UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C.  20549

                                    FORM 10-K
(MARK  ONE)
                      ANNUAL  REPORT  PURSUANT  TO  SECTION  13  OR  15(D)
    X                 OF THE SECURITIES EXCHANGE ACT OF 1934
                   FOR THE FISCAL YEAR ENDED DECEMBER 31, 2003
                                       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


                        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 ACT:  None

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

          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 the
filing  requirements  for  at  least  the  past  90  days.  Yes  X    No  ____
                                                                ---

          Indicate  by check mark if disclosure of delinquent filers pursuant to
Item  405  of Regulation S-K 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 an accelerated filer
(as  defined  in  Exchange  Act  Rule  12-2).  Yes  No X

          The  aggregate market value of the voting stock held by non-affiliates
of  the  registrant,  computed  by  reference to the closing sales price of such
shares on the Over The Counter Bulletin Board as of the last business day of the
registrant's  most  recently  completed  second fiscal quarter was approximately
$1,495,000.

          The  number of shares of Common Stock of the registrant outstanding as
of  March  24,  2004  was  2,994,905.

                       DOCUMENTS INCORPORATED BY REFERENCE
          None.

                                      INDEX

                                     PART I

Item  1.     Business

Item  2.     Properties

Item  3.     Legal  Proceedings

Item  4.     Submission  of  Matters  to  a  Vote  of  Security  Holders

                                     PART II

Item  5.     Market  for  Registrant's  Common  Equity  and  Related
     Stockholder  Matters

Item  6.     Selected  Financial  Data

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

Item  7A.     Quantitative  and  Qualitative  Disclosures
     About  Market  Risk

Item  8.     Financial  Statements  and  Supplementary  Data

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

Item  9A.     Controls  and  Procedures


                                    PART III

Item  10.     Directors  and  Executive  Officers  of  the  Registrant

Item  11.     Executive  Compensation

Item  12.     Security  Ownership  of  Certain  Beneficial  Owners
     and  Management

Item  13.     Certain  Relationships  and  Related  Transactions

Item  14.     Principal  Accountant  Fees

                                     PART IV

Item  15.     Exhibits,  Financial  Statement  Schedules,  and
     Reports  on  Form  8-K

                                     PART I

ITEM  1.          BUSINESS

GENERAL

     N-Viro  International Corporation (the "Company" or "N-Viro"), incorporated
in  Delaware  in  April,  1993, owns and licenses the N-Viro Process, a patented
technology to treat and recycle wastewater sludges and other bio-organic wastes,
utilizing certain alkaline and mineral by-products produced by the cement, lime,
electric  utilities  and  other  industries.  See  "The  N-Viro  Process."

     In  1979,  Mr.  J.  Patrick  Nicholson  and several investors formed N-Viro
Energy Systems, Limited.  N-Viro Energy Systems' initial strategy was to license
the  N-Viro  Process  to  third  parties  through  independent  agents.  Each
independent  agent  acted  in  its  respective  territory  as  a  marketing  and
distribution  agent  of  N-Viro  Energy  Systems, and retained the marketing and
distribution rights to certain other territories.  In early 1993, as a result of
the  then  pending  implementation of the 40 CFR part 503 Sludge Regulations (as
defined  below) and the market environment, N-Viro Energy Systems concluded that
a  strategy  that  also  included  the  development and operation, on a contract
management  basis,  of N-Viro facilities for third parties, and of Company-owned
and/or co-owned N-Viro facilities, would potentially expand the opportunities to
capitalize  on  the  N-Viro  Process.

     In  order  to  implement  this  strategy,  N-Viro  Energy Systems agreed to
combine with American N-Viro Resources, Inc., National N-Viro Tech, Inc., N-Viro
Midwest,  Inc.,  N-Viro  Soil  South,  Inc.  and  Tennessee-Carolina  N-Viro
(collectively,  the  "Combined  Agents")  to  form the Company.  The Company was
incorporated  in  April  1993  primarily  to  expand  the  opportunities  for
capitalizing  on the N-Viro Process.  The Company assumed N-Viro Energy Systems'
agreements  with  the  remaining agents who were continuing to market the N-Viro
Process  in  their  respective  territories.

     The  Company  became  a  public company on October 12, 1993 with an initial
public  offering  (the  "IPO")  of 2,000,000 shares of Common Stock at $9.50 per
share.  On  October  19,  1993, N-Viro Energy Systems contributed to the Company
all  of its assets (except certain marketable securities and accounts receivable
from  certain  related  parties),  subject  to  all  liabilities (except certain
retained  liabilities),  and the stockholders of the Combined Agents contributed
to the Company all of the outstanding capital stock of such entities in exchange
for  a total of 6,000,000 shares of Common Stock of the Company and organization
notes  totaling  $5,221,709  (including  notes of $276,909 which resulted from a
partial  exercise  of  an  over-allotment  option).  The organization notes were
repaid  out  of  the proceeds from the IPO.  On November 10, 1993, an additional
112,000  shares  were sold pursuant to the exercise by the Underwriters of their
over-allotment  option.

     On  October  30,  1995,  at  a  Special  Meeting  of  the Shareholders, the
shareholders  approved  a  one  for  four  reverse stock split which reduced the
number of issued and outstanding shares of the Common Stock.  This reverse split
did  not  affect  the  Company's  retained  deficit and the stockholders' equity
remained  substantially  unchanged.  This  action  was  deemed  necessary  by
management  of  the  Company  to remain in compliance with the minimum bid price
requirement  of  the  National  Association  of  Securities  Dealers  Automatic
Quotation  System  ("Nasdaq") or the alternative net tangible assets requirement
and  for  continued  listing  of  the Common Stock on Nasdaq.  The reverse split
reduced  the  number  of  issued  and  outstanding shares of the Common Stock to
approximately  2,037,000  (net  of  57,250  treasury  shares).

     In late 1995, the Company's business strategy changed from being a low cost
provider  of  a  process  to  marketing  the  N-Viro  Process, which produces an
"exceptional  quality"  sludge product, as defined in the 40 CFR part 503 Sludge
Regulations  under  the  Clean  Water  Act  of  1987 (the "part 503 Regs"), with
multiple  commercial  uses.  In  this strategy, the primary focus is to identify
allies,  public and private, who will build and operate the N-Viro facility.  To
date,  the  Company's revenues primarily have been derived from the licensing of
the  N-Viro  Process  to  treat  and  recycle  wastewater  sludges  generated by
municipal  wastewater  treatment  plants  and  from the sale to licensees of the
alkaline  admixture  used  in the N-Viro Process.  The Company has also operated
N-Viro  facilities  for third parties on a start-up basis and currently operates
one N-Viro facility on a contract management basis.  There are currently over 40
wastewater  treatment  facilities throughout the world treating sludge using the
N-Viro  Process.  The  Company  estimates that these facilities are treating and
recycling  sludge  at  an  annualized  rate  of  over 140,000 dry tons per year.
There  are  several  licensees  not  currently  operating,  including  both
international  and domestic contractors or public generators, who are developing
or  designing  site-specific  N-Viro  facilities.

     Since  1995,  the  Company  has marketed licenses for the use of the N-Viro
Process through its own sales and marketing force in the United States in all 50
states  and  the  District of Columbia and internationally throughout the world.
In  certain  other  parts  of the world, the Company licenses the N-Viro Process
through  agents  (the  "Agents").  Typically,  the  agreements  with  the Agents
provide  for  the  Company to receive a portion of the up-front license fees and
ongoing  royalty  fees  paid by the licensees and a portion of the proceeds from
the distribution and resale of alkaline admixture and the sale of N-Viro SoilTM.
Agents  have  total  responsibility and control over the marketing and contracts
for  N-Viro technology subject only to license models or minimum agreements with
the  Company.  The  sales  representative  network  is  the key component of the
Company's  domestic  sales  strategy.  The manufacturer's representative network
was  started  by  the  Company  after acquiring eight of eleven domestic agents.
These  representatives  receive  a  commission  on  certain  revenue.

     The  Toledo,  Ohio  facility  is  managed by the Company through a Contract
Management  Agreement  with  the  City  of  Toledo.  Revenue  generated from and
related  to  the  Toledo operation accounts for about 36% of the Company's total
revenue.  The  Company  processes  a  portion  of Toledo's wastewater sludge and
sells  the  N-Viro  Soil  product.  This  contract  with  the City of Toledo was
renewed  in  October  1999,  to extend through the year 2004.  In 2001, the City
exercised  its option to renew the contract for an additional five years through
2009.  Currently,  the  contract  is  in  its  sixteenth year of operation.  The
relationship  between  the City of Toledo and the Company has been satisfactory.

     In  early  1994  the  Company  purchased  a  site in Fort Meade, Florida to
develop a Company-owned N-Viro processing facility.  Construction was started at
the  site  in  late  1994 and the facility became operational in early 1995.  In
December  1995,  the Company entered into a Memorandum of Understanding with VFL
Technologies,  Inc.  ("VFL") to jointly own, through a limited partnership named
Florida  N-Viro,  L.P.  ("Florida  N-Viro"),  the  Fort Meade, Florida facility,
beginning  January 1, 1996.  On December 31, 1997, the members of Florida N-Viro
Management,  LLC,  the  management  company  of  the  Florida entity, approved a
Settlement Agreement that amended certain provisions and increased the Company's
ownership  percentage  in  Florida  N-Viro  to  50%.

     In  August 2000, a Memorandum of Understanding was entered into between the
Company  and  VFL,  clarifying  decisions,  information and additional operating
requirements  of  Florida  N-Viro.  Later that month, the Company loaned Florida
N-Viro  $120,000  cash  to  help  meet  operating  expenses,  and  was  issued a
promissory  note.  An  additional $50,000 cash was loaned in November 2000 under
similar  circumstances,  and a second promissory note was issued to the Company.
Both  promissory  notes  are  unsecured and are payable on demand, and both bear
interest  at  9.75%.

          In  January  2001,  a  Special  Meeting  of  the Board of Directors of
Florida  N-Viro  Management  LLC  was  held.  Among  the  decisions  made  were
amendments to both the Partnership Agreement and the Memorandum of Understanding
entered  into  in  August  2000.  The  aggregate  ownership  percentages  in the
investment  of  the  Company and VFL in Florida N-Viro were amended to 47.5% and
52.5%,  respectively,  effective  January 1, 2001.  Also, a decision was made to
relieve  the  requirement  of  the Company from funding any additional losses of
Florida  N-Viro,  provided  the  Company  loan  an  additional total of $180,000
between  January and February, 2001, to be evidenced by a third promissory note.
The  third note is unsecured, due on demand and bears interest at prime (tied to
a local Bank) plus  %, or the applicable federal rate, whichever is higher.  All
loans  made  by  the  Company  to  Florida N-Viro in 2000 and 2001, were made to
equalize  each  partner's  advances  to  the  partnership  at the time, and were
required  after  additional  monies  were  advanced by VFL during 2000.  VFL has
subsequently  loaned  additional  monies  to  Florida N-Viro to fund operations,
totaling approximately $535,000 through December 31, 2003.  The Company has made
no  additional  loans  since  January 2001, and is actively pursuing sale of its
investment  in  Florida  N-Viro.  Because  Florida  N-Viro  had not remitted any
interest  to  the  Company  through March, 2003, the Company set up a reserve at
December  31,  2002  of approximately $63,000 for the full amount of the accrued
interest  on  all  notes.  In 2003, the Company continued to reserve all accrued
interest  due  on  the  notes,  but  received  approximately $23,000 in cash for
accrued  interest.

     In  2003,  Florida  N-Viro recorded a net loss of approximately $1,144,000,
including  a  major  asset  impairment  writedown of $1,062,000.  Cash flow from
operations  was  positive,  and  the  Company  believes  the  remaining
revenue-generating  assets  of  Florida N-Viro will continue to provide adequate
cash  flow  to  fund  operations  for  2004.

          In February 2004, VFL announced the sale of its company to an outside,
independent  third  party.  As of the date of this filing, the sale has not been
finalized.  The  effect  on  the Company and its investment in Florida N-Viro is
uncertain.

THE  N-VIRO  PROCESS

     The N-Viro Process is a patented process for the treatment and recycling of
bio-organic  wastes,  utilizing  certain  alkaline  by-products  produced by the
cement,  lime,  electric  utilities  and  other industries.  To date, the N-Viro
Process  has  been commercially utilized for the recycling of wastewater sludges
from  municipal wastewater treatment facilities.  N-Viro Soil produced according
to  N-Viro  Process  specifications  is  an "exceptional quality" sludge product
under  the  part  503  Regs.

     The  N-Viro  Process involves mixing the wastewater sludge with an alkaline
admixture  and  then  subjecting  the mixture to a controlled period of storage,
mechanical  turning and accelerated drying in which a blending of the sludge and
the  alkaline  admixture  occurs.  The N-Viro Process stabilizes and pasteurizes
the  wastewater  sludge,  reduces  odors  to  acceptable  levels, neutralizes or
immobilizes  various  toxic  components  and  generates N-Viro SoilTM, a product
which  has  a  granular  appearance  similar to soil and has multiple commercial
uses.  These  uses  include  agricultural lime, soil enrichment, top soil blend,
landfill  cover  and  filter,  and  land  reclamation.

     The  alkaline  admixture  used in the N-Viro Process consists of by-product
dusts  from  cement or lime kilns, certain fly ashes and other products of coal,
coke or petroleum combustion and by-product dusts from sulfuric acid "scrubbers"
used  in acid rain remediation systems and from fluidized bed coal-fired systems
used  in  electric  power  generation.  The  particular  admixture  that is used
usually  depends upon cost and availability in local markets.  In certain cases,
commercial  lime  may  also  be  added  to  the  admixture.

     The  Company  is a distributor of alkaline admixture and is responsible for
quality  control  of  the  admixture.  The  Company  also works with established
by-product marketers.  The Company generally charges a mark-up over its cost for
alkaline  admixture  sold  directly  by  the  Company.

     N-Viro  Soil  is  sold  for  agricultural  use as a bio-organic and mineral
fertilizer  with  agricultural  liming  and  nutrient  values, as landfill cover
material,  as  a  topsoil blending ingredient and for land reclamation projects.
The  Company  estimates  that  approximately  five  percent  of  the N-Viro Soil
produced  is  sold  to  landfills for cover material, small amounts are sold for
land  reclamation  and  similar  projects,  and  a  substantial  portion  of the
remainder  is sold for agricultural use or as a topsoil blend.  Although the use
of  N-Viro  Soil is not subject to any federal regulations or restrictions, each
N-Viro  facility is typically required to obtain a state and/or local permit for
the  sale  of  N-Viro  Soil.  In  addition, many states and/or local governments
require  site-specific  permits  for the use of sludge products in bulk amounts.

RESEARCH  AND  DEVELOPMENT

     In  2003  the Company expended approximately $59,000 on research and patent
development.  Research  and  development  on  N-Viro  Soil  has  been,  to date,
performed  primarily  by  BioCheck Laboratories and Dr. Terry J. Logan.  Through
June  30, 1999, Dr. Logan acted as an independent consultant to the Company on a
part-time  basis  and was, and continues to be, a director of the Company.  From
July  1,  1999  through  May 9, 2002, Dr. Logan was employed with the Company as
President  and  Chief  Operating Officer, and after that time to the present has
been  employed  as President and Chief Executive Officer.  BioCheck Laboratories
was  once  a wholly-owned operating subsidiary of the Company, whose assets were
sold  in  1997  to  its  former  employees.

     All  participants  on the Company's technology council, including Dr. Logan
and  the  officers  of BioCheck, have contracts with the Company, protecting the
Company's  rights.

     In  addition,  in  2003  alone,  grants  totaling  $90,000 were secured for
process and product research.  A field-scale test of the Company's animal manure
treatment  technology  was  tested  at a large poultry operation in the State of
Delaware  in  2001  in collaboration with Environmental Technologies of Delaware
LLC  ("ETD").  ETD  holds  an  exclusive license for the Company's animal manure
treatment  technology  ("Nuresoil")  for  the  States  of Delaware, Maryland and
Virginia.  The  State  of Maryland funded a study, conducted with the University
of  Maryland,  to  utilize  bio-mineral treated poultry manure to reclaim acidic
landfill  cover.  In  1999,  two  patents  were submitted to the U.S. Patent and
Trademark  Office  ("USPTO")  and to the European Patent Office for disinfection
and  for  phosphorus  and  trace metal immobilization in animal manure.  In late
2000, the USPTO declared the manure disinfection technology to be patentable and
this  patent  was  issued in 2001.  The second manure patent, for phosphorus and
trace  metal  immobilization, was declared by the USPTO to be patentable in 2001
and  that  patent  was  awarded  in  2002.  International patents have also been
applied  for.  The  Company  continues  to investigate methods to shorten drying
time,  substitute  various  other  materials  for  use as alkaline admixture and
improve the quality and attractiveness of N-Viro Soil to a variety of end-users.
Several  developments  are  the  subject of issued patents, including the use of
carbon  dioxide in the N-Viro Process as a means to (i) reduce by-product carbon
dioxide  emissions  from  industrial processes by immobilizing carbon dioxide in
N-Viro Soil and (ii) improve the quality and value of N-Viro Soil.  In addition,
the  Company  has  developed  a dryer system which reduces processing time while
continuing  to  permit  the survival of beneficial microflora.  Licensees of the
Company  began  operating  dryer  facilities  in  Phillipsburg,  New  Jersey and
Leamington,  Ontario Canada in 1995.  A facility in Sarnia, Ontario, Canada came
on  line  in March, 2001.  The Company's "BioBlend", which uses N-Viro Soil as a
reagent  to accelerate and deodorize yard waste composting, is being utilized to
produce  topsoil  at  the  Englewood,  Ohio N-Viro facility and at several other
licensed  facilities.

     In  2000,  the  Department  of  Agri-Food  Canada,  filed Canadian and U.S.
patents  on  the  use  of N-Viro Soil to suppress soybean cyst nematode (SCN), a
soil pathogen which can severely reduce soybean yields and for which there is no
effective  control.  Those  patents  were  awarded  in  2002.  SCN  damage  is a
widespread  problem  throughout  soybean growing areas.  Research in Canada, and
confirmed  in  Ohio,  show  that  there is potential for N-Viro Soil to increase
soybean yields in areas with heavy infestations of SCN.  N-Viro is the exclusive
licensee  for  the  use  patent in the U.S. and internationally.  In Canada, the
license  is  held  by  N-Viro  Systems Canada, Inc.  The USDA funded research in
2001-2003  on  the effects of N-Viro Soil and Nuresoil on the control of certain
soil  nematodes  in  soybeans  and  other  crops.

     In  2001,  the  Company  filed  two  patents  with the USPTO that deal with
controlled  heating,  drying  and combustion of organic wastes, including sewage
sludges,  animal manures, and pulp and paper wastes.  One of the patents teaches
the  ability  of  mineral  by-products,  such as coal combustion by-products, to
control  the  burning  of  organic  wastes in a coal-fired power plant as a coal
substitute.  The  patent also teaches the generation of ammonia from the organic
waste for NOx control at the power plant, and the utilization of waste heat from
the power plant to dry the organic wastes.  The original submission was declared
to  be  patentable  by the USPTO in late 2001 and the patent was issued in 2002.
International  patents  have also been applied for.  The Company is currently in
discussions  with  several  fuel users and marketers to develop this technology.
The Company also filed an application with the USPTO to control the ignitability
of  volatile  organics  in  dryers by the addition of mineral by-products.  This
application  was  approved  and  the patent issued in 2003.  Two further patents
were  applied for, for the use of mineral by-products to enhance heating, drying
and  disinfection  of  organic  wastes  under  non-alkaline  conditions.  These
applications  were approved in early 2004 and are expected to be issued in 2004.

     Because  of  the joint development of early N-Viro patents with the Medical
College  of Ohio ("MCO"), in 1995, the Company and MCO agreed that the rights of
MCO  to  any  intellectual  property  of  value  to  the Company in development,
patentable  or  patented  would  generate royalties to MCO.  The Company and MCO
have  also  agreed  that  future  claims  to  the  N-Viro  Soil process is  % of
technical  revenues.  MCO rights to BioBlend and other N-Viro technologies range
from  2%  to  4%  of  technical  revenues derived from these newer technologies.
Cumulative royalties expensed to MCO through December 31, 2003 are approximately
$58,000.

ORGANIZATION

     Day-to-day  operations, including management of the Toledo, Ohio processing
facility,  and  support  functions,  is  directed by the Company's President and
Chief  Executive  Officer.  Support  functions  include  alkaline  admixture
procurement and sales, product market development and sales, regulatory affairs,
and  licensee  support.  Domestic sales and marketing and project development is
directed  by the Company's Chief Operating Officer and Executive Vice-President,
who  coordinates internal staff, a network of manufacturers representatives, and
consultants.  International  sales  and marketing, legal affairs and stockholder
relations  are directed by the Company's Chief Executive Officer.  The company's
Chief  Financial  Officer  has  responsibility  for  all  finance and accounting
functions  and  reporting,  filings with the Securities and Exchange Commission,
and  serves  as Corporate Treasurer and Secretary.  In 2003, the Company's Board
of  Directors  appointed two members to oversee Company management, assisting in
planning  and  executive  oversight.

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

                                   The Agents

          Agent                                                        Territory

     Bio-Recycle  Pty.  Ltd.            Australia,  New  Zealand  and  Singapore
     CRM  Technologies                                           Eastern  Europe
     EIEC                                                                  Spain
     Esson  Technology,  Inc.                                              China
     Itico                             Egypt,  North  Africa,  The  Middle  East
     Nesher  Israel  Cement,  Ltd                                         Israel
     N-Viro  Filipino                                                Philippines
     N-Viro  Systems  Canada,  Inc                                        Canada
     South  Africa  N-Viro                    All  Africa  except  North  Africa

     In  their respective territories, the Agents market licenses for the N-Viro
Process, serve as distributors of alkaline admixture, oversee quality control of
the  N-Viro Process and N-Viro Soil, enforce the terms of the license agreements
with  licensees  and market N-Viro Soil (or assist licensees in marketing N-Viro
Soil).  In  general, the Agents have paid one-time, up-front fees to the Company
for  the  rights  to  market  or  use  the  N-Viro  Process  in their respective
territories.  Typically,  the agreements with the Agents provide for the Company
to  receive a portion of the up-front license fees and ongoing royalty fees paid
by  the licensees and a portion of the proceeds from the distribution and resale
of  alkaline  admixture  and  the  sale  of  N-Viro  Soil.

INDUSTRY  OVERVIEW

     Sludge  Management  Practices  and  the 40 CFR part 503 Sludge Regulations.
Historically,  sludge  management  has  involved either disposal, principally by
landfilling,  incineration,  ocean  dumping  and  surface  disposal,  or  land
application  for beneficial use.  On February 19, 1993, the EPA published the 40
CFR  part  503 Sludge Regulations ("part 503 Regs") under the Clean Water Act of
1987  implementing the EPA's "exceptional quality" sludge program.  The part 503
Regs  establish  sludge  use  and disposal standards applicable to approximately
35,000  publicly  and  privately-owned wastewater treatment plants in the United
States,  including  primary  publicly-owned treatment works ("POTWs"), secondary
and  advanced  treatment POTWs, privately-owned treatment works, federally-owned
treatment  works and domestic septage haulers.  The EPA currently estimates that
the 13,000 to 15,000 POTWs generate 110 to 150 million wet metric tons of sewage
sludge  per  year.  Under  the  part  503  Regs,  sludge  may  be disposed of in
municipal  solid  waste  landfills  approved  under  Subtitle  D of the Resource
Conservation  and Recovery Act ("RCRA"), or may be surface disposed, incinerated
or  land  applied  for  beneficial  use  in  accordance  with  the  requirements
established  by  the  part  503  Regs.

     Disposal.  Landfilling,  incineration  and ocean dumping have traditionally
provided  inexpensive,  reliable  methods of sludge disposal.  Ocean dumping was
banned  in  the  United  States  in  December  1992.  Under  the  part 503 Regs,
landfilling  and  incineration remain permissible sludge management alternatives
but  have  become  subject  to  more  stringent  regulatory standards.  The vast
majority  of  states  have  some site restrictions or other management practices
governing  the disposal of sludge in landfills.  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 Regs impose
additional  specific  pollutant limits for sludges to be incinerated and for the
resulting  air  emissions.

     Surface  disposal of sludge involves the placement of sludge on the land at
a  dedicated  site  for  disposal  purposes.  The  part 503 Regs 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  is  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.  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 Regs, sludge products that meet certain
stringent  standards  with  respect  to  pathogen  levels  relating to coliform,
salmonella,  enteric  viruses and viable helminth ova counts ("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" sludge products.  The Class A pathogen levels are
significantly  more  stringent  than  the  Class B pathogen levels; for example,
permitted  Class B fecal coliform levels are 2,000 times higher than their Class
A  counterparts.

     "Exceptional  quality" sludge products are treated by the EPA as fertilizer
material,  thereby  exempting  these products from federal restrictions on their
agricultural use or land application.  N-Viro Soil that is produced according to
N-Viro Process specifications meets the pollutant concentration limits and other
standards  set  forth  in  the  part 503 Regs and, therefore, is an "exceptional
quality"  sludge  product  that  exceeds  the  EPA's  standards for unrestricted
agricultural  use  and  land  application.  Lower  quality  sludges,  including
sludge-based  products  that  meet Class B pathogen levels and certain pollutant
control  and  pest  attraction requirements, may also be applied to the land for
beneficial  use  but  are  subject  to  greater  record  keeping  and  reporting
requirements  and  restrictions  governing,  among  other  items,  the  type and
location  of  application,  the  volume  of application and limits on cumulative
levels  of  metals.  Sludges  applied to the land for agricultural use must meet
Class  B  pathogen  levels  and,  if  applied  in  bulk,  require an EPA permit.

COMPETITION

     The  Company  is  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 the Company.  There can be no
assurance  that  the  Company will be able to maintain a competitive position in
the  sludge  treatment  industry.

     A  1988  EPA  survey  estimated that sludge generators in the United States
utilized landfilling, incineration, surface disposal and ocean dumping as sludge
management  alternatives  for  approximately  two-thirds  of  wastewater sludges
generated.  Although ocean dumping was banned in December 1992, other methods of
sludge disposal remain permissible sludge management alternatives under the part
503  Regs,  and in many instances will be less expensive than treatment methods,
including  the  N-Viro  Process.

     Sludge  treatment  alternatives other than disposal include processes, such
as  aerobic  and  anaerobic  digestion  and  lime  stabilization, that typically
produce  lower  quality  sludge  products,  and  other  processes,  such  as
pelletization,  composting, high heat lime sterilization and high heat en-vessel
lime  pasteurization,  that produce "exceptional quality" sludge products.  Some
of  these  processes  have  established  a  significant market presence, and the
Company cannot predict whether any of such competing treatment processes will be
more  or  less  successful  than  the  N-Viro  Process.  In  2000  the  primary
competition  to  N-Viro  technology  was  the  dumping  of  raw sewage sludge in
landfills.  While  such  practices  are  prohibited  in some states (e.g., North
Carolina  and  New  Jersey),  the  practice  is  accepted  by  the  USEPA.

ENVIRONMENTAL  REGULATION

     Various  environmental protection laws have been enacted and amended during
recent  decades  in  response  to  public  concern  over  the  environment.  The
Company's  operations  and  those of its licensees are subject to these evolving
laws  and  the  implementing  regulations.  The United States environmental laws
which  the Company believes are, or may be, applicable to the N-Viro Process and
the  land  application of N-Viro Soil include Resource Conservation and Recovery
Act  ("RCRA"),  as  amended  by the Hazardous and Solid Waste Amendments of 1984
("HSWA"),  the  Federal  Water  Pollution  Control Act of 1972 (the "Clean Water
Act"),  the  Clean  Air  Act  of  1970,  as  amended  (the "Clean Air Act"), the
Comprehensive  Environmental  Response,  Compensation,  and  Liability  Act
("CERCLA"),  the  Pollution  Prevention Act of 1990 and the Federal Insecticide,
Fungicide and Rodenticide Act ("FIFRA").  These laws regulate the management and
disposal  of wastes, control the discharge of pollutants into the air and water,
provide  for  the  investigation  and  remediation  of  contaminated  land  and
groundwater  resources  and  establish  a pollution prevention program.  Many of
these laws have international counterparts, particularly in Europe and elsewhere
in  North  America.  In  addition, various states have implemented environmental
protection  laws  that  are  similar  to  the  applicable  federal  laws and, in
addition,  states  may  require, among other things, permits to construct N-Viro
facilities  and  to  sell and/or use N-Viro Soil. There can be no assurance that
any  such  permits  will  be  issued.

     The  part  503 Regulations.  Sewage sludge and the use and disposal thereof
is regulated under the Clean Water Act.  On February 19, 1993, the EPA published
the  part 503 Regs under the Clean Water Act implementing the EPA's "exceptional
quality"  sludge  program.  These  regulations establish sludge use and disposal
standards  applicable to approximately 35,000 wastewater treatment plants in the
United States, including approximately 13,000 to 15,000 publicly owned treatment
works  ("POTWs").  Under  the  part  503 Regs, sludge products that meet certain
stringent  standards  are considered to be "exceptional quality" sludge products
and  are  not  subject  to  any federal restrictions on agricultural use or land
application.  N-Viro Soil produced according to N-Viro Process specifications is
an  "exceptional  quality"  sludge  product.  Lower  quality  sludges and 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 sludges and sludge products, including N-Viro Soil
and  other "exceptional quality" sludge 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, the Company reviews
the results of regular testing of sludges required by the EPA to be conducted by
wastewater  treatment  plants,  and  itself tests N-Viro Soil produced at N-Viro
facilities  on  a  regular  basis.  In  general, the Company does 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.  In  five  N-Viro
facilities,  however, the Company has permitted the use of the N-Viro Process to
produce a product that is not an "exceptional quality" sludge product due to the
high  pollutant levels of the resulting product.  This product is not considered
to be N-Viro Soil and is used solely for landfill cover at an adjacent landfill.
In  addition,  the  Company  has  previously  licensed for use at five treatment
facilities  an  earlier  sludge  treatment process that is designed to produce a
sludge  product  that meets only Class B pathogen levels, and therefore does not
produce  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, such as
Rhode  Island,  Massachusetts  and  New  Jersey, currently have regulations that
impose more stringent numerical concentration limits for certain pollutants 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.  However, such sewage sludge is not
considered  a  hazardous  waste  unless  it exhibits a hazardous characteristic.
While  it  is  possible  that  sewage  sludge  could  exhibit  the  toxicity
characteristic,  the  Company  believes  that  regular  tests  for  hazardous
constituent  levels  provide assurance that the sewage sludge used in the N-Viro
Process  does  not exhibit the toxicity characteristic.  The alkaline admixtures
used in the N-Viro Process are specifically exempted from RCRA regulation by the
so-called  Bevill  Amendments  to  RCRA.  Although  the benefit of the exemption
provided  by  the  "Bevill  Amendments" can be lost if the alkaline admixture is
derived  from  or  mixed  with  a  hazardous  waste, the Company has adopted and
implemented  policies  and  operational  controls, including review of operating
permits  held  by  alkaline  admixture  suppliers  and  periodic testing of such
admixtures, to ensure that the alkaline admixtures used in the N-Viro Process by
itself  and  its  licensees are not derived from or mixed with hazardous wastes.

     Although  neither the alkaline admixture nor wastewater sludges 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  Clean  Air  Act.  The  Clean Air Act empowers the EPA to establish and
enforce ambient air quality standards and limits of emissions of pollutants from
specific  facilities.  The  Clean Air Act Amendments of 1990 (the "Clean Air Act
Amendments")  impose  stringent  requirements  upon  owners  and  operators  of
facilities  that  discharge  emissions  into  the  air.

     Existing  N-Viro  facilities generally have installed "baghouse" technology
for  alkaline  admixture  storage  and  handling  operations in order to collect
airborne  dust.  At  present,  the  Company  does  not  believe  that any N-Viro
facilities will be required to undertake any further measures in order to comply
with  the Clean Air Act or the existing Clean Air Act Amendments.  Ammonia odors
of  varying strength typically result from sludge treatment processes, including
the  N-Viro  Process.  A  number  of  N-Viro  facilities  have installed ammonia
"scrubbers"  to  reduce  ammonia odors produced to varying degrees by the N-Viro
Process.  The  installation  of ammonia "scrubbers" is not required by the Clean
Air  Act  or  the  existing  Clean  Air Amendments.  However, the Company or its
licensees may be required under the Occupational Safety and Health Act and state
laws regulating nuisances, odors and air toxic emissions to install odor control
technology  to  limit  ammonia  emissions  and  odors produced during the N-Viro
Process,  particularly  at  N-Viro facilities located near populated residential
areas.  The  amount of ammonia gas produced is dependent upon the type of sludge
being  treated  and  the  amount  and  type  of  alkaline  admixture being used.

     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.

     The Company believes that the N-Viro Process poses little risk of releasing
hazardous  substances  into  the  environment  that  presently  could  result in
liability  under CERCLA.  Although the sewage sludge and alkaline waste products
could  contain  hazardous  substances (as defined under CERCLA), the Company has
developed  plans  to  manage the risk of CERCLA liability, including training of
operators,  regular  testing of the sludge and the alkaline admixture to be used
in  the  N-Viro Process and reviewing incineration and other permits held by the
entities  from  whom  alkaline  admixtures  are  obtained.

     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.  The Company believes that
the  N-Viro  Process  contributes  to  pollution  prevention  by  providing  an
alternative  to  disposal.

     The  alkaline  admixtures  used in the N-Viro Process may be required to be
registered  as  pesticides  under  FIFRA because of their effect on pathogens in
sludge.  The  EPA  does  not  currently regulate commercial lime or any alkaline
by-products  under  FIFRA  and  has not attempted to assert such jurisdiction to
date.  In the event the alkaline by-products are required to be registered under
FIFRA,  the  Company  would likely be required to submit certain data as part of
the  registration  process  and  might be subject to further federal regulation.

     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.  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.

EMPLOYEES

     As  of  December  31,  2003,  the Company had 16 employees in the following
capacities:  7  engaged in sales and marketing; 3 in finance and administration;
and 6 in operations.  The Company considers its relationships with its employees
to  be  satisfactory.

     The  Company  is  a  party to a collective bargaining agreement (the "Labor
Agreement")  covering  certain  employees  of  National  N-Viro  Tech,  Inc.,  a
wholly-owned  subsidiary  of the Company.  The employees that are covered by the
Labor  Agreement  work  at the Toledo, Ohio N-Viro facility which is operated by
the  Company  on  a  contract  management  basis  for the City of Toledo.  These
employees are members of the International Brotherhood of Teamsters, Chauffeurs,
Warehouseman  and  Helpers  Local  Union  No.  20, and the Company considers its
relationships  with  the organization to be satisfactory.  At present, the Labor
Agreement  expires  October  31,  2004.

N-VIRO  FACILITIES

     To  date,  the  Company  principally  has  licensed  the  N-Viro Process to
municipalities  for  use  in  municipally-owned wastewater treatment plants. The
Company  has also operated, generally on a start-up basis, N-Viro facilities for
municipalities and currently operates one municipally-owned N-Viro facility on a
contract  management  basis.  In  most  cases, however, municipal licensees have
elected  to  design,  construct  and  operate  N-Viro  facilities independently.
     As  of  December  31,  2003,  there  were  more  than  40 N-Viro facilities
operating  throughout  the  world.  The  sludge  processing  capacity  of  these
facilities ranges from one to 200 dry tons per day.  Based upon reports received
from  N-Viro  facilities,  the  Company estimates they are processing wastewater
sludge at an annualized rate of over 167,000 dry tons per year.  The chart below
summarizes  the current annualized sludge processing volume for each of the five
largest  N-Viro  facilities  through  December  31,  2003.

<TABLE>
<CAPTION>


Facility Location           Approximate Sludge Processing Volume (dry tons/year)
<S>                         <C>
Middlesex County, New Jersey                                              55,000
Plattsburgh, New York. . . .                                              49,500
Wilmington, Delaware . . . .                                              11,000
Syracuse, New York . . . . .                                               9,900
Toledo, Ohio . . . . . . . .                                               7,200
Volusia County, Florida. . .                                               6,900
</TABLE>


     All  of  the  existing  N-Viro  facilities  are owned and operated by third
parties, with the exception of the Toledo, Ohio facility which has been operated
by  the  Company  on  a  contract  management  basis  since  January  1990.

     Design and construction of a facility using the N-Viro Process is typically
undertaken  by  local  independent  engineering  and construction firms.  Such a
facility  can  be  completed  in  approximately  six  months,  but  could  take
substantially longer, depending on the size and complexity of the facility.  The
N-Viro  Process  produces  ammonia  in  various concentrations, depending on the
characteristics  of  the sludge.  A number of N-Viro facilities, typically those
located  near residential areas, have installed odor control systems in order to
minimize  the  release  of  ammonia odors resulting from the N-Viro Process.  An
odor  control  system  can  significantly  increase  construction time and cost.
Construction of N-Viro facilities generally requires state and local permits and
approvals  and, in certain instances, may require an environmental impact study.
     The Company had previously licensed for use at five treatment facilities an
earlier  sludge  treatment  process that is designed to produce a sludge product
that  meets  only  Class  B  pathogen  levels, and therefore does not produce an
"exceptional  quality" sludge product under the part 503 Regs.  Royalty payments
from  sludge  processed  at  the  five  facilities using such earlier technology
currently  account  for  less  than two percent of total royalty payments to the
Company  and  the  Company  does  not  actively  market the use of this process.
SEGMENT  INFORMATION

     EARNINGS  VARIATION  DUE  TO  BUSINESS  CYCLES  AND  SEASONAL FACTORS.  The
Company's operating results can experience quarterly or annual variations due to
business cycles, seasonality and other factors.  The market price for its common
stock  may decrease if its operating results do not meet the expectations of the
market.

     Currently,  approximately  35%  of the Company's revenue is from management
operations, 62% from other domestic operations, 2% from research and development
grants  and  the  remaining  1%  from  foreign  operations.  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 (such as the
current  conditions  in  the Asia Pacific region and Latin America) and interest
rates,  as well as other factors.  In addition, operating results of some of the
Company's  business  segments  are  influenced, along with other factors such as
interest rates, by particular business cycles and seasonality.  See Notes to the
Financial  Statements  contained  in  Item  8  hereof.

     COMPETITION.  The  Company  competes  against  companies  in  a  highly
competitive  market  and  has fewer resources than most of those companies.  Its
business  competes within and outside the United States principally on the basis
of  the  following  factors:

<TABLE>
<CAPTION>


<S>                 <C>                 <C>                 <C>                <C>

SEGMENT

Management          Other Domestic                           Research &
Operations          Operations           Foreign Operations  Development

COMPETITIVE FACTORS
                                                             Innovative
Price                Price               Price               Technologies

                                         Product quality and
Reliability          Reputation          specifications      Technical support
Product quality and  Product quality
Specifications       and specifications  Custom design       Reputation

Responsiveness to                        Equipment financing Product quality
Customer             Technical support   assistance          and specifications

Technical support    Custom design       Technical support   Custom design

                     Equipment financing                     Equipment financing
Reputation           assistance          Reputation          assistance
</TABLE>


     Competitive  pressures,  including those described above, and other factors
could  cause  the  Company  to lose market share or could result in decreases in
prices,  either  of  which could have a material adverse effect on its financial
position  and  results  of  operations.

     RISKS  OF DOING BUSINESS IN OTHER COUNTRIES.  The Company conducts business
in  markets  outside  the  United  States, and expects 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.  The Company has not entered
into any currency swap agreements which may reduce these risks.  The Company may
enter  into  such  agreements  in the future if it is deemed necessary to do so.

     Current  economic  and  political conditions in the Asia Pacific and Middle
East regions have affected the Company outlook for potential revenue there.  The
Company  cannot  predict  the  full  impact of this economic instability, but it
could  have  a  material  adverse  effect  on  revenues  and  profits.


ITEM  2.          PROPERTIES

     The  Company's  executive and administrative offices are located in Toledo,
Ohio,  under a lease that was renewed in January 2003.  The Company believes its
relationship  with  its  lessor  is  satisfactory.  The  total  minimum  rental
commitment  for the years ending December 31, 2004 through 2006 is approximately
$56,000  each  year.  The  total  rental  expense  included in the statements of
operations for the years ended December 31, 2003, 2002 and 2001 is approximately
$57,100,  $64,600  and  $65,100,  respectively.  The Company also leases various
equipment  on  a  month-to-month  basis.


ITEM  3.          LEGAL  PROCEEDINGS.

     On June 11, 2003, Strategic Asset Management, Inc. ("SAMI"), the beneficial
owner  of  101,115  shares  of  the  voting,  common  stock  of  the  Company or
approximately  3.38%  of  the  total  number of issued and outstanding shares of
voting,  common  stock,  filed  a  stockholder's  derivative  action in Delaware
Chancery  Court  ("the  Court")  against the Company and its Board of Directors,
seeking,  among other things, to enjoin the Company from modifying the terms and
conditions contained in a consulting agreement dated December 2, 1999, effective
as  of July 20, 2002 (the "Consulting Agreement") by and between the Company and
J.  Patrick  Nicholson,  the  former  Chairman  of  the  Board  and  currently a
consultant to the Company. R. Francis DiPrete, formerly the president and member
of  the board of directors of SAMI, is a member of the Board of Directors of the
Company.

     The  Board  began  considering  the  modification  of  Mr.  Nicholson's
relationship  with  the  Company  in  January, 2003, after SAMI began to inquire
about  the  Company's  financial statements, the Company's financial performance
and  the  reasonableness  of compensation paid to Mr. Nicholson.  As a result of
SAMI's  inquiry,  the  Board formed a Special Committee comprised of independent
directors  and  chaired  by  Director  Phillip  Levin.

     The  Special  Committee  retained  independent legal counsel, who, in turn,
retained  an  independent  certified  public accounting firm to review financial
dealings,  including  expense  reimbursements,  between  the  Company  and  Mr.
Nicholson.  On  May  14, 2003, the independent counsel delivered a report to the
Special  Committee  indicating  that  while there had been certain lapses in the
Company's expense reimbursement policies and procedures as well as some failures
to follow appropriate accounting conventions as they pertained to Mr. Nicholson,
there  was  no  wrongdoing  on  Mr.  Nicholson's  part.

     After reviewing the Special Committee's report, the Board determined it was
appropriate  to modify the terms of the Consulting Agreement to reduce the level
of  compensation  as well as to improve financial accountability with respect to
the  reimbursement  of  expenses.

     On  June  11,  2003,  concerned  that  the  Board  ultimately  would accept
unreasonable  modifications  to  the  Consulting  Agreement,  SAMI  filed in the
Delaware  Chancery  Court  a stockholders' derivative action against the Company
and  the  Board  (other  than Mr. DiPrete, who is an officer and a member of the
Board  of Directors of SAMI), seeking, among other things, to enjoin the Company
from  modifying  the  terms  of the Consulting Agreement and further seeking Mr.
Nicholson's  termination.  So  as  to  provide  time  to  resolve  the  matter
voluntarily  without  incurring  litigation  costs, the parties consented to the
entry of a preliminary injunction that provided that N-Viro would not enter into
any  new  agreement  with  Mr.  Nicholson  without  SAMI's  consent.

     At  a  Special Meeting on July 28, 2003, the Board approved entering into a
settlement  agreement  (the  "Settlement  Agreement")  with  SAMI,  which N-Viro
entered into as of August 1, 2003.  The Settlement Agreement provided that, by a
set  date,  either  Mr.  Nicholson,  N-Viro  and  SAMI  participate  in  a
specially-tailored  arbitration  proceeding  to set the terms of Mr. Nicholson's
compensation  as  a consultant to N-Viro or, if Mr. Nicholson would not agree to
do  so,  that  N-Viro  would  terminate  the  Consulting  Agreement  for  cause.

     The Settlement Agreement also required the Company to reimburse SAMI for up
to  $100,000  in  legal,  accounting  and  consulting  fees  incurred by SAMI in
connection  with  the  lawsuit.  The settlement further obligated the Company to
issue  SAMI  a  warrant  to acquire up to 75,000 shares of the Company's voting,
common  stock at a purchase price per share of $0.72.  This price was determined
based  upon  the closing trading price for the Company's voting, common stock on
the  date  that the parties reached oral agreement on the settlement terms.  The
Settlement  Agreement  terms  are  subject  to  the  Chancery  Court's approval.

     Following  the  execution  of  the  Settlement  Agreement  but prior to the
initiation  of the arbitration proceeding contemplated therein, N-Viro, SAMI and
Mr.  Nicholson  agreed to determine the new terms of Mr. Nicholson's consultancy
by  agreement  rather  than  arbitration  (the  "New  Agreement").

     Under  the  terms  of  the New Agreement, Mr. Nicholson provides consulting
services  to  the Company for a period of five (5) years, subject to renewal, at
the  Company's  discretion,  for  up  to  three  additional  one-year terms.  In
exchange  for  such  consulting services, Mr. Nicholson is paid at a rate of One
Hundred  Twenty-five  and  00/100  Dollars  ($125)  per  hour,  with  a  minimum
commitment  on  the  part  of the Company to use at least sixteen (16) hours per
month of consulting services.  Mr. Nicholson is also eligible to receive a bonus
during  each  year  of  the  term  of his consultancy in an amount equal to five
percent  (5%)  of  the  net  income of the Company, subject to a maximum payment
during each year of Thirty Thousand and 00/100 Dollars ($30,000).  Additionally,
Mr.  Nicholson  is  entitled  to  receive  commissions in exchange for obtaining
government  research  grants, license fees and other income opportunities.  Such
commissions  are  described  in detail in Section 4 of the New Agreement and are
based either on the Company's gross or net income from the opportunities created
by  Mr.  Nicholson.

     Also  under  the  terms  of  the  New Agreement, the Company is required to
provide  Mr. Nicholson with Five Hundred and 00/100 Dollars ($500) per month for
office  expenses,  plus  secretarial  support  from  the  Company's  existing
secretarial resources, and no corporate vehicle.  For a period of ten years, the
Company  will  provide  Mr.  Nicholson  and his spouse with medical insurance to
supplement  their coverage under the federal government's Medicare program, with
coverage for Mr. Nicholson's spouse to begin on her sixty-fifth (65th) birthday.
With  respect  to  life  insurance,  for a period of ten years the Company shall
contribute  up  to  $10,000 per annum toward the cost of a life insurance policy
owned  and  maintained  by Mr. Nicholson.  Finally, Mr. Nicholson cannot compete
with  the  Company  for  a  period  of  ten  (10)  years.  In  exchange for this
commitment,  the  Company will pay Mr. Nicholson Forty-eight Thousand and 00/100
Dollars  ($48,000)  per  year until the earlier of ten (10) years or the date of
Mr.  Nicholson's  death.

     In  actions  related  to  the modification of the Consulting Agreement, the
Company  also  demanded  the  re-payment  of  approximately  $24,000 owed to the
Company  by N-Viro Energy Systems, Inc. ("Systems"), an entity controlled by Mr.
Nicholson.  The  Board  authorized Systems to re-pay the loan, at its option, by
surrendering  to  the Company shares of the Company's voting, common stock owned
by  Systems  having a value equal to the amount of the debt.  The Company's loan
to Systems pre-dates the implementation of the prohibition on loans to corporate
officers  and  directors  included  in  the Sarbanes-Oxley Act and its rules and
regulations.

     In  light of Mr. Nicholson's diminished duties on behalf of the Company and
as part of the terms of the Settlement Agreement, the Board also called upon Mr.
Nicholson  voluntarily to resign his seat on the Board.  As an inducement to Mr.
Nicholson to resign from the Board, as well as in recognition of Mr. Nicholson's
significant interest in having input on the Board with respect to the management
and  control  of  the  Company (which interest stems from his current control of
529,589  shares  of  the  voting,  common  stock of the Company or approximately
17.33%  of  the  total  number of issued and outstanding shares of the Company's
voting,  common stock), the Board authorized the creation of a class of Series A
Preferred  Stock  of the Company (the "Preferred Stock"), one share of which was
issued to Mr. Nicholson following his resignation from the Board.  The holder of
the  Preferred Stock has the right to elect one member to the Board.  The holder
always  shall  be  Mr.  Nicholson  as  the  Series  A  Preferred  Stock  is
non-transferable.  Furthermore, the Series A Preferred Stock has a term equal to
ten years, and the right to appoint a Director is subject to cancellation if Mr.
Nicholson  ceases to control at least 17.5% of the aggregate number of shares of
the  Company's  voting,  common  stock issued and outstanding as a result of his
actions.  The  Series  A Preferred Stock does not have a liquidation preference.

     On  August  28,  2003,  Mr. Nicholson resigned from the Board of Directors.
Accordingly,  the  Company  filed  the  Certificate  of  Designation, Rights and
Preferences  with  the Secretary of State of the State of Delaware and issued to
Mr.  Nicholson  the  Series  A  Preferred  Stock.  Mr.  Nicholson  subsequently
appointed  Mr.  Brian  Burns  to  the  Board.

     The  execution  of  the  New  Agreement,  coupled  with  the  other actions
described  above, satisfy the conditions for submitting the Settlement Agreement
to  the Chancery Court for approval.  On December 15, 2003, the Company appeared
before  the Delaware Chancery Court but the final ruling has yet to be issued as
of  the  date  of  this  Form  10-K  filing.

     In  addition  to  the foregoing, 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.          SUBMISSION  OF  MATTERS  TO  A  VOTE  OF  SECURITY  HOLDERS

     a.          The  Annual Stockholders Meeting was held on November 13, 2003.


     b.     The  following  members of the Board of Directors were re-elected to
fill  vacancies  in Class I and to serve until the 2006 Annual Meeting and until
their  successors  are  elected  and  qualified.

<TABLE>
<CAPTION>


                         For     Against  Withheld
                      ---------  -------  --------
<S>                   <C>        <C>      <C>
Bobby B. Carroll . .  1,690,666  526,955         0

B. K Wesley Copeland  1,690,716  526,905         0
</TABLE>


          The  following  members of the Board of Directors whose term of office
as  a  director  continued  after  the  meeting  are:
               Terry  Logan,  Chief  Executive  Officer  and  President  of  the
Company,  Michael  Nicholson,  Chief  Operating  Officer of the Company, Phillip
Levin,  Chairman of the Board of the Company, Brian Burns, Christopher Anderson,
Daniel  Haslinger  and R. Francis DiPrete.  At the meeting, as summarized below,
the  number  of  classes  of  directors  was  reduced  from three to two and the
directors  were  re-designated  to  serve  in  those  two classes.  In addition,
immediately after the meeting, effective November 13, 2003, Bobby B. Carroll and
B.K.  Wesley  Copeland  resigned  as directors.  Accordingly, the directors were
re-designated  so  that  Messrs.  Logan,  Nicholson,  Levin and Burns have terms
expiring  in  2004  while  Messrs.  DiPrete,  Haslinger  and Anderson have terms
expiring  in  2005.


     c.          The  following  matters  were  voted  upon  at  the  Annual
Stockholders  Meeting:

          The  proposal  of  an  amendment to the Company's Amended and Restated
Certificate of Incorporation and the By-laws, to reduce the number of classes of
directors  from  three  to  two and to designate the directors to serve in those
classes  was  approved  as  follows:


<TABLE>
<CAPTION>


             For       Against     Abstain
<S>         <C>         <C>         <C>
            1,311,641   900,855     5,125
</TABLE>



          The  proposal  of an amendment to the Amended and Restated Certificate
of  Incorporation  of  the  Company  to  decrease the number of directors of the
Company  to  between  seven  and  nine  was  approved  as  follows:


<TABLE>
<CAPTION>


            For        Against      Abstain
<S>        <C>         <C>          <C>
           2,117,884   94,787       4,950
</TABLE>


          The  proposal  to approve the Company's 2003 Stock Option Plan was not
approved  as  follows:


<TABLE>
<CAPTION>


         For        Against        Abstain    Broker Non-Votes
<S>      <C>        <C>            <C>        <C>
         296,529    1,302,743      250        618,099
</TABLE>


          The  proposal of a compensation arrangement for non-employee directors
of  the  Company  was  approved  as  follows:


<TABLE>
<CAPTION>


           For         Against      Abstain     Broker Non-Votes
<S>       <C>          <C>          <C>         <C>
          1,408,561    185,309      5,652       618,099
</TABLE>



          The  proposal  to  ratify  Hausser  +  Taylor,  LLC as the independent
auditors  for  the  year  2003  was  approved  as  follows:


<TABLE>
<CAPTION>


           For             Against      Abstain
<S>        <C>             <C>          <C>
           2,125,386       84,435       7,800
</TABLE>





                                     PART II

ITEM  5.          MARKET  FOR  REGISTRANT'S  COMMON  EQUITY
               AND  RELATED  STOCKHOLDER  MATTERS

MARKET  INFORMATION

     The  Company's  shares  of  Common Stock are traded on the Over The Counter
Bulletin  Board  under  the  symbol "NVIC.OB".  The price range per share of the
Common  Stock  since  January  1,  2002,  was  as  follows:


<TABLE>
<CAPTION>


Quarter         High    Low
------------   ------  -----
<S>             <C>    <C>
First 2002.     $1.25  $0.75
Second 2002     $1.14  $0.64
Third 2002.     $0.88  $0.40
Fourth 2002     $1.85  $0.30
First 2003.     $1.70  $0.80
Second 2003     $1.01  $0.72
Third 2003.     $2.79  $0.70
Fourth 2003     $3.70  $2.40
</TABLE>



The  Company's  stock  price  closed  at  $2.60  per  share  on  March 24, 2004.

HOLDERS

     As  of  March  24,  2004,  the number of holders of record of the Company's
Common  Stock  was  approximately  200.

DIVIDENDS

     The  Company  has  never  paid  dividends with respect to its Common Stock.

UNREGISTERED  SALES  OF  SECURITIES

     In  February 2003, the Company closed on an $845,000 credit facility with a
local  bank.  To  secure the credit facility, the Company was required to obtain
additional  collateral  of  $100,000  (the  "Additional Collateral") from a real
estate  mortgage  from  a third party.  Messrs. J. Patrick Nicholson, the former
Chairman  of  the Board and Consultant to the Company; Michael G. Nicholson, the
Company's Chief Operating Officer and a Director; Robert F. Nicholson, a Company
employee,  and  Timothy  J.  Nicholson,  a  Company employee, ("the Nicholsons")
collectively provided the $100,000 Additional Collateral.  In exchange for their
commitment,  the  Company  agreed  to  provide, among other things, a warrant to
acquire  in the aggregate, 50,000 shares of the Company's voting common stock at
a  purchase  price of $0.90 per share.  The warrant was exercisable, in whole or
in  part,  at any time and from time to time until February, 2006.  The issuance
of  the  warrant by the Company was exempt from registration pursuant to Section
4(2)  of  the  Securities  and  Exchange  Act  of  1933.  In February, 2004, the
Nicholsons  exercised  the  warrant  and acquired 50,000 of the Company's common
stock  at  a  purchase  price  of  $0.90  per  share.

     At  a  Special  Meeting  on  July 28, 2003, the Board of Directors approved
entering  into  a  settlement  agreement  with  Strategic Asset Management, Inc.
("SAMI"),  which  the Company entered into as of August 1, 2003 (the "Settlement
Agreement").  The  Settlement  Agreement  obligated  the Company to, among other
things,  issue  SAMI  a  warrant to acquire up to 75,000 shares of the Company's
voting,  common  stock  at  a  purchase price per share of $.72.  This price was
determined based upon the closing trading price for the Company's voting, common
stock  on  the  date  that  the parties reached oral agreement on the settlement
terms.  The  Settlement  Agreement  terms  are  subject  to the Chancery Court's
approval.  The  issuance  of  the  warrant  by  the  Company will be exempt from
registration  pursuant  to  Section  4(2)  of the Securities and Exchange Act of
1933.


ITEM  6.          SELECTED  FINANCIAL  DATA

     The  following  selected  consolidated statement of operations data for the
years  ended  December 31, 1999, 2000, 2001, 2002 and 2003; and the consolidated
balance sheet data set forth below as of December 31, 1999, 2000, 2001, 2002 and
2003  respectively,  have  been  derived  from  the  financial statements of the
Company  which  have been audited by Hausser + Taylor, LLC, independent auditors
for  the  years  ended  December  31,  1999,  2000,  2001  and 2002, and Follmer
Rudzewicz  PLC,  independent  auditors for the year ended December 31, 2003.  In
the  opinion  of  management,  the  financial  data  presented below reflect all
adjustments (which are of a normal recurring nature) necessary to present fairly
the  Company's financial position and results of operations.  The data presented
below  should  be read in conjunction with "Management's Discussion and Analysis
of  Financial  Condition and Results of Operations" and the Financial Statements
and  Supplementary  Data  appearing  elsewhere  in  this  Form  10-K.

STATEMENT  OF  OPERATIONS  DATA  (IN  THOUSANDS,  EXCEPT  PER  SHARE  DATA):


<TABLE>
<CAPTION>


                                                         as restated
                                      12/31/03      12/31/02    12/31/01    12/31/00   12/31/99
                                    ------------   ---------   ---------   ---------  ----------
<S>                                 <C>            <C>         <C>         <C>         <C>
Revenues . . . . . . . . . . . . .  $      5,401   $   5,319   $   4,459   $   4,223   $   4,749
Net income (loss) from operations.          (822)         61      (1,053)       (643)        528
Net income (loss). . . . . . . . .        (1,522)        (14)     (1,191)       (809)        471
Net income (loss) per share. . . .  $      (0.59)  $   (0.01)  $   (0.45)  $   (0.31)  $    0.18
</TABLE>



BALANCE  SHEET  DATA  (IN  THOUSANDS):



<TABLE>
<CAPTION>


                                                     as restated

                                  12/31/03   12/31/02   12/31/01   12/31/00   12/31/99
                                  ---------  ---------  ---------  ---------  ---------
<S>                               <C>        <C>        <C>        <C>        <C>
Total assets                      $   3,232  $   4,242  $   4,266  $   4,809  $   4,772
Notes and line of credit payable  $   1,053  $   1,475  $   1,402  $     649  $     352
Shareholder Advance               $      17  $      24  $      24  $      22  $      49
</TABLE>



PRIOR  PERIOD  ADJUSTMENT

     During the third quarter of 2003, the Company determined it had underbilled
a  customer  for certain services which resulted in an understatement of revenue
totaling  approximately $214,000 and gross profit of approximately $194,000 over
a two and one-half year period beginning in the third quarter of 2000 and ending
in  the  fourth  quarter  of  2002.  As  a  result, the Company has restated its
previously  issued financial statements included herein and has recorded a prior
period  adjustment  to reduce, by $36,000, its accumulated deficit as of January
1,  2001.  The  Company  previously reported net losses of $96,000, or $0.04 per
share, and $1,267,000, or $0.48 per share, for the years ended December 31, 2002
and  2001,  respectively.  The  restatements resulted in the Company reporting a
net loss of $14,000, or $0.01 per share, and $1,191,000, or $0.45 per share, for
the  years  ended  December  31,  2002  and  2001,  respectively.


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
"Selected  Financial  Data"  and the 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.

     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,
                        2003        2002 (AS RESTATED)  2001 (AS RESTATED)
                      --------     -----------------   -----------------
<S>                    <C>          <C>                 <C>

Technology fees . . .   12.6%       14.4%               20.8%
Facility management .   25.7%       35.2%               36.7%
Products and services   61.7%       50.4%               42.5%
Totals. . . . . . . .  100.0%       100.0%              100.0%
</TABLE>



     Technology  fee  revenues  consist  of:  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;
research  & development revenue, which represent payments from federal and state
agencies awarded to the Company to fund ongoing site-specific research utilizing
the  N-Viro  technology.

     Facility  management  revenues  are  recognized  under  contracts where the
Company  itself  manages the N-Viro Process to treat sludge, pursuant to a fixed
price  contract.

     Product and service revenues consist of:  alkaline admixture revenue, which
represent ongoing payments from licensees arising from the sale and distribution
of  alkaline  admixture  by  the  Company  and  the Agents to N-Viro facilities;
service  fee  revenue  for the management of alkaline admixture, which represent
fees  charged by the Company to manage and sell the alkaline admixture on behalf
of  a  third  party customer;  N-Viro Soil sales, which represent either revenue
received  from  sales of N-Viro Soil sold by N-Viro facilities, or through sales
of  N-Viro  Soil  sold  directly by the Company;  commissions earned on sales of
equipment  to  an  N-Viro facility;  rental of equipment to a licensee or agent;
testing income, which represent fees charged for the periodic quality control of
the  N-Viro  Soil  produced;  equipment sales, which represent the price charged
for  equipment  held  for  subsequent  sale.

     The Company's policy is to record fully revenues payable pursuant to agency
and  license agreements when the Company has fulfilled its obligations under the
relevant  contract,  except  when  the  license  agreement pertains to a foreign
contract.  In  this case, revenue is recorded when cash is received and when the
Company  has  fulfilled  its  obligations  under  the relevant foreign contract.


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                           Year  Ended                             Year  Ended
                                               Period  to  Period    December  31,      Period to Period    December  31,
                           December 31, 2003   Percentage Change    2002 (as restated)  Percentage Change  2001 (as restated)
                           ------------------  ------------------   ------------------  -----------------  ------------------
(Dollars in thousands)

COMBINED STATEMENT OF
OPERATIONS DATA:
<S>                                    <C>             <C>            <C>                <C>                 <C>
Revenues. . . . . . . . . . . . . . .  $ 5,401            1.5%        $5,319              19.3%           $ 4,459

Cost of revenues. . . . . . . . . . .    3,970           17.4%         3,381              21.0%             2,795

Gross profit. . . . . . . . . . . . .    1,431         (26.2%)         1,938              16.5%             1,664

Operating expenses. . . . . . . . . .    2,253           20.0%         1,877            (30.9%)             2,717

Operating income (loss) . . . . . . .     (822)             *             61                 *             (1,053)

Non-operating income (expense). . . .     (700)             *            (75)                *               (138)

Loss before income tax expense. . . .   (1,522)             *            (14)                *             (1,191)

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

Net loss. . . . . . . . . . . . . . .  $(1,522)             *         $  (14)                *            $(1,191)
</TABLE>

<TABLE>
<CAPTION>


PERCENTAGE OF REVENUES:

<S>                                    <C>                             <C>                                   <C>
Revenues. . . . . . . . . . . . . . .   100.0%                         100.0%                               100.0%

Cost of revenues. . . . . . . . . . .    73.5                           63.6                                 62.7

Gross profit. . . . . . . . . . . . .    26.5                           36.4                                 37.3

Operating expenses. . . . . . . . . .    41.7                           35.3                                 60.9

Operating income (loss) . . . . . . .   (15.2)                           1.1                                (23.6)

Non-operating income (expense). . . .   (13.0)                          (1.4)                                (3.1)

Loss before income tax expense. . . .   (28.2)                          (0.3)                               (26.7)

Federal and state income tax expense.     0.0                            0.0                                  0.0

Net loss. . . . . . . . . . . . . . .  (28.2%)                          (0.3%)                              (26.7%)
</TABLE>


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


COMPARISON OF YEAR ENDED DECEMBER 31, 2003 WITH YEAR ENDED DECEMBER 31, 2002 (AS
RESTATED)

     Revenues  increased  $82,000,  or approximately 1.5%, to $5,401,000 for the
year  ended  December  31,  2003 from $5,319,000 for the year ended December 31,
2002.  The increase in revenue was due to the following:  revenues from one-time
domestic  license or international territory fees increased $14,000, to $106,000
in  2003  from  $92,000  in 2002;  and revenues from existing on-line facilities
increased  $68,000  to  $5,295,000  from  $5,227,000  in 2002.  This increase in
revenue  from existing on-line facilities was primarily from:  fees derived from
the  management  of  alkaline admixture of $545,000, an increase in royalties of
$72,000,  an  increase  in  leased  equipment revenue of $94,000, an increase in
commission, product and consulting revenue totaling $32,000, offset by decreases
in facility management fee operations of $486,000, alkaline admixture revenue of
$18,000  and research and development project revenue of $171,000.  The decrease
in  facility  management  revenue  was  primarily the direct result of increased
competition from local alternative processing companies.  The Company expects no
further  decrease from 2003 to 2004, as the provisions of the operating contract
require  a  minimum  processing  volume  to  be  serviced  by  the  Company.

     Gross  Profit  decreased  $507,000, or approximately 26%, to $1,431,000 for
the year ended December 31, 2003 from $1,938,000 for the year ended December 31,
2002.  The  decrease in gross profit was primarily due to the increased costs of
procuring  materials  and  transportation  for  the  management  and purchase of
alkaline admixture, and an increase in the cost of goods sold recognized for the
topsoil  blend  product  shipped  in  2003.  The  Company's  largest increase in
revenue  in  2003  continued  to  be from the fees received on the management of
alkaline  admixture, which was a new source of revenue for 2002.  The Company is
paid  a  fee  by  certain customers to manage the mineral by-product used in the
N-Viro  process.  The overall gross profit margin decreased to approximately 26%
in  2003  from  approximately  36%  for  2002.

     Operating  expenses  increased $376,000, or approximately 20% to $2,253,000
for the year ended December 31, 2003 from $1,877,000 for the year ended December
31,  2002.  The  primary  reason  for  the increase in operating expenses was an
increase  of  $474,000  in  outside  professional  fees  and  settlement  costs.
Included  in  the  increase  of  $474,000  for  outside  professional  fees  and
settlement  costs  was  $388,000  for  expenses directly related to a derivative
action  filed  by  a  stockholder.

     Nonoperating  expense  increased by $640,000 to expense of $700,000 for the
year ended December 31, 2003 from expense of $59,000 for the year ended December
31, 2002.  The increase was primarily due to an increase in the loss of $504,000
in  the  equity of a joint venture, to a loss of $539,000 in 2003 from a loss of
$35,000  in 2002.  Also, the Company recorded an increase in interest expense of
$109,000,  and  a decrease in interest and dividend income of $18,000 from 2002,
to  $25,000.

     The  Company  recorded a net loss of $1,522,000 for the year ended December
31, 2003 compared to a net loss of $14,000 for the year ended December 31, 2002.

     The  Company  incurred  a  loss  of  approximately $539,000 on its share of
Florida  N-Viro,  L.P.  in  2003,  an  increase  in  loss of $504,000 from 2002.
Included  in  this  increase  in  loss  from the joint venture was approximately
$500,000  for  an  impairment  write-down of a group of assets at one of Florida
N-Viro's  operating  sites.  The  Company's  investment in the joint venture now
reflects  zero value on its balance sheet, and an additional loss has been added
to  the  allowance to reserve the Note Receivable due from Florida N-Viro.  Even
though  the  investment is now reflected at zero value, the Company believes the
remaining  operating  assets of Florida N-Viro have value and will be marginally
profitable  in  2004.  See  the  discussion  in  Liquidity and Capital Resources
section  later  in  this  Item  7.  The  audited financial statements of Florida
N-Viro,  L.P.  are  included  in  this  document  after  the Company's financial
statements as Item 15(d), Financial Statements of Subsidiaries not Consolidated.

COMPARISON OF YEAR ENDED DECEMBER 31, 2002 WITH YEAR ENDED DECEMBER 31, 2001 (AS
RESTATED  FOR  BOTH  YEARS)

     Revenues  increased  $861,000,  or approximately 19%, to $5,319,000 for the
year  ended  December  31,  2002 from $4,459,000 for the year ended December 31,
2001.  The increase in revenue was due to the following:  revenues from one-time
domestic  license  or international territory fees increased $59,000, to $92,000
for  2002  from  $33,000  for  2001;  revenues  from existing on-line facilities
increased  $947,000  to  $5,227,000  from $4,280,000 for 2001.  This increase in
revenue from existing on-line facilities was primarily from:  the recognition of
a  new  source of revenue for 2002, fees derived from the management of alkaline
admixture  of  $520,000,  an  increase  in facility management fee operations of
$235,000,  an increase in alkaline admixture revenue of $373,000, an increase in
commission, product and consulting revenue totaling $46,000, offset by decreases
in  royalties  of  $182,000, research and development project revenue of $37,000
and  leased  equipment  revenue  of  $10,000.  An  additional  decrease in gross
revenue  was the $144,000 in equipment sales in 2001 to an existing licensee who
is not yet on-line.  There were no equipment sales in 2002.  The mix of revenues
for  2002 continued to change from previous years, in that the Company continues
to  move  towards  a  higher  amount of revenues derived from ongoing licensees.

     Gross  Profit  increased  $274,000, or approximately 17%, to $1,938,000 for
the year ended December 31, 2002 from $1,664,000 for the year ended December 31,
2001.  The  increase  in gross profit was primarily due to the increased revenue
derived  from the management of alkaline admixture, facility management and sale
of  alkaline  admixture,  and  offset  primarily  by  a  decrease in royalty and
equipment  sales revenue.  The Company's largest increase in revenue in 2002 was
from  the fees received on the management of alkaline admixture, which was a new
source  of  revenue for 2002.  The Company is paid a fee by certain customers to
manage  the  mineral  by-product  used in the N-Viro process.  The overall gross
profit margin decreased slightly to approximately 36% in 2002 from approximately
37%  for  2001.

     Operating  expenses  decreased $839,000, or approximately 31% to $1,878,000
for the year ended December 31, 2002 from $2,717,000 for the year ended December
31,  2001.  The  primary  reason  for the decrease in operating expenses was the
settlement  in  late  2001  by  the  Company  for the defense of its patents and
licensing  rights,  which  was  approximately  $549,000  less in 2002 than 2001.
Selling,  general  and administrative expenses also decreased by $290,000, which
was  primarily  due  to:  a  decrease  of  $141,000 in legal fees, a decrease of
$93,000  in  salaries,  employee  benefits  and  consultants  and  a decrease in
penalties  of  $68,000.

     Nonoperating  expense  decreased  by  $63,000 to expense of $75,000 for the
year  ended  December  31,  2002  from  expense  of  $138,000 for the year ended
December  31,  2001.  The  decrease  was primarily due to the Company's share of
decrease  in  losses  of  Florida  N-Viro, L.P. by $102,000 from 2001, partially
offset  by  decreases  in interest income of $21,000 and the loss on the sale of
assets  of  $16,000.

     The  Company recorded a net loss of $14,000 for the year ended December 31,
2002  compared to a net loss of $1,191,000 for the year ended December 31, 2001.

     The  Company  incurred  a  loss  of  approximately  $35,000 on its share of
Florida  N-Viro,  L.P.  in  2002,  a  decreased loss of $102,000 from 2001.  The
audited  financial  statements  of  Florida  N-Viro,  L.P.  for  the years ended
December  31,  2002  and  2001 are included in this document after the Company's
financial  statements  as  Item  15(d), Financial Statements of Subsidiaries not
Consolidated.

INFLATION

     The  Company  believes that inflation has not had a material impact to date
on  the  Company's  operations.


LIQUIDITY  AND  CAPITAL  RESOURCES
     The  Company  had  a working capital deficit of approximately $1,642,000 at
December  31,  2003  compared  to  a deficit of $847,000 at December 31, 2002, a
decrease  of  approximately  $795,000.  Current  assets  at  December  31,  2003
included  cash  of $124,000, which is a decrease of about $281,000 from December
31,  2002 (which included restricted cash of $400,000).  The decrease in working
capital  was  principally  due  to  the  net  loss  for  the  year.

     In 2003 the Company's cash flow generated from operations was approximately
$317,000,  an  improvement of approximately $132,000 from 2002.  No unusual cash
transactions  were  recorded  in 2003.  The Company generated positive cash flow
from  operations mainly by extending payment terms with creditors, primarily for
professional  fees  and  non-revenue  generating  vendors.

     In  January, 2003, the Company had available a $750,000 line-of-credit with
its  former  bank  which  was  scheduled to expire January 31, 2003.  Borrowings
against the line bore interest at prime plus 1% on borrowings up to $400,000 and
prime  plus  3%  for  borrowings  above  $400,000.  Borrowings,  which  were
collateralized  by  all  of  the Company's assets including accounts receivable,
inventories,  equipment,  assignment  of  a  $400,000 certificate of deposit and
assignment  of  certain  contracts, were due on demand.  In February, 2003, this
line  of  credit  was paid off with the redemption of the certificate of deposit
and  additional  debt  secured by another local bank, discussed in the following
section.

     In  February  2003  the  Company closed on an $845,000 credit facility with
Monroe  Bank  +  Trust  (the  "Bank").  This  senior  debt  credit  facility was
comprised  of  a $295,000 four year term note at 7.5% and a line of credit up to
$550,000  at  Prime  plus  1.5% and secured by a first lien on all assets of the
Company.  The  Company used the funds to refinance its prior debt and to provide
working  capital.  Previously,  the  Company  had a $750,000 line of credit with
another  financial  institution, secured by a $400,000 restricted Certificate of
Deposit,  required  and  held  by  this financial institution.  Effectively, the
former line of credit provided only $350,000 of additional working capital.  The
effective  increase  in  the  line  provided the Company with additional working
capital,  and  the  debt  refinance  provided  lower  cost and longer term debt,
improving cash flow.  To secure the credit facility, the Company was required by
the  Bank  to  obtain  additional  collateral  of  $100,000  (the  "Additional
Collateral") from a real estate mortgage from a third party.  Messrs. J. Patrick
Nicholson,  the  former  Chairman  of  the  Board and Consultant to the Company;
Michael  G.  Nicholson,  the  Company's  Chief Operating Officer and a Director;
Robert  F.  Nicholson,  a  Company employee, and Timothy J. Nicholson, a Company
employee,  ("the  Nicholsons")  collectively  provided  the  $100,000 Additional
Collateral.  In exchange for their commitment, the Company agreed to provide the
Nicholsons  the  following:  (1)  an annual fee in an amount equal to $2,000 per
annum;  (2)  interest  at  an  annual  rate  of  5% of the $100,000 value of the
Additional  Collateral beginning on the first anniversary date of the closing of
the  credit  facility,  and  (3)  a  warrant to acquire in the aggregate, 50,000
shares  of  the  Company's  voting common stock at a purchase price of $0.90 per
share,  which  was the closing market price of the Company's common stock on the
prior  business  day  to  the  closing  of the Credit Facility.  The warrant was
exercisable,  in  whole  or  in  part,  at  any time and from time to time until
February,  2006.  In addition, the Company granted to the Nicholsons a lien upon
the  Company's  inventory and accounts receivable.  This lien is subordinated to
both existing liens on the Company's assets and all liens granted by the Company
in  favor  of  the  financial  institution  providing  the  Credit Facility.  At
December  31,  2003,  the  Company  had  borrowed $398,223 against the line.  In
February,  2004, the Nicholsons exercised the warrant and acquired 50,000 of the
Company's  common  stock  at  a  purchase  price  of  $0.90  per  share.

     The  Company  was  in violation of financial covenants governing the credit
facility,  concerning  the  maintenance  of both a tangible net worth amount and
positive  debt  service  coverage  ratio  for  the period, both of which require
positive net earnings.  The Bank waived this violation in light of the Company's
net  loss  for  the  year  ended  December  31,  2003,  but  required additional
consideration  in  exchange  for  this  waiver.  In  January  2004,  the Company
obtained  a  certificate  of deposit in the amount of $75,000 with the Bank, and
transferred custodianship of its treasury stock to the Bank.  In February, 2004,
the Company renewed its line of credit with the Bank through April, 2004, and in
April 2004 it was renewed again through October, 2004.  As part of this renewal,
the  Bank  decreased  the  maximum  amount  available  to  borrow on the line to
$400,000.  As  of  the  date  of  this filing, the Company had borrowed $200,000
against  the  line.

     The  normal  collection  period  for  accounts receivable are approximately
45-60 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.  The Company increased its reserve for
bad  debts  during  2003  by $15,946 as a result of an increase in the amount of
outstanding  trade  receivables.

     In  2003,  the  Company's  investment in a 47.5% owned partnership, Florida
N-Viro,  L.P.,  recorded  a  net  loss of approximately $1,144,000, including an
impairment  writedown  of  a  group  of  assets  of  $1,062,000.  Cash flow from
operations  was  positive,  and  the  Company  believes  the  remaining
revenue-generating  assets  of  Florida  N-Viro,  L.P.  will continue to provide
adequate  cash  flow  to  fund  operations  for  2004.

     The  Company  is  currently  actively  pursuing  sale  of its investment in
Florida  N-Viro,  L.P.,  which  may provide, in management's opinion, additional
funds  to  finance  the  Company's cash requirements.  Because these efforts are
still  in  progress,  there  can  be  no assurance the Company will successfully
complete  these  negotiations.

     During  the  fourth  quarter  of  2003, the Company issued 12,900 shares of
common stock for stock options exercised, realizing total proceeds of $24,610 to
the Company.  Of these shares, 4,900 were issued to R. Francis DiPrete, a member
of  the  Board  of Directors.  The proceeds of the exercises of the options were
used  for  working  capital.

     During  the  first  quarter  of 2004, an additional 41,500 shares of common
stock  were  issued  to  employees and former directors of the Company for stock
options  exercised,  realizing  total  proceeds to the Company of $66,117.  Also
during  the  first quarter of 2004, 50,000 warrants were exercised jointly by J.
Patrick  Nicholson and three of his sons, Michael, Robert and Timothy Nicholson,
pursuant  to  the  terms  of  an  Agreement  signed  in February, 2003 to pledge
additional  collateral  in  securing additional financing to the Company.  These
warrants  were exercised at $0.90 per share, and the Company issued unregistered
common  stock  in  exchange  for  the  $45,000 in proceeds.  The proceeds of the
exercises  of  both  the  options  and  warrants  were used for working capital.

     Also  during the first quarter of 2004, the Company issued 72,237 shares of
unregistered  common stock to two trade creditors, eliminating $162,533 worth of
debt  owed  by  the  Company  to  such  creditors.  In addition, 7,329 shares of
unregistered  common  stock  were  issued to Phillip Levin and Daniel Haslinger,
respectively,  both  members of the Board of Directors, in exchange for services
rendered  to  management  incurred from April through December, 2003, for $9,000
each,  or  a  total  of  $18,000.

     The  Company  is currently completing a private placement of up to $750,000
in  unregistered  shares  of  its common stock.  The Company hopes to sell up to
333,333  shares  of  common  stock  at a price per share of $2.25.  To date, the
Company  has issued 193,417 shares for total proceeds of $435,188.  There can be
no  assurance  that  the  Company  will be successful in finding a buyer for the
balance  of the private offering.  If the shares are sold, the proceeds from the
offering  will  be  used  to  supplement  the  Company's  working  capital.

     On  March  24,  2004, the Company announced in a Form 8-K that the Board of
Directors had approved a Rights Offering for the beneficial owners of its common
stock.  The  Company  plans  to  issue one right to purchase one share of common
stock,  for  each ten shares of stock beneficially owned.  The Rights, which are
being issued without registration, will be non-transferable and exercisable only
by  the beneficial owners in whose names they are issued.  On April 8, 2004, the
Company  announced  the  record  date  for the Rights Offering will be April 16,
2004.  If  the Rights are exercised, the proceeds from the offering will be used
to  supplement  the  Company's  working  capital.

     The  Company  is  currently  in  discussions  with several companies in the
cement  and  fuel  industries  for  the development and commercialization of the
patented  N-Viro  fuel  technology.  Because  these  discussions  are  still  in
progress,  there  can  be  no  assurance  they  will  be  successful.

     The  Company  continues  to  focus on the development of regional biosolids
processing  facilities.  Currently  the  Company is in negotiations with several
privatization  firms  to  permit  and  develop independent, regional facilities.

     The Company expects continued improvements in operating results for 2004 as
a  result  of  a  return  to  low  administrative costs, along with realized and
expected  new sources of revenue.  Additionally, market developments and ongoing
discussions  with  companies in the cement, fuel and wastewater industries could
provide  enhanced  liquidity  and  positively  impact  2004  operations.

     Current  market trends and Company business development provide significant
basis  for  the  Company's optimistic outlook for 2004 and beyond.  The national
public attack on Class B levels of sludge treatment is rapidly moving the market
to  Class  A  technologies, of which the Company's patented N-Viro processes are
very  cost  competitive,  and  well  established  in  the  market  place.  The
development  and  patenting  of  new  technologies  for animal manure treatment,
bio-fuel and nematode control have the potential to expand the Company's revenue
base  over  the  next  five  years  and  beyond.


OFF-BALANCE  SHEET  ARRANGEMENTS  AND  OTHER

     At  December  31,  2003,  the  Company 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, the Company may
make certain indemnities, commitments and guarantees under which the Company 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  the  Company's  negligence or willful misconduct and (ii) indemnities
involving  the  accuracy of representations and warranties in certain contracts.
Pursuant  to  Delaware  law,  the  Company  may  indemnify  certain officers and
directors for certain events or occurrences while the officer or director is, or
was,  serving  at  the Company's request in such capacity.  The Company also has
director and officer insurance coverage that limits its exposure and enables the
Company  to  recover  a  portion  of  any  future  amounts  that  it may pay for
indemnification purposes. The Company believes the applicable insurance coverage
is  generally  adequate  to cover any estimated potential liability for which it
may provide indemnification.  The majority of these indemnities, commitments and
guarantees do not provide for any limitation of the maximum potential for future
payments  the  Company could be obligated to make.  The Company has not recorded
any  liability  for  these  indemnities, commitments and other guarantees in the
accompanying  Consolidated  Balance  Sheets.


CONTRACTUAL  OBLIGATIONS

     The following table summarizes our contractual cash obligations at December
31, 2003, and the effect these obligations are expected to have on liquidity and
cash  flow  in  future  periods:

<TABLE>
<CAPTION>

                                                                   Payments Due By Period

                                         key        Total         Less than 1 year   1 - 3 years   4 - 5 years   after 5 years
                                  --------------   -----------    --------------  -------------  ------------   --------------
<S>                                      <C>         <C>           <C>               <C>           <C>             <C>
Purchase obligations . . . . . . .          (1)    $ 3,298,000    $  208,000       $ 1,014,000   $  676,000      $ 1,400,000

Long-term debt obligations . . . .          (2)        654,504       259,782           394,722           -                  -

Operating leases . . . . . . . . .          (3)        199,729        61,127           136,350         2,252                -

Capital lease obligations. . . . .                         -             -               -               -                  -

Other long-term debt obligations .                         -             -               -               -                  -
                                  --------------   -----------    --------------  -------------  ------------   --------------

Total contractual cash obligations                 $ 4,152,233    $  528,909       $ 1,545,072   $  678,252      $ 1,400,000
</TABLE>


(1)  Purchase  obligations  include  agreements  to  purchase  services that are
enforceable  and legally binding on the Company and that specify all significant
terms  and  the  approximate  timing  of  the  transaction. Purchase obligations
exclude  agreements  that  are  cancelable  without  penalty.

(2)  Amounts  represent the expected cash payments of our long-term obligations.

(3)  Amounts  represent  the  expected  cash  payments  of  our  operating lease
obligations.



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 -  The Company does 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  -  The  Company  estimates  losses  for
uncollectible  accounts  based  on  the aging of the accounts receivable and the
evaluation  and  the  likelihood  of  success  in  collecting  the  receivable.

     Property  and  Equipment/Long-Lived  Assets  -  Property  and  equipment is
reviewed  for impairment pursuant to the provisions of SFAS No. 144, "Accounting
for the Impairment or Disposal of Long-Lived Assets."  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.

Equity  Method  Investment  -  The Company accounts for its investments in joint
ventures  under  the  equity  method.  The  Company  periodically  evaluates the
recoverability  of  its  equity  investments in accordance with APB No. 18, "The
Equity  Method of Accounting for Investments in Common Stock."  If circumstances
were to arise where a loss would be considered other than temporary, the Company
would  record a write-down of excess investment cost.  Management has determined
that  no  write-down  was  required  at  December  31,  2003  and  2002.

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.  In  accordance with SFAS No. 142, the Company tests for impairment
annually.

Fair  Value  of  Financial  Instruments  - The carrying amounts of cash and cash
equivalents,  receivables,  accounts payable and accrued liabilities approximate
their  fair  values  because  of  the  short-term  nature  of these instruments.
Management  believes  the  carrying  amounts  of  the current and long-term debt
approximate  their  fair  value  based on interest rates for the same or similar
debt  offered  to  the  Company having the same or similar terms and maturities.

     Income  Taxes  -  The Company assumes the deductibility of certain costs in
income  tax  filings  and  estimates the recovery of deferred income tax assets.

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

     SFAS  No.  149,  "Amendment  of Statement 133 on Derivative Instruments and
Hedging  Activities",  amends  and  clarifies financial reporting for derivative
instruments,  including  certain  derivative  instruments  embedded  in  other
contracts  and  for  hedging  activities  under  SFAS  No.  133, "Accounting for
Derivative Instruments and Hedging Activities."  This statement is effective for
contracts  entered  into  or  modified  after  June  30,  2003,  and for hedging
relationships  designated  after June 30, 2003.  The Company does not expect the
application  of  the provisions of SFAS No. 149 to have a material impact on its
financial  position,  results  of  operations  or  cash  flows.

     SFAS  No.  150,  "Accounting  for  Certain  Financial  Instruments  with
Characteristics  of  both Liabilities and Equity", provides standards for how an
issuer  classifies  and  measures  certain  financial  instruments  with
characteristics  of both liabilities and equity.  The Statement is effective for
financial  instruments  entered  into  or  modified  after  May 31, 2003 and for
pre-existing  instruments  as  of  the  beginning  of  the  first interim period
beginning  after  June 15, 2003.  The adoption of this standard had no effect on
the  Company's  financial  condition  or  results  of  operations.

     FIN  46, "Consolidation of Variable Interest Entities, an interpretation of
ARB  51",  was issued.  The primary objectives of FIN 46 are to provide guidance
on the identification and consolidation of variable interest entities, or VIE's,
which  are  entities  for  which  control  is  achieved through means other than
through  voting rights.  The Company has completed an analysis of FIN 46 and has
determined  that  is  does  not  have  any  VIEs.

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


RISK  FACTORS

THE  COMPANY'S  LICENSEES  ARE  SUBJECT  TO  EXTENSIVE  AND  INCREASINGLY STRICT
FEDERAL,  STATE  AND  LOCAL  ENVIRONMENTAL  REGULATION  AND  PERMITTING.

     The  Company's  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 the Company's business and
financial  condition.

THE  ABILITY  TO  GROW  MAY  BE  LIMITED  BY  COMPETITION.

     The  Company  provides a variety of technology and services relating to the
treatment  of  wastewater  residuals.  The  Company  is  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.

     The  Company  derives  a  substantial  portion of its revenue from services
provided under municipal contracts, and many of these are subject to competitive
bidding.  The  Company  also  intends  to bid on additional municipal contracts,
however,  and  may  not  be  the  successful  bidder.  In  addition, some of its
contracts  will  expire  in the future and those contracts may not be renewed or
may  be renewed on less attractive terms.  If the Company is 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 its
business,  financial  condition  and  results  of  operation.

THE  COMPANY'S  CUSTOMER  CONTRACTS MAY BE TERMINATED PRIOR TO THE EXPIRATION OF
THEIR  TERM.

     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 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 THE COMPANY'S 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.

     The Company's business depends on provision of 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 quarter and year ended
December  31,  2003,  our single largest customer accounted for approximately 35
percent  and  44  percent,  respectively,  of  our  revenues  and  our top three
customers  accounted  for approximately 69 percent and 65 percent, respectively,
of  our  revenues.

THE  COMPANY  IS  AFFECTED  BY  UNUSUALLY  ADVERSE  WEATHER  CONDITIONS.

     The  Company's 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  level  of  land  application that can be
performed.  Long  periods  of  adverse  weather  could  have a material negative
effect  on  the  Company's  business  and  financial  condition.

FUEL  COST  VARIATION  COULD  AFFECT  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  customers,  price escalations or reductions in the supply of
fuel could increase operating expenses and have a negative impact on the results
of  operations.  The  Company  is 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.

THE  COMPANY  IS  DEPENDENT  ON  THE  MEMBERS  OF  ITS  MANAGEMENT  TEAM.

     The Company is highly dependent on the services of its management team, the
loss  of  any  of  whom  may  have a material adverse effect on its business and
financial  condition.

     The  Company has entered into employment agreements with certain members of
its  management  team, which contain non-compete and other provisions.  The laws
of  each  state  differ  concerning  the  enforceability  of  non-competition
agreements.  The  Company  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 its key executive officers was to
leave  and  the  courts refused to enforce the non-compete covenant, the Company
might  be  subject  to  increased  competition,  which could have a material and
adverse  effect  on  its  business  and  financial  condition.

THE  COMPANY'S INTELLECTUAL PROPERTY MAY BE MISAPPROPRIATED OR SUBJECT TO CLAIMS
OF  INFRINGEMENT.

     The  Company attempts to protect our intellectual property rights through a
combination  of  patent,  trademark, and trade secret laws, as well as licensing
agreements.  The  Company's 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.

     The  Company's  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 the Company's ability to
offer  services.  The Company has not conducted an independent review of patents
issued  to  third  parties.

     The  Company  also  relies  on  unpatented  proprietary  technology.  It is
possible  that  others will independently develop the same or similar technology
or  otherwise  obtain  access  to  its unpatented technology.  If the Company is
unable  to  maintain  the  proprietary  nature  of its technologies, it could be
materially  adversely  affected.

     The  Company  cautions  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.
Some,  but  not  all,  of  the  factors  that  could  cause actual results to be
different  than  those  anticipated  or predicted by the Company include:  (i) a
deterioration  in economic conditions in general;  (ii) a decrease in demand for
the Company's products or services in particular;  (iii) the Company's 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 the
Company's  products  or  services;  (v)  increases  in  the  Company's operating
expenses resulting from increased costs of labor and/or consulting services; and
(vi)  a  failure  to  collect  upon or otherwise secure the benefits of existing
contractual  commitments with third parties, including customers of the Company.
For  example,  while the Company anticipates obtaining the permits and approvals
necessary  for the Bio-Fuel pilot program to commence operations within the next
twelve  months,  such  program  may  not  begin until after that period or ever.
Delay  or  cancellation  with  respect  to this project could result from  (1) a
failure  to  achieve  acceptable air quality levels in preliminary testing,  (2)
costs  associated  with  the  use  of  Bio-Fuel  significantly exceeding current
estimates,  or  (3)  competing  technologies rendering the Bio-Fuel process less
attractive.


ITEM  7A.          QUANTITATIVE  AND  QUALITATIVE  DISCLOSURES
               ABOUT  MARKET  RISK

     As  of December 31, 2003, the Company held no investments subject to market
risk.  In  January,  2004,  the Company held $75,000 in a certificate of deposit
with its bank.  Market risk is considered to be low, with the potential for loss
of  earnings,  value  or other changes in interest rates to be immaterial to the
Company.


ITEM  8.          FINANCIAL  STATEMENTS  AND  SUPPLEMENTARY  DATA



                   INDEX TO FINANCIAL STATEMENTS AND SCHEDULE




REPORT  OF  INDEPENDENT  PUBLIC  ACCOUNTANTS

FINANCIAL  STATEMENTS
    Consolidated  balance  sheet
    Consolidated  statements  of  operations
    Consolidated  statements  of  stockholders'  equity  (deficit)
    Consolidated  statements  of  cash  flows
    Notes  to  consolidated  financial  statements

REPORT  OF  INDEPENDENT  PUBLIC  ACCOUNTANTS  ON
    ACCOMPANYING  INFORMATION

ACCOMPANYING  INFORMATION
    Schedule  II  -  Valuation  and  qualifying  accounts  and reserves






INDEPENDENT  AUDITOR'S  REPORT


Board  of  Directors
N-Viro  International  Corporation
Toledo,  Ohio  43606

We  have  audited  the  accompanying  consolidated  balance  sheet  of  N-Viro
International  Corporation (a Delaware entity), as of December 31, 2003, and the
related  consolidated  statements  of operations, stockholders' equity, and cash
flows  for  the year 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  audit.

The Company has an investment in Florida N-Vivo, L.P., which is accounted for in
the  accompanying financial statement using the equity method of accounting.  We
did  not  audit  the financial statements of Florida N-Viro, L.P.  The financial
statements  of this partnership were audited by other auditors, whose report has
been  furnished  to us, and in our opinion, insofar as it relates to the amounts
and  information relating to this partnership, is based solely on the reports of
the  other  auditors.

We  conducted our audit in accordance with auditing standards generally accepted
in  the  United  States  of  America.  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.  An audit includes
examining,  on  a test basis, evidence supporting the amounts and disclosures in
the  consolidated  financial  statements.  An  audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as  evaluating the overall financial statement presentation. We believe that our
audit  provides  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  as  of  December  31,  2003 and the results of their operations and
their  cash  flows  for  the  year  then  ended  in  conformity  with accounting
principles  generally  accepted  in  the  United  States  of  America.

The  accompanying  financial  statements  have  been  prepared assuming that the
Company  will  continue  as  a  going  concern.  As  discussed  in Note 1 to the
consolidated  financial  statements,  the Company continues to sustain operating
losses  and  the  Company  continues  to  have low levels of working capital and
liquidity.  These matters raise substantial doubt about the Company's ability to
continue  as  a  going  concern.  The  consolidated  financial statements do not
reflect  any adjustments that might be necessary should the Company be unable to
continue  as  a  going  concern.



 /s/   FOLLMER  RUDZEWICZ  PLC
------------------------------
FOLLMER  RUDZEWICZ  PLC
Southfield,  Michigan
April  1,  2004







Report  of  Independent  Public  Accountants
--------------------------------------------

To  the  Board  of  Directors
N-Viro  International  Corporation
Toledo,  Ohio

     We  have  audited  the  accompanying  consolidated  balance sheet of N-Viro
International  Corporation  and  subsidiaries  as  of December 31, 2002, and the
related  consolidated  statements  of  operations, stockholders' equity and cash
flows  for  each  of the two years in the period ended December 31, 2002.  These
financial  statements  are  the responsibility of the Company's management.  Our
responsibility  is  to express an opinion on these financial statements based on
our  audits.

     We  did  not  audit  the  financial  statements  of Florida N-Viro, L.P., a
limited  partnership,  the  investment in which is reflected in the accompanying
financial  statements  using the equity method of accounting.  The investment in
this  partnership  represents  12% of total assets as of December 31, 2002.  The
Company's  share  of  the net loss of this partnership represents 36% and 11% of
the  net  loss  of  the  Company  for  each of the two years in the period ended
December 31, 2002.  The financial statements of this partnership were audited by
other  auditors, whose report has been furnished to us, and our opinion, insofar
as  it relates to amounts and information relating to this partnership, is based
solely  on  the  reports  of  the  other  auditors.

     We  conducted  our  audits  in accordance with auditing standards generally
accepted  in the United States of America.  Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement.  An audit includes examining, on a
test  basis,  evidence  supporting  the amounts and disclosures in the financial
statements.  An audit also includes 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, based on our audits and the reports of other auditors, the
financial statements referred to above present fairly, in all material respects,
the  consolidated  financial  position  of  N-Viro International Corporation and
subsidiaries  as  of  December  31,  2002, and the consolidated results of their
operations  and  their  cash flows for each of the two years in the period ended
December  31,  2002, in conformity with accounting principles generally accepted
in  the  United  States  of  America.

     The  accompanying financial statements have been prepared assuming that the
Company  will  continue  as  a  going  concern.  As  discussed in Note 1D to the
financial  statements,  the Company has in the past and continues to sustain net
and  operating losses.  In addition, the Company has used substantial amounts of
working capital in its operations which has reduced the Company's liquidity to a
low  level.  At  December 31, 2002, current liabilities exceed current assets by
$1,040,210.  In May 2002, the Company was removed from listing its shares on the
NASDAQ SmallCap Market, which might further limit the Company's ability to raise
equity  capital.  These  matters  raise  substantial  doubt  about the Company's
ability to continue as a going concern.  The financial statements do not include
any  adjustments  relating  to the recoverability and classification of recorded
assets or the amounts and classification of liabilities that may result from the
outcome  of  these  uncertainties.

                                             /s/HAUSSER  +  TAYLOR  LLC
                                             --------------------------
                                             HAUSSER  +  TAYLOR  LLC



Cleveland,  Ohio
March  19,  2003,  except  for
  Note  11,  as  to  which  the
  date  is  April  1,  2004





                        N-VIRO INTERNATIONAL CORPORATION

                           CONSOLIDATED BALANCE SHEETS

                           December 31, 2003 and 2002


<TABLE>
<CAPTION>


                                             2003         2002 (as restated)
                                         ------------    ------------------
<S>                                       <C>             <C>
ASSETS

CURRENT ASSETS
Cash and cash equivalents:
Unrestricted . . . . . . . . . . . . . .  $  123,547      $         4,935
Restricted . . . . . . . . . . . . . . .           -              400,000
Receivables:
Trade, net . . . . . . . . . . . . . . .     842,583              874,421
Notes receivable - current . . . . . . .      59,017               16,358
Related parties. . . . . . . . . . . . .      17,000                    -
Prepaid expenses and other assets. . . .      49,540              137,257
Inventory. . . . . . . . . . . . . . . .      80,932              117,440
                                         ------------    ------------------
Total current assets . . . . . . . . . .   1,172,619            1,550,411

PROPERTY AND EQUIPMENT, NET. . . . . . .     468,497              559,095

INVESTMENT IN FLORIDA N-VIRO, L.P. . . .           -              490,583

NOTES RECEIVABLE, NET OF CURRENT PORTION     346,248              374,606

INTANGIBLE AND OTHER ASSETS, NET . . . .   1,209,825            1,267,384
                                         ------------    ------------------


                                          $3,197,189      $     4,242,079
</TABLE>



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




                        N-VIRO INTERNATIONAL CORPORATION

                           CONSOLIDATED BALANCE SHEETS

                           December 31, 2003 and 2002

<TABLE>
<CAPTION>


                                                                     2003           2002 (as restated)
                                                                --------------     -------------------
<S>                                                              <C>                <C>
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

CURRENT LIABILITIES
Current maturities of long-term debt. . . . . . . . . . . . . .  $    259,782       $      392,078
Line-of-credit. . . . . . . . . . . . . . . . . . . . . . . . .       398,223              656,087
Accounts payable. . . . . . . . . . . . . . . . . . . . . . . .     1,737,019              978,691
Accrued liabilities . . . . . . . . . . . . . . . . . . . . . .       419,377              370,251
                                                                --------------     -------------------
Total current liabilities . . . . . . . . . . . . . . . . . . .     2,814,401            2,397,107

LONG-TERM DEBT, LESS CURRENT MATURITIES . . . . . . . . . . . .       394,722              426,738
                                                                --------------     -------------------

Total liabilities . . . . . . . . . . . . . . . . . . . . . . .     3,209,123            2,823,845

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY (DEFICIT)
Common stock, $.01 par value
Authorized - 7,000,000 shares
Issued - 2,713,833 shares in 2003 and 2,700,933 shares in 2002.        27,138               27,010
Preferred stock, $.01 par value
Authorized - 2,000,000 shares
Issued - 1 share in 2003 and -0- shares in 2002 . . . . . . . .             -                    -
Additional paid-in capital. . . . . . . . . . . . . . . . . . .    13,587,484           13,495,602
Accumulated deficit . . . . . . . . . . . . . . . . . . . . . .   (12,941,666)         (11,419,488)
                                                                --------------     -------------------
                                                                      672,956            2,103,124

Less treasury stock, at cost, 123,500 shares. . . . . . . . . .       684,890              684,890
                                                                --------------     -------------------
Total stockholders' equity (deficit). . . . . . . . . . . . . .       (11,934)           1,418,234

                                                                 $  3,197,189       $    4,242,079
</TABLE>



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



                        N-VIRO INTERNATIONAL CORPORATION

                      CONSOLIDATED STATEMENTS OF OPERATIONS

                  Years Ended December 31, 2003, 2002 and 2001

<TABLE>
<CAPTION>


                                                   2003      2002 (as restated)    2001 (as restated)
                                              ------------     ----------------      ----------------
<S>                                            <C>               <C>                    <C>
REVENUES. . . . . . . . . . . . . . . . . . .  $ 5,401,048       $    5,319,477       $    4,458,823

COST OF REVENUES. . . . . . . . . . . . . . .    3,970,380            3,381,413            2,794,950
                                              ------------     ----------------      ----------------

GROSS PROFIT. . . . . . . . . . . . . . . . .    1,430,668            1,938,064            1,663,873

OPERATING EXPENSES
Selling, general and administrative . . . . .    2,209,112            1,876,601            2,167,308
Litigation settlement expense . . . . . . . .       43,900                  545              549,852
                                              ------------     ----------------      ----------------
                                                 2,253,012            1,877,146            2,717,160
                                              ------------     ----------------      ----------------

OPERATING INCOME (LOSS) . . . . . . . . . . .     (822,344)              60,918           (1,053,287)

NONOPERATING INCOME (EXPENSE)
Interest and dividend income. . . . . . . . .       25,165               42,914               63,739
Interest expense. . . . . . . . . . . . . . .     (170,793)             (62,282)             (59,626)
Loss on sale of assets. . . . . . . . . . . .      (15,547)             (21,426)              (5,005)
Loss from equity investment in joint venture.     (538,659)             (34,503)            (136,880)
                                              ------------     ----------------      ----------------
                                                  (699,834)             (75,297)            (137,772)
                                              ------------     ----------------      ----------------

LOSS BEFORE INCOME TAXES. . . . . . . . . . .   (1,522,178)             (14,379)          (1,191,059)

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

NET LOSS. . . . . . . . . . . . . . . . . . .  $(1,522,178)      $      (14,379)      $   (1,191,059)


Basic and diluted loss per share. . . . . . .  $     (0.59)      $        (0.01)      $        (0.45)

Weighted average common shares
 outstanding - basic and diluted. . . . . . .    2,578,871            2,577,433            2,635,334
</TABLE>


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



                        N-VIRO INTERNATIONAL CORPORATION

            CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)

                  Years Ended December 31, 2003, 2002 and 2001

<TABLE>
<CAPTION>

                                                     Additional
                                            Common     Paid-in     Accumulated     Treasury
                                            Stock      Capital        Deficit       Stock        Total
                                          ---------  -----------   ------------   ----------  ------------
<S>                                        <C>       <C>           <C>            <C>         <C>
BALANCE JANUARY 1, 2001 (as restated) . .  $27,010   $13,498,602   $(10,214,050)  $(617,977)  $ 2,693,585

Net loss - as filed . . . . . . . . . . .        -             -     (1,267,218)          -    (1,267,218)
Prior period adjustment . . . . . . . . .                                76,159                    76,159
Purchase of treasury stock. . . . . . . .        -             -              -     (66,913)      (66,913)
Other . . . . . . . . . . . . . . . . . .        -        (3,000)             -           -        (3,000)
                                          ---------  -----------   ------------   ----------  ------------

BALANCE DECEMBER 31, 2001 (as restated) .   27,010    13,495,602    (11,405,109)   (684,890)    1,432,613

Net loss - as filed . . . . . . . . . . .        -             -        (95,852)          -       (95,852)
Prior period adjustment . . . . . . . . .                                81,473                    81,473
                                          ---------  -----------   ------------   ----------  ------------

BALANCE DECEMBER 31, 2002 (as restated) .   27,010    13,495,602    (11,419,488)   (684,890)    1,418,234

Net loss. . . . . . . . . . . . . . . . .        -             -     (1,522,178)          -    (1,522,178)
Issuance of common stock - 12,900 shares.      129        24,482              -           -        24,611
Other . . . . . . . . . . . . . . . . . .       (1)       67,400              -           -        67,399
                                          ---------  -----------   ------------   ----------  ------------

BALANCE DECEMBER 31, 2003 . . . . . . . .  $27,138   $13,587,484   $(12,941,666)  $(684,890)  $   (11,934)
</TABLE>



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


                        N-VIRO INTERNATIONAL CORPORATION

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                  Years Ended December 31, 2003, 2002 and 2001

<TABLE>
<CAPTION>


                                                              2003          2002 (as restated)   2001 (as restated)
                                                         -------------      ----------------     ------------------
<S>                                                       <C>               <C>                  <C>

Cash Flows From Operating Activities
Net loss . . . . . . . . . . . . . . . . . . . . . . . .  $(1,522,178)      $      (14,379)      $   (1,191,059)
Adjustments to reconcile net loss to net
cash (used in) provided by operating activities:
Depreciation and amortization. . . . . . . . . . . . . .      263,834              253,373              263,861
Provision (credit) for bad debts . . . . . . . . . . . .       15,946               15,731              (57,063)
Loss on the sale of fixed assets . . . . . . . . . . . .       15,547               21,426                5,005
Loss from investment in Florida N-Viro . . . . . . . . .      538,658               34,503              136,880
Decrease (increase) in trade receivables . . . . . . . .      113,339              160,107              477,994
Decrease (increase) in prepaid expenses and other assets       47,418              (86,099)              33,812
Decrease (increase) in inventory . . . . . . . . . . . .       36,508             (117,440)                   -
(Decrease) increase in accounts payable and accrued
liabilities. . . . . . . . . . . . . . . . . . . . . . .      808,270              (82,304)             (35,274)
                                                         -------------      ----------------     ------------------

Net cash provided (used in) by operating activities. . .      317,342              184,918             (365,844)

Cash Flows From Investing Activities
Reductions to restricted cash and cash equivalents . . .      400,000                    -               17,666
Purchases of property and equipment. . . . . . . . . . .      (21,378)             (25,969)             (43,681)
Proceeds from sale of property and equipment . . . . . .        8,692                    -                    -
Collections from (advances to) related parties . . . . .            -                 (145)              (2,549)
Increase in notes receivable . . . . . . . . . . . . . .     (157,636)             (35,748)            (212,873)
Collections on notes receivable. . . . . . . . . . . . .       35,838               22,288               20,777
Expenditures for intangible assets . . . . . . . . . . .      (65,345)             (79,408)             (42,726)
                                                         -------------      ----------------     ------------------

Net cash provided (used in) by investing activities. . .      200,171             (118,982)            (263,386)

Cash Flows From Financing Activities
Net borrowings on line-of-credit . . . . . . . . . . . .     (257,864)             152,474              203,613
Borrowings under long-term obligations . . . . . . . . .      369,753              261,398              523,472
Principal payments on long-term obligations. . . . . . .     (528,900)            (520,300)            (177,913)
Issuance of common stock . . . . . . . . . . . . . . . .       24,610                    -                    -
Expenditures for private placement of stock. . . . . . .       (6,500)                   -                    -
Other. . . . . . . . . . . . . . . . . . . . . . . . . .            -                    -               (3,000)
                                                         -------------      ----------------     ------------------
Net cash (used in) provided by financing activities. . .     (398,901)            (106,428)             546,172
                                                         -------------      ----------------     ------------------

Net Increase (Decrease) in Cash and Cash Equivalents . .      118,612              (40,492)             (83,058)

Cash and Cash Equivalents - Beginning. . . . . . . . . .        4,935               45,427              128,485
                                                         -------------      ----------------     ------------------

Cash and Cash Equivalents - Ending . . . . . . . . . . .  $   123,547       $        4,935       $       45,427


Supplemental disclosure of cash flows information:
Cash paid during the year ended for interest . . . . . .  $   100,571       $      154,101       $       59,345
</TABLE>



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


                        N-VIRO INTERNATIONAL CORPORATION

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                      F-31
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.  Credit  is  generally  granted  on  an
unsecured  basis.  Periodic  credit  evaluations  of customers are conducted and
appropriate  allowances  are  established.

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.

     The Company accounts for its investments in joint ventures under the equity
method.  The  Company  periodically  evaluates  the recoverability of its equity
investments  in accordance with APB No. 18, "The Equity Method of Accounting for
Investments in Common Stock."  If circumstances were to arise where a loss would
be  considered  other  than  temporary, the Company would record a write-down of
excess  investment  cost.  Management  has  determined  that  no  write-down was
required  at  December  31,  2003  and  2002.

D.     Going  Concern - The accompanying financial statements have been prepared
assuming  that the Company will continue as a going concern.  The Company has in
the  past  and  continues to sustain net and operating losses.  In addition, the
Company  has used substantial amounts of working capital in its operations which
has  reduced  the  Company's  liquidity  to  a low level.  At December 31, 2003,
current  liabilities  exceed  current assets by $1,641,782.  These matters raise
substantial  doubt  about  the Company's ability to continue as a going concern.
The  financial  statements  do  not  include  any  adjustments  relating  to the
recoverability  and  classification  of  recorded  assets  or  the  amounts  and
classification  of  liabilities  that  may  result  from  the  outcome  of these
uncertainties.

E.     Fair  Value  of Financial Instruments - The fair values of cash, accounts
receivable,  accounts payable and other short-term obligations approximate their
carrying  values  because  of the short maturity of these financial instruments.
The  carrying  values  of  the Company's long-term obligations approximate their
fair  value.  In  accordance  with  Statement  of Financial Accounting Standards
("SFAS")  No. 107, "Disclosure About Fair Value of Financial Instruments," rates
available  at  balance  sheet dates to the Company are used to estimate the fair
value  of  existing  debt.

F.     Cash  and  Cash  Equivalents  -  The  Company  has cash on deposit 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  a  certificate of deposit which was held as
collateral  against  the Company's line-of-credit as of December 31, 2002.  This
certificate  of  deposit  was  used to pay the Company's line of credit with its
former  lending  institution in February, 2003.  The Company also obtained a new
certificate  of  deposit  for  $75,000  with  its current lending institution in
January,  2004.

G.     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  $124,314  and  $93,064  of net
receivables  for  the years ended December 31, 2003 and 2002, 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.


                        N-VIRO INTERNATIONAL CORPORATION

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE  1.     OPERATIONS  AND  SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES
(CONTINUED)

     Management  estimates an allowance for doubtful accounts, which was $55,946
and  $40,000  as  of  December 31, 2003 and 2002, respectively.  The estimate is
based  upon  management's review of delinquent accounts and an assessment of the
Company's  historical  evidence  of  collections.

H.     Inventory - Inventory is recorded at lower of cost or market and consists
of  N-Viro  soil,  manufactured  by the Company, which is available for sale and
used  in  commercial,  agricultural  and  horticultural  applications.  The
weighted-average  method  is  used  to  value  the  inventory.

I.     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 $116,572,
$119,730  and  $140,331  in  2003,  2002 and 2001, 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.

J.     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  four  to  seventeen  years;  weighted-average
amortization  periods  for patents/related intangibles and territory rights were
14.9 and 15.0 years, respectively, at December 31, 2003 and 2002).  Amortization
expense  amounted  to  $140,558,  $133,643  and $123,530 in 2003, 2002 and 2001,
respectively;  estimated  amortization  expense,  based  on intangible assets at
December  31, 2003, for each of the ensuing five years is as follows:  2004-2005
-  $143,000;  2006 - $136,000; 2007 - $121,000; 2008 - $104,000.  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.  Management  believes  the carrying amount is not impaired
based  upon  estimated  future cash flows.  In accordance with SFAS No. 142, the
Company  tests  for  impairment  annually.

     The Company is also amortizing the capitalized cost of obtaining its credit
facility,  for  the additional collateral required and evidenced by a warrant to
purchase  50,000  shares  of  the Company's common stock.  The Company estimated
this  cost  at  February  26,  2003 to be $30,000, and is amortizing this over 4
years  by  the straight-line method.  Amortization expense amounted to $6,705 in
2003;  estimated  amortization  expense  for  each  of the next five years is as
follows:  2004-2006  -  $7,500;  2007  -  $795;  2008  -  $-0-.

K.     Revenue  Recognition  -  Facility  management  revenue, sludge processing
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 Soil 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.


                        N-VIRO INTERNATIONAL CORPORATION

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE  1.     OPERATIONS  AND  SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES
(CONTINUED)

          Research  and  development  revenue is recognized as work is performed
and  billed  to  the  contracting  entity  in  accordance  with  the  contract.

          Any  type of revenue generated from international customers (excluding
Canada)  is  recognized  when  the  cash  is  received.

          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  revenues.

L.     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, 2003, 2002 and 2001, the
effects  of  the  stock  options granted are excluded from the diluted per share
calculation  because  they  would  be  antidilutive.

M.  New  Accounting  Standards  -  In  April 2003, the FASB issued SFAS No. 149,
"Amendment  of  Statement 133 on Derivative Instruments and Hedging Activities."
This  statement  amends  and  clarifies  financial  reporting  for  derivative
instruments,  including  certain  derivative  instruments  embedded  in  other
contracts  and  for  hedging  activities  under  SFAS  No.  133, "Accounting for
Derivative  Instruments and Hedging Activities." This statement is effective for
contracts  entered  into  or  modified  after  June  30,  2003,  and for hedging
relationships  designated  after  June 30, 2003. The Company does not expect the
application  of  the provisions of SFAS No. 149 to have a material impact on its
financial  position,  results  of  operations  or  cash  flows.

          In  May  2003,  the  FASB issued SFAS No. 150, "Accounting for Certain
Financial  Instruments  with  Characteristics  of  both Liabilities and Equity."
This  statement  establishes standards for how an issuer classifies and measures
certain  financial  instruments  with  characteristics  of  both liabilities and
equity.  SFAS  No.  150  is  effective for financial instruments entered into or
modified  after May 31, 2003, and otherwise is effective at the beginning of the
first interim period beginning after June 15, 2003.  The Company does not expect
the  application  of the provisions of SFAS No. 150 to have a material impact on
its  financials  position,  results  of  operations  or  cash  flows.

          FIN  46,  "Consolidation  of  Variable  Interest  Entities,  an
interpretation  of ARB 51", was issued.  The primary objectives of FIN 46 are to
provide  guidance  on  the identification and consolidation of variable interest
entities,  or  VIE's,  which  are entities for which control is achieved through
means  other  than through voting rights.  The Company has completed an analysis
of  FIN  46  and  has  determined  that  is  does  not  have  any  VIEs.

          The  adoption  of  the  new  standards did not, or is not expected to,
materially  affect  the  Company's financial position and results of operations.

N.  Reclassifications - Certain amounts from the prior year financial statements
have  been  reclassified  to  conform  to  the  current  year  presentation.

O.     Advertising  costs  -  Advertising  costs  are  expensed  as  incurred.



NOTE  2.     BALANCE  SHEET  DATA

NOTES  AND  OTHER  RECEIVABLES:

At December 31, 2003, unsecured, 9.75% demand notes receivable totaling $210,674
(including  accrued interest of $40,674) and unsecured, prime (stated by a local
bank)  plus  %  demand  note  receivable  totaling  $205,947  (including accrued
interest  of  $25,947)  are due from Florida N-Viro, the Company's joint venture
investee.  The  notes  due from Florida N-Viro have been deemed to be noncurrent
by management in the accompanying balance sheets.  The Company recorded interest
income  of  $22,411  in  2003,  which was the amount of interest received on the
notes  due from Florida N-Viro.  During 2003, the Company continued to record an
allowance  totaling $25,800 for the interest portion of the note receivable.  In
2003,  an  additional $48,076 was recorded to the allowance against the Note, to
recognize the additional loss in excess of the remaining investment account that
absorbed  the  writedown  of  assets  impaired of Florida N-Viro.  The Company's
limited partner interest in the joint venture is now reflected at a -0- value as
of December 31, 2003.  Any additional losses passed through from the partnership
will  be  recorded  as an increase to the allowance against the Note Receivable.
See  "Investment  in  Florida  N-Viro,  L.P."  later  in  this  section.

The  Company  has  an  unsecured  receivable from a related party, N-Viro Energy
Systems,  Inc.,  estimated  to  be $17,000 in 2003 and totaling $24,606 in 2002.
During 2003, the amount due from the related party has been deemed to be current
by  management  in  the  accompanying  balance  sheets,  but  was  classified as
noncurrent  at  December  31, 2002.  The amount due is part of a settlement with
the  Company's  former Chairman of the Board, which was settled in August, 2003.

At  December  31, 2003, an unsecured, 6% demand note receivable dated October 1,
2003  is  due from an unrelated third-party licensee, Soil Preparation Inc., for
$111,375.  The  Note  is  for  18  months,  with  principal scheduled to be paid
commencing  July  1,  2004  and  ending  December  1,  2005.

At December 31, 2003, an unsecured, 6% demand note receivable dated December 15,
2003  is  due from an unrelated third-party licensee, N-Viro Systems Canada, for
$23,781.  The  Note  is  for  13  months,  with  principal  scheduled to be paid
commencing  January  1,  2004  and  ending  January  1,  2005.


<TABLE>
<CAPTION>


                                                                      2003      2002
                                                                  ----------   --------
<S>                                                                 <C>         <C>
Notes receivable - Florida N-Viro, L.P., net of allowance of
114,697 in 2003 and $63,232 in 2002 . . . . . . . . . . . . . . .   $301,924   $350,000
Note receivable - related party (reclassified as current in 2003).        -      24,606
Notes receivable - third-party licensees . . . . . . . . . . . . .   103,341     16,358
                                                                  ----------   --------
                                                                     405,265    390,964
Less current maturities. . . . . . . . . . . . . . . . . . . . . .    59,017     16,358
                                                                  ----------   --------
                                                                    $346,248   $374,606
</TABLE>


NOTE  2.     BALANCE  SHEET  DATA  (CONTINUED)

PROPERTY  AND  EQUIPMENT  (AT  COST):


<TABLE>
<CAPTION>


                                                   2003          2002
                                                -----------   ----------
<S>                                             <C>           <C>
Land and leasehold improvements. . . . . . . .  $   43,903    $   43,903
Equipment. . . . . . . . . . . . . . . . . . .   1,034,349     1,215,893
Furniture and fixtures . . . . . . . . . . . .     134,954       160,706
                                                -----------   ----------
                                                 1,213,206     1,420,502
Less accumulated depreciation and amortization     744,709       861,407
                                                -----------   ----------
                                                $  468,497    $  559,095
</TABLE>



INVESTMENT  IN  FLORIDA  N-VIRO,  L.P.:

Florida  N-Viro,  L.P.  was  formed  in January 1996 pursuant to a joint venture
agreement between the Company and VFL Technology Corporation (VFL).  The Company
owns a 47.5% interest in the joint venture and, as described in Note 1, accounts
for  its  investment  under  the  equity  method.  The Company's limited partner
interest in the joint venture is now reflected at a -0- value as of December 31,
2003.  Any  additional  losses  passed  through  from  the  partnership  will be
recorded  as  an  increase  to  the  allowance  against  the  Note  Receivable.

The  Company  is  currently  actively pursuing sale of its investment in Florida
N-Viro,  L.P.,  which  may provide, in management's opinion, additional funds to
finance  the  Company's  cash  requirements.  Because these efforts are still in
progress, there can be no assurance the Company will successfully complete these
negotiations.

Condensed  financial  information of the partnership as of December 31, 2003 and
2002  is  as  follows:


<TABLE>
<CAPTION>


                          2003             2002
                       -----------      ----------
<S>                    <C>              <C>
Current assets. . . .  $  576,499       $  624,843
Long-term assets. . .     711,278        1,928,495
                       -----------      ----------

                       $1,287,777       $2,553,338

Current liabilities .  $1,464,216       $1,537,744
Long-term liabilities      14,251           62,467
Partners' equity. . .    (190,690)         953,127
                       -----------      ----------

                       $1,287,777       $2,553,338
</TABLE>


<TABLE>
<CAPTION>

                                Year Ended December 31,
                    2003               2002             2001
                 ------------        ------------     -----------
<S>              <C>                 <C>              <C>
Net sales        $ 2,458,270         $3,135,465       $2,930,294
Net loss.         (1,143,817)           (72,636)        (288,168)
</TABLE>


NOTE  2.     BALANCE  SHEET  DATA  (CONTINUED)

INVESTMENT  IN  FLORIDA  N-VIRO,  L.P.  (CONTINUED):

During  2003,  2002  and  2001, the Partnership's largest customer accounted for
19%, 29% and 19%, respectively, of its revenue.  Additionally, during 2003, 2002
and  2001,  the  Partnership's  largest  customers  accounted  for  73%  (four
customers),  60%  (three  customers)  and 59% (four customers) of total revenue,
respectively.

INTANGIBLE  AND  OTHER  ASSETS:

<TABLE>
<CAPTION>


                                                               2003                        2002
                                                           ---------------              ------------
<S>                                                         <C>                           <C>
Patents and related intangibles, less accumulated
amortization (2003 - $483,900; 2002 - $399,300). . . . . .  $      755,081              $    774,324
Territory rights, less accumulated amortization
  (2003 - $258,800; 2002 - $202,800)                               427,091                   483,060
Loan costs, less accumulated amortization ($6,865 in 2003
and $-0- in 2002). . . . . . . . . . . . . . . . . . . . .          23,135                         -
Other. . . . . . . . . . . . . . . . . . . . . . . . . . .           4,518                    10,000
                                                           ---------------              ------------
                                                            $    1,209,825              $  1,267,384
</TABLE>



ACCRUED  LIABILITIES:


<TABLE>
<CAPTION>


                         2003            2002
                       --------        --------
<S>                     <C>              <C>
Employee benefits      $147,758        $137,313
Sales tax payable       176,422         175,661
Interest payable.        83,452          12,782
Other payable . .        11,745          44,495
                       --------        --------
                       $419,377        $370,251
</TABLE>


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

In  February 2003 the Company closed on an $845,000 credit facility with a local
bank (the "Bank").  This senior debt credit facility was comprised of a $295,000
four  year  term  note at 7.5% and a line of credit up to $550,000 at Prime plus
1.5% and secured by a first lien on all assets of the Company.  The Company used
the  funds  to  refinance  its  prior  debt  and  to  provide  working  capital.
Previously,  the  Company  had  a $750,000 line of credit with another financial
institution,  secured  by a $400,000 restricted Certificate of Deposit, required
and  held by this financial institution.  Effectively, the former line of credit
provided only $350,000 of additional working capital.  The effective increase in
the  line  provided  the  Company  with additional working capital, and the debt
refinance  provided  lower  cost  and longer term debt, improving cash flow.  To
secure  the  credit  facility,  the  Company  was required by the Bank to obtain
additional  collateral  of  $100,000  (the  "Additional Collateral") from a real
estate  mortgage  from  a third party.  Messrs. J. Patrick Nicholson, the former
Chairman  of  the Board and Consultant to the Company; Michael G. Nicholson, the
Company's Chief Operating Officer and a Director; Robert F. Nicholson, a Company
employee,  and  Timothy  J.  Nicholson,  a  Company employee, ("the Nicholsons")
collectively provided the $100,000 Additional Collateral.  In exchange for their
commitment,  the  Company agreed to provide the Nicholsons the following: (1) an
annual  fee  in  an amount equal to $2,000 per annum;  (2) interest at an annual
rate  of  5% of the $100,000 value of the Additional Collateral beginning on the
first  anniversary date of the closing of the credit facility, and (3) a warrant
to  acquire in the aggregate, 50,000 shares of the Company's voting common stock
at  a  purchase  price of $0.90 per share, which was the closing market price of
the  Company's  common  stock  on  the  prior business day to the closing of the
Credit  Facility.  The warrant was exercisable, in whole or in part, at any time
and from time to time until February, 2006.  In addition, the Company granted to
the  Nicholsons  a  lien  upon  the Company's inventory and accounts receivable.
This lien is subordinated to both existing liens on the Company's assets and all
liens granted by the Company in favor of the financial institution providing the
Credit  Facility.  At  December  31,  2003,  the  Company  had borrowed $398,223
against  the  line.  In February, 2004, the Nicholsons exercised the warrant and
acquired  50,000  of the Company's common stock at a purchase price of $0.90 per
share.

The  Company  was  in  violation  of  financial  covenants  governing the credit
facility,  concerning  the  maintenance  of both a tangible net worth amount and
positive  debt  service  coverage  ratio  for  the period, both of which require
positive earnings.  The Bank waived this violation in light of the Company's net
loss for the year ended December 31, 2003, but required additional consideration
in  exchange  for  this  waiver.  In  January  2004,  the  Company  obtained  a
certificate  of  deposit in the amount of $75,000 with the Bank, and transferred
custodianship of its treasury stock to the Bank.  In February, 2004, the Company
renewed  its line of credit with the Bank through April, 2004, and in April 2004
it  was  renewed again through October, 2004.  As part of this renewal, the Bank
decreased the maximum amount available to borrow on the line to $400,000.

Long-term  debt  at  December  31,  2003  and  2002  is  as  follows:


<TABLE>
<CAPTION>


                              2003         2002
                          -----------   ----------
<S>                         <C>          <C>
Notes payable . . . . .     $654,504     $818,816
Less current maturities      259,782      392,078
                           ----------   ----------
                            $394,722     $426,738
</TABLE>

The  notes  payable  are  notes  signed  for  amounts  owed to vendors and other
parties.  The  notes  bear  interest  ranging from 6% to 19.35% (with a weighted
average  interest  rate  of 6.9% as of December 31, 2003) and are due at varying
dates  through  March 2007.  Included in notes payable is $45,191 in installment
notes  secured  by  equipment  and $572,292 secured by the general assets of the
Company.  The  remainder  of  the  notes are unsecured.  Aggregate maturities of
long-term debt for the years ending December 31 are as follows: 2004 - $259,782;
2005  -  $172,105;  2006  -  $179,091  and  2007  -  $43,526.  Interest paid was
approximately  $75,300,  $54,000  and  $55,300  for the years ended December 31,
2003,  2002  and  2001,  respectively.

NOTE  4.     EQUITY  TRANSACTIONS

The  Company  has  authorized  2,000,000 shares of preferred stock, par value of
$.01  per  share, of which one share and -0- shares were outstanding at December
31,  2003 and 2002, respectively.  In 2003, the Board authorized the creation of
a  class  of Series A Preferred Stock of the Company, $0.01 par value, one share
of  which  was  issued  to  Mr.  J.  Patrick  Nicholson,  in connection with the
Settlement Agreement described in Note 6.  The holder of the Preferred Stock has
the  right  to  elect  one  member to the Board.  The holder always shall be Mr.
Nicholson as the Series A Preferred Stock is non-transferable.  Furthermore, the
Series A Preferred Stock has a term equal to ten years, and the right to appoint
a  Director  is  subject  to  cancellation if Mr. Nicholson ceases to control at
least  17.5%  of  the aggregate number of shares of the Company's voting, common
stock issued and outstanding as a result of his actions.  The Series A Preferred
Stock  does  not have a liquidation preference, and the issuance was exempt from
registration  pursuant  to  Section  4(2)  of the Securities Act or Regulation D
promulgated  thereunder,  as  a  transaction  not  involving  a public offering.

The  Company  has a stock option plan for directors and key officers under which
600,000 shares of common stock may be issued.  The 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 immediately, but can not be exercised
until  six  months  from  the  date  of grant.  Options have been granted at the
approximate  market  value of the stock at date of grant.  In the fourth quarter
of 2003, two optionees exercised a total of 12,900 options at a weighted average
option  price  of  $1.91.

The  following  summarizes  the  number  of grants and their respective exercise
prices  and  grant  date fair values per option for the years ended December 31,
2003,  2002  and 2001 and the number outstanding and exercisable at those dates:

<TABLE>
<CAPTION>


                                               2003                      2002 (restated)        2001
                                                            Weighted           Weighted             Weighted
                                                            Average            Average              Average
                                                            Exercise           Exercise             Exercise
                                              Shares         Price     Shares   Price     Shares     Price
                                           ----------    ----------   -------  ---------  ---------  --------
<S>                                         <C>         <C>            <C>       <C>        <C>        <C>
Outstanding, beginning of year . . . . . .    578,025   $      2.46   567,525  $   2.49   516,325     $2.69
Granted. . . . . . . . . . . . . . . . . .          -             -    10,500      0.91    93,200      1.50
Expired during the year. . . . . . . . . .    (65,650)         3.36         -             (42,000)     2.72
Outstanding, end of year . . . . . . . . .    512,375          2.35   578,025      2.46   567,525      2.49
                                            ----------               --------             -------
Eligible for exercise at end of year . . .    466,075                 499,225             403,425

Weighted average fair value per option for
options granted during the year. . . . . .  $       -                          $   1.07            $   1.50
</TABLE>

NOTE  4.     EQUITY  TRANSACTIONS  (CONTINUED)

A  further  summary  of  stock  options  follows:


<TABLE>
<CAPTION>


                            Options Outstanding                                    Options Exercisable
                                 Weighted
                                  Average             Weighted       Weighted
                                 Remaining             Average        Average
                                  Number             Contractual      Exercise     Number       Exercise
                                Outstanding             Life            Price    Exercisable      Price
<S>                         <C>                  <C>                  <C>        <C>              <C>
                                                      2003
                            ---------------------------------------------------------------------------
Range of exercise prices:
0.91 to $2.43 . . . . . .              448,200           5.42     $ 1.99            409,900     $ 2.03
4.00 to $5.00 . . . . . .               64,175           5.05       4.87             56,175       4.85
                            -------------------                                  -----------
                                        512,375                                     466,075

                                                2002 - restated
-------------------------------------------------------------------------------------------------------
Range of exercise prices:
0.91 to $2.43 . . . . . .              469,100           6.45     $ 1.98            412,200     $ 2.06
4.00 to $5.00 . . . . . .              108,925           3.77       4.52             87,025       4.40
                            -------------------                                  -----------
                                        578,025                                     499,225

                                                       2001
-------------------------------------------------------------------------------------------------------

Range of exercise prices:
1.50 to $2.43 . . . . . .              458,600           7.37     $ 2.01            324,100     $ 2.09
4.00 to $5.00 . . . . . .              108,925           4.77       4.52             79,325       4.35
                            -------------------                                  -----------
                                        567,525                                     403,425
</TABLE>



                        N-VIRO INTERNATIONAL CORPORATION

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
As permitted under accounting principles generally accepted in the United States
of America, the Company's present accounting with respect to the recognition and
measurement of stock-based employee compensation costs is in accordance with APB
Opinion  No.  25, which generally requires that compensation costs be recognized
for  the  difference,  if  any,  between the quoted market price of the stock at
grant  date  and  the  amount  an  employee  must  pay to acquire the stock.  No
compensation  cost  was recognized under APB No. 25 for the years ended December
31,  2003, 2002 and 2001.  The Company follows the disclosure provisions of SFAS
Statements  No.  123  and  No.  148 which prescribe a fair-value based method of
measurement  that  results  in the disclosure of computed compensation costs for
essentially  all  awards  of  stock-based  compensation  to  employees.


NOTE  4.     EQUITY  TRANSACTIONS  (CONTINUED)

<TABLE>
<CAPTION>


                                                 2003      2002 (as restated)   2001 (as restated)
                                             ------------  -------------------  -------------------
<S>                                          <C>           <C>                  <C>
Loss from continuing operations:
Net loss as reported. . . . . . . . . . . .  $(1,522,178)  $          (14,379)  $       (1,191,059)
Deduct: Total stock-based employee
compensation expense determined under
fair value based method for all awards, net
of related tax effects. . . . . . . . . . .       74,484              220,656              246,222
                                             ------------  -------------------  -------------------
Pro-forma net loss. . . . . . . . . . . . .   (1,596,662)            (235,035)          (1,437,281)
Loss from continuing operations per
share (basic and diluted):
As reported . . . . . . . . . . . . . . . .  $     (0.59)  $            (0.01)  $            (0.45)
Pro-forma . . . . . . . . . . . . . . . . .  $     (0.62)  $            (0.09)  $            (0.55)
</TABLE>

In determining the pro forma amounts above, the value of each grant is estimated
at  the  grant date using the fair value method prescribed in Statement No. 123,
with  the  following  weighted-average  assumptions for grants in 2003, 2002 and
2001,  respectively: no assumed dividend rates for all years; risk-free interest
rates  of  4.5%,  4.5% and 5.0% on expected lives of 10 years for all years; and
expected  price  volatility  of  109%,  109%  and  113%,  respectively.

NOTE  5.     REVENUE  AND  MAJOR  CUSTOMERS

Revenues  for  the  years  ended December 31, 2003, 2002 and 2001 consist of the
following:


<TABLE>
<CAPTION>


                          2003     2002 (as restated)   2001 (as restated)
                       ----------  -------------------  -------------------
<S>                    <C>         <C>                  <C>
Facility management .  $1,386,720  $         1,872,722  $         1,637,243
Technology fees . . .     681,036              767,228              925,245
Products and services   3,333,292            2,679,527            1,896,335
                       ----------  -------------------  -------------------

                       $5,401,048  $         5,319,477  $         4,458,823
                       ==========  ===================  ===================
</TABLE>


NOTE  5.     REVENUE  AND  MAJOR  CUSTOMERS  (CONTINUED)

Cost of revenues for the years ended December 31, 2003, 2002 and 2001 consist of
the  following:


<TABLE>
<CAPTION>


                          2003        2002        2001
                       ----------  ----------  ----------
<S>                    <C>         <C>         <C>
Facility management .  $1,385,713  $1,527,754  $1,272,566
Technology fees . . .     171,728     143,628     183,294
Products and services   2,412,939   1,710,031   1,339,090
                       ----------  ----------  ----------

                       $3,970,380  $3,381,413  $2,794,950
                       ==========  ==========  ==========
</TABLE>




Revenues  for  the years ended December 31, 2003, 2002 and 2001 include revenues
from  one  major  customer,  the  City of Toledo, Ohio (included in the facility
management  and  products  and  services  classifications),  which  represented
approximately  35%,  44% and 38%, respectively, of total revenues.  In addition,
the  Company had another major customer, WeCare Environmental Services, totaling
approximately  34%,  16%  and 11% of total revenues (which is included mainly in
the products and services classification) for the years ended December 31, 2003,
2002 and 2001, respectively.  The accounts receivable balances due (all of which
are  unsecured)  from  these  customers  at  December  31,  2003  and  2002 were
approximately  $402,000  and  $281,000,  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  6.     COMMITMENTS  AND  CONTINGENCIES

During  1999, the Company entered into employment and consulting agreements with
an  officer  of  the Company, Dr. Terry J. Logan.  The employment agreement will
expire  in June 2004.  Future compensation amounts are to be determined annually
by  the  Board.  The  consulting  agreement  begins  upon  termination  of  the
employment agreement and extends through July 2014, respectively.  The agreement
requires  Dr.  Logan  to  provide  minimum  future  services  to be eligible for
compensation.

In  August  2003,  the  Company  entered into a Settlement Agreement with Mr. J.
Patrick Nicholson and negotiated a new consulting agreement.  The new consulting
agreement  will  expire  in  August  2008, and Mr. Nicholson will be required to
provide  future services to be eligible for compensation.  Mr. Nicholson is also
entitled to payments of $48,000 per year for non-competition and $6,000 per year
for  office  space  reimbursement,  in  addition  to  life  and health insurance
coverage  similar  to  the  provision  contained  in  his  1999  employment  and
consulting  agreements  previously discussed.  The details of this new agreement
were  disclosed  in  a  filing  on  August  29,  2003  on  Form  8-K.

In  the  third  quarter  of  2003,  the  Company entered into an employment with
another  officer of the Company, Michael G. Nicholson.  The employment agreement
will  expire  in  June  2007.  Future  compensation amounts are to be determined
annually by the Board.  The agreement was disclosed in a filing on June 10, 2003
on  Form  8-K.

The  Company  leases  its  executive and administrative offices in Toledo, Ohio.
The  total  minimum  rental  commitment  for  the years ending December 31, 2004
through  2006  is  approximately  $56,000  each  year.  The total rental expense
included  in the statements of operations for the years ended December 31, 2003,
2002  and 2001 is approximately $57,100, $64,600 and $65,100, respectively.  The
Company  also  leases  various  equipment  on  a  month-to-month  basis.

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.

The  Company  is  involved in legal proceedings and subject to claims which have
arisen  in  the  ordinary course of business.  These actions, when concluded and
determined,  will  not,  in  the  opinion of management, have a material adverse
effect  upon  the financial position, results of operations or cash flows of the
Company.


NOTE  7.     INCOME  TAX  MATTERS

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  composition of the deferred tax assets and liabilities at December 31, 2003
and  2002  is  as  follows:

<TABLE>
<CAPTION>


                                               2003          2002
                                           ------------  ------------
<S>                                        <C>           <C>
Gross deferred tax liability, accelerated
depreciation. . . . . . . . . . . . . . .  $   (38,000)  $      (700)
Gross deferred tax assets:
Loss carryforwards. . . . . . . . . . . .    4,881,700     4,492,700
Patent costs. . . . . . . . . . . . . . .      207,600       284,100
Florida N-Viro asset impairment . . . . .      200,000             -
Allowance for doubtful accounts . . . . .       22,400        16,000
Allowance for notes receivable. . . . . .       45,900        25,300
Property and equipment basis difference .        4,100         7,000
Litigation settlement - cost of warrants.       17,600             -
Other . . . . . . . . . . . . . . . . . .       18,600        16,700

Less valuation allowance. . . . . . . . .   (5,359,900)   (4,841,100)
                                           ------------  ------------

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



NOTE  7.     INCOME  TAX  MATTERS  (CONTINUED)

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, 2003, 2002 and 2001 and are as
follows:


<TABLE>
<CAPTION>


                                                   2003       2002        2001
                                                ----------  ---------  ----------
<S>                                             <C>         <C>        <C>
Computed "expected" tax (credits). . . . . . .  $(517,500)  $(32,600)  $(431,000)
State taxes, net of federal tax benefit. . . .    (45,500)    (2,900)    (38,000)
(Decrease) increase in income taxes resulting
from:
Change in valuation allowance. . . . . . . . .    518,800    (28,900)    455,000
Other. . . . . . . . . . . . . . . . . . . . .     44,200     64,400      14,000
                                                ----------  ---------  ----------

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




The net operating losses available at December 31, 2003 to offset future taxable
income  total  approximately  $12,200,000 and expire principally in years 2009 -
2023.


NOTE  8.     CASH  FLOWS  INFORMATION

Information relative to the statements of cash flows not disclosed elsewhere for
the  years  ended  December  31,  2003  and  2002  follows:


<TABLE>
<CAPTION>


                                                        2003      2002
                                                       -------  --------
<S>                                                    <C>      <C>
Stock warrants issued as part of debt refinancing . .  $30,000  $      -
                                                       =======  ========

Fixed asset purchases financed with notes payable . .  $34,000  $178,842
                                                       =======  ========

Cost of warrants issued for SAMI settlement . . . . .  $43,900  $      -
                                                       =======  ========

Conversion of accounts receivable to notes receivable  $97,448  $      -
                                                       =======  ========

Loan forgiveness on office equipment purchase . . . .  $ 5,165  $      -
                                                       =======  ========
</TABLE>



NOTE  9.     SEGMENT  INFORMATION

The Company has determined that its reportable segments are those that are based
on  the Company's method of internal reporting, which segregates its business by
product  category  and  service lines.  The Company's reportable segments are as
follows:

Management Operations - The Company provides employee and management services to
operate  the  Toledo  Wastewater  Treatment  Facility.

Other Domestic Operations - Sales of territory or site licenses and royalty fees
to  use  N-Viro  technology  in  the  United  States.

Foreign  Operations - Sale of territory or site licenses and royalty fees to use
N-Viro  technology  in  foreign  operations.

Research and Development - The Company contracts with Federal and State agencies
to  perform  or  assist in research and development on the Company's technology.

The  accounting policies of the segments are the same as those described in Note
1  which  contains  the Company's significant accounting policies.  Fixed assets
generating  specific  revenue  are  identified with their respective segments as
they  are  accounted  for as such in the internal accounting records.  All other
assets, including cash and other current assets, and all long-term assets, other
than  fixed assets, are identified with the Corporate segment.  The Company does
not  allocate  any  selling, general and administrative expenses to any specific
segments.  All  of  the  other  income  (expense)  costs  or  income  are
non-apportionable and not allocated to a specific segment.  The Company accounts
for  and  analyzes  the  operating data for its segments generally by geographic
location,  with  the  exception  of  the  Management Operations and Research and
Development  segments.  These  segments  represent  both a significant amount of
business  generated  as  well as a specific location and unique type of revenue.

The next two segments are divided between domestic and foreign sources, as these
segments  differ in terms of environmental and municipal legal issues, nature of
the  waste  disposal infrastructure, political climate and availability of funds
for  investing  in  the  Company's  technology.  These  factors have not changed
significantly  over  the  past three years and are not expected to change in the
near  term.

The  last  segment  is  the  Research  and Development segment.  This segment is
unlike  any other segment in that revenue is generated as a result of a specific
project  to  conduct  initial  or additional ongoing research into the Company's
emerging  technologies.



NOTE  9.     SEGMENT  INFORMATION  (CONTINUED)

The  table  below  presents  information  about  the segment profits and segment
identifiable  assets  used by the chief operating decision makers of the Company
as  of  and  for  the  years  ended December 31, 2003, 2002 and 2001 (dollars in
thousands).


<TABLE>
<CAPTION>


                         Other
                      Management    Domestic      Foreign     Research &
                      Operations   Operations   Operations   Development   Total
<S>                   <C>          <C>          <C>          <C>           <C>
                                             2003
                      -----------------------------------------------------------
Revenues . . . . . .  $     1,880  $     3,378  $        51  $         92  $5,401
Cost of revenues . .        1,385        2,503            -            82   3,970
Segment profits. . .          495          875           51            10   1,431
Identifiable assets.          353           83            -             -     436
Depreciation . . . .           64           42            -             -     106

                                     2002 (as restated)
                      -----------------------------------------------------------
Revenues . . . . . .  $     2,340  $     2,669  $        50  $        260  $5,319
Cost of revenues . .        1,528        1,732            2           119   3,381
Segment profits. . .          812          937           48           141   1,938
Identifiable assets.          340          108            -            44     492
Depreciation . . . .           41           44            -             6      91

                                     2001 (as restated)
                      -----------------------------------------------------------
Revenues . . . . . .  $     1,727  $     2,213  $       222  $        297  $4,459
Cost of revenues . .        1,273        1,206          132           184   2,795
Segment profits. . .          454        1,007           90           113   1,664
Identifiable assets.          184           87            -            51     322
Depreciation . . . .           31           71            -             7     109
</TABLE>

NOTE  9.     SEGMENT  INFORMATION  (CONTINUED)

A  reconciliation of total segment profits, identifiable assets and depreciation
and  amortization  to  the  consolidated  financial statements as of and for the
years  ended  December  31,  2003, 2002 and 2001 follows (dollars in thousands):

<TABLE>
<CAPTION>


                                                  2003    2002 (as restated)   2001 (as restated)
                                                --------  -------------------  -------------------
<S>                                             <C>       <C>                  <C>
Segment profits:
Segment profits for reportable segments. . . .  $ 1,431   $            1,938   $            1,664
Corporate selling, general and administrative
expenses and research and development costs. .   (2,253)              (1,877)              (2,717)
Other income (expense) . . . . . . . . . . . .     (700)                 (75)                (138)
                                                --------  -------------------  -------------------
Consolidated earnings before taxes . . . . . .  $(1,522)  $              (14)  $           (1,191)
                                                ========  ===================  ===================

Identifiable assets:
Identifiable assets for reportable segments. .  $   436   $              492   $              322
Corporate property and equipment . . . . . . .       32                   67                  158
Current assets not allocated to segments . . .    1,173                1,550                1,529
Intangible and other assets not allocated to
segments . . . . . . . . . . . . . . . . . . .    1,591                2,367                2,491
Consolidated eliminations. . . . . . . . . . .        -                 (234)                (234)
                                                --------  -------------------  -------------------
Consolidated assets. . . . . . . . . . . . . .  $ 3,232   $            4,242   $            4,266
                                                ========  ===================  ===================

Depreciation and amortization:
Depreciation for reportable segments . . . . .  $   106   $               91   $              109
Corporate depreciation and amortization. . . .      157                  162                  155
                                                --------  -------------------  -------------------
Consolidated depreciation and amortization . .  $   263   $              253   $              264
                                                ========  ===================  ===================
</TABLE>




NOTE  10.     SELECTED  QUARTERLY  FINANCIAL  DATA  (UNAUDITED)

The  following  is  a summary of selected quarterly financial data for the years
ended  December  31,  2003  and  2002:

<TABLE>
<CAPTION>


                                              Quarters Ended
                        ------------------------------------------------------------
                            March 31        June 30     September 30    December 31
                        ----------------  -----------  --------------  -------------
<S>                     <C>               <C>          <C>             <C>
                                                     2003
                        ------------------------------------------------------------
Revenues . . . . . . .  $     1,245,269   $1,408,122   $   1,408,921   $  1,338,736
Operating loss . . . .         (119,384)    (297,640)       (229,945)      (175,375)
Net loss . . . . . . .         (137,513)    (384,560)       (288,880)      (711,225)
Basic and diluted loss
per share. . . . . . .  $         (0.05)  $    (0.15)  $       (0.11)  $      (0.28)
</TABLE>

NOTE  10.     SELECTED  QUARTERLY  FINANCIAL  DATA  (UNAUDITED)  (CONTINUED)

<TABLE>
<CAPTION>


                                                    Quarters Ended
                           ----------------------------------------------------------------
                               March 31         June 30       September 30    December 31
                            (as restated)    (as restated)   (as restated)   (as restated)
                           ----------------  --------------  --------------  --------------
<S>                        <C>               <C>             <C>             <C>
                                                      2002
                        -------------------------------------------------------------------
Revenues. . . . . . . . .  $      1,435,233  $   1,258,770   $    1,503,465  $   1,122,009
Operating income (loss) .            17,072       (131,536)         151,826         23,555
Net income (loss) . . . .            41,508       (108,017)         123,975        (71,845)
Basic and diluted income
(loss) per share. . . . .  $           0.01  $       (0.04)  $         0.05  $       (0.02)
</TABLE>






NOTE  11.     PRIOR  PERIOD  ADJUSTMENT

     During the third quarter of 2003, the Company determined it had underbilled
a  customer  for certain services which resulted in an understatement of revenue
totaling  approximately $214,000 and gross profit of approximately $194,000 over
a two and one-half year period beginning in the third quarter of 2000 and ending
in  the  fourth  quarter  of  2002.  As  a  result, the Company has restated its
previously  issued financial statements included herein and has recorded a prior
period  adjustment  to reduce, by $36,000, its accumulated deficit as of January
1,  2001.  The  Company  previously reported net losses of $96,000, or $0.04 per
share, and $1,267,000, or $0.48 per share, for the years ended December 31, 2002
and  2001,  respectively.  The  restatements resulted in the Company reporting a
net loss of $14,000, or $0.01 per share, and $1,191,000, or $0.45 per share, for
the  years  ended  December  31,  2002  and  2001,  respectively.


NOTE  12.     401(K)  PLAN

     The  Company  has  a 401(k) plan covering substantially all employees which
provides  for  contributions  in  such  amounts  as  the  Board of Directors may
determine  annually.  Participating  employees  may also contribute a portion of
their  annual  compensation.  There were no employer contributions for the years
ended  December  31,  2003,  2002  and  2001.


NOTE  13.     SUBSEQUENT  EVENTS

     Management  of  the  Company  expects improvements in operating results for
2004 as a result of lower administrative costs, along with realized and expected
new  sources  of  revenue.  Additionally,  market  developments  and  ongoing
discussions  with  companies in both the utility and wastewater industries could
provide  enhanced liquidity and positively impact 2004 operations.  There can be
no assurance that these developments will create sufficient funds to finance the
Company's  operations.

     On  February  5,  2004  the  Company  closed  on  a Security Units Purchase
Agreement  (the "Agreement") with Ophir Holdings, Inc ("Ophir").  This Agreement
is  for the purchase of a minimum of $375,000 and a maximum of $750,000 worth of
N-Viro International Corporation common stock, at a price of $2.25 per share, or
a minimum of 166,667 or a maximum of 333,334 shares, respectively.  The payments
were  due  on an installment basis, the first payment due within two days of the
signing  of  the  Agreement,  and  ending  on  March  31,  2004.  The  stock  is
non-registered,  restricted  shares  and  has  been  issued  in reliance upon an
exemption  from  registration  under  the  Securities  and Exchange Act of 1933.
Certain  limitations  and  rights  have  been  provided  for  in  the Agreement,
primarily  regarding  future  private placements by the Company and registration
rights.  Under  this  Agreement,  to  date the Company has received cash for the
purchase  of  $435,188  of  common  stock,  or  193,417  shares.


                        N-VIRO INTERNATIONAL CORPORATION

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE  13.     SUBSEQUENT  EVENTS  (CONTINUED)


     During  the  first  quarter  of 2004, an additional 41,500 shares of common
stock  were  issued for stock options exercised, realizing total proceeds to the
Company of $66,117.  Also during the first quarter of 2004, 50,000 warrants were
exercised jointly by J. Patrick Nicholson and three of his sons, Michael, Robert
and Timothy Nicholson, pursuant to the terms of an Agreement signed in February,
2003.  These  warrants were exercised at $0.90 per share, and the Company issued
unregistered  common  stock  in  exchange  for  the  $45,000  in  proceeds.

     Also,  during the first quarter of 2004 the Company issued 72,237 shares of
unregistered  common stock to two trade creditors, eliminating $162,533 worth of
debt  owed  by  the  Company  to  such creditors.  An additional 7,329 shares of
unregistered  common  stock  was  issued  to Phillip Levin and Daniel Haslinger,
respectively,  both  members of the Board of Directors, in exchange for services
rendered  to  management  incurred from April through December, 2003, for $9,000
each,  or  a  total  of  $18,000.

     On  March  24,  2004, the Company announced in a Form 8-K that the Board of
Directors had approved a Rights Offering for the beneficial owners of its common
stock.  The  Company  plans  to  issue one right to purchase one share of common
stock,  for  each ten shares of stock beneficially owned.  The Rights, which are
being issued without registration, will be non-transferable and exercisable only
by  the beneficial owners in whose names they are issued.














INDEPENDENT  AUDITOR'S  REPORT



Board  of  Directors
N-Viro  International  Corporation
Toledo,  Ohio  43606


Our  audit  of  the  consolidated  financial  statements  N-Viro  International
Corporation  and  subsidiaries  included  Schedule II, contained herein, for the
year  ended  December  31,  2003.  Such  schedule  is  presented for purposes of
complying  with  the  Securities  and  Exchange  Commission's  rule and is not a
required  part  of  the basic consolidated financial statements. In our opinion,
this  schedule  presents fairly the information set forth therein, in conformity
with  accounting  principles generally accepted in the United States of America.


/s/  FOLLMER  RUDZEWICZ  PLC
FOLLMER  RUDZEWICZ  PLC
Southfield,  Michigan

April 1, 2004















                    Report of Independent Public Accountants
                    ----------------------------------------



To  the  Board  of  Directors
N-Viro  International  Corporation
Toledo,  Ohio


     Our audits of the consolidated financial statements of N-Viro International
Corporation and subsidiaries included Schedule II, contained herein, for each of
the two years in the period ended December 31, 2002.  Such schedule is presented
for purposes of complying with the Securities and Exchange Commission's rule and
is  not  a required part of the basic consolidated financial statements.  In our
opinion,  such  schedule  presents  fairly the information set forth therein, in
conformity with accounting principles generally accepted in the United States of
America.


/s/  HAUSSER  +  TAYLOR  LLC
HAUSSER  +  TAYLOR  LLC



Cleveland,  Ohio
March  19,  2003





                        N-VIRO INTERNATIONAL CORPORATION

                                   SCHEDULE II
                 VALUATION AND QUALIFYING ACCOUNTS AND RESERVES

                        December 31, 2003, 2002 and 2001
                        --------------------------------


<TABLE>
<CAPTION>


                                             Balance at                Deductions        Balance at
                                              Beginning   Charged to      From              Close
                                              of Period   Operations    Reserves          of Period
                                             -----------  -----------  -----------       -----------
<S>                                          <C>          <C>          <C>               <C>         <C>
Allowance for doubtful accounts - deducted
from trade receivables and notes receivable
in the balance sheets:

2003. . . . . . . . . . . . . . . . . . . .  $   103,200  $    67,500  $         -       $  170,700  (3)
                                             ===========  ===========  ===========       ===========

2002. . . . . . . . . . . . . . . . . . . .  $    87,500  $    15,700  $         -       $  103,200  (2)
                                             ===========  ===========  ===========       ===========

2001. . . . . . . . . . . . . . . . . . . .  $   144,564  $         -  $    57,500 (1)      $87,500
                                             ===========  ===========  ===========       ===========
</TABLE>

(1)  The  2001  deduction from reserves was the result of the Company collecting
amounts due  from  certain  customers  that  were  previously  reserved  for.

(2)  This  includes  $40,000 related to trade receivables and $63,200 related to
accrued  interest on  notes  receivable.

(3)  This  includes $56,000 related to trade receivables and $114,700 related to
accrued  interest  on  notes  receivable.


                                       31
ITEM  9.          CHANGES  IN  AND  DISAGREEMENTS  WITH  ACCOUNTANTS  ON
                         ACCOUNTING  AND  FINANCIAL  DISCLOSURES

     None.


ITEM  9A.          CONTROLS  AND  PROCEDURES

     As of December 31, 2003, under the direction of our Chief Executive Officer
and  Chief  Financial  Officer, we evaluated the effectiveness of the design and
operation  of  our disclosure controls and procedures, as defined in Rules 13a -
15(e) and 15d - 15(e) under the Securities Exchange Act of 1934, as amended.  We
concluded  that  our  disclosure  controls  and  procedures were effective as of
December 31, 2003, such that the information required to be disclosed in our SEC
reports  is recorded, processed, summarized and reported within the time periods
specified  by  the SEC's rules and forms, and is accumulated and communicated to
management,  including  our Chief Executive Officer and Chief Financial Officer,
as  appropriate  to  allow  timely  decisions  regarding  required  disclosure.

     There  were  no significant changes in our internal controls over financial
reporting  during  the  quarter  ended  December  31,  2003 that have materially
affected,  or  are reasonably likely to materially affect, our internal controls
over  financial  reporting.


                                    PART III

ITEM  10.          DIRECTORS  AND  EXECUTIVE  OFFICERS  OF  THE  REGISTRANT

     The  information  required by this Item is incorporated by reference to the
information under the heading "Election of Directors" and "Executive Officers of
the  Company"  in  the  definitive  proxy  statement of the Company for the 2004
Annual  Meeting  of  Stockholders.


ITEM  11.          EXECUTIVE  COMPENSATION

     The  information  required by this Item is incorporated by reference to the
information  under  the heading "Executive Compensation" in the definitive proxy
statement  of  the  Company  for  the  2004  Annual  Meeting  of  Stockholders.


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

     The  information  required by this Item is incorporated by reference to the
information  under  the heading "Security Ownership of Directors and Management"
in  the definitive proxy statement of the Company for the 2004 Annual Meeting of
Stockholders.


ITEM  13.          CERTAIN  RELATIONSHIPS  AND  RELATED  TRANSACTIONS

     The  information  required by this Item is incorporated by reference to the
information under the heading "Certain Relationship and Related Transactions" in
the  definitive  proxy  statement  of the Company for the 2004 Annual Meeting of
Stockholders.


ITEM  14.          PRINCIPAL  ACCOUNTANT  FEES

     The  information  required by this Item is incorporated by reference to the
information  under  the  heading  "Independent Auditors" in the definitive proxy
statement  of  the  Company  for  the  2004  Annual  Meeting  of  Stockholders.


                                     PART IV

ITEM  15.     EXHIBITS,  FINANCIAL  STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

(A)  1.          THE COMPANY'S CONSOLIDATED FINANCIAL STATEMENTS ARE INCLUDED IN
PART  II,  ITEM  8:

         Report  of  Independent  Auditors                           F-3  -  F-4
         Consolidated  balance  sheets                               F-5  -  F-6
         Consolidated  statements  of  operations                            F-7
         Consolidated  statements  of  stockholders'  equity                 F-8
         Consolidated  statements  of  cash  flows                           F-9
         Notes  to  consolidated  financial  statements            F-10  -  F-29

(A)  2.          THE FOLLOWING FINANCIAL STATEMENTS ARE INCLUDED IN ITEM 15 (D):

                    Financial  Statements  of  Subsidiaries  not  Consolidated.

     All  other  schedules  for  which  provision  is  made  in  the  applicable
accounting regulation of the Securities and Exchange Commission are not required
under  the  related  instructions  or  are  inapplicable and therefore have been
omitted.


(A)  3.          EXHIBITS

Exhibit
Number     Description
------     -----------

3.1          Certificate  of  Incorporation  of  the  Company  (incorporated  by
reference to Exhibit 3.1 to the Registration Statement of the Registrant on Form
S-1  (Reg.  No.  33-62766)  (the  "Registration  Statement").)

3.2          Amended  and  Restated Certificate of Incorporation, dated June 17,
1998.#

3.3          Certificate  of Designation of Series A Redeemable Preferred Stock,
dated  August  27,  2003.#

3.4          Amendment to the Certificate of Incorporation of the Company, dated
November  13,  2003.#

3.5          By-Laws of the Company (incorporated by reference to Exhibit 3.2 to
the  Registration  Statement).

3.6          Amendment  to  By-Laws  of  the  Company,  dated  August 29, 2003.#

3.7          Amended  and  Restated  By-Laws  of the Company, dated November 13,
2003.#

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

10.3     Employment Agreement, dated June 14, 1999, between N-Viro International
Corporation  and  Terry  J. Logan (incorporated by reference to Exhibit 1 to the
Form  8-K  dated  June  30,  1999).*#

10.4     Amended  and Restated Employment Agreement, dated June 6, 2003, between
N-Viro  International  Corporation  and  Michael  G.  Nicholson (incorporated by
reference  to  Exhibit  99.1  to  the  Form  8-K  dated  June  6,  2003).*#

10.5     Business  Loan  Agreement  dated  February  26,  2003,  between  N-Viro
International Corporation and Monroe Bank + Trust;  letter of credit enhancement
dated  February 25, 2003 between N-Viro International Corporation and Messrs. J.
Patrick  Nicholson,  Michael  G.  Nicholson,  Robert P. Nicholson and Timothy J.
Nicholson  (all  incorporated  by reference to Exhibits 99.1 through 99.3 to the
Form  8-K  dated  March  3,  2003).

10.6     Settlement  Agreement  and Release dated August 29, 2003 between N-Viro
International  Corporation  and  Strategic  Asset  Management, Inc.;  Consulting
Agreement  dated August 28, 2003 between N-Viro International Corporation and J.
Patrick Nicholson (all incorporated by reference to Item 5 of the Form 8-K dated
August  29,  2003).

10.7     Security Units Purchase Agreement dated January 30, 2004 between N-Viro
International Corporation and Ophir Holdings, Inc. (incorporated by reference to
Exhibit  99.1  to  the  Form  8-K  dated  February  5,  2004).

14.1     Code  of  Ethics##

21.1     List  of  subsidiaries  of  the  Company.#

24.1     Powers  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
               ##To  be filed as an exhibit to the definitive proxy statement of
the  Company  for  the  2004  Annual  Meeting  of  Stockholders.
               *Indicates  a  management  contract  or  compensatory  plan  or
arrangement.

(B)     REPORTS  ON  FORM  8-K

          The  Company  filed  a  report  on Form 8-K dated October 22, 2003, to
announce  it  had  been  notified  by the Delaware Chancery Court that a date of
December  15,  2003  had  been  set  to hold a hearing on the Company's proposed
settlement  of  a  derivative  action  filed  June  11,  2003 by Strategic Asset
Management,  Inc.,  and  to  enter  judgment  on  the  settlement  terms.

          The  Company  filed  a  report on Form 8-K dated November 17, 2003 and
announced  in  a  press  release  the  results of voting and other events at the
Annual  Stockholders  meeting  held  on  November  13,  2003.

(C)     The  exhibits  listed  in  Item 15(a)(3) are either filed with this Form
10-K or incorporated by reference in accordance with Rule 12b-32 of the Exchange
Act.

(D)     FINANCIAL  STATEMENTS  OF  SUBSIDIARIES  NOT  CONSOLIDATED



     FLORIDA  N-VIRO,  L.P.
     ----------------------

     Table  of  Contents
     -------------------




                                                                            Page
                                                                            ----

                                                    Independent Auditor's Report

                                                                  Balance Sheets

                                Statement of Income (Loss) and Partners' Capital

                                                         Statement of Cash Flows

                                                   Notes to Financial Statements








March  9,  2004


     INDEPENDENT  AUDITOR'S  REPORT


To  the  Partners
Florida  N-Viro,  L.P.
West  Chester,  Pennsylvania


I  have  audited  the  accompanying  balance  sheets of Florida N-Viro, L.P., (a
Limited  Partnership),  as  of  December  31,  2003  and  2002,  and the related
statements  of income (loss) and partners' capital, and cash flows for the years
then  ended.  These  financial  statements  are  the  responsibility  of  the
Partnership's  management.  My  responsibility is to express an opinion on these
financial  statements  based  on  my  audit.

I conducted my audit in accordance with auditing standards generally accepted in
the  United  States  of America. Those standards require that I plan and perform
the  audit to obtain reasonable assurance about whether the financial statements
are  free  of  material  misstatement.  An  audit  includes examining, on a test
basis,  evidence  supporting  the  amounts  and  disclosures  in  the  financial
statements.  An audit also includes assessing the accounting principles used and
significant  estimates  made  by  management,  as well as evaluating the overall
financial statement presentation.  I believe that my audit provides a reasonable
basis  for  my  opinion.

In my opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Florida N-Viro, L.P. as of December
31,  2003  and  2002, and the results of operations and cash flows for the years
then  ended  in  conformity with accounting principles generally accepted in the
United  States  of  America.



JMC/rb







/s/  Joseph  M.  Cahill,  Ltd.











                              FLORIDA N-VIRO, L.P.
                              --------------------

                                 Balance Sheets
                                 --------------

                           December 31, 2003 and 2002
                           --------------------------

                                     ASSETS
                                     ------

<TABLE>
<CAPTION>


                                                                                            2003        2002
                                                                                         ----------  ----------
<S>                                                                                      <C>         <C>
  Current Assets:
    Cash. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $  305,114  $  149,155
    Accounts Receivable (less reserve for doubtful accounts of $7,500 in 2003 and 2002)     247,127     433,744
    Prepaid Expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .      24,258      41,944
                                                                                         ----------  ----------
    Total Current Assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     576,499     624,843
                                                                                         ----------  ----------

  Property and Equipment
    Land. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     147,163     147,163
    Site improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     282,007     282,007
    Building. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   1,189,682   1,189,682
    Operating equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   1,244,595   1,244,595
    Furniture and fixtures. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .      12,565      12,565
                                                                                          2,876,012   2,876,012
                                                                                         ----------  ----------

    Less Accumulated Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . .   2,164,734     947,517
                                                                                         ----------  ----------

    Total Property and Equipment. . . . . . . . . . . . . . . . . . . . . . . . . . . .     711,278   1,928,495

Total Assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $1,287,777  $2,553,338
</TABLE>



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



                              FLORIDA N-VIRO, L.P.
                              --------------------

                                 Balance Sheets
                                 --------------

                           December 31, 2003 and 2002
                           --------------------------

                        LIABILITIES AND PARTNERS' CAPITAL
                        ---------------------------------

<TABLE>
<CAPTION>



                                            2003         2002
                                         -----------  ----------
<S>                                      <C>          <C>
  Current Liabilities:

    Payables:
      Trade . . . . . . . . . . . . . .  $   38,047   $   93,472
    Notes payable - current . . . . . .      48,216       47,731
    Notes payable - related party . . .   1,234,984    1,182,539
    Accrued expenses. . . . . . . . . .     142,969      214,002
                                         -----------  ----------

  Total Current Liabilities . . . . . .   1,464,216    1,537,744

  Long-term Liabilities:
  Notes Payable . . . . . . . . . . . .      14,251       62,467
                                         -----------  ----------

  Total Liabilities . . . . . . . . . .   1,478,467    1,600,211

  Partners' Capital . . . . . . . . . .    (190,690)     953,127
                                         -----------  ----------

Total Liabilities and Partners' Capital  $1,287,777   $2,553,338
</TABLE>





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



                              FLORIDA N-VIRO, L.P.
                              --------------------

                Statements of Income(Loss) and Partners' Capital
                ------------------------------------------------

                 For the years ended December 31, 2003 and 2002
                 ----------------------------------------------

<TABLE>
<CAPTION>



                                          2003         2002
                                      ------------  -----------
<S>                                   <C>           <C>
Revenues . . . . . . . . . . . . . .  $ 2,458,270   $3,135,465

Cost of sales. . . . . . . . . . . .    2,238,579    2,774,725
                                      ------------  -----------

  Gross profit (loss). . . . . . . .      219,691      360,740

Selling, general and administrative.      225,142      335,363
                                      ------------  -----------

Income (loss) from operations. . . .       (5,451)      25,377

Other income (expense):
  Interest income. . . . . . . . . .          180          122
  Loss on impairment . . . . . . . .   (1,062,430)           -
  Gain (loss) on sale of assets. . .            -       (8,335)
  Interest expense . . . . . . . . .      (76,116)     (89,800)
                                      ------------  -----------

Total other income (expense) . . . .   (1,138,366)     (98,013)
                                      ------------  -----------

Net Income (loss). . . . . . . . . .   (1,143,817)     (72,636)


Beginning partners' capital. . . . .      953,127    1,025,763
                                      ------------  -----------

Ending partners' capital . . . . . .  $  (190,690)  $  953,127
                                      ============  ===========
</TABLE>







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



                              FLORIDA N-VIRO, L.P.
                              --------------------

                            Statements of Cash Flows
                            ------------------------

                 For the years ended December 31, 2003 and 2002
                 ----------------------------------------------

<TABLE>
<CAPTION>



                                                           2003         2002
                                                       ------------  ----------
<S>                                                    <C>           <C>
Cash flows from operating activities
  Net income (loss) . . . . . . . . . . . . . . . . .  $(1,143,817)  $ (72,636)
  Adjustments to reconcile net income
    to net cash provided by operating
    activities:
  Depreciation. . . . . . . . . . . . . . . . . . . .      154,787     175,192
  (Gain) loss on sale of assets . . . . . . . . . . .            -       8,335
  Loss on impairment. . . . . . . . . . . . . . . . .    1,062,430           -
  (Increase) decrease in:
  Accounts receivable-trade . . . . . . . . . . . . .      186,617      34,314
  Prepaid expenses. . . . . . . . . . . . . . . . . .       17,686     117,961

  Increase (decrease) in:
  Accounts payable-trade. . . . . . . . . . . . . . .      (55,425)   (244,328)
  Accounts payable-related party. . . . . . . . . . .            -           -
  Accrued expenses. . . . . . . . . . . . . . . . . .      (71,033)     14,584
                                                       ------------  ----------

Net cash provided (used) by
    operating activities. . . . . . . . . . . . . . .      151,245      33,422

Cash flows from investing activities:
  Proceeds from the sale of assets. . . . . . . . . .            -       9,322
  Purchase of property and equipment. . . . . . . . .            -      (8,313)
                                                       ------------  ----------

Net cash provided (used) by
    investing activities. . . . . . . . . . . . . . .            -       1,009

Cash flows from financing activities:
  Proceeds from new borrowings. . . . . . . . . . . .       52,445     173,867
  Payments on long-term debt. . . . . . . . . . . . .      (47,731)    (64,199)
                                                       ------------  ----------

Net cash provided (used) by
  financing activities. . . . . . . . . . . . . . . .        4,714     109,668
                                                       ------------  ----------

Net increase (decrease) in cash and cash equivalents.      155,959     144,099

Cash and cash equivalents at beginning of year. . . .      149,155       5,056
                                                       ------------  ----------

Cash and cash equivalents at end of year. . . . . . .  $   305,114   $ 149,155
                                                       ============  ==========

Supplemental disclosure for cash flows
Interest Paid . . . . . . . . . . . . . . . . . . . .  $    53,690   $  14,146
                                                       ============  ==========
</TABLE>


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


                              FLORIDA N-VIRO, L.P.
                              --------------------

                          Notes to Financial Statements
                          -----------------------------

                           December 31, 2003 and 2002
                           --------------------------


Note  A  -  Background
----------------------

     Business Activities  - Florida N-Viro, L.P. was formed January 1, 1996 as a
     -------------------
Delaware Limited Partnership under the Delaware Revised Limited Partnership Act.
The  Partnership  has entered into a patent and technology agreement with N-Viro
International  Corporation  for  the  exclusive, royalty free, use in Florida of
certain  systems/processes  for  the  treatment  and  remediation  of wastewater
sludge.  The  Partnership  operates  from  its  Ft.  Meade  and Volusia, Florida
facilities.

The  Partnership  consists  of  one  general  partner,  Florida  N-Viro  Limited
Liability Corporation, a Delaware limited liability corporation, and two limited
partners:  VFL Technology Corporation and N-Viro International Corporation.  The
general  partner  is  a limited liability corporation that has limited resources
and  is  responsible  for  the liabilities of the partnership beyond the capital
contributed  by  the  limited  partners.

     The  Partnership  agreement  terminates  on  December  31,  2026.


Note  B  -  Summary  of  Accounting  Principles
-----------------------------------------------

1.     Method  of Accounting and Use of Estimates - The financial statements are
       ------------------------------------------
prepared  using  the accrual basis of accounting.  Generally accepted accounting
principles requires management to make estimates and assumptions that affect the
reported  amounts  of  assets  and  liabilities  at  the  date  of the financial
statements,  and  the  reported  amounts  of  revenues  and  expenses during the
reporting  period.  Actual  results  could  defer  from  the  estimates.

2.     Cash  and  Cash  Equivalents  -  The Partnership considers all short-term
       ----------------------------
investments  with  an  original  maturity  of  three  months  or less to be cash
equivalents.

3.     Property  and  Equipment  -  Property and equipment, carried at cost, are
       ------------------------
depreciated  over the estimated useful life of the related assets.  Depreciation
is computed principally by the straight-line method.  The estimated useful lives
used  in  computing  depreciation  are  summarized  as  follows:


                              FLORIDA N-VIRO, L.P.
                              --------------------

                    Notes to Financial Statements (continued)
                    -----------------------------------------


<TABLE>
<CAPTION>


                        Years of Useful Life
<S>                     <C>
Operating equipment. .                  5-10
Furniture and fixtures                   5-7
Site improvements. . .                    15
Buildings. . . . . . .                    39
</TABLE>




     Depreciation  amounted  to  $150,780  and  $175,192  for  2003  and  2002,
respectively.

     Maintenance,  repairs  and  expenditures  for  renewals and betterments not
determined  to extend the useful life or to increase materially the productivity
of  the  properties to which they are applied are charged to income as incurred.
Other  renewals  and  betterments  are  capitalized.

     It  is  the  policy  of  the  Partnership  generally  to eliminate from the
accounts  the  cost and related allowances for depreciation applicable to assets
retired  or  otherwise  disposed  of,  charging  or  crediting  to  income  the
differences  between  depreciation  cost  and  the  proceeds of sale or salvage.

4.     Income  Taxes  -  No  provision  for  income  taxes is required since the
       -------------
partners  report their proportionate share of partnership taxable income or loss
on  their  respective  income  tax  returns.  Such  income  or  losses  are
proportionately  allocated to the partners based upon their ownership interests.

5.     Advertising  -  The  Partnership follows the policy of charging the costs
       -----------
of  advertising  to  expense  as  incurred.

     Advertising  expense  is $7,616 and $6,076 for 2003 and 2002, respectively.


Note  C  -  Related  Parties
----------------------------

     The Partnership had sales to a partner of $422,130 and $483,837 in 2003 and
2002,  respectively.

The  Partnership  has  a  revolving credit loan agreement with a partner and the
note  balances were $534,984 and $482,539 as of December 31, 2003 and 2002.  The
interest  rate  charged  on  the  outstanding  balance  is prime plus 1/4%.  The
Partnership  also  has  on  demand  notes  payable to partners of $240,000 at an
interest  rate  of  9-3/4%  and $460,000 of notes payable at an interest rate of
prime  plus  1/4%.



                              FLORIDA N-VIRO, L.P.
                              --------------------

                    Notes to Financial Statements (continued)
                    -----------------------------------------


     The  Partnership rents equipment and personnel from a partner in the normal
course  of business. In 2003 and 2002, the equipment and personnel expenses were
$160,977  and  $204,462.


Note  D  -  Concentration  of  Credit  Risk
-------------------------------------------

In  the  normal  course of business, the Partnership extends credit to customers
principally  in  the  State  of  Florida.  The  Partnership has an allowance for
doubtful  accounts  of  $7,500  for  the  years  2003  and  2002.

The Partnership conducts a major portion of its business with several customers.
For  the year ended December 31, 2003, four customers accounted for 73% of total
revenue.  For  2002,  three  customers  accounted  for  60%  of  revenue.

     The  Partnership maintains its operating checking account at a bank located
in  Southeastern  Pennsylvania.  The balance in this account may at times exceed
the  federally  insured  limit  of  $100,000.


NOTE  E  -  LONG-TERM  NOTES  PAYABLE
-------------------------------------

Long-term  notes  payable  consist  of  the  following:

<TABLE>
<CAPTION>



                                                   2003      2002
                                                  -------  --------
<S>                                               <C>      <C>
10.007% Note payable to bank, monthly
 payments of $2,445, including interest, secured
by equipment, due June 2005. . . . . . . . . . .   40,710    64,661

10.257% Note payable to bank, monthly
 payments of $2,279, including interest, secured
by equipment, due October 2004 . . . . . . . . .   21,757    45,537
                                                  -------  --------

Total Long Term Debt . . . . . . . . . . . . . .  $62,467  $110,198
Less current maturities. . . . . . . . . . . . .   48,216    47,731
                                                  -------  --------

                                                  $14,251  $ 62,467
</TABLE>


Maturities  of  Long  Term  Debt  are  as  follows:


<TABLE>
<CAPTION>



<S>      <C>
2004. .  48,216
2005. .  14,251

         62,467
</TABLE>





                              FLORIDA N-VIRO, L.P.
                              --------------------

                    Notes to Financial Statements (continued)
                    -----------------------------------------


Note  F  -  Lease  Commitments
------------------------------

The  Partnership  leases various equipment under operating leases that expire at
various  times  through  the  year  2006.

The  following  is  a  schedule  detailing  future  minimum  lease  payments:

               Year  Ended  December  31
               -------------------------

                                                                 2004     23,198
                                                                 2005     19,680
                                                                  2006     3,280

                                                                      $   46,158


                                      E-13


Note  G  -  Working  Capital  Deficiency
----------------------------------------

The  Partnership's financial statements have been presented on the basis that it
is  a  going  concern,  which  contemplates  the  realization  of assets and the
satisfaction  of  liabilities  in the normal course of business. The Partnership
has  incurred losses over the past years and has working capital deficiencies as
of  December  31,  2003  and  2002.

Management  believes  that  actions presently being taken to expand the customer
base  and  revenues  and  for the partners to provide additional working capital
when  needed,  will provide the opportunity for the Partnership to continue as a
going  concern.


Note  H  -  Impairment  Loss
----------------------------

During  2003,  operating equipment, site improvements, and a building located at
the  Company's  Fort  Meade, Florida site were deemed to be impaired and written
down  to their fair value.  Fair value, which was determined by reference to the
current  market  prices  for  similar  assets,  exceeded their carrying value by
$1,062,430.  An  impairment loss of that amount, included in other expenses, has
been  charged  to  operations  in  2003.











     FLORIDA  N-VIRO,  L.P.
     ----------------------

     Table  of  Contents
     -------------------




<TABLE>
<CAPTION>



                                                 Page
<S>                                               <C>
Independent Auditor's Report . . . . . . . . . .  E-10

Balance Sheets . . . . . . . . . . . . . . . . .  E-11-12

Statement of Income (Loss) and Partners' Capital  E-13

Statement of Cash Flows. . . . . . . . . . . . .  E-14

Notes to Financial Statements. . . . . . . . . .  E-15-18
</TABLE>






February  18,  2003


     INDEPENDENT  AUDITOR'S  REPORT


To  the  Partners
Florida  N-Viro,  L.P.
West  Chester,  Pennsylvania


I  have  audited  the  accompanying  balance  sheets of Florida N-Viro, L.P., (a
Limited  Partnership),  as  of  December  31,  2002  and  2001,  and the related
statements  of income (loss) and partners' capital, and cash flows for the years
then  ended.  These  financial  statements  are  the  responsibility  of  the
Partnership's  management.  My  responsibility is to express an opinion on these
financial  statements  based  on  my  audit.

I conducted my audit in accordance with auditing standards generally accepted in
the  United  States  of America. Those standards require that I plan and perform
the  audit to obtain reasonable assurance about whether the financial statements
are  free  of  material  misstatement.  An  audit  includes examining, on a test
basis,  evidence  supporting  the  amounts  and  disclosures  in  the  financial
statements.  An audit also includes assessing the accounting principles used and
significant  estimates  made  by  management,  as well as evaluating the overall
financial statement presentation.  I believe that my audit provides a reasonable
basis  for  my  opinion.

In my opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Florida N-Viro, L.P. as of December
31,  2002  and  2001, and the results of operations and cash flows for the years
then  ended  in  conformity with accounting principles generally accepted in the
United  States  of  America.



JMC/rb







/s/  Joseph  M.  Cahill,  Ltd.









------

                              FLORIDA N-VIRO, L.P.
                              --------------------

                                 Balance Sheets
                                 --------------

                           December 31, 2002 and 2001
                           --------------------------

                                     ASSETS
                                     ------

<TABLE>
<CAPTION>



                                                                                   2002        2001
                                                                                ----------  ----------
<S>                                                                             <C>         <C>
  Current Assets:
    Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $  149,155  $    5,056
    Accounts Receivable (less reserve for doubtful accounts of $7,500 in 2002)     433,744     468,058
    Prepaid Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . .      41,944     159,905
    Total Current Assets . . . . . . . . . . . . . . . . . . . . . . . . . . .     624,843     633,019
                                                                                ----------  ----------

  Property and Equipment
    Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     147,163     147,163
    Site improvements. . . . . . . . . . . . . . . . . . . . . . . . . . . . .     282,007     312,517
    Building . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   1,189,682   1,183,169
    Operating equipment. . . . . . . . . . . . . . . . . . . . . . . . . . . .   1,244,595   1,242,795
    Furniture and fixtures . . . . . . . . . . . . . . . . . . . . . . . . . .      12,565      13,215
                                                                                 2,876,012   2,898,859
                                                                                ----------  ----------

    Less Accumulated Depreciation. . . . . . . . . . . . . . . . . . . . . . .     947,517     785,827
                                                                                ----------  ----------

    Total Property and Equipment . . . . . . . . . . . . . . . . . . . . . . .   1,928,495   2,113,032
                                                                                ----------  ----------

Total Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $2,553,338  $2,746,051
</TABLE>













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



                              FLORIDA N-VIRO, L.P.
                              --------------------

                                 Balance Sheets
                                 --------------

                           December 31, 2002 and 2001
                           --------------------------

                        LIABILITIES AND PARTNERS' CAPITAL
                        ---------------------------------



<TABLE>
<CAPTION>



                                            2002        2001
                                         ----------  ----------
<S>                                      <C>         <C>
  Current Liabilities:

    Payables:
      Trade . . . . . . . . . . . . . .  $   93,472  $  337,800
    Notes payable - current . . . . . .      47,731      64,199
    Notes payable - related party . . .   1,182,539   1,008,672
    Accrued expenses. . . . . . . . . .     214,002     199,419
                                         ----------  ----------

  Total Current Liabilities . . . . . .   1,537,744   1,610,090

  Long-term Liabilities:
  Notes Payable . . . . . . . . . . . .      62,467     110,198
                                         ----------  ----------

  Total Liabilities . . . . . . . . . .   1,600,211   1,720,288

  Partners' Capital . . . . . . . . . .     953,127   1,025,763
                                         ----------  ----------

Total Liabilities and Partners' Capital  $2,553,338  $2,746,051
</TABLE>








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



                              FLORIDA N-VIRO, L.P.
                              --------------------

                Statements of Income(Loss) and Partners' Capital
                ------------------------------------------------

                 For the years ended December 31, 2002 and 2001
                 ----------------------------------------------



<TABLE>
<CAPTION>



                                         2002         2001
                                      -----------  -----------
<S>                                   <C>          <C>
Revenues . . . . . . . . . . . . . .  $3,135,465   $2,930,294

Cost of sales. . . . . . . . . . . .   2,774,725    2,839,116
                                      -----------  -----------

  Gross profit (loss). . . . . . . .     360,740       91,178

Selling, general and administrative.     335,363      300,118
                                      -----------  -----------

Income (loss) from operations. . . .      25,377     (208,940)

Other income (expense):
  Interest income. . . . . . . . . .         122            5
  Gain (loss) on sale of assets. . .      (8,335)      (2,860)
  Interest expense . . . . . . . . .     (89,800)     (76,343)
                                      -----------  -----------

Total other income (expense) . . . .     (98,013)     (79,228)
                                      -----------  -----------

Net Income (loss). . . . . . . . . .     (72,636)    (288,168)
                                      -----------  -----------

Beginning partners' capital. . . . .   1,025,763    1,313,931

Ending partners' capital . . . . . .  $  953,127   $1,025,763
                                      ===========  ===========
</TABLE>










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



                              FLORIDA N-VIRO, L.P.
                              --------------------

                            Statements of Cash Flows
                            ------------------------

                 For the years ended December 31, 2002 and 2001
                 ----------------------------------------------


<TABLE>
<CAPTION>



                                                          2002        2001
                                                       ----------  ----------
<S>                                                    <C>         <C>
Cash flows from operating activities
  Net income (loss) . . . . . . . . . . . . . . . . .  $ (72,636)  $(288,168)
  Adjustments to reconcile net income
    to net cash provided by operating
    activities:
  Depreciation. . . . . . . . . . . . . . . . . . . .    175,192     183,891
  (Gain) loss on sale of assets . . . . . . . . . . .      8,335       2,890
  (Increase) decrease in:
  Accounts receivable-trade . . . . . . . . . . . . .     34,314    (112,963)
  Prepaid expenses. . . . . . . . . . . . . . . . . .    117,961    (134,118)

  Increase (decrease) in:
  Accounts payable-trade. . . . . . . . . . . . . . .   (244,328)    (16,855)
  Accounts payable-related party. . . . . . . . . . .          -     108,599
  Accrued expenses. . . . . . . . . . . . . . . . . .     14,584      35,174
                                                       ----------  ----------

Net cash provided (used) by
    operating activities. . . . . . . . . . . . . . .     33,422    (221,550)

Cash flows from investing activities:
  Proceeds from the sale of assets. . . . . . . . . .      9,322       8,367
  Purchase of property and equipment. . . . . . . . .     (8,313)    (37,356)
                                                       ----------  ----------

Net cash provided (used) by
    investing activities. . . . . . . . . . . . . . .      1,009     (28,989)

Cash flows from financing activities:
  Proceeds from new borrowings. . . . . . . . . . . .    173,867     360,000
  Payments on long-term debt. . . . . . . . . . . . .    (64,199)   (111,174)
                                                       ----------  ----------

Net cash provided (used) by
  financing activities. . . . . . . . . . . . . . . .    109,668     248,826
                                                       ----------  ----------

Net increase (decrease) in cash and cash equivalents.    144,099      (1,713)

Cash and cash equivalents at beginning of year. . . .      5,056       6,769
                                                       ----------  ----------

Cash and cash equivalents at end of year. . . . . . .  $ 149,155   $   5,056
                                                       ==========  ==========

Supplemental disclosure for cash flows
Interest Paid . . . . . . . . . . . . . . . . . . . .  $  14,146   $  20,220
                                                       ==========  ==========
</TABLE>



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


                              FLORIDA N-VIRO, L.P.
                              --------------------

                          Notes to Financial Statements
                          -----------------------------

                           December 31, 2002 and 2001
                           --------------------------


Note  A  -  Background
----------------------

     Business Activities  - Florida N-Viro, L.P. was formed January 1, 1996 as a
     -------------------
Delaware Limited Partnership under the Delaware Revised Limited Partnership Act.
The  Partnership  has entered into a patent and technology agreement with N-Viro
International  Corporation  for  the  exclusive, royalty free, use in Florida of
certain  systems/processes  for  the  treatment  and  remediation  of wastewater
sludge.  The  Partnership  operates  from  its  Ft.  Meade  and Volusia, Florida
facilities.

The  Partnership  consists  of  one  general  partner,  Florida  N-Viro  Limited
Liability Corporation, a Delaware limited liability corporation, and two limited
partners:  VFL Technology Corporation and N-Viro International Corporation.  The
general  partner  is  a limited liability corporation that has limited resources
and  is  responsible  for  the liabilities of the partnership beyond the capital
contributed  by  the  limited  partners.

     The  Partnership  agreement  terminates  on  December  31,  2026.


Note  B  -  Summary  of  Accounting  Principles
-----------------------------------------------

1.     Method  of Accounting and Use of Estimates - The financial statements are
       ------------------------------------------
prepared  using  the accrual basis of accounting.  Generally accepted accounting
principles requires management to make estimates and assumptions that affect the
reported  amounts  of  assets  and  liabilities  at  the  date  of the financial
statements,  and  the  reported  amounts  of  revenues  and  expenses during the
reporting  period.  Actual  results  could  defer  from  the  estimates.

2.     Cash  and  Cash  Equivalents  -  The Partnership considers all short-term
       ----------------------------
investments  with  an  original  maturity  of  three  months  or less to be cash
equivalents.

3.     Property  and  Equipment  -  Property and equipment, carried at cost, are
       ------------------------
depreciated  over the estimated useful life of the related assets.  Depreciation
is computed principally by the straight-line method.  The estimated useful lives
used  in  computing  depreciation  are  summarized  as  follows:


                              FLORIDA N-VIRO, L.P.
                              --------------------

                    Notes to Financial Statements (continued)
                    -----------------------------------------


<TABLE>
<CAPTION>



                        Years of Useful Life
<S>                     <C>
Operating equipment. .                  5-10
Furniture and fixtures                   5-7
Site improvements. . .                    15
Buildings. . . . . . .                    39
</TABLE>





     Depreciation  amounted  to  $175,192  and  $183,891  for  2002  and  2001,
respectively.

     Maintenance,  repairs  and  expenditures  for  renewals and betterments not
determined  to extend the useful life or to increase materially the productivity
of  the  properties to which they are applied are charged to income as incurred.
Other  renewals  and  betterments  are  capitalized.

     It  is  the  policy  of  the  Partnership  generally  to eliminate from the
accounts  the  cost and related allowances for depreciation applicable to assets
retired  or  otherwise  disposed  of,  charging  or  crediting  to  income  the
differences  between  depreciation  cost  and  the  proceeds of sale or salvage.

4.     Income  Taxes  -  No  provision  for  income  taxes is required since the
       -------------
partners  report their proportionate share of partnership taxable income or loss
on  their  respective  income  tax  returns.  Such  income  or  losses  are
proportionately  allocated to the partners based upon their ownership interests.

5.     Advertising  -  The  Partnership follows the policy of charging the costs
       -----------
of  advertising  to  expense  as  incurred.

     Advertising  expense  is $6,076 and $9,837 for 2002 and 2001, respectively.


Note  C  -  Related  Parties
----------------------------

     The  Partnership had sales to a partner of $483,837 and $36,879 in 2002 and
2001,  respectively.

The  Partnership  has  a  revolving credit loan agreement with a partner and the
note  balances were $482,539 and $308,672 as of December 31, 2002 and 2001.  The
interest  rate  charged  on  the  outstanding  balance  is prime plus 1/4%.  The
Partnership  also  has  on  demand  notes  payable to partners of $240,000 at an
interest  rate  of  9-3/4%  and $460,000 of notes payable at an interest rate of
prime  plus  1/4%.



                              FLORIDA N-VIRO, L.P.
                              --------------------

                    Notes to Financial Statements (continued)
                    -----------------------------------------


     The  Partnership rents equipment and personnel from a partner in the normal
course  of business. In 2002 and 2001, the equipment and personnel expenses were
$204,462  and  $162,055.


Note  D  -  Concentration  of  Credit  Risk
-------------------------------------------

In  the  normal  course of business, the Partnership extends credit to customers
principally  in  the  State  of  Florida.  The  Partnership has an allowance for
doubtful  accounts  of  $7,500  for  the  year  2002.

The Partnership conducts a major portion of its business with several customers.
For the year ended December 31, 2002, three customers accounted for 60% of total
revenue.  For  2001,  four  customers  accounted  for  59%  of  revenue.

     The  Partnership maintains its operating checking account at a bank located
in  Southeastern  Pennsylvania.  The balance in this account may at times exceed
the  federally  insured  limit  of  $100,000.


NOTE  E  -  LONG-TERM  NOTES  PAYABLE
-------------------------------------

Long-term  notes  payable  consist  of  the  following:

<TABLE>
<CAPTION>



                                                    2002      2001
                                                  --------  --------
<S>                                               <C>       <C>
9.25% Note payable to bank, monthly payments
of $2,245, including interest, secured by
equipment, due August 2002 . . . . . . . . . . .         -    17,355
10.007% Note payable to bank, monthly
 payments of $2,445, including interest, secured
 by equipment, due June 2005 . . . . . . . . . .    64,661    88,341
10.257% Note payable to bank, monthly
payments of $2,279, including interest, secured
 by equipment, due October 2004. . . . . . . . .    45,537    68,701
                                                  --------  --------

Total Long Term Debt . . . . . . . . . . . . . .  $110,198  $174,397
Less current maturities. . . . . . . . . . . . .    47,731    64,199
                                                  --------  --------

                                                  $ 62,467  $110,198
</TABLE>


Maturities  of  Long  Term  Debt  are  as  follows:


<TABLE>
<CAPTION>


<S>       <C>
2003 . .  47,731
2004 . .  48,216
2005 . .  14,251
         -------
         110,198
         =======
</TABLE>





                              FLORIDA N-VIRO, L.P.
                              --------------------

                    Notes to Financial Statements (continued)
                    -----------------------------------------


Note  F  -  Lease  Commitments
------------------------------

The  Partnership  leases various equipment under operating leases that expire at
various  times  through  the  year  2006.

The  following  is  a  schedule  detailing  future  minimum  lease  payments:

               Year  Ended  December  31
               -------------------------

<TABLE>
<CAPTION>



<S>      <C>
2003. .  32,214
2004. .  23,198
2005. .  19,680
2006. .   3,280
        -------
         78,372
        =======
</TABLE>

                                      E-23

Note  G  -  Working  Capital  Deficiency
----------------------------------------

The  Partnership's financial statements have been presented on the basis that it
is  a  going  concern,  which  contemplates  the  realization  of assets and the
satisfaction  of  liabilities  in the normal course of business. The Partnership
has  incurred losses over the past years and has working capital deficiencies as
of  December  31,  2002  and  2001.

Management  believes  that  actions presently being taken to expand the customer
base  and  revenues  and  for the partners to provide additional working capital
when  needed,  will provide the opportunity for the Partnership to continue as a
going  concern.


Note  H  -  Reclassifications
-----------------------------

Reclassifications  occurred  to  certain  prior year amounts in order to conform
with  the current year classifications.  The reclassifications have no effect on
reported  net  income.



                                   SIGNATURES


     Pursuant  to  the  requirements  of  Section  13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its  behalf  by  the  undersigned,  thereunto  duly  authorized.

     N-VIRO  INTERNATIONAL  CORPORATION
Dated:  April  14,  2004

     By:  /s/  Terry  J.  Logan*
        ------------------------
          Terry  J.  Logan,  Chief  Executive  Officer  and  President
          (Principal  Executive  Officer)


     Pursuant  to  the requirements of the Securities Exchange Act of 1934, 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:  April  14,  2004

/s/  Terry  J.  Logan,  Ph.D.*                            /s/  James  K.  McHugh
------------------------------                            ----------------------
Terry  J.  Logan,  Ph.D.,  Chief  Executive  Officer,          James  K.  McHugh
President and Director          Chief Financial Officer, Secretary and Treasurer
(Principal  Executive  Officer)                  (Principal  Financial  Officer)


/s/  Michael  G.  Nicholson*                                /s/  Phillip  Levin*
----------------------------                                --------------------
Michael  G. Nicholson, Chief Operating Officer,          Phillip Levin, Director
                                                   and  Chairman  of  the  Board
Senior  Vice-President  and  Director


/s/  Daniel  J.  Haslinger*                           /s/  R.  Francis  DiPrete*
---------------------------                           --------------------------
Daniel  J.  Haslinger,  Director                 R.  Francis  DiPrete,  Director


/s/  Christopher  Anderson*                                   /s/  Brian  Burns*
---------------------------                                   ------------------
Christopher  Anderson,  Director                         Brian  Burns,  Director



                                                                     Exhibit 3.2

                AMENDED AND RESTATED CERTIFICATE OF INCORPORATION

                                       OF

                        N-VIRO INTERNATIONAL CORPORATION


     We,  J.  Patrick  Nicholson, Chairman of the Board, Chief Executive Officer
and  President,  and  James  K.  McHugh,  Chief Financial Officer, Secretary and
Treasurer,  of  N-Viro  International  Corporation,  a Delaware corporation (the
"Corporation"),  do  hereby  certify  that,  in  accordance  with  the  General
Corporation  Law  of  the State of Delaware (the "DGCL"), Title 8, Sections 103,
242  and  245 of the DGCL, the Corporation's Certificate of Incorporation, which
was  originally  filed  on April 29, 1993, is hereby amended and restated in its
entirety  to  read  as  follows:

                                   ARTICLE ONE

     The  name  of  the  Corporation  is  N-Viro  International  Corporation.

                                   ARTICLE TWO

     The address of the Corporation's registered office in the State of Delaware
is  Corporation  Trust Center, 1209 Orange Street, City of Wilmington, County of
New  Castle  19801.  The  name  of  its  registered agent at such address is The
Corporation  Trust  Company.

                                  ARTICLE THREE

     The  purpose  of the Corporation is to engage in any lawful act or activity
for  which  corporations  may  be organized under the General Corporation Law of
Delaware~

                                  ARTICLE FOUR

     The  total  number of all classes of stock which the Corporation shall have
authority  to  issue  is  nine  million (9,000,000) shares, of which two million
(2,000,000) shares, designated as Preferred Stock, shall have a par value of One
Cent  ($.01)  per  share  (the "Preferred Stock"), and seven million (7,000,000)
shares,  designated  as  Common Stock, shall have a par value of One Cent ($.01)
per  share  (the  "Common  Stock").

     A  statement of the powers, preferences and rights, and the qualifications,
limitations  or  restrictions  thereof, in respect of each class of stock of the
Corporation  is  as  follows:

PREFERRED  STOCK
---------  -----

     The  Preferred  Stock  may  be  issued  from  time  to time by the Board of
Directors  as shares of one or more classes or series. The designations, powers,
preferences and relative, optional, conversion and other special rights, and the
qualifications, limitations and restrictions thereof, of Preferred Stock of each
class  or  series  shall  be such as are stated and expressed herein and, to the
extent  not  stated  and  expressed herein, shall be such as may be fixed by the
Board  of  Directors  (authority  so  to  do being hereby expressly granted) and
stated  and  expressed  in  a  resolution or resolutions adopted by the Board of
Directors  providing  for  the issue of Preferred Stock of such class or series.
Such  resolution  or  resolutions shall (a) specify the class or series to which
such  Preferred  Stock shall belong, (b) fix the dividend rate therefor, (c) fix
the amount which the holders of Preferred Stock of such class or series shall be
entitled  to  be  paid  in  the event of a voluntary liquidation, dissolution or
winding up of the Corporation, (d) state whether or note Preferred Stock of such
class  or series shall be redeemable and at what times and under what conditions
and  the  amount  or amounts payable thereon in the event of redemption, (e) fix
the  voting  powers  of  the holders of Preferred Stock of such class or series,
whether  full  or  limited,  or without voting powers, but in no event shall the
holders  of Preferred Stock of such class or series be entitled to more than one
vote for each share held at all meetings of the stockholders of the Corporation;
and  may, in a manner not inconsistent with the provisions of this ARTICLE FOUR,
(i) limit the number of shares of such class or series which may be issued, (ii)
provide  for a sinking or purchase fund for the redemption or purchase of shares
of  such class or series and the terms and provisions governing the operation of
any  such  fund  and  the  status  as to reissuance of shares of Preferred Stock
purchased  or  otherwise reacquired or redeemed or retired through the operation
thereof,  (iii)  impose  conditions  or  restrictions  upon  the  creation  of
indebtedness  of the Corporation or upon the issue of additional Preferred Stock
or  other  capital  stock  ranking  equally  therewith  or  prior  thereto as to
dividends  or  distribution  of assets on liquidation, and (iv) grant such other
special  rights to the holders of Preferred Stock of such class or series as the
Board  of  Directors  may  determine  and  which  are  not inconsistent with the
provisions  of  this  ARTICLE  FOUR. The term "fix for such class or series" and
similar  terms  shall  mean  stated and expressed in a resolution or resolutions
adopted  by the Board of Directors providing for the issue of Preferred Stock of
the  class  or  series  referred  to  therein.  No further action or vote of the
stockholders  shall  be  required for any action taken by the Board of Directors
pursuant  to  this  ARTICLE  FOUR.

COMMON  STOCK
------  -----

     1.  Dividends.
         ---------

     Subject  to  the  preferred rights of the holders of shares of any class or
series  of Preferred Stock as provided by the Board of Directors with respect to
any  such  class  or  series of Preferred Stock, the holders of the Common Stock
shall be entitled to receive, as and when declared by the Board of Directors out
of  the  funds  of  the  Corporation  legally available therefor, such dividends
(payable in cash, stock or otherwise) as the Board of Directors may from time to
time  determine,  payable to stockholders of record on such dates, not exceeding
sixty (60) days preceding the dividend payment dates, as shall be fixed for such
purpose  by  the  Board  of  Directors  in advance of payment of each particular
dividend.

     2.     Liquidation.
            -----------

     In  the  event  of  any  liquidation,  dissolution  or  winding  up  of the
Corporation, whether voluntary or involuntary, after the distribution or payment
to  the  holders of shares of any class or series of Preferred Stock as provided
by  the Board of Directors with respect to any such class or series of Preferred
Stock,  the  remaining  assets  of the Corporation available for distribution to
stockholders  shall be distributed among and paid to the holders of Common Stock
ratably  in  proportion  to  the  number  of shares of Common Stock held by them
respectively.

     3.  Voting  Rights.
         ------  ------

     Except  as  otherwise  required  by  law  or  as  provided  by the Board of
Directors  with  respect  to  any class or series of Preferred Stock, the entire
voting  power  and  all  voting rights shall be vested exclusively in the Common
Stock.  Each  holder of shares of Common Stock shall be entitled to one vote for
each  share  standing  in  his  name  on  the  books  of  the  Corporation.

                                  ARTICLE FIVE

     1.     Board  of  Directors.
            ---------  ---------

     The number of Directors shall initially be nine (9). Without further action
or  vote of the stockholders, the Directors shall have the power to increase the
number  of  Directors  to  twelve  (12) by majority vote. The Directors shall be
classified  with  respect to the time for which they shall severally hold office
into  three  classes, with each class having as nearly equal number of Directors
as possible. At each annual meeting of stockholders, the successors to the Class
of  Directors whose term expires at that meeting shall be elected to hold office
for a term expiring at the annual meeting of stockholders held in the third year
following  the  year of their election and until their successors have been duly
elected  and qualified. At each annual meeting of stockholders at which a quorum
is  present,  the  persons  receiving  a  plurality  of  the votes cast shall be
Directors.  No  Director  or  Class of Directors may be removed from office by a
vote  of  the  stockholders  at any time except for cause. Election of Directors
need  not be by written ballot unless the By-Laws of the Corporation so provide.

     2.  Vacancies.
         ---------

     Any  vacancy  on  the  Board of Directors resulting from death, retirement,
resignation,  disqualification or removal from office or other cause, as well as
any  vacancy  resulting from an increase in the number of Directors which occurs
between  annual  meetings  of  the  stockholders at which Directors are elected,
shall  be  filled  only  by  a  majority vote of the remaining Directors then in
office,  though  less  than a quorum, except that those vacancies resulting from
removal from office by a vote of the stockholders may be filled by a vote of the
stockholders  at  the  same  meeting at which such removal occurs. The Directors
chosen to fill vacancies shall hold office for a term expiring at the end of the
next annual meeting of stockholders at which the term of the Class to which they
have  been elected expires.  No decrease in the number of Directors constituting
the  Board  of  Directors  shall  shorten  the  term  of any incumbent Director.

     Notwithstanding  the foregoing, whenever the holders of one or more classes
or series of Preferred Stock shall have the right, voting separately, as a class
or  series,  to  elect  Directors,  the  election,  term  of  office, filling of
vacancies, removal and other features of such Directorships shall be governed by
the  terms  of  the  resolution or resolutions adopted by the Board of Directors
pursuant  to ARTICLE FOUR applicable thereto, and each Director so elected shall
not  be subject to the provisions of this ARTICLE FIVE unless otherwise provided
therein.

     3.     Power  to  Makes  Alter  and  Repeal  By-Laws.
            -----  ---------  ------------------  -------

     In  furtherance  and  not in limitation of the powers conferred by statute,
the  Board  of  Directors  is expressly authorized to make, alter and repeal the
By-Laws  of  the  Corporation.

     4.     Amendment  and  Repeal  of  ARTICLE  FIVE.
            ---------  ---  ------  --  -------  ----

     Notwithstanding  any  provision of this Amended and Restated Certificate of
Incorporation  and  of  the  By-Laws, and notwithstanding the fact that a lesser
percentage  may  be  specified  by  Delaware  law,  unless  such action has been
approved by a majority vote of the full Board of Directors, the affirmative vote
of  sixty-six  and  two-thirds  percent  (66-2/3%)  of  the  votes  which  all
stockholders  of the then outstanding shares of capital stock of the Corporation
would  be  entitled to cast thereon, voting together as a single class, shall be
required  to amend or repeal any provisions of this ARTICLE FIVE or to adopt any
provision inconsistent with this ARTICLE FIVE. In the event such action has been
previously  approved  by  a  majority  vote  of the full Board of Directors, the
affirmative vote of a majority of the outstanding stock entitled to vote thereon
shall  be  sufficient  to amend or repeal any provision of this ARTICLE FIVE or.
adopt  any  provision  inconsistent  with  this  ARTICLE  FIVE.

                                   ARTICLE SIX

     The  Corporation  reserves  the right to amend, alter, change or repeal any
provision  in  this  Amended  and  Restated Certificate of Incorporation, in the
manner  now  or-  hereafter  prescribed  by  statute.

                                  ARTICLE SEVEN

     No  Director  of  the Corporation shall be liable to the Corporation or its
stockholders  for  monetary  damages for breach of fiduciary duty as a Director,
except for liability (i) for any breach of the Director's duty of loyalty to the
Corporation or its stockholders, (ii) for acts or omissions not in good faith or
which  involve intentional misconduct or a knowing violation of law, (iii) under
Section 174 of the Delaware General Corporation Law (the "DGCL") or (iv) for any
transaction  from  which  the  Director  derived  an  improper personal benefit.

                                  ARTICLE EIGHT

     The  Corporation  shall,  to the fullest extent permitted by Section 145 of
the  DGCL,  as the same may be amended and supplemented, indemnify each Director
and  officer  of  the  Corporation from and against any and all of the expenses,
liabilities  or  other matters referred to in or covered by said Section and the
indemnification  provided  for herein shall not be deemed exclusive of any other
rights  to  which those indemnified may be entitled under any By-Law, agreement,
vote  of  stockholders,  vote of disinterested Directors or otherwise, and shall
continue  as  to  a  person who has ceased to be a Director or officer and shall
inure  to the benefit of the heirs, executors and administrators of such persons
and  the  Corporation  may  purchase  and  maintain  insurance  on behalf of any
Director  or  officer  to  the  extent  permitted  by  Section  145 of the DGCL.

                                  ARTICLE NINE

     Whenever  a  compromise or arrangement is proposed between this Corporation
and  its  creditors or any class of them and/or between this Corporation and its
stockholders  or  any  class of them, any court of equitable jurisdiction within
the  State  of  Delaware  may,  on  the  application  in  a  summary way of this
Corporation  or  of any creditor or stockholder thereof or on the application of
any  receiver  or  receivers appointed for this Corporation under Section 291 of
Title 8 of the Delaware Code or on the application of trustees in dissolution or
of any receiver or receivers appointed for this Corporation under Section 279 of
Title  8  of  the  Delaware  Code  order  a meeting of the creditors or class of
creditors,  and/or  of  the  stockholders  or  class  of  stockholders  of  this
Corporation, as the case may be, to be summoned in such manner as the said court
directs.  If  a  majority  in  number representing three-fourths in value of the
creditors  or  class  of  creditors,  and/or  of  the  stockholders  or class of
stockholders of this Corporation, as the case may be, agree to any compromise or
arrangement and to any reorganization of this Corporation as consequence of such
compromise  or  arrangement,  the  said  compromise  or arrangement and the said
reorganization  shall,  if sanctioned by the court to which the said application
has  been made, be binding on all the creditors or class of creditors, and/or on
all  the stockholders or class of stockholders, of this Corporation, as the case
may  be,  and  also  on  the  Corporation.

                                   ARTICLE TEN

                              Business Combination.
                              --------------------

     (A)     Special  Vote  by Stockholders. In addition to any affirmative vote
             ------------------------------
required by law or this Amended and Restated Certificate of Incorporation or the
Bylaws of the Corporation, and except as otherwise expressly provided in Section
10(B)  of  this  Amended  and  Restated Certificate of Incorporation, a Business
Combination  (as  hereinafter defined) with, or proposed by or on behalf of, any
Interested  Stockholder  (as  hereinafter defined) or any Affiliate or Associate
(as  hereinafter  defined)  of  any  Interested  Stockholder  or  any person who
thereafter  would  be  an  Affiliate or Associate of such Interested Stockholder
shall  require  the affirmative vote of not less than seventy-five percent (75%)
of  the  votes  entitled  to  be cast by the holders of all the then outstanding
shares  of  Voting  Stock  (as hereinafter defined), voting together as a single
class, excluding Voting Stock beneficially owned by such Interested Stockholder.
Such  affirmative  vote  shall be required notwithstanding the fact that no vote
may  be  required,  or  that  a  lesser percentage or separate class vote may be
specified,  by  law or in any agreement with any national securities exchange or
otherwise.

     (B)     Regular  Vote  by  Stockholders. The provisions of Section 10(A) of
             -------  ----------------------
this  Amended  and Restated Certificate of Incorporation shall not be applicable
to  any  particular  Business  Combination,  and such Business Combination shall
require  only  such  affirmative  vote,  if any, as is required by law or by any
other provision of this Amended and Restated Certificate of Incorporation or the
Bylaws  of  the  Corporation,  or  any  agreement  with  any national securities
exchange,  if  the  Business  Combination  shall  have  been  approved  either
specifically  or  as  a  transaction  which  is  within  an approved category of
transactions,  by  a  majority  (whether  such  approval  is  made  prior  to or
subsequent  to  the  acquisition of, or announcement or public disclosure of the
intention  to  acquire, beneficial ownership of the Voting Stock that caused the
Interested  Stockholder  to  become an Interested Stockholder) of the Continuing
Directors  (as  hereinafter  defined).

     (C) Definitions. The following definitions shall apply with respect to this
         -----------
ARTICLE  TEN:

     (1)     The  term  "Business  Combination"  shall  mean:  (i) any merger or
consolidation of the Corporation or any Subsidiary (as hereinafter defined) with
(x)  any  Interested  Stockholder  or  (y) any other corporation (whether or not
itself an Interested Stockholder) which is or after such merger or consolidation
would  be an Affiliate or Associate of an Interested Stockholder; (ii) any sale,
lease,  exchange,  mortgage,  pledge,  transfer or other disposition or security
arrangement,  investment,  loan,  advance,  guarantee,  agreement  to  purchase,
agreement  to  pay,  extension  of  credit, joint venture participation or other
arrangement  (in  one  transaction  or a series of transactions) with or for the
benefit  of  any  Interested  Stockholder  or  any Affiliate or Associate of any
Interested  Stockholder  which,  together  with  all  other  such  arrangements
(including  all  contemplated future events), has an aggregate Fair Market Value
and/or  involves  aggregate  commitments of $500,000 or more or constitutes more
than  ten  percent  (10%)  of the book value of the total assets (in the case of
transactions  involving  assets  or  commitments  other  than  Capital Stock (as
hereinafter  defined))  or ten percent (10%) of the stockholders' equity (in the
case  of  transactions  in  Capital  Stock)  of  the  entity  in  question  (the
"Substantial  Part"),  as  reflected  in  the  most  recent  fiscal  year-end
consolidated  balance sheet of such entity existing at the time the stockholders
of  the  Corporation  would  be  required  to  approve or authorize the Business
Combination involving the assets, securities and/or commitments constituting any
Substantial Part; (iii) the adoption of any plan or proposal for the liquidation
or  dissolution  of  the  Corporation  or for any amendment to the Corporation's
Bylaws  or to this Amended and Restated Certificate of Incorporation proposed by
or  on  behalf of an Interested Stockholder or any Affiliate or Associate of any
Interested  Stockholder;  (iv) any reclassification of securities (including any
reverse  stock  split), or recapitalization of the Corporation, or any merger or
consolidation  of  the  Corporation  with  any  of its Subsidiaries or any other
transaction  (whether  or  not  with  or  otherwise  involving  an  Interested
Stockholder)  that  has  the  effect,  directly or indirectly, of increasing the
proportionate  share  of any class or series of Capital Stock, or any securities
convertible into Capital Stock or into equity securities of any Subsidiary, that
is  beneficially  owned  by  any  Interested  Stockholder  or  any  Affiliate or
Associate of any Interested Stockholder; or (v) any agreement, contract or other
arrangement  providing  for  any  one  or  more  of the actions specified in the
foregoing  clauses  (i)  to  (iv).

     (2)     The  term  "Capital  Stock"  shall  mean  all  Capital Stock of the
Corporation authorized to be issued from time to time under ARTICLE FOUR of this
Amended  and  Restated Certificate of Incorporation, and the term "Voting Stock"
shall  mean  all  Capital  Stock  which by its terms may be voted on all matters
submitted  to  stockholders  of  the  Corporation  generally.

     (3)     The  term  "person" shall mean any individual, firm, corporation or
other  entity  and shall include any group comprised of any person and any other
person  with  whom  such person or any Affiliate or Associate of such person has
any  agreement,  arrangement  or  understanding, directly or indirectly, for the
purpose  of  acquiring,  holding,  voting  or  disposing  of  Capital  Stock.

     (4)     The term "Interested Stockholder" shall mean any person (other than
the  Corporation  or  any Subsidiary and other than any profit-sharing, employee
stock  ownership  or  other  employee  benefit  plan  of  the Corporation or any
Subsidiary  or  any  trustee  of or fiduciary with respect to any such plan when
acting  in  such  capacity  or  any  stockholder of the Corporation prior to the
adoption  of  this Amended and Restated Certificate of Incorporation) who (a) is
or  has  announced  or  publicly  disclosed  a  plan  or intention to become the
beneficial  owner  of Voting Stock representing ten percent (10%) or more of the
votes  entitled  to  be  cast  by  the holders of all then outstanding shares of
Voting  Stock;  or  (b) is an Affiliate or Associate (other than any stockholder
prior to the adoption of this Amended and Restated Certificate of Incorporation)
of  the Corporation and at any time within the two-year period immediately prior
to  the  date  in question was the beneficial owner of Voting Stock representing
ten percent (10%) or more of the votes entitled to be cast by the holders of all
then  outstanding  shares  of  Voting  Stock.

     (5)     A  person  shall  be  a "beneficial owner" of any Capital Stock (a)
which  such  person  or  any  of its Affiliates or Associates beneficially owns,
directly  or  indirectly;  (b)  which  such  person  or any of its Affiliates or
Associates  has,  directly or indirectly, (i) the right to acquire (whether such
right  is  exercisable  immediately  or  subject  only  to  the passage of time)
pursuant  to any agreement, arrangement or understanding or upon the exercise of
conversion  rights,  exchange rights, warrants or options, or otherwise, or (ii)
the  right  to  vote pursuant to any agreement, arrangement or understanding; or
(c)  which  is  beneficially  owned, directly or indirectly, by any other person
with which such person or any of its Affiliates or Associates has any agreement,
arrangement  or  understanding  for the purpose of acquiring, holding, voting or
disposing  of  any  shares  of  Capital  Stock.  For  the purpose of determining
whether  a  person  is an Interested Stockholder pursuant to Section 10(C)(4) of
this  Amended and Restated Certificate of Incorporation, the number of shares of
Capital  Stock deemed to be outstanding shall include shares deemed beneficially
owned by such person through application of this Section 10(C)(5), but shall not
include  any  other shares of Capital Stock that may be issuable pursuant to any
agreement,  arrangement or understanding, or upon exercise of conversion rights,
warrants  or  options,  or  otherwise.

     (6)     The  terms  "Affiliate"  and  "Associate" shall have the respective
meanings  ascribed  to  such  terms  in Rule 1 2b-2 under the Exchange Act as in
effect  on  the  date  of  filing  of  this  Amended and Restated Certificate of
Incorporation  with  the  Secretary  of State of the State of Delaware (the term
"registrant"  in  said  Rule  12b-2  meaning  in  this  case  the  Corporation).

     (7)     The  term "Subsidiary" means any company of which a majority of any
class  of  equity  security  is beneficially owned by the Corporation; provided,
                                                                       --------
however  that for purposes of the definition of Interested Stockholder set forth
in  Section  10(C)(4) of this Amended and Restated Certificate of Incorporation,
the  term  "Subsidiary"  shall  mean  only a company of which a majority of each
class  of  equity  security  is  beneficially  owned  by  the  Corporation.

     (8)     The  term  "Continuing  Director"  means any member of the Board of
Directors,  while  such person is a member of the Board of Directors, who is not
an  Affiliate  or  Associate or representative of the Interested Stockholder and
was  a  member  of  the  Board of Directors prior to the time that an Interested
Stockholder  became an Interested Stockholder, and any successor of a Continuing
Director  while such successor is a member of the Board of Directors, who is not
an Affiliate or Associate or representative of the Interested Stockholder and is
recommended  or  elected  to  succeed  the  Continuing Director by a majority of
Continuing  Directors.

     (9)     The  term  "Fair  Market  Value" means (a) in the case of cash, the
amount  of  such  cash; (b) in the case of stock, the highest closing sale price
during  the  30-day period immediately preceding the date in question of a share
-of  such stock on the Composite Tape for New York Stock Exchange-Listed Stocks,
or,  if  such  stock  is not quoted on the Composite Tape, on the New York Stock
Exchange, or, if such stock is not listed on the New York Stock Exchange, on the
principal United States securities exchange registered, or, if such stock is not
listed on any such exchange, the highest closing bid quotation with respect to a
share  of  such stock during the 30-day period preceding the date in question on
the  National  Association  of  Securities  Dealers,  Inc.  Automated Quotations
Systems  or  any  similar  system  then  in  use,  or, if no such quotations are
available,  the  fair  market  value  on the date in question of a share of such
stock as determined by a majority of the Continuing Directors in good faith; and
(c)  in  the case of property other than cash or stock, the Fair Market Value of
such  property on the date in question as determined in good faith by a majority
of  the  Continuing  Directors.

     (D)  Authority. A majority of the Continuing Directors shall have the power
          ---------
and  duty  to  determine  for  the  purpose of this ARTICLE TEN, on the basis of
information  known to them after reasonable inquiry, all questions arising under
this  ARTICLE  TEN,  including,  without  limitation, (i) whether a person is an
Interested  Stockholder,  (ii)  the  number  of shares of Capital Stock or other
securities  beneficially  owned  by  any  person,  (iii)  whether a person is an
Affiliate  or  Associate  of  another,  (iv)  whether  a  Proposed  Action  (as
hereinafter  defined)  is  with,  or  proposed by, or on behalf of an Interested
Stockholder  or  an  Affiliate  or  Associate  of an interested Stockholder, (v)
whether the assets that are the subject of any Business Combination have, or the
consideration  to  be received for the issuance or transfer of securities by the
Corporation  or  any  Subsidiary  in any Business Combination has, an aggregated
Fair  Market Value of $500,000 or more and (vi) whether the assets or securities
that  are the subject of any Business Combination constitute a Substantial Part.
Any such determination made in good faith shall be binding and conclusive on all
parties.

     (E)  Fiduciary  Obligation.  Nothing contained in this ARTICLE TEN shall be
          ---------------------
construed  to  relieve  any Interested Stockholder from any fiduciary obligation
imposed  by  law.

     (F)  Proposed  Action.  For  the  purposes  of this ARTICLE TEN, a Business
          ----------------
Combination  or  any  proposal  to  amend, repeal or adopt any provision of this
Amended and Restated Certificate of Incorporation inconsistent with this ARTICLE
TEN  (collectively,  "Proposed Action") is presumed to have been proposed by, or
on  behalf of, an Interested Stockholder or a person who thereafter would become
such if (i) after the Interested Stockholder became such, the Proposed Action is
proposed  following  the  election  of any director of the Corporation who, with
respect  to  such  Interested  Stockholder,  would  not  qualify  to  serve as a
Continuing Director or (ii) such Interested Stockholder, Affiliate, Associate or
person votes for or consents to the adoption of any such Proposed Action, unless
as to such Interested Stockholder, Affiliate, Associate or person, a majority of
the  Continuing  Directors  makes  a good-faith determination that such Proposed
Action  is  not  proposed  by  or  on  behalf  of  such  Interested Stockholder,
Affiliate,  Associate  or  person,  based  on  information  known  to them after
reasonable  inquiry.

     (G)  Amendment.  Notwithstanding  any  other provisions of this Amended and
          ---------
Restated  Certificate  of  Incorporation  or  the Bylaws of the Corporation (and
notwithstanding  the fact that a lesser percentage or separate class vote may be
specified  by law, this Amended and Restated Certificate of Incorporation or the
Bylaws of the Corporation), the affirmative vote of the holders of not less than
seventy-five  percent  (75%)  of the votes entitled to be cast by the holders of
all  the  then  outstanding  shares of Voting Stock, voting together as a single
class, excluding Voting Stock beneficially owned by such Interested Stockholder,
shall be required to amend or repeal, or adopt any provisions inconsistent with,
this ARTICLE TEN; provided, however, that this Section 10(G) shall not apply to,
                  --------- -------
and  such  seventy-five  percent  (75%)  vote  shall  not  be  required for, any
amendment,  repeal or adoption unanimously recommended by the Board of Directors
if  all  of  such  directors  are  persons  who  would  be  eligible to serve as
Continuing  Directors within the meaning of Section 10(C)(8) of this Amended and
Restated  Certificate  of  Incorporation.


     I,  J.  Patrick Nicholson, being the Chairman of the Board, Chief Executive
Officer and President of the Corporation, do hereby declare and certify that the
foregoing Amended and Restated Amended and Restated Certificate of Incorporation
was  duly  adopted  in  accordance  with  DGCL Sections 103, 242 and 245, at the
Annual  Meeting  of  Stockholders of the Corporation held on June 2, 1998, and I
further  state  that  the  execution  of  the  Amended  and Restated Amended and
Restated  Certificate of Incorporation is my own act and deed and that the facts
herein  stated  are  true, and accordingly I have hereunto set my hand this 17th
                                                                            ----
day  of  June,  1998.

                                                  By:   /s/ J. Patrick Nicholson
                                                     ---------------------------
                                           J. Patrick Nicholson, Chairman of the
                                              Board, Chief Executive Officer and
                                                                       President
ATTESTED  BY:

 /s/   James  K.  McHugh
------------------------
James  K.  McHugh,  Chief  Financial  Officer,  Secretary  and  Treasurer

STATE  OF  OHIO     )
     )  SS
COUNTY  OF  LUCAS     )

     The  foregoing  Amended  and  Restated  Amended and Restated Certificate of
Incorporation  of  N-Viro  International  Corporation was acknowledged before me
this 17thday of June, 1998 by J. Patrick Nicholson, Chairman of the Board, Chief
     ----
Executive  Officer and President, on behalf of N-Viro International Corporation,
a  Delaware  corporation.
                                                             /s/ James D. O'Neil
                                                         -----------------------
                                                                   Notary Public

My  Commission  Expires:     [SEAL]

                                 JAMES D. O'NEIL
                          Notary Public - State of Ohio
                       My Commission Expires June 11, 2000


                                                                     Exhibit 3.3

                           CERTIFICATE OF DESIGNATION
                                       OF
                       SERIES A REDEEMABLE PREFERRED STOCK
                                       OF
                        N-VIRO INTERNATIONAL CORPORATION


                         Pursuant to Section 151 of the
                General Corporation Law of the State of Delaware


          The  undersigned  duly  authorized  officer  of  N-Viro  International
Corporation,  a corporation organized and existing under the General Corporation
Law  of  the  State  of  Delaware (the "Corporation"), does hereby certify that,
pursuant  to authority conferred upon the Board of Directors of the Company (the
"Board")  by  the  [Amended  and  Restated]  Certificate of Incorporation of the
Corporation  and  pursuant  to Section 151 of the General Corporation Law of the
State  of Delaware, the Board at a meeting duly held on August 8, 2003 adopted a
resolution  (i)  authorizing  a  new  series  of  the  Corporation's  previously
authorized  Preferred  Stock,  $.01 par value per share (the "Preferred Stock"),
and  (ii)  providing  for  the  designations,  preferences  and  relative,
participating,  optional or other rights, and the qualifications, limitations or
restrictions  thereof,  of 1 share of Series A Redeemable Preferred Stock of the
Corporation,  as  follows:

          RESOLVED,  that  the  Corporation  is  authorized  to issue 1 share of
Series  A Redeemable Preferred Stock, $.01 par value per share, which shall have
the  following  powers,  designations,  preferences  and  other  special rights:

          Section 1.     Designation and Amount.  The share of such series shall
                         ----------------------
be  designated as "Series A Redeemable Preferred Stock" (the "Series A Preferred
Stock")  and  the  number  of  shares constituting such series shall be one (1).

          Section 2.     Maturity.  The Series A Preferred Stock shall mature in
                         --------
ten  (10)  years following the date of issuance thereof, and shall be subject to
mandatory re-purchase by the Corporation, and sale by the holder thereof, for an
amount  payable  in  cash equal to its par value.   The Series A Preferred Stock
will  not  be  subject  to  any  sinking  fund.

          Section 3.     Rank.  The Series A Preferred Stock shall, with respect
                         ----
to dividend rights and rights upon liquidation, dissolution or winding up of the
Corporation,  rank  (i)  senior  to all classes or series of common stock of the
Corporation,  and  to  all  equity  securities  ranking  junior  to the Series A
Preferred  Stock  with  respect  to  dividend rights or rights upon liquidation,
dissolution  or  winding  up of the Corporation, (ii) on a parity with all other
equity  securities  issued  by  the  Corporation the terms of which specifically
provide that such equity securities rank on a parity with the Series A Preferred
Stock  with  respect to dividend rights and rights upon liquidation, dissolution
or  winding  up of the Corporation, and (iii) junior to equity securities issued
by  the  Corporation  to  the  extent  that  the terms of such equity securities
specifically  provide  that  such  equity securities rank senior to the Series A
Preferred  Stock  with  respect  to  dividend rights or rights upon liquidation,
dissolution  or  winding  up  of  the  Corporation.

          Section  4.     Dividends.  The shares of the Series A Preferred Stock
                          ---------
shall  not  be entitled to receive any dividends, notwithstanding the payment of
dividends on any other shares of the capital stock of the Corporation, including
common  stock.

          Section  5.     Liquidation  Preference.  Upon  any  voluntary  or
                          -----------------------
involuntary  liquidation,  dissolution  or  winding  up  of  the  affairs of the
Corporation, the holders of the Series A Preferred Stock shall be entitled to be
paid  out of the assets of the Corporation legally available for distribution to
its  stockholders  a  liquidation  preference  of  One Dollar ($1.00) per share,
before  any  distribution  of  assets  is made to holders of Common Stock or any
other  class  or series of capital stock of the Corporation that ranks junior to
the  Series  A Preferred Stock as to liquidation rights.  For such purposes, the
consolidation  or  merger of the Corporation with or into any other corporation,
or  the sale, lease or conveyance of all or substantially all of the property or
business  of  the  Corporation, shall not be deemed to constitute a liquidation,
dissolution  or  winding  up  of  the  Corporation.

          Section  6.     Redemption.
                          ----------

          (A)     The Series A Preferred Stock shall be redeemable following the
first  to  occur  of  the  following  events: (i) the transfer, by sale, gift or
otherwise,  whether  voluntary or involuntary, by operation of law or otherwise,
of  the  Series  A  Preferred  Stock  by the initial holder thereof, or (ii) the
transfer  or  sale  by  the  initial holder of the Series A Preferred Stock, his
family  members,  or entities controlled by him or them, of shares of the common
stock  of the Corporation such that the initial holder of the Series A Preferred
Stock  ceases  to  be the beneficial owner of at least 17.50% of the outstanding
shares of the common stock of the Corporation, as reflected in the reports filed
by such initial holder with the Securities and Exchange Commission under Section
16  of  the Securities Exchange Act of 1934.  On and after the occurrence of the
first  to  occur  of  such events, the Corporation, at its option, upon not less
than  10  nor  more  than  60  days' written notice, may redeem the share of the
Series  A  Preferred  Stock  at  any  time for cash at a redemption price of One
Dollar  ($1.00)  per  share,  to  the  extent  the Corporation has funds legally
available  therefor.  In  the  event  that  the  Corporation does not have funds
legally  available  for such redemption, the Corporation may redeem the share of
the Series A Preferred Stock by delivering to the holder of such share of Series
A  Preferred  Stock  such  number  of  whole  shares  of the common stock of the
Corporation  as  shall  be  determined  by  dividing One Dollar by the per share
closing  price  of the common stock of the Corporation on the fifth business day
prior to the redemption date, rounded up to the nearest whole share.  Holders of
Series  A Preferred Stock to be redeemed shall surrender such Series A Preferred
Stock  at  the  place  designated  in  such  notice and shall be entitled to the
redemption  price  following  such  surrender.  If  notice  of redemption of any
shares of Series A Preferred Stock has been given and if the funds (or shares of
common  stock)  necessary  for  such  redemption  have  been  set  aside  by the
Corporation  in  trust  for  the  benefit of the holder of the share of Series A
Preferred  Stock  so  called  for redemption, then from and after the redemption
date,  such  shares  of  Series  A  Preferred  Stock  shall  no longer be deemed
outstanding  and  all rights of the holder of such shares will terminate, except
the  right  to  receive  the  redemption  price.

          (B)     Notice  of  redemption  shall  be  mailed  by the Corporation,
postage  prepaid, not less than 10 nor more than 60 days prior to the redemption
date,  addressed  to  the holder of record of the Series A Preferred Stock to be
redeemed  at  his  address  as  it  appears on the stock transfer records of the
transfer agent.  The notice shall state:  (i)  the redemption date; and (ii) the
place  or  places  where  the  Series A Preferred Stock is to be surrendered for
payment  of  the  redemption  price.

          (C)     From  and  after  the redemption date (unless default shall be
made  by  the Corporation in providing for the payment of the redemption price),
all  rights  of  the  holder thereof (except the right to receive the redemption
price)  shall  cease.

          Section  7.     Voting  Rights.
                          --------------

          (A)     The  holder of the Series A Preferred Stock shall not have any
voting  rights except as set forth in this Section 7 or as otherwise required by
law.  To  the  extent that voting rights otherwise required by law can be waived
or  released,  such  voting  rights  are  hereby  waived  and  released.

          (B)     So  long  as the Series A Preferred Stock remains outstanding,
the  holder of the Series A Preferred Stock shall have the special right, voting
separately  as  a  single  class,  to nominate, as provided in Section 7(C), and
elect one member of the Board of Directors of the Corporation at the 2003 annual
meeting  of  the shareholders of the Corporation and to nominate, as provided in
Section  7(C),  and elect his or her successor at each succeeding annual meeting
of  the shareholders of the Corporation thereafter at which such successor is to
be  elected.  The  director  so  elected  from  time  to time in respect of this
Section 7(B) shall be one of such number of members of the Board of Directors as
has  been  set  by  the  Board  of  Directors  pursuant  to  the  Certificate of
Incorporation  or  Bylaws  of the Corporation, and not a director in addition to
such number, and shall be referred to herein as the "Section 7(B) Director."  In
case of the resignation or death of the Section 7(B) Director while the Series A
Preferred Stock remains outstanding, the holder of the Series A Preferred Stock,
voting  as a single class, shall be entitled to nominate, as provided in Section
7(C),  and  elect  his  or  her  successor by written consent, setting forth the
action  so  taken,  which  consent shall be signed by the holder of the Series A
Preferred  Stock  and shall be delivered to the Secretary of the Corporation for
placement  among  the  minutes  of  proceedings  of  the  shareholders  of  the
Corporation.

          (C)     The  holder  of the Series A Preferred Stock shall give notice
to the Secretary of the Corporation of the identity of such holder's nominee for
director  at  least  60  days  prior  to  the  date  of  each  annual meeting of
shareholders.  Such  notice  shall  be  accompanied  by a Directors and Officers
Questionnaire,  in  the  form then in use by the Corporation (which is available
from  the Secretary of the Corporation), completed and executed by such nominee.
The  Corporation,  acting  through  a  majority of its Directors, shall have the
right  to reject any such nominee (i) who is less than 21 years old, or (ii) who
is  a principal shareholder, officer or director of (or holds a similar position
in  a non-corporate entity), or is employed by, a competitor of the Corporation,
or  any  person  or  entity which controls, is controlled by, or is under common
control  with,  a competitor of the Corporation, (iii) who is the initial holder
of  the  Series  A  Preferred  Stock  or such holder's spouse, sibling or lineal
descendent,  or  (iv)  with  respect  to  whom  any of the following events have
occurred  during  the past five years, in which event the holder of the Series A
Preferred Stock shall be required to nominate another individual for election to
the  Board:

     (a)     A  petition  under  the  Federal  bankruptcy  laws  or  any  state
insolvency  law  was filed by or against, or a receiver, fiscal agent or similar
officer was appointed by a court for the business or property of such person, or
any  partnership in which he was a general partner at or within two years before
the  time of such filing, or any corporation or business association of which he
was  an executive officer at or within two years before the time of such filing;

     (b)     Such  person  was  convicted in a criminal proceeding or is a named
subject of a pending criminal proceeding (excluding traffic violations and other
minor  offenses);

     (c)     Such  person was the subject of any order, judgment, or decree, not
subsequently  reversed,  suspended  or  vacated,  of  any  court  of  competent
jurisdiction,  permanently  or  temporarily  enjoining  him  from,  or otherwise
limiting,  the  following  activities:

     (1)     Acting  as  a  futures  commission  merchant,  introducing  broker,
commodity  trading  advisor,  commodity  pool  operator,  floor broker, leverage
transaction  merchant,  any  other  person  regulated  by  the Commodity Futures
Trading  Commission,  or  an associated person of any of the foregoing, or as an
investment  adviser,  underwriter,  broker  or  dealer  in  securities, or as an
affiliated person, director or employee of any investment company, bank, savings
and  loan  association  or  insurance  company, or engaging in or continuing any
conduct  or  practice  in  connection  with  such  activity;

     (2)     Engaging  in  any  type  of  business  practice;  or

     (3)     Engaging in any activity in connection with the purchase or sale of
any  security  or  commodity  or  in connection with any violation of Federal or
State  securities  laws  or  Federal  commodities  laws;

     (d)     Such  person  was the subject of any order, judgment or decree, not
subsequently  reversed,  suspended or vacated, of any Federal or State authority
barring,  suspending  or  otherwise  limiting for more than 60 days the right of
such  person  to engage in any activity described in paragraph (f)(3)(i) of this
section,  or  to  be  associated  with  persons engaged in any such activity; or

     (e)     Such  person  was  found  by a court of competent jurisdiction in a
civil  action  or  by  the  Commission  to  have  violated  any Federal or State
securities  law,  and  the  judgment  in  such  civil  action  or finding by the
Commission  has  not  been  subsequently  reversed,  suspended,  or  vacated.

     (f)     Such  person  was  found  by a court of competent jurisdiction in a
civil action or by the Commodity Futures Trading Commission to have violated any
Federal commodities law, and the judgment in such civil action or finding by the
Commodity  Futures  Trading  Commission  has  not  been  subsequently  reversed,
suspended  or  vacated.

Such  rejection  shall  be communicated in writing to the holder of the Series A
Preferred  Stock  within  10  days  after  the  delivery to the Secretary of the
Corporation  of  the  identity  of  such  holder's  nominee for director and the
completed  and  executed Directors' and Officers' Questionnaire.  If such notice
of  rejection  is not delivered by such date, such nominee shall be deemed to be
accepted.

          (D)     So  long  as the Series A Preferred Stock remains outstanding,
the  Corporation  shall  not, without the consent or the affirmative vote of the
holder  of  the Series A Preferred Stock, given in person or by proxy, either in
writing  or  at  a meeting (such Series A Preferred Stock voting separately as a
class),  repeal,  amend, or otherwise change any of the provisions applicable to
the Series A Preferred Stock in any manner that materially and adversely affects
the  powers,  preferences, or other special rights or privileges of the Series A
Preferred  Stock or the holder thereof; provided, however, that any increases in
the  amount  of  the  authorized  Preferred Stock or the creation or issuance of
other  series  of  Preferred  Stock, or any increase in the amount of authorized
shares  of  such  series or of any other series of Preferred Stock, in each case
ranking on a parity with or junior to the Series A Preferred Stock, shall not be
deemed  to  materially  and  adversely affect such powers, preferences, or other
special  rights  or  privileges.

          (E)     The foregoing voting provisions will not apply if, at or prior
to  the  time  when  the  act with respect to which such vote would otherwise be
required  shall  be  effected,  the  Series  A  Preferred  Stock shall have been
redeemed  or  called  for redemption upon proper notice and sufficient funds (or
common  stock)  shall  have  been  deposited in trust to effect such redemption.

          (F)     The  term  of  office of any director elected pursuant to this
section  shall  end  and such director shall be deemed to have resigned upon the
redemption  of  the  Series  A  Preferred  Stock.

          (G)     Except as expressly stated in this Certificate of Designation,
the  Series  A  Preferred  Stock  shall  not  have  any relative, participating,
optional  or  other  special  voting  rights  and powers, and the consent of the
holders  thereof  shall  not be required for the taking of any corporate action,
including  but  not  limited  to  any  merger  or  consolidation  involving  the
Corporation  or  a  sale  of  all  or  substantially  all  of  the assets of the
Corporation,  irrespective of the effect that such merger, consolidation or sale
may  have  upon  the powers, preferences, rights or privileges of the holders of
the  Series  A  Preferred  Stock.

          Section  8.     Conversion.  The Series A Preferred Stock shall not be
convertible  into  or  exchangeable  for any other property or securities of the
Corporation.

          Section  9.     Amendment.  This  Certificate of Designation shall not
                          ---------
be  amended in any manner that would materially and adversely affect the holders
of  the  Series A Preferred Stock without the affirmative consent or vote of the
holder  of  the  Series  A  Preferred  Stock.

          IN  WITNESS  WHEREOF, the undersigned has executed and subscribed this
certificate and does affirm the foregoing as true under the penalties of perjury
this  27th  day  of  August,  2003.


                                     /s/  Terry  J.  Logan
                                   -----------------------
                                   Terry  Logan
                                   President

ATTEST:

  /s/   James  K.  McHugh
-------------------------

Corporate  Secretary



                                                                     Exhibit 3.4

                                AMENDMENT TO THE
                          CERTIFICATE OF INCORPORATION
                                       OF
                        N-VIRO INTERNATIONAL CORPORATION


It  is  hereby  certified  that:
1.     The  name  of  the corporation (hereinafter called the "Corporation") is:
                        N-VIRO INTERNATIONAL CORPORATION
2.     This  Amendment  to the Corporation's Amended and Restated Certificate of
Incorporation hereby amends Article FIVE, Section 1, of the Amended and Restated
Certificate  of  Incorporation  of  the  Corporation  as  set  forth  herein.
3.     Article  FIVE,  Section  1,  is  hereby  deleted  in its entirety and the
following  shall  be  inserted  herein:
                                  ARTICLE FIVE
1.     BOARD  OF  DIRECTORS
The  number  of  Directors shall initially be seven (7); provided, however, that
such  number  of Directors may from time to time be increased and decreased by a
duly  adopted  resolution  of the Board but shall in no event be reduced to less
than  seven  (7)  nor  increased  to more than nine (9).  The Board of Directors
shall  be  divided  into  two  classes  (designated as "Class One Directors" and
"Class  Two  Directors"),  as nearly equal in number as the then total number of
Directors  constituting the entire Board permits, with the term of office of one
class  expiring each year. The initial Class One Directors shall consist of four
(4)  Directors  and  shall  hold  office  for a term expiring at the 2005 annual
meeting  of  stockholders  and  the initial Class Two Directors shall consist of
three (3) Directors and shall hold office for a term expiring at the 2004 annual
meeting  of  stockholders,  with  the members of each class of Directors to hold
office  until  their successors shall be elected and qualified, subject to prior
death,  retirement,  resignation  or  removal.  At  each  such annual meeting of
stockholders  and  at each annual meeting thereafter, successors to the class of
Directors  whose  term  expires  at that meeting shall be elected and qualified,
subject  to  prior  death,  retirement,  resignation  or removal. At each annual
meeting  of  stockholders  at which a quorum is present, the persons receiving a
plurality  of  the  votes  cast  shall  be  Directors.  No  Director or class of
Directors  may  be removed from office by a vote of the stockholders at any time
except for cause. Election of Directors need not be by written ballot unless the
Bylaws  of  the  Corporation  so  provide.
4.     This Amendment to the Restated Certificate of Incorporation has been duly
adopted  by  the required vote of stockholders in accordance with Section 242 of
the  General  Corporation  Law  of  Delaware.
5.     This  Amendment  to the Amended and Restated Certificate of Incorporation
has  been  duly adopted by the Board of Directors in accordance with Section 242
of  the  General  Corporation  Law  of  the  State  of  Delaware.
Signed  and  attested  to  on    November  13,  2003.
                               --------------

By:    /s/  Terry  J.  Logan
     -----------------------
     Terry  J.  Logan,  Chief  Executive  Officer

ATTEST:
  /s/  James  K.  McHugh
------------------------
James  K.  McHugh,  Secretary


                                                                     Exhibit 3.6
                               AMENDMENT TO BYLAWS
                                       OF
                        N-VIRO INTERNATIONAL CORPORATION

The  undersigned,  constituting  all  of  the  Directors of N-Viro International
Corporation,  a  Delaware corporation (the "Corporation"), hereby amends Article
II,  Section  I  of  the  Bylaws  of  the  Corporation  to  read  as  follows:
                                   ARTICLE II
     Section  1.     Number  and Term of Office. The business and affairs of the
                     --------------------------
Corporation  shall be managed by or under the direction of a Board of Directors,
none of whom need to be stockholders of the Corporation. The number of Directors
constituting  the  Board  of  Directors  shall  be  fixed  from  time to time by
resolution  passed  by a majority of the Board of Directors. The Directors shall
be  classified  with  respect  to  the  time for which they shall severally hold
office  into  two  (2)  classes as nearly equal in number as possible. Except as
hereinafter  otherwise  provided  for  the  filling  of  vacancies,  the Class I
Directors  shall  hold  office  for  an initial term expiring at the 2004 annual
meeting  of  stockholders  and  the  Class II Directors shall hold office for an
initial  term  expiring  at  the  2005  annual meeting of stockholders, with the
members  of  each  class  of  Directors  to  hold  office until their respective
successors  have  been  duly  elected  and  qualified  or  until  their  earlier
resignation,  removal, retirement or death. Thereafter at each annual meeting of
stockholders,  the  successors  to  the class of Directors whose term expires at
that  meeting  shall be elected to hold office for a term expiring at the annual
meeting  of  stockholders  held  in  the second year following the year of their
election  and  until  their  respective  successors  have  been duly elected and
qualified  or  until  their  earlier  resignation, removal, retirement or death.
     IN  WITNESS WHEREOF, the undersigned have executed this Amendment this 29th
day  of  August,  2003.
"DIRECTORS"


  /s/   J.  Patrick  Nicholson            /s/  Michael  G.  Nicholson
------------------------------          -----------------------------
J.  Patrick  Nicholson                   Michael  G.  Nicholson


  /s/  Terry  J.  Logan            /s/  R.  Francis  DiPrete
-----------------------          ---------------------------
Terry  J.  Logan,  Ph.D.          R.  Francis  DiPrete


  /s/  Phillip  Levin            /s/  Bobby  B.  Carroll
---------------------          -------------------------
Phillip  Levin                    Bobby  B.  Carroll


  /s/  B.K.  Wesley  Copeland            /s/  Daniel  J.  Haslinger
-----------------------------          ----------------------------
B.K.  Wesley  Copeland                  Daniel  J.  Haslinger


                                                                     Exhibit 3.7

                          AMENDED AND RESTATED BY-LAWS
                                       OF
                        N-VIRO INTERNATIONAL CORPORATION

                                    ARTICLE I
                                  Stockholders
                                  ------------

     SECTION  1.  Annual  Meeting. The annual meeting of the stockholders of the
                  ---------------
Corporation shall be held on such date, at such time and at such place within or
without  the  State  of Delaware as may be designated by the Board of Directors,
for  the  purpose  of  electing  Directors and for the transaction of such other
business  as  may  be  properly  brought  before  the  meeting.

     SECTION  2.  Special  Meetings.  Except  as  otherwise  provided  in  the
                  -----------------
Certificate  of  Incorporation,  a  special  meeting  of the stockholders of the
Corporation  may  be  called  at  any  time  by  the  Board  of Directors or the
President.  Any  special meeting of the stockholders shall be held on such date,
at  such  time  and at such place within or without the State of Delaware as the
Board  of  Directors  or  the  officer  calling  the meeting may designate. At a
special  meeting  of  the  stockholders,  no business shall be transacted and no
corporate  action  shall  be  taken  other than that stated in the notice of the
meeting  unless  all  of  the stockholders are present in person or by proxy, in
which case any and all business may be transacted at the meeting even though the
meeting  is  held  without  notice.

     SECTION  3.  Notice  of  Meetings.  Except  as  otherwise provided in these
                  --------------------
By-Laws or by law, a written notice of each meeting of the stockholders shall be
given  not  less  than ten (10) nor more than sixty (60) days before the date of
the  meeting  to  each  stockholder  of the Corporation entitled to vote at such
meeting  at  his  address  as  it appears on the records of the Corporation. The
notice shall state the place, date and hour of the meeting and, in the case of a
special  meeting,  the  purpose  or  purposes  for  which the meeting is called.

     SECTION  4.  Quorum.  At  any meeting of the stockholders, the holders of a
                  ------
majority  in  number of the total outstanding shares of stock of the Corporation
entitled  to  vote  at  such meeting, present in person or represented by proxy,
shall  constitute  a  quorum  of  the  stockholders for all purposes, unless the
representation  of  a  larger  number of shares shall be required by law, by the
Certificate  of  Incorporation  or  by  these  By-Laws,  in  which  case  the
representation  of  the  number of shares so required shall constitute a quorum;
provided  that  at  any  meeting of the stockholders at which the holders of any
class  of  stock  of  the  Corporation shall be entitled to vote separately as a
class,  the  holders  of a majority in number of the total outstanding shares of
such class, present in person or represented by proxy, shall constitute a quorum
for  purposes of such class vote unless the representation of a larger number of
shares  of  such  class  shall  be  required  by  law,  by  the  Certificate  of
Incorporation  or  by  these  By-Laws.

     SECTION  5.  AdjournedMeetings. Whether or not a quorum shall be present in
                  -----------------
person  or  represented  at  any  meeting  of the stockholders, the holders of a
majority  in  number of the shares of stock of the Corporation present in person
or  represented  by  proxy and entitled to vote at such meeting may adjourn from
time  to  time;  provided, however, that if the holders of any class of stock of
the  Corporation  are  entitled to vote separately as a class upon any matter at
such  meeting, any adjournment of the meeting in respect of action by such class
upon  such matter shall be determined by the holders of a majority of the shares
of  such class present in person or represented by proxy and entitled to vote at
such  meeting. When a meeting is adjourned to another time or place, notice need
not  be  given  of  the  adjourned  meeting  if  the  time and place thereof are
announced  at  the  meeting  at which the adjournment is taken. At the adjourned
meeting  the  stockholders, or the holder of any class of stock entitled to vote
separately as a class, as the case may be, may transact any business which might
have  been transacted by them at the original meeting. If the adjournment is for
more  than  thirty  (30)  days, or if after the adjournment a new record date is
fixed  for  the  adjourned  meeting,  a notice of the adjourned meeting shall be
given  to  each stockholder of record entitled to vote at the adjourned meeting.

     SECTION 6. Organization. The President or, in his absence, a Vice President
                ------------
shall  call all meetings of the stockholders to order, and shall act as Chairman
of  such  meetings.  In  the  absence  of  the  President  and  all  of the Vice
Presidents,  the  holders  of a majority in number of the shares of stock of the
Corporation  present  in  person or represented by proxy and entitled to vote at
such  meeting  shall  elect  a  Chairman.

     The  Secretary of the Corporation shall act as Secretary of all meetings of
the stockholders; but in the absence of the Secretary, the Chairman may appoint,
any  person  to  act  as  Secretary  of the meeting. It shall be the duty of the
Secretary  to  prepare  and make, at least ten (10) days before every meeting of
stockholders,  a complete list of stockholders entitled to vote at such meeting,
arranged  in  alphabetical order and showing the address of each stockholder and
the number of shares registered in the name of each stockholder. Such list shall
be  open,  either  at  a  place within the city where the meeting is to be held,
which  place  shall  be  specified  in  the  notice of the meeting or, if not so
specified,  at  the place where the meeting is to be held, for the ten (10) days
next  preceding  the  meeting,  to  the  examination of any stockholder, for any
purpose  germane  to  the  meeting, during ordinary business hours, and shall be
produced  and  kept  at  the time and place of the meeting during the whole time
thereof  and  subject  to  the inspection of any stockholder who may be present.

     SECTION  7.  Voting.  Except  as  otherwise  provided in the Certificate of
                  ------
Incorporation or by law, each stockholder shall be entitled to one vote for each
share  of  the  capital  stock of the Corporation registered in the name of such
stockholder upon the books of the Corporation. Each stockholder entitled to vote
at  a  meeting  of  stockholders  or  to express consent or dissent to corporate
action  in  writing without a meeting may authorize another person or persons to
act for him by proxy, but no such proxy shall be voted or acted upon after three
(3)  years  from  its  date, unless the proxy provides for a longer period. When
directed  by  the  presiding  officer or upon the demand of any stockholder, the
vote upon any matter before a meeting of stockholders shall be by ballot. Except
as  otherwise  provided by law or by the Certificate of Incorporation, Directors
shall  be  elected by a plurality of the votes cast at a meeting of stockholders
by the stockholders entitled to vote in the election and, whenever any corporate
action,  other  than  the  election  of  Directors  is  to be taken, it shall be
authorized  by  a majority of the votes cast at a meeting of stockholders by the
stockholders  entitled  to  vote  thereon.

     Shares of the capital stock of the Corporation belonging to the Corporation
or  to  another corporation, if a majority of the shares entitled to vote in the
election of directors of such other corporation is held, directly or indirectly,
by  the Corporation, shall neither be entitled to vote nor be counted for quorum
purposes.

     SECTION  8.  Inspectors.  When required by law or directed by the presiding
                  ----------
officer  or  upon  the  demand  of  any  stockholder  entitled  to vote, but not
otherwise,  the  polls shall be opened and closed, the proxies and ballots shall
be received and taken in charge, and all questions touching the qualification of
voters,  the  validity of proxies and the acceptance or rejection of votes shall
be  decided at any meeting of the stockholders by two or more Inspectors who may
be  appointed  by  the  Board  of  Directors  before  the  meeting, or if not so
appointed,  shall  be  appointed by the presiding officer at the meeting. If any
person  so  appointed  fails  to  appear  or  act,  the vacancy may be filled by
appointment  in  like  manner.

     SECTION  9.  Consent  of  Stockholders in Lieu of Meeting. Unless otherwise
                  ------------------------------------ -------
provided in the Certificate of Incorporation, any action required to be taken or
which  may  be taken at any annual or special meeting of the stockholders of the
Corporation,  may be taken without a meeting, without prior notice and without a
vote,  if  a  consent  in  writing,  setting forth the action so taken, shall be
signed  by  the  holders  of  outstanding stock having not less than the minimum
number  of  votes  that would be necessary to authorize to take such action at a
meeting  at  which  all  shares entitled to vote thereon were present and voted.
Prompt  notice  of  the taking of any such corporate action without a meeting by
less  than  unanimous  written  consent shall be given to those stockholders who
have  not  consented  in  writing.

                                   ARTICLE II
                               Board of Directors
                               ------------------

     SECTION  1.  Number  and  Term  of  Office. The business and affairs of the
                  -----------------------------
Corporation  shall be managed by or under the direction of a Board of Directors,
none of whom need to be stockholders of the Corporation. The number of Directors
constituting  the  Board  of  Directors  shall  be  fixed  from  time to time by
resolution  passed  by a majority of the Board of Directors. The Directors shall
be  classified  with  respect  to  the  time for which they shall severally hold
office  into  two  (2)  classes as nearly equal in number as possible. Except as
hereinafter  otherwise  provided  for  the  filling  of  vacancies,  the Class I
Directors  shall  hold  office  for  an initial term expiring at the 2004 annual
meeting  of  stockholders  and  the  Class II Directors shall hold office for an
initial  term  expiring  at  the  2005  annual meeting of stockholders, with the
members  of  each  class  of  Directors  to  hold  office until their respective
successors  have  been  duly  elected  and  qualified  or  until  their  earlier
resignation,  removal, retirement or death. Thereafter at each annual meeting of
stockholders,  the  successors  to  the class of Directors whose term expires at
that  meeting  shall be elected to hold office for a term expiring at the annual
meeting  of  stockholders  held  in  the second year following the year of their
election  and  until  their  respective  successors  have  been duly elected and
qualified  or  until  their  earlier  resignation, removal, retirement or death.

     SECTION  2.  Removal.  Vacancies and Additional Directors. The stockholders
                  --------------------------------------------
may,  at  any  special meeting the notice of which shall state that it is called
for  that  purpose,  remove,  with  or  without cause, any Director and fill the
vacancy;  provided  that  whenever  any  Director shall have been elected by the
holders  of  any  class of stock of the Corporation voting separately as a class
under  the  provisions of the Certificate of Incorporation, such Director may be
removed and the vacancy filled only by the holders of that class of stock voting
separately  as  a  class. Vacancies caused by any such removal and not filled by
the  stockholders  at the meeting at which such removal shall have been made, or
any  vacancy caused by the death or resignation of any Director or for any other
reason,  and  any  newly created directorship resulting from any increase in the
authorized  number  of  Directors,  may  be  filled by the affirmative vote of a
majority  of  the Directors then in office, although less than a quorum, and any
Director so elected to fill any such vacancy or newly created directorship shall
hold  office  until  his successor is elected and qualified or until his earlier
resignation or removal. The Directors chosen to fill vacancies shall hold office
for  a  term  expiring  at the end of the next annual meeting of stockholders at
which the term of the class to which they have been elected expires. No decrease
in the number of Directors constituting the Board of Directors shall shorten the
term  of  any  incumbent  Director.

     When  one  or  more  Directors  shall  resign effective at a future date, a
majority  of the Directors then in office, including those who have so resigned,
shall  have  power  to  fill such vacancy or vacancies, the vote thereon to take
effect  when  such  resignation or resignations shall become effective, and each
Director  so  chosen shall hold office as herein provided in connection with the
filling  of  other  vacancies.

     SECTION  3.  Place of Meeting. The Board of Directors may hold its meetings
                  ----------------
in  such  place  or  places  in  the  State  of Delaware or outside the State of
Delaware  as  the  Board  from  time  to  time  shall  determine.

     SECTION  4.  Regular  Meetings.  Regular meetings of the Board of Directors
                  -----------------
shall  be  held  at  such  times  and  places  as the Board from time to time by
resolution  shall determine. No notice shall be required for any regular meeting
of the Board of Directors; but a copy of every resolution fixing or changing the
time  or  place  of  regular meetings shall be mailed to every Director at least
five  (5)  days  before  the  first  meeting  held  in  pursuance  thereof.

     SECTION  5.  Special  Meetings.  Special meetings of the Board of Directors
                  -----------------
shall  be  held  whenever called by direction of the President, or by any two of
the  Directors  then  in  office.

     Notice  of the day, hour and place of holding of each special meeting shall
be  given  by  mailing  the  same at least two (2) days before the meeting or by
causing  the same to be transmitted by telegraph, cable or wireless at least one
day  before  the  meeting  to  each  Director. Unless otherwise indicated in the
notice  thereof,  any  and all business other than an amendment of these By-Laws
may  be transacted at any special meeting, and an amendment of these By-Laws may
be  acted upon if the notice of the meeting shall have stated that the amendment
of  these By-Laws is one of the purposes of the meeting. At any meeting at which
every  Director  shall  be present, even though without any notice, any business
may  be  transacted,  including  the  amendment  of  these  By-Laws.

     SECTION  6.  Quorum. Subject to the provisions of Section 2 of this ARTICLE
                  ------
II,  a  majority  of  the members of the Board of Directors in office (but in no
case  less  than  one-third (1/3) of the total number of Directors nor less than
two (2) Directors) shall constitute a quorum for the transaction of business and
the vote of the majority of the Directors present at any meeting of the Board of
Directors  at  which  a  quorum  is  present  shall  be  the act of the Board of
Directors. If at any meeting of the Board there is less than a quorum present, a
majority  of  those  present  may  adjourn  the  meeting  from  time  to  time.

     SECTION  7.  Organization.  The  Chairman of the Board shall preside at all
                  ------------
meetings of the Board of Directors. In the absence of the Chairman of the Board,
an acting Chairman shall be elected from the Directors present. The Secretary of
the  Corporation shall act as Secretary of all meetings of the Directors; but in
the  absence  of the Secretary, the Chairman of the Board or acting Chairman may
appoint  any  person  to  act  as  Secretary  of  the  meeting.

     SECTION  8. Committees. The Board of Directors may, by resolution passed by
                 ----------
a  majority of the whole Board, designate one or more committees, each committee
to  consist  of  one  or more of the Directors of the Corporation. The Board may
designate  one  or more Directors as alternate members of any committee, who may
replace  any  absent  or disqualified member at any meeting of the committee. In
the  absence  or  disqualification  of  a  member  of a committee, the member or
members thereof present at any meeting and not disqualified from voting, whether
or not he or they constitute a quorum, may unanimously appoint another member of
the  Board of Directors to act at the meeting in the place of any such absent or
disqualified  member.  Any  such committee, to the extent provided by resolution
passed  by  a  majority  of the whole Board, shall have and may exercise all the
powers and authority of the Board of Directors in the management of the business
and  the  affairs  of  the  Corporation,  and  may  authorize  the  seal  of the
Corporation  to  be  affixed  to  all  papers  which may require it; but no such
committee  shall  have  the  power  or  authority  in  reference to amending the
Certificate  of Incorporation, adopting an agreement of merger or consolidation,
recommending  to  the  stockholders  the  sale,  lease  or  exchange  of  all or
substantially  all of the Corporation's property and assets, recommending to the
stockholders  a dissolution of the Corporation or a revocation of a dissolution,
or  amending  these  By-Laws;  and unless such resolution, these By-Laws, Or the
Certificate  of Incorporation expressly so provide, no such committee shall have
the  power  or  authority  to declare a dividend or to authorize the issuance of
stock.

     SECTION  9.  Conference  Telephone Meetings. Unless otherwise restricted by
                  ------------------------------
the  Certificate  of Incorporation or by these By-Laws, the members of the Board
of  Directors  or  any  committee  designated by the Board, may participate in a
meeting  of  the  Board  of  such  committee,  as  the  case may be, by means of
conference  telephone  or similar communications equipment by means of which all
persons participating in the meeting can hear each other, and such participation
shall  constitute  presence  in  person  at  such  meeting.

     SECTION  10.  Consentof  Directors  or Committee in lieu of Meeting. Unless
                   ------------------------------------------------------
otherwise  restricted  by  the Certificate of Incorporation or by these By-Laws,
any  action  required  or  permitted  to be taken at any meeting of the Board of
Directors,  or  of  any committee thereof, may be taken without a meeting if all
members  of  the  Board  or  committee,  as  the case may be, consent thereto in
writing and the writing or writings are filed with the minutes of proceedings of
the  Board  or  committee,  as  the  case  may  be.


                                   ARTICLE III
                                    Officers
                                    --------

     SECTION  1. Officers. The officers of the Corporation shall be a President,
                 --------
one  or  more  Vice Presidents, a Secretary and a Treasurer, and such additional
officers,  if any, as shall be elected by the Board of Directors pursuant to the
provisions  of  Section  6  of this ARTICLE III. The President, one or more Vice
Presidents,  the  Secretary  and  the Treasurer shall be elected by the Board of
Directors  at  its  first meeting after each annual meeting of the stockholders.
The  failure  to  hold  such  election shall not of itself terminate the term of
office  of  any  officer.  All officers shall hold office at the pleasure of the
Board  of  Directors. Any officers may resign at any time upon written notice to
the Corporation. Officers may, but need not, be Directors. Any number of offices
may  be  held  by  the  same  person.

     All  officers,  agents  and  employees shall be subject to removal, with or
without  cause, at any time by the Board of Directors. The removal of an officer
without  cause  shall  be  without prejudice to his contract rights, if any. The
election  or  appointment  of  an  officer  shall  not of itself create contract
rights.  All  agents  and  employees other than officers elected by the Board of
Directors  shall  also be subject to removal, with or without cause, at any time
by  the  officers  appointing  them.

     Any  vacancy  caused  by  the  death  of  any officer, his resignation, his
removal,  or otherwise, may be filled by the Board of Directors, and any officer
so  elected  shall  hold  office  at  the  pleasure  of  the Board of Directors.

     In  addition to the powers and duties of the officers of the Corporation as
set  forth  in  these  By-Laws, the officers shall have such authority and shall
perform  such  duties  as  from  time  to time may be determined by the Board of
Directors.

     SECTION  2.  Powers and Duties of the President. The President shall be the
                  ----------------------------------
chief  executive  officer  of the Corporation and, subject to the control of the
Board  of  Directors,  shall have general charge and control of all its business
and  affairs  and shall have all powers and shall perform all duties incident to
the  office  of  President. He shall preside at all meetings of the stockholders
and  at  all meetings of the Board of Directors and shall have such other powers
and  perform  such  other  duties as may from time to time be assigned to him by
these  By-Laws  or  by  the  Board  of  Directors.

     SECTION  3.  Powers  and Duties of the Vice Presidents. Each Vice President
                  -----------------------------------------
shall  have  all  powers  and shall perform all duties incident to the office of
Vice President and shall have such other powers and perform such other duties as
may  from  time  to  time be assigned to him by these By-Laws or by the Board of
Directors  or  by  the  President.

     SECTION  4. Powers andDuties of the Secretary. The Secretary shall keep the
                 ---------------------------------
minutes  of  all  meetings  of  the  Board  of  Directors and the minutes of all
meetings of the stockholders in books provided for that purpose; he shall attend
to  the  giving  or  serving  of  all  notices of the Corporation; he shall have
custody  of  the  corporate  seal of the Corporation and shall affix the same to
such documents and other papers as the Board of Directors or the President shall
authorize  and  direct;  he  shall  have  charge of the stock certificate books,
transfer books and stock ledgers and such other books and papers as the Board of
Directors  or  the  President shall direct, all of which shall at all reasonable
times  be  open  to  the  examination  of any Director, upon application, at the
office  of  the  Corporation during business hours; and he shall have all powers
and  shall perform all duties incident to the office of Secretary and shall have
such  other  powers and shall perform such other duties as may from time to time
be  assigned  to  him  by  these  By-Laws  or  by  the Board of Directors or the
President.

     SECTION  5.  Powers  andDutiesof  the  Treasurer.  The Treasurer shall have
                  -----------------------------------
custody of, and when proper shall pay out, disburse or otherwise dispose of, all
funds  and  securities of the Corporation which may have come into his hands; he
may  endorse on behalf of the Corporation for collection checks, notes and other
obligations  and shall deposit the same to the credit of the Corporation in such
bank  or  banks  or  depositary  or  depositaries  as the Board of Directors may
designate;  he  shall  sign  all  receipts and vouchers for payments made to the
Corporation; he shall enter or cause to be entered regularly in the books of the
Corporation  kept  for  the  purpose  full  and  accurate accounts of all moneys
received  or  paid  or otherwise disposed of by him and whenever required by the
Board of Directors or the President shall render statements of such accounts; he
shall,  at  all reasonable times, exhibit his books and accounts to any Director
of  the  Corporation,  upon application, at the office of the Corporation during
business  hours;  and  he  shall  have  all  powers and shall perform all duties
incident  of  the  office of Treasurer and shall also have such other powers and
shall  perform  such other duties as may from time to time be assigned to him by
these  By-Laws  or  by  the  Board  of  Directors  or  the  President.

     SECTION  6.  Additional  Officers.  The Board of Directors may from time to
                  --------------------
time  elect such other officers (who may but need not be Directors), including a
Controller,  Assistant  Treasurers,  Assistant  Secretaries  and  Assistant
Controllers,  as  the Board may deem advisable and such officers shall have such
authority  and shall perform such duties as may from time to time be assigned to
them  by  the  Board  of  Directors  or  the  President.

     The  Board of Directors may from time to time by resolution delegate to any
Assistant  Treasurer  or Assistant Treasurers any of the powers or duties herein
assigned to the Treasurer; and may similarly delegate to any Assistant Secretary
or  Assistant  Secretaries  any  of  the powers or duties herein assigned to the
Secretary.

     SECTION  7. Giving of Bond by Officers. All officers of the Corporation, if
                 --------------------------
required  to  do  so  by  the  Board  of  Directors,  shall furnish bonds to the
Corporation  for the faithful performance of their duties, in such penalties and
with  such  conditions  and  security  as  the  Board  shall  require.

     SECTION  8.  Voting  Upon  Stocks. Unless otherwise ordered by the Board of
                  --------------------
Directors,  the  President  or  any  Vice  President  shall  have full power and
authority  on  behalf of the Corporation to attend and to act and to vote, or in
the  name  of  the  Corporation  to  execute  proxies to vote, at any meeting of
stockholders  of any corporation in which the Corporation may hold stock, and at
any  such meeting shall possess and may exercise, in person or by proxy, any and
all  rights,  powers and privileges incident to the ownership of such stock. The
Board of Directors may from time to time, by resolution, confer like powers upon
any  other  person  or  persons.

     SECTION  9.  Compensationof Officers. The officers of the Corporation shall
                  ------------------------
be  entitled  to receive such compensation for their services as shall from time
to  time  be  determined  by  the  Board  of  Directors.


                                   ARTICLE IV
                    Indemnification of Directors and Officers
                    -----------------------------------------

     SECTION  1. Nature of Indemnity. The Corporation shall indemnify any person
                 -------------------
who  was  or  is  a party or is threatened to be made a party to any threatened,
pending  or  completed  action,  suit  or  proceeding,  whether civil, criminal,
administrative  or investigative, by reason of the fact that he is or was or has
agreed  to become a Director or officer of the Corporation, or is or was serving
or  has  agreed  to  serve  at  the  request of the Corporation as a Director or
officer  of  another  corporation,  partnership,  joint  venture, trust or other
enterprise,  or by reason of any action alleged to have been taken or omitted in
such  capacity,  and  may  indemnify  any  person  who  was  or is a party or is
threatened to be made a party to such an action, suit or proceeding by reason of
the  fact  that he is or was or has agreed to become an employee or agent of the
Corporation,  or  is or was serving or has agreed to serve at the request of the
Corporation  as  an employee or agent of another corporation, partnership, joint
venture,  trust  or  other  enterprise,  against  expenses (including attorneys'
fees),  judgments,  fines and amounts paid in settlement actually and reasonably
incurred  by  him  or  on  his  behalf  in  connection with such action, suit or
proceeding  and  any appeal therefrom, if he acted in good faith and in a manner
he  reasonably  believed  to  be  in or not opposed to the best interests of the
Corporation,  and,  with  respect  to  any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful; except that in the case of
an action or suit by or in the right of the Corporation to procure a judgment in
its  favor  (i)  such  indemnification  shall  be limited to expenses (including
attorneys'  fees) actually and reasonably incurred by such person in the defense
or  settlement of such action or suit, and (ii) no indemnification shall be made
in respect of any claim, issue or matter as to which such person shall have been
adjudged  to be liable to the Corporation unless and only to the extent that the
Delaware Court of Chancery or the court in which such action or suit was brought
shall determine upon application that, despite the adjudication of liability but
in  view  of  all  the  circumstances  of  the  case,  such person is fairly and
reasonably  entitled  to indemnity for such expenses which the Delaware Court of
Chancery  or  such  other  court  shall  deem  proper.

The  termination  of  any  action,  suit  or  proceeding  by  judgment,  order,
settlement,  conviction,  or  upon  a plea of nolo contendere or its equivalent,
                                              ---- ----------
shall  not,  of itself, create a presumption that the person did not act in good
faith  and  in  a manner which he reasonably believed to be in or not opposed to
the  best interests of the Corporation, and, with respect to any criminal action
or  proceeding,  had  reasonable cause to believe that his conduct was unlawful.

     SECTION  2.  Successful  Defense.  To  the extent that a Director, officer,
                  -------------------
employee  or  agent  of  the  Corporation  has  been successful on the merits or
otherwise  in defense of any action, suit or proceeding referred to in SECTION 1
of this ARTICLE IV or in defense of any claim, issue or matter therein, he shall
be  indemnified  against  expenses  (including  attorneys'  fees)  actually  and
reasonably  incurred  by  him  in  connection  therewith.

     SECTION  3.  Determination  that  Indemnification  is  Proper.  Any
                  ------------------------------------------------
indemnification  of  a Director or officer of the Corporation under SECTION 1 of
this  ARTICLE  IV  (unless  ordered by a court) shall be made by the Corporation
unless  a  determination is made that indemnification of the Director or officer
is  not  proper  in  the  circumstances  because  he  has not met the applicable
standard  of  conduct set forth in SECTION 1. Any indemnification of an employee
or  agent  of the Corporation under SECTION 1 (unless ordered by a court) may be
made  by  the  Corporation  upon  a  determination  that  indemnification of the
employee  or  agent  is  proper  in  the  circumstances  because  he has met the
applicable  standard  of  conduct set forth in SECTION 1. Any such determination
shall  be  made  (i)  by  the  Board of Directors by a majority vote of a quorum
consisting of Directors who were not parties to such action, suit or proceeding,
or  (ii)  if such a quorum is not obtainable, or, even if obtainable a quorum of
disinterested  Directors  so  directs, by independent legal counsel in a written
opinion,  or  (iii)  by  the  stockholders.

     SECTION  4.  Advance  Payment  of  Expenses.  Unless the Board of Directors
                  ------------------------------
otherwise  determines  in  a  specific  case, expenses incurred by a Director or
officer  in  defending  a  civil or criminal action, suit or proceeding shall be
paid by the Corporation in advance of the final disposition of such action, suit
or  proceeding upon receipt of an undertaking by or on behalf of the Director or
officer to repay such amount if it shall ultimately be determined that he is not
entitled  to be indemnified by the Corporation as authorized in this ARTICLE IV.
Such  expenses  incurred  by other employees and agents may be so paid upon such
terms  and  conditions, if any, as the Board of Directors deems appropriate. The
Board  of  Directors  may authorize the Corporation's legal counsel to represent
such  Director,  officer,  employee  or agent in any action, suit or proceeding,
whether  or  not  the Corporation is a party to such action, suit or proceeding.

     SECTION  5.  Survival;  Preservation  of  Other  Rights.  The  foregoing
                  ------------------------------------------
indemnification  provisions  shall  be  deemed  to  be  a  contract  between the
Corporation  and  each  Director,  officer, employee and agent who serves in any
such  capacity  at  any  time  while  these  provisions  as well as the relevant
provisions  of the Delaware General Corporation Law are in effect and any repeal
or  modification  thereof shall not affect any right or obligation then existing
with  respect  to  any state of facts then or previously existing or any action,
suit or proceeding previously or thereafter brought or threatened based in whole
or  in  part  upon  any  such  state  of facts. Such a contract right may not be
modified  retroactively  without the consent of such Director, officer, employee
or  agent.

     The  indemnification  provided  by  this  ARTICLE  IV  shall  not be deemed
exclusive  of  any other rights to which those indemnified may be entitled under
any  By-Law,  agreement,  vote  of  stockholders  or  disinterested Directors or
otherwise,  both  as  to  action  in  his  official capacity and as to action in
another  capacity  while  holding such office, and shall continue as to a person
who  has  ceased to be a Director, officer, employee or agent and shall inure to
the  benefit  of  the  heirs, executors and administrators of such a person. The
Corporation  may  enter  into  an agreement with any of its Directors, officers,
employees  or  agents providing for indemnification and advancement of expenses,
including  attorneys' fees, that may change, enhance, qualify or limit any right
to  indemnification  or  advancement  of  expense  created  by  this ARTICLE IV.

     SECTION  6. Severability. If this ARTICLE IV or any portion hereof shall be
                 ------------
invalidated  on  any  ground  by  any  court of competent jurisdiction, then the
Corporation-  shall  nevertheless  indemnify  each  Director  or officer and may
indemnify  each  employee  or  agent of the Corporation as to costs, charges and
expenses  (including  attorneys'  fees),  judgments,  fines  and amounts paid in
settlement  with  respect  to  any  action,  suit  or proceeding, whether civil,
criminal,  administrative  or  investigative,  including  an action by or in the
right  of  the  Corporation,  to  the fullest extent permitted by any applicable
portion  of  this  ARTICLE  IV  that  shall not have been invalidated and to the
fullest  extent  permitted  by  applicable  law.

     SECTION  7.  Subrogation.  In  the event of payment of indemnification to a
                  -----------
person  described  in  SECTION  1  of  this ARTICLE IV, the Corporation shall be
subrogated  to  the  extent of such payment to any right of recovery such person
may  have  and such person, as a condition of receiving indemnification from the
Corporation,  shall execute all documents and do all things that the Corporation
may deem necessary or desirable to perfect such right of recovery, including the
execution  of  such documents necessary to enable the Corporation effectively to
enforce  any  such  recovery.

     SECTION  8.  NoDuplication of Payments. The Corporation shall not be liable
                  --------------------------
under  this  ARTICLE  IV  to  make any payment in connection with any claim made
against  a  person  described in SECTION 1 of this ARTICLE IV to the extent such
person  has  otherwise  received  payment (under any insurance policy, By-Law or
otherwise)  of  the  amounts  otherwise  indemnifiable  hereunder.


                                    ARTICLE V
                             Stock-Seal-Fiscal Year
                             ----------------------

     SECTION 1. Certificates for Shares of Stock. The certificates for shares of
                --------------------------------
stock  of  the  Corporation  shall  be  in  such form, not inconsistent with the
Certificate  of  Incorporation,  as shall be approved by the Board of Directors.
All certificates shall be signed by the President or a Vice President and by the
Secretary  or an Assistant Secretary of the Treasurer or an Assistant Treasurer,
and  shall  not  be  valid  unless  so  signed.

     In  case any officer or officers who shall have signed any such certificate
or  certificates  shall cease to be such officer or officers of the Corporation,
whether  because  of death, resignation or otherwise, before such certificate or
certificates  shall  have been delivered by the Corporation, such certificate or
certificates  may  nevertheless  be issued and delivered as though the person or
persons  who  signed  such certificate or certificates had not ceased to be such
officer  or  officers  of  the  Corporation.

     All certificates for shares of stock shall be consecutively numbered as the
same  are  issued.  The name of the person owning the shares represented thereby
with the number of such shares and the date of issue thereof shall be entered on
the  books  of  the  Corporation.

     Except  as  hereinafter  provided,  all  certificates  surrendered  to  the
Corporation  for  transfer  shall be cancelled, and no new certificates shall be
issued  until  former  certificates  for  the  same  number  of shares have been
surrendered  and  cancelled.

     SECTION 2. Lost. Stolen or Destroyed Certificates. Whenever a person owning
                --------------------------------------
a  certificate  for  shares of stock of the Corporation alleges that it has been
lost,  stolen  or  destroyed,  he shall file in the office of the Corporation an
affidavit  setting  forth,  to  the  best of his knowledge and belief, the time,
place  and  circumstances of the loss, theft or destruction, and, if required by
the  Board of Directors, a bond of indemnity or other indemnification sufficient
in  the  opinion  of the Board of Directors to indemnify the Corporation and its
agents  against  any claim that may be made against it or them on account of the
alleged  loss, theft or destruction of any such certificate or the issuance of a
new  certificate in replacement therefor. Thereupon the Corporation may cause to
be  issued  to  such person a new certificate in replacement for the certificate
alleged  to  have  been  lost,  stolen  or destroyed. Upon the stub of every new
certificate so issued shall be noted the fact of such issue and the number, date
and  the  name  of  the  registered  owner  of  the  lost,  stolen  or destroyed
certificate  in  lieu  of  which  the  new  certificate  is  issued.

     SECTION  3. Transfer of Shares. Shares of stock of the Corporation shall be
                 ------------------
transferred  on the books of the Corporation by the holder thereof, in person or
by  his  attorney duly authorized in writing, upon surrender and cancellation of
certificates  for  the  number  of  shares of stock to be transferred, except as
provided  in  SECTION  2  of  this  ARTICLE  V.

     SECTION  4.  Regulations.  The  Board  of  Directors  shall  have power and
                  -----------
authority to make such rules and regulations as it may deem expedient concerning
the  issue, transfer and registration of certificates for shares of stock of the
Corporation.

     SECTION  5.  Record  Date.  In order that the Corporation may determine the
                  ------------
stockholders  entitled to notice of or to vote at any meeting of stockholders or
any  adjournment  thereof,  or to express consent to corporate action in writing
without a meeting or to receive payment of any dividend or other distribution or
allotment  of  any  rights,  or to exercise any rights in respect of any change,
conversion  or  exchange of stock or for the purpose of any other lawful action,
as  the  case may be, the Board of Directors may fix, in advance, a record date,
which  shall  not be (i) more than sixty (60) nor less than ten (10) days before
the date of such meeting, or (ii) in the case of corporate action to be taken by
consent  in  writing  without  a  meeting,  prior to, or more than ten (10) days
after,  the  date upon which the resolution fixing the record date is adopted by
the  Board  of  Directors, or (iii) more than sixty (60) days prior to any other
action.

     If  no  record  date is fixed, the record date for determining stockholders
entitled  to  notice  of or to vote at a meeting of stockholders shall be at the
close of business on the day next preceding the day on which notice is given or,
if notice is waived, at the close of business on the date next preceding the day
on  which  the  meeting  is  held;  the record date for determining stockholders
entitled  to  express  consent to corporate action in writing without a meeting,
when no prior action by the Board of Directors is necessary, shall be the day on
which  the first written consent is delivered to the Corporation; and the record
date for determining stockholders for any other purpose shall be at the close of
business  on  the  day  on  which  the  Board of Directors adopts the resolution
relating  thereto.  A determination of stockholders of record entitled to notice
of or to vote at a meeting of stockholders shall apply to any adjournment of the
meeting;  provided,  however,  that  the Board of Directors may fix a new record
date  for  the  adjourned  meeting.

     SECTION  6.  Dividends.  Subject  to  the  provisions of the Certificate of
                  ---------
Incorporation,  the  Board  of  Directors  shall  have  power to declare and pay
dividends  upon  shares  of  stock  of  the  Corporation,  but only out of funds
available  for  the  payment  of  dividends  as  provided  by  law.

     Subject  to  the  provisions  of  the  Certificate  of  Incorporation,  any
dividends  declared  upon  the stock of the Corporation shall be payable on such
date  or  dates as the Board of Directors shall determine. If the date fixed for
the  payment  of  any dividend shall in any year fall upon a legal holiday, then
the  dividend  payable  on  such  date shall be paid on the next day not a legal
holiday.

     SECTION  7.  CorporateSeal.  The  Board of Directors may provide a suitable
                  -------------
seal,  containing  the  name of the Corporation, which seal shall be kept in the
custody  of  the  Secretary.  A duplicate of the seal may be kept and be used by
any  officer  of  the  Corporation  designated  by the Board of Directors or the
President.

     SECTION  8.  Fiscal  Year. The fiscal year of the Corporation shall be such
                  ------------
fiscal  year  as  the  Board  of Directors from time to time by resolution shall
determine.


                                   ARTICLE VI
                            Miscellaneous Provisions
                            ------------------------

     SECTION  1.  Checks,  Notes,  Etc..  All checks, drafts, bills of exchange,
                  ---------------------
acceptances, notes or other obligations or orders for the payment of money shall
be  signed  and, if so required by the Board of Directors, countersigned by such
officers  of the Corporation and/or other persons as the Board of Directors from
time  to  time  shall  designate.

     Checks,  drafts,  bills  of  exchange,  acceptances, notes, obligations and
orders  for the payment of money made payable to the Corporation may be endorsed
for  deposit  to the credit of the Corporation with a duly authorized depository
by the Treasurer and/or such other officers or persons as the Board of Directors
from  time  to  time  may  designate.

     SECTION 2. Loans. No loans and no renewals of any loans shall be contracted
                -----
on  behalf  of  the  Corporation except as authorized by the Board of Directors.
When  authorized  to  do  so, any officer or agent of the Corporation may effect
loans  and  advances  for  the Corporation from any bank, trust company or other
institution  or from any firm, corporation or individual, and for such loans and
advances  may  make,  execute  and  deliver  promissory  notes,  bonds  or other
evidences  of  indebtedness  of  the  Corporation. When authorized so to do, any
officer  or  agent  of  the  Corporation may pledge, hypothecate or transfer, as
security  for  the  payment  of  any  and  all loans, advances, indebtedness and
liabilities  of  the  Corporation,  any  and  all  stocks,  securities and other
personal  property  at  any  time  held  by the Corporation, and to that end may
endorse,  assign and deliver the same. Such authority may be general or confined
to  specific  instances.

     SECTION  3.  Contracts. Except as otherwise provided in these By-Laws or by
                  ---------
law  or  as  otherwise  directed by the Board of Directors, the President or any
Vice  President  shall  be authorized to execute and deliver, in the name and on
behalf  of  the Corporation, all agreements, bonds, contracts, deeds, mortgages,
and  other  instruments,  either  for  the  Corporation's  own  account  or in a
fiduciary  or  other  capacity, and the seal of the Corporation, if appropriate,
shall  be  affixed  thereto  by  any  of  such  officers  or the Secretary or an
Assistant Secretary. The Board of Directors, the President or any Vice President
designated  by  the Board of Directors may authorize any other officer, employee
or  agent  to execute and deliver, in the name and on behalf of the Corporation,
agreements,  bonds,  contracts,  deeds, mortgages, and other instruments, either
for  the  Corporation's own account or in a fiduciary or other capacity, and, if
appropriate,  to  affix  the  seal of the Corporation thereto. The grant of such
authority  by  the  Board  of  any  such  officer  may be general or confined to
specific  instances.

     SECTION  4.  Waivers of Notice. Whenever any notice whatever is required to
                  ---------- ------
be  given by law, by the Certificate of Incorporation or by these By-Laws to any
person  or persons, a waiver thereof in writing, signed by the person or persons
entitled  to  the notice, whether before or after the time stated therein, shall
be  deemed  equivalent  thereto.

     SECTION 5. Offices Outside of Delaware. Except as otherwise required by the
                ---------------------------
laws of the State of Delaware, the Corporation may have an office or offices and
keep  its  books,  documents and papers outside of the State of Delaware at such
place or places as from time to time may be determined by the Board of Directors
or  the  President.


                                   ARTICLE VII
                                   Amendments
                                   ----------

     These  By-Laws  and  any  amendment  thereof  may  be  altered,  amended or
repealed,  or  new  By-Laws  may  be  adopted,  by the Board of Directors at any
regular  or  special meeting by the affirmative vote of a majority of all of the
members  of  the Board, provided in the case of any special meeting at which all
of  the  members  of  the Board are not present, that the notice of such meeting
shall have stated that the amendment of these By-Laws was one of the purposes of
the meeting; but these By-Laws and any amendment thereof may be altered, amended
or  repealed  or  new By-Laws may be adopted by the holders of a majority of the
total  outstanding  stock  of  the  Corporation  entitled  to vote at any annual
meeting or at any special meeting, provided, in the case of any special meeting,
that  notice  of  such  proposed  alteration,  amendment,  repeal or adoption is
included  in  the  notice  of  the  meeting.




                                                              N00030EXHIBIT 21.1
                                                                    ------------

LIST  OF  SUBSIDIARIES  OF  THE  COMPANY
----------------------------------------

National  N-Viro  Tech.,  Inc.  (Ohio)
Midwest  N-Viro,  Inc.  (Illinois)
Tennessee-Carolina  N-Viro,  Inc.  (Tennessee)
N-Viro  Soil  South,  Inc.  (Florida)
N-Viro  Honolulu,  Inc.  (Hawaii)
Pan-American  N-Viro,  Inc.  (Delaware)
BioCheck  Laboratories,  Inc.  (Ohio)
American  N-Viro  Resources,  Inc.  (Ohio)




                                                                          ------
                                                                    EXHIBIT 24.1
                                                                    ------------

     POWER  OF  ATTORNEY
     -------------------


          KNOW  ALL  MEN  BY  THESE PRESENTS that the undersigned, a Director of
N-Viro International Corporation (the "Company"), a Delaware corporation that is
filing  an  Annual Report on Form 10-K ("Form 10-K") for the year ended December
31, 2003 with the Securities and Exchange Commission under the provisions of the
Securities and Exchange Act of 1934, as amended, hereby constitutes and appoints
James  K.  McHugh his true and lawful attorney-in-fact and agent, for him and in
his name, place and stead, in the capacity as Chief Executive Officer, President
and  Director  of the Company, to sign such Form 10-K and any and all amendments
thereto,  and to file such Form 10-K and each such amendment so signed, with all
exhibits  thereto,  and  any  and  all  other documents in connection therewith,
hereby granting unto said attorney-in-fact and agent full power and authority to
do and perform any and all acts and things requisite and necessary to be done in
and  about  the premises, as fully to all intents and purposes as he might do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
may  lawfully  do  or  cause  to  be  done  by  virtue  hereof.
          IN  WITNESS  WHEREOF, the undersigned hereunto sets his hand this 23rd
day  of  March,  2004.


               /s/  Terry  J.  Logan,  Ph.D.
               -----------------------------
               Terry  J.  Logan,  Ph.D.


                                                                          ------
                                                                    EXHIBIT 24.1
                                                                    ------------

     POWER  OF  ATTORNEY
     -------------------


          KNOW  ALL  MEN  BY  THESE PRESENTS that the undersigned, a Director of
N-Viro International Corporation (the "Company"), a Delaware corporation that is
filing  an  Annual Report on Form 10-K ("Form 10-K") for the year ended December
31, 2003 with the Securities and Exchange Commission under the provisions of the
Securities and Exchange Act of 1934, as amended, hereby constitutes and appoints
James  K.  McHugh his true and lawful attorney-in-fact and agent, for him and in
his  name,  place  and stead, in the capacity as Chief Operating Officer, Senior
Vice-President  and  Director, to sign such Form 10-K and any and all amendments
thereto,  and to file such Form 10-K and each such amendment so signed, with all
exhibits  thereto,  and  any  and  all  other documents in connection therewith,
hereby granting unto said attorney-in-fact and agent full power and authority to
do and perform any and all acts and things requisite and necessary to be done in
and  about  the premises, as fully to all intents and purposes as he might do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
may  lawfully  do  or  cause  to  be  done  by  virtue  hereof.
          IN  WITNESS  WHEREOF, the undersigned hereunto sets his hand this 23rd
day  of  March,  2004.


               /s/  Michael  G.  Nicholson
               ---------------------------
               Michael  G.  Nicholson


                                                                          ------
                                                                    EXHIBIT 24.1
                                                                    ------------

     POWER  OF  ATTORNEY
     -------------------


          KNOW  ALL  MEN  BY  THESE PRESENTS that the undersigned, a Director of
N-Viro International Corporation (the "Company"), a Delaware corporation that is
filing  an  Annual Report on Form 10-K ("Form 10-K") for the year ended December
31, 2003 with the Securities and Exchange Commission under the provisions of the
Securities and Exchange Act of 1934, as amended, hereby constitutes and appoints
James  K.  McHugh his true and lawful attorney-in-fact and agent, for him and in
his  name,  place and stead, in the capacity as Director, to sign such Form 10-K
and  any  and  all  amendments thereto, and to file such Form 10-K and each such
amendment  so signed, with all exhibits thereto, and any and all other documents
in  connection  therewith,  hereby granting unto said attorney-in-fact and agent
full power and authority to do and perform any and all acts and things requisite
and  necessary to be done in and about the premises, as fully to all intents and
purposes as he might do in person, hereby ratifying and confirming all that said
attorney-in-fact and agent may lawfully do or cause to be done by virtue hereof.
          IN  WITNESS  WHEREOF, the undersigned hereunto sets his hand this 23rd
day  of  March,  2004.


               /s/  Brian  Burns
               -----------------
               Brian  Burns


                                                                          ------
                                                                    EXHIBIT 24.1
                                                                    ------------

     POWER  OF  ATTORNEY
     -------------------


          KNOW  ALL  MEN  BY  THESE PRESENTS that the undersigned, a Director of
N-Viro International Corporation (the "Company"), a Delaware corporation that is
filing  an  Annual Report on Form 10-K ("Form 10-K") for the year ended December
31, 2003 with the Securities and Exchange Commission under the provisions of the
Securities and Exchange Act of 1934, as amended, hereby constitutes and appoints
James  K.  McHugh his true and lawful attorney-in-fact and agent, for him and in
his  name,  place and stead, in the capacity as Director, to sign such Form 10-K
and  any  and  all  amendments thereto, and to file such Form 10-K and each such
amendment  so signed, with all exhibits thereto, and any and all other documents
in  connection  therewith,  hereby granting unto said attorney-in-fact and agent
full power and authority to do and perform any and all acts and things requisite
and  necessary to be done in and about the premises, as fully to all intents and
purposes as he might do in person, hereby ratifying and confirming all that said
attorney-in-fact and agent may lawfully do or cause to be done by virtue hereof.
          IN  WITNESS  WHEREOF, the undersigned hereunto sets his hand this 23rd
day  of  March,  2004.


               /s/  Christopher  Anderson
               --------------------------
               Christopher  Anderson


                                                                          ------
                                                                    EXHIBIT 24.1
                                                                    ------------

     POWER  OF  ATTORNEY
     -------------------


          KNOW  ALL  MEN  BY  THESE PRESENTS that the undersigned, a Director of
N-Viro International Corporation (the "Company"), a Delaware corporation that is
filing  an  Annual Report on Form 10-K ("Form 10-K") for the year ended December
31, 2003 with the Securities and Exchange Commission under the provisions of the
Securities and Exchange Act of 1934, as amended, hereby constitutes and appoints
James  K.  McHugh his true and lawful attorney-in-fact and agent, for him and in
his  name,  place and stead, in the capacity as Director, to sign such Form 10-K
and  any  and  all  amendments thereto, and to file such Form 10-K and each such
amendment  so signed, with all exhibits thereto, and any and all other documents
in  connection  therewith,  hereby granting unto said attorney-in-fact and agent
full power and authority to do and perform any and all acts and things requisite
and  necessary to be done in and about the premises, as fully to all intents and
purposes as he might do in person, hereby ratifying and confirming all that said
attorney-in-fact and agent may lawfully do or cause to be done by virtue hereof.
          IN  WITNESS  WHEREOF,  the undersigned hereunto sets his hand this 9th
day  of  April,  2004.


               /s/  Daniel  J.  Haslinger
               --------------------------
               Daniel  J.  Haslinger


                                                                          ------
                                                                    EXHIBIT 24.1
                                                                    ------------

     POWER  OF  ATTORNEY
     -------------------


          KNOW  ALL  MEN  BY  THESE PRESENTS that the undersigned, a Director of
N-Viro International Corporation (the "Company"), a Delaware corporation that is
filing  an  Annual Report on Form 10-K ("Form 10-K") for the year ended December
31, 2003 with the Securities and Exchange Commission under the provisions of the
Securities and Exchange Act of 1934, as amended, hereby constitutes and appoints
James  K.  McHugh his true and lawful attorney-in-fact and agent, for him and in
his  name,  place and stead, in the capacity as Director, to sign such Form 10-K
and  any  and  all  amendments thereto, and to file such Form 10-K and each such
amendment  so signed, with all exhibits thereto, and any and all other documents
in  connection  therewith,  hereby granting unto said attorney-in-fact and agent
full power and authority to do and perform any and all acts and things requisite
and  necessary to be done in and about the premises, as fully to all intents and
purposes as he might do in person, hereby ratifying and confirming all that said
attorney-in-fact and agent may lawfully do or cause to be done by virtue hereof.
          IN  WITNESS  WHEREOF, the undersigned hereunto sets his hand this 26th
day  of  March,  2004.


               /s/  R.  Francis  DiPrete
               -------------------------
               R.  Francis  DiPrete


                                                                          ------
                                                                    EXHIBIT 24.1
                                                                    ------------

     POWER  OF  ATTORNEY
     -------------------


          KNOW  ALL  MEN  BY  THESE PRESENTS that the undersigned, a Director of
N-Viro International Corporation (the "Company"), a Delaware corporation that is
filing  an  Annual Report on Form 10-K ("Form 10-K") for the year ended December
31, 2003 with the Securities and Exchange Commission under the provisions of the
Securities and Exchange Act of 1934, as amended, hereby constitutes and appoints
James  K.  McHugh his true and lawful attorney-in-fact and agent, for him and in
his  name,  place and stead, in the capacity as Director, to sign such Form 10-K
and  any  and  all  amendments thereto, and to file such Form 10-K and each such
amendment  so signed, with all exhibits thereto, and any and all other documents
in  connection  therewith,  hereby granting unto said attorney-in-fact and agent
full power and authority to do and perform any and all acts and things requisite
and  necessary to be done in and about the premises, as fully to all intents and
purposes as he might do in person, hereby ratifying and confirming all that said
attorney-in-fact and agent may lawfully do or cause to be done by virtue hereof.
          IN  WITNESS  WHEREOF, the undersigned hereunto sets his hand this 23rd
day  of  March,  2004.


               /s/  Phillip  Levin
               -------------------
               Phillip  Levin


                                                                    Exhibit 31.1
                                                                     -----------


                                  CERTIFICATION

     I,  Terry  J.  Logan,  certify  that:

1.     I  have  reviewed  this  Form  10-K  of N-Viro International Corporation;

2.     Based  on my knowledge, this report does not contain any untrue statement
of  a  material  fact  or  omit  to  state a material fact necessary to make the
statements  made, in light of the circumstances under which such statements were
made,  not  misleading  with  respect  to  the  period  covered  by this report;

3.     Based  on  my  knowledge,  the  financial statements, and other financial
information included in this report, fairly present in all material respects the
financial  condition,  results of operations and cash flows of the registrant as
of,  and  for,  the  periods  presented  in  this  report;

4.     The  registrant's  other  certifying officer(s) and I are responsible for
establishing  and  maintaining disclosure controls and procedures (as defined in
Exchange  Act  Rules  13a-15(e)  for  the  registrant  and  have:

     (a)  Designed  such  disclosure  controls  and  procedures,  or caused such
disclosure  controls  and  procedures  to  be designed under our supervision, to
ensure  that  material  information  relating  to  the registrant, including its
consolidated  subsidiaries, is made known to us by others within those entities,
particularly  during  the  period  in  which  this  report  is  being  prepared;

     (b)  Evaluated  the  effectiveness  of the registrant's disclosure controls
and  procedures  and  presented  in  this  report  our  conclusions  about  the
effectiveness  of  the  disclosure controls and procedures, as of the end of the
period  covered  by  this  report  based  on  such  evaluation;  and

     (c)  Disclosed  in  this  report  any  change  in the registrant's internal
control  over  financial  reporting  that  occurred during the registrant's most
recent  fiscal quarter (the registrant's fourth fiscal quarter in the case of an
annual  report)  that  has  materially  affected,  or  is  reasonably  likely to
materially  affect,  the registrant's internal control over financial reporting;
and

5.     The  registrant's other certifying officer(s) and I have disclosed, based
on  our  most recent evaluation of internal control over financial reporting, to
the  registrant's  auditors and the audit committee of the registrant's board of
directors  (or  persons  performing  the  equivalent  functions):

     (a)  All  significant deficiencies and material weaknesses in the design or
operation  of  internal  control  over  financial reporting which are reasonably
likely  to  adversely  affect  the  registrant's  ability  to  record,  process,
summarize  and  report  financial  information;  and

     (b)  Any  fraud, whether or not material, that involves management or other
employees  who have a significant role in the registrant's internal control over
financial  reporting.

Dated:  April  14,  2004


/s/  Terry  J.  Logan
---------------------
Terry  J.  Logan,  Chief  Executive  Officer


                                                                    Exhibit 31.2
                                                                     -----------


                                  CERTIFICATION

     I,  James  K.  McHugh,  certify  that:

1.     I  have  reviewed  this  Form  10-K  of N-Viro International Corporation;

2.     Based  on my knowledge, this report does not contain any untrue statement
of  a  material  fact  or  omit  to  state a material fact necessary to make the
statements  made, in light of the circumstances under which such statements were
made,  not  misleading  with  respect  to  the  period  covered  by this report;

3.     Based  on  my  knowledge,  the  financial statements, and other financial
information included in this report, fairly present in all material respects the
financial  condition,  results of operations and cash flows of the registrant as
of,  and  for,  the  periods  presented  in  this  report;

4.     The  registrant's  other  certifying officer(s) and I are responsible for
establishing  and  maintaining disclosure controls and procedures (as defined in
Exchange  Act  Rules  13a-15(e)  for  the  registrant  and  have:

     (a)  Designed  such  disclosure  controls  and  procedures,  or caused such
disclosure  controls  and  procedures  to  be designed under our supervision, to
ensure  that  material  information  relating  to  the registrant, including its
consolidated  subsidiaries, is made known to us by others within those entities,
particularly  during  the  period  in  which  this  report  is  being  prepared;

     (b)  Evaluated  the  effectiveness  of the registrant's disclosure controls
and  procedures  and  presented  in  this  report  our  conclusions  about  the
effectiveness  of  the  disclosure controls and procedures, as of the end of the
period  covered  by  this  report  based  on  such  evaluation;  and

     (c)  Disclosed  in  this  report  any  change  in the registrant's internal
control  over  financial  reporting  that  occurred during the registrant's most
recent  fiscal quarter (the registrant's fourth fiscal quarter in the case of an
annual  report)  that  has  materially  affected,  or  is  reasonably  likely to
materially  affect,  the registrant's internal control over financial reporting;
and

5.     The  registrant's other certifying officer(s) and I have disclosed, based
on  our  most recent evaluation of internal control over financial reporting, to
the  registrant's  auditors and the audit committee of the registrant's board of
directors  (or  persons  performing  the  equivalent  functions):

     (a)  All  significant deficiencies and material weaknesses in the design or
operation  of  internal  control  over  financial reporting which are reasonably
likely  to  adversely  affect  the  registrant's  ability  to  record,  process,
summarize  and  report  financial  information;  and

     (b)  Any  fraud, whether or not material, that involves management or other
employees  who have a significant role in the registrant's internal control over
financial  reporting.

Dated:  April  14,  2004


/s/  James  K.  McHugh
----------------------
James  K.  McHugh,  Chief  Financial  Officer


                                                                   Exhibit 32.1
                                                                     -----------



      CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO SECTION 906 OF THE
                           SARBANES-OXLEY ACT OF 2002


I,  Terry  J.  Logan,  the  Chief  Executive  Officer  of  N-Viro  International
Corporation, certify that (i) the Form 10-K fully complies with the requirements
of  Section  13(a)  or 15(d) of the Securities Exchange Act of 1934 and (ii) the
information  contained  in  the  Form  10-K  fairly  presents,  in  all material
respects,  the  financial  condition  and  results  of  operations  of  N-Viro
International  Corporation.


/s/  Terry  J.  Logan
---------------------
Terry  J.  Logan,  Chief  Executive  Officer
April  14,  2004



                                                                    Exhibit 32.2
                                                                     -----------



      CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO SECTION 906 OF THE
                           SARBANES-OXLEY ACT OF 2002


I,  James  K.  McHugh,  the  Chief  Financial  Officer  of  N-Viro International
Corporation, certify that (i) the Form 10-K fully complies with the requirements
of  Section  13(a)  or 15(d) of the Securities Exchange Act of 1934 and (ii) the
information  contained  in  the  Form  10-K  fairly  presents,  in  all material
respects,  the  financial  condition  and  results  of  operations  of  N-Viro
International  Corporation.


/s/  James  K.  McHugh
----------------------
James  K.  McHugh,  Chief  Financial  Officer
April  14,  2004