XNL Xethanol Corp.

Xethanol Corporation (AMEX: XNL), a renewable energy company, today reported financial results for the first quarter ended March 31, 2008. For the three months ended March 31, 2008, the company reported a net loss of $2.0 million, or ($0.07) per share, as compared to a $5.5 million net loss, or ($0.19) per share, for the same period of the prior year. The reduction in the net loss was primarily related to significantly lower general and administrative costs and equity compensation expenses compared to the same period in the prior year, as well as a gain from the sale of a portion of the company�s investment in New Generation Biofuels Holdings, Inc. (formerly named H2Diesel Holdings, Inc.). David Ames, President and CEO of Xethanol, commented, �We continue to make progress in improving our operating results, particularly by reducing our cost structure to fit the current size of the business and market conditions. We are also evaluating potential merger partners, investments, new business product lines, and acquisitions.� Review of the Quarter The company reported net sales of $3.0 million in first quarter 2008, which was a 24.3% increase over the same period in the prior year. Cost of goods sold was $3.6 million for the year compared to $2.9 million in the prior year. The increase was attributable to an increase in gallons of ethanol sold at the company�s Blairstown, Iowa ethanol plant as well as higher costs for corn and fuel for the plant compared to the same period in the prior year. The company had an operating loss for quarter. Because of the continued high prices for corn and gas, on May 1, 2008 the company temporarily ceased production of ethanol at its Blairstown plant to reduce its operating losses. Management is monitoring the situation closely and evaluating strategies for the plant. General and administrative (G&A) costs were $1.7 million in first quarter 2008 compared to $2.7 million for the comparable period in the prior year. The reduction in G&A was primarily due to a decrease in legal and accounting fees as well as lower costs associated with the termination of the CoastalXethanol operations and other cost savings measures implemented by management. During first quarter 2008, the company reported: 1. Lower equity compensation expense of $137,000 as compared to $1.6 million in the same period of the prior year 2. A $757,000 gain on the sale of a portion of the company�s shares of the common stock of New Generation Biofuels Holdings; 3. A $346,000 reduction in the net loss in equity of New Generation Biofuels Holdings. The company had cash, cash equivalents and marketable securities of $10.1 million at March 31, 2008 and $9.5 million as of May 7, 2008. Attached are the unaudited consolidated statement of operations for the three months ended March 31, 2008 and 2007 and unaudited consolidated balance sheets at March 31, 2008 and December 31, 2007. For more information about the Company�s financial performance, please see the Quarterly Report on Form 10-Q for the three months ended March 31, 2008 that was filed with the SEC and which is available at the SEC�s website at www.sec.gov. About Xethanol Corporation Xethanol Corporation is a renewable energy company focused on alternate energy products and technologies as well as producing ethanol and other co-products. Xethanol is focusing on renewable energy and clean technology, including biomass gasification for electricity production, wind power, solar power, energy storage, energy infrastructure, energy efficiency, waste recycling and agricultural processes. Xethanol has research agreements in place, including several aimed at efficient production of cellulosic ethanol. The company is working with some of the nation�s leading scientific institutions, including the National Renewable Energy Lab in Golden, Colorado; Virginia Tech in Blacksburg, Virginia; the USDA Forest Products Lab in Madison, Wisconsin; and the Energy and Environmental Research Lab in Grand Forks, North Dakota. For more information about Xethanol, please visit its website at http://www.xethanol.com. Forward Looking Statements Some of the statements made in this press release may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on management�s current expectations and include known and unknown risks, uncertainties and other factors, many of which the company is unable to predict or control, that may cause the company�s actual results or performance to differ materially from any future results or performance expressed or implied by such forward-looking statements. These statements involve risks and uncertainties, including risks and uncertainties associated with the company�s business and cost reduction strategies and its research projects. These risks and uncertainties are in addition to other factors detailed from time to time in the company�s filings with the SEC, including the section entitled �Risk Factors� in its annual report on Form 10-K for the year ended December 31, 2007 filed with the SEC on March 31, 2008. The company cautions investors that any forward-looking statements made by the company are not necessarily indicative of future performance. The company is not responsible for updating the information contained in this press release beyond the published date, or for changes made to this document by wire services or Internet services. XETHANOL CORPORATION Consolidated Statement of Operations (in thousands, except per share data) � � Three Months Ended March 31, 2008 � 2007 (Unaudited) (Unaudited) � Net sales $ 3,012 $ 2,423 Cost of sales, including depreciation of $115 and $113 for 2008 and 2007, respectively � 3,561 � 2,884 � Gross loss � (549 ) � (461 ) � � Operating expenses: General and administrative expenses 1,740 2,733 Equity compensation 137 1,559 Depreciation and amortization 18 17 Research and development � 65 � � 272 � Total operating expenses � 1,960 � � 4,581 � � Loss from operations before other income (expense) � (2,509 ) � (5,042 ) � Other income (expense): Interest income 72 140 Interest expense (13 ) (14 ) Gain on sale of investment in New Generation Biofuels Holdings, Inc. 757 - Loss on equity of New Generation Biofuels Holdings, Inc. (280 ) (626 ) Other income � 1 � � 1 � Total other (expense) income � 537 � � (499 ) � Net loss $ (1,972 ) $ (5,541 ) � Basic and diluted net loss per share $ (0.07 ) $ (0.19 ) � Weighted average number of shares outstanding � 28,609,103 � � 28,543,468 � XETHANOL CORPORATION Consolidated Balance Sheets (in thousands) � � March 31, 2008 � December 31, 2007 (Unaudited) ASSETS Current assets: Cash and cash equivalents $ 10,135 $ 12,322 Receivables 415 564 Inventories 290 294 Other current assets � 1,050 � � 879 � Total current assets 11,890 14,059 � � Property and equipment, net 4,191 4,316 Property held for development 554 554 Property previously held for development 5,416 5,416 Investment in and advances to New Generation Biofuels Holdings, Inc. 347 647 Research and license agreements, net of amortization of $477 and $409 in 2008 and 2007, respectively 555 623 Other assets � 1,154 � � 403 � TOTAL ASSETS $ 24,107 � $ 26,018 � � � LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable and accrued expenses $ 3,151 � $ 3,221 � Total current liabilities 3,151 3,221 � Note payable 291 295 Minority interest 116 116 Capitalized lease obligation � 12 � � 14 � Total liabilities � 3,570 � � 3,646 � � Commitments and contingencies � Stockholders' equity: Preferred stock, $0.01 par value, 1,000,000 shares authorized; 0 shares issued and outstanding - - Common stock, $0.001 par value, 100,000,000 shares authorized; 28,609,103 shares issued and outstanding in 2008 and 2007, respectively 29 29 Additional paid-in-capital 89,308 89,171 Accumulated deficit � (68,800 ) � (66,828 ) Total stockholders' equity � 20,537 � � 22,372 � TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 24,107 � $ 26,018 �