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

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

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


                    ANNUAL REPORT UNDER SECTION 13 OR 15 (D)
                     OF THE SECURITIES EXCHANGE ACT OF 1934
                   FOR THE FISCAL YEAR ENDED DECEMBER 31, 2006

                          COMMISSION FILE NO.: 0-32143



                              GS ENERGY CORPORATION
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             (Exact name of registrant as specified in its charter)


Delaware                                                         20-3148296
--------------------------------------------------------------------------------
(State of other jurisdiction of                               (IRS Employer
incorporation or organization                                Identification No.)


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


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

Securities registered pursuant to Section 12(b) of the Act: None.

Securities registered pursuant to Section 12(g) of the Act: Common Stock, $0.001
par value.

Check whether the issuer is not required to file reports  pursuant to Section 13
or 15(d) of the Exchange Act. (X)

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 __.

Check if there is no disclosure of delinquent  filers in response to Item 405 of
Regulation S-B contained in this form, and no disclosure  will be contained,  to
the best of the  registrant's  knowledge,  in  definitive  proxy or  information
statements  incorporated  by  reference  in Part III of this Form  10-KSB or any
amendment to this Form. (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

State issuer's revenues for its most recent fiscal year: $5,844,799.

The  number of  outstanding  shares of  common  stock as of April 16,  2007 was:
2,497,163,844.  Based on the closing price of the Registrant's common stock, the
aggregate  market  value  of the  voting  stock  held by  non-affiliates  of the
Registrant as of April 16, 2007 was $2,996,596.

Transitional Small Business Disclosure Format:                      Yes __ No X

DOCUMENTS INCORPORATED BY REFERENCE: None

Amendment No. 1

This amendment is being filed in order to correct an error in the  certification
filed as Exhibit 31.2

<PAGE>




                             GS ENERGY CORPORATION

                           ANNUAL REPORT ON FORM 10KSB
                   FOR THE FISCAL YEAR ENDED DECEMBER 31, 2006


                                TABLE OF CONTENTS


<TABLE>
<CAPTION>

                                                                                                       Page No
Part I
<S>  <C>                                                                                                    <C>
Item 1      Description of Business .........................................................................3
Item 2      Description of Properties........................................................................7
Item 3      Legal Proceedings................................................................................7
Item 4      Submission of Matters to a Vote of Security Holders .............................................7

Part II
Item 5      Market for Registrant's Common Equity and Related Stockholder Matters ...........................8
Item 6      Management's Discussion and Analysis of Financial Condition and Results of Operations............9
Item 7      Financial Statements ...........................................................................13
Item 8      Changes and Disagreements with Accountants on Accounting and Financial Disclosure ..............35
Item 8A   Controls and Procedures ..........................................................................35

Part III
Item 9      Directors, Executive Officers, Promoters and Control Persons; Compliance with
                  Section 16(a) of the Exchange Act   ......................................................36
Item 10     Executive Compensation .........................................................................37
Item 11     Security Ownership of Certain Beneficial Owners and Related Stockholder Matters ................37
Item 12     Certain Relationships and Related Transactions .................................................38

Part IV
Item 13     Exhibits and Reports on Form 8K ................................................................39
Item 14     Principal Accountant Fees and Services .........................................................40

Signatures..................................................................................................41

</TABLE>



<PAGE>

                           Forward Looking Statements

FORWARD LOOKING STATEMENTS

In  addition  to   historical   information,   this   Annual   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.  Readers  should
carefully review the risk factors described in other documents the Company files
from time to time with the  Securities  and  Exchange  Commission  (the  "SEC"),
including  the  Quarterly  Reports on Form 10QSB to be filed by us in the fiscal
year 2007.

                                     PART I

ITEM 1.  DESCRIPTION OF BUSINESS

GS Energy Corporation ("we," "our," "us," "GS Energy," or the "Company"), during
the twelve months ended December 31, 2006,  conducted its operations through its
subsidiary GS  Manufacturing,  Inc. GS  Manufacturing  holds  majority  stake in
Warnecke Design Service,  Inc. (100%), a specialty metal  manufacturing  company
that 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.

Warnecke is the exclusive  manufacturer  for NextGen Fuel, Inc., a subsidiary of
GS AgriFuels Corporation.  In addition, Warnecke Design holds the right of first
refusal to provide  all of the  equipment  manufacturing  needs of GS  CleanTech
Corporation.  GS Energy,  GS CleanTech  and GS AgriFuels  are all majority  held
subsidiaries of GreenShift Corporation.

Our executive  offices are located at One Penn Plaza,  Suite 1612,  New York, NY
10119. Our telephone number is 212-994-5374.

More  information on GS Energy  Corporation  and its business model is available
online at www.gs-energy.com where we will also provide free access to our annual
reports on Form 10KSB,  quarterly reports on Form 10QSB, current reports on Form
8K and  amendments to those reports filed  pursuant to Section 13(a) or 15(d) of
the  Securities  Exchange Act of 1934 as soon as  reasonably  practicable  after
electronic filing with the SEC.

BUSINESS RISK FACTORS

There are many  important  factors that have  affected,  and in the future could
affect,  GS Energy  Corporation's  business,  including  but not  limited to the
factors discussed below,  which should be reviewed carefully together with other
information contained in this report. Some of the factors are beyond our control
and future trends are difficult to predict.

There is  substantial  doubt  concerning  our  ability  to  continue  as a going
concern.

GS Energy  Corporation  incurred a loss of  $1,023,150  during the twelve months
ended December 31, 2006, and GS Energy Corporation had approximately $419,881 in
cash at December 31, 2006. These matters raise substantial doubt about GS Energy
Corporation's ability to continue as a going concern. Management's plans include
raising  additional  proceeds from debt and equity  transactions  and completing
strategic acquisitions.

The exercise of our outstanding warrants and options and GS Energy Corporation's
various  anti-dilution  and  price-protection  agreements could cause the market
price of our common stock to fall,  and may have  dilutive and other  effects on
our existing stockholders.

The  exercise  of our  outstanding  warrants  and  options  could  result in the
issuance of up to 237,500,000  shares of common stock,  assuming all outstanding
warrants and options are currently exercisable.  Such issuances would reduce the
percentage of ownership of our existing  common  stockholders  and could,  among
other  things,  depress  the  price  of our  common  stock.  This  result  could
detrimentally  affect  our  ability  to  raise  additional  equity  capital.  In
addition,  the sale of these  additional  shares of  common  stock may cause the
market price of our stock to decrease.

<PAGE>

ITEM 1.  DESCRIPTION OF BUSINESS (continued)

BUSINESS RISK FACTORS (continued)



We may be unable to satisfy our current debts.

Our total liabilities as of December 31, 2006 were $2,343,071.  We cannot afford
to pay these amounts out of our operating cash flows.

We lack capital to fund our operations.

During the twelve months ended December 31, 2006 our operations  used $89,568 in
cash. In addition,  during those twelve months we were required to make payments
on some of our outstanding  debts.  Loans from some of our  shareholders and the
issuance  convertible  debentures funded both the cash shortfall from operations
and our debt service.  Those individuals may not be able to continue to fund our
operations or our debt service.

Our operations will suffer if we are unable to manage our rapid growth.

We are  currently  experiencing  a  period  of  rapid  growth  through  internal
expansion and strategic acquisitions. This growth has placed, and could continue
to place, a significant strain on our management, personnel and other resources.
Our  ability to grow will  require us to  effectively  manage our  collaborative
arrangements  and to  continue  to  improve  our  operational,  management,  and
financial systems and controls,  and to successfully train,  motivate and manage
our  employees.  If we are unable to effectively  manage our growth,  we may not
realize the expected  benefits of such growth,  and such failure could result in
lost sales opportunities,  lost business,  difficulties operating our assets and
could therefore significantly impair our financial condition.

We may have  difficulty  integrating our recent  acquisitions  into our existing
operations.

Acquisitions  will involve the  integration  of companies  that have  previously
operated independently from us, with focuses on different geographical areas. We
may not be able to fully  integrate the  operations of these  companies  without
encountering difficulties or experiencing the loss of key employees or customers
of such companies.  In addition,  we may not realize the benefits  expected from
such integration.

Our use of percentage of  completion  accounting  could result in a reduction or
elimination of previously reported profits.

A   substantial   portion   of   our   revenues   are   recognized   using   the
percentage-of-completion method of accounting. This method of accounting results
in us recognizing  contract  revenue and earnings over the term of a contract in
the same  periodic  proportions  as we incur  costs  relating  to the  contract.
Earnings  are  recognized  periodically,  based upon our  estimate  of  contract
revenues and costs,  except that a loss on a contract is  recognized  in full as
soon as we  determine  that it will occur.  Since the future  reality may differ
from our estimates,  there is with each contract a risk that actual earnings may
be less  than  our  estimate.  In that  event,  we are  required  to  record  an
elimination of previously recognized earnings.

We will be unable to service our customers  unless we can continue to retain top
quality subcontractors and equipment manufacturers at favorable prices.

We rely on third party  subcontractors  and equipment  manufacturers to complete
our projects.  The quality and  timeliness  of the services and  equipment  they
provide  determines,  in part, the quality of our work product and our resulting
reputation  in the industry.  In addition,  if the amount we are required to pay
for their  services  and  equipment  exceeds  the amount we have  calculated  in
bidding for a fixed-price  contract,  we will lose money on the contract.  If we
are unable to maintain  relationships with  subcontractors and manufacturers who
will fill our requirements at a favorable price, our business will suffer.

Our failure to attract qualified engineers and management personnel could hinder
our success.

Our ability to attract and retain  qualified  engineers  and other  professional
personnel  when we need them will be a major  factor in  determining  our future
success.  There is a very  competitive  market  for  individuals  with  advanced
engineering  training,  and we are not  assured  of  being  able to  retain  the
personnel we will need.

Key personnel are critical to our business and our future success depends on our
ability to retain them.

Our success depends on the contributions of our key management,  and engineering
personnel.  The loss of these officers could result in lost sales opportunities,
lost  business,   difficulties   operating  our  assets,   difficulties  raising
additional  funds  and  could  therefore   significantly  impair  our  financial
condition.  Our future  success  depends on our ability to retain and expand our
staff  of  qualified  personnel,   including  environmental  technicians,  sales
personnel and engineers.  Without  qualified  personnel,  we may incur delays in
rendering our

<PAGE>


ITEM 1.  DESCRIPTION OF BUSINESS (continued)

BUSINESS RISK FACTORS (continued)


services or be unable to render  certain  services.  We may not be successful in
our efforts to attract and retain qualified  personnel as their  availability is
limited due to the demand of hazardous waste management  services and the highly
competitive  nature  of  the  hazardous  waste  management  industry.  We do not
maintain key person insurance on any of our employees, officers or directors.

GreenShift Corporation can exert control over us and may not make decisions that
further the best interests of all stockholders.

GreenShift  Corporation  controls  100% of our  outstanding  Series C  preferred
stock.  The preferred  shares are convertible into 80% of our Common Stock. As a
result, GreenShift Corporation exerts a significant degree of influence over our
management  and  affairs  and  over  matters  requiring   stockholder  approval,
including  the  election of  directors  and  approval of  significant  corporate
transactions.  In addition, this concentration of ownership may delay or prevent
a change in control of us and might affect the market price of our common stock,
even when a change in control may be in the best  interest of all  stockholders.
Furthermore,  the  interests of this  concentration  of ownership may not always
coincide  with  our  interests  or  the  interests  of  other  stockholders  and
accordingly,  they could cause us to enter into transactions or agreements which
we would not otherwise consider.

GS Energy Corporation is not likely to hold annual  shareholder  meetings in the
next few years.

Delaware  corporation law provides that members of the board of directors retain
authority  to act  until  they are  removed  or  replaced  at a  meeting  of the
shareholders.  A  shareholder  may petition  the  Delaware  Court of Chancery to
direct that a shareholders  meeting be held. But absent such a legal action, the
board has no obligation to call a  shareholders  meeting.  Unless a shareholders
meeting is held, the existing directors elect directors to fill any vacancy that
occurs on the board of directors. The shareholders,  therefore,  have no control
over the constitution of the board of directors,  unless a shareholders  meeting
is held.  Management  does not expect to hold annual meetings of shareholders in
the next few years,  due to the expense  involved.  Kevin  Kreisler and James L.
Grainer,  who  are  currently  the  directors  of GS  Energy  Corporation,  were
appointed to that  position by the previous  directors.  If other  directors are
added to the Board in the future, it is likely that Mr. Kreisler and Mr. Grainer
will appoint them. As a result,  the shareholders of GS Energy  Corporation will
have no effective  means of exercising  control over the operations of GS Energy
Corporation.

Investing in our stock is highly speculative and you could lose some or all of
your investment.

The value of our common stock may decline and may be affected by numerous market
conditions, which could result in the loss of some or the entire amount invested
in our stock. The securities  markets  frequently  experience  extreme price and
volume  fluctuations  that affect  market  prices for  securities  of  companies
generally and very small capitalization companies such as us in particular.

The volatility of the market for GS Energy  Corporation common stock may prevent
a shareholder from obtaining a fair price for his shares.

The common stock of GS Energy  Corporation is quoted on the OTC Bulletin  Board.
It is impossible to say that the market price on any given day reflects the fair
value of GS Energy  Corporation,  since the price  sometimes moves up or down by
50% or more in a week's time. A shareholder in GS Energy  Corporation  who wants
to sell his shares,  therefore, runs the risk that at the time he wants to sell,
the market price may be much less than the price he would consider to be fair.

Our common stock  qualifies as a "penny stock" under SEC rules which may make it
more difficult for our stockholders to resell their shares of our common stock.

Our common stock trades on the OTC Bulletin Board.  As a result,  the holders of
our  common  stock  may find it more  difficult  to obtain  accurate  quotations
concerning  the market  value of the  stock.  Stockholders  also may  experience
greater difficulties in attempting to sell the stock than if it were listed on a
stock exchange or quoted on the NASDAQ National  Market or the NASDAQ  Small-Cap
Market.  Because our common  stock does not trade on a stock  exchange or on the
NASDAQ National Market or the NASDAQ Small-Cap  Market,  and the market price of
the common stock is less than $5.00 per share,  the common stock  qualifies as a
"penny stock." SEC Rule 15g-9 under the Securities  Exchange Act of 1934 imposes
additional  sales practice  requirements  on  broker-dealers  that recommend the
purchase or sale of penny  stocks to persons  other than those who qualify as an
"established   customer"  or  an  "accredited   investor."   This  includes  the
requirement   that  a   broker-dealer   must   make  a   determination   on  the
appropriateness  of  investments  in penny stocks for the customer and must make
special
<PAGE>

ITEM 1.  DESCRIPTION OF BUSINESS (continued)

BUSINESS RISK FACTORS (continued)

disclosures to the customer concerning the risks of penny stocks. Application of
the penny stock rules to our common  stock  affects the market  liquidity of the
shares,  which in turn may affect the ability of holders of our common  stock to
resell the stock.

Only a small portion of the investment community will purchase "penny stocks"
such as our common stock.

GS Energy  Corporation  common  stock is defined  by the SEC as a "penny  stock"
because it trades at a price less than  $5.00 per share.  GS Energy  Corporation
common stock also meets most common  definitions  of a "penny  stock,"  since it
trades for less than $1.00 per share. Many brokerage firms will discourage their
customers from purchasing  penny stocks,  and even more brokerage firms will not
recommend a penny stock to their customers.  Most  institutional  investors will
not invest in penny stocks.  In addition,  many  individual  investors  will not
consider a purchase of a penny stock due,  among other  things,  to the negative
reputation  that attends the penny stock market.  As a result of this widespread
disdain  for  penny  stocks,  there  will  be a  limited  market  for GS  Energy
Corporation  common stock as long as it remains a "penny  stock." This situation
may limit the liquidity of your shares.



<PAGE>


ITEM 2.  DESCRIPTION OF PROPERTIES

GS Energy Corporation  currently  maintains office space in the leased office of
its parent,  Greenshift,  at One Penn Plaza, Suite 1612, New York, NY. The lease
for this space  expires in May of 2011.  We paid no rent  during  2006 for these
offices. During 2007 GS Energy Corporation does not expect to pay rent for these
offices.  We believe  these  offices  will be  sufficient  for our needs for the
foreseeable future.

Warnecke  Design  Services,  Inc. (WDS) leases its 18,000 square foot office and
production  facility in Ohio from a company owned by its principal  shareholder.
The Company pays $5,000 per month rent under a month to month lease.  WDS leases
20,000 square feet of additional production and testing space and pays $1,500 on
a month to month basis.

ITEM 3.  LEGAL PROCEEDINGS

GS Energy's subsidiary,  Warnecke Design Services,  Inc., is a nameed party in a
complaint against a customer of the company in which an engineering company that
performed services for that customer alleges non-payment of services,  breach of
contract, and the disclosure of trade secrets. The Company intends to vigorously
defend  itself  against  this  complaint  and does  not  currently  have  enough
information to assess the likely ovtcome of this matter.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS



<PAGE>

                                     PART II

ITEM 5.   MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED SHAREHOLDER MATTERS

GS Energy  Corporation's Common Stock trades on the OTC Bulletin Board under the
symbol "GSEG." The following table sets forth,  for the periods  indicated,  the
range of high and low closing bid prices for the  Company's  Common Stock during
the past two years as reported by the National Association of Securities Dealers
composite feed or other qualified  inter-dealer  quotation medium.  The reported
bid quotations reflect  inter-dealer  prices without retail markup,  markdown or
commissions, and may not necessarily represent actual transactions.

--------------------------------------------------------------------------------
Period                              High                       Low
--------------------------------------------------------------------------------
2006 First Quarter                 .0019                      .0011
2006 Second Quarter                .009                       .0012
2006 Third Quarter                 .0036                      .0021
2006 Fourth Quarter                .0023                      .0009

2005 First Quarter                 .011                       .0005
2005 Second Quarter                .0075                      .0005
2005 Third Quarter                 .0069                      .0028
2005 Fourth Quarter                .0053                      .0015

                                      Approximate  Number of Holders
Title of Class                       of Record as of April 13, 2007
--------------------------------------------------------------------------------
Common Stock,  0.001 par value                   149

The number of holders  does not give effect to  beneficial  ownership  of shares
held in the street name of stock  brokerage  houses or clearing  agents and does
not necessarily reflect the actual ownership of the shares.

DIVIDENDS

We have no present intention of paying dividends in the foreseeable  future. Our
policy  for the time  being is to  retain  earnings  and  utilize  the funds for
operations and growth.  Future dividend policies will be determined by the Board
of Directors based on our earnings,  financial  condition,  capital requirements
and other existing conditions.



SALE OF UNREGISTERED SECURITIES

GS Energy Corporation did not sell any unregistered equity securities during the
4th quarter of 2006.


REPURCHASE OF EQUITY SECURITIES

GS Energy  Corporation did not repurchase any of its equity securities that were
registered  under  Section 12 of the  Securities  Act during the 4th  quarter of
2006.


<PAGE>

ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS AND PLAN OF OPERATION

                           Forward Looking Statements

FORWARD LOOKING STATEMENTS

In  addition  to   historical   information,   this   Annual   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 the 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.  Readers  should
carefully review the risk factors described in other documents the Company files
from time to time with the  Securities  and  Exchange  Commission  (the  "SEC"),
including  the  Quarterly  Reports on Form 10QSB to be filed by us in the fiscal
year 2007.

OVERVIEW

GS Energy Corporation ("we," "our," "us," "GS Energy," or the "Company"), during
the twelve months ended December 31, 2006,  conducted its operations through its
subsidiary GS Manufacturing,  Inc. GS Manufacturing owns 100% of Warnecke Design
Service,  Inc.  (100%),  a specialty metal  manufacturing  company that 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.

Warnecke is the exclusive  manufacturer  for NextGen Fuel, Inc., a subsidiary of
GS AgriFuels.  In addition,  Warnecke Design holds the right of first refusal to
provide all of the equipment manufacturing needs of GS CleanTech Corporation and
GS  AgriFuels  Corporation.  GS Energy,  GS CleanTech  and GS AgriFuels  are all
majority held subsidiaries of GreenShift Corporation.

RESTRUCTURING PLAN

During October 2006, we commenced  implementation  of a plan to restructure  our
carbon trading investments and our manufacturing operations.

On October 9, 2006,  we completed  the sale of 100% of the  outstanding  capital
stock of GS  Carbon  Trading,  a wholly  owned  subsidiary  of the  Company,  to
DirectView,  Inc.,  a  publicly  traded  company,  in  return  for  about 85% of
DirectView's  issued and outstanding  stock. GS Carbon,  a newly formed company,
was  established  to  affect  reductions  in  the  carbon  intensity  of  energy
consumption and it plans to accomplish  this through its ongoing  investments in
and  support of Sterling  Planet and  TerraPass  and their  trading and sales of
renewable energy certificates, energy efficiency certificates, and other similar
attributes  that  represent  the positive  environmental  attributes  of reduced
carbon emissions.

On October 18, 2006, we executed an agreement to merge with GS AgriFuels.  Under
the terms of the  merger  agreement,  holders  of GS Energy  common  stock  will
receive 1 share of GS  AgriFuels  common stock for each 1,000 shares owned in GS
Energy.  This corresponds to a total of about 2.5 million shares of GS AgriFuels
common stock that will be issued to GS Energy common stock shareholders upon the
closing  of  the  merger.  GreenShift,  which  currently  owns  about  90% of GS
AgriFuels  and  about  80% of GS Energy  in the form of  preferred  stock,  will
exchange its GS Energy stock for GS AgriFuels  stock such that  GreenShift  will
own about 85% of GS AgriFuels after completion of the merger.

In connection with the execution of the merger agreement, we transferred our 85%
stake in  DirectView,  Inc.,  our 30%  stake  in  AirCycle  Corporation  and our
inactive  Separation  and Recovery  Technologies  subsidiary  to  GreenShift  as
repayment  for about  $600,000 in debt due to GreenShift  and to redeem  400,000
shares of GS Energy preferred stock with a face value of $400,000.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

The consolidated  financial statements included herein have been prepared by the
Company,  in accordance  with Generally  Accepted  Accounting  Principles.  This
requires the  Company's  management to make certain  estimates and  assumptions.
These  estimates  and  assumptions  affect  the  reported  amounts of assets and
liabilities and disclosure of the contingent  assets and liabilities at the date
of the financial  statements.  These estimates and assumptions  will also affect
the  reported  amounts of certain  revenues and  expenses  during the  reporting
period. In the opinion of management, all adjustments which, except as described
elsewhere  herein,  are  of a  normal  recurring  nature,  necessary  for a fair
presentation of the financial  position,  results of operations,  and cash flows
for the periods  presented.  Actual results could differ materially based on any
changes  in  the  estimates  and  assumptions  that  the  Company  uses  in  the
preparation of its financial  statements and any changes in the Company's future
operational plans.







<PAGE>

ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION (CONTINUED)

RESULTS OF OPERATIONS

THE YEAR ENDED DECEMBER 31, 2006 COMPARED TO THE YEAR ENDED DECEMBER 31, 2005

Revenues

Total  revenues  were  $5,844,799  for the year ended  December  31,  2006,  and
$2,427,196 for the twelve months ended December 31, 2005.

All revenues  realized  during the year ended  December 31, 2006 were due to the
operating activities of our subsidiary,  Warnecke Design Services, Inc. ("WDS").
WDS  has   traditionally   engaged  in  the   engineering   and  fabrication  of
manufacturing equipment for large domestic and international manufacturers,  and
revenues for the year ended  December 31, 2006 related  primarily to orders from
that customer base.

WDS is currently  executing a growth plan targeted at designing and  fabricating
processing  equipment for the biofuels industry.  This plan includes engineering
and fabrication  services for both nonaffiliated  companies and GS AgriFuels and
its wholly owned subsidiary NextGen Fuels, and GS CleanTech Corporation. Both of
these  companies  are  controlled  through  an 80% or  greater  ownership  by GS
Energy's parent company,  Greenshift  Corporation.  Although the company expects
increases  in revenue from these areas of  expansion,  there can be no assurance
that the growth plan can be successfully implemented.

Cost of Revenues

Cost of revenues  for the year ended  December 31, 2006 was  $4,428,955,  all of
which were  attributable to WDS. Cost of revenues included direct labor costs of
$1,263,679,  purchased  components  and other  direct costs of  $2,641,927,  and
indirect labor and manufacturing overhead of $523,349.  Cost of revenues for the
year ended December 31, 2005 was $2,084,966

Selling, General and Administrative Expenses

Selling,  general and  administrative  expenses for the year ended  December 31,
2006 were 1,800,620 and for the year ending  December 31, 2005 were  $1,772,834.
Selling,  general and  administrative  expenses are expected to remain high as a
percentage of sales until such time that the Company can achieve  enough revenue
growth and obtain the economies of scale necessary to support these expenses.

Interest Expense and Financing Costs

Interest  expenses and financing costs for the year ended December 31, 2006 were
$326,849 and for the year ended  December 31, 2005 were  $385,626.  The interest
expense was primarily  attributable to our financing agreements with Cornell and
Highgate.

We incurred  $83,653 in amortization of financing costs during the twelve months
ended  December  31,  2006.  These  expenses  represent  the costs  incurred  in
connection  with the  Highgate  and Cornell  Debentures  and the fees we paid to
compensate the parties associated with these financing transactions.

The interest  expenses and financing  costs noted above are expected to decrease
in future  quarters due to the fact the Cornell  Debentures  were converted into
common stock and the Highgate  Debentures  were assumed by GreenShift.  Interest
expense  and  financing  costs could  increase in future  periods if the Company
obtains new debt or equity financing.

Net Income and Net Loss

Our net loss for the year ended  December  31, 2006 was  $1,023,150  and for the
year ended  December 31, 2005 was  $1,876,262.  The net loss incurred was due to
the expenses and other factors described above.

Liquidity and Capital Resources

The company had  $2,343,071 in liabilities at the end of the twelve months ended
December 31, 2006.

On February 7, 2006, GreenShift  Corporation,  GS Energy's majority shareholder,
assumed  certain  convertible  debentures GS Energy  Corporation  had previously
issued to  Highgate  House  Funds,  Ltd.,  in the  amount of  $1,150,369,  which
included accrued interest of $89,734.  In return for GreenShift's  assumption of
<PAGE>

this debt, GS Energy issued GreenShift  1,150,369 shares of GS Energy's series C
Preferred  Stock.  Shares of GS Energy's  Series C Preferred  Stock carry a face
value  of  $1.00,  pay a  coupon  of 8%,  and are  convertible  into  GS  Energy
Corporation common stock at $0.01 per share.

Additionally,  on February 2, 2006,  Cornell  Capital  Partners,  LP,  converted
$404,122 of debt into common stock. The amount converted equaled the entirety of
the principal and accrued  interest on the  convertible  Debenture  issued by GS
Energy to Cornell.

The completion of the above described transactions resulted in the conversion of
all of GS Energy's outstanding  convertible debt with Cornell and Highgate,  and
the reduction of GS Energy's debt by a total of $1,554,491.

The company had  $885,300 in accounts  payable and accrued  expenses at December
31, 2006. The Company may not be able to satisfy these amounts predominantly out
of cash flows from its operations,  and may need to obtain additional  financing
to satisfy these obligations.

Cash

Our primary  sources of liquidity  are cash  provided by investing and financing
activities.  For the twelve  months ended  December  31, 2006,  net cash used in
operating activities was $89,568.

Liquidity

We  used  cash  provided  from  investing  and  financing   activities  to  fund
operations.

The Company's  capital  requirements  consist of general  working capital needs,
scheduled principal and interest payment on debt, obligations and capital leases
and planned  capital  expenditures.  The  Company's  capital  resources  consist
primarily  of cash  generated  from the issuance of debt and common  stock.  The
Company's  capital  resources  can be  expected  to be  impacted  by  changes in
accounts  receivable as a result of revenue  fluctuations,  economic trends, and
collection activities. At December 30, 2006 the company had $419,881 in cash.

Cash Flows

For the twelve  months  ending  December  31,  2006,  we obtained  net cash from
financing of $602,904 and used cash for investing activities of $250,323.

The Company had a working capital  position of $255,696 at December 31, 2006. In
reviewing  our  financial  statements  as of  December  31,  2006,  our  auditor
concluded  that there was  substantial  doubt as to our ability to continue as a
going concern.

Off Balance Sheet Arrangements

On October 31, 2006,  NextGen  Acquisition,  Inc., a subsidiary of GS AgriFuels,
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  obligations  of  NextGen  Acquisition,  Inc.  under the Term Note have been
guaranteed by GS Energy Corporation, Warnecke Design Services, Inc. and Warnecke
Rentals,  LLC.  Each of the  Guarantors  has  pledged  its  assets to secure its
guaranty.





<PAGE>



ITEM 7.  FINANCIAL STATEMENTS

                                                                        Page No
FINANCIAL STATEMENTS

     Report of Independent Registered Public Accounting Firm.................14

     Consolidated Balance Sheets.............................................15

     Consolidated Statements of Operations...................................16

     Consolidated Statements of Stockholders' Equity.........................17

     Consolidated Statements of Cash Flows...................................20

     Notes to Consolidated Financial Statements..............................22



<PAGE>



ITEM 7.  FINANCIAL STATEMENTS (CONTINUED)

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of
GS Energy, Inc. & Subsidiaries

We have audited the accompanying consolidated balance sheet of GS Energy, Inc. &
Subsidiaries as of December 31, 2006, and the consolidated related statements of
income,  stockholders'  equity  and  cash  flows  for  each of the  years in the
two-year period ended December 31, 2006. These consolidated financial statements
are the  responsibility of the company's  management.  Our  responsibility is to
express an  opinion  on these  consolidated  financial  statements  based on our
audit.

We conducted  our audit in accordance  with the standards of the Public  Company
Accounting Oversight Board (United States). Those standards require that we plan
and  perform  the  audit  to  obtain  reasonable  assurance  about  whether  the
consolidated financial statements are free of material misstatement. The company
is not  required  to  have,  nor were we  engaged  to  perform,  an audit of its
internal control over financial reporting.  Our audit included  consideration of
internal  control  over  financial  reporting  as a basis  for  designing  audit
procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the  effectiveness  of the company's  internal  control
over financial reporting. Accordingly, we express no such opinion. An audit also
includes  examining,  on a test  basis,  evidence  supporting  the  amounts  and
disclosures in the consolidated  financial statements,  assessing the accounting
principles  used  and  significant  estimates  made  by  management,  as well as
evaluating the overall consolidated financial statement presentation. We believe
that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated  financial statements referred to above present
fairly, in all material respects,  the financial  position of GS Energy,  Inc. &
Subsidiaries  as of  December  31,  2006  and the  consolidated  results  of its
operations and its cash flows for each of the years in the two-year period ended
December 31, 2006 in conformity with accounting principles generally accepted in
the United States of America.

The accompanying  consolidated  financial statements have been prepared assuming
that GS Energy,  Inc. & Subsidiaries  will continue as a going concern.  As more
fully  described  in the notes to the  consolidated  financial  statements,  the
Company has suffered  recurring losses from operations and has a working capital
deficiency as of December 31, 2006.  These conditions  raise  substantial  doubt
about its ability to continue as a going concern.  Management's  plans in regard
to these matters are also described in the notes. These  consolidated  financial
statements do not include any adjustments  that might result from the outcome of
this uncertainty.


Rosenberg Rich Baker Berman & Co.

Bridgewater, New Jersey
April 16, 2007





<PAGE>

<TABLE>


                     GS ENERGY CORPORATION AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
<CAPTION>
                                DECEMBER 31, 2006


ASSETS
Current assets:
<S>                                                                     <C>
     Cash ...........................................................   $  419,881
     Accounts receivable - net of allowance for
            doubtful accounts of $26,560 ............................      349,942
     Accounts receivable - affiliate ................................      811,678
     Costs and estimated earnings in excess of
       billings on uncompleted contracts ............................      204,262
Costs and estimated earnings in excess of
       billings on uncompleted contracts - related party ............      412,419

     Prepaid expenses ...............................................       38,089
                                                                        ----------
Total current assets ................................................    2,236,271


Net fixed assets ....................................................      945,382

Goodwill ............................................................      905,579
                                                                        ----------

TOTAL ASSETS ........................................................   $4,087,232
                                                                        ==========

LIABILITIES AND STOCKHOLDER'S EQUITY
Current liabilities:
     Accounts payable and accrued expenses ..........................      885,300
Current portion of mortgages and notes payable ......................       67,004
     Loans payable - Related parties ................................      646,178
     Billing in excess of costs and estimated earnings
       on uncompleted contracts .....................................       21,381
     Billing in excess of costs and estimated earnings
       on uncompleted contracts - related party .....................      360,712
                                                                        ----------
     Total current liabilities ......................................    1,980,575
Long term liabilities
     Mortgage and notes payable, net of current portion .............      362,496
                                                                        ----------
         Total long term liabilities ................................      362,496
                                                                        ----------
TOTAL LIABILITIES ...................................................    2,343,071


STOCKHOLDERS' EQUITY

 Preferred stock, $0.001 par value:
     Series C: 400,000 authorized, 1,600,369 issued and outstanding .        1,600
     Series D: 1,000,000 authorized, 1,000,000 issued and outstanding        1,000
Common stock, $0.001 par value, 5,000,000,000 authorized;
  2,527,163,844 issued and outstanding ..............................    2,527,164
Additional paid-in capital ..........................................    5,564,849
Accumulated deficit .................................................   (6,350,452)
                                                                        ----------
TOTAL STOCKHOLDERS' EQUITY ..........................................    1,744,161
                                                                        ----------

TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY ..........................   $4,087,232
                                                                        ==========

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


<PAGE>

<TABLE>

                     GS ENERGY CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
           FOR THE YEARS ENDED DECEMBER 31, 2006 AND DECEMBER 31, 2005

<CAPTION>

                                                               Twelve Months      Twelve Months
                                                                   Ended              Ended
                                                                Dec. 31, 2006     Dec. 31, 2005
                                                               --------------     ------------


<S>                                                           <C>                <C>
Revenues (including related party revenues of $1,894,704) .   $   5,844,799      $   2,427,196
Cost of revenues (including cost of revenues of $1,509,600)       4,428,955          2,084,966
                                                              -------------      -------------
     Gross profit .........................................       1,415,844            342,230

Operating expenses
     Selling, general and administrative expenses .........       1,800,620          1,772,834
     Amortization expense, intangible assets ..............         140,467             60,032
                                                              -------------      -------------
         Total operating expenses .........................       1,941,087          1,832,866
                                                              -------------      -------------

Operating loss ............................................        (525,243)        (1,490,636)

Other expenses and financing costs
     Interest expense and financing costs .................         326,849            385,626
     Other (Income) Expense ...............................         (23,005)              --
     Impairment of Long Lived Asset .......................         190,103               --
                                                              -------------      -------------
     Other expense ........................................         493,947            385,626
                                                              -------------      -------------

Loss before provision for income taxes ....................      (1,019,190)        (1,876,262)

     Provision for income taxes ...........................           3,960               --
                                                              -------------      -------------

Net loss ..................................................   $  (1,023,150)     $  (1,876,262)
                                                              =============      =============

Net loss per common share, basic and diluted ..............   $        --        $        --
                                                              =============      =============

Weighted average of shares of common stock
  Outstanding, basic and diluted ..........................   2,456,781,844        794,114,168
                                                              =============      =============


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


<PAGE>

<TABLE>


                     GS ENERGY CORPORATION AND SUBSIDIARIES
                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
           FOR THE YEARS ENDED DECEMBER 31, 2005 AND DECEMBER 31, 2006


<CAPTION>

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

                                       Series A               Series B          Series C               Series D
                                    Preferred Stock        Preferred Stock    Preferred Stock       Preferred Stock
----------------------------------------------------------------------------------------------------------------------
                                   Shares       Amount     Shares    Amount    Shares    Amount
---------------------------------------------------------------------------------------------------------------------
<S>                               <C>          <C>        <C>       <C>     <C>          <C>       <C>       <C>
Balance at 12/31/04 ............   1,000,000     1,000       --      --           --        --          --     --
--------------------------------  ==========   =======   ========   =====   ==========   =======   =========  =====

--------------------------------  ----------   -------   --------   -----   ----------   -------   ---------  -----
Issuance of Series B Preferred .        --        --      251,507     252         --        --          --     --
Stock
--------------------------------  ----------   -------   --------   -----   ----------   -------   ---------  -----
Issuance of Series C Preferred
Stock ..........................        --        --         --      --        400,000       400        --     --
--------------------------------  ----------   -------   --------   -----   ----------   -------   ---------  -----
Conversion of debentures to ....        --        --         --      --           --        --          --     --
common stock
--------------------------------  ----------   -------   --------   -----   ----------   -------   ---------  -----
Issuance of common stock for ...        --        --         --      --           --        --          --     --
acquisition of SRTI
--------------------------------  ----------   -------   --------   -----   ----------   -------   ---------  -----
Issuance of stock options ......        --        --
--------------------------------  ----------   -------   --------   -----   ----------   -------   ---------  -----
    Officers ...................        --        --         --      --           --        --          --     --
--------------------------------  ----------   -------   --------   -----   ----------   -------   ---------  -----
    Highgate House, LLC ........        --        --         --      --           --        --          --     --
--------------------------------  ----------   -------   --------   -----   ----------   -------   ---------  -----
Beneficial interest in equity
issued under convertible
debentures, net ................        --        --         --      --           --        --          --     --
--------------------------------  ----------   -------   --------   -----   ----------   -------   ---------  -----
Contribution of Air Cycle
investment by GreenShift
Corporation ....................        --        --         --      --           --        --          --     --
--------------------------------  ----------   -------   --------   -----   ----------   -------   ---------  -----
Exercise of stock options ......        --        --         --      --           --        --          --     --
--------------------------------  ----------   -------   --------   -----   ----------   -------   ---------  -----
compensation ...................        --        --         --      --           --        --          --     --
--------------------------------  ----------   -------   --------   -----   ----------   -------   ---------  -----
Cancellation of common shares
by officer .....................        --        --         --      --           --        --          --     --
--------------------------------  ----------   -------   --------   -----   ----------   -------   ---------  -----
Net loss .......................        --        --         --      --           --        --          --     --
--------------------------------  ----------   -------   --------   -----   ----------   -------   ---------  -----

--------------------------------  ----------   -------   --------   -----   ----------   -------   ---------  -----
Balance at 12/31/05 ............   1,000,000   $ 1,000    251,507   $ 252      400,000   $   400        --     --
--------------------------------  ==========   =======   ========   =====   ==========   =======   =========  ======
Stock issued for services ......        --        --         --      --           --        --          --     --
--------------------------------  ----------   -------   --------   -----   ----------   -------   ---------  -----
Exercise of stock options ......        --        --         --      --           --        --          --     --
--------------------------------  ----------   -------   --------   -----   ----------   -------   ---------  -----
Conversion of debentures to ....        --        --         --      --           --        --          --     --
common stock
--------------------------------  ----------   -------   --------   -----   ----------   -------   ---------  -----
Record Greenshift Preferred ....    (375,000)     (375)      --      --           --        --          --     --
conversion
--------------------------------  ----------   -------   --------   -----   ----------   -------   ---------  -----
Book remaining convertible .....        --        --         --      --           --        --          --     --
debt to APIC
--------------------------------  ----------   -------   --------   -----   ----------   -------   ---------  -----
Stock Option Compensation ......        --        --         --      --           --        --          --     --
--------------------------------  ----------   -------   --------   -----   ----------   -------   ---------  -----
To record issuance Series C ....        --        --     (251,507)   (252)   1,150,369     1,150        --     --
preferred to Greenshift for
assuming convertible debentures
--------------------------------  ----------   -------   --------   -----   ----------   -------   ---------  -----
Record conversion preferred ....    (625,000)     (625)      --      --           --        --     1,000,000  1,000
series A and common stock to
series D
--------------------------------  ----------   -------   --------   -----   ----------   -------   ---------  -----
To record reduction of shares ..        --        --         --      --           --        --          --     --
issued under contract & equity
investment
--------------------------------  ----------   -------   --------   -----   ----------   -------   ---------  -----
Record subscription receipts ...        --        --         --      --           --        --          --     --
--------------------------------  ----------   -------   --------   -----   ----------   -------   ---------  -----
Preferred C shares in exchange .        --        --         --      --        450,000       450        --     --
for equity investment
--------------------------------  ----------   -------   --------   -----   ----------   -------   ---------  -----
Record transfer to Greenshift ..        --        --         --      --       (400,000)     (400)       --     --
in exchange for redemption of
preferred stock & settlement
of debt
--------------------------------  ----------   -------   --------   -----   ----------   -------   ---------  -----
Record 4th quarter stock .......        --        --         --      --           --        --          --     --
issuance to officers
--------------------------------  ----------   -------   --------   -----   ----------   -------   ---------  -----
Record adjustment of stock .....        --        --         --      --           --        --          --     --
certificates from prior
transfer agent
--------------------------------  ----------   -------   --------   -----   ----------   -------   ---------  -----
Net loss .......................        --        --         --      --           --        --          --     --
--------------------------------  ----------   -------   --------   -----   ----------   -------   ---------  -----
Balance at 12/31/06 ............        --     $  --         --     $--      1,600,369   $ 1,600   1,000,000  1,000
--------------------------------  ----------   -------   --------   -----   ----------   -------   ---------  -----
</TABLE>

<PAGE>


<TABLE>
<CAPTION>

--------------------------------------------------------------------------------------------------------------------------
                                                                Stock            Additional   Total Stockholders'
                                                             Subscription          Paid In   Accumulated  Equity (Deficit)
                                         Common Stock         Receivable           Capital              Deficit
--------------------------------------------------------------------------------------------------------------------------
                                     Shares       Amount
--------------------------------------------------------------------------------------------------------------------------
<S>                                <C>             <C>           <C>         <C>          <C>           <C>
Balance at 12/31/04 ............      88,232,363        88,232        --        214,286    (3,451,040)  (3,147,522)
--------------------------------  ==============   ===========   =========   ==========   ===========   ==========

--------------------------------  --------------   -----------   ---------   ----------   -----------   ----------
Issuance of Series B Preferred .            --            --          --      2,514,817          --      2,515,069
Stock
--------------------------------  --------------   -----------   ---------   ----------   -----------   ----------
Issuance of Series C Preferred
Stock ..........................            --            --          --        399,600          --        400,000
--------------------------------  --------------   -----------   ---------   ----------   -----------   ----------
Conversion of debentures to
common stock ...................      47,951,907        47,952        --          6,413          --         54,365
--------------------------------  --------------   -----------   ---------   ----------   -----------   ----------
Issuance of common stock for
acquisition of SRTI ............     434,782,608       434,783        --      1,521,738          --      1,956,521
--------------------------------  --------------   -----------   ---------   ----------   -----------   ----------
Issuance of stock options
--------------------------------  --------------   -----------   ---------   ----------   -----------   ----------
    Officers ...................            --            --          --        172,933          --        172,933
--------------------------------  --------------   -----------   ---------   ----------   -----------   ----------
    Highgate House, LLC ........            --            --          --        176,485          --        176,485
--------------------------------  --------------   -----------   ---------   ----------   -----------   ----------
Beneficial interest in equity
issued under convertible
debentures, net ................            --            --          --         36,489          --         36,489
--------------------------------  --------------   -----------   ---------   ----------   -----------   ----------
Contribution of Air Cycle
investment by GreenShift
Corporation ....................            --            --          --         50,000          --         50,000
--------------------------------  --------------   -----------   ---------   ----------   -----------   ----------
Exercise of stock options ......      50,000,000        50,000     (25,000)     (25,000)         --           --
--------------------------------  --------------   -----------   ---------   ----------   -----------   ----------
Issuance of stock for
compensation ...................     690,250,000       690,250        --        278,250          --        968,500
--------------------------------  --------------   -----------   ---------   ----------   -----------   ----------
Cancellation of common shares
by officer .....................     (50,000,000)      (50,000)       --         50,000          --           --
--------------------------------  --------------   -----------   ---------   ----------   -----------   ----------
Net loss .......................            --            --          --           --      (1,876,262)  (1,876,262)
--------------------------------  --------------   -----------   ---------   ----------   -----------   ----------

--------------------------------  --------------   -----------   ---------   ----------   -----------   ----------
Balance at 12/31/05 ............   1,261,216,878   $ 1,261,217   $ (25,000)   5,396,011   $(5,327,302)   1,306,578
--------------------------------  ==============   ===========   =========   ==========   ===========   ==========
Stock issued for services ......     178,567,100       178,567        --        318,306          --        496,873
--------------------------------  --------------   -----------   ---------   ----------   -----------   ----------
Exercise of stock options ......     375,000,000       375,000    (237,500)    (137,500)         --           --
--------------------------------  --------------   -----------   ---------   ----------   -----------   ----------
Conversion of debentures to ....     436,956,966       436,957        --        (32,835)         --        404,122
common stock
--------------------------------  --------------   -----------   ---------   ----------   -----------   ----------
Record Greenshift Preferred ....   3,000,000,000     3,000,000        --     (2,999,625)         --           --
conversion
--------------------------------  --------------   -----------   ---------   ----------   -----------   ----------
Book remaining convertible .....            --            --          --      1,080,697          --      1,080,697
debt to APIC
--------------------------------  --------------   -----------   ---------   ----------   -----------   ----------
Stock Option Compensation ......            --            --          --        384,174          --        384,174
--------------------------------  --------------   -----------   ---------   ----------   -----------   ----------
To record issuance Series C ....            --            --          --           (898)         --           --
preferred to Greenshift for
assuming convertible debentures
--------------------------------  --------------   -----------   ---------   ----------   -----------   ----------
Record conversion preferred ....  (3,000,000,000)   (3,000,000)       --      2,999,625          --           --
series A and common stock to
series D
--------------------------------  --------------   -----------   ---------   ----------   -----------   ----------
To record reduction of shares ..     (23,560,000)      (23,560)       --         23,560          --           --
issued under contract equity
investment
--------------------------------  --------------   -----------   ---------   ----------   -----------   ----------
Record subscription receivable .            --            --       262,500         --            --        262,500
--------------------------------  --------------   -----------   ---------   ----------   -----------   ----------
Preferred C shares in exchange .            --            --          --      1,935,313          --      1,935,763
for equity investment
--------------------------------  --------------   -----------   ---------   ----------   -----------   ----------
Record transfer to Greenshift ..            --            --          --     (3,300,962)         --     (3,301,362)
in exchange for redemption of
preferred stock & settlement
of debt
--------------------------------  --------------   -----------   ---------   ----------   -----------   ----------
Record 4th quarter stock .......     298,982,900       298,983        --       (101,017)         --        197,966
issuance to officers
--------------------------------  --------------   -----------   ---------   ----------   -----------   ----------
Net loss .......................            --            --          --           --      (1,023,150)  (1,023,150)
--------------------------------  --------------   -----------   ---------   ----------   -----------   ----------
Balance at 12/31/06 ............   2,527,163,844   $ 2,527,164   $    --      5,564,849   $(6,350,452)   1,744,161
--------------------------------  --------------   -----------   ---------   ----------   -----------   ----------

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

</TABLE>


<PAGE>

<TABLE>

                     GS ENERGY CORPORATION AND SUBSIDIARIES
                 CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
                      FOR THE YEARS ENDED DECEMBER 31, 2006
<CAPTION>

                                                                          Dec. 31, 2006  Dec. 31, 2005
                                                                          -------------  -------------
CASH FLOWS FROM OPERATING ACTIVITIES
<S>                                                                        <C>           <C>
Net loss ................................................................  $(1,023,150)  $(1,876,262)
Adjustments to reconcile net loss to net cash used in
  operating activities:
     Amortization of website costs ......................................       45,025        60,032
     Impairment of long-lived assets ....................................      190,103
     Amortization of deferred financing costs ...........................       83,653        62,595
     Amortization of Warrants ...........................................        4,013          --
     Depreciation expense ...............................................      116,506        52,738
         Amortization of debt discounts .................................      252,879       161,374
     Stock and stock options issued for services ........................    1,079,016     1,141,433
         Income from equity investments .................................      (18,667)         --

Changes in assets and liabilities:
     Increase in accounts receivable ....................................     (969,260)      473,377
     Decrease in inventory ..............................................       58,426         5,690
     Decrease in costs and estimated earnings in
       excess of billings on uncompleted contracts ......................     (131,085)     (322,853)
     Increase in other assets ...........................................       (3,439)      (14,731)
     Increase in deferred financing costs ...............................         --         (68,000)
     Increase in accounts payable and accrued expenses ..................      211,482      (223,109)
     Increase in accrued interest .......................................         --          20,212
     Increase in billings in excess of costs and estimated
       earnings on uncompleted contracts ................................      229,930        26,037
     Increase in estimated losses on contracts in progress ..............         --          24,190
     Decrease in deferred revenue .......................................         --            (585)
     Change in Investment Payable .......................................     (215,000)         --
                                                                           -----------   -----------
         Net cash used in operating activities ..........................      (89,568)     (477,862)

CASH FLOWS FROM INVESTING ACTIVITIES
     Net cash acquired from purchase of subsidiaries ....................         --         277,824
     Purchase of  equipment .............................................     (250,323)      (71,196)
                                                                           -----------   -----------
         Net cash provided by (used in) investing activities ............     (250,323)      206,628

CASH FLOW FROM FINANCING ACTIVITIES
     Proceeds from issuance of convertible debt .........................         --         615,000
     Repayment of debt ..................................................     (277,613)         --
     Proceeds from notes payable ........................................         --         176,852
     Repayments of notes payable ........................................         --        (150,912)
     Loans from related parties .........................................      880,517        22,092
     Redemption of preferred stock ......................................         --        (234,930)
                                                                           -----------   -----------
         Net cash provided by financing activities ......................      602,904       428,102

     Increase in cash ...................................................      263,013       156,868
     Cash at beginning of period ........................................      156,868          --
                                                                           -----------   -----------
     Cash at end of period ..............................................  $   419,881   $   156,868
                                                                           ===========   ===========

SUPPLEMENTAL STATEMENT OF NON-CASH
INVESTING AND FINANCING ACTIVITIES:
Conversion of accrued interest to convertible debenture .................  $      --     $    20,212
                                                                           ===========   ===========
Conversion of debenture and accrued interest into common stock ..........  $   404,122   $    54,365
                                                                           ===========   ===========
Subscription receivable from exercise of options ........................  $      --     $    25,000
                                                                           ===========   ===========
Issuance of stock options for financing fees ............................  $      --     $   176,485
                                                                           ===========   ===========
Conversion of redeemable preferred stock into Series B preferred ........  $      --     $ 2,515,069
                                                                           ===========   ===========
Conversion of Series A preferred stock to common stock ..................  $ 3,000,000   $      --
                                                                           ===========   ===========
Cancellation of Series B Preferred stock ................................  $       252   $      --
                                                                           ===========   ===========
Issuance of preferred Series C stock at par for acquisition .............  $       450   $      --
                                                                           ===========   ===========
Issuance of preferred Series C stock for convertible debt assumption ....  $      --     $   400,000
                                                                           ===========   ===========
Issuance of preferred Series C additional paid in capital for acquisition  $ 1,935,313             $
                                                                           ===========   ===========
                                                                                         -----------
Issuance of Common shares for acquisition of SRTI .......................  $      --     $ 1,956,521
                                                                           ===========   ===========
Conversion of convertible debentures and interest into Series C
Preferred stock .........................................................  $ 1,150,369   $      --
                                                                           ===========   ===========

Increase in additional paid in capital for investment in
     unconsolidated subsidiary ..........................................  $      --     $    50,000
                                                                           ===========   ===========
Value of beneficial conversion feature on convertible debt ..............  $      --     $   186,447
                                                                           ===========   ===========
Value of warrants issued with convertible debenture .....................  $      --     $   144,448
                                                                           ===========   ===========


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

<PAGE>
                     GS ENERGY CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 1 - BASIS OF PRESENTATION

THE COMPANY

GS Energy Corporation ("we," "our," "us," "GS Energy," or the "Company"), during
the twelve months ended December 31, 2006,  conducted its operations through its
wholly owned subsidiary GS Manufacturing,  Inc. GS Manufacturing  holds majority
stake in Warnecke Design Service,  Inc. (100%), a specialty metal  manufacturing
company that 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.

Warnecke is the exclusive  manufacturer  for NextGen Fuel, Inc., a subsidiary of
GS AgriFuels Corporation.  In addition, Warnecke Design holds the right of first
refusal to provide  all of the  equipment  manufacturing  needs of GS  CleanTech
Corporation.  GS Energy,  GS CleanTech  and GS AgriFuels  are all majority  held
subsidiaries of GreenShift Corporation.

PRINCIPLES OF CONSOLIDATION

The  Company  owns  GS  Manufacturing  which  has  two  wholly  owned  operating
subsidiaries  - Warnecke  Design  Services,  Inc.,  and  Warnecke  Rentals,  LLC
(collectively,  "WDS"). We acquired WDS on May 27, 2005 in return for $50,000 in
cash  and  a  $350,000  convertible  demand  note.  WDS  is  a  specialty  metal
manufacturer that produces customized automation and processing equipment for an
array  of   industries   and  provides   design,   development,   manufacturing,
installation and maintenance  services for its clients.  WDS' customers  include
electronics,  automotive,  plastics and other  manufacturers,  including several
Fortune 500 companies.

The accompanying  consolidated  financial  statements include all accounts of GS
Energy Corporation,  Warnecke Design Services,  Inc., and Warnecke Rentals,  LLC
beginning June 1, 2005. All significant  inter-company accounts and transactions
have been eliminated in consolidation.

NOTE 2 - 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 $1,023,150  during the year ended  December 31, 2006,  and had an accumulated
deficit and negative cash flow from operations.  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.

<PAGE>
                     GS ENERGY CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

REVENUE RECOGNITION

The  Company  follows  the  percentage-of-completion  method of  accounting  for
contracts  for which the outcomes can be reliably  estimated.  Costs include all
direct material and labor costs,  and indirect costs,  such as supplies,  tools,
repairs and  depreciation.  Revenue on such contracts is determined by reference
to stage of completion. Revenue on long-term contracts is for which the outcomes
cannot be  estimated  reliably  at the outset is  recognized  to the extent that
costs incurred are deemed recoverable.

The asset  "costs and  estimated  earnings in excess of billings on  uncompleted
contracts"  represents  revenues  recognized in excess of amounts invoiced.  The
liability  "billings in excess of costs and  estimated  earnings on  uncompleted
contracts" represents invoices in excess of revenues recognized.

ACCOUNTS RECEIVABLE

Accounts  receivable  are  customer  obligations  due under  normal  trade terms
requiring  payment  within 30 days from the invoice date. No interest is charged
on any past due accounts.  The carrying amount of accounts receivable is reduced
by a valuation allowance that reflects  management's best estimate of the amount
that will not be collected.  Management  reviews  balances that are 90 days from
the invoice date and based on assessment of current creditworthiness,  estimates
the portion,  if any, of the balance that will not be collected.  As of December
31, 2006, $25,650 has been assigned to the allowance for doubtful accounts.  The
amount of accounts receivable invoices that were written off to bad debt expense
was  $30,548  and  $-0-  for  the  years  ended  December  31,  2006  and  2005,
respectively.

PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment are stated at cost, less accumulated depreciation.
For  financial  reporting  purposes,  the  costs  of  plant  and  equipment  are
depreciated  over the  estimated  useful  lives of the assets,  which range from
three to five  years  for  equipment,  and 40 years for real  estate,  using the
straight-line method.

LONG LIVED ASSETS

The Company  evaluates  its  long-lived  assets for  financial  impairment,  and
continues to evaluate them as events or changes in  circumstances  indicate that
the  carrying  amount of such assets may not be fully  recoverable.  The Company
evaluates  the  recoverability  of  long-lived  assets by measuring the carrying
amount of the  assets  against  the  estimated  undiscounted  future  cash flows
associated  with them.  At the time such  evaluations  indicate  that the future
undiscounted  cash flows of certain  long-lived  assets  are not  sufficient  to
recover the carrying value of such assets, the assets are adjusted to their fair
values. In the third quarter of 2006,  Management  determined that the GS-Energy
website did not  represent a future  economic  benefit and the entire  remaining
balance of $190,103 was written off as of September 30, 2006.

INCOME TAXES

     The Company  accounts for income taxes under the provisions of Statement of
Financial  Accounting  Standards (SFAS) No. 109,  "Accounting for Income Taxes".
SFAS No.  109 uses the asset and  liability  method so that  deferred  taxes are
determined based on the estimated future tax effects of differences  between the
financial statement and tax basis of assets and liabilities given the provisions
of enacted  tax laws and tax rates.  Deferred  income tax  expense or benefit is
based on the changes in the  financial  statement  basis versus the tax bases in
the Company's assets or liabilities from period to period.

USE OF ESTIMATES

     The  preparation  of financial  statements  in conformity  with  accounting
principles   generally  accepted  in  the  United  States  of  America  requires
management to make estimates and assumptions that affect the reported amounts of
assets and  liabilities  and disclosure of contingent  assets and liabilities at
the dates of the financial  statements and the reported  amounts of revenues and
expenses  during the reporting  periods.  Actual results could differ from those
estimates.

<PAGE>

                     GS ENERGY CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)


CONCENTRATIONS OF CREDIT RISK

Financial instruments,  which potentially subject the Company to a concentration
of credit risk,  consist of cash and cash  equivalents.  The Company  places its
cash and cash  equivalents  with various high  quality  financial  institutions;
these deposits may exceed  federally  insured limits at various times throughout
the year.  The Company  provides  credit in the normal  course of business.  The
Company  performs  ongoing  credit  evaluations  of its  customers and maintains
allowances for doubtful accounts based on factors surrounding the credit risk of
specific customers, historical trends, and other information.

For the year ended  December 31, 2006,  the Company's  three  largest  customers
accounted for 25.8%,  15.8% and 13.6% of the Company's net revenues.  There were
no suppliers that accounted for more than 10% of the Company's purchases.

FAIR VALUE OF FINANCIAL INSTRUMENTS

The carrying  amounts  reported in the balance sheet as of December 31, 2006 for
cash  equivalents  and accounts  payable  approximate  fair value because of the
immediate or short-term maturity of these financial instruments.  The fair value
of notes payable and long-term  debt  approximates  their  carrying value as the
stated or discounted rates of the debt reflect recent market conditions.

LIMITATIONS

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

CASH AND CASH EQUIVALENTS

For purposes of balance sheet  classification  and the statements of cash flows,
the Company considers all highly liquid  investments  purchased with an original
maturity of three months or less to be cash equivalents.

WARRANTY RESERVE

The Company  warranties  its  equipment  for defects in design,  materials,  and
workmanship  generally  for a period 12 months  from the date placed in service.
Provision for estimated  warranty  costs is recorded as incurred and is included
in cost of goods sold.

GOODWILL AND OTHER INTANGIBLE ASSETS

     Goodwill represents the excess of the purchase price over the fair value of
the  net  assets   acquired   and  is   evaluated   annually   for   impairment.
Indefinite-lived  intangibles are not amortized,  but are evaluated annually for
impairment.  Future events could cause the Company to conclude  that  impairment
indicators exist and that goodwill and other intangible  assets  associated with
our acquired businesses are impaired.

EARNINGS (LOSS) PER SHARE

Earnings  (Loss) per common share  represents the amount of earnings  (loss) for
the  period  available  to each  share of common  stock  outstanding  during the
reporting  period.  Diluted  earnings  (loss) per share  reflects  the amount of
earnings  (loss)  for  the  period  available  to each  share  of  common  stock
outstanding  during the  reporting  period,  while giving effect to all dilutive
potential common shares that were outstanding during the period,  such as common
shares that could result from the potential exercise or conversion of securities
into common stock. The computation of diluted earnings (loss) per share does not
assume  conversion,  exercise,  or contingent  issuance of securities that would
have an  antidilutive  effect on  earnings  (loss) per share.  Potential  future
dilutive  securities  include  approximately  237,500,000  shares issuable under
outstanding options as of December 31, 2006.



<PAGE>


                     GS ENERGY CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

STOCK BASED COMPENSATION

The Company  accounts for stock based  compensation in accordance with SFAS 123,
"Accounting  for  Stock-Based  Compensation",  Under the fair value  recognition
provisions of SFAS 123,  stock-based  compensation cost is measured at the grant
date  based on the value of the  award and is  recognized  as  expense  over the
vesting period.  As required by Statement No. 123 the Company accounts for stock
issued for  services to  non-employees  by reference to the fair market value of
the  Company's  stock  on  the  date  of  issuance  as it is  the  more  readily
determinable value.

DEFERRED FINANCING CHARGES AND DEBT DISCOUNTS

Deferred  finance costs  represent  costs which may include direct costs paid to
our warrants issued to third parties in order to obtain long-term  financing and
have been  reflected  as other  assets.  Costs  incurred  with  parties  who are
providing the actual long-term  financing,  which generally include the value of
warrants,  or the intrinsic value of beneficial  conversion  features associated
with the  underlying  debt,  are reflected as a debt  discount.  These costs and
discounts are generally amortized over the life of the related debt. These costs
were fully amortized in 2006.

NEW ACCOUNTING PRONOUNCEMENTS

In November 2004, the FASB issued SFAS No. 151,  "Inventory Costs - an amendment
of ARB No. 43, Chapter 4," which  clarifies the accounting for abnormal  amounts
of  idle  facility  expense,   freight,  handling  costs,  and  wasted  material
(spoilage) and also requires that the allocation of fixed production overhead be
based on the  normal  capacity  of the  production  facilities.  SFAS No. 151 is
effective for inventory  costs incurred during fiscal years beginning after June
15, 2005.  This statement is not  anticipated  to have a material  effect on the
Company's results of operations.

In December 2004, the FASB issued FASB statement No. 153 ("SFAS 153").  SFAS 153
addresses  accounting  for  non-monetary  transactions.  This  statement  is not
anticipated to have a material effect on the Company's results of operations.

In December 2004, the Financial  Accounting Standards Board ("FASB") issued SFAS
No. 123R "Share  Based  Payment."  This  statement is a revision to SFAS 123 and
supersedes  Accounting  Principles  Board (APB) Opinion No. 25,  "Accounting for
Stock Issued to Employees," and amends FASB Statement No. 95, "Statement of Cash
Flows".  This statement requires a public entity to expense the cost of employee
services received in exchange for an award of equity instruments. This statement
also  provides  guidance  on valuing  and  expensing  these  awards,  as well as
disclosure  requirements  of  these  equity  arrangements.   This  statement  is
effective as of the  beginning of the first interim or annual  reporting  period
that begins after December 15, 2005. This statement is not anticipated to have a
material effect on the Company's results of operations.

In June,  2005,  the  Financial  Accounting  Standards  Board  (FASB) has issued
Statement No. 154,  Accounting Changes and Error  Corrections,  a replacement of
APB  Opinion  No. 20 and FASB  Statement  No. 3. The  Statement  applies  to all
voluntary  changes in accounting  principle,  and changes the  requirements  for
accounting for and reporting of a change in accounting principle. This statement
will  improve  financial  reporting  because its  requirements  will enhance the
consistency of financial information between periods.

NOTE 4 - ACQUISITIONS

WARNECKE

On June 1, 2005,  the Company  completed  its  acquisition  of  Warnecke  Design
Service, Inc., and Warnecke Rentals,  L.L.C., for $489,904,  $89,904 was paid in
cash and $400,000  was paid by  Greenshift  Corporation  in exchange for 400,000
Series C Preferred Shares.  Greenshift Corporation owns 80% of the fully diluted
capital  stock of the  Company.  Warnecke,  located  in  Ottoville,  Ohio,  is a
specialty metal  manufacturer that produces equipment for an array of industries
and provides design,  development,  manufacturing,  installation and maintenance
services for its clients. Warnecke's customers include electronics,  automotive,
plastics and other manufacturers, including several Fortune 500 companies.

The transaction was accounted for as an acquisition under the purchase method of
accounting  in  accordance  with  Statement  of  Accounting  Standards  No. 141,
Business  Combinations.  Under  the  purchase  method of  accounting,  the total
purchase price is allocated to the net tangible and intangible  assets  acquired
by the company in connection with the transaction, based on their fair values as
of the completion of the transaction.  The excess cost over the net tangible and
identifiable intangible assets is allocated to goodwill. The purchase allocation
was recorded as follows:
<PAGE>
                     GS ENERGY CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 4 - ACQUISITIONS (CONTINUED)

Cash ...................................       77,728
Accounts Receivable ....................      665,725
Costs and Earnings in Excess of Billings      162,743
Inventory ..............................       64,116
Prepaid Expenses .......................       15,585
Property and Equipment .................      793,107
Goodwill ...............................      905,579
Accounts Payable .......................     (818,422)
Notes Payable ..........................   (1,200,131)
Loans Payable ..........................      (50,000)
Billings in excess of earnings .........     (126,126)
                                          -----------
Total Purchase Price ...................  $   489,904
                                          ===========


<PAGE>
                     GS ENERGY CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 5 - PROPERTY AND EQUIPMENT

Property, plant and equipment consist of the following at December 31, 2006:


Land and Building .............  $ 540,058
Equipment .....................    171,445
Vehicle .......................     12,336
Computer Equipment and Software    155,152
Leasehold Improvements ........    368,372
                                 ---------
                                 ---------

Less Accumulated Depreciation .   (301,981)
                                 ---------
                                 ---------

Net Fixed Assets ..............  $ 945,382
                                 =========

Depreciation  expense  charged to  operations  was  $116,506 and $52,738 for the
years ended December 31, 2006 and 2005, respectively.

NOTE 6 - COSTS AND ESTIMATED EARNINGS ON CONTRACTS IN PROGRESS

Following is a summary of costs,  billings,  and estimated earnings on contracts
in progress  as of  December  31, 2006  accounted  for under the  percentage  of
completion method of accounting.


Cost incurred on contracts in progress  $ 2,300,180
Estimated earnings (losses) ..........      521,768
                                        -----------
                                          2,821,948
Less billings to date ................   (2,587,360)
                                        -----------
                                        $   234,588
                                        ===========

The above  accounts are shown in the  accompanying  consolidated  balance sheets
under these captions at December 31, 2006.


Costs and estimated earnings in excess of
billings on uncompleted contracts .......  $ 616,681
                                            (382,093)
Billings in excess of costs and estimated
earnings on uncompleted contracts          ---------
                                           $ 234,588
                                           =========

NOTE 7 - CONVERTIBLE DEBENTURES

CONVERSION OF DEBT


On February 2, 2006, GreenShift  Corporation,  GS Energy's majority shareholder,
assumed  certain  convertible  debentures  GS Energy  had  previously  issued to
Highgate House Funds, Ltd., in the amount of $1,150,369,  which included accrued
interest of  $89,734.  Concurrently,  GS Energy  issued  1,150,369  shares of GS
Energy's  Series C Preferred  Stock to GreenShift in  satisfaction  of the debt.
Shares of GS Energy's Series C Preferred Stock carry a face value of $1.00,  and
are convertible into GS Energy common stock at $0.01 per share.


Additionally,  on February 2, 2006,  Cornell  Capital  Partners,  LP,  converted
$404,122 of debt into  436,956,966  shares of common stock. The amount converted
equaled the entirety of the  principal and accrued  interest on the  Convertible
Debenture issued by GS Energy Corporation to Cornell.


The completion of the above described transactions resulted in the conversion of
all of GS Energy's outstanding  convertible debt with Cornell and Highgate,  and
the reduction of GS Energy's debt by a total of $1,554,508.

SERIES B PREFERRED STOCK

On March 13,  2006  Candent  Corporation  surrendered  to GS Energy  Corporation
251,507 shares of Series B Preferred Stock that GS Energy  Corporation issued to
Candent  Corporation  in  2004.  The  251,507  shares  represented  all  of  the
outstanding shares of Series B Preferred Stock. The Series B Preferred Stock was
convertible into 4.95% of the outstanding GS Energy


<PAGE>

                     GS ENERGY CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



Corporation  common  stock,  and the holder had the right to receive  additional
shares until the market value of the GS Energy  Corporation  shares  received on
conversion totaled $2,750,000. Candent surrendered the shares in response to the
decision  by  GS  Energy  Corporation   management  to  terminate  the  business
operations that GS Energy Corporation  acquired from Candent in exchange for the
Series B preferred shares.

NOTE 8 - LONG-TERM DEBT
<TABLE>
<CAPTION>

Following is a summary of long-term debt at December 31, 2006:


Note payable at 3.5% interest, due in monthly installments of $941 including
interest through February 1, 2010. This note is secured by a second lien on real
estate separately held
<S>                                                                                  <C>
by the Company's parent, GS Energy. ............................................     32,951

Installment loan payable at 10% interest, due in monthly
Installments of $2,971 including interest through
November 30, 2007.  This loan is secured by equipment. .........................     28,416

Mortgage payable at 4% interest due in monthly installments
of $1,849 including interest through 2018.  The mortgage
is secured by the property with a book value of $533,309. ......................    162,685

Mortgage payable at 5% interest due in monthly installments
of $1,224 including interest through 2023.  The mortgage
is secured by property with a book value of $533,309. ..........................    205,448
                                                                                  ---------
                                                                                    429,500
Less Current Maturities ........................................................    (67,004)
                                                                                  ---------
Long-term Debt, net of Current Maturities ......................................  $ 362,496
                                                                                  =========
</TABLE>

Following are maturities of long-term for each of the next five years:

2007                            67,004
2008                            40,139
2009                            41,852
2010                            32,165
2011                            33,623
Thereafter                     214,717
                            ----------
                              $429,500



<PAGE>

                     GS ENERGY CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 9 - RELATED PARTY TRANSACTIONS

Kevin Kreisler, GS Energy Corporation's chairman, is also the chairman and chief
executive officer of GreenShift  Corporation  ("GreenShift").  James Grainer, GS
Energy Corporation's president and chief financial officer, is the president and
chief financial officer of GreenShift.  GreenShift owns 80% of the fully diluted
capital stock of GS Energy  Corporation and provides  management  services to GS
Energy  Corporation.  About 80% of the capital  stock of  GreenShift  is held by
Viridis Capital, LLC, of which Mr. Kreisler is the sole member.

During the year ended December 31, 2005, GS Energy  Corporation paid $150,000 in
management fees to GreenShift for GreenShift's provision of management and other
services.  Additionally,  for their services,  Mr. Kreisler and Mr. Grainer each
received  150,000,000  options exercisable at $0.0005 per share. During the year
ended December 31, 2005, GS Energy Corporation's chairman advanced $43,085 to GS
Energy  Corporation  for working  capital.  The  advances,  of which $21,659 was
repaid,  are  unsecured  and accrue  interest  at 8%. As of December  31,  2005,
outstanding advances form GS Energy Corporation's chairman were $22,076.

In connection  with the April 1, 2005  transfer,  and in  consideration  for the
February  2005  agreement  by  GS  Energy  Corporation's  chairman  to  guaranty
repayment  of the  Highgate  Debentures,  the  Board of  Directors  of GS Energy
Corporation  amended  the terms of the Series A  Preferred  Stock.  The Series A
Preferred  Stock was  amended  to be  convertible  into 875  shares of GS Energy
Corporation's  common stock with a provision that adjusts this conversion  ratio
so that the Series A Preferred Stock will be convertible  into 70% of the common
shares  outstanding  upon  conversion.  The  holder  of each  share of  Series A
Preferred  Stock is  entitled  to cast the same  number of votes at a meeting of
shareholders  as equals the  number of common  shares  into which the  Preferred
share could be converted.

On June 1, 2005, GreenShift provided GS Energy Corporation with bridge financing
of  $50,000  to  assist  GS  Energy  Corporation  with  its  completion  of  its
acquisition  of  Warnecke  Design  Services,   Inc.   ("Warnecke").   GS  Energy
Corporation  had been  unable  to  secure  suitable  financing  due to GS Energy
Corporation's debentures with Cornell and Highgate ($850,000 of which debentures
relate back to the operations of BIB Holdings, Ltd.). To rectify this situation,
GreenShift  provided  the bridge  financing  to GS Energy  Corporation  which GS
Energy  Corporation  then used to close the Warnecke  acquisition in conjunction
with the  issuance by GS Energy  Corporation  to Warnecke of a note for $350,000
bearing  a term  of 30  days  and an  interest  rate  of 6%  (the  "WDS  Note").
GreenShift  then assumed and paid off the WDS Note in return for 400,000  shares
of  Series C  Preferred  Stock in GS  Energy  Corporation  with a face  value of
$400,000 and an 8% coupon.

In  consideration  of the bridge  financing and the assumption and conversion of
the WDS Note by GreenShift,  GS Energy  Corporation agreed to amend its Series A
Preferred  Stock to allow for  conversion  at any time and, in the event of full
conversion,  to provide GreenShift with ongoing dilution protections  equivalent
to those granted under the Series A Preferred Stock Certificate of Designations,
as amended, that act to at all times maintain GreenShift's common holdings in GS
Energy  Corporation equal to 70% of the fully diluted capital stock of GS Energy
Corporation.

On December 21, 2005 GS Energy  Corporation  acquired  GreenShift's 30% stake in
Air Cycle Corporation in return for 10% of GS Energy Corporation's fully diluted
capital stock, which was executed by amending  GreenShift's  dilution protection
agreement with GS Energy Corporation from 70% to 80%.

<PAGE>


                     GS ENERGY CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 9 - RELATED PARTY TRANSACTIONS (CONTINUED)


During the year  ended  December  31,  2005  Serenity  Capital,  LLC  excercised
50,000,000 options with exercise price of $0.0005 in exchange for a subscription
receivable of $25,000. The sole member of Serenity Capital, LLC is a relative of
the Company's CEO.

The Company  entered into a consulting  agreement  with Serenity  Capital,  LLC,
dated  January,  2, 2005,  and amended  March 31,  2005,  for the  provision  of
consulting  services related to the  distribution of industrial  commodities and
commodity  valuation.  The agreement called for the Company to issue to Serenity
certain cash or stock in payment for the services, payable upon the provision of
such  services.   During  the  year  ended  December  2005  the  Company  issued
150,000,000  shares to Serenity Capital,  LLC for services  performed under this
agreement.  The sole member of Serenity  Capital is a relative of the  Company's
CEO. The agreement  with  Serenity  Capital,  LLC was cancelled  during the year
ended December 31, 2005

The Company entered into a consulting  agreement with Cyrus Capital,  LLC, dated
January,  2, 2005,  and amended March 31, 2005,  for the provision of consulting
services  related to the  distribution  of industrial  commodities and commodity
valuation.  The agreement  called for the Company to issue to Cyrus certain cash
or stock in  payment  for the  services,  payable  upon  the  provision  of such
services.  During the year ended  December  2005 the Company  issued  50,000,000
shares to Cyrus Capital,  LLC for services  performed under this agreement.  The
sole member of Cyrus is a relative of the  Company's  CEO.  The  agreement  with
Cyrus Capital, LLC was cancelled during the year ended December 31, 2005..

GS Energy  Corporation  entered  into an "IT  Services  Agreement"  with Candent
Corporation dated January 2, 2005, and amended March 31, 2005, for the provision
of  technical  and  customer  service  support  for GS Energy  Corporation.  The
agreement  called for GS Energy  Corporation to issue to Candent $50,000 in cash
or stock in payment for services  provided during the first quarter 2005. The IT
Services  Agreement also called for ongoing services relative to the development
of GS  Energy  Corporation's  secondary  commodities  trading  platform  at  the
annualized  rate of  $100,000.  150,000,000  shares were issued to Candent at an
average  price of $0.0007 per share for services  rendered in prior  periods and
during 2005.  150,000,000  performance-based  options exercisable at $0.0005 per
share were issued to Candent in April 2005.  The former  president of Candent is
the spouse of the Company's CEO. This agreement was cancelled as of December 31,
2005

During  June  2005,  WDS'  president  advanced  $50,000  to WDS,  which loan was
unsecured  and is due in full on demand along with  interest  accruing at 6% per
annum.  As of December 31, 2006,  the balance due to the Company's  president is
$145,000.

During the year ended December 31, 2006, GreenShift Corporation advanced $50,893
to GS Energy Corporation for operating expenses and GS Energy Corporation repaid
$250,000 to GreenShift,  resulting in a balance due from GreenShift of $203,441.
This advance is unsecured,  bears  interest at 8% and is  considered  payable on
demand.

On March 13,  2006  Candent  Corporation  surrendered  to GS Energy  Corporation
251,507 shares of Series B Preferred Stock that GS Energy  Corporation issued to
Candent  Corporation  in  2004.  The  251,507  shares  represented  all  of  the
outstanding shares of Series B Preferred Stock. The Series B Preferred Stock was
convertible  into 4.95% of the outstanding GS Energy  Corporation  common stock,
and the holder had the right to receive additional shares until the market value
of the GS Energy Corporation  shares received on conversion totaled  $2,750,000.
Candent  surrendered  the  shares  in  response  to the  decision  by GS  Energy
Corporation  management  to  terminate  the business  operations  that GS Energy
Corporation acquired from Candent in exchange for the Series B preferred shares.
The former president of Candent Corporation is the wife of GS Energy's chairman.
The stock of Candent  Corporation is held in trust for the benefit of its former
president.

In the fourth  quarter of 2006,  GS Energy  cancelled  all  outstanding  options
issued to officers,  and issued shares of common stock as a  replacement  award.
James Grainer's  225,000,000 remaining options previously received for rendering
consulting and management services, were cancelled and replaced with 120,000,000
shares of common  stock..  In  accordance  with FASB 123R,  the shares of common
stock  were  deemed  a  replacement  award  and  inasmuch  as the  Black-Scholes
valuation  of the  options  did not  exceed the value of the shares on the grant
date and no additional expense was recorded.

During the year ended December 31, 2006 James Grainer received 12,500,000 shares
for consulting and management services provided to the Company.  During the year
ended December 31, 2005 Mr. Grainer received  125,000,000  shares for consulting
and management services provided to the Company.  During the year ended December
31,  2006 Kevin  Kreisler,  the  Company's  Chief  Executive  Officer,  received
12,500,000 shares valued at $20,000 for services provided to the Company.
<PAGE>

RIGHT OF FIRST REFUSAL MANUFACTURING AGREEMENT

WDS  holds  the  right  of  first  refusal  to  provide  all  of  the  equipment
manufacturing needs of GS CleanTech Corporation and GS AgriFuels Corporation. GS
Energy,  GS CleanTech  and GS AgriFuels are all majority  held  subsidiaries  of
GreenShift Corporation.

SALES TO GS ETHANOL TECHNOLOGIES

During  the  year  ended  December  31,  2006,  WDS  performed  engineering  and
manufacturing services for GS Ethanol Technologies,  Inc. ("GSET"), a subsidiary
of GS CleanTech Corporation. Greenshift Corporation, the majority shareholder of
GS  Energy,  is also  the  majority  shareholder  of GS  CleanTech  Corporation.
Revenues related to services  performed for GSET totaled $960,626 for the twelve
months ended  December 31,  2006.  Also,  at December 31, 2006 the Company had a
receivable from GSET of $611,344.

GSET has recently  executed a number of agreements  relative to its corn oil and
animal fat extraction  technologies and has acquired certain parts and inventory
relating  to  these  agreements  that are  currently  located  at the  Company's
manufacturing  facility.  As of December 31, 2006 the Company was in the process
of performing the  fabrication  and assembly work on the projects in which these
parts are utilized.

TRANSACTIONS WITH GS AGRIFUELS

The company generated revenue from Mean Green Biofuels, Inc., a subsidiary of GS
AgriFuels  of  $27,850  for  the  year  ended  December  31,  2006.   Greenshift
Corporation is the parent of GS Agrifuels.

The Company is the exclusive  manufacturer  for NextGen Fuel, Inc., a subsidiary
of GS AgriFuels.  During the year ended December 31, 2006, the Company generated
revenue of $944,580 for design, fabrication, assembly, testing, and installation
services  performed for NextGen Fuel, Inc. At December 31, 2006, the Company had
a receivable due from NextGen Fuel, Inc. in the amount of $125,335.

On  October  31,  2006,  the  Company  refinanced  $568,958  in debt due to Fort
Jennings  State  Bank  and U.S.  Bank  with GS  AgriFuels.  The  purpose  of the
refinancing  was to grant to Stillwater  Asset Backed Fund, LP a first  priority
security  interest  in all  assets  of  the  Company,  and  was a  condition  of
Stillwater's loan to NextGen Acquisition, Inc..

ISSUANCE OF SERIES D PREFERRED STOCK

On May 5, 2006,  GreenShift  exchanged  3,000,000,000 shares of GS Energy common
stock and 625,000  shares of GS Energy  Series A Preferred  Stock for  1,000,000
shares of GS Energy Series D Preferred Stock. GS Energy Series D Preferred Stock
includes  dilution  protections  such that the preferred  shares are convertible
into 80% of GS  Energy's  issued and  outstanding  capital  stock at the time of
conversion.

TRANSFER OF ASSETS FROM GREENSHIFT CORPORATION

On July 1, 2006, GS Energy  acquired from its majority  shareholder,  GreenShift
Corporation,  all of Greenshift's  interest in Sterling Planet, Inc., all of its
interest  in  TerraPass,  Inc.,  and all of the capital  stock of four  recently
formed corporations:  GS Solar, Inc., GS Wind, Inc., GS Hydro, Inc. and GS Wave,
Inc.

TRANSFER OF ASSETS TO GREENSHIFT CORPORATION

On October  9, 2006,  GS Energy  Corporation  completed  its sale of 100% of the
outstanding  capital stock of GS Carbon  Trading,  Inc. to  DirectView,  Inc. in
return for 1.8 billion shares of DirectView's common stock and 100,000 shares of
DirectView's new Series 2 Preferred Stock. DirectView's Series 2 Preferred Stock
gives GS Energy  voting  rights equal to the number of common  shares into which
the Series 2 stock can be  converted.  The  Series 2  Preferred  Stock  includes
conversion  adjustment  provisions that, until December 31, 2008,  automatically
adjust the  conversion and voting rate the Series 2 stock to be and remain equal
to 80% of DirectView's  fully-diluted  issued and outstanding capital stock when
taken with GS Energy's  then-current  DirectView  common stock  holdings.  After
December 31, 2008 the conversion rate and voting rights are such as they were on
December 31, 2008.

On  October  18,  2006,  GS  Energy   Corporation   transferred   to  GreenShift
Corporation,  its majority  shareholder,  the following  securities:  85% of the
issued  and  outstanding  equity of  DirectView,  Inc.,  30% of the  issued  and
outstanding  equity  of  AirCycle  Corporation,  and  100%  of  the  issued  and
outstanding equity of Separation and Recovery Technologies, Inc. In exchange for
the securities,  GreenShift  Corporation's cancelling future payments of certain
debentures  and other  amounts due from GS Energy to GreenShift in the aggregate
amount of six hundred thousand and four dollars ($604,000) and the cancelling of
four hundred thousand (400,000) shares of GS Energy's Series C Preferred Stock.

MERGER AGREEMENT WITH GS AGRIFUELS

On October 18, 2006, GS Energy Corporation and GS AgriFuels Corporation executed
an Agreement and Plan of Merger (the "Merger Agreement").  Pursuant to the terms
and  conditions of the Merger  Agreement,  GS Energy will merge with and into GS
Acquisition, Inc., a newly formed special purpose subsidiary of GS AgriFuels. As
a result of the merger, GS Energy common stock shareholders will receive 1 share
of GS  AgriFuels  common  stock in return  for every  1,000  shares of GS Energy
common stock held at the time of the closing of the Merger.  GS Energy preferred
stock  shareholders  will receive GS AgriFuels  preferred  stock with rights and
preferences  substantially  identical to their GS Energy shares.  The closing of
the merger will occur after  approval  of the merger by the  shareholders  of GS
Energy.

GS Energy owns a specialty manufacturing company, Warnecke Design Service, Inc.,
which  currently  provides  manufacturing  services  for  NextGen.  GS AgriFuels
acquired NextGen on October 30, 2006. A merger of GS Energy with GS AgriFuels is
expected to be strategic to both companies for several reasons,  including:  (a)
the integration of NextGen's and Warnecke Design's businesses can be expected to
enhance  operating  margins for both companies  while  establishing an immediate
stream of revenues and earnings for GS AgriFuels;  and (b) merging GS Energy and
GS AgriFuels can be expected to increase liquidity for both companies, which can
be material to the future development activities of the combined companies.  The
foregoing  descriptions of the transactions  contemplated by GS AgriFuels and GS
Energy are only a summary and are  qualified  in their  entirety by reference to
the documents filed as exhibits to this Current Report.


GUARANTEE AGREEMENT WITH STILLWATER ASSET-BASED FUND, LP

On October 31, 2006 GS Energy guaranteed the following obligations:

a.   14-month Term Note in the principal amount of $6,000,000  issued by NextGen
     Acquisition, Inc. to Stillwater Asset-Based Fund, LP;

b.   3-year Secured Convertible Debenture in the principal amount of $13,000,000
     issued by GS AgriFuels Corporation to Cornell Capital Partners, LP.

GS Energy's guaranty was secured by a pledge of its assets.  The proceeds of the
financing  transactions  were  used  to fund  the  acquisition  by GS  AgriFuels
Corporation of NextGen Fuels, Inc.

GS AgriFuels Corporation is a subsidiary of GreenShift  Corporation,  which owns
80% of the  equity in GS Energy  Corporation.  NextGen  Acquisition,  Inc.  is a
subsidiary of GS AgriFuels Corporation.

Information  regarding the  obligations  and the acquisition may be found in the
Current Report on Form 8-K being filed by GS AgriFuels Corporation  simultaneous
with the filing of this Current Report.


NOTE 10 - INCOME TAXES

GS Energy  Corporation has incurred  losses,  which have generated net operating
loss carry  forwards for GS Energy  Corporation  as of December 31, 2006.  These
loss carry  forwards are subject to  limitation  in future years should  certain
ownership  changes  occur.  For the years ended  December 31, 2006 and 2005,  GS
Energy Corporation's  effective tax rate differs from the federal statutory rate
principally  due to net operating  losses and other  temporary  differences  for
which no benefit was  recorded.  The  provision  for income  taxes for the years
ended  December  31, 2006 and 2005  consisted  of state  income tax  provisions.
Deferred tax assets are as follows:

                                   12/31/2006   12/31/2005
                                   ----------   ----------
Deferred Tax Asset:

Net operating loss carry forwards  $ 1,099,820   $ 690,557
                                   -----------   ---------

Total deferred tax assets .......    1,099,820     690,557
Less: Valuation allowance .......   (1,099,820)   (690,557)
                                   -----------   ---------

Net deferred tax asset ..........  $      --    $       --
                                   ==========   ==========

GS  Energy  Corporation  has  federal  net  operating  loss   carry-forwards  of
approximately $2,749,550 which expire through December 31, 2026.

NOTE 11 - CONTINGENCIES

The Company's subsidiary,  Warnecke Design Services, Inc., is a named party in a
complaint against a customer of the company in which an engineering company that
performed services for that customer alleges non-payment of services,  breach of
contract, and the disclosure of trade secrets. The Company intends to vigorously
defend  itself  against  this  complaint  and does  not  currently  have  enough
information to assess the likely outcome of this matter.


<PAGE>


                     GS ENERGY CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 12 - IMPAIRMENT OF LONG LIVED ASSETS

Costs  associated  with  the  development  of the GS  Energy  website  had  been
capitalized,  to be amortized  over a five year period.  In the third quarter of
2006, Management determined that the website did not represent a future economic
benefit  and the entire  remaining  balance of  $190,103  was  written off as of
December 31, 2006.




<PAGE>


                     GS ENERGY CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 13 - OPTIONS AND WARRANTS


The following is a table of stock options and warrants outstanding as of
December 31, 2005 and December 31, 2006

                                   Number of Shares Weighted Average
                                                    Exercise Price
--------------------------------------------------------------------

Outstanding at December 31, 2005   587,500,000   $     .0005
   Issued ......................   300,000,000   $     .0015
   Exercised ...................  (375,000,000)  $     .0006
   Cancelled ...................  (275,000,000)  $     .0010
                                                 ------------
Outstanding at December 31, 2006   237,000,000   $     .0009

<TABLE>

Summarized information about GS Energy Corporation's stock options outstanding
at December 31, 2006 is as follows:
<CAPTION>

Exercise Prices    Number of Options     Weighted Average     Weighted Average
                     Outstanding            Remaining          Exercise Price
                                       Contractual Life                                    Exercisable
-----------------------------------------------------------------------------------------------------------------------
                                                                              Number of Options       Weighted Average
                                                                                  Exercise                Price
-----------------------------------------------------------------------------------------------------------------------
<C>                  <C>                      <C>                <C>             <C>                        <C>
$0.01                37,500,000               8.0                .01             37,500,000                 0.0005
$0.0                100,000,000               8.0                .01             00,000,000                 0.0015
                    -----------                                                 -----------
                    237,500,000                                                 237,500,000
</TABLE>


Options  exercisable  at  December  31, 2006 were  237,500,000,  with a weighted
average  exercise  price of $0.000921  per share.  The fair value of each option
granted  during 2005 is estimated  on the date of grant using the  Black-Scholes
option-pricing model with the following assumptions:

                                                          2005
                                                      -----------

Dividend yield                                              --
Expected volatility                                        69%
Risk-free interest rate                                     2%
Expected life                                          10 yrs.



NOTE 14 - ECONOMIC DEPENDENCY

During  the year ended  December  31,  2006,  the  Company  earned  revenues  of
$1,498,626,  which arose from  contracts  with one customer.  As of December 31,
2006,  these contracts are expected to generate  additional  revenue of $630,476
upon completion.






<PAGE>


                     GS ENERGY CORPORATION AND SUBSIDIARIES

ITEM 8.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
         ACCOUNTING AND FINANCIAL DISCLOSURE

None.

ITEM 8A.          CONTROLS AND PROCEDURES

EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

Our principal  executive officer and principal  financial and accounting officer
have  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.

CHANGES IN INTERNAL CONTROLS

There were no significant changes,  including any corrective actions with regard
to significant deficiencies and material weaknesses, in our internal controls or
in other factors that could  significantly  affect  internal  controls since the
date of the most recent  evaluation  of these  controls by the  Company's  chief
executive officer and chief financial officer.



<PAGE>



                     GS ENERGY CORPORATION AND SUBSIDIARIES
                                    PART III

ITEM 9.  DIRECTORS AND EXECUTIVE OFFICERS

Name                              Age         Position
--------------------------------------------------------------------------------
Kevin Kreisler               34  Chairman, Chief Executive Officer

James Grainer                52  President, Chief Financial Officer, Director


Kevin  Kreisler - Mr.  Kreisler is the founder of  GreenShift.  Mr.  Kreisler is
currently  the Chairman of the Board and Chief  Executive  Officer of GreenShift
Corporation,  and he serves as Chairman of the Board and Chief Executive Officer
of  several  of  GreenShift's  companies.  Previously,  Mr.  Kreisler  worked at
GreenShift's GS CleanTech  Corporation,  where he served as vice-president  from
1998 to 2000, president from 2000 to 2002, and chief executive officer from 2002
to February 2005. Mr.  Kreisler is a graduate of Rutgers  University  College of
Engineering  (B.S.,  Civil  and  Environmental   Engineering,   1994),   Rutgers
University Graduate School of Management (M.B.A.,  1995), and Rutgers University
School of Law (J.D.,  1997).  Mr.  Kreisler is  admitted to practice  law in New
Jersey and the United States District Court for the District of New Jersey.

James L. Grainer - Mr.  Grainer has made his career in the fields of  investment
banking and financial management and accounting. Since December 2004 Mr. Grainer
has  served  as  the  President  and  Chief  Financial   Officer  of  GS  Energy
Corporation. At the same time, beginning in October 2004, Mr. Grainer has served
as the  President  and Chief  Financial  Officer of  GreenShift  Corporation,  a
publicly-held  company business development company.  From 2003 until June 2004,
Mr.  Grainer  was the  Chief  Financial  Officer  of Polo  Linen,  where  he was
responsible  for that  company's  financial  management  and was involved in all
aspects  of  strategic  management.  From 2001 until  2003 Mr.  Grainer  was the
Managing Director of Investment Banking and Head of the Investment Banking Group
at Zanett  Securities,  a merchant  banking firm located in New York City.  From
1992 until 2001 Mr. Grainer was a Managing  Director in the  Investment  Banking
Group at Prudential  Securities,  where he served as a member of the  Management
Committee  for the  Prudential  Securities  Private  Equity  Fund and held other
financial  management  positions.  Prior to joining Prudential  Securities,  Mr.
Grainer  was  employed as a Senior  Manager by  Deloitte &Touchee,  where he was
actively  involved  in managing  all aspects of  Deloitte's  tax  practice.  Mr.
Grainer is licensed as a certified public accountant in the State of New York.

NOMINATING AND AUDIT COMMITTEE

The  Board  of  Directors  does  not have an  audit  committee  or a  nominating
committee,  due to the small  size of the Board.  Mr.  Grainer,  however,  is an
"audit  committee   financial   expert"  within  the  definition  given  by  the
Regulations  of  the  Securities  and  Exchange  Commission,  by  reason  of his
experience in public accounting and as a financial officer.

CODE OF ETHICS

The Company does not have a written code of ethics  applicable  to its executive
officers.  The Board of  Directors  has not  adopted  a  written  code of ethics
because there are only two members of management.

SHAREHOLDER COMMUNICATIONS

The Board of  Directors  will not adopt a  procedure  for  shareholders  to send
communications  to the Board of  Directors  until it has  reviewed the merits of
several alternative procedures.

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

None of the  officers,  directors or  beneficial  owners of more than 10% of the
Company's  common stock failed to file on a timely basis the reports required by
Section 16(a) of the Exchange Act during the year ended December 31, 200.






<PAGE>




ITEM 10.          EXECUTIVE COMPENSATION

The  following  table  sets  forth   compensation   information  for  GS  Energy
Corporation's  executive officers during the years indicated as relevant.  As of
December 31, 2005, no executive  officer held shares of exercisable  options for
GS Energy Corporation's Common Stock.
<TABLE>
<CAPTION>

Name and Principal Position       Annual Compensation Long-term Compensation      All Other
                                                                                  Compensation
--------------------------------------------------------------------------------------------------
                        Year     Salary      Bonus     Other     Securities Underlying Options
                                                                  Granted (shares)
--------------------------------------------------------------------------------------------------
<S>                      <C>   <C>        <C>        <C>            <C>         <C>
Kevin Kreisler ........  2006  $    --    $    --    $       --     12,500,000  $         --
Chairman and Chief
Executive Officer2005 .             --         --            --    150,000,000            --
                         2004       --         --            --           --              --

James Grainer .........  2006       --         --            --     12,500,000            --
Chief Financial Officer  2005       --         --            --    150,000,000            --
                         2004       --         --            --           --              --
</TABLE>

EMPLOYMENT AGREEMENTS

GS Energy's relationships with its officers are on an at-will basis.

COMPENSATION OF DIRECTORS

Our directors are reimbursed for out-of-pocket expenses incurred on our behalf,
but receive no additional compensation for service as directors.

ITEM 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following  table sets forth certain  information  regarding the  "beneficial
ownership"  of the  Company's  Common  Stock as of April 16, 2007 by each of the
Company's directors and executive officers,  all current directors and executive
officers  as a  group,  and  persons  or  groups  owning  more  than  5% of  the
outstanding  Common Stock. In computing the number of shares  beneficially owned
by a person and the percentage ownership of that person,  shares of common stock
subject  to  options  or  warrants  held  by  that  person  that  are  currently
exercisable  or  exercisable  within  60  days of the  date  hereof  are  deemed
outstanding.  Except as indicated in the footnotes to this table and pursuant to
applicable community property laws, each stockholder named in the table has sole
voting and  investment  power with respect to the shares set forth opposite such
stockholder's  name.  On April 16,  2007 there were  2,497,163,844  shares of GS
Energy common stock issued and outstanding as well as 1,600,370 shares of Series
C Preferred  Stock and 1,000,000  shares of Series D . The following  table sets
forth the number of the Company's shares  beneficially owned by each person who,
as of the  closing,  will own  beneficially  more than 5% of either class of the
Company's voting stock, as well as the ownership of such shares by each director
of the  Company  and the shares  beneficially  owned by the new  directors  as a
group.
<TABLE>
<CAPTION>

Name and Address of Beneficial Owner         Amount and Nature
                                          of Beneficial Ownership       Percent and Class of Stock
----------------------------------------------------------------------------------------------------
<S>                                               <C>                    <C>
James Grainer                                     193,066,000            7,7% Common Stock
                                                         --              0% Series A Preferred

Kevin Kreisler                                           --              0% Common Stock
                                                    1,600,000            100% Series C Preferred(1)
                                                    1,000,000            100% Series D Preferred(1)

Current executive officers
  and directors as a group (2 persons)            193,066,000            7.7% Common Stock
                                                    1,600,000            100% Series C Preferred
                                                    1,000,000            100% Series D Preferred

<FN>

1.   All shares are held  directly by  GreenShift  Corporation,  an affiliate of
     Kevin Kreisler that is majority controlled by Kevin Kreisler
</FN>

</TABLE>


<PAGE>


ITEM 12.   CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
           AND DIRECTOR INDEPENDENCE

Related Party Transactions

On October 31, 2006 GS Energy guaranteed the following obligations:

a.   14-month Term Note in the principal amount of $6,000,000  issued by NextGen
     Acquisition, Inc. to Stillwater Asset-Based Fund, LP.

b.   3-year Secured Convertible Debenture in the principal amount of $13,000,000
     issued by GS AgriFuels Corporation to Cornell Capital Partners, LP.

GS Energy's guaranty was secured by a pledge of its assets.

The proceeds of the financing  transactions were used to fund the acquisition by
GS AgriFuels Corporation of NextGen Fuels, Inc.

GS AgriFuels Corporation is a subsidiary of GreenShift  Corporation,  which owns
80% of the equity in GS Energy  Corporation.  NextGen Fuel, Inc. is a subsidiary
of GS AgriFuels Corporation.

Director Indpendence

Neither  member  of our  Board  of  Directors  is an  independent  director,  as
"independence" is defined by the rules of the NASDAW Stock Market.




<PAGE>


                                     PART IV

ITEM 13.          EXHIBITS AND REPORTS ON FORM 8K

Index to Exhibits

Exhibit Number             Description

3.1  Certificate  of  Incorporation,  as  amended - filed as an  exhibit  to the
     Current Report on Form 8-K filed on July 15, 2005 and  incorporated  herein
     by reference.

3.1(a) Agreement and Plan of Merger with Incode Technologies Corporation - filed
     as an exhibit to the Current  Report on Form 8-K filed on July 15, 2005 and
     incorporated herein by reference.

3.2  By-Laws - filed as an  exhibit to the  Current  Report on Form 8-K filed on
     July 15, 2005 and incorporated herein by reference.

10.1 Guaranty  Agreement  dated  October 25, 2006 among  Stillwater  Asset-Based
     Fund, LP and GreenShift  Corporation,  GS AgriFuels Corporation,  GS Energy
     Corporation and GS CleanTech Corporation.

10.2 Pledge  Agreement  dated  October 25, 2006 between  Stillwater  Asset-Based
     Fund, LP and GS AgriFuels Corporation.

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 and Accounting  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>

ITEM 14.          PRINCIPAL ACCOUNTANT FEES AND SERVICES

INDEPENDENT AUDITOR FEES



     Audit Fees

     Rosenberg Rich Baker Berman & Company,  P.A.  billed $60,590 to the Company
in 2006 and $9,000 in 2005 for professional  services  rendered for the audit of
our 2006 financial statements.

         Audit-Related Fees

     Rosenberg Rich Baker Berman & Company,  P.A.  billed $29,345 to the Company
in 2006 and $0 in 2005 for  assurance and related  services that are  reasonably
related  to the  performance  of the  2005  audit  or  review  of the  quarterly
financial statements.

     Tax Fees

     Rosenberg  Rich Baker  Berman & Company,  P.A.  billed $0 to the Company in
2006 and $0 in 2005 for professional  services rendered for tax compliance,  tax
advice and tax planning.

     All Other Fees

     Rosenberg  Rich Baker  Berman & Company,  P.A.  billed $0 to the Company in
2006 and $0 in 2005 for services not described above.

     It is the policy of the  Company's  Board of  Directors  that all  services
other than audit,  review or attest services,  must be pre-approved by the Board
of  Directors.  All of the services  described  above were approved by the Audit
Committee.






<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.

GS ENERGY CORPORATION

By:                    /S/      KEVIN KREISLER
                       -----------------------
                                KEVIN KREISLER
                                Chairman and Chief Executive Officer
Date:                           April 16, 2007

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following  persons on behalf of the  registrant and
in the capacities and on the dates indicated.

                       /S/      JAMES GRAINER
                       -----------------------
By:                             JAMES GRAINER
                                Director, Chief Financial Officer,
                                 Chief Accounting Officer
Date:                           April 16, 2007

                       /S/      KEVIN KREISLER
                       -----------------------
By:                             KEVIN KREISLER
                                Director, Chief Executive Officer
Date:                           April 16, 2007