--------------------------------------------------------------------------------
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                            -------------------------

                                   FORM 10-Q/A
                                (Amendment No. 1)
                            -------------------------


                 ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (D)
                     OF THE SECURITIES EXCHANGE ACT OF 1934
                   FOR THE FISCAL QUARTER ENDED MARCH 31, 2009

                          COMMISSION FILE NO.: 0-28887



                          CARBONICS CAPITAL CORPORATION
--------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)


Delaware                                                           22-3328734
--------------------------------------------------------------------------------
(State of other jurisdiction of                                   IRS Employer
incorporation or organization)                               Identification No.)


One Penn Plaza, Suite 1612, New York, New York                          10119
--------------------------------------------------------------------------------
(Address of principal executive offices)                            (Zip Code)

                                 (212) 994-5374
--------------------------------------------------------------------------------
               (Registrant's telephone number including area code)



Check mark  whether  the issuer (1) filed all  reports  required  to be filed by
Section 13 or 15(d) of the  Securities  Exchange  Act of 1934 during the past 12
months (or for such shorter  period that the registrant as required to file such
reports),  and (2) has been subject to such filing  requirements for the past 90
days. Yes X No __

Indicate by check mark whether the registrant has submitted  electronically  and
posted on its corporate Web site, if any, every  Interactive  Data File required
to be submitted and posted pursuant to Rule 405 of Regulation S-T (ss.232.405 of
this chapter)  during the  preceding 12 months (or for such shorter  period that
the registrant was required to submit and post such files.) Yes __ No__

Indicate by check mark whether the registrant is a large  accelerated  filer, an
accelerated filer, a non-accelerated  filer, or a smaller reporting company. See
the definitions of "large accelerated  filer,"  "accelerated filer" and "smaller
reporting company" in Rule 12b-2 of the Exchange Act. (Check One)

Large accelerated filer                    Accelerated filer
                        ---                                        ---
Non-accelerated filer                     Small reporting company   X
                        ---                                        ---

Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act) Yes No X

The  number  of  outstanding  shares  of  common  stock  as of May 19,  2009 was
148,689,737.





                                 Amendment No. 1

This Amendment No.1 on Form 10-Q/A,  which amends and restates items  identified
below with  respect to the Form 10- Q, filed by Carbonics  Corporation  ("we" or
"the Company") with the  Securities and Exchange  Commission  (the "SEC") on May
19, 2009 (the "Original Filing"), is being filed in order to :

     o    Include restated  financial  statements as described in Note 8 to the
          financial statements;

     o    Amend Item 2,  Management's  Discussion  and Analysis,  to reflect the
          amended financial statements;

     o    Amend Item 4, Controls and Procedures,  to reflect the modification to
          management's  assessment  of its  disclosure  controls and  procedures
          caused by the restatement and to provide further disclosures;

     o    Amend the  following  notes  under Item 1,  Financial  Statements  and
          Supplementary Schedules, to reflect the amended financial statements:

          o    Note 3, Going  Concern,  was  updated to  restate  the  Company's
               working capital deficit;

          o    Note 4, Significant Accounting Policies, to modify the Fair Value
               of Financial Instruments and Deferred Financing and Debt Discount
               sections;

          o    Note 5,  Financing  Arrangements,  was  updated  to  restate  the
               convertible debenture disclosures;

          o    Note 6, Derivatives, was deleted;

          o    Note 8,  Restatements,  was updated to outline  the changes  that
               were made to the financial statements.

None of the other  disclosures in this Report have been amended or updated.  For
updated information about Carbonics Corporation, please refer to the more recent
filings made with the SEC.




                                       2
<PAGE>

<TABLE>

                          CARBONICS CAPITAL CORPORATION
                          QUARTERLY REPORT ON FORM 10Q
                   FOR THE FISCAL QUARTER ENDED MARCH 31, 2009

                                TABLE OF CONTENTS



<CAPTION>

                                                                                                           Page No
Part I            Financial Information

<S>               <C>                                                                                           <C>
Item 1.           Financial Statements ..........................................................................3
                  Condensed Consolidated Balance Sheet - March 31, 2009 (unaudited)
                    and December 31, 2008 (audited)..............................................................4
                  Condensed Consolidated Statements of Operations - for the Three Months
                     Ended March 31, 2009 (unaudited) and 2008 (unaudited).......................................5
                  Statement of Stockholders' Equity - December 31, 2008 and Three Months
                    Ended March 31, 2009.........................................................................6
                  Condensed Consolidated Statements of Cash Flows - for the Three Months
                    Ended March 31, 2009 (unaudited) and 2008 (unaudited)........................................7
                  Notes to Condensed Consolidated Financial Statements...........................................8
Item 2.           Management's Discussion and Analysis .........................................................12
Item 3            Quantitative and Qualitative Disclosures about Market Risk....................................14
Item 4.           Controls and Procedures.......................................................................14

Part II           Other Information

Item 1.           Legal Proceedings.............................................................................15
Items 1A.         Risk Factors..................................................................................15
Item 2.           Unregistered Sales of Equity Securities and Use of Proceeds...................................15
Item 3.           Defaults upon Senior Securities...............................................................15
Item 4.           Submission of Matters to a Vote of Security Holders...........................................15
Item 5.           Other Information ............................................................................15
Item 6.           Exhibits .....................................................................................15

Signatures                                                                                                      16
</TABLE>


                                       3
<PAGE>


                                     PART I


ITEM 1            FINANCIAL STATEMENTS




































                                       4
<PAGE>

<TABLE>


                          CARBONICS CAPITAL CORPORATION
                      CONDENSED CONSOLIDATED BALANCE SHEET
             AS OF MARCH 31, 2009 (UNAUDITED) AND DECEMBER 31, 2008

<CAPTION>
                                                                             RESTATED         RESTATED
                                                                            3/31/2009       12/31/2008
                                                                        ------------------------------
ASSETS
Current Assets:

<S>                                                                     <C>              <C>
   Cash                                                                 $      62,247    $        --
   Note receivable - related party                                            320,691          386,132
                                                                        -------------    -------------
      Total current assets                                                    382,938          386,132


TOTAL ASSETS                                                            $     382,938    $     386,132
                                                                        =============    =============

LIABILITIES AND STOCKHOLDERS' DEFICIT

Current Liabilities:

   Accounts payable and accrued expenses                                $     672,698    $     591,511
   Accrued interest                                                           477,948          439,870
   Convertible debentures, net of discount                                  6,348,055        9,235,713
                                                                        -------------    -------------
      Total current liabilities                                             7,498,701       10,267,094

   TOTAL LIABILITIES                                                        7,498,701       10,267,094
                                                                        -------------    -------------

Preferred stock
   Series C, par $0.001, 1,000,000 shares authorized, 805, 767 issued
   and outstanding                                                                806              806
Common stock, par $0.001, 500,000,000 authorized
   133,179,405 and 127,279,405 issued and outstanding, respectively           133,179          127,279
Additional paid-in capital                                                125,030,653      125,027,231
Accumulated deficit                                                      (132,280,402)    (135,036,278)
                                                                        -------------    -------------
   Total stockholders' deficiency                                          (7,115,763)      (9,880,962)
                                                                        -------------    -------------

TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIENCY                          $     382,938    $     386,132
                                                                        =============    =============


              The notes to the financial statement are an integral
                           part of these statements.
</TABLE>

                                       5
<PAGE>

<TABLE>


                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
            FOR THE THREE MONTH PERIODS ENDED MARCH 31, 2009 AND 2008
                                   (UNAUDITED)
<CAPTION>

                                                  Three Months Ended  Three Months Ended
                                                          (Restated)          (Restated)
                                                             3/31/09             3/31/08
                                                  --------------------------------------
<S>                                                <C>                 <C>
Revenue                                            $           --      $            --
                                                   -----------------   -----------------

Operating expenses:
    General and administrative expenses                      21,882               96,846
     Stock based compensation                                  --                 90,000
                                                  -----------------    -----------------
      Total operating expenses                               21,882              186,846
                                                  -----------------    -----------------

Operating loss                                              (21,882)            (186,846)
                                                  -----------------    -----------------

Other income (expense):
    Change in fair value of conversion features           2,878,336            1,189,051
    Costs related to conversion features                       --                   (493)
    Settlement expense                                      (62,500)                --
    Interest expense                                        (38,077)             (37,429)
                                                  -----------------    -----------------
      Total other income (expense)                        2,777,759            1,151,622

Net income before provision for income taxes              2,755,877              964,776
                                                  -----------------    -----------------

Provision for income taxes                                     --                   --

Net Income                                        $       2,755,877    $         964,776
                                                  =================    =================

Common share, basic and diluted
income per share from continuing operations       $            0.02    $            0.10

Common share, basic and diluted
income per share                                  $            0.02    $            0.10
                                                  =================    =================

Weighted average share of common stock
    outstanding, basic and diluted                      127,607,259            9,937,290
                                                  =================    =================




            The notes to the Consolidated Financial Statement are an
                       integral part of these statements.


</TABLE>












                                       6
<PAGE>






                         ]CARBONICS CAPITAL CORPORATION
                       STATEMENTS OF STOCKHOLDERS' EQUITY
   FOR THE YEAR ENDED DECEMBER 31, 2008 AND THREE MONTHS ENDED MARCH 31, 2009

<TABLE>
<CAPTION>
                                                        Series C Preferred Stock            Common Stock
                                                          Shares         Amount         Shares        Amount
                                                     -------------------------------------------------------
<S>                                                      <C>        <C>              <C>         <C>
Balance, December 31, 2007                               974,140    $       974      9,549,266   $     9,549
                                                     ===========    ===========    ===========   ===========

Issuance of common stock upon conversion of debt            --             --        9,730,140         9,730
Stock issued for services                                   --             --        3,000,000         3,000
Stock issued for compensation                               --             --       10,000,000        10,000
Conversion of Series C Preferred into common stock      (168,373)          (168)    95,000,000        95,000
Beneficial conversion features                              --             --             --            --
Forgiveness of affiliate debt                               --             --             --            --
Net loss                                                    --             --             --            --
                                                     -----------    -----------    -----------   -----------

Balance, December 31, 2008                               805,767    $       806    127,279,406   $   127,279
                                                     ===========    ===========    ===========   ===========

Issuance of common stock upon conversion of debt            --             --        5,900,000         5,900
Beneficial conversion features                              --             --             --            --
Net income                                                  --             --             --            --
                                                     -----------    -----------    -----------   -----------

Balance, March 31, 2009                                  805,767    $       806    133,179,406   $   133,179
                                                     ===========    ===========    ===========   ===========
</TABLE>


<TABLE>
<CAPTION>

                                                                                               Total
                                                        Additional       Cumulative    Stockholders'
                                                   Paid-In-Capital          Deficit          Equity

<S>                                                  <C>              <C>              <C>
Balance, December 31, 2007                           $ 126,524,280    $(128,653,242)   $  (2,118,439)
                                                     =============    =============    =============

Issuance of common stock upon conversion of debt            53,370             --             63,100
Stock issued for services                                   87,000             --             90,000
Stock issued for compensation                              190,000             --            200,000
Conversion of Series B Preferred into common stock         (94,832)            --               --
Beneficial conversion features                              63,733             --             63,733
Forgiveness of affiliate debt                           (1,796,320)            --         (1,796,320)
Net (loss)                                                    --         (6,383,036)      (6,383,036)
                                                     -------------    -------------    -------------
Balance, December 31, 2008                           $ 125,027,231    $(135,036,278)   $  (9,880,962)
                                                     =============    =============    =============

Issuance of common stock upon conversion of debt            (1,239)            --             (1,239)
Beneficial conversion features                               4,661             --              4,661
Net income                                                    --          2,755,877        5,489,641
                                                     -------------    -------------    -------------

Balance, March 31, 2009                              $ 125,030,653    $(132,280,402)   $  (7,115,763)
                                                     =============    =============    =============





              The notes to the financial statement are an integral
                           part of these statements.
</TABLE>
                                       7
<PAGE>

<TABLE>

                          CARBONICS CAPITAL CORPORATION
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
               FOR THE THREE MONTHS ENDED MARCH 31, 2009 AND 2008
                                   (UNAUDITED)
<CAPTION>
                                                                                 (RESTATED)         (RESTATED)
                                                                        Three Months Ended  Three Months Ended
                                                                                   3/31/09             3/31/08
                                                                        --------------------------------------
CASH FLOW FROM OPERATING ACTIVITIES
<S>                                                                             <C>            <C>
Net income from continuing operations                                           $ 2,755,877    $   964,775

Adjustments to reconcile net income to net cash used in operating activities:

   Depreciation                                                                        --            5,588
   Stock based compensation                                                            --           90,000
   Changes in beneficial conversion features                                     (2,878,336)    (1,189,051)

Changes in Assets and Liabilities
   Deposits                                                                            --           32,152
   Accounts payable                                                                  13,233       (254,808)
   Accrued expenses                                                                  67,955        (83,334)
   Deferred financing fees                                                             --          (43,946)
   Liabilities to be settled in stock                                                  --         (407,333)
   Interest payable - related party                                                    --          196,832
   Interest payable                                                                  38,077         37,429
                                                                                -----------    -----------
      Net cash provided used in operating activities                                 (3,194)      (651,696)
                                                                                -----------    -----------

CASH FLOWS FROM FINANCING ACTIVITIES

   Issuances (Repayments) of short-term borrowings                                   65,441           --
   Proceeds from notes receivable - related party                                      --          854,168
   Issuance of note receivable                                                         --             --
   Repayment of notes payable - related party                                          --         (200,000)
                                                                                -----------    -----------
      Net cash provided by financing activities                                      65,441        654,168
                                                                                -----------    -----------

   Net (decrease) increase in cash                                                   62,247          2,472

   Cash at beginning of period                                                         --             --
                                                                                -----------    -----------

   Cash at end of period                                                        $    62,247    $     2,472
                                                                                ===========    ===========

Supplemental statement of non-cash investing and financing activities:

      Conversion of debentures                                                  $     4,661         30,300
      Transfer of net assets to related party                                   $      --        2,203,653


              The notes to the financial statement are an integral
                           part of these statements.

</TABLE>


                                       8
<PAGE>
1        CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance  with  accounting  principles  generally  accepted in the
United States for interim  financial  information  and with the  instructions to
Form  10Q  of  Regulation  S-X.  Accordingly,  they  do not  include  all of the
information and footnotes required by accounting  principles  generally accepted
in the United  States  for  complete  financial  statements.  In the  opinion of
management,  all normal recurring  adjustments  considered  necessary for a fair
statement  of the  results of  operations  have been  included.  The  results of
operations  for the  three  months  ended  March  31,  2009 are not  necessarily
indicative  of the results of  operations  for the full year.  When  reading the
financial  information  contained in this Quarterly Report,  reference should be
made to the financial  statements  and notes  contained in the Company's  Annual
Report on Form 10-K for the year ended December 31, 2008.

2        NATURE OF OPERATIONS

We develop  renewable  energy projects that facilitate the more efficient use of
carbon in energy supply chains. Our development activities during 2009 primarily
involved  evaluation  of a number of different  chemical and other  technologies
designed to separate carbon dioxide from exhaust for conversion into value-added
carbonaceous products.

We  are  party  to a  technology  commercialization  agreement  with  GreenShift
Corporation,  which  company  is  majority  owned by our  majority  shareholder,
Viridis  Capital,  LLC,  pursuant  to which  GreenShift  has  agreed to  provide
commercialization support services and access to GreenShift's rights to sell and
use a proprietary  biomass  gasification  technology in fields of use outside of
the corn ethanol industry.  Carbonics will pay GreenShift a royalty equal to 10%
of the pre-tax net income generated by Carbonics through use of this technology.

Our strategic plan also involves the  acquisition  of accretive  assets and cash
flows that are strategic to our technology development efforts. We are currently
evaluating a number of qualified  opportunities  that produce the raw  materials
needed for our  technologies,  or that have the  infrastructure we need to scale
our  technologies,  or that have the  ability to refine the  products we produce
with our  technologies  into  finished  goods.  Our plan in this  respect  is to
leverage  the  targeted  assets  and cash  flows to defray  our  technology  and
financing risk as we commercialize our technologies.

3        GOING CONCERN

The  accompanying  financial  statements  have been  prepared  assuming that the
Company will continue as a going concern. The Company had an accumulated deficit
of  ($132,280,402) at March 31, 2009. As of March 31, 2009 the Company's current
liabilities   exceeded  current  assets  by  $7,115,763.   These  matters  raise
substantial  doubt about the Company's  ability to continue as a going  concern.
Management's  plans  include  raising  additional  proceeds from debt and equity
transactions and completing strategic acquisitions.

4        SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

USE OF ESTIMATES

The preparation of financial statements in conformity with accounting principles
generally  accepted in the United States of America requires  management to make
estimates  and  assumptions   that  affect  the  reported   amounts  of  assets,
liabilities,  revenues,  expenses,  and disclosures of contingencies  during the
reporting period. Actual results could differ from management's estimates.

STOCK BASED COMPENSATION

The  Company  accounts  for stock and stock  options  issued  for  services  and
compensation to employees under SFAS 123(r). For non-employees,  the fair market
value of the Company's  stock on the date of stock issuance or  option/grant  is
used.  The Company  determines the fair market value of options issued under the
Black-Scholes  Pricing Model.  Under the provisions of SFAS 123(r),  share-based
compensation  cost is measured at the grant date, based on the fair value of the
award,  and is recognized as an expense over the  employee's  requisite  service
period (generally the vesting period of the equity grant).

FAIR VALUE OF FINANCIAL INSTRUMENTS

The carrying amounts reported in the balance sheet as of March 31, 2009 for cash
equivalents,  accounts  receivable,  other  receivables,  accounts payable,  and
accrued  expenses  approximate fair value because of the immediate or short-term
maturity of these  financial  instruments.  The fair value of notes  payable and
long-term  debt  approximates  their  carrying value as the stated or discounted
rates of the debt reflect  recent  market  conditions.  It was not  practical to

                                       9
<PAGE>

estimate  the fair  value of the  convertible  debt due to the  nature  of these
items.  These  estimates  would be based on the  carrying  amounts,  maturities,
effective interest rates and volatility of the Company's stock. The Company does
not believe it is practical due to the  significant  volatility of the Company's
stock.

Fair value estimates are made at a specific point in time, based on the terms of
the financial  instrument.  These estimates are subjective in nature and involve
uncertainties  and  matters of  significant  judgment  and  therefore  cannot be
determined with precision.  Changes in assumptions  could  significantly  affect
these estimates.

The Company  adopted SFAS 157 on January 1, 2008.  This statement  establishes a
framework for measuring  fair value,  and expands  disclosures  about fair value
measurements.  SFAS 157 establishes a fair value hierarchy that  prioritizes the
inputs to valuation  techniques  used to measure fair value into three levels as
follows:

o    Level 1 -- quoted  prices  (unadjusted)  in active  markets  for  identical
     assets or liabilities  that the Company has the ability to access as of the
     measurement date. Financial assets and liabilities utilizing Level 1 inputs
     include active exchange-traded securities and exchange-based derivatives.

o    Level 2 -- inputs other than quoted prices included within Level 1 that are
     directly  observable  for the asset or liability or  indirectly  observable
     through  corroboration  with observable  market data.  Financial assets and
     liabilities  utilizing  Level 2 inputs  include  fixed  income  securities,
     non-exchange-based derivatives, mutual funds, and fair-value hedges.

o    Level 3 --  unobservable  inputs for the asset or liability  only used when
     there is little,  if any, market activity for the asset or liability at the
     measurement date. Financial assets and liabilities utilizing Level 3 inputs
     include infrequently-traded,  non-exchange-based derivatives and commingled
     investment funds, and are measured using present value pricing models.

The  following  table  presents  the embedded  derivative,  the  Company's  only
financial   assets  measured  and  recorded  at  fair  value  on  the  Company's
Consolidated Balance Sheets on a recurring basis and their level within the fair
value hierarchy during the three months ended March 31, 2009:
<TABLE>
<CAPTION>

                                                                                 Fair Value
As of March 31, 2009                                    Level 1       Level 2       Level 3       Total
                                                        --------      --------      -------       ------
<S>                                                       <C>          <C>        <C>          <C>
Embedded conversion  liabilities                          $ --         $ --       $4,062,240   $ 4,062,240
</TABLE>



<TABLE>
<CAPTION>
The following table  reconciles,  for the three months ended March 31, 2009, the
beginning and ending balances for financial  instruments  that are recognized at
fair value in the consolidated financial statements:

<S>                                                                    <C>
Balance of Embedded Conversion Liabilities at December 31, 2007        $ 1,251,891
Reductions in fair value due to principal conversions                      (63,733)

Gain on fair value adjustments to embedded derivatives                   5,757,079
                                                                       -----------
Balance of Embedded Conversion Liabilities at December 31, 2008          6,945,237
Accretion adjustments to fair value - beneficial conversion features        (4,661)

Gain on fair value adjustments to embedded conversion liabilities       (2,878,336)
                                                                       -----------

Balance of Embedded Conversion Liabilities at March 31, 2009           $ 4,062,240
                                                                       ===========
</TABLE>
The valuation of the derivatives are calculated using a complex binomial pricing
model that is based on changes in the volatility of our shares, our stock price,
the probability of a reduction in exercise and conversion price, and the time to
conversion of the related financial instruments. See Note 6 for more information
on the valuation methods used.

DEFERRED FINANCING COSTS AND DEBT DISCOUNTS

Deferred  finance costs  represent  costs which may include direct costs paid or
warrants issued to third parties in order to obtain long-term financing and have
been  reflected as other assets.  Costs  incurred with parties who are providing
the actual long-term  financing,  which generally include the value of warrants,
fair value of the  derivative  conversion  feature,  or the  intrinsic  value of
beneficial   conversion  features  associated  with  the  underlying  debt,  are
reflected as a debt discount.  These costs and discounts are generally amortized
over the life of the related debt. On April 2, 2007,  YA Global  Investment,  LP
declared certain debentures to be in default (See Note 5). As a result, deferred
financing  fees  related  to these  debentures  were  deemed  to be  permanently
impaired and were written off to amortization expense.

                                       10
<PAGE>


5        FINANCING ARRANGEMENTS
<TABLE>
<CAPTION>
The following is a summary of the Company's financing arrangements as of March
31:

Current portion of convertible debentures:

<S>                                                                                  <C>
Convertible debenture payable from CICS to YAGI issued October 2005                  $      2,009,690
Convertible debenture payable from CICS to YAGI issued June 2007                              633,333
Convertible debenture payable from CICS to YAGI issued February 2006                       3,705,032
                                                                                     ----------------
     Total current convertible debentures                                            $      6,348,055
                                                                                     ================
</TABLE>
CONVERTIBLE DEBENTURES

YA Global Investments, LP

On April 2, 2007 YA Global Investments,  LP ("YAGI") declared certain debentures
issued by the Company to YAGI to be in default for the failure by the Company to
maintain  an  effective  registration  statement  as  required  by the  Investor
Registration Rights Agreement executed  contemporaneous with the issuance of the
debentures.  The Debentures are  unconditionally  guaranteed by Viridis Capital,
LLC  ("Viridis"),  a  wholly-owned  affiliate of Kevin  Kreisler,  the Company's
chairman and chief executive officer (the "Guaranty").

In  addition,  on April 2, 2007 the  Company,  YAGI and Viridis  entered  into a
Forbearance Agreement,  pursuant to which YAGI agreed to forbear from exercising
the remedies  available to it under the Debentures and the related  security and
stock pledge agreements,  which would have included the liquidation by YAGI of a
portion  of the  Company's  holdings.  The  terms of the  Forbearance  Agreement
provided that YAGI shall instead accept, convert and liquidate sufficient shares
of Viridis'  Series C  Preferred  Stock in the  Company to  facilitate  the full
repayment of the  Debentures.  YAGI shall accept the Series C Preferred Stock in
tranches, and it shall not convert a tranche until it has sold 80% of the shares
of Company common stock issuable upon  conversion of the previous  tranche.  Any
such conversions shall be subject to the ownership  limitations specified in the
Debentures  (i.e.,  limitations  to  ownership  of no  more  than  4.9%  of  the
outstanding  capital  stock of the Company.  YAGI shall apply the net  proceeds,
which are defined in the Forbearance  Agreement as 90% of the lowest closing bid
price for the  Company's  common stock for the five trading days  preceding  the
conversion  date  of the  Series  C  shares,  to the  full  satisfaction  of the
Company's  obligations  under the  Debentures in the following  priorities:  (a)
first, to accrued  interest on the most recently issued  Debenture,  (b) then to
principal on the most recently issued Debenture, (c) then to accrued interest on
the next most recently issued Debenture,  (d) then to principal on the next most
recently issued Debenture,  and so forth until all of the Company's  obligations
under the Debentures have been satisfied in full.

On June 26, 2007,  Carbonics entered into a Securities  Purchase Agreement (this
"Agreement"),  with YAGI.  In connection  with this  Agreement,  YAGI  purchased
secured convertible  debentures  amounting to $570,000 due on June 26, 2009. The
June 26,  2007 YAGI  debentures  provide  for  interest in the amount of 12% per
annum and are  convertible  at the lesser of $0.60 or 90% of the lowest  closing
bid price of  Carbonics'  common stock  during the 30 trading  days  immediately
preceding  the  conversion  date.  YAGI will be entitled to convert the June 26,
2007  debenture  on the basis of the  conversion  price into  Carbonics'  common
stock,  provided  that YAGI cannot  convert into shares that would cause YAGI to
own more 4.9% of Carbonics Capital's outstanding common stock.

In addition,  Carbonics  issued to YAGI a warrant to purchase  500,000 shares of
Carbonics  Capital's  common stock at $1.00 per share.  The value of the warrant
was  calculated  to be $570,000 at the time of the  issuance  using the guidance
found in APB Opinion 14,  "Accounting for Convertible  Debt and Debt issued with
Detachable Stock Purchase Warrants" and was recorded as a discount. The discount
is amortized to interest  expense over the term of the loan using the  effective
interest  method of  amortization.  During the three months ended March 31, 2009
and 2008,  interest  expense from accretion of the debt discount was $47,348 and
$152,720, respectively.

On January 25,  2008,  a financing  was  completed  that  resulted in  Carbonics
becoming  the  guarantor of the debts of several of its former  affiliates.  The
beneficiary  of the  guarantees was YA Global  Investments,  LP ("YAGI"),  which
committed  to extend  credit to those  affiliates.  As of March  31,  2009,  the
outstanding principal and accrued interest of the debt was $48,406,629.

On August 14, 2008,  certain Secured  Convertible  Debentures  between Carbonics
Capital Corporation and YA Global Investments,  L.P. were amended.  The maturity
date of the following  Secured  Convertible  Debentures have been extended until
December 31,  2011;  a certain  Secured  Convertible  Debenture  No. CCP-2 dated
October 12,  2005 in the  original  principal  amount of  $1,475,000;  a certain
Secured  Convertible  Debenture No. CCP-4 dated February 8, 2006 in the original
principal  amount of $3,050,369;  a certain  Secured  Convertible  Debenture No.
GSHF-3-1 dated June 26, 2007 in the original principal amount of $570,000.

                                       11
<PAGE>

The  Company  accounted  for  the  YAGI  Debenture  dated  October  12,  2005 in
accordance with SFAS No. 150, Accounting for Certain Financial  Instruments with
Characteristics  of both  Liabilities  and Equity (SFAS 150), as the  conversion
feature  embedded in the YAGI Debenture could result in the note principal being
converted to a variable  number of the  Company's  common  shares.  The carrying
amount of the debenture has been restated for the prior year (please see Note 10
Restatement of Prior Years Financials,  below). The Company determined the value
of the YAGI  Debenture at December 31, 2008 to be $3,014,535  which  represented
the  face  value  of the  debenture  plus the  present  value of the  $2,411,628
conversion feature. As of March 31, 2009, income of $1,004,845 has been recorded
from a reduction in the fair value of the conversion  feature on the convertible
note payable,  thereby,  decreasing  the carrying value of the YAGI Debenture to
$2,009,690 at June 30, 2009.

The  Company  accounted  for  the  YAGI  Debenture  dated  February  8,  2006 in
accordance with SFAS No. 150, Accounting for Certain Financial  Instruments with
Characteristics  of both  Liabilities  and Equity (SFAS 150), as the  conversion
feature  embedded in the YAGI Debenture could result in the note principal being
converted to a variable  number of the  Company's  common  shares.  The carrying
amount of the debenture has been restated for the prior year (please see Note 10
Restatement of Prior Years Financials,  below). The Company determined the value
of the YAGI  Debenture at December 31, 2008 to be $5,587,845  which  represented
the  face  value  of the  debenture  plus the  present  value of the  $4,470,276
conversion  feature.  The  Company  recognized  a  reduction  in the  conversion
liability at present value of $4,661 for the  conversions  that occurred  during
the  three  months  ended  March  31,  2009.  As of March  31,  2009,  income of
$1,873,491  has  been  recorded  from a  reduction  in  the  fair  value  of the
conversion  feature on the convertible  note payable as well as s a reduction in
the  conversion  liability at present value of $4,661 for the  conversions  that
occurred during the quarter, thereby,  decreasing the carrying value of the YAGI
Debenture to $3,705,032 at March 31, 2009.

The  Company  accounted  for  the  YAGI  Debenture  dated  October  12,  2005 in
accordance with SFAS No. 150, Accounting for Certain Financial  Instruments with
Characteristics  of both  Liabilities  and Equity (SFAS 150), as the  conversion
feature  embedded in the YAGI Debenture could result in the note principal being
converted to a variable  number of the  Company's  common  shares.  The carrying
amount of the debenture has been restated for the prior year (please see Note 10
Restatement of Prior Years Financials,  below). The Company determined the value
of the YAGI Debenture at December 31, 2008 to be $632,840 which  represented the
face value of the  debenture  plus the present  value of the $62,840  conversion
feature.  As of March 31, 2009,  the carrying value of the YAGI Debenture to was
$633,333 at March 31, 2009.

6        RELATED PARTY TRANSACTIONS

REDUCTION OF DEBT PAYABLE TO RELATED PARTIES

Effective March 31, 2008, the Company waived  $2,000,000 of note receivable from
GreenShift,  which  note was  issued in  connection  with the  November  9, 2007
transfer of GS AgriFuels  Corporation  and EcoSystem  Corporation  to GreenShift
Corporation.  This  reduction  was in part  attributable  to the  fact  that the
appraised value of GS AgriFuels,  which appraisal was completed during the first
quarter  of 2008,  was  assessed  to be less than the total  debt  payable by GS
AgriFuels,   and  the  fact  that  GreenShift  realized  impairment  charges  of
$11,153,816  relating to the impairment of GS AgriFuels' NextGen Fuel, Inc., and
Sustainable Systems, Inc. subsidiaries.

On January 25,  2008,  a financing  was  completed  that  resulted in  Carbonics
becoming  the  guarantor of the debts of several of its former  affiliates.  The
beneficiary  of the  guarantees was YA Global  Investments,  LP ("YAGI"),  which
committed  to extend  credit to those  affiliates.  As of March  31,  2009,  the
outstanding principal and accrued interest of the debt was $48,406,629.

7        SUBSEQUENT EVENTS

On May 4, 2009, the Superior Court of the State of California  entered a default
against the Company in the amount of $62,500.  Golden  State  Equity  Investors,
Inc. alleged claims against the Company in which they asserted a cause of action
for breach of contract regarding a Settlement  Agreement dated July 9, 2008. The
Company has recorded this default amount effective January 1, 2009.

8        RESTATEMENTS

The Company has restated its financial  statements  for the years ended December
31, 2008.  Subsequent to the filing of the original financial statements for the
years then  ended,  Management  determined  that the  Company's  prior  policies
relating to  accounting  for the impact of conversion  features  embedded in the
Company's various derivative securities should be revised to conform with recent

                                       12
<PAGE>

guidance under EITF 08-04,  Transition  Guidance for Conforming Changes to Issue
No. 98-5, involving  application of conforming changes from the issuance of SFAS
No. 150,  Accounting for Certain Financial  Instruments with  Characteristics of
both  Liabilities  and Equity  (SFAS  150).  Due to the  variable  number of the
Company's  common shares  issuable  upon  conversion of certain of the company's
derivative  securities,  such  instruments  should  have been  accounted  for as
liabilities  under SFAS 150 during 2008 based on  interpretive  guidance in EITF
08-04. During 2008, the Company had accounted for such instruments as derivative
instruments  under SFAS No.  133,  Accounting  for  Derivative  Instruments  and
Hedging Activities, by bifurcating the conversion features from the related host
contracts  and  recognizing  them at fair value,  amortizing  the  related  debt
discounts,  and  recognizing  gain or loss  for  changes  in fair  value  of the
conversion  features.  Management  believes that accounting for these conversion
features as liabilities under SFAS 150 is the preferable  accounting  treatment.
In accordance with SFAS No. 154,  Accounting Changes and Error Corrections,  the
Company has restated the financial  statements  for the year ended  December 31,
2008 to reflect the adoption of this change in accounting through  retrospective
application  of this  accounting  interpretation  to prior periods in accordance
with this standard.
<TABLE>

The following shows the effect of the restatements on the financial statements:
<CAPTION>
                                                           3/31/09              3/31/09             12/31/08             12/31/08
Balance Sheets:                                        As reported          As restated          As reported          As restated
                                                     -----------------------------------------------------------------------------
<S>                                                  <C>                  <C>                  <C>                  <C>
Convertible debentures, current                      $   2,049,074        $   6,348,055        $   2,006,387        $   9,235,713
Liability for derivative instruments                     4,650,932                 --             10,310,380                --
Accumulated deficit                                   (132,563,958)        (132,280,402)        (138,053,599)        (135,036,278)

                                                           3/31/09              3/31/09              3/31/08              3/31/08
Statements of Operations:                              As reported          As restated          As reported          As restated
                                                     ------------------------------------------------------------------------------
Loss on fair value-derivatives                       $   5,659,448        $       --           $   1,567,573        $       --
Amortization of debt discount                              (47,348)               --                (152,720)               --
Change in conversion liabilities                              --             2,878,336                  --              1,189,051
Conversion liability expense                                  --                  --                    --                   (493)
Income (loss) from
  continuing operations                                  5,511,523          2, 755,877             1,190,577             964,776

Net income (loss)                                        5,489,641           2,755,877             1,190,577             964,776

Earnings (loss) per share:
Continuing operations                                $        0.04        $      (0.02)        $        0.12         $      0.10

Total, basic and diluted                             $        0.04        $      (0.02)        $        0.12         $      0.10

                                                           3/31/09             3/31/09              12/31/08            12/31/08
Statements of Stockholders' Equity:                    As reported         As restated           As reported         As restated
                                                     ------------------------------------------------------------------------------
Change in conversion feature due
  to conversion liabilities                                  --                  4,661                  --                63,733
Net loss                                            $    5,489,641        $  2,755,877         $ (9,733,673)         $   964,776


                                                           3/31/09             3/31/09              3/31/08              3/31/08
Statements of Cash Flows:                              As reported         As restated          As reported          As restated
                                                    -------------------------------------------------------------------------------

Net loss from continuing operations                 $   5,489,641            2,755,877         $   1,190,577         $   964,776
Amortization of debt discount
  and deferred financing costs                             47,348                --                  152,720             330,519
Change in fair value of derivatives                    (5,659,448)               --               (1,567,573)               --
Interest from conversion liabilities                         --              2,878,336                  --             1,189,051

</TABLE>

                                       13
<PAGE>

ITEM 2     MANAGEMENT DISCUSSION AND ANALYSIS

We develop  renewable  energy projects that facilitate the more efficient use of
carbon in energy supply chains. Our development activities during 2009 primarily
involved  evaluation  of a number of different  chemical and other  technologies
designed to separate carbon dioxide from exhaust for conversion into value-added
carbonaceous products.

We  are  party  to a  technology  commercialization  agreement  with  GreenShift
Corporation,  which  company  is  majority  owned by our  majority  shareholder,
Viridis  Capital,  LLC,  pursuant  to which  GreenShift  has  agreed to  provide
commercialization support services and access to GreenShift's rights to sell and
use a proprietary  biomass  gasification  technology in fields of use outside of
the corn ethanol industry.  Carbonics will pay GreenShift a royalty equal to 10%
of the pre-tax net income generated by Carbonics through use of this technology.

Our strategic plan also involves the  acquisition  of accretive  assets and cash
flows that are strategic to our technology development efforts. We are currently
evaluating a number of qualified  opportunities  that produce the raw  materials
needed for our  technologies,  or that have the  infrastructure we need to scale
our  technologies,  or that have the  ability to refine the  products we produce
with our  technologies  into  finished  goods.  Our plan in this  respect  is to
leverage  the  targeted  assets  and cash  flows to defray  our  technology  and
financing risk as we commercialize our technologies.

RESULTS OF OPERATIONS

Three Months Ended March 31, 2009 Compared to Three Months Ended March 31, 2008

Revenues

There were no revenues from continuing operations for the three months ended
March 31, 2009 and 2008.

Cost of Revenues

There was no cost of revenues for the three months ended March 31, 2009 and
2008.

General and Administrative Expenses Operating Expenses

General and administrative expenses during the three months ended March 31, 2009
totaled $21,882 with $0 related to stock based  compensation.  In the comparable
period of the prior year, general and  administrative  expenses totaled $186,846
with $90,000  related to stock based  compensation.  General and  administrative
expenses  during the three  months ended March 31, 2009  primarily  consisted of
legal fees and office related expenses.

Interest Expense

Interest  expense  for the three  months  ended  March 31,  2009 was $38,077 and
$37,429 for the same period in 2008.

 Gain Associated with Change in Convertible Liabilities

As of March 31, 2009,  Carbonics Capital had several convertible  debentures due
to YA  Global  Investments,  LP.  The  Company  accounted  for  the  convertible
debentures in accordance  with SFAS No. 150,  Accounting  for Certain  Financial
Instruments with  Characteristics  of both Liabilities and Equity (SFAS 150), as
the conversion  feature  embedded in the convertible  debentures could result in
the note principal and related  accrued  interest being  converted to a variable
number of the  Company's  common  shares.  We  calculate  the fair  value of the
conversion feature at the time of issuance and record a conversion liability for
the calculated value. We recognize interest expense for the conversion liability
which is added to the principal of the  debenture.  We also  recognize  interest
expense for accretion of the conversion liability over the term of the note. For
the three  months  ended  March 31,  2009 and 2008,  we  recognized  $0 and $493
interest  expense  for the  accretion  of the  conversion  liability  for  these
debentures.  For the three months ended March 31,  2009and 2008, we recognized a
gain for the change in fair value of the conversion  liability of $2,878,336 and
a gain of $1,189,051 for these debentures.

Net Income

Net income for the three months ended March 31, 2009 was $2,755,877 as compared
to a net income of $967,776 from the same period in 2008.

Liquidity and Capital Resources

The Company had $7,498,701 in current liabilities at March 31, 2009, and may
need to obtain additional financing to satisfy these obligations.

                                       14
<PAGE>

Our primary sources of liquidity are cash provided by and financing  activities.
For the three  months  ended  March  31,  2009,  net cash used in our  operating
activities  was $3,194 as compared to $651,696  used in the three  months  ended
March 31, 2008. The Company's  capital  requirements  consist of general working
capital needs,  scheduled  principal and interest payments on debt,  obligations
and capital  leases and planned  capital  expenditures.  The  Company's  capital
resources  consist primarily of proceeds from issuance of debt and common stock.
The Company plans to fund ongoing  operations  during 2009 with a combination of
proceeds  from the  issuance of debt and equity as well as the  repayment to the
Company of loans receivable and other amounts due.

Cash Flows

Our  operating  activities  during the three  months  ended  March 31, 2009 used
$3,194 in cash. At March 31, 2009, accounts payable and accrued expenses totaled
$672,699.  At March 31,  2009 the  Company  had  $62,247 in cash.  For the three
months ended March 31, 2009, investing activities used $0 in cash, and cash from
financing activities provided $65,442. The Company had a working capital deficit
of  $7,115,763  at March 31, 2009,  which  includes  convertible  debentures  of
$6,348,055.

At the present time,  Carbonics Capital has no source of committed  capital.  We
are currently  investigating  the availability of both equity and debt financing
necessary to complete the  Company's  current  projects.  We do not know at this
time if the  necessary  funds  can be  obtained  nor on what  terms  they may be
available.

Off Balance Sheet Arrangements

None.


                                       15
<PAGE>



ITEM 3   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable.

ITEM 4            CONTROLS AND PROCEDURES

EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

Our principal executive officer and principal financial officer  participated in
and  supervised  the  evaluation of our  disclosure  controls and procedures (as
defined in Rules 13(a)-15(e) and 15(d)-15(e)  under the Securities  Exchange Act
of 1934,  as amended  (the  "Exchange  Act"))  that are  designed to ensure that
information  required  to be  disclosed  by us in the  reports  that  we file is
recorded,  processed,  summarized and reported within the time periods specified
in the Securities and Exchange Commission's rules and forms. Disclosure controls
and procedures include, without limitation,  controls and procedures designed to
ensure that the  information  required to be disclosed by us in the reports that
we  file  or  submit  under  the  Act is  accumulated  and  communicated  to our
management,  including our principal executive officer or officers and principal
financial officer, to allow timely decisions regarding required disclosure.

Management  determined  that at March  31,  2009,  the  Company  had a  material
weakness  because  it did not have a  sufficient  number  of  personnel  with an
appropriate level of knowledge and experience of generally  accepted  accounting
principles  in the United States of America  (U.S.  GAAP) that are  commensurate
with the Company's financial  reporting  requirements.  As a result,  Management
concluded  that  the  Company's  disclosure  controls  and  procedures  were not
effective at March 31, 2009.

There have been no changes in the  Company's  internal  control  over  financial
reporting during the most recently completed fiscal quarter that have materially
affected or are reasonably  likely to materially  affect the Company's  internal
control over financial reporting.















                                       16
<PAGE>



                                     PART II

                                OTHER INFORMATION


ITEM 1            LEGAL PROCEEDINGS

None.

ITEM 1A  RISK FACTORS

Not  Applicable.

ITEM 2   UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None.

ITEM 3   DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None.

ITEM 5   OTHER INFORMATION

None.

ITEM 6            EXHIBITS

INDEX TO EXHIBITS

Exhibit
Number            Description
-------------------------------------------------------------------------------

31.1 Certification    of   Chief    Executive    Officer    pursuant   to   Rule
     13a-14(a)/15d-14(a),   as  adopted   pursuant   to   Section   302  of  the
     Sarbanes-Oxley Act of 2002.

31.2 Certification    of   Chief    Financial    Officer    pursuant   to   Rule
     13a-14(a)/15d-14(a),   as  adopted   pursuant   to   Section   302  of  the
     Sarbanes-Oxley Act of 2002.

32.1 Certification  of Chief  Executive  Officer  and  Chief  Financial  Officer
     pursuant  to  18  U.S.C.   Section  1350,   as  adopted   pursuant  to  the
     Sarbanes-Oxley Act of 2002.



<PAGE>



                                   SIGNATURES

Pursuant to the requirements of Section 13 or 15 (d) of the Securities  Exchange
Act of 1934,  the  registrant  has duly  caused  this report to be signed on its
behalf by the undersigned, thereunto duly authorized on the date indicated.

CARBONICS CAPITAL CORPORATION

                /S/      KEVIN KREISLER
                -----------------------
By:                      KEVIN KREISLER
                         Chairman and Chief Executive Officer
Date:                    May 20 , 2009

                /S/      JACQUELINE FLYNN
                -------------------------
By:                      JAQUELINE FLYNN
                         Chief Financial Officer
Date:                    May 20 , 2009














                                       17