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      of
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      May
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Xethanol
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            <td align="left" valign="top" width="3%" style="border-bottom: black thin solid;">&#160;</td>
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      provisions (</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><em>see
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            <td align="left" style="width: 27pt;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-FAMILY: Wingdings">o</font></font></td>
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              <div align="justify"><font style="DISPLAY: inline; FONT-FAMILY: Wingdings"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Written
                communications pursuant to Rule 425 under the Securities Act (17
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          <tr valign="top" style="line-height: 1.25;">
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                material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
                240.14a-12)</font></div>
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      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">

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            <td align="left">&#160;</td>
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      </table>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">

          <tr valign="top" style="line-height: 1.25;">
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                communications pursuant to Rule 14d-2(b) under the Exchange Act (17
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      </table>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">

          <tr valign="top" style="line-height: 1.25;">
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            <td align="left">&#160;</td>
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      </table>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">

          <tr valign="top" style="line-height: 1.25;">
            <td align="left" style="width: 27pt;"><font style="FONT-FAMILY: Wingdings" size="2">o</font></td>
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                communications pursuant to Rule 13e-4(c) under the Exchange Act (17
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><strong><font size="2">SECTION
      1 REGISTRANT&#8217;S BUSINESS AND
      OPERATIONS</font></strong></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>ITEM
      1.01. Entry into a Material Definitive Agreement.</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">On
      May
      30, 2006, Xethanol Corporation ("Xethanol") entered into an Organizational
      Agreement ("Organizational Agreement") with Coastal Energy Development, Inc.
      (&#8220;Coastal&#8221;), pursuant to which they organized a Delaware limited liability
      company known as CoastalXethanol, LLC (&#8220;CoastalXethanol&#8221;). On the same date,
      Xethanol and Coastal entered into an Operating Agreement that relates to the
      operation and management of CoastalXethanol. The purpose for which
      CoastalXethanol was organized is to develop and operate facilities for the
      production of ethanol in the State of Georgia and in certain parts of the State
      of South Carolina. Xethanol has granted CoastalXethanol the exclusive right
      to
      use its technology for the development and operation of such facilities in
      the
      geographic areas in which CoastalXethanol intends to construct its facilities.
      Xethanol owns 80% of the membership interests in CoastalXethanol and Coastal
      owns 20% of the membership interests in CoastalXethanol.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Organizational
      Agreement</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Significant
      provisions in the Organizational Agreement include:</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 54pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Special
        Purpose Limited Liability Companies</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
        Each of
        CoastalXethanol&#8217;s facilities will be constructed and operated by a special
</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">purpose
        limited liability company. CoastalXethanol will be the manager of each of
        those
        limited liability companies and Coastal will provide </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">them
        with
        certain services that are set forth in the Organizational Agreement. Those
        limited liability companies will pay management fees to </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">CoastalXethanol,
        also as set forth in the Organizational Agreement.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 54pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font id="TAB1" style="MARGIN-LEFT: 54pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Loans</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
      Xethanol has agreed to make certain loans to CoastalXethanol to provide it
      with
      working capital until the facilities that it intends to construct become
      operational. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font id="TAB1" style="MARGIN-LEFT: 54pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Warrants
      to Purchase Xethanol Common Stock</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
      Xethanol has issued to Coastal a warrant to purchase 200,000 shares of its
      Common Stock, par value $.001 per share, at a purchase price of $6.85 per share
      that is </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">first
      exercisable on May 30, 2007 and is exercisable until May 30, 2010</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
      Xethanol has granted Coastal certain registration rights with respect to the
      shares underlying such warrants.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font id="TAB1" style="MARGIN-LEFT: 54pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Exchange
      of Coastal Interests</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
      In the
      event of a Change of Control of Xethanol, Coastal will have the right to
      exchange its interest in CoastalXethanol for shares of Xethanol, at an exchange
      rate that is based upon the appraised value of Coastal&#8217;s interest in
      CoastalXethanol and 95% of the market price of Xethanol Common Stock for the
      15
      days preceding the completion of the valuation of Coastal&#8217;s interest in
      CoastalXethanol. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font id="TAB1" style="MARGIN-LEFT: 54pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Xethanol
      has agreed to permit Coastal to require Xethanol to exchange Coastal&#8217;s interest
      in CoastalXethanol for shares of Xethanol Common Stock after three years from
      the date of the Organizational Agreement. Coastal has agreed to permit Xethanol
      to require Coastal to exchange its interest in CoastalXethanol for shares of
      Xethanol Common Stock after three years from the date of the Organizational
      Agreement. In each case, the exchange rate will be set by mutual agreement
      or,
      if the parties cannot agree, based upon the appraised value of Coastal&#8217;s
      interest in CoastalXethanol and the market price of Xethanol Common Stock for
      the 30 days preceding the completion of the valuation of Coastal&#8217;s interest in
      CoastalXethanol</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Reference
      is made to Exhibits 1.1 and 1.2 to this Current Report on Form 8-K for the
      complete terms of the Organizational Agreement and the Operating Agreement.
      </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
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    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>SECTION
      3 - SECURITES AND TRADING MARKETS</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>ITEM
      3.02. Unregistered Sales of Equity Securities</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 45pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(a)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">On
      May
      30, 2006, Xethanol issued to Coastal a warrant (the &#8220;Warrant&#8221;) to purchase
      200,000 shares of the $.001 par value common stock (&#8220;Common Stock&#8221;) of
      Xethanol.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 45pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 45pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(b)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
      Warrant was issued in connection with and pursuant to the Organizational
      Agreement between Xethanol and Coastal dated May 30, 2006, without consideration
      for the Warrant other than the obligations of Coastal in the Organizational
      Agreement. Xethanol did not receive any cash in connection with the issuance
      of
      the Warrant. No commissions were paid or payable with respect to the issuance
      of
      the warrants</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 45pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(c)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Exemption
      from registration of the </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Warrant
      specified in the preceding subparagraph (a) is </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">claimed
      under Section 4(2) of the Securities Act of 1933, as amended (the &#8220;Act&#8221;)
</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">because
      the transaction </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">did
      not
      involve a public offering and was therefore exempt from the registration
      requirements of Section 5 of the Act.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 45pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(d)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 9pt">&#160;&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
      Warrant is first exercisable on May 30, 2007 and is exercisable until May 30,
      2010 to purchase up to 200,000 shares of Common Stock at a purchase price of
      $6.85 per share. The Warrant is attached to this Current Report on Form 8-K
      as
      Exhibit 3.1.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div><br>
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    </div><br>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>SECTION
      9 - FINANCIAL STATEMENTS AND EXHIBITS </strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>ITEM
      9.01. Exhibits</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Following
      is the Index of Exhibits furnished in accordance with Item 601 of Regulation
      S-K, filed as part of this Current Report on Form 8-K or incorporated by
      reference herewith:</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">1.1&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;
      </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Organizational
      Agreement, dated as of May 30, 2006, by and between Xethanol Corporation, a
      Delaware corporation, Coastal Energy Development, Inc., a Georgia
      corporation.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">1.2&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;
      </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Operating
      Agreement dated as of May 30, 2006, by and between Xethanol Corporation and
      the
      Coastal Energy Development, Inc.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">3.1&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;
      </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Form
      of
      Warrant issued by Xethanol Corporation to Coastal Energy Development,
      Inc.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">99.1&#160;&#160;&#160;&#160;&#160;&#160;
      </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Press
      release issued by Xethanol Corporation on May 31, 2006.</font></div><br>
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        </div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
          <hr style="COLOR: black" noshade size="2">
        </div>
      </div>
      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right">
        </div>
      </div>
    </div><br>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>SIGNATURES</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 54pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Pursuant
      to the requirements of the Securities and Exchange Act of 1934, the Registrant
      has duly caused this report to be signed on its behalf by the undersigned
      hereunto duly authorized.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">
      <table align="center" bgcolor="#ffffff" border="0" cellpadding="0" cellspacing="0" width="100%">

          <tr valign="top" bgcolor="#ffffff">
            <td width="50%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">&#160;</font></td>
            <td width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">&#160;</font></td>
            <td width="49%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">&#160;</font></td>
          </tr>
          <tr valign="top" bgcolor="#ffffff">
            <td><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">&#160;</font></td>
            <td colspan="2"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">Xethanol
              Corporation</font></td>
          </tr>
          <tr valign="top" bgcolor="#ffffff">
            <td><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">&#160;<br>&#160;</font></td>
            <td><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">&#160;<br>&#160;</font></td>
            <td><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">&#160;<br>&#160;</font></td>
          </tr>
          <tr valign="top" bgcolor="#ffffff">
            <td><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">Date:&#160;June
              2,
              2006</font></td>
            <td><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">By:&#160;&#160;</font></td>
            <td><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">/s/&#160;Lawrence
              S. Bellone</font></td>
          </tr>
          <tr valign="top" bgcolor="#ffffff">
            <td colspan="2"><font style="FONT-FAMILY: " size="1">&#160;</font></td>
            <td align="left">
              <hr style="COLOR: black" align="left" noshade size="2" width="80%"><font size="2">Lawrence
              S. Bellone</font></td>
          </tr>
          <tr valign="top" bgcolor="#ffffff">
            <td colspan="2"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">&#160;</font></td>
            <td><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">Chief
              Financial Officer</font></td>
          </tr>

      </table><br></div>
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{"company-data": {"conformed-name": "XETHANOL CORP", "cik": "0001145061", "assigned-sic": "3250", "irs-number": "841169517", "state-of-incorporation": "CO", "fiscal-year-end": "0205"}, "filing-values": {"form-type": "8-K", "act": "34", "file-number": "000-50154", "film-number": "06883884"}, "business-address": {"street1": "1185 AVENUE OF THE AMERICAS,", "street2": "20TH FLOOR", "city": "NEW YORK", "state": "NY", "zip": "10036", "phone": "6467234000"}, "mail-address": {"street1": "1185 AVENUE OF THE AMERICAS,", "street2": "20TH FLOOR", "city": "NEW YORK", "state": "NY", "zip": "10036"}, "former-company": {"former-conformed-name": "ZEN POTTERY EQUIPMENT INC", "date-changed": "20010717"}}
UNITED
      STATES
SECURITIES
      AND EXCHANGE COMMISSION
WASHINGTON,
      DC 20549
FORM
      8-K
CURRENT
      REPORT PURSUANT
TO
      SECTION 13 OR 15(D) OF THE
SECURITIES
      EXCHANGE ACT OF 1934
Date
      of
      report (Date of earliest event reported):
May
      30, 2006
Xethanol
      Corporation
(Exact
      Name of Registrant as Specified in Its Charter)
Delaware
(State
      or
      Other Jurisdiction of Incorporation)
000-50154
84-1169517
(Commission
                File Number)
(IRS
                Employer Identification No.)
1185
                Avenue of the Americas
New
                York, New York
10036
(Address
                of Principal Executive Offices)
(Zip
                Code)
(646)
      723-4000
(Registrant's
      Telephone Number, Including Area Code)
(Former
      Name or Former Address, if Changed Since Last Report)
Check
      the
      appropriate box below if the Form 8-K filing is intended to simultaneously
      satisfy the filing obligation of the registrant under any of the following
      provisions (
see
General
      Instruction A.2. below):
o
Written
                communications pursuant to Rule 425 under the Securities Act (17
                CFR
                230.425)
o
Soliciting
                material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
                240.14a-12)
o
Pre-commencement
                communications pursuant to Rule 14d-2(b) under the Exchange Act (17
                CFR
                240.14d-2(b))
o
Pre-commencement
                communications pursuant to Rule 13e-4(c) under the Exchange Act (17
                CFR
                240.13e-4(c))
SECTION
      1 REGISTRANT'S BUSINESS AND
      OPERATIONS
ITEM
      1.01. Entry into a Material Definitive Agreement.
On
      May
      30, 2006, Xethanol Corporation ("Xethanol") entered into an Organizational
      Agreement ("Organizational Agreement") with Coastal Energy Development, Inc.
      ("Coastal"), pursuant to which they organized a Delaware limited liability
      company known as CoastalXethanol, LLC ("CoastalXethanol"). On the same date,
      Xethanol and Coastal entered into an Operating Agreement that relates to the
      operation and management of CoastalXethanol. The purpose for which
      CoastalXethanol was organized is to develop and operate facilities for the
      production of ethanol in the State of Georgia and in certain parts of the State
      of South Carolina. Xethanol has granted CoastalXethanol the exclusive right
      to
      use its technology for the development and operation of such facilities in
      the
      geographic areas in which CoastalXethanol intends to construct its facilities.
      Xethanol owns 80% of the membership interests in CoastalXethanol and Coastal
      owns 20% of the membership interests in CoastalXethanol.
Organizational
      Agreement
Significant
      provisions in the Organizational Agreement include:
Special
        Purpose Limited Liability Companies
.
        Each of
        CoastalXethanol's facilities will be constructed and operated by a special
purpose
        limited liability company. CoastalXethanol will be the manager of each of
        those
        limited liability companies and Coastal will provide
them
        with
        certain services that are set forth in the Organizational Agreement. Those
        limited liability companies will pay management fees to
CoastalXethanol,
        also as set forth in the Organizational Agreement.
Loans
.
      Xethanol has agreed to make certain loans to CoastalXethanol to provide it
      with
      working capital until the facilities that it intends to construct become
      operational.
Warrants
      to Purchase Xethanol Common Stock
.
      Xethanol has issued to Coastal a warrant to purchase 200,000 shares of its
      Common Stock, par value $.001 per share, at a purchase price of $6.85 per share
      that is
first
      exercisable on May 30, 2007 and is exercisable until May 30, 2010
.
      Xethanol has granted Coastal certain registration rights with respect to the
      shares underlying such warrants.
Exchange
      of Coastal Interests
.
      In the
      event of a Change of Control of Xethanol, Coastal will have the right to
      exchange its interest in CoastalXethanol for shares of Xethanol, at an exchange
      rate that is based upon the appraised value of Coastal's interest in
      CoastalXethanol and 95% of the market price of Xethanol Common Stock for the
      15
      days preceding the completion of the valuation of Coastal's interest in
      CoastalXethanol.
Xethanol
      has agreed to permit Coastal to require Xethanol to exchange Coastal's interest
      in CoastalXethanol for shares of Xethanol Common Stock after three years from
      the date of the Organizational Agreement. Coastal has agreed to permit Xethanol
      to require Coastal to exchange its interest in CoastalXethanol for shares of
      Xethanol Common Stock after three years from the date of the Organizational
      Agreement. In each case, the exchange rate will be set by mutual agreement
      or,
      if the parties cannot agree, based upon the appraised value of Coastal's
      interest in CoastalXethanol and the market price of Xethanol Common Stock for
      the 30 days preceding the completion of the valuation of Coastal's interest in
      CoastalXethanol
Reference
      is made to Exhibits 1.1 and 1.2 to this Current Report on Form 8-K for the
      complete terms of the Organizational Agreement and the Operating Agreement.
SECTION
      3 - SECURITES AND TRADING MARKETS
ITEM
      3.02. Unregistered Sales of Equity Securities
(a)
On
      May
      30, 2006, Xethanol issued to Coastal a warrant (the "Warrant") to purchase
      200,000 shares of the $.001 par value common stock ("Common Stock") of
      Xethanol.
(b)
The
      Warrant was issued in connection with and pursuant to the Organizational
      Agreement between Xethanol and Coastal dated May 30, 2006, without consideration
      for the Warrant other than the obligations of Coastal in the Organizational
      Agreement. Xethanol did not receive any cash in connection with the issuance
      of
      the Warrant. No commissions were paid or payable with respect to the issuance
      of
      the warrants
.
(c)
Exemption
      from registration of the
Warrant
      specified in the preceding subparagraph (a) is
claimed
      under Section 4(2) of the Securities Act of 1933, as amended (the "Act")
because
      the transaction
did
      not
      involve a public offering and was therefore exempt from the registration
      requirements of Section 5 of the Act.
(d)
The
      Warrant is first exercisable on May 30, 2007 and is exercisable until May 30,
      2010 to purchase up to 200,000 shares of Common Stock at a purchase price of
      $6.85 per share. The Warrant is attached to this Current Report on Form 8-K
      as
      Exhibit 3.1.
SECTION
      9 - FINANCIAL STATEMENTS AND EXHIBITS
ITEM
      9.01. Exhibits
Following
      is the Index of Exhibits furnished in accordance with Item 601 of Regulation
      S-K, filed as part of this Current Report on Form 8-K or incorporated by
      reference herewith:
1.1
Organizational
      Agreement, dated as of May 30, 2006, by and between Xethanol Corporation, a
      Delaware corporation, Coastal Energy Development, Inc., a Georgia
      corporation.
1.2
Operating
      Agreement dated as of May 30, 2006, by and between Xethanol Corporation and
      the
      Coastal Energy Development, Inc.
3.1
Form
      of
      Warrant issued by Xethanol Corporation to Coastal Energy Development,
      Inc.
99.1
Press
      release issued by Xethanol Corporation on May 31, 2006.
SIGNATURES
Pursuant
      to the requirements of the Securities and Exchange Act of 1934, the Registrant
      has duly caused this report to be signed on its behalf by the undersigned
      hereunto duly authorized.
Xethanol
              Corporation
Date: June
              2,
              2006
By:
/s/ Lawrence
              S. Bellone
Lawrence
              S. Bellone
Chief
              Financial Officer