General Environmental Management Inc. announced today after the closing bell that it has entered into a Letter of Intent to execute formal agreements with Bio-Energy Solutions Group, Inc. (BESG) to manage their waste-to-energy operations in Pernambuco, Brazil. Responsibilities would include the collection and processing of municipal solid waste and subsequent conversion to alternative energy. The management agreement has a term of 15 years.

“We are very pleased to have entered into a Letter of Intent to formalize a management contract services relationship with BESG,” stated Timothy J. Koziol, CEO of GEM. “BESG has contracts for 34 towns in the state of Pernambuco, Brazil, with additional towns requesting contracts. BESG offers a compelling alternative to the traditional landfill approach by reducing municipal solid waste using natural processes, extracting marketable recyclates from the waste input stream, and enabling the residual biomass to be used as feedstock for generating renewable energy in an environmental friendly manner.”

Koziol continued, “This waste-to-energy (WTE) project is enormous in scope, and GEM will have to consider the best use of resources to accomplish the management of this project, but we are pleased to have been chosen and look forward to making this project the main focus of our business activities. GEM will therefore not complete the financing and acquisition of California Living Waters. The formal purchase agreements called for GEM to make a payment to United Stated Environmental Response LLC on June 30, 2010, which we will not make. Although we believe in the opportunity to build a strong and profitable company with Southern California Waste Water as a foundational entity, we will change our focus to the WTE arena and build an international enterprise with BESG, beginning with Brazil.”

John Creel, CEO of BESG, commented, “I am thrilled to have the GEM management team join forces with BESG. We expect them to bring the same expertise for growth and development that catapulted them onto Deloitte’s 2009 Technology Fast 500 Ranking for North America as we provide solutions to some of the waste issues affecting our environment today. The world is faced with massive problems involving landfills, including running out of room, destruction of the surrounding environment, and the atmospheric pollution of nearby communities. Municipalities around the world are seeking an affordable answer to these ever-increasing problems. What better solution than to collect and convert the waste in a process that is eco-friendly and produces much needed eco-friendly power through our patented technology.”

Over the past two years, Johannes Steinacker, BESG Executive Vice President of Sales for South America, has methodically built a strong presence in Brazil. In 2008, he was appointed by the Brazilian government to be their Special Secretary of State for Foreign Business and Investment, and later resigned when offered the position of Vice President of the newly formed Chamber for New Business Development for the State of Pernambuco. Steinacker said, “The initial installation of a facility in the state of Pernambuco, Brazil is expected to serve primarily organic materials from towns in two states. It is anticipated that 4,900,000 tons per year of feedstock from over 368 municipalities will be managed by this initial facility by the end of 2011.”

“Although the task is challenging, we believe the need for a solution like the one BESG brings to the table is critical, and we are thrilled to partner with BESG,” added Bill Mitzel, President and COO of GEM. “We have proven our ability to manage and provide environmental solutions, and believe this solution may be the beginning of a long-term solution for WTE operations.”

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