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


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

                                    FORM 10-Q
                            -------------------------



                 ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (D)
                     OF THE SECURITIES EXCHANGE ACT OF 1934
                   FOR THE FISCAL QUARTER ENDED MARCH 31, 2008

                          COMMISSION FILE NO.: 0-28887



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


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


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

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



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

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

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


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

The  number  of  outstanding  shares  of  common  stock  as of May 20,  2007 was
119,141,090.







<PAGE>



                          CARBONICS CAPITAL CORPORATION
                         QUARTERLY REPORT ON FORM 10QSB
                   FOR THE FISCAL QUARTER ENDED MARCH 31, 2008
<TABLE>

                                TABLE OF CONTENTS



<CAPTION>

                                                                                                           Page No
Part I            Financial Information

<S>               <C>                                                                                             <C>
Item 1.           Financial Statements (unaudited)................................................................2
                  Condensed Consolidated Balance Sheet - March 31, 2008 (unaudited)...............................3
                  Condensed Consolidated Statements of Operations - for the Three Months Ended
                    March 31, 2008 (unaudited) and 2007 (unaudited)...............................................4
                  Condensed Consolidated Statements of Cash Flows - for the Three Months Ended
                    March 31, 2008 (unaudited) and 2007 (unaudited)...............................................5
                  Notes to Condensed Consolidated Financial Statements............................................6
Item 2.           Management's Discussion and Analysis ...........................................................9
Item 3            Quantitative and Qualitative Disclosures about Market Risk.....................................11
Item 4.           Controls and Procedures........................................................................11

Part II           Other Information

Item 1.           Legal Proceedings..............................................................................11
Item 2.           Unregistered Sales of Equity Securities and Use of Proceeds....................................11
Item 3.           Defaults upon Senior Securities................................................................11
Item 4.           Submission of Matters to a Vote of Security Holders............................................11
Item 5.           Other Information .............................................................................11
Item 6.           Exhibits ......................................................................................11

Signatures                                                                                                       13

</TABLE>






                                       2
<PAGE>



                                     PART I


ITEM 1            FINANCIAL STATEMENTS

































                                       3

<PAGE>

<TABLE>


                          CARBONICS CAPITAL CORPORATION
                             CONDENSED BALANCE SHEET
             AS OF MARCH 31, 2008 (UNAUDITED) AND DECEMBER 31, 2007
<CAPTION>
                                                                       3/31/2008       12/31/2007
                                                                   ------------------------------
ASSETS
Current Assets:
<S>                                                                <C>              <C>
   Cash ........................................................   $       2,472    $        --
   Note receivable - related party .............................         497,556        2,948,831
   Interest receivable - related party .........................            --            196,832
                                                                   -------------    -------------
      Total current assets .....................................         500,028        3,145,663

Furniture and equipment - net ..................................          64,040           69,628

   Deposits ....................................................            --             32,515
                                                                   -------------    -------------

TOTAL ASSETS ...................................................   $     564,068    $   3,247,806
                                                                   =============    =============

LIABILITIES AND STOCKHOLDERS' DEFICIT

Current Liabilities:

   Accounts payable and accrued expenses .......................   $     682,439    $   1,064,672
   Liabilities to be settled in stock ..........................            --            407,333
   Accrued interest ............................................         299,874          262,445
   Current portion of convertible debentures, net of discount ..         602,907          622,660
   Derivative liability ........................................         214,329        1,781,903
   Current maturities of long term debt ........................            --             26,329
                                                                   -------------    -------------
      Total current liabilities ................................       1,799,549        4,165,342

   Lease Payable ...............................................          25,324             --
   Convertible debentures, net of current ......................       1,009,761          867,587
                                                                   -------------    -------------
     Total long term liabilities ...............................       1,035,085          867,587
                                                                   -------------    -------------

TOTAL LIABILITIES ..............................................       2,834,634        5,032,929
                                                                   -------------    -------------

Preferred stock
   Series C, par $0.001, 1,000,000 shares authorized,
   974,140 issued and outstanding ..............................             974              974
Common stock, par $0.001, 500,000,000 authorized
   12,694,513 and 9,549,266 issued and outstanding, respectively          12,695            9,549
Additional paid-in capital .....................................     124,845,114      126,524,280
Accumulated deficit ............................................    (127,129,349)    (128,319,926)
                                                                   -------------    -------------
   Total stockholders' deficiency ..............................      (2,270,566)      (1,785,123)
                                                                   -------------    -------------

TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIENCY .................   $     564,068    $   3,247,806
                                                                   =============    =============


              The notes to the financial statement are an integral
                           part of these statements.
</TABLE>
                                       4
<PAGE>


<TABLE>

                          CARBONICS CAPITAL CORPORATION
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

<CAPTION>

                                                   Three Months Ended  Three Months Ended
                                                             March 31            March 31
                                                                 2008                2007
                                                   --------------------------------------
<S>                                                      <C>                  <C>
Revenue                                                  $      --            $      --

Cost of revenues .....................................          --                   --
                                                         -----------          -----------
  Gross profit .......................................          --                   --
                                                         -----------          -----------

Operating expenses:
   General and administrative expenses ...............        96,846              891,600
    Stock based compensation .........................        90,000              492,696
                                                         -----------          -----------
     Total operating expenses ........................       186,846            1,384,296
                                                         -----------          -----------

Operating loss .......................................      (186,846)          (1,384,296)
                                                         -----------          -----------

Other income (expense):
   Gain (loss) on fair value of derivative instruments     1,567,573                  570
   Amortization of deferred financing costs and
     debt discount ...................................      (152,720)             (73,342)
   Loss on impairment of assets ......................          --                   --
   Loss on extinguishment of debt ....................          --                   --
   Settlement expense ................................          --                   --
   Interest expense ..................................       (37,429)             (63,180)
                                                         -----------          -----------
     Total other income (expense) ....................     1,377,424             (135,952)

Net income before provision for income taxes .........     1,190,578           (1,520,248)

Provision benefit for income taxes ...................          --                   --

Net income from continuing operations ................     1,190,578           (1,520,248)
                                                         -----------          -----------

Discontinued operations:
Loss from discontinued operations ....................          --             (9,000,711)
Gain on disposal of discontinued operations ..........          --                   --
                                                         -----------          -----------
   Total discontinued operations .....................          --             (9,000,711)
                                                         -----------          -----------

Net Loss .............................................   $ 1,190,578          $(10,520,959)
                                                         ===========          ===========


Common share, basic and diluted
loss per share from continuing operations ............   $       .12          $     (0.24)

Common share, basic and diluted
loss per share from discontinued operations ..........   $      --            $     (1.40)
                                                         -----------          -----------

Common share, basic and diluted
loss per share .......................................   $       .12          $     (1.64)
                                                         ===========          ===========

Weighted average share of common stock
   outstanding, basic and diluted ....................     9,937,290            6,424,015
                                                         ===========          ===========

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

</TABLE>
                                       5

<PAGE>


<TABLE>

                          CARBONICS CAPITAL CORPORATION
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)

<CAPTION>
                                                                 Three Months Ended Three Months Ended
                                                                           March 31          March 31
                                                                               2008             2007
                                                                   ----------------   ---------------
CASH FLOW FROM OPERATING ACTIVITIES

<S>                                                                      <C>            <C>
   Net cash used in continuing operations ............................   $  (651,696)   $  (265,623)
   Net cash used in discontinued operations ..........................          --         (132,811)
                                                                         -----------    -----------

      Net cash provided by (used in) operating activities ............      (651,696)      (398,434)
                                                                         -----------    -----------

CASH FLOW FROM INVESTING ACTIVITIES

   Issuance of note receivable .......................................          --          (73,877)
   Investment in unconsolidated subsidiaries .........................          --             --
                                                                         -----------    -----------
      Net cash used in investing activities ..........................          --          (73,877)
                                                                         -----------    -----------

CASH FLOWS FROM FINANCING ACTIVITIES

   Issuances (Repayments) of short-term borrowings ...................          --           (5,275)
   Proceeds from convertible debenture ...............................          --          224,577
   Redemption of preferred stock .....................................          --               (9)
   Proceeds from the issuance of common stock ........................          --          313,695
   Proceeds from notes receivable - related party ....................       854,168           --
   Repayment of notes payable - related party ........................      (200,000)          --
                                                                         -----------    -----------
      Net cash provided by financing activities ......................       654,168        532,988
                                                                         -----------    -----------
   Net increase in cash ..............................................         2,472         60,677
   Cash at beginning of period .......................................          --        2,006,131
                                                                         -----------    -----------
   Cash at end of period .............................................   $     2,472    $ 2,066,808
                                                                         ===========    ===========




Supplemental statement of non-cash investing and financing activities:

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


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

</TABLE>


                                       6
<PAGE>



                          CARBONICS CAPITAL CORPORATION
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
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-Q 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,  2008 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, 2007.

2        NATURE OF OPERATIONS

COMPLETION OF NAME CHANGE AND REVERSE STOCK SPLIT

Effective  February  11,  2008,  the Company  changed  its name from  GreenShift
Corporation to Carbonics  Capital  Corporation  and completed a 1 for 20 reverse
stock split.

FORGIVENESS OF REALATED PARTY DEBT

During the first quarter of 2008, the company waived $2,000,000 of the debenture
receivable  from  GreenShift  Corporation.   Additionally,  the  company  waived
interest receivable from GreenShift in the amount of $196,832,  as well as other
related company notes receivable of $6,821 in the first quarter of 2008.

3        GOING CONCERN

The  accompanying  financial  statements  have been  prepared  assuming that the
Company  will  continue  as a going  concern.  The  Company  had a net income of
$1,190,578,  which was primarily composed of a gain on derivative  valuation for
the three  months  ended March 31, 2008 and had an  accumulated  deficit.  As of
March 31, 2008 the Company's  current  liabilities  exceeded  current  assets by
$1,299,521. These matters raise substantial doubt about the Company's ability to
continue as a going  concern.  Management's  plans  include  raising  additional
proceeds   from  debt  and  equity   transactions   and   completing   strategic
acquisitions.

4        SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

PRINCIPLES OF CONSOLIDATION

For  the  quarter  ended  March  31,  2008  the  company  had  no   consolidated
subsidiaries.  For the  quarter  ended  March  31,  2007 the  operations  of all
consolidated companies are reflected in discontinued operations.

5        FINANCING ARRANGEMENTS
<TABLE>
<CAPTION>

The following is a summary of the Company's financing arrangements as of March
31, 2008:

Current portion of convertible debentures:
<S>                                                                             <C>
YAGI convertible debenture payable from Carbonics Capital issued October 2005       602,907
                                                                                -----------
     Total current portion of convertible debentures ........................   $   602,907
                                                                                ===========
Long-term convertible debenture:
YAGI convertible debenture payable from Carbonics Capital issued July 2005 ..   $   570,000
YAGI convertible debenture payable from Carbonics Capital issued April 2006 .     1,150,369
Note discounts ..............................................................      (710,608)
                                                                                -----------
     Total long-term convertible debentures .................................   $ 1,009,761
                                                                                ===========
</TABLE>

CONVERTIBLE DEBENTURES

YA Global Investments, LP

On April 2, 2007 YA Global Investments,  LP ("YAGI") declared certain debentures
issued by the Company to YAGI to be in default for the failure by the Company to
maintain  an  effective  registration  statement  as  required  by the  Investor

                                       7
<PAGE>

Registration Rights Agreement executed  contemporaneous with the issuance of the
debentures.  The Debentures are  unconditionally  guaranteed by Viridis Capital,
LLC  ("Viridis"),  a  wholly-owned  affiliate of Kevin  Kreisler,  the Company's
chairman and chief executive officer (the "Guaranty").

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

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

In addition,  Carbonics  issued to YAGI a warrant to purchase  500,000 shares of
Carbonics  Capital's  common stock at $1.00 per share.  The value of the warrant
was  calculated  to be $570,000 at the time of the  issuance  using the guidance
found in APB Opinion 14,  "Accounting for Convertible  Debt and Debt issued with
Detachable Stock Purchase Warrants" and was recorded as a discount. The discount
is amortized to interest  expense over the term of the loan using the  effective
interest method of  amortization.  During the three months ended March 31, 2008,
interest expense from accretion of the debt discount was $49,172.

On June 29, 2007 the Company and Viridis,  entered into a letter agreement dated
with  YAGI.  The  agreement  recited  that  the  Company  had  defaulted  in its
obligation  to file a  registration  statement  to  permit  YAGI to  resell  the
Company's   common  stock  issuable  upon  conversion  of  certain   convertible
debentures  that the Company  sold to YAGI.  YAGI agreed to waive the  penalties
available to it as a result of the default if the following conditions were met:

1.   The Company  agreed to permit one  conversion by YAGI of Series C Preferred
     Stock  pledged to it by Viridis in excess of the stated limit on conversion
     (4.99% of outstanding shares). The converted principal amount was $390,000,
     which was converted  into  approximately  9.99% of the  outstanding  common
     shares on June 28, 2007.

2.   The  Company  agreed to  increase  its  authorized  shares as  promptly  as
     reasonably  possible  in order to permit  the  conversion  of the  Series C
     Preferred Stock.

3.   The  Company  agreed  to effect  restructuring  of the  Company  as soon as
     practicable,  but no later than  March 1, 2008.  In  addition  the  Company
     agreed to increase its authorized  capital stock to an amount sufficient to
     permit YAGI after the  restructuring,  to convert  into common stock all of
     the convertible debentures issued to it by the Company.

4.   The Company agreed to file a registration statement with the Securities and
     Exchange  Commission  that will,  when declared  effective,  permit YAGI to
     resell to the public the  common  stock  issuable  upon  conversion  of the
     debentures  issued to it by the Company and the debentures  issued to it by
     the Company.

As of March 31, 2008 YAGI had reduced  accrued  interest  and  principal  on the
debentures of $118,107 and  $1,079,733  (less  $390,000 for shares issued during

                                       8
<PAGE>

2008),  respectively,  based on these  agreements  through the acceptance of the
Company Series C Preferred Stock from Viridis. As a result, the Company issued a
note to Viridis in the amount of $807,840.

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, 2008 the change in the fair value of the derivative  resulted in
an accounting  gain of $1,567,573..  Amortization  of the debt discount  totaled
$152,720 for the quarter ended d March 31, 2008. The unamortized  portion of the
debt discount  related to the  derivatives was $710,608 at March 31, 2008. As of
March 31, 2008, the fair value of the derivative liabilities was $214,329.

7        RELATED PARTY TRANSACTIONS

On November 9, 2007, the Company and GreenShift  Corporation  completed a series
of transactions, including the transfer to GreenShift of Carbonics' stakes in GS
AgriFuels  Corporation  and  EcoSystem  Corporation.  GreenShift  assumed all of
Carbonics'  intercompany,  affiliate related party notes payable and receivable,
all trade payables,  and all receivables,  but did not assume Carbonics' debt to
YA Global  Investments,  LP.  In  exchange  GreenShift  issued  to  Carbonics  a
promissory note in the aggregate  amount of $2,948,831  (the "Carbonics  Note").
The principal and interest on the Carbonics Note, which accrues at the per annum
rate of 8%, are due and payable in full on December 31, 2009. The Carbonics Note
was reduced by $2,000,000 in the first quarter 2008.  This reduction was in part
attributable  to the  fact  that the  appraised  value  of GS  AgriFuels,  which
appraisal  was completed  during the first  quarter of 2008,  was assessed to be
less than the total debt payable by GS AgriFuels,  and the fact that  GreenShift
realized  impairment  charges of  $11,153,816  relating to the  impairment of GS
AgriFuels'  NextGen Fuel,  Inc., and  Sustainable  Systems,  Inc.  subsidiaries.
Additionally the company waived the interest  receivable from GreenShift as well
as other related party notes in the amount of $196,832.

On November 9, 2007, in connection with the transfer to GreenShift of Carbonics'
stakes in GS AgriFuels and EcoSystem,  GreenShift  assumed  liability for a term
note  issued  by  Carbonics  to  Viridis  Capital,  LLC  with a face  amount  of
$1,339,704  (the  "Viridis  Note"),  which  amount is due upon  demand and bears
interest  at the rate of 8%. As of  December  31,  2007,  the  balance  due from
Carbonics to Viridis was $0.

On December 12, 2007,  Carbonics  distributed  2,000,000  and  1,000,000  common
shares of EcoSystem Corporation and GS EnviroServices,  Inc.,  respectively,  to
all  shareholders of Carbonics  except for Viridis  Capital,  LLC, the Company's
majority  shareholder.  On December 12, 2007, Carbonics  distributed all of what
was then  Carbonics'  80% stake in  GreenShift  on a  pro-rated  basis to all of
Carbonics'  shareholders.  This was  accomplished  by  Carbonics'  conversion of
200,000 shares of GreenShift  Series D Preferred Stock into 20,800,000 shares of
GreenShift common stock, which were distributed to the minority  shareholders of
Carbonics,  and the  distribution  by Carbonics of 800,000  shares of GreenShift
Series D  Preferred  Stock to  Viridis  Capital,  LLC,  the  Company's  majority
shareholder. Kevin Kreisler, the sole member of Viridis Capital, is the Chairman
and Chief Executive Officer of the Company.

8        SUBSEQUENT EVENTS

None.









                                       9
<PAGE>




ITEM 2     MANAGEMENT DISCUSSION AND ANALYSIS

OVERVIEW

We  develop  renewable  energy  projects  based  on  established  technological,
geographical  or  other  advantages.  Our  ambition  is  to  develop  successful
renewable  energy  projects that  facilitate the more efficient use of carbon in
energy supply chains.  Our plan to achieve this involves the planned  completion
of one or more of the following activities:

>>   Direct development of qualified projects;

>>   Majority investments in qualified projects; and/or,

>>   Acquisition of qualified distressed or other assets.

We are also actively  seeking to retain new senior  management and plan to do so
in conjunction with one or more of the above activities.

We also hold the rights to a process  for  preferential  separation  of plastics
from mixed  waste  streams  developed  by Argonne  National  Laboratory  under a
contract with the U.S.  Department of Energy.  This technology  cost-effectively
preferentially  separates and recovers  targeted  plastics from a mixed plastics
stream which enhances the value of recycled plastics. The Company views targeted
waste  plastics as a valuable,  large volume,  chemically  consistent  source of
carbon and hydrogen for possible  thermal and catalytic  conversion  into liquid
fuels. Our business plan also involves  developing  compatible projects that can
exploit the value of this technology.

DIVESTMENT

During the fourth  quarter  2007,  the Company  divested 100% of its interest in
EcoSystem Corporation,  GS AgriFuels Corporation,  GS EnviroServices,  Inc., and
GreenShift  Corporation (f/k/a GS CleanTech  Corporation).  The results of these
companies are reported herein as discontinued operations.

RESULTS OF OPERATIONS

Quarter ended March 31, 2008 Compared to Quarter Ended March 31, 2007

Revenues

There were no revenues from continuing operations for the quarter ended March
31, 2008.

Cost of Revenues

There was no cost of revenues for the quarter ended March 31, 2008.

Selling, General and Administrative Expenses Operating Expenses

Selling,  general and administrative expenses during the quarter ended March 31,
2008 totaled  $186,846.  In the  comparable  period of the prior year,  selling,
general and administrative  expenses totaled $1,384,296 attributable to selling,
general  and  administrative  expenses  with  $492,696  related  to stock  based
compensation.  Selling,  general and administrative  expenses during the quarter
ended March 31, 2008 primarily  consisted of accounting  and legal fees,  office
related expenses as well as costs associated with payroll. Due to the divestment
of our  operations  at the end of  2007,  selling,  general  and  administrative
expenses in 2008 will consist of development  costs  associated with our planned
future projects. General and administrative expenses are expected to remain high
as a percentage  of sales until such time that the Company can achieve  initiate
and sustain sufficient revenue to support these expenses.

Interest Expense

Interest expense for the three months ended March 31, 2008 was $37,429,  and was
$63,180 for the same period in 2007.

Expenses Associated with Derivative Instruments

As of March 31, 2008 Carbonics Capital had several convertible debentures due to
YA Global  Investments,  LP.  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


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<PAGE>

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 Global was $2,323,276,  $1,612,668 net of $710,608 discount as
of March 31, 2008.  For the three months ended March 31, 2008,  we  recognized a
gain for the  change in fair value of the  derivative  of  $1,567,573  for these
debentures. The derivative liability as of March 31, 2008 was $214,329.

Net Income or Loss

Net income from continuing  operations for the three months ended March 31, 2008
was  $1,190,578 as compared to a loss from  continuing  operations of $1,520,248
from the same period in 2007. The Company transferred its interest in all of its
subsidiaries  to GreenShift  Corporation  during the three months ended December
31, 2007. Net loss from discontinued operations was $9,000,711 in 2007.

Liquidity and Capital Resources

The Company had  $2,834,634 in  liabilities at the end of the three months ended
March 31, 2008,  and may need to obtain  additional  financing to satisfy  these
obligations.

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

Cash Flows

Our  operating  activities  during the three  months  ended  March 31, 2008 used
$651,696 in cash.  At March 31,  2008,  accounts  payable  and accrued  expenses
totaled  $682,439.  At March 31, 2008 the Company had $2,472 cash. For the three
months ended March 31, 2008, investing activities used $0 in cash, and cash from
financing  activities  provided  $654,168.  The  Company  had a working  capital
deficit of $1,299,521 at March 31, 2008, which includes  derivative  liabilities
of $214,329 and convertible debentures of $1,612,668, net of discounts.

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

Off Balance Sheet Arrangements

None.






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ITEM 3     QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable.

ITEM 4            CONTROLS AND PROCEDURES

EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

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

INDEX TO EXHIBITS

Exhibit
Number            Description

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

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

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







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                                   SIGNATURES

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

CARBONICS CAPITAL CORPORATION

                /S/      KEVIN KREISLER
                -----------------------
By:                      KEVIN KREISLER
                         Chairman and Chief Executive Officer
Date:                    May 19, 2008

                /S/      JACQUELINE FLYNN
                -------------------------
By:                      JAQUELINE FLYNN
                         Chief Financial Officer

Date:                    May 20, 2008






























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