Quality Stocks News-SSWM Reports 2006 Financial Results

Quality Stocks News-SSWM Reports 2006 Financial Results

Tuesday January 16 Company Closes U.S. Gas Station Projects to Concentrate on Mexico Environmental Infrastructure Projects

CARLSBAD, Calif.--Sub-Surface Waste Management of Delaware, Inc., (SSWM) today announced audited financial results for fiscal year 2006 ended September 30, 2006.

SSWM CEO Bruce Beattie commented, "FY 2006 was clearly a transition year as we made the decision to close five retails gas station cleanups in the U.S. in favor of environmental infrastructure projects in Mexico where our full resources were successfully spent securing significant new contract work that will build and sustain a steady revenue stream in 2007 and beyond. Our current $2.4MM in projects in progress in Mexico already surpasses the 2006 total fiscal year revenues by almost 400% and we expect to increase this revenue rate as additional contracts with the State of Puebla, CFE (Comision Federal de Electricidad) and other clients begin in 2007. We have set the stage for significant growth in 2007 and beyond based upon proven technology, government enforcement, political support, and new financial and technical partnerships."

Results of Operations For Year Ended September 30, 2006

The Company's revenues for year ended September 30, 2006 were $508,460 compared to $1,094,775 for the year ended September 30, 2005; a decrease of 54 percent. Revenues decreased primarily due to the Company's withdrawal from its projects in South Carolina and from the time delay resulting from the startup of its operations in Mexico. Revenues for the year ended September 30, 2006, consisted primarily of bio-remediation of hydro-carbons in contaminated soil for the projects in Mexico. The Company incurred a gross profit loss for the year ended September 30, 2006 of $174,883 compared to $287,092 gross profit for the year ended September 30, 2005 primarily due to the write off of $201,641 of costs and estimated profits associated with the closure of the five active projects in South Carolina.

The Company incurred a net loss of $2,283,895 for the year ended September 30, 2006, compared to $1,627,719 for the year ended September 30, 2005. The Company had negative cash flows from operations of $740,675 for the year ended September 30, 2006, compared to negative cash flows from operations of $887,591 for the year ended September 30, 2005. Basic and diluted net loss per share was $0.03 for the year ended September 30, 2006 and $0.04 for the year ended September 30, 2005. Weighted average common shares outstanding increased from 43,249,462 for the year ended September 30, 2005 to 76,536,237 for the year ended September 30, 2006.

During the year ended September 30, 2006, the Company incurred $2,031,547 in selling, general and administrative expenses, compared to $1,762,396 for the year ended September 30, 2005. The increase in selling, general and administrative expenses of approximately $269,151 was primarily due to increases in legal, accounting, payroll expenses and business development expenses in Mexico.

Depreciation expense for the year ended September 30, 2006 was $24,714 compared to $13,233 for the year ended September 30, 2005. The increase was due principally to the purchase of equipment related to the startup of operations in Mexico. Interest expense for the years September 30, 2006 and 2005 respectively were $53,509 and $141,027. During this year notes payable decreased by $57,321 and therefore there was a decrease in interest expense.

Liquidity and Capital Resources:

As of September 30, 2006, the Company had a negative working capital of $117,746 compared to working capital of $430,810 at September 30, 2005, or a decrease of $548,556 in the working capital. During the year ended September 30, 2006, the Company incurred a cash flow deficit of $740,675 from operating activities. Cash flows used in investing activities resulted in a deficit of $57,032 during the year ended 2006. The Company met its cash requirements during this period through the issuance of common and preferred stock totaling $741,503 in proceeds. $345,000 was also drawn from a $500,000 line of credit to provide additional funds. Cash totaled $310,809 as of September 30, 2006.

A consolidated financial recap of results for FY 2006, 2005 and 2004 are shown in the following table:

SSWM Audited Financial Results

                     2006-2005

                      % Change     2006      % Rev    2005      % Rev

Revenue                    -54%    $508,460   100%  $1,094,775    100%

Cost of Rev                -15%    $683,343   134%    $807,683     74%

Gross profit              -161%   -$174,883   -34%    $287,092     26%

SG & A                      15%  $2,031,547   400%  $1,762,396    161%

Depn                                $24,714            $13,233      1%

Total operating             16%  $2,056,261   404%  $1,775,629    162%

Loss from Operations        50% -$2,231,144  -439% -$1,488,537   -136%

Other Income/expense

Interest Income            -59%        $758     0%      $1,845      0%

Interest Expense           -62%    -$53,509   -11%   -$141,027    -13%

Total other                -62%    -$52,751   -10%   -$139,182    -13%

Net Loss                    40% -$2,283,895  -449% -$1,627,719   -149%

Net Loss/share                       -$0.03             -$0.04

Weighted Average

 Common Stock Out                76,536,237         43,249,462

Balance Sheet

Current Assets             -22%     936,866         $1,194,608

Fixed Assets                49%     101,404            $68,086

Other Assets               -86%       7,335            $54,069

Total Assets               -21%  $1,045,605         $1,316,763

Current Liabilities         38%   1,054,612           $763,798

Long Term Liabilities                     0                 $0

Total Liabilities           38%  $1,054,612           $763,798

Total Stockholders

 Equity                   -102%     -10,007           $552,965

Total Liabilities and

 Stockholder Equity        -21%  $1,044,605         $1,316,763

Net Working Capital       -127%   -$117,746           $430,810

                                                   2004         % Rev

Revenue                                               $234,018    100%

Cost of Rev                                           $273,231    117%

Gross profit                                          -$39,213    -17%

SG & A                                              $3,104,724   1327%

Depn                                                    $5,098      2%

Total operating                                     $3,109,822   1329%

Loss from Operations                               -$3,149,035  -1346%

Other Income/expense

Interest Income                                         $3,432      1%

Interest Expense                                     -$171,032    -73%

Total other                                          -$167,600    -72%

Net Loss                                           -$3,316,635  -1417%

Net Loss/share                                          -$0.15

Weighted Average Common Stock Out                   22,313,409

Balance Sheet

Current Assets                                        $784,960

Fixed Assets                                           $28,673

Other Assets                                            $2,919

Total Assets                                          $816,552

Current Liabilities                                   $760,067

Long Term Liabilities                                       $0

Total Liabilities                                     $760,067

Total Stockholders Equity                              $56,485

Total Liabilities and Stockholder Equity              $816,552

Net Working Capital                                    $24,893

The consolidated financial data above has been derived from the Company's Financial Statements for the periods ending 2004, 2005 and 2006 as shown. For the full financial report and additional information and a discussion of risk factors, please see the SSWM current 10Q & past 10K reports at www.sec.gov .

About Sub-Surface Waste Management

Sub-Surface Waste Management Inc. is a majority owned subsidiary of U.S. Microbics, Inc. (OTCBB:BUGS - News) and provides comprehensive civil and environmental engineering project management services including specialists to design, permit, build and operate environmental waste clean-up treatment systems using conventional, biological and filtration technologies. SSWM is capitalizing on its patented technologies registered in Mexico with SEMARNAT a Federal regulatory agency overseeing environmental compliance nationwide.

Investors and media contact Bruce Beattie at 760/918-1860, ext. 105 or bbeattie@bugsatwork.com; or learn about the company by visiting its Web site at www.subsurfacewastemanagement.com

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The information contained in this press release includes forward-looking statements. Forward-looking statements usually contain the words "estimate," "anticipate," "believe," "expect" or similar expressions that involve risks and uncertainties. These risks and uncertainties include the company's status as a startup company with uncertain profitability, need for significant capital, uncertainty concerning market acceptance of its products, competition, limited service and manufacturing facilities, dependence on technological developments and protection of its intellectual property. The company's actual results could differ materially from those discussed herein. Factors that could cause or contribute to such differences are discussed more fully in the "Risk Factors," "Management's Discussion and Analysis or Plan of Operation" and other sections of the company's Form 10-KSB and other publicly available information regarding the company on file with the Securities and Exchange Commission. The company will provide you with copies of this information upon request.

Contact:

Sub-Surface Waste Management Inc.

Bruce Beattie, 760/918-1860, ext. 105

bbeattie@bugsatwork.com

www.subsurfacewastemanagement.com