Allegations denied.

NORTH LINDENHURST, N.Y.--(BUSINESS WIRE)--Jan. 10, 1997--KBF Pollution Management Inc. stated today that a Suffolk County, New York grand jury issued an indictment against KBF, and its president, Larry Kreisler. The indictment was made public yesterday, Jan. 9, 1997 by the Suffolk County District Attorney.

The indictment against KBF and Kreisler contains eight counts: one charging that KBF diluted its discharge to the sewer system in order to achieve discharge standards and that it keeps false records relating to the discharges between January 1988 and April 1996, two counts charging illegal dealing in hazardous waste, and five counts of filing a false document. All counts except the first refer to purported activities which took place prior to September 1994. There is no allegation that KBF or its employees caused any damage to the environment.

Through his attorney, Fred Eisenbud of Cahn Wishod & Lamb in Melville, N.Y., Kreisler denied all of the allegations, and indicated that a motion to dismiss will be filed as soon as possible. "Mr. Kreisler is confident that the court on motion or a jury after trial will find that the charges are completely without substance," Eisenbud said. "KBF and its president are anxious to have the earliest possible determination of the charges so that the two-year old cloud which has hung over KBF can be removed and its good name restored."

Eisenbud stated it is the company's belief that the charges stem from unfounded assertions by disgruntled former employees who had been discharged for cause. "Following the execution of a search warrant more than two years ago," Eisenbud said, "KBF repeatedly asked the District Attorney to take the matter to the grand jury so that KBF would have a chance to clear its name, but the District Attorney refused to do so until recently."

KBF has been operating since 1986 under extremely strict federal, state and county regulations. During that time, it has processed thousands of gallons of metals-bearing liquid waste each week, and has recovered for recycling over 100,000 pounds of metals annually. Eisenbud noted that the company has never been charged with any permit violation relating to the operation of its facility, even though it is the subject of multiple, unannounced,inspections by one or more regulatory agencies every month.

"We have always provided and will continue to provide environmentally safe metals removal and recycling services to our over 1650 customers in complete compliance with all of our permits and exemptions," Kreisler said through his attorney. He added, "We ask our customers to bear with us while we clear our name once and for all."

Kreisler holds the patent-pending technology for removing metals from liquid waste streams that is used by KBF. The company trades on the NASDAQ Bulletin Board ("KBFP").

CONTACT: KBF Pollution Management

516/225-0007