KL Process Design Group, the 2nd Generation Cellulosic Ethanol Leader, Becomes Public and Changes Its Name to KL Energy Corp.

Company to Focus on Expansion of Its Current Operation of the US' First Commercial Waste Wood to Ethanol Facility

KL Energy Corp. (OTCBB: KLEG) today announced that it has acquired KL Process Design Group (KLPDG), a leading process design and engineering firm and a pioneer in the commercialization of second generation cellulose-based ethanol (CBE) production. This acquisition and accompanying funding will allow KL Energy Corp. to develop its second commercial scale CBE production facility. Ethanol produced from cellulose is an alternative energy source highly-anticipated globally as a means of generating energy production through various waste materials and biomass and therefore does not come into competition with food sources. In connection with the transaction, $6.1 million in notes made in anticipation of the transaction and held by European institutional investors Fair Energy (through affiliate company Niton Capital) and The Green Fund, were converted into common stock in KL Energy Corp.

KL Energy Corp. (previously KLPDG) was formed early in 2000 to focus on the design and production of bio-ethanol plants, with projects focused on efficient construction, process optimization, and industry leading energy-efficiencies. Applying their advanced engineering skills and knowledge gained in petrochemical process design, the Company has become a leader in the design and optimization of grain-based ethanol (GBE) plants. Simultaneously KL worked to design, build and operate the first small commercial scale 2nd generation cellulose-based ethanol (CBE) plant in the United States.

Since January of 2008, the Company has been successfully producing cellulosic ethanol using waste wood as feedstock, at its commercial scale facility near Upton, Wyoming. The first facility of its kind in the country, the new plant was completely designed, engineered, constructed and is being operated by KL Energy (KL). The current success is the result of six years of development efforts between KL and the South Dakota School of Mines and Technology. KL's cellulosic ethanol plant is supplying fuel grade ethanol today, which is being used in traditional and high performance motor-sport applications (ALMS). KL's "zero radius" design concept technology has proven its adaptability to other biomass feedstock based on the geographic availability of feedstock and local economic drivers.

Randy Kramer, KL Energy's President and Chief Executive Officer and co-founder, said, "We are at a major inflection point for our company, as we transition to the public markets as the leader in engineering, design, and production of cellulose ethanol. The interest we have developed not only in the United States, but globally since beginning production at our Upton, WY facility has been astounding. As world economies continue searching for feasible alternatives to carbon-based fuels relying on non-food feedstock, we believe KL Energy is a leading solution provider having already proven our technology on a commercial scale. Our company has the expertise and experience required to address the needs of the United States and International markets with a wide variety of new projects," continued Mr. Kramer.

Dave Litzen, KL Energy's Vice President of Process Engineering, and co-founder, stated, "We have combined our experience of energy efficient corn based ethanol process design with tried and tested petrochemical optimization and design methodologies as our foundation. Concentrating our teams combined multi industry experience on the most economic way to design, build and operate CBE plants we have dramatically reduced the development and implementation time lines and economics, enabling us to offer to the market financially viable commercial scale CBE production today. We have established what we believe are the most environmentally friendly methods of extraction and production of cellulose ethanol currently available for commercial implementation."

About Fair Energy

Fair Energy is a global player in the oil and biofuel markets, sourcing, trading and supplying the full spectrum of both petroleum and biomasses products from the raw material to the finished pure and blended products. Fair Energy is well placed through its worldwide activity in oil and biofuel trading. Through Niton Capital (its affiliate company), it offers a highly skilled and professional service thanks to its various strategic infrastructure investments; production, processing, shipping, storage and terminal access.

About The Green Fund

The Green Fund has identified its investment universe as WCARE; Water, Carbon emission reductions, Asset based lending in agricultural commodities, Renewable energy and environmentally sound and sustainably certifiable real estate. The fund is unique in its approach to sustainable and socially responsible investments by providing, where applicable, an audited third party certification of sustainability. The Green Fund focuses on investments in emerging and/or developed markets with emphasis on (i) asset and/or equity based investments, future flow, or collateralized-debt transactions, including secured loans; (ii) trade-related debt instruments, such as letter of credit, promissory notes, or accounts receivable; and (iii) high-yielding transactions secured by readily-marketable commodities and/or other collateral.

About KL Energy Corp.

KL Energy Corp. is headquartered in Rapid City, and trades on the OTC Bulletin Board under the symbol KLEG. KL Energy Corp is firmly at the forefront of second generation cellulose-based ethanol production, a hugely anticipated global opportunity for energy production from waste materials and biomass. Besides cellulose based ethanol production, KL provides design-build operations services for biofuels facilities along with ethanol marketing services. Additional information is available at the Company's website at www.klenergycorp.com

FORWARD-LOOKING STATEMENTS

This press release may contain forward-looking statements, as defined in the Securities Reform Act of 1995 (the "Reform Act"). Forward-looking statements can be identified by the use of words such as "expects," "plans," "will," "may," "anticipates," "believes," "should," "intends," "estimates," and other words of similar meaning. These statements are subject to risks and uncertainties that cannot be predicted or quantified and consequently, actual results may differ materially from those expressed or implied by such forward-looking statements. The safe harbor for forward-looking statements provided to companies by the Reform Act does not apply to KL Energy Corp. (the "Company"). However, actual events or results may differ from the Company's expectations on a negative or positive basis and are subject to a number of known and unknown risks and uncertainties including, but not limited to, competition with larger companies, development of and demand for a new technology, risks associated with U.S. and international transactions, the impact of current, pending, or future legislation and regulation on the industry, general economic conditions, availability of funds for capital expenditure by customers, availability of timely financing, cash flow, timely delivery by suppliers, ability to maintain quality control, collection-related risks from U.S. and international transactions, or the Company's ability to manage growth. Other risk factors attributable to the Company's business may affect the actual results achieved by the Company including those that are found in the Company's most recent Current Report filed on Form 8-K, which risk factors will also be included with or prior to the filing of the Company's next Quarterly or Annual Report. All forward-looking statements included in this release are made as of the date of this press release, and the Company assumes no obligation to update any such forward-looking statements.

---

   _   _