NEW ORLEANS, LA -- (MARKET WIRE) -- 10/24/06 -- Kahn Gauthier Swick, LLC ("KGS") has filed the first class action lawsuit in the United States District Court for the Southern District of New York, on behalf of shareholders who purchased, exchanged or otherwise acquired the common stock of Xethanol Corp. ("Xethanol" or the "Company'') (AMEX: XNL) between January 31, 2006 and August 8, 2006 (the "Class Period").

Xethanol and certain of its officers and directors are charged with issuing a series of materially false and misleading statements in violation of Section 10(b) and 20(a) of the Exchange Act and Rule 10b-5 promulgated thereunder. Throughout the Class Period, Xethanol repeatedly assured investors that it could sustain itself on revenue from corn ethanol production while successfully commercializing biomass ethanol production. In fact, however, as investors have now learned, Xethanol was suffering from a host of undisclosed adverse factors that negatively impacted its business and it appears that they do not have the ability to commercialize biomass ethanol in the foreseeable near term. As investors learned the truth about Xethanol, shares of the Company declined precipitously -- falling from a Class Period high of over $15 per share in April 2006, to less than $4.00 per share by the end of the Class Period. While shares of Xethanol were artificially inflated during the Class Period, certain insiders were able to liquidate millions of dollars of their personally held Xethanol shares.

Particularly, the complaint alleges that Xethanol: (1) misrepresented management's experience and standard of ethics; (2) omitted disclosing a series of related party transactions and association with investors who had alarming records of stock fraud and related shareholder abuses; (3) materially overstated the Company's profitability by under-reporting the true costs associated with completing a biomass to ethanol production facility, and by failing to make proper adjustments to the Company's financial reports; (4) lacked any reasonable basis to assert that the Company was operating according to plan or could achieve the near-term commercialization of biomass ethanol production, or achieve the guidance sponsored and/or endorsed by the Company; and (5) caused plaintiffs and other Class members to purchase Xethanol common stock at artificially inflated prices.

If you wish to serve as lead plaintiff, you must move the Court no later than 60 days from today. Any member of the purported class may move the Court to serve as lead plaintiff through counsel of their choice, or may choose to do nothing and remain an absent class member. If you would like to discuss your legal rights, you may e-mail or call KGS, without obligation or cost to you. You may contact Managing Partner Lewis Kahn of KGS direct, toll free 1-866-467-1400, ext., 100, or 504-648-1850, or by email at lewis.kahn@kglg.com. You may also visit http://www.kglg.com/case/case.asp?lngCaseId=4939 to view a copy of the lawsuit.

SPECIAL NOTICE: While federal law does not prohibit other lawyers from "announcing" this lawsuit, Kahn Gauthier Swick is the law firm that researched, investigated, drafted and filed the securities fraud case against Xethanol. If you are a Xethanol shareholder who decides to contact one of these lawyers, Kahn Gauthier Swick reminds you to fully interview any lawyer to assure that they fully understand the facts surrounding the Xethanol claims our firm has filed in Court.

Contact:
Lewis Kahn
KGS
1-866-467-1400, ext. 100
504-648-1850
email: lewis.kahn@kglg.com