On or about January 30, 2012 the Arizona Corporation Commission issued a Temporary
Order to Cease and Desist against SouthWest BioFuels and Rick Jimenez, the former
CEO of SouthWest Bio-Fuels and current CEO of the Company. The Cease and Desist
Order alleges that SouthWest BioFuels, LLC (which merged with the Company in
November of 2011) and its CEO, Rick Jimenez violated Arizona securities laws in
connection with the solicitation of investors for SouthWest BioFuels. Any costs associated
with the resolution of this matter are as yet unknown.