Historical Overview

Capital City Energy Group, Inc.
with
Current Management’s Accomplishments

15 Feb 2011 Hotwell Services’ asset sale closed for $4.925MM
January 2011 Malpractice lawsuit filed against former counsel for CCEG and Hotwell Services; allegations in Complaint cause legal press to identify action in national news
2010 Hotwell Services turn-around under new management: from $1,600,000 EBITDA 2009 loss to greater than $200,000 EBITDA 2010 + DEBT reduction > $500,000; gross revenues for 2009 (interim management) & 2010 (new management) virtually equal, despite interim management’s acquisition of certain clientele following their departure from CCEG and Hotwell Services
20 Sept 2010 CCEG engages work-out specialist for negotiation of Hotwell Services’ trade debt, etc. at deep discounts, facilitating asset sale transaction; nearly entirety of $4MM debt reduced to $2.3MM
20 Aug 2010 Successor certified public accounting firm engaged, in collaboration with corporate controller, to internally audit and revise books, records and filings, leading to consolidated regulatory and tax filings, public audits and applications to normalize stock listings and trading (i.e., return to O-T-C BB or even AMEX)
20 June 2010 Former president of Hotwell Services and his successor employer/affiliate agree to pay CCEG and Hotwell Services $100k and the former President agreed to dismiss his claims for damages in settlement of the claims between the parties. Settlement also includes a non-compete provision applicable to the former president and his new employer/affiliate
28 May 2010 Bridge loan closed for Hotwell Services, allowing repurchase of Hotwell Services’ assets from private equity group thereby successfully reacquiring such assets
20 May 2010 CCEG re-engages original corporate COO, Dan Coffee, as consultant overseeing Hotwell operations. Hotwell evaluation and re-organization ensues
May 2010 CCEG engagement of industry expert, re: well portfolio evaluation
May 2010 Former investment banker files Complaint against CCEG in Florida to recover funds allegedly owed pursuant to a promissory note executed by interim management; CCEG files counterclaim for damages > $1,000,000, re: Hotwell Services acquisition
April - May 2010 Lawsuit filed against CCEG and Hotwell Services by former president seeking 1) an Order allowing president to compete against Hotwell Services and 2) compensatory damages for amounts allegedly owed to former President; CCEG and Hotwell Services counterclaim against former president
April 2010 CCEG successfully completes Ohio well project at operator subsidiary (Avanti); originally commenced in 2008 but abandoned without completion in 2009 at the direction of the interim management
March 2010 CCEG commences explorations, solicitations & negotiations, re: sale of Hotwell Services; Letter of Intent executed for Hotwell Services’ sale at $4.925MM ($2.3MM cash + $2.625MM stock)
March 2010 Commencement of negotiations with private equity firm for the reacquisition of Hotwell Services’ assets, which CCEG alleged was the result of improper foreclosure procedures and thus invalid; legal negotiations result in a successful, confidential settlement of all claims
March 2010 Hotwell Services’ president, CCEG CFO, and CFO’s accounting staff’s employment was terminated; industry-experienced Controller hired
February 2010 Board elects Timothy S. Shear as COB-CEO (Todd E. Crawford follows as successor COB, Shear remains CEO); legal counsel retained at Carlile Patchen & Murphy LLP
3 Feb 2010 Special shareholder meeting convened, where successor Board of Directors elected
15 Jan 2010 Letter sent to CCEG shareholders, announcing special meeting called by shareholders, accompanied by Proxy statement to elect successor Board of Directors
Nov-Dec 2009 Private equity firm engaged in acquisition of Hotwell Services calls $748k loan + accumulated interest resulting in foreclosure of Hotwell assets valued @ approximately $3MM; private equity firm temporarily allows lease-back of assets based on their anticipated interest in a successor company to Hotwell Services, which would be owned by the private equity company and former management of Hotwell Services
November 2009 Commence relationship with Christopher Ott, Esq., seeking re-capitalization and strategic partners for CCEG
1 Oct 2009 Todd E. Crawford, co-founder of CCEG, principal shareholder and CEO at affiliated investment banker which led CCEG incorporation, etc. seeks legal advice to explore possible take-over of CCEG
September 2009 CCEG, through its interim management, enters into agreement with private equity firm to sell Hotwell for approximately $2.5MM
March 2009 President of Hotwell Services (acquired 31 Dec 2008), and other Directors at CCEG Board remove original CEO and COO; new (“interim”) management assumes company control, discontinues public financial filings, press releases, tax filings, etc. and company goes dark. Stock removed from OTCBB and listed on OTC Pink Sheets. Stock price falls to pennies, correspondingly; this interim management shifts all revenues and assets to finance the distressed Hotwell Services.
31 December 2008 CCEG acquires Hotwell Services, Inc., an oil field wireline company, as a wholly owned subsidiary for $5MM of common stock of CCEG
2008 CCEG traded on the O-T-C Bulletin Board under symbol “CETG” between $3.50 and $0.85 per share, average price approximately $2 per share, trading volume averages approximately 17,000 shares per day; company debt free
2007 Fund roll-ups and reverse merger structures creation of Capital City Energy Group, Inc.
2 May 2003 CCEG began as Capital City Petroleum, LLC (CCP), a wholly owned subsidiary of Capital City Partners, a privately owned financial services firm. CCP designed, created and managed blind pool investment funds with approximately $16MM in fractional, non-operating natural gas and oil properties across the continental US