GRANT APPLICATION

During May 2009, the Company was requested by the U.S. Department of Energy and the U.S. Department of Agriculture to submit additional information relative to the Company's previously-filed pre-application for grant funding under the"Biomass Research and Development Initiative" for the construction of a demonstration facility based on the Company's Cellulosic Corn(TM) feedstock conditioning technology.

The Company's response to this request will be subject to additional review by the U.S. Department of Energy and the U.S. Department of Agriculture and there can be no assurance that the Company will be awarded any grant funds. If approved, the scope of the grant will be to test the Company's Cellulosic Corn(TM) feedstock conditioning technologies over a two year period at a targeted first generation corn ethanol facility.

The Company's patented and patent-pending feedstock conditioning technologies are designed to cost-effectively disintegrate cellulose to enhance corn-derived ethanol and oil production yields, decrease raw material and fossil fuel utilization by the corn ethanol process, and to improve the nutritional value of distillers grain. If approved, the grant award would be for $1.2 million and will require an additional $1.2 million to be provided by project collaborators. The Company will collaborate with EcoSystem and Global Ethanol, LLC on the project. p.22 1Q

***********

So what does the SkunK think about all this??? Of course plan number one is to get as many COES up and running as possible - as quickly as possible. Somewhere between 8-10 and we should be profitable.

In the background it looks like EcoSystems will be brought up big time legit and used to test these new technologies - hopefully using half grant $$ instead of just VC. Bringing Trevour Bourne aboard while working with Global Ethanol plays into the SkunK's feelings that these three companies will keep getting closer and closer until they are all headed to the same family reunion.