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

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

                                   FORM 10-QSB
                            -------------------------


                QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (D)
                     OF THE SECURITIES EXCHANGE ACT OF 1934
                   FOR THE FISCAL QUARTER ENDED MARCH 31, 2007

                          COMMISSION FILE NO.: 0-28887



                             GREENSHIFT 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 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 21,  2007 was
184,965,265.



Transitional Small Business Disclosure Format:  Yes       No  X
                                                    ---      ---




<PAGE>

<TABLE>

                                   CORPORATION
                         QUARTERLY REPORT ON FORM 10QSB
                   FOR THE FISCAL QUARTER ENDED MARCH 31, 2007

                                TABLE OF CONTENTS
<CAPTION>

                                                                                                           Page No
<S>               <C>                                                                                         <C>
Part I            Financial Information
Item 1.           Financial Statements (unaudited)...............................................................3
                  Consolidated Balance Sheet - March 31, 2007 (unaudited)........................................4
                  Consolidated Statements of Operations - for the Three Months Ended
                     March 31, 2007 (unaudited) and 2006 (unaudited).............................................6
                  Consolidated Statements of Cash Flows - for the Three Months Ended
                    March 31, 2007 (unaudited) and 2006 (unaudited)..............................................7
                  Notes to Consolidated Financial Statements.....................................................9
Item 2.           Management's Discussion and Analysis or Plan of Operation.....................................25
Item 3.           Controls and Procedures.......................................................................35

Part II           Other Information
Item 1.           Legal Proceedings.............................................................................36
Item 2.           Unregistered Sales of Equity Securities and Use of Proceeds...................................36
Item 3.           Defaults upon Senior Securities...............................................................36
Item 4.           Submission of Matters to a Vote of Security Holders...........................................36
Item 5.           Other Information ............................................................................36
Item 6.           Exhibits and Reports on Form 8K...............................................................36

Signatures
</TABLE>



<PAGE>

                         PART I - FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS (UNAUDITED FOR MARCH 31, 2007)

<PAGE>
<TABLE>

                     GREENSHIFT CORPORATION AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEET
<CAPTION>
                              AS OF MARCH 31, 2007
                                   (UNAUDITED)

  ASSETS

Current Assets:
<S>                                                                  <C>
   Cash ........................................................     $ 2,066,808
   Accounts Receivable, net ....................................       3,298,374
   Notes Receivable ............................................           1,298
   Accrued Interest, Dividends, and Fees Receivable ............          43,145
   Costs and Estimated Earnings in Excess
     of Billings on Uncompleted Contracts ......................         150,090
   Inventory ...................................................       5,460,557
   Prepaid Expenses and Other Current Assets ...................         527,172
                                                                     -----------
     Total Current Assets ......................................      11,547,444

Net Fixed Assets ...............................................       8,502,403

Other Assets:
   Investment in Unconsolidated Subsidiary at Cost .............       5,937,382
   Investment in Unconsolidated Subsidiary - Equity Method .....         303,078
   Project Development Costs ...................................         276,664
   Deferred Financing Fees .....................................       2,266,055
   Intangible Assets and License Agreements ....................      14,465,080
   Other Assets ................................................          25,025
   Net Noncurrent Assets of Discontinued Operations ............           7,500
   Deposits ....................................................         414,130
   Goodwill ....................................................      23,913,180
                                                                     -----------
     Total Other Assets ........................................      47,608,094

                                                                     -----------
TOTAL ASSETS ...................................................     $67,657,941
                                                                     ===========
</TABLE>



<PAGE>

<TABLE>

                     GREENSHIFT CORPORATION AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEET
<CAPTION>
                               AS OF MARCH 31, 2007
                             (UNAUDITED) (CONTINUED)

  LIABILITIES AND STOCKHOLDERS' DEFICIENCY

Current Liabilities:
<S>                                                                <C>
   Accounts Payable ...........................................    $  5,712,653
   Accrued Expenses ...........................................       3,243,516
   Due to Related Party .......................................         521,100
   Current portion of Convertible Debentures ..................       4,926,577
   Convertible Debentures - Related Party, Net of Discount ....       2,259,896
   Derivative Liability .......................................      13,028,582
   Notes payable and short term borrowings ....................      11,069,331
   Short-Term Borrowings - Related Party ......................         378,475
   Current Maturities of Long Term Debt .......................         217,071
   Current Portion of Liabilities Under Capital Lease .........           5,116
   Billings in Excess of Cost and Estimated
    Earnings on Uncompleted Contracts .........................          48,794
   Customer deposits ..........................................       3,997,000
   Liabilities of Discontinued Operations .....................         433,692
                                                                   ------------
     Total Current Liabilities ................................      45,841,803

   Loans Payable - Related Parties ............................         260,082
   Long Term Convertible Debenture, Net of Discount ...........      28,625,668
   Long Term Leases Payable ...................................          38,691
   Long Term Debt, Net of Current Maturities ..................       5,211,912
   Other long term liability ..................................         202,601
                                                                   ------------
     Total Long Term Liabilities ..............................      34,338,954

                                                                   ------------
TOTAL LIABILITIES .............................................      80,180,757

Minority Interest in Consolidated Subsidiary ..................       1,124,187

STOCKHOLDERS' DEFICIENCY

Preferred Stock,
  Series C, par $0.001, 1,000,000 authorized,
990,875 issued and outstanding ................................             991
Common Stock, Par $0.001, 200,000,000 authorized,
  140,507,851 issued and outstanding ..........................         140,507
Additional Paid-in-Capital ....................................      67,686,530
Accumulated Deficit ...........................................     (81,475,031)
                                                                   ------------
Total Stockholders' Deficiency ................................     (13,647,003)


                                                                   ------------
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIENCY ................    $ 67,657,941
                                                                   ============

</TABLE>




<PAGE>
<TABLE>


                     GREENSHIFT CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
         FOR THE THREE MONTHS ENDED MARCH 31, 2007 AND 2006 (UNAUDITED)
<CAPTION>
                                                     -------------------------------
                                                         3/31/2007        3/31/2006
                                                     -------------------------------
<S>                                                   <C>              <C>
Revenue ...........................................   $   4,039,941    $   4,178,668
Cost of Revenues ..................................       3,171,828        3,274,839
                                                      -------------    -------------

   Gross Profit ...................................         868,113          903,829

Operating Expenses:
     Selling Expenses .............................       1,305,892          972,943
     General and Administrative Expenses ..........       1,972,430        3,440,159
     Stock Based Compensation .....................       4,276,689             --
                                                      -------------    -------------
   Total Operating Expenses .......................       7,555,011        4,413,102
                                                      -------------    -------------

Operating (Loss) Income ...........................      (6,686,898)      (3,509,273)

   Other Income (Expense):
     Fees and other income ........................        (157,141)            --
     Other Expense (Income) from Settlements ......           2,279           19,260
     Change in Fair Value of Derivative Instruments      (2,411,737)         900,564
     Interest Expense .............................      (1,671,155)      (2,737,883)
     Amortization Expense, Intangible Assets ......        (518,288)        (135,806)
     Amortization of Debt Discount ................      (1,534,038)            --
     Miscellaneous Income (Expense) ...............            --              1,000
     Forgiveness of Interest and Finance Charges ..            --            119,240
     Gain/(loss) on equipment disposal ............            (600)          18,607
                                                      -------------    -------------
          Total Other Expense, Net ................      (6,290,680)      (1,815,018)
                                                      -------------    -------------

Loss before Provision for Income Taxes ............     (12,977,578)      (5,324,291)

Provision for Income Taxes ........................         (37,972)          (4,309)
                                                      -------------    -------------

Net (Loss) Income from Continuing Operations ......     (13,015,550)      (5,328,600)

Discontinued Operations:
Gain from discontinued operations .................            --            100,053
Gain on disposal of discontinued operations .......       2,494,946            6,000
                                                      -------------    -------------
   Total discontinued operations ..................       2,494,946          106,053

Net Loss before Minority Interest .................     (10,520,604)      (5,222,547)
                                                      -------------    -------------

     Minority Interest ............................            (355)         328,833
                                                      -------------    -------------

Net Loss ..........................................   $ (10,520,959)   $  (4,893,714)
                                                      =============    =============

Net Loss per Common Share, Basic and Diluted ......   $       (0.08)   $       (0.04)
                                                      =============    =============
Weighted Average Shares of Common Stock
Outstanding, Basic and Diluted ....................     128,480,300      108,785,938
                                                      =============    =============
</TABLE>


<PAGE>
<TABLE>




                     GREENSHIFT CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
          FOR THE THREE MONTHS ENDED MARCH 31, 2007 AND 2006 (UNAUDITED)
<CAPTION>

                                                                    Three months   Three months
                                                                       Ending        Ending
                                                                    March 31, 2007 March 31, 2006
                                                                   -----------------------------
CASH FLOW FROM OPERATING ACTIVITIES

<S>                                                                   <C>            <C>
             Net cash used in operating activities ................   $  (593,904)   $(1,962,536)
                                                                      -----------    -----------

CASH FLOW FROM INVESTING ACTIVITIES

         Change in investments ....................................       (16,600)    (1,688,581)
         Long term investment .....................................       282,671           --
         Construction in progress .................................      (685,240)          --
         Project development costs ................................        (6,191)          --
         Issuance of note receivable ..............................       (73,877)    (1,811,450)
         Additions to and acquisition of PPE ......................      (655,486)        (1,587)
         Investment of intangible assets ..........................          --           (7,777)
        Net cash acquired from purchase of subsidiaries ...........     1,109,490
         Acquisition of technology license ........................          --          (50,000)
                                                                      -----------    -----------
             Net cash used in investing activities ................       (45,233)    (3,559,395)

CASH FLOWS FROM FINANCING ACTIVITIES

        Short term borrowings .....................................     (3,500.00)          --
        Loan due to affiliate .....................................       703,890        874,239
        Loan due from affiliate ...................................      (294,317)          --
        Advances from related parties, net ........................      (607,949)       349,437
        Convertible debenture .....................................          --         (462,048)
        Proceeds from convertible debenture, net of financing costs     1,000,000           --
        Net proceeds from short term borrowings - related party ...        65,261         39,754
        Repayments of short term borrowings .......................          --          (71,104)
        Loan due from related party ...............................       130,000        311,030
        Issuance of (repayment of) long term debt .................       (30,764)       (41,861)
        Issuance of notes payable .................................      (965,250)          --
        Proceeds from (repayment of) convertible debentures .......       224,577           --
        Proceeds from related party convertible debentures ........       250,000           --
        Repayments of lease payable ...............................        (2,235)          --
        Repayment of notes payable ................................        (5,275)     2,162,611
        Repayment of term financing ...............................          --          (25,000)
        Repayment of investment payable ...........................          --         (440,000)
        Redemption of preferred stock .............................            (9)          --
        Issuance of convertible debentures-related party ..........      (151,653)          --
        Deferred financing fees ...................................        73,343       (113,646)
        Proceeds from issuance of common stock ....................       313,695      2,989,083
                                                                      -----------    -----------
             Net cash provided by financing activities ............       699,814      5,572,495
                                                                      -----------    -----------
</TABLE>

<PAGE>
<TABLE>

                     GREENSHIFT CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
          FOR THE THREE MONTHS ENDED MARCH 31, 2007 AND 2006 (UNAUDITED)
<CAPTION>

                                                                         Three months   Three months
                                                                            Ending         Ending
                                                                         March 31, 2007 March 31, 2006
                                                                        -----------------------------
<S>                                                                           <C>          <C>
Net increase in cash ......................................................   $   60,677   $   50,564

Cash at beginning of period ...............................................    2,006,131      708,489
                                                                              ----------   ----------
Cash at end of period .....................................................   $2,066,808   $  759,053
                                                                              ==========   ==========

Cash paid during the year for interest ...................................$        9,746   $   10,739

Supplemental statement of non-cash investing and and financing activities:

  Acquisition of equipment and/or vehicles with long term debt ............       32,829       43,527
  Acquisition of technology license .......................................      191,427         --
  Discounts on convertible debt ...........................................      954,603         --
  Beneficial conversion on convertible debt ...............................      221,208         --
  Issuance of common stock for acquisition in subsidiaries ................         --      2,192,016
  Acquisition of technology license .......................................         --        211,328
  Issuance of stock subscription ..........................................         --         75,000
  Issuance of stock options for services ..................................         --        300,000
  Conversion of debenture and accrued interest into common stock ..........         --        404,122
  Issuance of common stock for services ...................................         --        160,000
  Conversion of Series A Preferred stock to common stock ..................         --      3,000,000
  Cancellation of Series B Preferred stock ................................         --            252
  Conversion of convertible debentures and
     interest into Series C Preferred stock ...............................         --      1,150,369
</TABLE>


<PAGE>

                     GREENSHIFT CORPORATION AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)


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 10-QSB of Rule 310(b) of Regulation S-B.  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,  2007 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,  schedule and notes contained in the Company's
Annual Report on Form 10-KSB for the year ended December 31, 2006.

2 - NATURE OF OPERATIONS

GreenShift   Corporation  (the  "Company")  began  operations  as  a  closed-end
management  investment  company  on April 1,  2005  after the  Company  acquired
majority equity stakes in the  predecessors to the Company's GS CleanTech and GS
Energy subsidiaries and filed an election on Form N54A pursuant to Section 54 of
the Investment  Company Act of 1940 (the "40 Act") to be regulated as a business
development  company  ("BDC").  The Company  conducted  operations as a BDC from
April 1, 2005 through July 1, 2006.  During this time, the Company  acquired its
initial   technology   portfolio,   purchased  majority  equity  stakes  in  the
development  stage and  operating  companies  that would  eventually  become the
Company's  platform  companies,  and the Company  completed a number of minority
equity  investments  in  companies  that were  believed to be  strategic  to the
Company's mission.

On July 1, 2006,  the Company  filed Form N54C  pursuant to Section 54 of the 40
Act to withdraw its election to be regulated as a BDC. This decision was in part
prompted by the fact that the majority of the Company's resources were allocated
to  managing  the  operating  activities  of its  majority-owned  holdings.  The
de-election  changed the nature of the Company's business from an investment and
business  development  company  to an  active  operating  company.  The  Company
commenced  efforts to  restructure  its holdings and  investments at the time of
this de-election.  The primary purpose of this restructuring was to organize the
Company's holdings according to a sector-specific  approach,  within `pure-play'
platform  companies with investment theses that are both distinct and consistent
with GreenShift's overall mission.

During  the  quarter  ended  March  31,  2007  the  Company's   operations  were
administered through the following companies:

<TABLE>

<CAPTION>

Company                                                         Business Model
----------------------------------------------------- ------------------------------------------------

<S>                                                        <C>
GS CleanTech Corporation (OTC Bulletin Board: GSCT)        Clean Technology and Process Engineering
----------------------------------------------------- ------------------------------------------------

GS Agrifuels Corporation (OTC Bulletin Board: GSGF)        Clean Fuels Production and Sales
----------------------------------------------------- ------------------------------------------------

GS Energy Corporation (OTC Bulletin Board: GSEG)           Clean Energy Equipment Production and Sales
----------------------------------------------------- ------------------------------------------------

GS Carbon Corporation (OTC Bulletin Board: GSCR)           Decarbonization Research and Development
----------------------------------------------------- ------------------------------------------------
</TABLE>


<PAGE>

3 - GOING CONCERN

The accompanying  consolidated  financial statements have been prepared assuming
that the Company will continue as a going concern.  The Company  incurred a loss
of  $10,520,959  for the three months ended March 31, 2007. As of March 31, 2007
the Company's current liabilities  exceeded current assets by $34,294,359 and it
used cash in operations of $593,904. 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  to fund  operations  and to increase  revenue and cut  expenses to
reduce the loss from  operations.  There can be no  assurances  that the Company
will be able to eliminate  both its working  capital  deficit and its  operating
losses.  The accompanying  financial  statements do not contain any adjustments,
which may be required as a result of this uncertainty.

4 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

PRINCIPLES OF CONSOLIDATION

For the three month period ended March 31, 2007, the  accompanying  consolidated
financial  statements  include all accounts of the Company and its subsidiaries.
All  significant  intercompany  balances and  transactions  were  eliminated  in
consolidation.

USE OF ESTIMATES

The  preparation  of  consolidated   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.


 5 - FINANCING ARRANGEMENTS

The following is a summary of the Company's financing arrangements as of March
31, 2007:

Notes payable and short-term borrowings:

Note payable - Stillwater ..................................   $  5,094,000
Note payable - NextGen sellers .............................      4,029,437
Note payable - American State Bank .........................      1,800,000
Vendor composition plans ...................................          7,015
Loan payable-overdraft line ................................          1,300
Loan payable - Lakeland Bank ...............................         37,579
Note payable - Sustainable Sellers .........................        100,000
                                                               ------------
    Total notes payable and short term borrowings...........   $ 11,069,331

Current maturities of long-term debt:

Vehicle loans and other installment loans ...................      $156,806
Mortgages and other term notes ..............................        60,265
                                                                  ---------
    Total current maturities of long-term debt...............      $217,071
                                                                   ========

Current portion of convertible debentures:

Cornell Capital convertible debenture (July 2005) ...........   $   465,000
Cornell Capital convertible debenture (October 2005).........     1,010,000
Cornell Capital convertible debenture (February 2006)........     1,150,369
 Cornell Capital convertible debenture (April 2006) .........     1,900,000
 Cornell Capital convertible debenture (April 2006) .........     1,668,444
Convertible debenture - Candent Corporation .................     2,259,896
Convertible debenture - Kerns Manufacturing Corp ............       500,000
Convertible debenture - Kerns Manufacturing Corp ............     1,000,000
 Note discounts .............................................    (2,767,236)
                                                                -----------
    Total current portion of convertible debentures .........   $ 7,186,473
                                                                ===========

Long-term debt:

  Vehicle loan, net of current ...............................   $  263,811
 Note payable - Sustainable sellers ..........................    1,900,000
 Note payable - MT Dept of Agriculture .......................      124,052
 Note payable - First Community Bank .........................    1,381,733
Note payable - Great Northern Development ....................      300,000
  Note payable - Great Northern Development...................      724,162
 Note payable - Great Northern Development....................      140,857
 Mortgages payable and other term notes,
  net of current portion .....................................      377,297
                                                                 ----------
   Total long term debt ......................................   $5,211,912
                                                                 ==========

Convertible debentures, non-current:

Cornell Capital convertible debenture (April 2006) .........   $  4,400,000
Cornell Capital convertible debenture (February 2006) ......      1,949,631
Cornell Capital convertible debenture (March 2006) .........      1,145,719
Cornell Capital convertible debenture (February 2007) ......      1,125,000
Cornell Capital convertible debenture (June 2006) ..........      5,500,000
 Cornell Capital convertible debenture (October 2006) ......     13,000,000
Sustainable Systems, Inc. convertible debenture (March 2007)      3,552,005
Sustainable Systems, Inc. convertible debenture (March 2007)      3,552,013
  Note Discounts ...........................................     (5,598,700)
                                                               ------------
Total convertible debentures, non-current ..................   $ 28,625,668
                                                               ============

The convertible debentures noted above are convertible into the common stock of
the following companies:

 Greenshift .................................................   $ 4,885,265
                                                                ===========
 GS Cleantech...............................................    $ 9,468,444
                                                                ===========
 GS Agrifuels................................................   $27,553,649
                                                                ===========
 GS Carbon ..................................................   $ 2,270,719
                                                                ===========


The following chart is presented to assist the reader in analyzing the Company's
ability to fulfill its fixed debt service  requirements  (net of note discounts)
of as of March 31, 2007 and the Company's ability to meet such obligations:

      Year                                                        Amount
     2007                                                       $18,890,621
     2008                                                         8,039,835
     2009                                                        30,782,323
     2010                                                           809,653
     2011 and thereafter                                          2,258,066
                                                                  ---------
     Total minimum payments due under current
      and long-term obligations                                 $60,780,498
                                                                -----------


SERENTY CAPITAL


In  February  2006 GS  CleanTech  issued a  $500,000  convertible  debenture  to
Serenity  Capital,  LLC  ("Serenity")  in exchange for Serenity's  assumption of
$500,000 in debt.  The debenture is convertible at the lesser of $0.02 or 80% of
the average closing market price of GS CleanTech  common stock prior to the date
of  conversion.  A note  discount  of $500,000  and a  derivative  liability  of
$1,672,500 were recorded at the assumption  date.  During the year 2006 Serenity
effected  conversions  totaling $288,477 into a total of 14,423,880 shares of GS
CleanTech  common  stock.  During  the year  ended 2006  interest  expense  from
accretion  of the debt  discount  was  $464,465  and the gain on the fair market
value of the derivative  liability was $1,401,372.  As of December 31, 2006, the
principal  amount due on the  debenture  was  $211,523.  During the three months
ended March 31, 2007,  interest  expense from accretion of the debt discount was
$35,535  and  gain on the fair  market  value of the  derivative  liability  was
$271,128.  In March 2007, the remaining principal on the debenture was converted
into 10,576,120 shares of Common Stock.

CYRUS CAPITAL

In February 2006 GS CleanTech issued a $500,000  convertible  debenture to Cyrus
Capital,  LLC ("Cyrus") in exchange for Cyrus's  assumption of $500,000 in debt.
The  debenture  is  convertible  at the  lesser  of $0.02 or 80% of the  average
closing  market  price  of GS  CleanTech  common  stock  prior  to the  date  of
conversion A note discount of $500,000 and a derivative  liability of $1,672,000
were  recorded at the  assumption  date.  During the year 2006,  Cyrus  effected
conversions  totaling $400,000 into a total of 20,000,000 shares of GS CleanTech
common stock. As of December 31, 2006, principal amount due on the debenture was
$100,000.  Interest is accrued at a rate of 5% on the principal  balance.  As of
December 31, 2006,  $4,644 of interest is accrued on this debenture.  During the
three months ended March 31, 2007,  interest  expense from accretion of the debt
discount  was  $31,350  and gain on the  fair  market  value  of the  derivative
liability was $128,188.  In March 2007, the remaining principal on the debenture
was converted into 5,000,000 shares of Common Stock.  Cyrus is owned by a family
member of the Company's chairman.

TRANSACTIONS WITH KERNS MANUFACTURING

On February 28, 2007 GS CleanTech  entered into a  Stipulation  of Settlement to
settle the lawsuit titled "Kerns Manufacturing Corp. v. Veridium Corporation and
KBF Pollution  Management,  Inc.,  which was pending in the Supreme Court of the
State of New York  (County  of  Queens,  Index No.  19788/03).  Pursuant  to the
Stipulation,  GS CleanTech issued to Kerns Manufacturing Corp. (a) a Convertible
Debenture in the principal  amount of $500,000 that is due on March 31, 2007 and
(b) a Convertible Debenture in the principal amount of $1,000,000 that is due on
June 30, 2007.  Each  Debenture may be converted by its holder into common stock
of GS  CleanTech at a price equal to 90% of the average of the last trade prices
for the common stock during the five days preceding conversion. The total shares
issued  upon  conversion,  however,  may not,  when added to other GS  CleanTech
shares  beneficially  owned  by  the  holder,  total  more  that  4.99%  of  the
outstanding GS CleanTech common stock.

The Stipulation  provides that upon  satisfaction  of all obligations  under the
Stipulation,  the parties will exchange mutual general releases. If, however, GS
CleanTech   defaults  in   satisfying   the  $500,000   Debenture,   then  Kerns
Manufacturing Corp. may cause the action to be restored to the trial calendar of
the New York Supreme Court.

Kerns $0.5 Million Convertible Debenture

A note discount of $290,347 and a derivative liability of $290,347 were recorded
at the assumption date.  During the three months ended March 31, 2007,  interest
expense from  accretion  of the debt  discount was $290,347 and loss on the fair
market value of the derivative liability was $300,253. As of March 31, 2007, the
principal balance on this debenture was $500,000.

Kerns $1.0 Million Convertible Debenture
<PAGE>
A note discount of $580,694 and a derivative liability of $580,694 were recorded
at the assumption date.  During the three months ended March 31, 2007,  interest
expense from  accretion  of the debt  discount was $145,173 and loss on the fair
market value of the derivative liability was $600,469. As of March 31, 2007, the
principal balance on this debenture was $1,000,000.

CONVERTIBLE DEBENTURE - SEAWAY VALLEY FUND

On  December  28,  2006,  GS  Agrifuels  issued to  Seaway  Valley  Fund,  LLC a
Convertible  Debenture  due December 28, 2008 with a face amount of $250,000 for
monies  ultimately  received in January 2007 by GS Agrifuels from Seaway Valley
in the  amount of  $250,000.  The  terms of the  Convertible  Debenture  are the
following:  (i) an interest rate of eight percent (8%) payable, at the option of
Seaway Valley, in cash or registered common stock in GS AgriFuels Corporation or
any combination thereof; (ii) shall become due and be payable monthly commencing
March 31, 2007,  unless  otherwise  waived or deferred by Seaway  Valley;  (iii)
payment in full or in part of principal  plus accrued but unpaid  interest shall
be made only upon demand by Seaway Valley  commencing  April 31, 2007;  (iv) any
unpaid balance, at the option of Seaway Valley, shall become immediately due and
payable  without  notice or demand in the event of default,  and (v) any accrued
and unpaid  interest  shall be  convertible  upon  demand of Seaway  Valley into
registered shares of common stock equal to the lower of: (a) $3.00 per share; or
(b) the lowest convertible debenture conversion price, preferred,  common or any
other  class of stock or  convertible  security  issuance  price,  or warrant or
option  issuance  price,  issued  from  December  28,  2006  until  the  time of
conversion(s);  or (c) 100% of the  closing  market  price as of the date hereof
provided  that any such  conversion  price  shall not  trigger a lowering of the
conversion  price of any  convertible  debenture(s)  outstanding at December 28,
2006.  As of the date of this filing,  Seaway  Valley has received  neither cash
re-payments of principal or cash payments of interest,  nor has he exercised his
right to convert any  obligations  in GS AgriFuels  common stock.  For the three
months ending March 31, 2007, interest expense of $3,616 for this obligation was
incurred and accrued.

DEMAND NOTE:  STILLWATER ASSET-BASED FUND, LP

On October 30, 2006,  NextGen  Acquisition,  Inc., a subsidiary  of GS AgriFuels
which was formed to facilitate the acquisition of NextGen Fuel Inc., completed a
sale of securities to Stillwater  Asset-Based  Fund, LP pursuant to a Securities
Purchase  Agreement  dated as of October  27,  2006.  The  Agreement  called for
Stillwater  to purchase a Term Note in the principal  amount of $6 million.  The
Term Note was purchased by Stillwater  on October 31, 2006,  and in  conjunction
with the  financing  NextGen  Acquisition  paid an  origination  fee of $75,000,
prepaid interest of $300,000,  legal fees of $35,225,  and received net proceeds
of $5,589,775.  NextGen  Acquisition  used $4,879,236 of the proceeds to acquire
NextGen Fuel,  Inc.,  made a loan totaling  $568,958 to Warnecke Design Service,
Inc. (a  subsidiary  of GS Energy,  who is also owned by the  Company's  parent,
GreenShift  Corporation),  and repaid  GreenShift  $141,580  for amounts paid by
GreenShift in connection with the NextGen Fuel, Inc. Acquisition.  The Term Note
accrues  interest at a rate of 20% per annum.  Monthly payments of principal and
interest are due beginning  February 1, 2007, with a monthly principal amount of
at least $300,000 and additional principal payments made as a percentage of cash
receipts  of NextGen  Fuel,  Inc.  All amounts of  principal  and  interest  not
previously  satisfied  will be due on December  31,  2007.  The  obligations  of
NextGen  Acquisition  Inc.  under  the Term  Note  have  been  guaranteed  by GS
AgriFuels and by the following  affiliates:  GreenShift  Corporation,  GS Energy
Corporation,  GS  CleanTech  Corporation,  NextGen  Fuel Inc.,  Warnecke  Design
Services,  Inc.  and  Warnecke  Rentals,  LLC  (the  "Guarantors").  Each of the
Guarantors  has pledged its assets to secure its guaranty.  For the three months
ending March 31, 2007,  interest  expense of $290,225  for this  obligation  was
incurred of which $89,012 was accrued.

DEMAND NOTE - NEXTGEN SELLERS

On October 30, 2006, a wholly-owned subsidiary of GS AgriFuels purchased 100% of
the outstanding  capital stock of NextGen Fuel, Inc.  NextGen Fuel is engaged in
the   business   of   developing    and    distributing    esterification    and
transesterification  biodiesel  process  technologies.  The  purchase  price was
$21,204,437,  of which  $17,000,000  was paid at closing  and demand  notes were
issued to the selling shareholders totaling $4,204,437. $3,204,437 of the demand
notes are due on October 31, 2007 or sooner if NextGen Fuel has realized revenue
of  $7,500,000  subsequent  to the  acquisition  and  there are not  claims  for
indemnification  by GS AgriFuels.  The remaining  $1,000,000  demand note,  with
interest at 6% per annum, is due to a sales consultant and is payable along with
accrued interest upon the payment by customers for biodiesel  production systems
totaling  forty  million  gallons  per year of  production  capacity,  paid on a
pro-rated basis such that the consultant shall receive payments of $250,000 with
each ten million gallon per year system on a pro-rated basis with NextGen Fuel's
receipt of cash payments for such system.
<PAGE>

NOTE PAYABLE - SUSTAINABLE SYSTEMS SELLERS

On March 6, 2007, GS AgriFuels  purchased  the remaining 85% of the  outstanding
capital stock of Sustainable Systems,  Inc. Sustainable owns an oilseed crushing
facility in Culbertson, Montana, and is in the business of producing and selling
high oleic safflower, sunflower, and canola and other high value vegetable oils.
The purchase price was $12.6 million of which $100,000 was payable at closing, a
note was issued for $1.9 million and two $3.55 million debentures were issued to
the selling shareholders totaling $9,004,018.  The $1.9 million note is due upon
the completion and commissioning of Sustainable's  current plant expansion which
is expected to be completed in the first quarter of 2008 and accrues interest at
5% per annum to be paid on a pro-rated  basis at maturity.  For the three months
ending  March 31,  2007,  interest  expense  of $6,506 for this  obligation  was
incurred and accrued.

CONVERTIBLE DEBENTURES - SUSTAINABLE SYSTEMS SELLERS

On March 26, 2007, GS AgriFuels  acquired about 85% of the  outstanding  capital
stock of Sustainable Systems,  Inc. for a total purchase price of $12.6 million.
Sustainable owns an oilseed crushing facility in Culbertson,  Montana, and is in
the  business of  producing  and selling high oleic  safflower,  sunflower,  and
canola and other high value  vegetable  oils.  The  Company  issued  convertible
debentures at the closing for $3.55 million due on the first  anniversary of the
closing and another $3.55 million due on the second  anniversary of the closing.
The debentures accrue interest at 5% per annum and are to be paid on a pro-rated
basis on each relevant maturity date. The convertible debentures are convertible
into the Company's  common stock at the option of the holder any time after each
of their  respective  maturity  dates at a rate  equal  to the  volume  weighted
average price of the common stock for the 20 trading days prior to any such date
of  conversion  with a  minimum  conversion  price of  $4.50.  If at the time of
conversion the market price for GS AgriFuels common stock is less than $4.50, an
additional amount will be due equal to (a $4.50 minus the stock price multiplied
by (b) the number of shares due on conversion. The convertible debentures may be
redeemed  with cash by the Company at any time prior to conversion by the holder
without penalty.  The Company's  obligations  under the Note and the convertible
debentures are secured by the Company's  Sustainable common stock holdings.  For
the three months  ending March 31, 2007,  interest  expense of $24,329 for these
obligations was incurred and accrued.

INVENTORY FINANCING - SUSTAINABLE SYSTEMS

On February 5, 2007,  Sustainable Systems,  Inc., prior to becoming a subsidiary
of GS Agrifuels,  entered into an inventory  financing  agreement for $1,800,000
with American  State Bank. The Agreement  allows  American State Bank a security
interest in all  inventory  and any accounts  acquired  after the  agreement was
signed.  The  Agreement  accrues  interest  at a rate of 10% per annum.  Monthly
payments  consist  only of interest as of March 31,  2007 and  Sustainable  will
start making payments toward the principal in May 2007. All amounts of principal
and interest  remaining  will be due on September 1, 2007.  For the three months
ending March 31, 2007,  interest  expense of $22,764 for these  obligations  was
incurred of which $15,288 was accrued.

NOTE PAYABLE - SUSTAINABLE SYSTEMS

On September 25, 1998, Sustainable Systems, Inc., prior to becoming a subsidiary
of GS Agrifuels, signed a note payable for $1,381,733 with First Community Bank.
The note is secured by an  interest in all the assets of  Sustainable  including
the accounts receivable. The note accrues interest at a rate of 7.68% per annum.
Monthly  payments  consist of principal and interest and a final payment will be
due on September 25, 2013.

NOTES PAYABLE - SUSTAINABLE SYSTEMS

Sustainable   Systems  has  various  notes  payable  with  two  other   lenders.
Sustainable  has signed  three  notes  payable  with the Montana  Department  of
Agriculture  totaling $124,052.  All notes accrue interest at the rate of 3% per
annum with payments of principal and interest beginning March 6, 2011. The notes
are secured by an interest in various  equipment  including  eleven  pumps and a
solvent  recovery system.  For the three months ending March 31, 2007,  interest
expense of $918 for these obligations was incurred and accrued

Sustainable  has signed  four notes with  Great  Northern  Development  totaling
$1,165,019.  Three of the notes totaling $440,857 accrue interest at the rate of
6% per annum.  The payment  terms for the notes are as follows:  the $11,301 and
$129,556 notes are to be paid off with 180 monthly payments  beginning  December
15, 2005 with a maturity  date of November 15, 2020 and the $300,000  note is to
be paid off with 120 monthly  payments  beginning March 15, 2006 with a maturity
date of February 15, 2016. The fourth note for $724,162  accrues interest at the
rate of 5% per annum with  payments of  principal  only thru  November  2007 and
principal and interests payments until the maturity date of November
<PAGE>

15, 2010.  For the three  months  ending  March 31,  2007,  interest  expense of
$29,364 for these obligations was incurred and accrued.

CORNELL CAPITAL CONVERTIBLE DEBENTURES - GS CARBON

On March 23, 2006, GS Carbon entered into a Securities  Purchase  Agreement (the
"Agreement"),  with Cornell  Capital  Partners,  LP,  ("Cornell"),  and Highgate
(Cornell  and  Highgate  collectively,   "Buyers").   In  connection  with  this
Agreement, Highgate converted old debentures for conversion into new 10% Secured
Convertible  Debentures  amounting to $1,062,329  (including accrued interest of
$62,329)  and  Cornell  purchased  additional  secured  convertible   debentures
amounting to $150,000 for the total purchase price of $1,212,329  (the "Purchase
Price").  The  debentures  are due on March 23,  2009.  In  connection  with the
Agreement,  GS Carbon paid  Yorkville  Advisors LLC a fee equal to $15,000 and a
structuring  fee to  Yorkville  Advisors  LLC of $5,000 from the proceeds of the
Closing. Accordingly, GS Carbon received net proceeds of $130,000.

Each of the 10% Secured  Convertible  Debentures  provides  for  interest in the
amount of 10% per annum and are  convertible  at the  lesser of $0.015 or 85% of
the lowest  closing bid price of GS Carbon's  common stock during the 10 trading
days immediately preceding the conversion date.

GS Carbon at its  option  shall have the right,  with  three (3)  business  days
advance  written notice (the  "Redemption  Notice"),  to redeem a portion or all
amounts  outstanding  under the 10% Secured Debenture prior to the Maturity Date
provided that the Closing Bid Price of the Company's  common stock,  as reported
by  Bloomberg,  LP, is less than the Fixed  Conversion  Price at the time of the
Redemption  Notice.  GS Carbon shall pay an amount equal to the principal amount
being redeemed plus a redemption premium ("Redemption  Premium") equal to twenty
percent  (20%) of the principal  amount being  redeemed,  and accrued  interest,
(collectively referred to as the "Redemption Amount").

In connection  with this  Agreement,  GS Carbon issued to the Buyer  warrants to
purchase  1,636,000  shares of GS Carbon's Common Stock (the "Warrants") in such
amounts as set forth on below.


                                              Exercise price
 Number of warrants                            per share
 -------------------                          --------------
   400,000                                          $2.50
   660,000                                          $0.875
   576,000                                          $1.00
 ----------
 1,636,000
 ==========

In order to secure its obligations under the secured  convertible  debenture and
related  documents,  GS Carbon  has  granted  the  debenture  holders a security
interest in all of its assets and property,  and GS Carbon has pledged 1,000,000
shares of its common  stock.  A  certificate  representing  the  pledged  shares
together with a stock power has been deposited in escrow with a third party.  If
GS  Carbon  should  default  under  the  Securities  Purchase   Agreement,   10%
convertible secured debentures or the related transactional documents,  Highgate
is entitled to voting,  dividend and other rights over these pledged shares, and
may take  possession  of and sell the  pledged  shares to  satisfy  GS  Carbon's
obligations to the debenture  holders.  A foreclosure by Highgate of the pledged
shares could result in a change of control of GS Carbon.  Upon the  satisfaction
or conversion of the secured convertible debentures,  the pledged shares will be
returned to GS Carbon for cancellation and return to its treasury.

Under  the  terms of the  Securities  Purchase  Agreement,  secured  convertible
debentures  and warrants,  no  conversion  of the  debentures or exercise of the
warrants may occur if a conversion or exercise  would result in Highgate and any
of its affiliates beneficially owning more than 4.99% of GS Carbon's outstanding
common shares  following  such  conversion or exercise.  Highgate may waive this
provision upon 65 days prior notice to GS Carbon.

GS Carbon determined that the conversion  feature of the convertible  debentures
represents an embedded  derivative  since the debentures are convertible  into a
variable  number  of  shares  upon  conversion.   Accordingly,  the  convertible
debentures are not considered to be  conventional  debt under EITF 00-19 and the
embedded  conversion feature must be bifurcated from the debt host and accounted
for as a  derivative  liability.  GS  Carbon  believes  that the  aforementioned
embedded derivatives and freestanding warrants meet the criteria of SFAS 133 and
EITF 00-19, and should be accounted for as separate
<PAGE>

derivatives with a corresponding value recorded as liability.  Accordingly,  the
fair value of these  derivative  instruments has been recorded as a liability on
the  consolidated  balance  sheet with the  corresponding  amount  recorded as a
discount to the  debentures.  Such  discount  will be accreted  from the date of
issuance to the maturity date of the debentures. The change in the fair value of
the  liability  for  derivative  contracts  will be  credited  to other  income/
(expense) in the  consolidated  statements of operations.  The  $1,212,329  face
amount of the debentures  were stripped of their  conversion  feature due to the
accounting for the conversion feature as a derivative,  which was recorded using
the residual  proceeds method,  whereby any remaining  proceeds after allocating
the proceeds to the warrants and  conversion  option would be  attributed to the
debt. The beneficial  conversion  feature (an embedded  derivative)  included in
this debenture resulted in an initial debt discount of $1,192,329 and an initial
loss on the valuation of derivative  liabilities of $262,219.  At March 31, 2007
the conversion  derivative  liability on the Highgate debt calculated  using the
Black-Scholes  model was  $2,536,931.  For the three months ended March 31, 2007
the  unrealized  loss on the  conversion  derivative  on the  Highgate  date was
$1,062,104.

As a result of GS  Carbon's  meeting  the  requirements  of SFAS 133,  all of GS
Carbon's previously issued and outstanding instruments, which included 4,000,000
warrants  exercisable  at $.001 per share,  have been  classified  as derivative
liabilities.  The  aggregate of  413,000,000  warrants,  which expire five years
after issuance, were assigned an initial value of $1,597,189.  At March 31, 2007
the warrant derivative  liability  calculated using the Black-Scholes  model was
$50,397.  For the three months ended March 31, 2007 the  unrealized  gain on the
derivative created by the warrants was $147,797.

On February 26, 2007,  GS Carbon  entered into a Securities  Purchase  Agreement
(the  "February  2007  CCP  Agreement"),  with  Cornell  Capital  Partners,  LP.
("Cornell").  In  connection  with  the  February  2007 CCP  Agreement,  Cornell
purchased secured convertible debentures amounting to $1,125,000 due on February
26, 2009.

The February 26, 2007 Cornell  debentures  provide for interest in the amount of
10% per annum and are  convertible  at the  lesser of $0.05 or 90% of the lowest
closing  bid price of GS  Carbon's  common  stock  during  the 30  trading  days
immediately  preceding the conversion date.  Cornell will be entitled to convert
the February 26, 2007  debenture  on the basis of the  conversion  price into GS
Carbon's  common stock,  provided that Cornell  cannot  convert into shares that
would cause Cornell to own more 4.9% of GS Carbon's outstanding common stock.

GS Carbon at its  option  shall have the right,  with  three (3)  business  days
advance  written notice (the  "Redemption  Notice"),  to redeem a portion or all
amounts  outstanding  under the 10% Secured Debenture prior to the Maturity Date
provided that the Closing Bid Price of GS Carbon's  common stock, as reported by
Bloomberg,  LP,  is less  than  the  Fixed  Conversion  Price at the time of the
Redemption  Notice.  GS Carbon shall pay an amount equal to the principal amount
being redeemed plus a redemption premium ("Redemption  Premium") equal to twenty
percent  (20%) of the principal  amount being  redeemed,  and accrued  interest,
(collectively referred to as the "Redemption Amount").

In connection  with the February 2007 CCP  Agreement,  GS Carbon paid  Yorkville
Advisors,  LLP a fee equal to $100,000 and a structuring fee of $25,000 from the
proceeds  of the  closing.  Accordingly,  GS Carbon  received  net  proceeds  of
$1,000,000.  These fees were treated as a deferred  financing fees and beginning
on February 27, 2007 are being  amortized  over the term of the loan.  GS Carbon
used $900,000 of the proceeds from the Cornell  Debenture to repay loans payable
to GreenShift Corporation and GS Ethanol Technologies.

In addition GS Carbon issued to Cornell a warrant to purchase  50,000,000 shares
of GS  Carbon's  common  stock at $0.03 a share.  The value of the  warrant  was
calculated to be $712,125 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  using  the  effective  interest  method of
amortization.  The freestanding  warrant met the criteria of SFAS 133 and should
be accounted for as a derivative.  Therefore the offset to the $712,125 discount
on the debt was a derivative liability.  At March 31, 2007 the fair value of the
warrant  derivative  liability  created by the  warrant to  purchase  50,000,000
shares of common stock calculated using the Black-Scholes  model was $1,940,000.
For the three months ended March 31, 2007 the unrealized  loss on the derivative
instruments created by this warrants was $1,227,875.

GS Carbon  determined that the conversion  feature of the convertible  debenture
represents  an embedded  derivative  since the debenture is  convertible  into a
variable  number  of  shares  upon  conversion.   Accordingly,  the  convertible
debenture is not  considered  to be  conventional  debt under EITF 00-19 and the
embedded  conversion feature must be bifurcated from the debt host and accounted
for as a derivative  liability.  The embedded  derivative feature created by the
variable conversion meets the criteria of SFAS 133 and EITF 00-19, and should be
accounted for as a separate  derivative.  Accordingly,  on February 27, 2007 the
fair  value  of  the  embedded  derivative  of  $242,478  calculated  using  the
Black-Scholes   model  has  been  recorded  as  a  liability  on  the  condensed
consolidated balance sheet with a corresponding amount recorded as a discount to
the debenture. The discount is amortized to interest expense using the effective
interest method of amortization.
<PAGE>

At March 31, 2007 the fair value of the conversion  derivative liability created
by this debenture  calculated using the Black-Scholes model was $76,423. For the
three  months  ended  March  31,  2007  the  unrealized  gain on the  derivative
instrument created by this debenture was $166,055.

GS Carbon  determined  that the conversion  terms of the  convertible  debenture
created a beneficial  conversion at the commitment  date. GS Carbon followed the
guidance in EITF 98-5  "Accounting  for  Convertible  Securities with Beneficial
Conversion  Features  or  Contingently  Adjustable  Conversion  Ratios" and EITF
00-27,  "Application of Issue No.98-5 to Certain Convertible  Instruments",  and
determined that an interest expense of approximately $221,000 should be recorded
based on the beneficial conversion.

CORNELL CAPITAL CONVERTIBLE DEBENTURES - GS AGRIFUELS

On June 7, 2006, GS AgriFuels entered into a Securities  Purchase Agreement with
Cornell  Capital  Partners LP  ("Cornell")  under  which  Cornell  committed  to
purchase $22,000,000 in Secured Convertible Debentures.  The first Debenture, in
the principal amount of $5,500,000 was purchased by Cornell on June 7, 2006, for
which the company paid $600,000 in financing and  structuring  fees and received
cash proceeds of $4,900,000.  The Securities  Purchase  Agreement was amended on
October 30, 2006 to provide for only the one $5,500,000 debenture,  with certain
modifications  (see below) Under the terms of the Securities  Purchase Agreement
(as amended on October 30, 2006), the Debenture carries an interest rate of 10%,
and principal and interest on the Debenture,  which are due at the maturity date
of June 7, 2009, may be converted into common stock by Cornell Capital  Partners
at a conversion price equal to $3.00 per common share.  However,  the conversion
price will be reduced to equal any price at which GS AgriFuels  hereafter issues
common stock or derivative securities. The maximum number of shares that Cornell
may acquire at any time is 4.99% of the  outstanding  common shares.  If the bid
price of company stock falls below the  conversion  price,  GS AgriFuels has the
right to satisfy the  redemption  obligation by paying cash equal to 120% of the
principal  redeemed,  The  Debentures  are  secured  by a  pledge  of  all of GS
AgriFuels' assets,  including the capital stock of its subsidiaries:  Mean Green
BioFuels,  Inc.,  Mean Green  Biodiesel #1, Inc., Mean Green Biodiesel #2, Inc.,
and Mean Green Biodiesel #3, Inc. GS AgriFuels has agreed to file a registration
statement  with the  Securities  and Exchange  Commission  to enable  Cornell to
resell to the public any shares of GS  AgriFuels  common  stock it  acquires  on
conversion of the Debenture or exercise of the Warrant.  The registration rights
agreement  with  Cornell  Capital  entitles  Cornell to  liquidated  damages for
failure to  register,  and  Cornell  has waived any  liquidated  damages due for
failure to  register.  This is a one time waiver and Cornell  retains its rights
under the  agreement  for future  periods.  For the three months ended March 31,
2007, interest expense of $135,616 for this obligation was incurred and accrued.

Pursuant to the terms of the agreement,  GS AgriFuels issued 1,125,000 five year
warrants to purchase GS AgriFuels common stock that are exercisable at $.001 per
share to Cornell  Capital  Partners.  The options were issued to Cornell Capital
Partners in conjunction  with the Company's June 7, 2006 issuance of convertible
debentures.   The  fair  value  of  the  warrants  was   calculated   using  the
Black-Scholes Option Pricing Model and the Company recorded the $30,375 value of
the warrants as a discount to the note, and the note discount is being amortized
over the term of the debenture.  Interest  expense from the  amortization of the
note discount was $2,497 for the three months ended March 31, 2007.

In conjunction with the May 2006 Share Purchase  Agreement with  GreenShift,  GS
AgriFuels assumed GreenShift's obligations under a Secured Convertible Debenture
due to Cornell  Capital  Partners in the  principal  amount of  $1,949,631.  The
Debenture  carries an annual interest rate of 10%, and principal and interest on
the  Debenture,  which  are due at the  maturity  date of June 7,  2009,  may be
converted into common stock by Cornell  Capital  Partners at a conversion  price
equal to $3.00 per common share.  However,  the conversion price will be reduced
to equal  any  price at which GS  AgriFuels  hereafter  issues  common  stock or
derivative securities.  The maximum number of shares that Cornell may acquire at
any time is 4.99% of the outstanding  common shares.  For the three months ended
March 31, 2007, interest expense of $48,073 for this obligation was incurred and
accrued.

On October  30, 2006 GS  AgriFuels  completed  a sale of  securities  to Cornell
Capital  Partners,  LP pursuant to a Securities  Purchase  Agreement dated as of
October  30,  2006.  The  Agreement  called for  Cornell  to  purchase a Secured
Convertible  Debenture in the principal  amount of $13 million.  In  conjunction
with  this  financing,  the  Company  paid  a  financing  fee of  $1,300,000,  a
structuring fee of $50,000,  legal fees of $15,000, and received net proceeds of
$11,635,000 that were used for the acquisition of NextGen Fuel, Inc. The Secured
Convertible  Debenture will mature on October 30, 2009.  Interest will accrue on
the  Debenture  at the rate of 10% per annum and will be payable on the maturity
date.  If the  market  price  of GS  AgriFuels  common  stock  is less  than the
conversion  price,  GS  AgriFuels  can  redeem  the  Debenture  for  120% of its
principal amount. Cornell will be entitled to
<PAGE>

convert the accrued  interest  and  principal  amount of the  Debenture  into GS
AgriFuels  common  stock at a  conversion  price of $3.00 (or any lower price at
which GS  AgriFuels  hereafter  issues  common  stock to any third  party).  The
maximum  number of shares  that  Cornell may acquire at any time is 4.99% of the
outstanding  common  shares.  In  consideration  of Cornell's  investment in the
October 30, 2006 Debenture,  GS AgriFuels  issued to Cornell a five year Warrant
to purchase  540,000  common  shares.  The exercise  price is $.001 or any lower
price at which GS AgriFuels hereafter issues common stock to any third party. GS
AgriFuels has also agreed to file a  registration  statement with the Securities
and Exchange  Commission to enable Cornell to resell to the public any shares of
GS  AgriFuels  common  stock it  acquires on  conversion  of the  Debentures  or
exercise of the Warrant. The fair value of the warrants was calculated using the
Black-Scholes Option Pricing Model and the Company recorded the $1,079,460 value
of the  warrants  as a  discount  to the note,  and the note  discount  is being
amortized over the term of the  debenture.  For the three months March 31, 2007,
interest expense from the amortization of the note discount was $88,723. For the
three  months  ended  March 31,  2007,  interest  expense of  $320,548  for this
obligation was incurred and accrued.

Commencing  on February 1, 2007,  Cornell  was  entitled to convert  into common
stock up to $500,000 of the principal  amount of the  Debentures  (including the
$5,500,000  Debenture sold to Cornell on June 6, 2006) during any calendar month
at a conversion  price equal to 90% of the lowest daily Volume Weighted  Average
Price during the thirty trading days preceding conversion. However, GS AgriFuels
may opt to redeem the portion of the  Debentures  offered for conversion in this
manner by paying 120% of the amount  converted.  Cornell has not  converted  any
portion of the Debentures into stock as of March 31, 2007.

The  Debentures  are  secured  by a  pledge  of  all of GS  AgriFuels's  assets,
including the capital stock of its subsidiaries: Mean Green BioFuels, Inc., Mean
Green Biodiesel #1, Inc., Mean Green Biodiesel #2, Inc. and Mean Green Biodiesel
#3, Inc. The  subsidiaries  of GS AgriFuels  have pledged their assets to secure
the Debentures.  GreenShift Corporation, the parent of GS AgriFuels, and certain
subsidiaries of GreenShift Corporation  (including GS CleanTech Corporation,  GS
Energy Corporation and Viridis Capital) have also pledged their assets to secure
the Debentures and have guaranteed the Debentures due to Cornell.

6 - DERIVATIVES

In accordance  with SFAS No. 133,  "Accounting  for Derivative  Instruments  and
Hedging  Activities"  and  EITF  00-19  "Accounting  for  Derivative   Financial
Instruments  Indexed to, and Potentially Settled in, a Company's Own Stock", the
conversion features associated with the convertible  debentures are variable and
contain an  embedded  derivative  that  requires  bifurcation  from their  hosts
contacts.  The company has recognized the embedded derivatives as a liability at
the date the debentures were issued. As of March 31, 2007 the change in the fair
value  of  the  derivative   resulted  in  an  accounting  loss  of  $2,411,737.
Amortization of the debt discount totaled  $1,495,383 for the three months ended
March 31, 2007.  The  unamortized  portion of the debt  discount  related to the
derivatives  was  $4,534,914 at March 31, 2007.  As of March 31, 2007,  the fair
value of the derivative liabilities was $13,028,582.

7 - TECHNOLOGY LICENSES

On January 14, 2006, GS Carbon's  subsidiary,  General Ultrasonics  Corporation,
acquired 70% of H2 Energy Solutions,  Inc. H2 Energy owned the rights to certain
patented  ultrasonics  technologies  used in the reformation of synthetic fuels.
The purchase price of $261,328 was paid $50,000 in cash and current  liabilities
of  $211,328  were  assumed.  H2  Energy  subsequently  ceased  operations.  The
technology is under  development by General  Ultrasonics and the entire purchase
price of $261,328  was  assigned  to  technology  license.  The  technology  use
agreement  between H2 energy and the technology owner is for a term of ten years
and requires certain minimum royalties for the Company to maintain its exclusive
use.

On February 26, 2007, GCC acquired patent-pending  technologies involving carbon
aerogel   composites   (United  States  Patent   Application  Nos.   10/327,300,
10/695,214, 10/800,993, 10/840,544, and 10/198,095) (the "GCC Technologies") and
several  executory  contracts  pertaining to the GCC  Technologies in return for
$191,427 in debt.  Among these contracts is a contract with United  Technologies
Corporation for work to be performed in cooperation with the U.S.  Department of
Energy.

Technology licenses consist of the following at March 31, 2007:

Technology licenses                            $452,755
Less: Accumulated amortization                   34,261
                                                 ------
Technology licenses, net                       $418,494
                                               ========
<PAGE>

Amortization expense related to the technology license was $8,128 and $6,533 for
the three months  ended March 31, 2007 and the period of inception  (January 14,
2006) to March 31, 2006,  respectively.  The  estimated  aggregate  amortization
expense for the next five years is  estimated  to be  approximately  $45,000 for
each year.

8 - INVESTMENTS

INVESTMENT IN SUSTAINABLE SYSTEMS UNDER FINANCING AGREEMENT

On September  13, 2006, GS AgriFuels,  Inc.  entered into a financing  agreement
with  Sustainable  Systems,  LLC  whereby  AgriFuels  would  invest  a total  of
$3,000,000 into the company for a 15% stake in the company. As of March 6, 2007,
we had acquired an  approximately  15% interest  through advances of $2,000,000,
accounted for under the cost method. On March 6, 2007, GS AgriFuels acquired the
remaining  additional  85% of the  outstanding  capital  stock for $12.6 million
making Sustainable a wholly-owned subsidiary of the Company.

INVESTMENT IN ZEROPOINT CLEAN TECHNOLOGIES, INC.

In August 2006, GS Agrifuels  entered into a Series A Preferred  Stock  Purchase
Agreement with  ZeroPoint  Clean Tech,  Inc. under which GS Agrifuels  agreed to
purchase 113,800 shares of Series A Preferred Stock, representing  approximately
10% of the capital stock of ZeroPoint,  at a purchase price of $21.98 per share.
In conjunction with the Agreement,  ZeroPoint Clean Tech, Inc. also issued to GS
Agrifuels  56,900  five year  warrants to purchase  ZeroPoint  Clean Tech,  Inc.
common stock that are exercisable at $32.97 per share.

9 - GOVERNMENT GRANTS

On September 28, 2006, Sustainable Systems, prior to becoming a subsidiary of GS
Agrifuels,  was awarded a $700,000 a Workforce  Innovation in Regional  Economic
Development  (WIRED) grant from the Montana Department of Commerce (MDOC).  This
grant  reimburses  the Company for  expenses  related to training  employees  in
gaining skills and competencies needed to obtain or upgrade employment skills in
high growth industries or economic  sectors.  The Company is required to provide
to the MDOC detailed  documentation  regarding the projected  training  costs, a
hiring  and  training  plan as well as a  commitment  to provide  the  resources
necessary  for the  completion  of the training  project.  Sustainable  received
$76,960 in grant income during the three months ending March 31, 2007. The grant
is  contingent  upon the Company  submitting  evidence of the  commitment to the
project  within six months of the award,  providing  periodic  project  progress
reports  detailing  the  status of the  project,  percentage  completion,  costs
incurred, as well as an evaluation by the MDOC a year from the contract date.

10 - INCOME TAXES

The Company adopted the provisions of FASB  Interpretation  No. 48,  "Accounting
for  Uncertainty in Income  Taxes-An  Interpretation  of FASB Statement No. 109,
Accounting  for Income Taxes" ("FIN 48"), on January 1, 2007. As a result of the
implementation of FIN 48, the Company  recognized no material  adjustment in the
liability for unrecognized income tax benefits.  At the adoption date of January
1,  2007,  and at March 31,  2007,  there  were no  unrecognized  tax  benefits.
Interest and penalties  related to uncertain tax positions will be recognized in
income tax expense.  As of March 31, 2007, no interest  related to uncertain tax
positions had been accrued.

11 - SEGMENT INFORMATION

GreenShift   currently  operates  five  business  segments:   Corporate,   Clean
Technology Services, Clean Fuel Production and Sales, Clean Energy Manufacturing
and Sales,  and Other  Segments.  Summarized  financial  information  about each
segment is as follows:
<TABLE>

For the three months ended 3/31/2007:
<CAPTION>

Revenue   Corporate        CleanTech        CleanFuel         CleanEnergy       Other              Total
-----------------------------------------------------------------------------------------------------------
<C>     <C>             <C>              <C>              <C>              <C>              <C>
2007   $        --      $   3,196,086    $     418,138    $     358,597    $      67,120    $   4,039,941
2006   $        --      $   3,174,925    $        --      $   1,003,743    $        --      $   4,178,668

Net Loss
2007   $  (1,453,128)   $  (4,856,581)   $  (4,053,768)   $    (157,482)   $        --      $ (10,520,959)
2006   $    (283,851)   $  (3,864,955)   $     (39,754)   $    (705,154)   $        --      $  (4,893,714)

Total Assets
2007   $     301,537    $  17,843,809    $  47,328,442    $   2,750,791    $    (566,328)   $   67,657,941
</TABLE>

12 - ACQUISITIONS

The Company follows SFAS No. 141, "Business  Combinations." Under this standard,
business  acquisitions  are accounted for under the purchase method and goodwill
represents the excess of the purchase price of a business  acquisition  over the
fair market  value of the net assets  acquired at the date of  acquisition.  The
statement also requires the recognition of acquired intangible assets apart from
goodwill if it arises from contractual and other legal rights.  If an intangible
does not arise from contractual or other legal rights, it shall be recognized as
an asset apart from goodwill only if it is capable of being separated or divided
from the acquired entity and sold, transferred,  licensed, rented, or exchanged.
For transfers of assets under common control,  the Company follows provisions of
Appendix D of SFAS No. 141.

GS AGRIFUELS CORPORATION (F/K/A HUGO INTERNATIONAL TELECOM, INC.)

On January 16, 2007, GS Agrifuels  executed an agreement with Fulton  Biodiesel,
LLC, a subsidiary of Homeland Energy Biofuels,  LLC ("Homeland  Energy") to form
GS Fulton  Biodiesel LLC ("GS Fulton  Biodiesel").  The  agreement  calls for GS
Agrifuels  to own 80% of this  company  and the  construction  of a ten  million
gallon  per year  biodiesel  plant in  Fulton,  New York which will be the first
commercial-scale  facility in New York.  GS Fulton  Biodiesel  and NextGen Fuel,
Inc. are party to a settlement and services  agreement that requires the payment
of  $660,000 to an  engineering  and design  firm for  technical  services to be
provided for the  construction of the facility.  As of December 31, 2006 NextGen
Fuel,  Inc.  deposited  $220,000 into an escrow  account under the terms of this
agreement.  The  engineering  and  design  firm  subsequently  refused to accept
payment and disputes certain provisions of the settlement and services agreement
and the escrow was returned.

On March 6, 2007,  GS  Agrifuels  completed  the  acquisition  of the  remaining
approximately 85% of the outstanding capital stock of Sustainable  Systems,  Inc
(prior to the  acquisition,  the Company had invested  $2,000,000 in Sustainable
Systems  which had been  accounted  for under the cost  method  and  represented
approximately 15% of the outstanding stock). The total negotiated purchase price
of $12,657,093 paid $100,000 in cash and notes payable issued to the sellers for
$1,900,000,  convertible  debenture issued to the sellers for $7,104,018 as well
as  $3,553,075  in GS  Agrifuels'  common  stock at an agreed upon fair value of
$4.50  per  share.  The  $1.9  million  note  is due  upon  the  completion  and
commissioning  of Sustainable's  current plant expansion.  The two $3.55 million
debentures  are due on the  first  anniversary  of the  closing  and the  second
anniversary of the closing, respectively. GS Agrifuels has engaged a third party
valuation  expert  who is in the  process  of  determining  the  purchase  price
allocation.  The  excess of the  purchase  price  over the net  assets  has been
recorded  in  Goodwill  in the  amount of  $13,159,626  until  the  identifiable
intangibles  can be valued.  GS Agrifuels'  results of operations for the period
include the results of  operations  of  Sustainable  Systems  from March 6, 2007
through March 31, 2007.

GS  Agrifuels  is party to a  Development  Services  Agreement  with Mean  Green
Biodiesel  of Georgia,  LLC (f/k/a  Cantrell  Winsness  Technologies,  LLC) that
includes assignment of rights in and to GS Agrifuels's planned biodiesel project
in Memphis, Tennessee. The terms of this agreement include reimbursement by Mean
Green Biodiesel of Georgia,  LLC of expenses incurred by GS Agrifuels both prior
and  subsequent  to the execution of the  Development  Services  Agreement,  the
retention  of 9% equity  ownership  stake by GS  Agrifuels  in first ten million
gallon per year facility developed for Mean Green Biodiesel of Tennessee, LLC at
the site, and the purchase of one ten million  gallon per year biodiesel  system
from NextGen  Fuel,  Inc.  Mean Green  Biodiesel  of Georgia,  LLC is owned by a
former  consultant  to GS  Agrifuels.  GS  Agrifuels  may decide to  co-locate a
wholly- or majority-owned biodiesel production facility at the Memphis site.

On March 19, 2007, GS  EnviroServices,  Inc. and its wholly owned  subsidiaries,
Enviro-Safe   Corporation  and  Enviro-Safe   Corporation   (NE)  (f/k/a/  Jones
Environmental  Services  (NE) Inc.) entered into an Agreement and Plan of Merger
and  Reorganization   ("Merger")  with  TDS  (Telemedicine),   a  publicly  held
corporation.  19,000,000  shares  the  Company's  common  stock was issued to GS
CleanTech  in  exchange  for  the  purchase  of the GS  EnviroServices  and  its
subsidiaries.
<PAGE>
Prior to the merger,  the  shareholders  of TDS  (Telemedicine),  Inc.  retained
4,000,000 shares of common stock in the public company.

The  above   transaction   has  been   accounted   for  as  a   reverse   merger
(recapitalization)  with GS  EnviroServices,  Inc.  being deemed the  accounting
acquirer  and  TDS   (Telemedicine)   Inc.  being  deemed  the  legal  acquirer.
Accordingly,  the historical  financial  information  presented in the financial
statements  is that of GS  EnviroServices,  Inc.  (March 19,  2007,  its date of
inception) as adjusted to give effect to any  difference in the par value of the
issuer's and the accounting  acquirer's  stock with an offset to additional paid
in capital.  The basis of the assets and liabilities of GS EnviroServices,  Inc.
and  subsidiaries,  the  accounting  acquirer,  has  been  carried  over  in the
recapitalization.

MERGER AND REINCORPORATION

The Board  has  approved  the  reincorporation  of tds  (Telemedicine)  Inc.  by
changing its state of  incorporation  from New York to  Delaware,  which will be
effected  pursuant  to the Merger  Agreement.  Under the Merger  Agreement,  the
Corporation  will be merged  with and into its  subsidiary,  GS  EnviroServices,
Inc., a Delaware  Corporation.  GS  EnviroServices  was recently acquired by tds
(Telemedicine),  Inc.,  and is  the  holding  company  for  all of the  business
operations of tds (Telemedicine). Upon the effectiveness of the Reincorporation,
the New York  Corporation  will  cease to exist and  Delaware  Corporation  will
continue  to  operate  the New York  Corporation's  business  under the name "GS
EnviroServices,  Inc." (see ITEM 4.  Submission of Matters to a Vote of Security
Holders).

13 - RELATED PARTY TRANSACTIONS

LOAN TO GS AGRIFUELS FROM SEAWAY VALLEY FUND

On  December  28,  2006,  GS  Agrifuels  issued to Seaway  Valley  Fund,  LLC, a
Convertible  Debenture  due December 28, 2008 with a face amount of $250,000 for
monies ultimately received by GS Agrifuels in January 2007 from Seaway Valley in
the  amount  of  $250,000.  The  terms  of the  Convertible  Debenture  are  the
following:  (i) an interest rate of eight percent (8%) payable, at the option of
Seaway Valley, in cash or registered common stock in GS Agrifuels Corporation or
any combination thereof; (ii) shall become due and be payable monthly commencing
March 31, 2007,  unless  otherwise waived or deferred by Seaway Valley  (iii)
payment in full or in part of principal  plus accrued but unpaid  interest shall
be made only upon demand by Seaway Valley  commencing  April 30, 2007;  (iv) any
unpaid balance, at the option of Seaway Valley, shall become immediately due and
payable  without  notice or demand in the event of default,  and (v) any accrued
and unpaid  interest  shall be  convertible  upon  demand of Seaway  Valley into
registered shares of common stock equal to the lower of: (a) $3.00 per share; or
(b) the lowest convertible debenture conversion price, preferred,  common or any
other  class of stock or  convertible  security  issuance  price,  or warrant or
option  issuance  price,  issued  from  December  28,  2006  until  the  time of
conversion(s);  or (c) 100% of the  closing  market  price as of the date hereof
provided  that any such  conversion  price  shall not  trigger a lowering of the
conversion  price of any  convertible  debenture(s)  outstanding at December 28,
2006.  As of the date of this filing,  Seaway Valley has not exercised its right
to convert any  obligations in GS Agrifuels  common stock.  For the three months
ended  March 31,  2007,  interest  expense of $3,616 has been  accrued  for this
obligation.  The controlling member of Seaway valley is the President and CEO of
GS AgriFuels.

OTHER RELATED PARTY TRANSACTIONS

In August 2006 GS Agrifuels paid a $200,000  deposit to Warnecke Design Service,
Inc.  for the purchase of a NextGen  Fuel 10 million  gallon per year  biodiesel
system.  The total  purchase  price for this  system  is  $3,200,000,  and it is
expected that GS Agrifuels will take delivery of the system in the first quarter
of 2007.

NextGen  Fuel,  Inc.,  has an exclusive  manufacturing  agreement  with Warnecke
Design  Service,  Inc.,  for the design,  fabrication,  assembly,  testing,  and
commissioning of NextGen Fuel's biodiesel  production systems.  During the three
months ended March 31, 2007, the Company paid deposits  under the  manufacturing
agreement  totaling  approximately  $126, 000 to Warnecke  during the year ended
December 31, 2006, and had work in process inventory of $888,073, other deposits
of  $475,936,  and  accounts  payable  and accrued  expenses of $147,707  due to
Warnecke  at  March1,  2007.  GreenShift  Corporation,  the  Company's  majority
shareholder, is also the majority shareholder of GS Energy Corporation. Warnecke
Design Service, Inc. is a wholly owned subsidiary of GS Energy Corporation.

GS  Agrifuels  is party to a  Development  Services  Agreement  with Mean  Green
Biodiesel  of Georgia,  LLC (f/k/a  Cantrell  Winsness  Technologies,  LLC) that
includes  assignment of rights in and to GS Agrifuels' planned biodiesel project
in Memphis, Tennessee. The terms of this agreement include reimbursement by Mean
Green Biodiesel of Georgia,  LLC of expenses incurred by GS Agrifuels both prior
and  subsequent  to the execution of the  Development  Services  Agreement,  the
retention  of 9% equity  ownership  stake by GS  Agrifuels  in first ten million
gallon per year facility developed for Mean Green Biodiesel of Tennessee, LLC at
the site, and the purchase of one ten million  gallon per year biodiesel  system
from
<PAGE>
NextGen  Fuel,  Inc. Mean Green  Biodiesel of Georgia,  LLC is owned by a former
consultant  to GS  Agrifuels.  GS Agrifuels may decide to co-locate a wholly- or
majority-owned biodiesel production facility at the Memphis site.

14 - DISCONTINUED OPERATIONS

During the year ended  December  31, 2006,  the GS CleanTech  Board of Directors
adopted a plan for the sale of the Company's  environmental  consulting business
located in Mount  Arlington,  New Jersey  operated by  EnviroSciences  Inc.  The
assets  and   liabilities  of  this  operation  are  presented  as  discontinued
operations in the accompanying financial statements. On May 4, 2007, the Company
executed a Share  Purchase  Agreement  with the former  owners  (the  seller) of
EnviroServices  with an effective  date of January 1, 2007.  In exchange for the
acquisition  shares,  the seller  agreed the pay $250,000 to the Company.  As of
March  31,  2007,  this  cash is  included  in  prepaid  expenses.  The  Company
recognized  a gain of  $2,494,946  from the sale. A breakdown of this sale is as
follows:

Cash received on purchase                                     $  250,000

Assets disposed of                                             1,298,382
Liabilities disposed of                                       (3,543,328)
                                                               ---------
Net gain on disposal of assets and liabilities                 2,244,946
                                                               ---------

Total gain on sales of discontinued operation                 $2,494,946
                                                              ==========

On October 24, 2005, the GS CleanTech  Corporation  Board of Directors adopted a
plan to close the Paterson,  New Jersey recycling  facility operated by American
Metal Recovery  Corporation  ("AMRC").  The plan included the discontinuation of
the  operations of Metal Recovery  Transportation  Corporation  ("MRTC")  during
2005, as well. The decision to terminate operations at the Paterson facility was
made due to overall  economic  factors,  in particular the decreasing  volume of
inorganic,  metal  bearing  wastes  suitable  for  recycling.  AMRC  has  ceased
accepting waste and has removed all hazardous waste from the facility.  AMRC has
disposed  of all of the  equipment  and  cleaned  the  facility  as  required by
regulation and surrendered the premises on December 31, 2005. The results of the
recycling business are recorded as discontinued operations.
<TABLE>

The components of discontinued operations are as follows:
<CAPTION>

                                                                             2007          2006
                                                                             ----          ----
<S>                                                                     <C>             <C>
Net revenues ........................................................   $        --     $ 1,072,226
Cost of revenues ....................................................            --         601,451
                                                                        -------------   -----------
           Gross profit .............................................            --         470,775
                                                                        -------------   -----------

Selling, general and administrative expense .........................            --         314,632
                                                                        -------------   -----------
           Income from operations ...................................            --         156,143
                                                                        -------------   -----------

Other income and expenses, net ......................................            --         (26,552)
                                                                        -------------   -----------
           Total other income and expense ...........................            --         (26,552)
                                                                        -------------   -----------

           Income before provision for income taxes .................            --        (127,591)

Total provision for tax .............................................            --         (27,538)
                                                                        -------------   -----------
           Net income (loss) from discontinued operations ...........            --         100,053
                   Gain (loss) on disposal of discontinued operations            --           6,000
                                                                        -------------   -----------
                   Total income (loss) - discontinued operations ....   $        --     $   106,053
                                                                        =============   ===========

</TABLE>

The results presented above for 2007 and 2006 include the operating activity for
the  discontinued  operations for the 3 month period.  Assets and liabilities of
the  discontinued  businesses  were  reported as net assets and net  liabilities
(current and net of current) of discontinued operations at March 31, 2007.

Assets and liabilities of discontinued operations as of March 31, 2007 are as
follows:

Non-current assets of discontinued operations

     Other assets .....................................   $   7,500
                                                          =========
           Total assets of discontinued operations ....       7,500
                                                          =========

Current liabilities of discontinued operations:
     Accounts payable .................................     254,958
[GRAPHIC OMITTED]
[PG NUMBER]

                                                                 41

     Accrued Expenses .................................     178,733
                                                          ---------
           Total liabilities of discontinued operations     433,691
                                                          ---------

Net assets of discontinued operations .................   $(426,191)
                                                          =========

15 - COMMITMENTS AND CONTINGENCIES

LEGAL MATTERS

GS  Carbon's  General  Ultrasonics  subsidiary  is party to the matter  entitled
LeBlanc v.  Tomoiu.,  et. al.,  which action was filed in the Superior  Court of
Connecticut.  The verified complaint, which also names GreenShift and certain of
its affiliates, seeks damages relating to the acquisition by General Ultrasonics
of  the  stock  of H2  Energy  Solutions,  Inc.  from  substantially  all of its
shareholders,  as well as attorney's  fees and costs.  General  Ultrasonics  has
responded to the verified complaint and denies any liability.

OTHER CONTINGENCIES

GS  CleanTech  Corporation  is  subject  to  various  regulatory   requirements,
including the  procurement of requisite  licenses and permits at its facilities.
These  licenses and permits  without which GS  CleanTech's  operations  would be
adversely  affected are subject to periodic  renewal.  GS CleanTech  Corporation
anticipates that, once a license or permit is issued with respect to a facility,
the license or permit  will be renewed at the end of its term if the  facility's
operations are in compliance with the applicable regulatory requirements.

GS Cleantech Corporation owns property in Lowell, Massachusetts, the location of
their RCRA permitted  Treatment,  Storage and Disposal Facility (TSDF).  Per the
requirements  of the permit  associated  with the operation of this facility,  a
third party  evaluation  is  conducted  on a yearly  basis to evaluate the costs
associated  with  the  retirement  of  this  asset.  Per  the  outcome  of  this
evaluation, $90,000 has been placed in a trust with the Massachusetts Department
of Environmental  Protection  listed as beneficiary.  GS Cleantech  included the
$90,000 in this trust as part of deposits in other assets.

Under GS Cleantech's  insurance programs,  coverage is obtained for catastrophic
exposures, as well as those risks required to be insured by law or contract. The
deductible   per   occurrence   for   environmental   impairments   is  $25,000.
Environmental  liability  insurance is carried with policy  limits of $1,000,000
per occurrence and $2,000,000 aggregate.

A subsidiary  of GS Carbon that was spun-off  from GS Carbon in 2006 issued debt
instruments in the principal  amount of $498,074  several years ago. We recently
were  presented  with  evidence  that GS Carbon may be liable for payment of the
debts.  Management is actively  investigating the facts and  circumstances  with
respect to the debts, and is not able to determine at this time if GS Carbon has
liability for the debts.

EMPLOYMENT AGREEMENT

In February 2007 GS Carbon entered into a three-year  employment  agreement with
the  President of its newly formed  wholly owned  subsidiary.  The annual salary
stipulated in the agreement is $125,000 but could  increase to $150,000 based on
the subsidiary's  achievement of pre-tax  operating  profits for two consecutive
calendar quarters.

16 - SUBSEQUENT EVENTS

GREENSHIFT MERGER AGREEMENT

On April 3, 2007, GreenShift Corporation, GS CleanTech Corporation and GS Carbon
Corporation executed an Agreement and Plan of Merger.  Pursuant to the terms and
conditions  of the Merger  Agreement,  GS CleanTech  will merge with and into GS
CleanTech  Acquisition,  Inc.,  a newly formed  special  purpose  subsidiary  of
GreenShift,  and GS Carbon will merge into GS Carbon Acquisition,  Inc., another
newly formed special purpose subsidiary of GreenShift.

An additional pending merger involves  GreenShift's  majority owned GS Agrifuels
Corporation and GS Energy Corporation. Once all mergers are complete, GreenShift
will have two majority owned public subsidiaries,  GS Agrifuels  Corporation and
GS EnviroServices Corporation (f/k/a TDS (Telemedicine),  Inc.). GreenShift will
include the subsidiaries of GS CleanTech,  GS Carbon, and a number of minorities
held investments. GreenShift currently owns 80% of the capital
<PAGE>

stock  of GS  CleanTech  and  about  85%  of the  capital  stock  of GS  Carbon.
GreenShift believes that both of the above mergers will be strategic for several
reasons, including:

     >>   the reduction of operational overlap and redundancies,

     >>   the promotion of a unified vision among our employees,

     >>   the  reduction  of  confusion  to  third  parties  such as  customers,
          vendors, creditors, shareholders and other stakeholders,

     >>   the reduction of the focus,  capital,  and other resources required to
          administer  multiple  public  entities  as a result  of the  decreased
          complexity, and

     >>   increasing  the  ability  of our  management  to  focus  on  enhancing
          earnings,  strengthening  the Company's  balance  sheet,  and creating
          value for our shareholders.

The  foregoing  descriptions  of the  transactions  planned to be  completed  by
GreenShift,  GS  CleanTech,  GS  Agrifuels,  GS Energy  and GS Carbon are only a
summary and are  qualified in their  entirety by reference to the  documents and
exhibits filed on Form 8-K.

EMPLOYMENT AGREEMENT

In April  2007,  GS Carbon  entered  into an amended  employment  with the Chief
Science  Officer of General  Ultrasonics.  The  agreement  is for a term of five
years  calls  for an annual  salary  of  $150,000,  a  minimum  annual  bonus of
$250,000, and requires GS Carbon to Issue Series B Preferred Stock corresponding
to 5% of GS Carbon's fully diluted capital stock to the Chief Science Officer.

SHARE PURCHASE AGREEMENT

Subsequent  to  March  31,  2007,  the  Company  entered  into a Share  Purchase
Agreement to purchase the assets of GS Carbon  Corporation.  In exchange for the
Acquisition Shares, the Company has agreed to assume the repayment obligation of
a convertible  debenture due to Cornell  Capital  Partners,  LP in the amount of
$1,125,000 plus any other convertible debt outstanding as of June 30, 2007, with
the  exception of a maximum of $500,000 of CS Carbon  Corporation's  convertible
debentures which will remain the responsibility of GS Carbon Corporation.
<PAGE>

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

FORWARD LOOKING STATEMENTS

In  addition  to  historical   information,   this  Quarterly   Report  contains
forward-looking statements, which are generally identifiable by use of the words
"believes,"  "expects,"  "intends,"   "anticipates,"  "plans  to,"  "estimates,"
"projects," or similar expressions. These forward-looking statements are subject
to certain  risks and  uncertainties  that could cause actual  results to differ
materially from those  reflected in these  forward-looking  statements.  Factors
that might  cause such a  difference  include,  but are not  limited  to,  those
discussed  in the section  entitled  "Description  of  Business - Business  Risk
Factors".   Readers  are  cautioned  not  to  place  undue   reliance  on  these
forward-looking  statements,  which reflect management's opinions only as of the
date  hereof.  We  undertake  no  obligation  to revise or publicly  release the
results of any revision to these forward-looking statements

OVERVIEW

GreenShift  Corporation  ("we,"  "our," "us,"  "GreenShift,"  or the  "Company")
develops and supports  clean  technologies  and companies  that  facilitate  the
efficient use of natural resources.

We face  environmental  challenges  today that are the collective  by-product of
several generations of industrial development. These challenges do not originate
because of this development but rather because of how we, as an economy, consume
natural resources and manage the by-products of those resources.

The  resolution to the  challenges we currently  face is not likely to come from
compulsory  changes to how we consume things,  but rather from the  cost-savings
and increased profits that flow from consuming things more efficiently by virtue
of innovation and the intelligent use of technology.

Take standard corn derived ethanol production as an example;  corn is harvested,
milled, mashed,  fermented and distilled into 200 proof fuel-grade ethanol. From
a fuel production standpoint,  this process is 67% inefficient.  In other words,
only one third of each bushel of corn is converted  into ethanol.  Another third
is exhausted out of the fermentation  stage of the process in the form of carbon
dioxide and the final third ends up in a cellulosic  material called  distillers
grain  which  is sold as an  animal  feed.  Increasing  corn to fuel  conversion
efficiencies,  even  incrementally,  at any point in this process will  increase
fuel production,  reduce costs, reduce plant emissions and enable more consumers
to  use  less  fossil  fuels  and  more  ethanol  -  a  clean,   green   burning
carbon-neutral fuel.

GreenShift acquires,  develops and commercializes technologies that reduce these
types of  inefficiencies.  Our approach for ethanol  producers  exemplifies  the
prototypical  GreenShift  solution:  we focus on the distillers grain and carbon
dioxide by-products and we seek to increase fuel yields by implementing  robust,
scalable and cost-effective "plug-and-play" technologies directly on-site at the
ethanol producer's facility to increase the value of these by-products.

Our current  commercial  offerings,  which extract corn oil out of the grain and
convert it into  biodiesel,  increase  fuel clean fuel  yields to 3 gallons  per
bushel from 2.8 gallons per bushel. We also are supporting the commercialization
of  technologies  to convert the remainder of the distillers  grain biomass (and
other  locally  available  biomass  such as  corn  stover)  into  carbon-neutral
synthetic fuels (which can increase yields to more than 4.2 gallons per bushel),
and the research and development of a process to capture and convert the exhaust
carbon dioxide into an algal biomass for conversion into additional  clean fuels
(which can increase fuel yields even higher).

We believe that tremendous  environmental gains can be realized simply by making
it easy and  cost-effective  to use renewable sources of energy, to burn cleaner
fuels, and to reduce waste just by consuming natural resources more efficiently.

Our ambition is to catalyze the rapid  realization  of disruptive  environmental
gains by creating  valuable  opportunities for a great many people and companies
to use resources more efficiently and to be more profitable. To accomplish this,
we target and reduce or eliminate consumption inefficiencies by

     >>   developing and implementing  incremental  advances in technologies and
          business  practices

     >>   that leverage established  infrastructure and distribution channels to
          enable  increased  and  sustainable   profits  >>  by  decreasing  the
          consumption  of natural  resources  and the  generation  of wastes and
          emissions.

These incremental shifts forward in both economic and environmental gain - these
green shifts - are at the core of our  philosophy and they are the basis for our
primary  operations:  GS CleanTech,  GS AgriFuels,  GS Energy,  GS Carbon and GS
EnviroServices (see Item I, Description of Business - Operations, below).



<PAGE>

OPERATIONS AND BUSINESS STRATEGY

Our technology and business development efforts to date have been focused on the
following   activities:    (a)   technology    acquisition,    development   and
commercialization  (GS  CleanTech),  (b) provision of engineering (GS CleanTech)
and manufacturing (GS Energy) services  incidental to our technologies,  (c) the
formation  and  capitalization  of a  commercialization  entity to  implement  a
go-to-market strategy for the first wave of our technologies (GS AgriFuels), and
(d) clean technology research and development.

In addition, we provide manufacturing (GS Energy) and diversified environmental
engineering management services (GS EnviroServices) to third party clients.
These activities constituted the majority of our sales for 2006 but are expected
to decreases as a percentage of our overall sales as we continue to implement
our technology commercialization plans.

Technology Acquisition

We acquired and  currently own or otherwise  hold certain  rights to a number of
important clean technologies  through our various platform operating  companies,
some of which are listed here:
<TABLE>
<CAPTION>

Technology                             Status                          IP Rights                           Owned By
-------------------------------------------------------------------------------------------------------------------

<S>                                    <C>                             <C>                             <C>
Corn Oil Extraction                    Patent-Pending                  Owned                           GS CleanTech
Flash Desiccation/Homogenization       Patented                        Exclusive License               GS CleanTech
Carbon Dioxide Bioreactor              Patented/Patent-Pending         Exclusive License/Owned         GS CleanTech
Integrated Multi-Fuels Production      Patent-Pending                  Owned                           GS CleanTech
Biodiesel Production                   Patent-Pending                  Owned                           GS AgriFuels
Biomass Gasification                   Patent-Pending                  Limited Exclusive Rights(*)     GS AgriFuels
Ultrasonic Reformation                 Patent-Pending                  Owned                              GS Carbon
Carbon Nanostructure Composites        Patent-Pending                  Owned                              GS Carbon
<FN>
     (*)  GS  AgriFuels  holds  the  exclusive   distribution   rights  to  this
          technology in the North American  Ethanol  Production  Industry.  This
          technology was developed by GS AgriFuels' portfolio company, ZeroPoint
          Clean Tech, Inc.
</FN>
</TABLE>

Technology Development and Early-Stage Commercialization

Our technology development and early-stage  commercialization  activities during
2006 were implemented by GS CleanTech and focused on implementing a go-to-market
strategy  for  the  commercialization  of GS  CleanTech's  corn  oil  extraction
technology ("COES"). These activities included:

     >>   securing  agreements  for the sale of early adopter  installations  of
          COES at targeted qualified clients;

     >>   the installation of COES at these early adopter clients;

     >>   the roll-out of GS CleanTech's  current technology usage program where
          GS CleanTech's clients can use our technology for no up-front cost;

     >>   the execution of term sheets and letters of intent with GS CleanTech's
          prospective  usage  clients to validate the offering and to facilitate
          early-stage financing for GS CleanTech's commercialization program;

     >>   the  conversion  of GS  CleanTech's  letters of intent  into  executed
          agreements for deployments of COES under our usage program; and

     >>   the  installation  of  our  technology  at  GS  CleanTech's   clients'
          facilities under the usage program.

During 2006, GS CleanTech commissioned operations of its first two early-adopter
COES  installations  at two dry mill  ethanol  production  facilities  where the
technology  currently  extracts  corn oil at the combined  rate of more than 2.5
million gallons per year.

In total, GS CleanTech's  current  executed  contracts in its usage program will
produce more than 25 million  gallons of corn oil for conversion  into biodiesel
fuel as the  relevant  extraction  systems are fully  installed  during 2007 and
2008. GS CleanTech is currently  deploying  several of these extraction  systems
and began  commissioning  the  first of these  new  systems  in April  2007.  GS
CleanTech is currently  servicing an  extensive  sales  pipeline for  additional
deployments of the COES technology and Management expects that GS CleanTech will
execute agreements  corresponding to significant  additional volumes of corn oil
during 2007.

During 2006, GS AgriFuels  completed  the  acquisition  of biodiesel  technology
provider, NextGen Fuel, Inc., which had developed and began commercialization of
a proprietary,  patent-pending  continuous  flow biodiesel  system.  The NextGen
systems, which include both direct and transesterification, are skid mounted and
can produce  five (5) million or ten (10) million  gallons per year.  NextGen is
currently  servicing a substantial sales pipeline for the NextGen technology and
has  executed  contracts to sell  NextGen's  biodiesel  production  systems to a
number of clients.

<PAGE>

In  August   2006,   GS   AgriFuels   made  a   strategic   investment   in  the
development-stage  company  ZeroPoint Clean Tech,  Inc., which is developing and
commercializing a range of technologies  related to biomass  gasification,  fuel
reforming,  gas-to-liquid,  and  water  evaporation.  In  conjunction  with  the
investment  in  ZeroPoint,  GS AgriFuels  entered  into a  reciprocal  sales and
marketing  agreement  whereby  ZeroPoint  acquired the  non-exclusive  rights to
market and sell certain of our  technologies in  international  markets,  and GS
AgriFuels acquired the exclusive use and marketing rights for ZeroPoint's patent
pending gasification,  fuel reforming and gas-to-liquids technology in the North
American ethanol industry.  ZeroPoint is currently developing a commercial-scale
pilot facility to demonstrate the capabilities of this technology.

GS  CleanTech's  focus for much of 2007 will remain  resolved on delivering  its
technologies  to the  ethanol  production  industry.  As GS  CleanTech  achieves
budgeted  milestones in our ethanol program we intend to shift our focus towards
the  extraction,  beneficiation  and  refining  of other  co-products  and waste
products in other agriproducts based industries,  the municipal waste processing
industry and the power generation industry.

Technology-Driven Engineering and Manufacturing Services

GS CleanTech's  management and staff possesses  significant  process engineering
expertise  across  multiple  engineering  and  process  technology  disciplines,
including civil, chemical, mechanical, environmental and electrical engineering,
vegetable oil processing and refining,  waste  processing,  power generation and
production of various  agriproducts.  GS CleanTech's  business model is based on
the  provision of process  engineering,  equipment  sales and plant  development
services  incidental  to  GS  CleanTech's  technology  transfer  activities.  GS
CleanTech  relies on GS  Energy's  specialty  metal  manufacturing  capabilities
relative to these efforts.

GS Energy's  manufacturing  group,  Warnecke Design Services,  Inc., is run by a
team of seasoned custom equipment manufacturers and engineers. Warnecke provides
custom  equipment  manufacturing  services  for its  clients  including  machine
design,  machine  building,  control system  electronics  and  programming,  and
maintenance  support  services.  Warnecke  currently  services  clients  in  the
biofuels, automotive,  electronics, lighting, plastics, rubber and food products
industries

In addition to providing  GreenShift's  various platform companies with advanced
prototyping and pilot equipment manufacturing  services,  Warnecke fabricates GS
CleanTech's  COES and other  technology  deployments  (including GS  CleanTech's
flash desiccation and bioreactor technologies),  GS AgriFuels' NextGen biodiesel
production systems,  and has provided  significant  services to ZeroPoint in the
fabrication and commissioning of its current pilot facility.  Management expects
that Warnecke will provide all of GS CleanTech's  and GS AgriFuels'  fabrication
needs for the foreseeable future.

GS   AgriFuels   has   initiated   development   for  and  intends  to  build  a
commercial-scale  NextGen biodiesel  production  facility at a site proximate to
Warnecke's manufacturing  operations.  When complete, this facility will be used
to showcase the NextGen  technology for prospective  third-party  clients and to
generate revenues from the production and sale of biodiesel.

Formation of  Commercialization  Platform  and  Implementation  of  Go-to-Market
Strategy

We believe that the impact of our  technologies  becomes more  significant as we
move  through  early  stage   commercialization  and  into  maturity  with  each
technology,  and that  GreenShift can maximize the value of several of the above
technologies  by  facilitating  its direct use of those  technologies to produce
clean fuels and energy from biomass. In an effort to accomplish this, GreenShift
formed  GS  AgriFuels  during  2006  specifically  to  implement  a  coordinated
go-to-market strategy to achieve this.

GS  AgriFuels'  development  plans are based on the use of  several  classes  of
technology,  including  innovative  extraction,   desiccation,   homogenization,
process   intensification,    biodiesel   production,    biomass   gasification,
reformation, and catalytic technologies to:

     >>   Sell equipment at high margins into selected market segments;

     >>   Acquire  long term  rights to  high-quality  sources of  biomass  with
          low-risk and at low-cost;

     >>   Produce  biomass-derived  energy  and  fuels  out  of  non-traditional
          feedstocks such as corn oil and cellulosic biomass;

     >>   Acquire   production  assets  in  mature   agribusinesses  -  such  as
          traditional  corn  ethanol,  oilseed  crushing and other  agriproducts
          processing  facilities - and  synergistically  upgrade these locations
          into integrated multi-feedstock, multi-fuel ("IMF") biorefineries.

We believe that combined  applications of these  technologies  may have wide and
disruptive  application  potential  throughout the landscape of the agriproducts
sector. Our technologies are robust, scalable, energy efficient, modular
<PAGE>

and,   importantly,   capable  of  rapid  and   cost-effective   "plug-and-play"
integration  into the existing  agribusiness  infrastructure.  These  advantages
converge  to  potentially  enable the  refining  of many  different  alternative
feedstocks into clean and renewable energy and a number of different clean fuels
cost-effectively  at small scales. This provides us with, what we believe to be,
highly valuable opportunities to reduce commodity risk by creating opportunities
to  manage  production  assets  in  response  to  fluctuating  commodity  market
conditions.  No single  conventional  or new technology or group of technologies
that we are aware of can currently achieve this.

GS  AgriFuels'  production  plans  are  based on  leveraging  technology  and/or
geography to establish a feedstock procurement  advantage.  GS AgriFuels intends
to accomplish this by: (i) co-locating  agrifuels  production assets directly at
or in  proximity  to  its  sources  of  biomass  feedstock,  such  as an  animal
processing  facility  or an oil seed  crushing  facility;  and/or (ii) by taking
advantage  of  technologies  that  enable GS  AgriFuels  to obtain  and  process
feedstocks  that  other  producers  cannot  process,  such as the  corn  ethanol
co-product known as distillers dried grain.

GS AgriFuels has completed preliminary engineering and permitting activities for
biodiesel production sites in New York, Tennessee, and Ohio, and GS AgriFuels is
currently in various stages of negotiations to deploy a number of majority-owned
corn oil biodiesel  production  facilities  on-site at several  existing ethanol
facilities in the Mid-Western U.S.

Most of GS AgriFuels' planned facilities will have an initial nameplate capacity
of five (5) or ten (10) million gallons of biodiesel production and potentially
five (5) million gallons of ethanol, methanol and/or synthetic diesel production
derived from biomass gasification and gas-to-liquid technologies.

GS AgriFuels long-term  production plans are to build a large number of smaller,
strategically placed or "distributed"  production  facilities at or in proximity
to the plants'  source of  feedstocks  such as GS  AgriFuels  recently  acquired
Sustainable  Systems,  Inc.,  subsidiary.  Sustainable is a developer of oilseed
crush  facilities with one plant currently in operation in Culbertson,  Montana.
Sustainable  is currently  expanding  its oilseed  extraction  and vegetable oil
refining  capability from 300 tons per day to 600 tons per day at this plant and
GS AgriFuels intends to layer in biodiesel production and other  biomass-derived
energy and fuels  production  capability  on-site at  Sustainable in conjunction
with the completion of this expansion.

Clean Technology Research and Development

In  addition to the above,  we were also  involved in  technology  research  and
development   activities  during  2006.  These  were  predominantly  focused  on
developing our  early-stage  pilot carbon dioxide  bioreactor (GS CleanTech) and
ultrasonic reformation (GS Carbon) technologies.

GS CleanTech's patented bioreactor technology was developed at Ohio University's
Ohio Coal Research Center with funding from the U.S.  Department of Energy.  The
bioreactor uses algae to consume exhaust carbon dioxide emissions,  sunlight and
water to grow new algae,  giving off pure oxygen and water vapor in the process.
If properly  cultivated,  the algae  doubles in mass daily and are harvested for
conversion  into  clean  fuels as they grow to  maturity.  The  resultant  algal
biomass can either be routed for biodiesel  production (for high fat strains) or
gasification (for either high starch or high cellulose strains). GS CleanTech is
currently  developing its first commercial scale pilot bioreactor  system and is
ultimately  seeking  to  cost  effectively  commercialize  its  use  at  ethanol
facilities to further enhance corn to clean fuel conversion efficiencies.

GS  Carbon's   patent-pending   ultrasonic   reformation   process  uses  water,
carbon-based  materials  and high  intensity  ultrasonic  energies to synthesize
clean  burning  fuels and  other  materials.  Testing  and  development  of this
technology  at GS Carbon's  testing  laboratory  initiated  after  acquiring the
technology during 2006. In 2007, we anticipate extensive further testing as well
as an analysis of the economic viability of the technology.

Our plans for the  commercialization  of both of these technologies,  as well as
others  in our  portfolio,  are  very  similar  to how we have  implemented  the
commercialization  process for the COES technology and the go-to-market strategy
for GS AgriFuels.  In addition,  a key aspect of our  go-to-market  strategy for
these technologies is to forge strategic partnerships with qualified companies.

Environmental Engineering and Management Services

GS EnviroServices is a diversified  environmental services company that provides
industrial and hazardous waste management  services,  environmental  engineering
services,  and site remediation services. GS EnviroServices' focus is to provide
its clients  with  value-added,  environmentally  conscious  and  cost-effective
hazardous waste management services based on its efficient management of wastes.

GS  EnviroServices'  growth  strategy  is to expand its  geographic  base,  both
through increased sales activities and acquisitions,  and to add new services in
the area of technology implementation utilizing unique technologies developed by
affiliated GreenShift companies. We believe that our technologies will enable GS
EnviroServices  to  differentiate  itself from  standard  environmental  service
providers. GS EnviroServices' ambition is to provide its
<PAGE>
across the full range of needs of its  industrial  and  government  clients with
particular emphasis on technology-driven energy and water resource conservation.

Minority Investments

We recently  acquired  stakes in ZeroPoint  Clean Tech,  Inc. (10%;  owned by GS
AgriFuels),  Sterling Planet,  Inc. (10%; owned by GS Carbon),  TerraPass,  Inc.
(10%;  owned  by GS  Carbon),  General  Hydrogen  Corporation  (3%;  owned by GS
CleanTech),  Ovation Products  Corporation  (12%; owned by GS CleanTech) and Air
Cycle Corporation (30%; owned by GS Carbon).

ZeroPoint  Clean Tech,  Inc. is  commercializing  patent pending and proprietary
gasification,  gas to  liquids  and fuel  reforming  technology  that  ZeroPoint
management  believes  is the  most  effective  technology  available  for use in
gasifying a wider range of various  biomass  materials to create  carbon-neutral
energy (gas, electricity, ethanol, diesel substitutes and hydrogen), clean water
and  other  valuable  products.   ZeroPoint's  technology  is  well  suited  for
distributed deployments,  making it highly applicable to the localized nature of
many global sources of biomass feedstock.

Sterling Planet,  Inc. has established a strong reputation as the premier market
maker  for  renewable  energy  certificates.  Sterling  has sold  over 4 billion
kilowatt hours of renewable energy certificates since its inception.  The energy
underlying those  certificates  represents  enough energy to power 350,000 homes
for a full year and offset 2.6 million tons of carbon  dioxide.  Sterling Planet
currently services an impressive array of clients including Alcoa, The Coca-Cola
Company, DuPont, Delphi Corporation, Duke University,  University of Utah, Nike,
Pitney Bowes, U.S.  Environmental  Protection  Agency, the U.S. General Services
Administration,   the   Homeland   Security   Department,   Western  Area  Power
Administration,  New  York  State  Energy  Research  and  Development  Authority
(NYSERDA),  the U.S. Army, Staples,  Whirlpool Corporation,  the World Resources
Institute and over 150 other companies. GS Carbon holds a 10% stake in Sterling.

By  issuing a  "TerraPass"  to its  members,  TerraPass  utilizes  its  members'
voluntary  contributions to promote global energy  efficiency and greenhouse gas
reduction through targeted  projects.  It is through these clean energy projects
that TerraPass counterbalances  pollution from its members' vehicles.  TerraPass
recently  partnered with Ford Motor Company in a program called "Greener Miles,"
which allows  consumers to calculate  the amount of carbon  dioxide  produced by
their car in one year of driving, and then to purchase a TerraPass linked to the
cost of  producing an amount of clean energy  equivalent  to the carbon  dioxide
produced.  Individual purchases range from $29.95 to $79.95 annually,  depending
on the type of vehicle, amount of carbon dioxide emitted and miles traveled, and
the funds are used to invest in U.S. based renewable energy projects.  GS Carbon
holds a 10% stake in TerraPass.

General Hydrogen  Corporation is a leading developer of hydrogen fuel cell-based
power systems for electric  forklifts,  industrial  vehicles and other  off-road
equipment. General Hydrogen has right-sized fuel cell technology to a scale that
enables  their  commercially  viable  today.  Their  business  model is based on
replacing  lead-acid  batteries  in  centralized  industrial  applications  with
high-performance  power packs that contain a Ballard fuel cell.  They capitalize
effectively  on  existing  plant  infrastructure  while  creating  a  realizable
economic return on an impressively short payback period for their clients.

Ovation Products  Corporation is a  development-stage  company with patented and
proprietary  technologies  involving new  implementations  of vapor  compression
distillation.  Ovation has invested over $9 million  developing  technology that
offers  dramatic price and  performance  advantages  over competing  clean water
technologies.  Ovation is finalizing the development of its initial product, the
Clean Water  Appliance - a  fire-hydrant  sized  appliance  that can generate 25
gallons of pure water per hour from a variety of dirty water input  sources at a
cost  of  approximately  $0.004  per  gallon,  or  about  1.2%  of the  cost  of
traditional home distillation methods.

GS Carbon holds a 30% stake in Air Cycle, a lamp,  ballast,  battery and e-waste
recycling  company.  Air  Cycle's  Bulb  Eater(R)  product  line  crushes  spent
fluorescent  lamps  into  small  fragments  and  compacts  them  into  55-gallon
containers  which  are then  shipped  for  recycling.  Air  Cycle's  EasyPak(TM)
Recycling  Program is offered as an alternative for customers who generate spent
lamps, batteries,  and/or ballasts and cannot meet Air Cycle's quantity minimums
for bulk pick-ups.  Small shipments are instead  shipped through  pre-paid FedEx
transportation services.



<PAGE>


ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION


                   Risk Factors That May Affect Future Results

You should carefully consider the risks described below before buying our common
stock.  If any of the risks described  below actually  occurs,  that event could
cause the trading  price of our common stock to decline,  and you could lose all
or part of your investment.

                       I. Risks Attendant to our Business

We Have Lost Money  Historically Which Means That We May Not Be Able to Maintain
Profitability.

We have historically lost money and future losses may occur. Accordingly, we may
experience  liquidity  and cash flow  problems if we are not able to improve our
operating  performance or raise  additional  capital as needed and on acceptable
terms.

Most of our Subsidiaries  are  Implementing  New Business Plans,  Which Make the
Results of their Business Uncertain.

Some of our  subsidiaries,  such as GS  AgriFuels  or General  Ultrasonics,  are
development stage enterprises that are only now implementing the first stages of
their business plans. Others among our subsidiaries,  such as GS CleanTech or GS
Energy, have been in business for several years, but have recently substantially
revised  their  business  plans.  Most of our  subsidiaries  will be  engaged in
businesses  in the  coming  year that are  substantially  different  from  their
business  operations  in  prior  years.  This  revolution  in the  focus  of our
operations   means  that  the  success  of  our  several   enterprises  will  be
speculative. Our subsidiaries will face the uncertainty that accompanies any new
business venture.  If we have not planned adequately for  contingencies,  one or
more of our  subsidiaries  could fail, which would have a negative effect on our
overall financial results.

We Have Limited  Experience  Running Our Businesses Which May Hamper Our Ability
to Make Effective Management Decisions.

A  significant  portion of our  operations  have been acquired or started in the
last 24 months.  Therefore,  our experience in operating the current business is
limited.  Further,  we intend to pursue  additional  acquisitions to further the
development  of our clean  technology,  agrifuels,  and  environmental  services
businesses.  Most of our senior  executives are recently hired and consequently,
internal  communication and business-decision  making processes are evolving. We
may react too  slowly or  incorrectly  to trends  that may emerge and affect our
business.  Our future success depends on the ability of the senior executives to
establish an effective organizational structure and to make effective management
decisions despite their limited experience.

Some of Our Businesses  Are Based on Unproven  Revenue  Generation  Models Which
Means That We May Not Achieve Anticipated Revenues

Our  revenue  models,   especially  for  our  clean   technology  and  agrifuels
businesses, are new and evolving. Our ability to generate revenue depends, among
other things,  on our ability to provide quality products,  effectively  install
equipment,  and secure  suppliers and customers.  Because some of our businesses
are  either  newly  formed or  acquired,  based on  emerging  opportunities  and
technologies,  we have limited experience with our revenue models.  There can be
no  assurance  that the  projects  will be  successfully  completed  or that the
completed projects will provide the anticipated revenues. Accordingly, there can
be no assurance  that our business  revenue models will be successful or that we
can sustain revenue growth or maintain profitability.

The Market for  Alternative  Energy  Sources  is  Undetermined,  afnd May Not Be
Adequate for Sustain Prices at a Profitable Level.

Most of our  subsidiaries  are  involved in the  development  or  production  of
alternative  energy,  or are  providing  services to  companies  involved in the
production  of  alternative.  Their  success  will depend on the level of market
acceptance of alternative  energy sources.  The marketing of alternative  energy
sources on a national scale is a phenomenon  new to this decade.  The portion of
U.S. energy  represented by alternative  energy sources is still quite small. It
is not possible to predict with  assurance how large the market for  alternative
energy sources will become. If it has not developed to a
<PAGE>


ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION


sufficient  breadth when our subsidiaries are ready to market their products and
services,  the price at which  alternative  energy can be sold will be  limited,
which may make it  impossible  for our or more of our  subsidiaries  to  operate
profitably.

The Fiscal  Efficiencies  of Highly  Capitalized  Competitors in the Alternative
Energy  Field Could Defeat the Efforts of Our  Subsidiaries  to Capture a Viable
Market Share.

The  business of producing  alternative  energy is a  capital-intense  business,
requiring substantial capital resources. Relative to many of the participants in
this  industry,  our  capital  resources  are  miniscule.  The  costs  that  our
subsidiaries  incur in obtaining  capital are  substantially  greater per Dollar
than  the  cost  incurred  by  large  scale  enterprises  in  the  industry.  If
competition  reduces the prices  available for alternative  energy sources,  our
dependence on expensive  capital sources may prevent us from lowering our prices
to  meet  the  competition.  This  situation  could  cause  one or  more  of our
subsidiaries to be unable to compete effectively.

The Business Plans of most of our  Subsidiaries  Will Fail if They are Unable to
Obtain Substantial Additional Capital on Acceptable Terms.

Most of our  subsidiaries  have  developed  business  plans  that  will  require
significant  amounts of capital  for  development  of  research  and  production
facilities  and/or  marketing.  The  availability  of that capital on acceptable
terms  will  depend  on many  factors,  such  the flux of the  U.S.  and  global
economies,  global energy prices,  the success of investors in other alternative
energy ventures, and the success of our other enterprises.  If GreenShift and/or
our subsidiaries are not able to obtain the capital necessary to implement their
business  plans,  or cannot obtain capital on terms that make the business plans
viable, the under-funded subsidiaries will fail.

We may be unable to employ  and  retain  the  qualified  personnel  that will be
necessary for our success.

The alternative  fuels industry is growing rapidly.  As a result,  the number of
individuals  with  experience in the industry is  considerably  smaller than the
number of jobs available for such individuals. We will have to offer substantial
incentives in order to obtain the services of individuals with useful experience
in the production of biodiesel and ethanol.

As a result, our labor costs may be greater than they would be in a less dynamic
industry.  On  the  other  hand,  if we  are  unable  to  employ  the  qualified
individuals that we will need, our business may fail.


                II. Risks Attendant to our Corporation Structure

We will be Unable to Service our Debts if Our  Subsidiaries  Default in Settling
their Obligations to Us.

We have incurred  substantial  debt  obligations  and will continue to do so, in
order to fund the operations of our subsidiaries.  Since we carry on no business
at the level of our parent  corporation,  our  ability to service  our own debts
will  depend  on the  cash  flow  from our  subsidiaries.  If one or more of our
subsidiaries becomes unable to pay its debts to GreenShift,  we may be forced to
default  on our  own  debt  obligations.  Such a  default  could  result  in the
liquidation  of a portion of our assets,  most likely at less than their  market
value.

We will be Contingently Liable for the Debts of Some of our Subsidiaries.

We recently  guaranteed  $19  million in debt  incurred  by our  subsidiary,  GS
AgriFuels Corporation.  In order for our subsidiaries to obtain the capital that
will be  required  for their  growth,  it is likely  that in the  future we will
provide guarantees of other debts incurred by our subsidiaries. These guarantees
will subject our assets to the risk of the failure of a subsidiary whose debt we
have guaranteed.  If, for example, we were forced to satisfy our guarantee of GS
AgriFuels  debt,  to do so we  would  have  to  liquidate  our  holdings  in our
successful  subsidiaries.  Such  a  result  could  eliminate  the  value  of our
shareholders' investments.

<PAGE>

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

Our business development could be hindered if we lost the services of our Chief
Executive Officer.

Kevin Kreisler is the Chief  Executive  Officer of GreenShift and of each of its
primary subsidiaries.  Mr. Kreisler is responsible for strategizing not only our
business plan but also the means of financing it. If Mr.  Kreisler were to leave
us or become  unable to fulfill  his  responsibilities,  our  business  would be
imperiled.  At the  very  least,  there  would  be a  substantial  delay  in the
development of our plans until a suitable  replacement for Mr. Kreisler could be
retained.

Viridis  Capital LLC has the ability to  determine  all  matters  submitted  for
stockholder approval, and its interests may differ from other stockholders.

Viridis Capital,  LLC is owned by Kevin Kreisler,  our chief executive  officer.
Viridis Capital owns capital stock in GreenShift that gives it the power to cast
80% of the votes at any meeting of our  shareholders.  Accordingly,  Viridis can
determine the outcome of any corporate  transaction or other matter submitted to
our stockholders for approval, including mergers,  acquisitions,  consolidations
and the sale of all or  substantially  all of our assets.  Viridis  also has the
power to prevent or cause a change in  control.  The  interests  of Viridis  may
differ from the interests of the other stockholders, which could prevent actions
from being taken that might be in the best interests of GreenShift.


          III. Risks Factors Attendant to Ownership of our Common Stock

The resale of shares  acquired by Cornell  Capital  Partners from GreenShift may
reduce the market price of GreenShift' shares.

Cornell Capital Partners owns convertible debentures issued by GreenShift, which
will permit it to acquire  GreenShift  common stock and resell it to the public.
At the  current  market  price,  Cornell  Capital  Partners  could  convert  its
debentures  into over 50% of our  outstanding  common stock. It is possible that
resale of shares by  Cornell  Capital  Partners  will  significantly  reduce the
market price for GreenShift common stock.

Existing  shareholders may experience  significant dilution from our issuance of
shares to Cornell Capital Partners.


The  issuance of shares on  conversion  of the  convertible  debentures  held by
Cornell Capital Partners will have a dilutive impact on our  stockholders.  As a
result,  our net income per share  could  decrease  in future  periods,  and the
market price of our common stock could decline. In addition, the lower our stock
price  is,  the  more  shares  of  common  stock  we will  have to  issue if the
debentures are converted on the basis of the  contemporaneous  market price.  If
our stock  price is  lower,  then our  existing  stockholders  would  experience
greater dilution.

We will be quoted on the OTC Bulletin Board for the immediate future.

We currently do not meet the eligibility  requirements for listing on the NASDAQ
Stock  Market.  Until we meet those  standards  and are accepted into the NASDAQ
Stock Market,  or unless we are successful in securing a listing on the American
Stock Exchange or some other  exchange,  our common stock will be quoted only on
the OTC Bulletin  Board.  Such a listing is considered less  prestigious  than a
NASDAQ Stock Market or an exchange  listing,  and many brokerage  firms will not
recommend  Bulletin Board stocks to their clients.  This situation may limit the
liquidity of your shares.

Our common stock price may be volatile.

The trading price of our common stock may fluctuate substantially.  The price of
the common  stock may be higher or lower than the price you pay for your shares,
depending on many  factors,  some of which are beyond our control and may not be
directly related to our operating  performance.  These factors include,  but are
not limited to, the following:  o price and volume  fluctuations  in the overall
stock market from time to time;

     o    significant  volatility  in the  market  price and  trading  volume of
          securities traded on the OTC Bulletin Board companies;

     o    actual or anticipated  changes in our earnings or  fluctuations in our
          operating results.

As a result of these  factors,  you cannot be assured that when you are ready to
sell your  shares,  the market price will  accurately  reflect the value of your
shares or that you will be able to obtain a reasonable price for your shares.

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

THE THREE  MONTHS  ENDED MARCH 31, 2007 VERSUS THE THREE  MONTHS ENDED MARCH 31,
2006

Revenues

Total  revenues  for the three  months  ended March 31, 2007 were $4.0  million,
representing  an decrease of $0.2 million,  or 4.8%, over the three months ended
March 31, 2006 revenues of $4.2 million. Revenue from discontinued operations of
$0.0  million  and $1.1  million for the three  months  ended March 31, 2007 and
March 31, 2006, respectively, were excluded from these figures.

Cost of Revenues

Cost of revenues for the three months ended March 31, 2007 were $3.2 million, or
78.5% of revenue  compared  to $3.3  million,  or 78.4% of revenue  for the same
period in 2006. Costs of revenues from  discontinued  operations of $0.0 million
and $0.6  million for the three  months ended March 31, 2007 and March 31, 2006,
respectively, were excluded from these figures.

Operating Expenses

Operating  expenses for the three months ended March 31, 2007 were $7.6 million,
or 187% of revenue  compared  to $4.4  million,  or 106% of revenue for the same
period in 2006.  Included  in the three  months  ended  March 31,  2007 was $4.3
million in stock based  compensation  as compared to $0.0  million for the three
months ended March 31, 2006. The increase in operating expenses is due primarily
to increases in personnel  and other  overhead  related to the  Company's  clean
technology and renewable fuels  segments.  Selling,  general and  administrative
expense from discontinued  operations of $0.3 million for 2006 was excluded from
the above figures.

Interest Expense

Interest  expense for the three  months  ended March 31, 2007 was $1.7  million,
representing  a decrease of $1 million  from $2.7 million for the same period in
2006.

Expenses Associated with Derivative Instruments

Loss from the change in the fair market value of derivative liabilities was $2.4
million for the three  months  ended March 31,  2007.  Amortization  of deferred
financing   costs  and  debt  discounts  was  $0.5  million  and  $1.5  million,
respectively.

Net Income or Loss

Net loss from  continuing  operations for the three months ended March 31, 2007,
was $13 million as compared to a loss from continuing operations of $5.3 million
from the same  period in 2006.  Net loss  from  discontinued  operations  of $.1
million  for three  months  ended  March 31,  2006 was  excluded  from the above
figures. Net loss of $10.5 million for the three months ended March 31, 2007 was
due  primarily to  increased  operating  expenses for new business  initiatives,
adjustments  to the fair market value of the derivative  liability  instruments,
interest and  amortization  charges  associated with financing,  and issuance of
stock based compensation.

<PAGE>

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

DERIVATIVE LIABILITIES

As of March  31,  2007 we had  several  convertible  debentures  due to  Cornell
Capital.  The  conversion  feature  on these  debentures  is  variable  based on
trailing market prices and therefore contains an embedded  derivative.  We value
the conversion feature at the time of issuance using the Black-Scholes Model and
record a note discount and  derivative  liability for the calculated  value.  We
recognize  interest  expense for accretion of the note discount over the term of
the note. The derivative liability is valued at the end of each reporting period
and results in a gain or loss for the change in fair value.  Due to the volatile
nature of our stock, as well as the stock of our subsidiaries, the change in the
derivative  liability and the resulting gain or loss is usually  material to our
results.

The principal  amount on our  convertible  debentures due to Cornell Capital was
$33.3  million as of March 31, 2007 and the  unamortized  note discount was $8.4
million.  For the quarter ended March 31, 2007, we recognized  interest  expense
for  accretion of the debt discount of $1.7 million and a loss for the change in
fair  value  of the  derivative  of  $2.4  million  for  these  debentures.  The
derivative  liability as of March 31, 2007 was $13 million for debentures due to
Cornell Capital.

LIQUIDITY AND CAPITAL RESOURCES

Our primary  source of liquidity is cash  provided by  operating,  investing and
financing  activities.  For the three months ended March 31, 2007, net cash used
by our operating  activities was $.6 million as compared to the net cash used by
our  operating  activities  of $2 million for the three  months  ended March 31,
2006.

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 cash generated  from  operations and proceeds from issuance of debt
and common  stock.  The Company's  capital  resources are impacted by changes in
accounts  receivable as a result of revenue  fluctuations,  economic trends, and
collection activities. At March 31, 2007 the Company had cash of $2.1 million.

Cash Flows for the Three Months Ended March 31, 2007

Our operating  activities during the first three months of 2007 used $.6 million
in cash. At March 31, 2007, Accounts  receivable,  net of allowance for doubtful
accounts,  totaled $3.3 million and inventories  totaled $5.5 million.  Accounts
payable and accrued expenses totaled $9 million.

For the three months ended March 31,  2007,  we used $.05 million for  investing
activities,  and we obtained cash from financing  activities of $.7 million.  We
used these funds to further provide working capital for operations and to invest
in our subsidiaries.

The Company had a working  capital  deficit of $34.3  million at March 31, 2007,
which includes derivative  liabilities of $13 million and convertible debentures
of $2.3 million, net of discounts.

At the present  time,  GreenShift  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.


<PAGE>


ITEM 3.  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.  The
Company's chief executive officer and chief financial  officer  determined that,
as of the  end of  the  period  covered  by  this  report,  these  controls  and
procedures  are adequate and  effective in alerting  them in a timely  manner to
material  information  relating  to the  Company  required to be included in the
Company's periodic SEC filings.

There was no change in internal controls over financial reporting (as defined in
Rule 13a-15(f) promulgated under the Securities Exchange Act of 1934) identified
in connection  with the  evaluation  described in the preceding  paragraph  that
occurred during the Company's first fiscal quarter that has materially  affected
or is reasonably likely to materially affect the Company's internal control over
financial reporting.


                           PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

None.

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 AND REPORTS ON FORM 8-K

The following are exhibits filed as part of the Company's Form 10-QSB for the
period ended March 31, 2007:

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 President and 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.

GREENSHIFT CORPORATION

By:           /S/       KEVIN KREISLER
              ------------------------
                        KEVIN KREISLER
                        Chairman of the Board and Chief Executive Officer

Date:                   May 21, 2007