In order to support the validation, feasibility, plant engineering and design, as well the cost of the construction of the biorefinery, management has been seeking financial resources. Preliminary estimates suggest these costs and expenses could be in the $45 to $55 million range. In discussions and initial negotiations with prospective funding sources, restructuring and possibly reorganizing the Company may, and most probably, will be required.

Tom Bowers, CEO of Colusa Biomass stated, “It is critical that funding, which has not previously been available to us on acceptable terms, be obtained and committed. Such funding should place the Company and its technology, which is focused on the conversion of waste rice straw to fuel grade ethanol, and the production of sufficient quantities of marketable silica, in a position to pursue the opportunity.”

About Colusa Biomass Energy Corporation: The Company’s proprietary process is designed to convert waste biomass to fuel ethanol. Colusa Biomass is located in the heart of the Sacramento Valley rice producing region. The Company owns rights to a U.S. Patent and proprietary technologies for the conversion and refining of agricultural wastes to cellulosic ethanol.

Fact: There are currently approximately 97 million shares outstanding, of which 75 million are controlled by insiders.

Safe Harbor: Forward-looking statements in this release are made pursuant to the ``Safe Harbor'' provisions of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that such forward-looking statements involve risks and uncertainties, including, without limitation, continued acceptance of the company's products, increased levels of competition for the company, new products and technological changes, the company’s dependence upon third-party suppliers, intellectual property rights and other risks