -----  ------------  ----------  -------  ----------
<S>                 <C>    <C>           <C>         <C>      <C>
Mark D. Hagans         X                                 X*        X
James H. Hartung                X             X
Timothy R. Kasmoch                                        X        X*
Thomas L. Kovacik               X*                                 X
Carl Richard                                  X
Joseph H. Scheib       X*                     X*          X
Joan B. Wills                   X

</TABLE>

*  Committee Chair

AUDIT  COMMITTEE

     Our  Audit Committee consisted of Messrs. Scheib and Hagans.  In accordance
with  our  Audit  Committee Charter, each of the Audit Committee members must be
"independent"  as  determined  under  the  NASDAQ  rules.  The  Audit  Committee
currently  is not subject to, and does not follow, the independence criteria set
forth in Section 10A of the Securities Exchange Act 1934, as amended.  The Board
has  determined  that each of the directors who serve on the Audit Committee are
"independent"  under  the  NASDAQ  rules,  meaning  that  none  of  them  has  a
relationship  with us that may interfere with their independence from us and our
management.  Further,  the  Board  has determined that Mr. Scheib qualifies as a
"financial  expert"  as  defined  by the Securities and Exchange Commission (the
"SEC").

     The  Audit  Committee  recommends  the  appointment of the outside auditor,
oversees  our  accounting  and internal audit functions and reviews and approves
the  terms  of transactions between us and related party entities.  During 2010,
the  Audit  Committee met three times.  The Audit Committee has retained UHY LLP
to  conduct the audit for the year ended December 31, 2011.  The Audit committee
is  governed  by  a  written  charter, a copy of which was attached to the Proxy
Statement  for  our  annual  meeting  held  on  June  8,  2007.

COMPENSATION COMMITTEE

     The  Compensation  Committee  determines officers' salaries and bonuses and
administers  the grant of stock options pursuant to our stock option plans.  The
Compensation  Committee  does  not  have  a  written  charter.  The Compensation
Committee  consisted  of  Messrs.  Kovacik  and  Hartung  and  Ms.  Wills.  The
Compensation  Committee  met  three  times  during  2010.

     The  Board  has  determined  that  all  of the members of the committee are
"independent"  as  determined  under  the  NASDAQ  standards.

FINANCE COMMITTEE

     The  Finance  Committee,  consisting of Messrs. Hagans, Kasmoch and Scheib,
assists  in  monitoring  our cash flow requirements and approves any internal or
external financing or leasing arrangements.  The Finance Committee does not have
a  written  charter.  The  Finance  Committee  met  two  times  during  2010.

NOMINATING COMMITTEE

     The  Nominating  Committee,  consisting  of  Messrs.  Scheib,  Richard  and
Hartung, considers and recommends to the Board qualified candidates for election
as  Board  members,  and  establishes  and  periodically  reviews  criteria  for
selection  of  directors.  The  Nominating  Committee  does  not  have a written
charter.  The  Nominating  Committee  met  one  time  during  2010.

     The  Board  has  determined  that  all  of the members of the committee are
"independent"  as  determined  under  the  NASDAQ  standards.

     The  Nominating  Committee  will  consider  candidates  recommended  by
stockholders,  directors,  officers,  third-party search firms and other sources
for  nomination  as  a director.  The Committee considers the needs of the Board
and  evaluates  each  director  candidate  in  light of, among other things, the
candidate's  qualifications.  Recommended  candidates  must  be  of  the highest
character  and  integrity,  free  of  any  conflicts of interest and possess the
ability  to  work  collaboratively  with  others, and have the time to devote to
Board  activities.  All  candidates  will  be  reviewed  in  the  same  manner,
regardless  of  the  source  of  the  recommendation.  Presently, the Nominating
Committee  does  not  consider diversity as a characteristic in its selection of
candidates  except  to  the extent that the Nominating Committee seeks to expand
the  range of categories of experience and relationships in different aspects of
the  waste management process the Company requires for the different foci of its
business  and  potential  contacts  with sources of business opportunity for the
Company.

     The  Nominating  Committee will consider all stockholder recommendations of
proposed  director  nominees,  if such recommendations are timely received under
applicable  SEC  regulations  and  include all of the information required to be
included  as  set  forth  in  the  By-Laws.  To be considered "timely received,"
recommendations  must be received in writing at our principal executive offices,
at  N-Viro International Corporation, 3450 W. Central Avenue, Suite 328, Toledo,
Ohio  43606,  Attention:  Chairman,  Nominating  Committee, c/o James K. McHugh,
Corporate  Secretary,  no  later  than  February  25,  2012.

     All  candidates  recommended  by  stockholders  should  be  independent and
possess  substantial and significant experience which would be of value to us in
the  performance  of  the  duties  of  a director.  In addition, any stockholder
director  nominee  recommendation  must  include,  at  a  minimum, the following
information:  the  stockholder's  name;  address; the number and class of shares
owned; the candidate's biographical information, including name, residential and
business  address, telephone number, age, education, accomplishments, employment
history  (including positions held and current position), and current and former
directorships;  and  the  stockholder's  opinion  as  to whether the stockholder
recommended  candidate  meets  the definitions of "independent" under the NASDAQ
standards.  In  addition, the recommendation letter must provide the information
that  would  be  required  to  be  disclosed  in the solicitation of proxies for
election  of  directors  under  federal  securities  laws.  The stockholder must
include  the  candidate's  statement  that  he/she  meets these requirements; is
willing  to  promptly  complete  the  Questionnaire  required  of  all officers,
directors  and  candidates  for nomination to the Board; will provide such other
information  as  the  Committee may reasonably request; consents to serve on the
Board if elected; and a statement whether such candidate, if elected, intends to
tender, promptly following such person's election or re-election, an irrevocable
resignation  effective  upon  such person's failure to receive the required vote
for re-election at the next meeting at which such person would face re-election.

COMPENSATION OF DIRECTORS

     Our  Board  of  Directors  has approved the payment of cash compensation to
non-employee  directors  in exchange for their service on the Board.  The amount
of  cash compensation to be received by each non-employee director is $1,000 per
regular meeting attended during each calendar year, and $500 per special meeting
attended.  Our Board of Directors generally has four meetings per calendar year.
The  Directors  are  reimbursed for out-of-pocket expenses incurred in attending
meetings  of  the  Board  of  Directors  or  any  committees  thereof.

     Under  both  our  current  stock  option  plans  (the  N-Viro International
Corporation Second Amended and Restated 2004 Stock Option Plan ["2004 Plan"] and
the N-Viro International Corporation 2010 Stock Option Plan ["2010 Plan"]), each
non-employee  Director  automatically  receives  a  grant of options to purchase
2,500  or  5,000  shares, respectively, of Common Stock for each regular meeting
attended,  and  an  option  to  purchase 1,250 or 2,500 shares, respectively, of
Common  Stock  for each special meeting attended, subject to a maximum of 15,000
or  30,000  options,  respectively,  in  any  calendar  year.

     Directors  who are our employees do not receive any additional compensation
for  serving as Directors.  Directors who are our consultants do not receive any
additional  cash  compensation  for  serving  as Directors, but do receive stock
options  per  the  provisions  of  either  the  2004  Plan  or  the  2010  Plan.

     See  "Certain  Relationships  and  Related  Transactions"  for  additional
compensation  to  directors.

                             DIRECTOR COMPENSATION
<TABLE>
<CAPTION>


                       Fees                         Non-Equity    Non-Qualified   Non-Qualified
                    Earned or                        Incentive      Incentive        Deferred            All
                     Paid in     Stock    Option       Plan            Plan        Compensation         Other
Name                   Cash     Awards    Awards   Compensation    Compensation      Earnings     Compensation (1)    TOTAL
------------------  ----------  -------  --------  -------------  --------------  --------------  -----------------  --------
<S>                 <C>         <C>      <C>       <C>            <C>             <C>             <C>                <C>
Joseph H. Scheib    $    3,000        -  $ 34,785              -               -               -                  -  $ 37,785
Carl Richard        $    3,000        -  $ 34,785              -               -               -                  -  $ 37,785
James H. Hartung    $    3,000        -  $ 34,785              -               -               -                  -  $ 37,785
Mark D. Hagans      $    3,000        -  $ 34,785              -               -               -                  -  $ 37,785
Thomas L. Kovacik   $    3,000        -  $ 34,785              -               -               -  $          31,421  $ 69,206
Joan B. Wills       $    3,000        -  $ 34,785              -               -               -                  -  $ 37,785
Timothy R. Kasmoch           -        -         -              -               -               -                  -  $      0
                    ----------  -------  --------  -------------  --------------  --------------  -----------------  --------
                    $   18,000  $     0  $208,710  $           0  $            0  $            0  $          31,421  $258,131
                    ==========  =======  ========  =============  ==============  ==============  =================  ========

<FN>

(1)     represents a consulting fee paid to Mr. Kovacik in 2010 with 10,000 stock options.

</TABLE>


                       EXECUTIVE OFFICERS OF THE COMPANY

     Executive  officers  of the Company are appointed by the Board of Directors
and  hold  office at the pleasure of the Board.  Set forth below is biographical
and  other  information  on  the current executive officers of the Company.  Mr.
Kasmoch also serves as a member of the Board and his biographical information is
set  forth  above  under  the  caption  "Directors  of  the  Company."

<TABLE>
<CAPTION>

Name                Age                      Position
------------------  ---  ------------------------------------------------
<S>                 <C>  <C>

Timothy R. Kasmoch   49  President and Chief Executive Officer
Robert W. Bohmer     41  Executive Vice-President and General Counsel
James K. McHugh      52  Chief Financial Officer, Secretary and Treasurer

</TABLE>

ROBERT W. BOHMER has been our Executive Vice-President and General Counsel since
July  2007.  From  1996 until joining the Company, Mr. Bohmer had been a partner
with  the  law  firm  of Watkins, Bates and Carey, LLP, Toledo, Ohio.  From 2005
through  June  2007,  Mr.  Bohmer  had  served as general outside counsel to the
Company.

JAMES  K.  MCHUGH  has  served  as  our  Chief  Financial Officer, Secretary and
Treasurer since January 1997.  Prior to that date, Mr. McHugh served the Company
in  various  financial  positions  since April 1992, and was a key member of the
team  that  took  the  Company  public  in  1993.


            SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

     Section  16(a) of the Securities Exchange Act of 1934, as amended, requires
our directors and executive officers, and persons who own beneficially more than
ten  percent  (10%)  of  the  shares  of  our  Common  Stock, to file reports of
ownership  and changes of ownership with the Securities and Exchange Commission,
or SEC.  Copies of all filed reports are required to be furnished to us pursuant
to  Section  16(a).  Based  solely  on the reports received by us and on written
representations  from  reporting  persons, we believe that the current directors
and  executive  officers complied with all applicable filing requirements during
the  fiscal  year  ended  December  31,  2010,  with  the  following exceptions:

          Carl  Richard  was  late  filing  a  Form  4  (Statement of Changes of
     Beneficial Ownership of Securities) in connection with a purchase of Common
     Stock  on the open market that occurred on October 18, 2010. The Form 4 was
     filed  on  October  27,  2010.

          Carl  Richard was late filing a Form 4 in connection with six separate
     purchases of Common Stock on the open market that occurred between November
     7  and  November  19,  2010.  The  Form  4  was filed on November 19, 2010.

          Joseph  R.  Scheib  was  late filing a Form 4 for an exercise of stock
     options  and  concurrent acquisition of Common Stock that occurred on April
     2,  2010.  The  Form  4  was  filed  on  May  11,  2010.


ITEM  11.     EXECUTIVE  COMPENSATION

COMPENSATION  OF  EXECUTIVE  OFFICERS

     The  following  table  presents  the  total  compensation paid to our Chief
Executive  Officer,  Executive Vice President and Chief Financial Officer during
2010  and  2009.  There were no other executive officers who were serving at the
end  of  2010  or  2009  and  whose  total  compensation  exceeded  $100,000.

                           SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>

                                                                           Non-Equity   Nonqualified
                                                                           Incentive      Deferred
Name and Principal                                   Stock     Option         Plan      Compensation    All Other
Position                     Year   Salary   Bonus   Awards  Awards (4)   Compensation    Earnings    Compensation    TOTAL
---------------------------  ----  --------  ------  ------  -----------  ------------  ------------  -------------  --------
<S>                          <C>   <C>       <C>     <C>     <C>          <C>           <C>           <C>            <C>
TIMOTHY R. KASMOCH           2010  $150,000       -       -  $   446,152             -             -  $      21,518  $617,670
President and Chief          2009  $150,000       -       -  $   570,376             -             -  $      11,000  $731,376
   Executive Officer (1)

ROBERT W. BOHMER             2010  $150,000       -       -  $   373,763             -             -  $           0  $523,763
Executive Vice-President +   2009  $150,000       -       -  $   454,344             -             -  $           0  $604,344
   General Counsel (2)

JAMES K. MCHUGH              2010  $125,000  $7,810       -  $    94,926             -             -  $         399  $228,135
Chief Financial Officer,     2009  $116,688       -       -  $   190,746             -             -  $         399  $307,833
   Secretary + Treasurer (3)

<FN>

(1)     For  the  "All  Other  Compensation"  column,  Mr.  Kasmoch's spouse was
compensated  for  outside consulting services rendered to the Company at various
times  during  2009  and  2010,  in  addition to employee wages paid in the last
quarter  of  2010.  All  compensation  was  in  cash.

(2)     Mr. Bohmer's value of the 2009 Option Award includes the 2007 Option
Award recorded as an expense in the amount of $46,667.  The value of the 2010
Option Award includes the 2007 Option Award recorded as an expense in the amount
of $70,000.

(3)     For the "All Other Compensation" column, Mr. McHugh is taxed on the
imputed benefit of a life insurance policy that benefits his personal
beneficiary for one-half the face value of the policy and N-Viro International
Corporation for the other one-half.

(4)     The amounts included in the Option Awards column include the aggregate
grant date fair value of options granted in the fiscal year computed in
accordance with FASB ASC Topic 718.  We continue to use the Black-Scholes model
to measure the grant date fair value of stock options.  For a discussion of the
valuation assumptions used to value the options, see Note 5 to our Consolidated
Financial Statements included in this annual report on Form 10-K for the fiscal
year ended December 31, 2010.

</TABLE>


                        2010 GRANTS OF PLAN BASED AWARDS
<TABLE>
<CAPTION>


                                                         Estimated Future Payouts Under
                                                        Non-Equity Incentive Plan Awards
                      Grant    Approval   ----------------------------------------------------------
Name                  Date       Date               Threshold ($)            Target ($)  Maximum ($)
------------------  ---------  ---------  ---------------------------------  ----------  -----------
<S>                 <C>        <C>        <C>                                <C>         <C>
Timothy R. Kasmoch  3/17/2010  3/17/2010                                  -           -            -

Robert W. Bohmer    3/17/2010  3/17/2010                                  -           -            -

James K. McHugh     3/17/2010  3/17/2010                                  -           -            -


                                  Estimated Future Payouts Under
                                   Equity Incentive Plan Awards                Full Grant    Base Price
                    --------------------------------------------------------   Date Fair     of Option
Name                         Threshold (#)           Target (#)  Maximum (#)   Value ($)   Awards ($/shr.)
------------------  -------------------------------  ----------  -----------  -----------  ---------------
<S>                 <C>                              <C>         <C>          <C>          <C>
Timothy R. Kasmoch                                -           -      470,000         2.65             3.27

Robert W. Bohmer                                  -           -      320,000         2.65             3.27

James K. McHugh                                   -           -      100,000         2.65             3.27

</TABLE>


                  OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
<TABLE>
<CAPTION>


                                            OPTION AWARDS                                        STOCK AWARDS
                    ---------------------------------------------------------------------  --------------------------
                                                       Equity
                                                      Incentive
                                                        Plan                                                Market
                         # of            # of          Awards:                                 # of        Value of
                      Securities      Securities    # Securities                             Shares or     Shares or
                      Underlying      Underlying     Underlying                              Units of      Units of
                     Unexercised     Unexercised     Unexercised     Option      Option     Stock That    Stock That
                     Options (#)     Options (#)      Unearned      Exercise   Expiration    Have Not      Have Not
Name                 Exercisable    Unexercisable    Options (#)   Price (#)      Date      Vested (#)    Vested ($)
------------------  --------------  --------------  -------------  ----------  ----------  -------------  -----------
<S>                 <C>             <C>             <C>            <C>         <C>         <C>            <C>
Timothy R. Kasmoch         250,000               -              -  $     2.00    12/31/11              -            -
Timothy R. Kasmoch           2,500               -              -  $     1.70     2/15/16              -            -
Timothy R. Kasmoch          25,000               -              -  $     1.94     7/11/19              -            -
Timothy R. Kasmoch         243,000               -              -  $     2.23     7/22/19              -            -
Timothy R. Kasmoch         188,000         282,000              -  $     3.27     3/18/20              -            -

Robert W. Bohmer           100,000               -              -  $     2.80     6/13/17              -            -
Robert W. Bohmer            25,000               -              -  $     1.94     7/11/19              -            -
Robert W. Bohmer           168,000               -              -  $     2.23     7/22/19              -            -
Robert W. Bohmer           128,000         192,000              -  $     3.27     3/18/20              -            -

James K. McHugh             10,000               -              -  $     1.50     12/7/11              -            -
James K. McHugh             12,000               -              -  $     2.10    11/11/14              -            -
James K. McHugh             50,000               -              -  $     2.00    12/31/16              -            -
James K. McHugh             25,000               -              -  $     1.94     7/11/19              -            -
James K. McHugh             68,000               -              -  $     2.23     7/22/19              -            -
James K. McHugh             40,000          60,000              -  $     3.27     3/18/20              -            -


                       Equity           Equity
                      Incentive       Incentive
                    Plan Awards:     Plan Awards:
                     # Unearned       Market or
                       Shares,       Payout Value
                      Units or       of Unearned
                    Other Rights    Shares, Units
                      That Have    or Other Rights
                         Not          That Have
Name                 Vested (#)     Not Vested (#)
------------------  -------------  ----------------
<S>                 <C>            <C>
Timothy R. Kasmoch              -                 -
Timothy R. Kasmoch              -                 -
Timothy R. Kasmoch              -                 -
Timothy R. Kasmoch              -                 -
Timothy R. Kasmoch              -                 -

Robert W. Bohmer                -                 -
Robert W. Bohmer                -                 -
Robert W. Bohmer                -                 -
Robert W. Bohmer                -                 -

James K. McHugh                 -                 -
James K. McHugh                 -                 -
James K. McHugh                 -                 -
James K. McHugh                 -                 -
James K. McHugh                 -                 -
James K. McHugh                 -                 -

</TABLE>


     All  options  awards  were  made  granted under the Company's current stock
option  plan described under the caption "Equity Compensation Plan Information."


EMPLOYMENT AGREEMENTS
---------------------

     On  February  13,  2007,  we  entered into an employment agreement with Mr.
Timothy  R. Kasmoch as our President and Chief Executive Officer.  Mr. Kasmoch's
employment agreement was for a two-year term commencing on February 13, 2007 and
provided  for  automatic  renewal of successive one-year terms unless notice was
provided ninety (90) days prior to the expiration of the then current term.  The
agreement  provided  that  Mr.  Kasmoch  was to receive an annual base salary of
$150,000,  subject  to  an  annual  increase at the discretion of the Board.  In
addition,  Mr.  Kasmoch was eligible for an annual cash bonus in an amount to be
determined,  and  otherwise subject to the discretion of, the Board.  Generally,
Mr.  Kasmoch's  employment  agreement  may  have  been  terminated by us with or
without  cause  or  by  the  Employee  for  any  reason.  If  the  agreement was
terminated  by us without cause (other than by reason of the death or disability
of  Mr.  Kasmoch),  Mr.  Kasmoch would have continued to receive his base salary
then  in  effect  for the period between the termination date and the expiration
date  of the agreement.  If the agreement was terminated for any other reason by
either  party,  Mr.  Kasmoch was entitled to receive his base salary through the
effective date of the termination plus any bonus or incentive compensation which
had  been earned or payable through the termination date, as provided for in the
agreement.  A  copy of Mr. Kasmoch's employment agreement was attached to a Form
8-K  as  Exhibit  10.1,  filed  by  us  on  March  12,  2007.

Effective  April  2,  2008,  we entered into a first amendment to the employment
agreement  with  Mr.  Kasmoch.  The amendment extended the term of Mr. Kasmoch's
employment  agreement for an additional two years.  As a result, the term of Mr.
Kasmoch's  employment  agreement was set to expire on February 12, 2011, instead
of  February  12,  2009 as provided for in the original employment agreement.  A
copy  of  the  amendment to Mr. Kasmoch's employment agreement was attached to a
Form  8-K  as  Exhibit  10.1,  filed  by  us  on  April  7,  2008.

Effective  March  17,  2010,  we  entered  into  a new Employment Agreement (the
"Agreement")  with  Mr.  Kasmoch commencing February 26, 2010.  The Agreement is
for  a five-year term commencing on February 26, 2010 and provides for automatic
renewal  of successive one-year terms unless notice is provided ninety (90) days
prior  to  the expiration of the then current term.  The agreement provides that
Mr.  Kasmoch  is to receive an annual base salary of $150,000, subject to annual
increase  at the discretion of our Board of Directors.  In addition, Mr. Kasmoch
is  eligible  for  an  annual  cash  bonus  in  an  amount to be determined, and
otherwise  subject  to  the  discretion  of  the  Board of Directors.  Under the
agreement,  this determination is to be based upon the Board of Directors review
of  Mr.  Kasmoch's  performance.  The Agreement also provides for a stock option
grant  of  470,000  options  that  vest over a five year period, pursuant to the
Second  Amended  and  Restated  2004 Stock Option Plan.  While employed with the
Company,  the  Agreement  allows Mr. Kasmoch to engage in other limited business
activities that are not competitive with and do not involve the Company, subject
to  the  prior  disclosure  to  the  Company's  Audit Committee.  The Employment
Agreement  permits  Mr.  Kasmoch  to  terminate his employment in the event of a
change  of  control  or  certain  enumerated  material  breaches  thereof by the
Company.  A  copy  of  this  employment  agreement was attached to a Form 8-K as
Exhibit  10.1,  filed  by  us  on  March  19,  2010.

In  June  2007, we executed an employment agreement with Robert W. Bohmer as our
Vice-President of Business Development and General Counsel, which commenced July
1,  2007.  Mr.  Bohmer's  agreement was for a two-year term at $150,000 per year
plus  a  stock  option  grant  of  100,000  shares.  In addition, Mr. Bohmer was
eligible for an annual cash bonus in an amount to be determined.  Generally, the
agreement  may  have  been  terminated  by  us  with  or without cause or by the
Employee  for  any  reason.  A  copy  of  Mr.  Bohmer's employment agreement was
attached  to  a  Form  8-K  as  Exhibit  10.1,  filed  by  us  on June 20, 2007.

Effective  June  19,  2008,  we entered into a first amendment to the employment
agreement  with  Mr.  Bohmer.  The  amendment  extended the term of Mr. Bohmer's
employment  agreement for an additional two years.  As a result, the term of Mr.
Bohmer's employment agreement was set to expire on July 1, 2011, instead of July
1,  2009  as  provided for in the original employment agreement.  Except for the
extension  of  the  term, there were no other changes to Mr. Bohmer's employment
agreement.  A  copy  of  the  amendment to Mr. Bohmer's employment agreement was
attached  to  a  Form  8-K  as  Exhibit  10.1,  filed  by  us  on June 20, 2008.

Effective  March  17,  2010,  we  entered  into  a new Employment Agreement (the
"Agreement")  with  Mr.  Bohmer  as  our  Executive  Vice  President and General
Counsel,  commencing  February  26, 2010.  The Agreement is for a five-year term
commencing on February 26, 2010 and provides for automatic renewal of successive
one-year  terms  unless  notice  is  provided  ninety  (90)  days  prior  to the
expiration  of the then current term.  The Agreement provides that Mr. Bohmer is
to  receive  an annual base salary of $150,000, subject to an annual increase at
the  discretion  of our Board of Directors.  In addition, Mr. Bohmer is eligible
for an annual cash bonus in an amount to be determined, and otherwise subject to
the  discretion  of  the  Board  of  Directors.  Under  the  agreement,  this
determination  is  to  be based upon the President/Chief Executive Officer's and
Board  of  Directors  review  of  Mr.  Bohmer's performance.  The Agreement also
provides  for a stock option grant of 320,000 options that vest over a five year
period,  pursuant  to  the  Second  Amended and Restated 2004 Stock Option Plan.
While  employed  with  the Company, the Agreement allows Mr. Bohmer to engage in
other  limited  business  activities  that  are  not competitive with and do not
involve  the  Company,  subject  to  the prior disclosure to the Company's Audit
Committee.  The  Employment  Agreement  permits  Mr.  Bohmer  to  terminate  his
employment  in  the  event of a change of control or certain enumerated material
breaches  thereof  by  the  Company.  A  copy  of  this employment agreement was
attached  to  a  Form  8-K  as  Exhibit  10.1,  filed  by  us on March 19, 2010.

Effective  March  17,  2010,  we  entered  into  an  Employment  Agreement  (the
"Agreement")  with  James  K.  McHugh  to serve as the Company's Chief Financial
Officer  commencing  February  26,  2010.  The Agreement is for a five-year term
commencing on February 26, 2010 and provides for automatic renewal of successive
one-year  terms  unless  notice  is  provided  ninety  (90)  days  prior  to the
expiration  of the then current term.  The agreement provides that Mr. McHugh is
to  receive an annual base salary of $125,000, subject to annual increase at the
discretion of the Board of Directors of the Company.  In addition, Mr. McHugh is
eligible  for  an annual cash bonus in an amount to be determined, and otherwise
subject to the discretion of, the Board of Directors.  Under the agreement, this
determination  is  to  be based upon the President/Chief Executive Officer's and
Board  of  Directors  review  of  Mr.  McHugh's performance.  The Agreement also
provides  for  a stock option grant of 100,000 shares that vest over a five year
period,  pursuant  to  the  Second  Amended and Restated 2004 Stock Option Plan.
While  employed  with  the Company, the Agreement allows Mr. McHugh to engage in
other  limited  business  activities  that  are  not competitive with and do not
involve  the  Company,  subject  to  the prior disclosure to the Company's Audit
Committee.  The  Employment  Agreement  permits  Mr.  McHugh  to  terminate  his
employment  in  the  event of a change of control or certain enumerated material
breaches  thereof  by  the  Company.  A  copy  of  this employment agreement was
attached  to  a  Form  8-K  as  Exhibit  10.1,  filed  by  us on March 19, 2010.

EQUITY  COMPENSATION  PLAN  INFORMATION

     We maintain three stock option plans (two are able to issue new grants) for
directors,  executive  officers  and key employees.  The most recent plan ("2010
Plan")  was  approved  by  the  stockholders  in  August  2010.  The  2010  Plan
authorizes  the  Board  of  Directors or a committee thereof, to grant awards of
incentive  stock  options and non-qualified stock options for up to a maximum of
5,000,000  shares  of  Common  Stock.  For all of the plans, the total number of
options  granted  and  outstanding  as  of March 21, 2011 was 2,273,300, and the
number  of  options available for future issuance was 5,004,075.  Currently, all
of  the  plans  are  administered  by  the  Board  of Directors via a committee.


ITEM  12.     SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED  STOCKHOLDER  MATTERS

     We  had  outstanding  5,938,714  shares of Common Stock, $.01 par value per
share,  or the Common Stock, on March 21, 2011, which constitutes the only class
of  our  outstanding  voting  securities.

SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS
<TABLE>
<CAPTION>

                                                   (a)                   (b)                       (c)
                                                                                            Number of securities
                                          Number of securities                            remaining available for
                                              to be issued         Weighted-average        future issuance under
                                            upon exercise of       exercise price of        equity compensation
                                          outstanding options,   outstanding options,   plans (excluding securities
Plan category                             warrants and rights     warrants and rights     reflected in column (a))
---------------------------------------   --------------------   ---------------------  ----------------------------
<S>                                       <C>                    <C>                    <C>

Equity compensation plans
    approved by security holders . . . .             1,679,300   $              $2.50                     5,004,075 2

Equity compensation plans not
    approved by security holders                       258,270 1 $              $1.95                           -0-
                                        ----------------------   ---------------------   ---------------------------
Total                                                1,937,570   $              $2.43                     5,004,075

<FN>

1.     Represents  120,000  warrants  to  purchase  our  Common Stock, issued to
Strategic  Asset  Management,  Inc.,  in 2005 as part of an agreement to provide
consulting  services,  issued  at  $1.84  per  share,  and,  138,270 warrants to
purchase  our  Common Stock, issued to certain members of the Board of Directors
in  December 2006 in payment for services rendered, issued at a weighted average
of  $2.04  per  share.

2.     The  available  number  of  shares  to issue is combined under our N-Viro
International Corporation 2010 Stock Option Plan as approved by the stockholders
on  July  22,  2010  and the Second Amended and Restated 2004 Stock Option Plan.

</TABLE>


FIVE PERCENT STOCKHOLDERS

     As  of  March  21, 2011, the following were the only persons known to us to
own  beneficially  more  than  5%  of  the  outstanding  shares of Common Stock:

<TABLE>
<CAPTION>

                                   Name                                   Amount and          Percentage of
Title of                      and Address of                              Nature of        Outstanding Shares
Class                        Beneficial Owner                        Beneficial Ownership    of Common Stock
<S>           <C>                                                    <C>                   <C>
------------  -----------------------------------------------------  --------------------  -------------------
              Cooke Family Trust
              90 Grande Brook Circle, #1526
Common Stock  Wakefield, Rhode Island 02879                                    627,717 (1)               10.6%
------------  -----------------------------------------------------  --------------------  -------------------
              VC Energy I, LLC
              3900 Paradise Road, Suite U
Common Stock  Las Vegas, NV  89169                                             800,000 (2)               12.6%
------------  -----------------------------------------------------  --------------------  -------------------

<FN>

1.     The  shares  attributed  to  the  Cooke  Family  Trust  include  627,267  shares  owned
beneficially  and  450  in Common Stock warrants exercisable to purchase an equal number of
shares  of Common Stock.  This information was derived from the Schedule 13D Amendment #5 filed
on  May 10, 2010.

2.     The  shares  attributed  to VC Energy I, LLC include 400,000 shares owned beneficially
and  400,000  in  Common Stock warrants exercisable to purchase an equal  number  of shares of
Common Stock.  This information was derived from the Schedule  13G  filed  on  July  8,  2010.

</TABLE>


SECURITY  OWNERSHIP  OF  MANAGEMENT

     The  following  table  sets  forth,  as of March 21, 2011, unless otherwise
specified,  certain  information with respect to the beneficial ownership of our
shares  of  Common  Stock  by each person who is our director, a nominee for the
Board,  each of the Named Executive Officers, and by our directors and executive
officers  as  a  group.  Unless  otherwise  noted,  each  person  has voting and
investment  power, with respect to all such shares, based on 5,938,714 shares of
Common  Stock outstanding on the record date.  Pursuant to the rules of the SEC,
shares of Common Stock which a person has the right to acquire within 60 days of
the  date  hereof  pursuant  to  the  exercise of stock options are deemed to be
outstanding for the purpose of computing the percentage ownership of such person
but  are  not  deemed  outstanding  for  the purpose of computing the percentage
ownership  of  any  other  person.
<TABLE>
<CAPTION>


                                          Name of                            Amount and Nature of        Percent
Title of Class                       Beneficial Owner                        Beneficial Ownership   1   of Class
--------------  -----------------------------------------------------------  --------------------  --   ---------
<S>             <C>                                                          <C>                   <C>  <C>
Common Stock    Mark D. Hagans                                                             44,150    2      0.74%
Common Stock    James H. Hartung                                                           62,250    3      1.04%
Common Stock    Timothy R. Kasmoch                                                        866,500    4     12.94%
Common Stock    Thomas L. Kovacik                                                          52,500    5      0.88%
Common Stock    Carl Richard                                                              179,040    6      2.96%
Common Stock    Joseph H. Scheib                                                          241,072    7      3.98%
Common Stock    Joan B. Wills                                                             653,967    8     10.98%
Common Stock    Robert W. Bohmer                                                          423,600    9      6.66%
Common Stock    James K. McHugh                                                           218,920   10      3.56%
Common Stock    All directors and executive officers as a group (9 persons)             2,741,999   11     35.50%

<FN>

1.     Except  as otherwise indicated, all shares are directly owned with voting
and  investment  power  held  by  the  person  named.

2.     Represents  4,450  shares  of Common Stock owned by Mr. Hagans and 39,700
shares  issuable  upon  exercise  of  options which are currently exercisable at
prices  ranging  from  $1.94  to  $3.90  per  share.

3.     Represents  2,610  shares  of  Common  Stock owned by Mr. Hartung, 48,750
shares  issuable  upon  exercise  of  options which are currently exercisable at
prices  ranging  from  $1.42  to  $3.90 per share and 10,890 unregistered shares
issuable  upon exercise of warrants which are currently exercisable at $2.00 per
share.

4.     Represents  100,000  unregistered  shares  and 8,000 registered shares of
Common  Stock  owned  by  Mr.  Kasmoch, 50,000 unregistered shares issuable upon
exercise  of  warrants  which  are  currently exercisable at $1.85 per share and
708,500 shares issuable upon exercise of options which are currently exercisable
at  prices  ranging  from  $1.70  to  $3.27  per  share.

5.     Represents  1,000  shares of Common Stock owned by Mr. Kovacik and 51,500
shares  issuable  upon  exercise  of  options which are currently exercisable at
prices  ranging  from  $1.82  to  $3.90  per  share.

6.     Represents  61,601  shares  of  Common Stock owned by Mr. Richard, 60,000
shares  issuable  upon  exercise  of  options which are currently exercisable at
prices  ranging  from  $0.70  to  $3.90 per share and 57,439 unregistered shares
issuable  upon  exercise  of  warrants which are currently exercisable at prices
ranging  from  $1.85  to  $2.00  per  share.

7.     Represents  124,922  shares  of  Common Stock owned by Mr. Scheib, 61,250
shares  issuable  upon  exercise  of  options which are currently exercisable at
prices  ranging  from  $0.70  to  $3.90  per share, 600 shares owned by a family
member  over  which  Mr. Scheib acts as custodian and 54,300 unregistered shares
issuable  upon  exercise  of  warrants which are currently exercisable at prices
ranging  from  $1.85  to  $2.52  per  share.

8.     Represents  10,000  shares  of  Common  Stock  owned by Ms. Wills, 16,250
shares  issuable  upon  exercise  of  options which are currently exercisable at
prices  ranging from $2.66 to $3.53 per share and 627,717 shares of Common Stock
owned  beneficially  by  the  Cooke  Family Trust, a more than 5% stockholder of
which  Ms.  Wills  is the trustee.  See further information in the section "Five
Percent  Stockholders".

9.     Represents  2,600  shares of Common Stock owned by Mr. Bohmer and 421,000
shares  issuable  upon  exercise  of  options which are currently exercisable at
prices  ranging  from  $1.94  to  $3.27  per  share.

10.     Represents 13,920 shares of Common Stock owned by Mr. McHugh and a total
of  205,000  shares  issuable  upon  exercise  of  options  which  are currently
exercisable  at  prices  ranging  from  $1.50  to  $3.27  per  share.

11.     Represents  329,103  shares  of  Common Stock owned by the directors and
officers,  628,317  shares  owned  indirectly,  1,611,950  shares  issuable upon
exercise of options which are currently exercisable at prices ranging from $0.70
to  $3.90  per  share  and  a total of 172,629 unregistered shares issuable upon
exercise  of  warrants  which  are  currently exercisable at prices ranging from
$1.85  to  $2.52  per  share.

</TABLE>



ITEM  13.     CERTAIN  RELATIONSHIPS  AND  RELATED  TRANSACTIONS,  AND  DIRECTOR
INDEPENDENCE

     None

DIRECTOR INDEPENDENCE

     Although  we  are  not  subject  to  the  listing requirements of any stock
exchange, we are committed to a board in which a majority of our members consist
of  independent  directors,  as  defined  under the NASDAQ rules.  The Board has
reviewed  the  independence  of  its  members, applying the NASDAQ standards and
considering  other  commercial,  legal,  accounting  and  familial relationships
between  the  Directors  and  us.  The  Board  has  determined  that  all of the
Directors  and  director nominees are independent other than Mr. Kasmoch, who is
not  an  independent  Director  by  virtue  of his current position as our chief
executive  officer.


ITEM  14.     PRINCIPAL  ACCOUNTANT  FEES  AND  SERVICES

AUDIT FEES

     Audit  services  of  UHY  LLP  ("UHY")  included  the  audit  of our annual
financial  statements  for  2010  and  2009,  and  services related to quarterly
filings  with the SEC through the reporting period ended September 30 in each of
those years.  Fees for these services totaled approximately $73,500 for 2010 and
$72,000  for  2009.

AUDIT  RELATED  FEES

     There  were  no  fees  billed  for  the  years  ended December 31, 2010 and
December  31, 2009 for assurance and related services by UHY that are reasonably
related  to  the performance of the audit or review of our financial statements.

TAX  FEES

     There  were  no  fees  billed  for  the  years  ended December 31, 2010 and
December  31, 2009 for professional services rendered by UHY for tax compliance,
tax  advice,  and  tax  planning.

ALL  OTHER  FEES

     There  were  no  fees  billed  for  the  years  ended December 31, 2010 and
December  31,  2009  for  assistance  on  accounting  related  matters.

     Although  the  Audit  Committee Charter does not explicitly require it, the
Audit  Committee approves all engagements of outside auditors before any work is
begun  on  the  engagement.

     UHY LLP personnel work under the direct control of UHY LLP partners and are
leased  from  wholly-owned  subsidiaries of UHY Advisors, Inc. in an alternative
practice  structure.


<PAGE>

                                    PART IV


ITEM  15.     EXHIBITS,  FINANCIAL  STATEMENT  SCHEDULES

Exhibit
No.     Description
---     -----------

3.1     Second Amended and Restated Certificate of Incorporation of the Company,
dated  August  14,  2008 (incorporated by reference to Exhibit 10.1 to Form 10-Q
filed  August  14,  2008)

3.2     Second  Amended  and Restated By-Laws of the Company, effective June 17,
2008  (incorporated  by  reference to Exhibit 10.2 to Form 10-Q filed August 14,
2008).

10.1     Commercial  Line  of  Credit Agreement and Note dated October 15, 2008,
between  N-Viro International Corporation and Monroe Bank + Trust  (incorporated
by  reference  to  Exhibit  99.1  to  Form  8-K  filed  October  27,  2008).

10.2     First  Amendment  to  Consulting  Agreement  dated July 1, 2004 between
Terry J. Logan and N-Viro International Corporation, effective February 13, 2006
(incorporated  by  reference to Exhibit 10.3 to Form 8-K filed March 20, 2006).*

10.3     Employment  Agreement,  dated  February  13,  2007  between  Timothy R.
Kasmoch  and  N-Viro  International  Corporation  (incorporated  by reference to
Exhibit  10.1  to  Form  8-K  filed  March  12,  2007).*

10.4     First  Amendment  to  Employment Agreement, dated April 2, 2008 between
Timothy  R.  Kasmoch  and  N-Viro  International  Corporation  (incorporated  by
reference  to  Exhibit  10.1  to  Form  8-K  filed  April  7,  2008).

10.5     Employment  Agreement, dated June 12, 2007 between Robert W. Bohmer and
N-Viro  International  Corporation (incorporated by reference to Exhibit 10.1 to
Form  8-K  filed  June  20,  2007).*

10.6     First  Amendment  to  Employment Agreement, dated June 19, 2008 between
Robert W. Bohmer and N-Viro International Corporation (incorporated by reference
to  Exhibit  10.1  to  Form  8-K  filed  June  20,  2008).

10.7     Employment  Agreement,  dated March 17, 2010 between Timothy R. Kasmoch
and  N-Viro International Corporation (incorporated by reference to Exhibit 10.1
to  Form  8-K  filed  March  19,  2010)

10.8     Employment Agreement, dated March 17, 2010 between Robert W. Bohmer and
N-Viro  International  Corporation (incorporated by reference to Exhibit 10.2 to
Form  8-K  filed  March  19,  2010)

10.9     Employment  Agreement, dated March 17, 2010 between James K. McHugh and
N-Viro  International  Corporation (incorporated by reference to Exhibit 10.3 to
Form  8-K  filed  March  19,  2010)

10.10     The Amended and Restated N-Viro International Corporation Stock Option
Plan  (incorporated  by  reference  to  Form  S-8  filed  May  9,  2000).*

10.11     The  N-Viro  International  Corporation  2004  Stock  Option  Plan
(incorporated  by  reference  to  Form  S-8  filed  December  20,  2004).*

10.12     The  N-Viro  International Corporation Amended and Restated 2004 Stock
Option  Plan  (incorporated  by reference to the Proxy Statement on Schedule 14A
filed  May  14,  2008).*

10.13     The  N-Viro International Corporation Second Amended and Restated 2004
Stock  Option  Plan (incorporated by reference to the Definitive Proxy Statement
on  Schedule  14A  filed  July  13,  2009).*

10.14          The  N-Viro  International  Corporation  2010  Stock  Option Plan
(incorporated  by  reference  to  the Definitive Proxy Statement on Schedule 14A
filed  June  23,  2010).*

21.1     List  of  subsidiaries  of  the  Company.#

23.1     Consent  of  UHY  LLP.

24.1     Power(s)  of  Attorney.#

31.1     Certification of Chief Executive Officer Pursuant to Section 302 of the
Sarbanes-Oxley  Act  of  2002.

31.2     Certification of Chief Financial Officer Pursuant to Section 302 of the
Sarbanes-Oxley  Act  of  2002.

32.1     Certification of Chief Executive Officer Pursuant to Section 906 of the
Sarbanes-Oxley  Act  of  2002.

32.2     Certification of Chief Financial Officer Pursuant to Section 906 of the
Sarbanes-Oxley  Act  of  2002.


               #     Only  included  in  Form 10-K filed electronically with the
Securities  and  Exchange  Commission.

               *     Indicates  a  management  contract  or compensatory plan or
arrangement.


<PAGE>

                                   SIGNATURES


     Pursuant  to  the  requirements of Section 13 or 15(d) of the Exchange Act,
the  registrant  has  duly  caused this report to be signed on its behalf by the
undersigned,  thereunto  duly  authorized.

     N-VIRO  INTERNATIONAL  CORPORATION

Dated:  March  31,  2011

     By:  /s/  Timothy  R.  Kasmoch
        ---------------------------
          Timothy  R.  Kasmoch,  Chief  Executive  Officer  and  President
          (Principal  Executive  Officer)


                               POWER OF ATTORNEY

     Know  all  persons  by  these  presents,  that  each person whose signature
appears  below  constitutes  and  appoints James K. McHugh his attorney-in-fact,
each  with the power of substitution, for him in any and all capacities, to sign
any  amendments  to  this Form 10-K, and to file the same, with exhibits thereto
and  other  documents  in connection therewith, with the Securities and Exchange
Commission,  hereby  ratifying  and  confirming  all  that  each  of  said
attorneys-in-fact,  or  his  substitutes,  may  do or cause to be done by virtue
hereof.

     Pursuant  to  the  requirements  of  the Exchange Act, this report has been
signed  below  by  the  following persons on behalf of the registrant and in the
capacities  and  on  the  date  indicated.

Dated:  March  31,  2011

/s/  Timothy  R.  Kasmoch                           /s/  James  K.  McHugh
-------------------------                           ----------------------
Timothy  R.  Kasmoch,  Chief  Executive  Officer,   James  K.  McHugh
   President and Director                          Chief Financial Officer,
   (Principal  Executive  Officer)                    Secretary and Treasurer
                                                 (Principal  Financial  Officer)


/s/  James  H.  Hartung*                          /s/  Mark  D.  Hagans  *
----------------------                            ------------------------
James  H.  Hartung,  Director                     Mark D. Hagans, Director
   and  Chairman  of  the  Board


/s/  Joseph H.Scheib,  Director  *                /s/  Thomas  L.  Kovacik*
---------------------------------                --------------------------
Joseph  H.  Scheib,  Director                    Thomas  L.  Kovacik,  Director


/s/  Carl  Richard*                               /s/  Joan  B.  Wills*
-------------------                               ---------------------
Carl  Richard,  Director                          Joan  B.  Wills,  Director


*  by  James  K.  McHugh,  Attorney-In-Fact