BUGS Subsidiary Spin-Off on Schedule for Offering Registration; BUGS Shareholders to Own Part Of Energy Efficient Senior Housing Development Co.

Business Editors

U.S. Microbics Inc. (OTCBB:BUGS) announced today that the merger of its subsidiary with Capitol Group Holdings Inc. (CGHI) and the subsequent spin-off of this subsidiary is proceeding on schedule with anticipated S.E.C. filing of the SB-2 offering registration documents on or about July 31, 2002.

In conjunction with the spin-off, BUGS has also announced that it will distribute a stock dividend, to U.S. Microbics' common stock shareholders of record date July 3, 2002, consisting of free trading common shares of CGHI issued at the rate of one common share of CGHI for every 18 common shares of U.S. Microbics owned by a shareholder. This date is the last date for settlement of shares bought previously. In many cases, brokers require three days to settle or finalize a purchase transaction. If this is the case the last day to buy and be eligible for the dividend would be June 28, 2002. Stock purchasers should check with their brokers as to the last date to buy and still be legally eligible for the stock dividend. The stock dividend will be payable shortly after the effective date of the CGHI registration with the Securities Exchange Commission.

About CGHI

CGHI is entering the new and exciting market of "affordable quality senior housing." The senior housing market is expected to triple from $126 billion in 2005 to $490 billion in 2030 with most of the growth due to the aging baby boomer population. Working closely with Fleetwood Homes (NYSE:FLE), one of the largest builders of manufactured homes, and the energy community, CGHI will introduce the first-ever "Energy Star" manufactured housing development. The Energy Star program is a federal guarantee program that states the monthly cost of heating and cooling, a major concern for seniors. The rating for Homes in the first project is "5-STAR" with a $21 per month guarantee for the cost of heating and cooling. CGHI believes that everybody is entitled to a quality retirement, regardless of income or financial ability.

About U.S. Microbics Inc.

U.S. Microbics Inc. is an emerging global environmental company using conventional and biological technology to provide better, faster, cheaper and safer environmental cleanup solutions. For further information about U.S. Microbics contact Robert Brehm by phone at 760/918-1860, ext. 102 or learn about the company by visiting the Web site at www.bugsatwork.com.

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.