--------------------------------------------------------------------------------
                                  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, 2005

                          COMMISSION FILE NO.: 0-32143


                                INSEQ 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.)


535 West 34th Street, Suite 203, New York, NY                             10001
-------------------------------------------------------------------------------
(Address of principal executive offices)                              (Zip Code)


                                 (646) 792-2634
--------------------------------------------------------------------------------
               (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.
I
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)

State issuer's revenues for its most recent fiscal year: $2,425,911.

The  number of  outstanding  shares of  common  stock as of April 16,  2006 was:
4,948,173,844.  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, 2006 was $10,330,174.

Amendment No. 1
---------------

This  amendment  is being filed to correct an  erroneous  statement on the cover
page regarding the number of outstanding  shares at April 16, 2006, an erroneous
date on the cover page, and an erroneous number in Item 12 to the Form 10-KSB.

<PAGE>


<PAGE>




                               INSEQ CORPORATION
                           ANNUAL REPORT ON FORM 10KSB
                   FOR THE FISCAL YEAR ENDED DECEMBER 31, 2005

<TABLE>

                                TABLE OF CONTENTS

<CAPTION>

                                                                                                        Page No
Part I
<S>                                                                                                         <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 ...........................................................................12
Item 8      Changes and Disagreements with Accountants on Accounting and Financial Disclosure ..............30
Item 8A   Controls and Procedures ..........................................................................30

Part III
Item 9      Directors, Executive Officers, Promoters and Control Persons; Compliance with
                  Section 16(a) of the Exchange Act   ......................................................31
Item 10     Executive Compensation .........................................................................32
Item 11     Security Ownership of Certain Beneficial Owners and Related Stockholder Matters ................32
Item 12     Certain Relationships and Related Transactions .................................................33

Part IV
Item 13     Exhibits and Reports on Form 8K ................................................................35
Item 14     Principal Accountant Fees and Services .........................................................36

Signatures..................................................................................................37

</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 2006.

                                     PART I

ITEM 1. DESCRIPTION OF BUSINESS

INSEQ  Corporation  ("we,"  "our,"  "us,"  "INSEQ," or the  "Company")  seeks to
directly  facilitate the efficient use of virgin and partially  consumed natural
resources,  including metals, chemicals, fuels and plastics. We plan to do so by
manufacturing  and  selling  products  that we  intend  to make  it  easier  for
consumers  and  businesses  to reduce the  generation  of waste and to  increase
recycling.   It  is  our  hope  that  these  activities  will  make  a  positive
contribution  to  making  the  use  of  natural   resources  more  efficient  by
incrementally offsetting our clients' need for new virgin natural resources.

INSEQ  currently has three operating  subsidiaries - Warnecke  Design  Services,
Inc., and Warnecke Rentals, LLC (collectively,  "WDS") and Air Cycle Corporation
("Air Cycle").

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.  WDS  is  currently
executing a growth strategy that includes manufacturing processing equipment for
ethanol and biofuels plants.

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

INSEQ also  developed  an online  green  products  marketplace  during 2005 that
launched during the first quarter of 2006 and that currently offers for sale Air
Cycle's and other green products.

INSEQ  holds two  inactive  subsidiaries  related  to its former  online  dating
businesses:  Incode  Corporation,  Intrance  Corporation.  Intrance is a holding
company  through which Incode had  administered  its online  dating  businesses.
These  businesses are not currently  generating any revenue and INSEQ's  current
plan is to sell these businesses to a strategic  company and/or service as INSEQ
focuses on the development of its secondary  commodities  trading portal and the
above mentioned business development activities.

On September 15, 2005, the Company acquired 1,000 shares (or 100% of outstanding
shares of Common stock) of Separation and Recovery Technologies, Inc. ("SRT"),
in exchange for 434,782,608 unregistered shares of common stock of INSEQ in a
tax-free stock-for-stock exchange. SRT's financial statements are included in
the Company's consolidated financial statements. SRT did not have any operations
since its acquisition on September 15, 2005. SRT holds the rights to a new
patented technology developed by Argonne National Laboratory under a contract
with the U.S. Department of Energy that preferentially separates plastics from
mixed plastic wastes. The Company plans to further develop and commercialize
several applications of this technology.


Our executive offices are located at 535 West 34th Street, Suite 203, New York,
NY 10001. Our telephone number is 646-792-2634.

More information on INSEQ and its business model is available online at
www.inseq.com where we will also provide free access to our annual reports on
Form 10KSB, quarterly reports on Form 10QSB, current reports on
<PAGE>

ITEM 1. DESCRIPTION OF BUSINESS (continued)

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,  INSEQ'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.

INSEQ incurred a loss of $1,856,895  during the twelve months ended December 31,
2005, and INSEQ had  approximately  $156,868 in cash at December 31, 2005. These
matters raise  substantial  doubt about  INSEQ'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 issuance of shares  under our  agreements  with  Cornell and Highgate  could
increase our outstanding shares by over 15%.

While  Cornell and Highgate are subject to  restrictions  on conversion of their
respective debentures limiting their ownership to 9.9% of our common stock, upon
default the Cornell and Highgate  Debentures could be converted into 740,000,000
shares at the market price on December  31,  2005.  The issuance of these shares
would dilute the interest of our current shareholders by over 15%.

The conversion of our  convertible  debentures,  the exercise of our outstanding
warrants  and options and INSEQ'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 conversion of our outstanding  convertible debentures (including the Cornell
Debenture and Highgate Debenture),  and the exercise of our outstanding warrants
and options could result in the issuance of up to  740,000,000  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.

We may be unable to satisfy our current debts.

Our total liabilities as of December 31, 2005 were $3,588,756. We cannot afford
to pay these amounts out of our operating cash flows and our ability to operate
will be significantly impaired if we cannot reduce the Cornell and Highgate debt
with registered stock.

We lack capital to fund our operations.

     During the twelve  months  ended  December  31,  2005 our  operations  used
$477,862 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

<PAGE>

ITEM 1.  DESCRIPTION OF BUSINESS (continued)

BUSINESS RISK FACTORS (continued)

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,  environmental
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 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.

Some of our  existing  stockholders  can exert  control over us and may not make
decisions that further the best interests of all stockholders.

Our   officers,   directors  and   principal   stockholders   (greater  that  5%
stockholders)  together control 100% of our outstanding Series A preferred stock
and 100% of our Series C preferred  stock.  The preferred shares are convertible
into 80% of our  Common  Stock.  As a result,  these  stockholders,  if they act
individually or together,  may exert 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.

INSEQ 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
<PAGE>

ITEM 1.  DESCRIPTION OF BUSINESS (continued)

BUSINESS RISK FACTORS (continued)

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
sole  directors  of  INSEQ  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 INSEQ will have no effective  means of exercising  control over
the operations of INSEQ.

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 INSEQ common stock may prevent a shareholder
from obtaining a fair price for his shares.

The common stock of INSEQ 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 INSEQ,
since the price  sometimes  moves up or down by 50% or more in a week's  time. A
shareholder in INSEQ 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  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.

INSEQ common stock is defined by the SEC as a "penny stock" because it trades at
a price less than $5.00 per share.  INSEQ  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 INSEQ  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

INSEQ currently maintains office space at 111 Howard Boulevard in Mt. Arlington,
New Jersey in a facility leased by an affiliated company. The lease for this
space expires on December 31, 2007. We paid no rent during 2005 for these
offices. During 2006 INSEQ does not expect to pay rent for these offices. We
believe these offices will be sufficient for our needs for the foreseeable
future.

ITEM 3.  LEGAL PROCEEDINGS

None.

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

None.



<PAGE>


                                     PART II

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

INSEQ's Common Stock trades on the OTC Bulletin Board under the symbol "INSQ."
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.
<TABLE>
<CAPTION>

-------------------------------------------------------------------------------------------------------
Period                                                    High                                   Low
-------------------------------------------------------------------------------------------------------
<S>                                                       <C>                                   <C>
2005 First Quarter                                        .011                                  .0005
2005 Second Quarter                                      .0075                                  .0005
2005 Third Quarter                                       .0069                                  .0028
2005 Fourth Quarter                                      .0053                                  .0015

2004 First Quarter                                        0.26                                   0.04
2004 Second Quarter                                       0.07                                   0.01
2004 Third Quarter                                        0.01                                  0.001
2004 Fourth Quarter                                       0.01                                  0.001
</TABLE>

Title of Class  Approximate  Number of  Holders  of Record as of March 30,  2006
Common Stock,  0.001 par value 330 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

INSEQ did not sell any unregistered  equity securities during the 4th quarter of
2005.

REPURCHASE OF EQUITY SECURITIES

INSEQ did not repurchase any of its equity securities that were registered under
Section 12 of the Securities Act during the 4th quarter of 2005.


<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 2006.

OVERVIEW

INSEQ  Corporation  ("we,"  "our,"  "us,"  "INSEQ," or the  "Company")  seeks to
directly  facilitate the efficient use of virgin and partially  consumed natural
resources,  including metals, chemicals, fuels and plastics. We plan to do so by
manufacturing  and  selling  products  that we  intend  to make  it  easier  for
consumers  and  businesses  to reduce the  generation  of waste and to  increase
recycling.   It  is  our  hope  that  these  activities  will  make  a  positive
contribution  to  making  the  use  of  natural   resources  more  efficient  by
incrementally offsetting our clients' need for new virgin natural resources.

During 2005 we acquired  ownership  interests in three  operating  subsidiaries:
Warnecke Design Service, Inc., Warnecke Rentals, LLC (collectively WDS), and Air
Cycle Corporation.

INSEQ owns 100% of WDS, 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.  WDS  is  currently
executing a growth strategy that includes manufacturing processing equipment for
ethanol and biofuels plants.

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

INSEQ also  developed  an online  green  products  marketplace  during 2005 that
launched during Q1 2006 and that currently offers for sale Air Cycle's and other
green products.

INSEQ has two inactive subsidiaries related to its former online dating service,
Incode  Corporation  and  Intrance  Corporation,  as well  as a  third  inactive
subsidiary, Separation and Recovery Technologies, Inc.

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, 2005 COMPARED TO THE YEAR ENDED DECEMBER 31, 2004

Revenues

Total  revenues were  $2,427,196  for the year ended December 31, 2005, and $585
for the twelve months ended December 31, 2004.

The majority of revenues  realized  during the year ended December 31, 2005 were
due to the operating  activities of our recently acquired  subsidiary,  Warnecke
Design  Services,  Inc.  ("WDS").  Revenues of $1,384 were  recognized  from the
Company's  former online  dating  service.  The  operations of the online dating
service were suspended effective April 1, 2005.

Cost of Revenues

Cost of  revenues  for the year ended  December  31, 2005 was  $2,084,966  which
amount was primarily  attributable  to the operating  activities of our recently
acquired subsidiary, WDS.

Selling, General and Administrative Expenses

Selling,  general and  administrative  expenses for the year ended  December 31,
2005 were $1,772,834.

Interest Expense and Financing Costs

Interest  expenses and financing costs for the year ended December 31, 2005 were
$385,626 and was primarily  attributable  to our existing  financing  agreements
with Cornell and Highgate.

Net Income and Net Loss

Our net loss for the year ended  December 31, 2005 was  $1,876,262,  and our net
loss for the twelve  months ended  December  31, 2004 was $72,040.  The net loss
incurred was due to the expenses and other factors described above.

Liquidity and Capital Resources

The Company had  $649,628 in accounts  payable and accrued  expenses at December
31, 2005. In addition, the Company had $330,123 at December 31, 2005 relating to
the current  principal portion of long term debt that will require cash payments
over the next 12 months.  INSEQ intends to satisfy  these amounts  predominantly
out of cash flows from its operations.  The company had negative working capital
of $1,1,764,920 at December 31, 2005, of which $1,764,920 related to convertible
debentures due to Highgate House and Cornell  Capital  Partners.  On February 2,
2006 the Company  converted a portion of the convertible  debentures into common
stock and the remaining balance was assumed by GreenShift  Corporation,  INSEQ's
controlling shareholder.  See Note 11 to the financial statements for additional
details.







<PAGE>



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

OFF-BALANCE SHEET ARRANGEMENTS

We do not have any off-balance  sheet  arrangements  that have or are reasonably
likely to have a current or future effect on our financial  condition or results
of operations.





<PAGE>


ITEM 7.  FINANCIAL STATEMENTS
<TABLE>
<CAPTION>

                                                                                                           Page No
FINANCIAL STATEMENTS

<S>                                                                                                        <C>
Report of Independent Registered Public Accounting Firm ....................................................13

Consolidated Balance Sheets ................................................................................14

Consolidated Statements of Operations ......................................................................15

Consolidated Statements of Stockholders' Equity ............................................................16

Consolidated Statements of Cash Flows ......................................................................17

Notes to Consolidated Financial Statements .................................................................18
</TABLE>



<PAGE>


ITEM 7.  FINANCIAL STATEMENTS (CONTINUED)

             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FORM


To the Board of Directors and Stockholders
INSEQ Corporation and Subsidiaries:

     We have  audited  the  accompanying  consolidated  balance  sheets of INSEQ
Corporation  and  Subsidiaries as of December 31, 2005 and 2004, and the related
consolidated  statements of operations,  stockholders'  equity  (impairment) and
cash  flows  for the  years  then  ended.  These  financial  statements  are the
responsibility of the Company's management.  Our responsibility is to express an
opinion on these financial statements based on our audits.

We conducted our audits in accordance with the auditing standards established by
the Public Company Accounting  Oversight Board (United States).  Those standards
require that we plan and perform the audits to obtain reasonable assurance about
whether the financial  statements  are free of material  misstatement.  An audit
includes  examining,  on a test  basis,  evidence  supporting  the  amounts  and
disclosures in the financial  statements.  An audit also includes  assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall 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 consolidated  financial position of INSEQ
Corporation  and  Subsidiaries  as of  December  31,  2005  and  2004,  and  the
consolidated results of their operations and their cash flows for the years then
ended in conformity with accounting  principles generally accepted in the United
States of America.


The accompanying  consolidated  financial statements have been prepared assuming
that the Company will continue as a going  concern.  As more fully  discussed in
Note 2 to the consolidated financial statements, the Company has suffered losses
from  operations and has a working  capital  deficiency as of December 31, 2005.
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 Note 2. The consolidated  financial statements do not include any adjustments
that might result from the outcome of this uncertainty.

As  discussed  in  Note  13  to  the  consolidated  financial  statements,   the
accompanying  consolidated balance sheet as of December 31, 2004 and the related
consolidated  statements of operations,  stockholders'  equity  (impairment) and
cash flows for the year then ended have been restated.



                                   Rosenberg Rich Baker Berman & Company
                                   Rosenberg Rich Baker Berman & Company
                                   Bridgewater, New Jersey
                                   April 14, 2006



<PAGE>

<TABLE>

                       INSEQ CORPORATION AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                  AS OF DECEMBER 31, 2005 AND DECEMBER 31, 2004
<CAPTION>

                                                                       Dec. 31, 2005  Dec. 31, 2004
ASSETS                                                                        (as restated)
                                                                       ----------------------------
Current assets:
<S>                                                                     <C>            <C>
     Cash ...........................................................   $   156,868    $      --
     Accounts receivable ............................................       192,348           --
   Costs and estimated earnings in excess of
       billings on uncompleted contracts ............................       485,596           --
     Material and supply inventory ..................................        58,426           --
     Prepaid expenses ...............................................        30,316           --
  Loans receivable - Related parties ................................         4,334           --
                                                                        -----------    -----------
         Total current assets .......................................       927,888           --
Net fixed assets ....................................................       811,565           --

Other Assets:
     Goodwill .......................................................     2,462,100           --
     License agreements .............................................       110,000           --
     Investment - Unconsolidated subsidiary .........................       265,000           --
     Deferred financing costs, net ..................................        83,653         78,248
     Website costs, net .............................................       235,128        295,160
                                                                        -----------    -----------
         Total other assets .........................................     3,155,881        373,408
                                                                        -----------    -----------
TOTAL ASSETS ........................................................   $ 4,895,334    $   373,408
                                                                        ===========    ===========
LIABILITIES AND STOCKHOLDER'S EQUITY
Current liabilities:
     Accounts payable and accrued expenses ..........................       649,628         54,314
     Convertible dentures, net of discount of $256,760 ..............     1,245,278           --
  Current
portion of mortgages and notes payable ..............................       330,123           --
     Investment payable .............................................       215,000           --
     Loans payable - Related parties ................................        76,426           --
     Billing in excess of costs and estimated earnings
       on uncompleted contracts .....................................       152,163           --
     Estimated losses on uncompleted contracts ......................        24,190           --
     Unearned revenue ...............................................          --              585
                                                                        -----------    -----------
         Total current liabilities ..................................     2,692,808         54,899

Long term liabilities
     Convertible debentures .........................................          --          716,031
     Mortgage and notes payable, net of current portion .............       895,948           --
     Redeemable preferred stock - Related party .....................          --        2,750,000
                                                                        -----------    -----------
         Total long term liabilities ................................       895,948      3,466,031
                                                                        -----------    -----------
TOTAL LIABILITIES ...................................................     3,588,756      3,520,930

Contingencies .......................................................          --             --

STOCKHOLDERS' EQUITY

 Preferred stock, $0.001 par value:
     Series A: 1,000,000 authorized, 1,000,000 issued and outstanding         1,000          1,000
     Series B: 275,000 authorized, 251,507 issued and outstanding ...           252           --
     Series C: 400,000 authorized, 400,000 issued and outstanding ...           400           --
Common stock, $0.001 par value, 5,000,000,000 authorized;
  1,261,216,878 issued and outstanding ..............................     1,261,217         88,232
Additional paid-in capital ..........................................     5,396,011        214,286
Subscription receivable .............................................       (25,000)
Accumulated deficit .................................................    (5,327,302)    (3,451,040)
                                                                        -----------    -----------
TOTAL STOCKHOLDERS' EQUITY (IMPAIRMENT) .............................     1,306,578     (3,147,522)
                                                                        -----------    -----------

TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY ..........................   $ 4,895,334    $   373,408
                                                                        ===========    ===========
</TABLE>

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


<PAGE>

<TABLE>

                       INSEQ CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
           FOR THE YEARS ENDED DECEMBER 31, 2005 AND DECEMBER 31, 2004

<CAPTION>
                                                         Twelve Months    Twelve Months
                                                            Ended            Ended
                                                         Dec. 31, 2005   Dec. 31, 2004
                                                                          (as restated)
                                                        -------------------------------

<S>                                                     <C>              <C>
Revenues ............................................   $   2,427,196    $         585
Cost of revenues ....................................       2,084,966              325
                                                        -------------    -------------
     Gross profit ...................................         342,230              260

Operating expenses
     Selling, general and administrative expenses ...       1,772,834           50,260
     Amortization expense, intangible assets ........          60,032            5,003
                                                        -------------    -------------
         Total operating expenses ...................       1,832,866           55,263
                                                        -------------    -------------

Operating income (loss) .............................      (1,490,636)         (55,003)

Other expenses and financing costs
     Interest expense and financing costs ...........        (385,626)         (17,037)
                                                        -------------    -------------
     Other expense ..................................        (385,626)         (17,037)
                                                        -------------    -------------

Income (loss) before provision for income taxes .....      (1,876,262)         (72,040)

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

Net income (loss) ...................................   $  (1,876,262)   $     (72,040)
                                                        =============    =============

Net income (loss) per common share, basic and diluted   $       (0.00)   $       (0.00)
                                                        =============    =============

Weighted average of shares of common stock
  Outstanding, basic and diluted ....................     794,114,168      106,815,728
                                                        =============    =============
</TABLE>



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


<PAGE>


                       INSEQ CORPORATION AND SUBSIDIARIES
                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
    FOR THE YEARS ENDED DECEMBER 31, 2004 (AS RESTATED) AND DECEMBER 31, 2005

<TABLE>
<CAPTION>

                               Series A                 Series B                 Series C
                            Preferred Stock          Preferred Stock           Preferred Stock
                         ----------------------    ---------------------    ----------------------
                          Shares       Amount       Shares      Amount       Shares       Amount
                          ------       ------       ------      ------       ------       ------
<S>                       <C>          <C>         <C>         <C>           <C>       <C>

Balance at 8/23/04 ....        --       --            --          --             --          --


Issuance of preferred
shares ................   1,000,000    1,000          --          --             --          --
Value of beneficial
conversion feature on
convertible debt ......        --       --            --          --             --          --
Acquisition of
intangible assets .....        --       --            --          --             --          --
Effect of merger and
recapitalization ......        --       --            --          --             --          --
Net loss ..............        --       --            --          --             --          --
                          --------   -------      --------     --------      --------   ---------
Balance at 12/31/04 ...   1,000,000    1,000          --          --             --          --
                          =========  =======      ========     ========      ========   =========

Issuance of Series B
Preferred Stock .......        --       --     251,507    252     --             --          --
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 AirCycle investment by
GreenShift Corporation         --       --        --      --      --             --          --
Exercise of stock
options ...............        --       --        --      --      --             --          --
Issuance of stock for
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    1,261,216,878
                          =========   ======   =======   ====   ========        ===   ==============
</TABLE>

<TABLE>
<CAPTION>

                                                           Stock                         Total
                                                        Subscription  Paid In      Accumulated Stockholders'
                                  Common Stock           Receivable   Capital          Deficit     Deficit
                             ----------------------     ---------------------       ----------------------
                               Shares       Amount       Shares      Amount          Shares       Amount
                               ------       ------       ------      ------          ------       ------
<S>                         <C>             <C>         <C>            <C>         <C>           <C>

Balance at 8/23/04 ....          --            --           --            --            --            --

Issuance of preferred
shares ................          --            --           --            --            --           1,000
Value of beneficial
conversion feature on
convertible debt ......          --            --           --         214,286          --         214,826
Acquisition of
intangible assets .....          --            --           --            --       2,449,837    (2,449,837)
Effect of merger and
recapitalization ......      88,232,363       88,232        --            --        (929,163)     (840,931)
Net loss ..............          --            --           --            --         (72,040)      (72,040)
                            -----------    ---------    ---------   -----------    ----------    ----------

Balance at 12/31/04 ...      88,232,363       88,232         --         214,286    (3,451,040)   (3,147,522)
                          =============    =========    =========   ===========    ==========    ==========

Issuance of Series B
Preferred Stock .......            --           --           --       2,514,817          --       2,515,069
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 ...   $   1,261,217    $ (25,000)   5,396,011   $(5,327,302)    1,306,578             $
                          =============    =========    =========   ===========    ==========    ==========

            The notes to the Consolidated Financial Statements are an
                       integral part of these statements.
</TABLE>



<PAGE>
<TABLE>

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

                                                                       Dec. 31,       Dec. 31,
                                                                        2005           2004
                                                                           (as restated)
                                                                       ------------------------
CASH FLOWS FROM OPERATING ACTIVITIES
<S>                                                                    <C>            <C>
Net loss ...........................................................   $(1,876,262)   $(720,040)
Adjustments to reconcile net loss to net cash used in
  operating activities:
     Amortization of website costs .................................        60,032        5,003
     Amortization of deferred financing costs ......................        62,595        3,402
     Depreciation expense ..........................................        52,738         --
     Amortization of debt discounts ................................       161,374        8,736
     Stock based compensation ......................................     1,141,433         --
Changes in assets and liabilities:
     Decrease in accounts receivable ...............................       473,377         --
     Decrease in inventory .........................................         5,690
     Increase in costs and estimated earnings in
       excess of billings on uncompleted contracts .................      (322,853)        --
     Increase in prepaid expenses ..................................       (14,731)        --
     Increase in deferred financing costs ..........................       (68,000)        --
     Increase in accounts payable and accrued expenses .............      (223,109)      54,314
     Increase in accrued interest ..................................        20,212
     Increase in billings in excess of costs and estimated
       earnings on uncompleted contracts ...........................        26,037         --
     Increase in estimated losses on contracts in progress .........        24,190         --
     Decrease in deferred revenue ..................................          (585)         585
                                                                       -----------    ---------
         Net cash used in operating activities .....................      (477,862)         -0-

CASH FLOWS FROM INVESTING ACTIVITIES
     Net cash acquired from purchase of subsidiaries ...............       277,824         --
     Purchase of  equipment ........................................       (71,196)        --
                                                                       -----------    ---------
         Net cash provided by investing activities .................       206,628          -0-

CASH FLOW FROM FINANCING ACTIVITIES
     Proceeds from issuance of convertible debt ....................       615,000      414,000
     Repayment of convertible debt .................................          --       (414,000)
     Proceeds from notes payable ...................................       176,852         --
     Repayments of notes payable ...................................      (150,912)        --
     Loans from related parties ....................................        22,092         --
     Redemption of preferred stock .................................      (234,930)        --
                                                                       -----------    ---------
         Net cash provided by financing activities .................       428,102         --

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

SUPPLEMENTAL STATEMENT OF NON-CASH
INVESTING AND FINANCING ACTIVITIES:
Conversion of accrued interest to convertible debenture ............        20,212         --
                                                                       ===========    =========
Conversion of debenture into common stock ..........................        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         --
                                                                       ===========    =========
Issuance of preferred Series C stock for convertible debt assumption       400,000         --
Issuance of common shares for acquisition of SRTI ..................     1,956,521         --
                                                                       ===========    =========
Increase in additional paid in capital for investment in
     unconsolidated subsidiary .....................................        50,000         --
                                                                       ===========    =========
Value of beneficial conversion feature on convertible debt .........       186,447      214,026
                                                                       ===========    =========
Value of warrants issued with convertible debenture ................       144,448         --
                                                                       ===========    =========
</TABLE>
       The notes to the consolidated condensed financial statements are an
                       integral part of these statements.
<PAGE>
                       INSEQ CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 1 - BASIS OF PRESENTATION

THE COMPANY

INSEQ  Corporation (the "Company") is a holding company that is the successor by
merger to the company known as Incode Technologies Corporation. INSEQ's business
model is to  facilitate  the  efficient  utilization  of primary  and  secondary
commodities including metals, chemicals, fuels and plastics.

PRINCIPLES OF CONSIOLIDATION

The Company  currently 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.

On September 15, 2005, the Company acquired 1,000 shares (or 100% of outstanding
shares of Common stock) of Separation and Recovery  Technologies,  Inc. ("SRT"),
in exchange for  434,782,608  unregistered  shares of common stock of INSEQ in a
tax-free  stock-for-stock  exchange.  SRT's financial statements are included in
the Company's  consolidated  financial  statements from the date of acquisition.
SRT did not have any operations since its acquisition on September 15, 2005.

SRT  holds  certain  exclusive  rights  to a new  patented  technology  for  the
separation  of  plastics  from  solid  wastes  and  non-exclusive  rights to the
technology  for the separation of plastics from  electronic  equipment and white
appliances.  The new  technology  was developed by Argonne  National  Laboratory
under a contract with the U.S. Department of Energy.

On December 21,  2005,  the Company  acquired  1,500 shares (or 30% of the fully
diluted capital stock) of Aircycle  Corporation  from GreenShift  Corporation in
exchange for 10% of INSEQ's fully diluted  capital stock.  The Company  accounts
for this investment using the equity method of accounting.

Aircycle offers recycling services and  transportation  throughout North America
to assist facilities in the proper disposal of lamps, ballasts,  batteries,  and
computer hardware.

The Company holds two additional subsidiaries:  Incode Corporation, and Intrance
Corporation,  the  latter  being a holding  company  through  which  Incode  had
administered  its online dating  businesses.  These businesses are not currently
generating  any revenue and the Company's  current plan is to use the underlying
technologies  of these  businesses to enhance the  development  of its secondary
commodities  trading  platform  and  then  sell  these  former  businesses  to a
strategic  company and/or service as the Company  focuses on the  development of
its  secondary  commodities  trading  portal  and the above  mentioned  business
development activities.

The accompanying consolidated financial statements include all accounts of INSEQ
Corporation,   Warnecke  Design  Services,  Inc.,  Warnecke  Rentals,  LLC,  and
Separation  and  Recovery  Technologies,   Inc.  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 $1,872,262 during the year ended December 31, 2005, 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>
                       INSEQ 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.

INVENTORIES

Material and supply  inventory  represents  raw materials on hand to be used for
the production of products and equipment for sale.  Inventory is recorded at the
lower of cost or market.

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.  Management
currently believes all accounts are fully collectible.

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. There were no impairments for the year ended December 31, 2005.

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>
                       INSEQ 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,  2005,  the  Company's  two largest  customers
accounted for 24.5% and 24.4% of the Company's net revenues.  No other  customer
accounted for more than 10% of net revenues.

FAIR VALUE OF FINANCIAL INSTRUMENTS

The carrying  amounts  reported in the balance sheet as of December 31, 2004 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

WDS warranties its equipment for defects in design,  materials,  and workmanship
generally  for a period 12 months  from date placed in  service.  Provision  for
estimated  warranty  costs is recorded  as  incurred  and is included in cost of
goods sold.  There were no  estimated  warranty  liabilities  as of December 31,
2005 and December 31, 2004.

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  1,500,000,000  shares issuable under
outstanding warrants and debt conversions as of December 31, 2005.



<PAGE>

                       INSEQ 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.

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>

                       INSEQ 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
                                           ===========

SEPARATION AND RECOVERY TECHNOLOGIES, INC.

On  September  15,  2005  the  Company  acquired  1,000  shares  (or 100% of the
outstanding  shares of common  stock) of Separation  and Recovery  Technologies,
Inc. ("SRT"), in exchange for 434,782,608 unregistered shares of common stock of
INSEQ in a tax-free stock-for-stock exchange. SRT holds certain exclusive rights
to a new patented  technology  for the  separation of plastics from solid wastes
and  non-exclusive  rights to the technology for the separation of plastics from
electronic  equipment and white appliances.  The new technology was developed by
Argonne National Laboratory under a contract with the U.S. Department of Energy.
The transaction was accounted for as an acquisition 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:

Cash ................   $  290,000
Prepaid Consulting ..       15,000
License .............       95,000
Goodwill ............    1,556,521
                        ----------
 Total Purchase Price   $1,956,521
                        ==========

AIR CYCLE CORPORATION On December 21, 2005 INSEQ acquired GreenShift's 30% stake
in Air Cycle  Corporation  in return for 10% of INSEQ's  fully  diluted  capital
stock, which was executed by amending GreenShift's dilution protection agreement
with INSEQ from 70% to 80%. The purchase  price for the  acquisition of Aircycle
Corporation by Greenshift  Corporation  ("Greenshift")  was $265,000 ($50,000 in
cash and $215,000 payable).  Immediately following  Greenshift's  acquisition of
Aircycle Corporation,  Greenshift transferred it's ownership to the Company. The
Company recorded an investment in Aircycle  Corporation at Greenshift's  cost of
$265,000,  an investment  payable of $215,000 and a $50,000  increase in paid-in
capital. The investment payable is due according to the following schedule:  (a)
$50,000 on or before  January 15,  2006,  (b) $50,000 on or before  February 15,
2006,  (c)  $50,000 on or before  March 15,  2006,  and (d) $65,000 on or before
April 15, 2006. Aircycle offers recycling services and transportation throughout
North America to assist  facilities in the proper  disposal of lamps,  ballasts,
batteries, and computer hardware. The Company accounts for the investment in Air
Cycle using the equity method of accounting.

EFFECTIVENESS OF REINCORPORATION MERGER

The Company's reincorporation merger with Incode Technologies Corporation became
effective July 13, 2005. The purpose of this  transaction  was to (1) change the
name of the Company to "INSEQ  Corporation,"  (2) increase the authorized common
shares from  2,000,000,000 to 5,000,000,000,  and (3) change the Company's state
of incorporation from Nevada to Delaware.  The Company commenced trading on July
15, 2005, on the OTC Bulletin Board  maintained by the NASD under its new symbol
INSQ.

The results of operations  for the acquired  entities are included from the June
1, 2005 for Warnecke and from  September  15, 2005 for SRTI in the  consolidated
statement of  operations.  The  following  pro forma  results for the year ended
December  31, 2005 are  presented as if the  acquisition  was made on January 1,
2005, for the year ended.

                        2005            2004
                      --------       ---------
Net Sales ........   $ 4,705,410    $ 5,047,672
Net Loss .........    (1,619,896)      (757,234)
Net Loss per Share         (0.00)         (0.01)

<PAGE>
                       INSEQ CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 5 - PROPERTY AND EQUIPMENT

Property, plant and equipment consist of the following at December 31, 2005:


Land and Building ...........   $ 540,000
Equipment ...................     152,262
Vehicle .....................       7,000
Computer Equipment ..........      93,374
Leasehold Improvements ......      71,667
                                ---------
                                  864,303
Less Accumulated Depreciation     (52,738)
                                ---------

Net Fixed Assets ............   $ 811,565
                                =========

Depreciation  expense  charged  to  operations  was  $52,738  for the year ended
December 31, 2005.

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, 2005  accounted  for under the  percentage  of
completion method of accounting.


Cost incurred on contracts in progress   $ 5,065,263
Estimated earnings (losses) ..........      (136,361)
                                         -----------
                                         -----------
                                           4,928,902
Less billings to date ................     4,595,469
                                         -----------
                                         -----------
                                         $   333,433
                                         ===========

The above accounts are shown in the accompanying consolidated balance sheets
under these captions at December 31, 2005.


Costs and estimated earnings in excess of
 billings on uncompleted contracts                      $ 485,596

Billings in excess of costs and estimated
 earnings on uncompleted contracts                       (152,163)
                                                        ---------
                                                        $ 333,433
                                                        =========

NOTE 7 - CONVERTIBLE DEBENTURES

CORNELL DEBENTURE

In January,  2004, BIB Holdings,  Ltd., the  predecessor to Incode  Technologies
Corporation  ("Incode"),  our immediate  predecessor,  entered into a Securities
Purchase  Agreement with Cornell Capital  Partners for the sale of $1,200,000 in
convertible debentures (the "Cornell Debenture"). The debentures issued pursuant
to the Cornell  Agreement  accrue  interest at 5% per annum,  mature three years
from the date of issuance,  and are convertible into the Company's common stock,
at the  investor's  option at the lower of $0.204 or eighty percent (80%) of the
average of the three (3) lowest  daily  volume  weighted  average  prices of the
common stock for the five (5) trading days immediately  preceding the conversion
date. The balance at December 31, 2005 and December 31, 2004 was $421,321. There
have been no conversions during the twelve months ended December 31, 2005.

HIGHGATE DEBENTURES

On November 23, 2004, the Company entered into a Convertible  Debenture Purchase
Agreement  pursuant  to which  the  Company  issued  convertible  debentures  to
Highgate  House  Funds,  Ltd.,  that as of December  31,  2004,  had a principal
balance of $500,000. During the year ended December 31, 2005, the Company issued
an additional $330,000 debenture and the debenture holder converted $54,365 into
47,951,907  shares of the Company's  common stock.  Effective  June 1, 2005, the
Company entered into an Amended and Restated  Securities Purchase Agreement with
Highgate  whereby the  outstanding  principal  balance of  $775,635  and accrued
interest of $20,082 were exchanged for a convertible  debenture in the amount of
$795,717.  A loss of $2,905 was recorded n this exchange.  The debentures issued
pursuant to this  agreement bear annual  interest at 10%,  mature two years from
the date of issuance,  and are convertible  into the Company's common stock at a
fixed  conversion  price of $0.001 per share.  The outstanding  balance on these
debentures at December 31, 2005 and December 31, 2004 was $795,717 and $500,000,
respectively.

<PAGE>
                       INSEQ CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 7 - CONVERTIBLE DEBENTURES (CONTINUED)

Due to the convertible nature of the $795,717 convertible debenture, the Company
recorded  a  charge  due  to a  beneficial  conversion  feature  of  $79,572  in
accordance  with EITF Issue No.  00-27,  "Application  of EITF Issue No. 98-5 to
Certain Convertible Instruments". The value of the beneficial conversion feature
was  measured  using the  intrinsic  value and is being  amortized  to  interest
expense over the life of the debenture. The amount amortized to interest expense
in 2005 was $23,212. The unamortized discount at December 31, 2005 is $56,360.

The $795,717 debenture was also issued with 300,000,000 warrants. The warrants
have been valued on a Black-Scholes calculation using the following assumptions:

Fair market value of stock   $     0.001
Exercise price ...........   $     0.003
Dividend yield ...........         0.00%
Risk free interest rate ..         2.00%
Expected volatility ......           69%
Expected life ............      10 years

In accordance with APB 14, "Accounting for Convertible Debt and Debt Issued with
Stock Purchase  Warrants",  the proceeds of the $795,717  convertible  debenture
have been allocated to the convertible debt and warrants based on their relative
fair  values.  The  issuance  of the  warrants  resulted  in a  discount  to the
convertible  debenture  of $144,448 and is being  amortized to interest  expense
over the life of the debenture. The amount amortized to interest expense in 2005
was $24,075. The unamortized discount at December 31, 2005 is $120,373.

Effective July 7, 2005, INSEQ entered into Securities Purchase  Agreement,  with
Highgate House Fund,  Ltd., for the sale of $285,000 in convertible  debentures.
The debentures  issued  pursuant to this agreement bear annual  interest at 10%,
mature  two  years  from  the date of  issuance,  and are  convertible  into the
Company's common stock a fixed conversion price of $0.004 per share.

Due to the convertible nature of the $285,000 convertible debenture, the Company
recorded  a  charge  due to a  beneficial  conversion  feature  of  $106,875  in
accordance  with EITF Issue No.  00-27,  "Application  of EITF Issue No. 98-5 to
Certain Convertible Instruments". The value of the beneficial conversion feature
was  measured  using the  intrinsic  value and is being  amortized  to  interest
expense over the life of the debenture. The amount amortized to interest expense
in 2005 was $26,717. The unamortized discount at December 31, 2005 is $80,027.

The  principal  and  interest on both the  Cornell  Debenture  and the  Highgate
Debenture may be converted by the holder into shares of INSEQ common  stock.  If
any portion of either  debenture  remains  outstanding the maturity date of each
debenture,  INSEQ must either pay the principal and accrued  interest or convert
same into  shares of common  stock at the fixed  conversion  price of $0.001 and
$0.004  per  share  for  the  June 1,  2005  and the  July  7,  2005  debenture,
respectively.  INSEQ's  obligations under the debentures are secured by a pledge
of all of INSEQ's assets.

<PAGE>
                       INSEQ CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

Following is a summary of long-term debt at December 31, 2005:
<S>                                                                            <C>
Note payable at 7% interest with the principal
and interest due May 8, 2006.  This note is personally
guaranteed by the president of Warnecke Design, Inc. .......................   $   104,152

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
property with a book
value of $533,309  .........................................................        42,077

Note payable at 7% interest, due in annual installments
of $150,000 every January.  Interest is payable monthly.  The note
is secured by a mortgage on property with a book value of $533,309
and guaranteed by the president of Warnecke Design, Inc. ...................
Subsequent to the year ended December 31, 2005, this note
was in default when the January 2006 payment was not made ..................
There is no default penalty per the agreement and the note
holder agreed to extend the January 2006 payment until
June 2006  .................................................................       595,937

10% installment loan payable in monthly installments of
$2,971 including interest.  Secured by equipment with a
book value of $61,106  .....................................................        59,600

5.22% installment loan due in monthly installments
of $922 including interest .................................................        29,778

7.99% installment loan due in monthly installments
of $317 including interest .................................................         5,912

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  ..................       169,489

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  ......................       219,126
                                                                               -----------
                                                                                 1,226,071
Less Current Maturities ....................................................      (330,123)
                                                                               -----------
Long-term Debt, net of Current Maturities ..................................   $   859,948
                                                                               ===========
</TABLE>

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

      2006                       330,123
      2007                       224,736
      2008                       188,496
      2009                       179,851
      2010                        23,848
Thereafter                       243,017
                              ----------
                              $1,190,071

<PAGE>

                   INSEQ CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 9 - RELATED PARTY TRANSACTIONS

Kevin  Kreisler,  INSEQ's  chairman,  is also the chairman  and chief  executive
officer  of  GreenShift  Corporation  ("GreenShift").   James  Grainer,  INSEQ'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
INSEQ and provides  management services to INSEQ. 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,  INSEQ 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 $0.001 per share.

During the year ended December 31, 2005,  INSEQ's  chairman  advanced $43,085 to
INSEQ 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 INSEQ's chairman were $21,426.

During 2004, Mr. Grainer acted as an  independent  consultant to INSEQ.  In that
role,  he  assisted  in   negotiating   and  completing  a  series  of  material
transactions  for INSEQ.  As of December 31, 2004,  INSEQ had accrued $50,000 of
compensation payable to Mr. Grainer.  During the six months ended June 30, 2005,
Mr. Grainer  received  $25,000 in cash and  50,000,000  shares of Company common
stock at $0.0011 per share for his prior consulting services.

During  2004,  INSEQ  issued  1000  shares of common and  1,000,000  of Series A
Preferred Stock to Incandent Capital,  LLC ("Incandent") in conjunction with the
acquisition  of Incode  Corporation by BIB Holdings,  Ltd.,  the  predecessor to
Incode Technologies Corporation ("Incode"),  our immediate predecessor.  INSEQ's
chairman  is the sole  member of  Incandent.  On April 1,  2005,  Mr.  Kreisler,
through  Incandent,  made a  capital  contribution  of its  1,000,000  shares of
INSEQ's Series A Preferred Stock to GreenShift in connection  with  GreenShift's
initiation of operations as a regulated  investment company under the Investment
Company Act of 1940.

In connection  with the April 1, 2005  transfer,  and in  consideration  for the
February  2005  agreement  by INSEQ's  chairman  to  guaranty  repayment  of the
Highgate  Debentures,  the Board of Directors of INSEQ  amended the terms of the
Series A  Preferred  Stock.  The  Series A  Preferred  Stock was  amended  to be
convertible  into 875  shares of INSEQ'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 INSEQ with bridge financing of $50,000 to
assist INSEQ with its completion of its acquisition of Warnecke Design Services,
Inc.  ("Warnecke").  INSEQ had been unable to secure  suitable  financing due to
INSEQ'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 INSEQ which INSEQ then used to close
the Warnecke  acquisition in conjunction  with the issuance by INSEQ 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  INSEQ  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,  INSEQ 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 INSEQ equal to 70%
of the fully diluted capital stock of INSEQ.

During 2004, INSEQ's subsidiary,  Intrance Corporation, issued 275,000 shares of
a Series A Preferred Stock to Candent  Corporation in consideration  for INSEQ's
acquisition of certain assets from Candent. On March 31, 2005, these shares, net
of 23,493  preferred  shares redeemed for $234,930 in March 2005, were exchanged
for shares of INSEQ's Series B Preferred Stock that may be converted after April
1, 2008 into 77 shares of the  Company's  common  stock  with a  provision  that
adjusts this  conversion  ratio the so that the Series B Preferred Stock will be
convertible into 4.95% of the common shares  outstanding  upon  conversion.  The
Series B Preferred  Stock is also subject to adjustment as necessary so that the
market  value of the common  shares into which the Series B  Preferred  Stock is
convertible  is no less than  $2,515,070.  Effective June 30, 2005, the Series B
Preferred Stock was amended to provide for the final  conversion and elimination
of all these  adjustment  provisions  on December 31,  2005.  The holder of each
share  of  Series B  Preferred  Stock is  entitled  to cast at any  shareholders
meeting the number of votes that  equals the number of common  shares into which
the Series B share could be converted.  The president of Candent  Corporation is
the wife of INSEQ's chairman.  The stock of Candent Corporation is held in trust
for the benefit of its president.

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


<PAGE>

                       INSEQ CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 9 - RELATED PARTY TRANSACTIONS (CONTINUED)

During the year ended December 31, 2005,  Lawrence  Kreisler,  the father of the
Company's CEO,  exercised  50,000,000  options with exercise price of $0.0005 in
exchange for a subscription receivable of $25,000.

INSEQ 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 INSEQ.  The agreement called for INSEQ 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 calls for ongoing  services
relative to the development of INSEQ's secondary commodities trading platform at
the  annualized  rate of  $100,000.  The  president  of Candent is the spouse of
INSEQ's chairman.  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.
Additionally,  150,000,000  performance-based  options exercisable at $0.001 per
share  were  issued  to  Candent  in April  2005.  These  options  will  vest in
connection with the successful launch by INSEQ of its new secondary  commodities
trading platform.

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.

During  the year  ended  December  31,  2005,  GreenShift  Corporation  advanced
$141,438  to  INSEQ  for  operating   expenses  and  INSEQ  repaid  $145,772  to
GreenShift,  resulting in a balance due from GreenShift of $4,334.  This advance
is unsecured, bears interest at 6% and is considered payable on demand.

NOTE 10 - INCOME TAXES

INSEQ  Corporation has incurred losses,  which have generated net operating loss
carryforwards  for INSEQ as of December 31, 2005. These loss  carryforwards  are
subject to limitation in future years should  certain  ownership  changes occur.
For the years ended  December  31,  2005 and 2004,  INSEQ'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, 2005 and 2004  consisted of
state income tax provisions. Deferred tax assets are as follows:

                                   12/31/2005   12/31/2004
                                   ----------   ----------

Deferred Tax Asset:

Net operating loss carryforwards   $ 690,557    $ 26,000
                                   ---------    --------

Total deferred tax assets ......     690,557      26,000
Less: Valuation allowance ......    (690,557)    (26,000)
                                   ---------    --------

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

INSEQ has federal net operating loss carry-forwards of approximately $1,726,400
which expire through December 31, 2025.

NOTE 11 - COMMITMENTS AND CONTINGENCIES

MINIMUM ANNUAL ROYALTIES

On  September  15,  2005  the  Company  acquired  1,000  shares  (or 100% of the
outstanding  shares of common  stock) of Separation  and Recovery  Technologies,
Inc.  ("SRT").  SRT is  party  to a  license  agreement  with  Argonne  National
Laboratory under which SRT has exclusive rights to patented technologies for the
preferential  separation  of  plastics  from mixed  waste  streams.  The license
agreement requires royalties and fees to Argonne including the following minimum
annual royalties:

        Year                  Minimum Royalties
        ----                  -----------------
        2006                        $     0
        2007                        $15,000
        2008                        $25,000
        2009                        $55,000
        2010                        $75,000
        2011                       $100,000
<PAGE>


                       INSEQ CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 12 - SUBSEQUENT EVENTS

CONVERTIBLE DEBENTURES

On February 2, 2006, Greenshift  Corporation,  INSEQ's controlling  shareholder,
agreed to assume the  Convertible  Debentures  that INSEQ had issued to Highgate
House Funds, Ltd., in the amount of $1,150,369,  which includes accrued interest
of $89,734.  Highgate House Funds,  Ltd. released INSEQ from all liability under
the Debentures.

Additionally,  on February 2, 2006,  Cornell  Capital  Partners,  LP,  converted
$404,139 of debt into common stock. The amount converted equaled the entirety of
the principal and accrued interest on the Convertible  Debenture issued by INSEQ
to Cornell.

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

SERIES B PREFERRED STOCK

On March 13, 2006 Candent  Corporation  surrendered  to INSEQ 251,507  shares of
Series B Preferred  Stock that INSEQ 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  INSEQ  common  stock,  and the  holder  had the  right  to  receive
additional  shares  until the  market  value of the  INSEQ  shares  received  on
conversion totaled $2,750,000. Candent surrendered the shares in response to the
decision by INSEQ  management  to terminate the business  operations  that INSEQ
acquired from Candent in exchange for the Series B preferred shares.

APPOINTMENT OF PRINCIPAL OFFICERS

On March 13, 2006 the Board of  Directors  of INSEQ  Corporation  elected  Kevin
Kreisler to serve as INSEQ's Chief Executive Officer.  Mr. Kreisler has been the
Chairman of the Board of INSEQ since March  2005.  James  Grainer,  who had been
INSEQ's Chief Executive Officer, will remain the Chief Financial Officer.

NOTE 13 - RESTATEMENT

The Company has restated its financial  statements  for the year ended  December
31, 2004. The restated  financial  results  reflect prior period  adjustments to
correct accounting treatment and other errors, as follows:

During 2005, the Company  determined  that it had not properly  accounted for an
embedded  beneficial  conversion  feature related to the issuance of the Cornell
Debentures in January 2004.  The  beneficial  conversion  feature of $214,026 is
amortized over the term of the debenture,  resulting in a $205,290 debt discount
as of December 31, 2004 and a reduction  of interest  expense of an equal amount
in 2004.

During 2005, the Company determined an error was made in determining the opening
balance of equity upon the merger and  recapitalization  in 2004.  The beginning
balance of common  stock as of August 23,  2004 was  determined  to be  $88,232,
resulting in an adjustment of $129,011.

The impact of these adjustments of the Company's financial results as originally
reported is summarized below:

        Year Ended December 31, 2004:
                                               As Reported      As Restated
                                               -----------      -----------
Convertible Debt, net of discount of $205,290   $ 921,321      $   716,031
Common Stock ................................   $ 217,243      $    88,232
Accumulated Deficit ......................... $(3,785,341)     $(3,451,040)
Net loss ....................................    (277,330)         (72,040)
Net loss per common share ...................   $   (0.00)     $     (0.00)


                       INSEQ CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 14 - OPTIONS AND WARRANTS

The  following  is a table of  stock  options  and  warrants  outstanding  as of
December 31, 2004 and December 31, 2005
<TABLE>
<CAPTION>

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

<S>                                                   <C>                <C>
Outstanding at December 31, 2003 .............               --          $  --
   Granted at fair value .....................               --             --
   Forfeited .................................               --             --
   Exercised .................................               --             --
                                                      -----------        -------
Outstanding at December 31, 2004 .............               --          $  --
   Granted at fair value .....................        637,500,000         .00029
   Forfeited .................................               --             --
   Exercised .................................         50,000,000)        .0005
                                                      -----------        -------
Outstanding at December 31, 2005 .............        587,000,000        $.00031
</TABLE>

<TABLE>

Summarized information about INSEQ's stock options outstanding at December 31,
2005 is as follows:
<CAPTION>

          Exercise Prices              Number of         Weighted         Weighted                    Exercisable
                                                         Average
                                        Options         Remaining         Average        Number of Options     Weighted Average
                                      Outstanding    Contractual Life  Exercise Price                           Exercise Price
----------------------------------------------------------------------------------------------------------------------------------
<S>                                      <C>                     <C>            <C>            <C>                         <C>
$0.0001                                  337,500,000             9.00           0.0001         337,500,000                 0.0001
$0.0005                                  250,000,000             9.00           0.0005         250,000,000                 0.0005
                                    -----------------                                  --------------------
                                         587,500,000                                           587,500,000
</TABLE>

Options  exercisable  at  December  31, 2005 were  587,500,000,  with a weighted
average  exercise  price of  $0.00031  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.





<PAGE>


                       INSEQ 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>


                       INSEQ CORPORATION AND SUBSIDIARIES
                                    PART III

ITEM 9.  DIRECTORS AND EXECUTIVE OFFICERS

Name                      Age      Position
--------------------------------------------------------------------------------
Kevin Kreisler               33  Chairman, Chief Executive Officer

James Grainer                51  President, Chief Financial Officer, Director


Kevin  Kreisler - Mr.  Kreisler has over fifteen years of  diversified  business
experience  specifically  including the operation of publicly-traded  companies.
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  Veridium  Corporation,  INSEQ  Corporation,  and  General
Ultrasonics  Corporation.  Mr.  Kreisler  is also  Chairman  of  Enviro-Sciences
Corporation,  and a  member  of the  board  of  directors  of  Ovation  Products
Corporation, Aerogel Composite, Inc., Sterling Planet, Inc., and TerraPass, Inc.
Mr. Kreisler served as Veridium's  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 INSEQ 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  &  Touche,  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, 2005.




<PAGE>
ITEM 10.          EXECUTIVE COMPENSATION

The following table sets forth compensation information for INSEQ's executive
officers during the years indicated as relevant. As of December 31, 2005, no
executive officer held shares of exercisable options for INSEQ'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                      2005  $      --  $      --    $    --                150,000,000       $     --
Chairman and Chief Executive Officer2004         --         --         --                        --              --
                                    2003         --         --         --                        --              --

James Grainer                       2005         --         --         --                150,000,000             --
Chief Financial Officer             2004         --         --         --                        --              --
                                    2003         --         --         --                        --              --
</TABLE>

EMPLOYMENT AGREEMENTS

Incode'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 March 30, 2006 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 March 30, 2006 there were  367,243,231  shares of BIB's
common stock  issued and  outstanding  as well as  1,000,000  shares of Series A
Preferred Stock convertible into 200,000,000  common shares. 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                                                               91,000,000            6.8% Common Stock
                                                                                    --        0% Series A Preferred

Kevin Kreisler (1)                                                          12,500,000              0% Common Stock
                                                                             1,000,000      100% Series A Preferred (1)
                                                                               400,000      100% Serice C Preferred (1)

Current executive officers and directors as a group (2 persons)            103,500,000            6.8% Common Stock
                                                                             1,000,000      100% Series A Preferred
                                                                               400,000      100% Series C 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

Kevin  Kreisler,  INSEQ's  chairman,  is also the chairman  and chief  executive
officer  of  GreenShift  Corporation  ("GreenShift").   James  Grainer,  INSEQ'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
INSEQ and provides  management services to INSEQ. 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,  INSEQ 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 $0.001 per share.

During the year ended December 31, 2005,  INSEQ's  chairman  advanced $43,085 to
INSEQ 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 INSEQ's chairman were $21,426.

During 2004, Mr. Grainer acted as an  independent  consultant to INSEQ.  In that
role,  he  assisted  in   negotiating   and  completing  a  series  of  material
transactions  for INSEQ.  As of December 31, 2004,  INSEQ had accrued $50,000 of
compensation payable to Mr. Grainer.  During the six months ended June 30, 2005,
Mr. Grainer  received  $25,000 in cash and 125,000,000  shares of Company common
stock at $0.0011 per share for his prior consulting services.

During  2004,  INSEQ  issued  1000  shares of common and  1,000,000  of Series A
Preferred Stock to Incandent Capital,  LLC ("Incandent") in conjunction with the
acquisition  of Incode  Corporation by BIB Holdings,  Ltd.,  the  predecessor to
Incode Technologies Corporation ("Incode"),  our immediate predecessor.  INSEQ's
chairman  is the sole  member of  Incandent.  On April 1,  2005,  Mr.  Kreisler,
through  Incandent,  made a  capital  contribution  of its  1,000,000  shares of
INSEQ's Series A Preferred Stock to GreenShift in connection  with  GreenShift's
initiation of operations as a regulated  investment company under the Investment
Company Act of 1940.

In connection  with the April 1, 2005  transfer,  and in  consideration  for the
February  2005  agreement  by INSEQ's  chairman  to  guaranty  repayment  of the
Highgate  Debentures,  the Board of Directors of INSEQ  amended the terms of the
Series A  Preferred  Stock.  The  Series A  Preferred  Stock was  amended  to be
convertible  into 875  shares of INSEQ'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 INSEQ with bridge financing of $50,000 to
assist INSEQ with its completion of its acquisition of Warnecke Design Services,
Inc.  ("Warnecke").  INSEQ had been unable to secure  suitable  financing due to
INSEQ'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 INSEQ which INSEQ then used to close
the Warnecke  acquisition in conjunction  with the issuance by INSEQ 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  INSEQ  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,  INSEQ 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 INSEQ equal to 70%
of the fully diluted capital stock of INSEQ.

During 2004, INSEQ's subsidiary,  Intrance Corporation, issued 275,000 shares of
a Series A Preferred Stock to Candent  Corporation in consideration  for INSEQ's
acquisition of certain assets from Candent. On March 31, 2005, these shares, net
of 23,493  preferred  shares redeemed for $234,930 in March 2005, were exchanged
for shares of INSEQ's Series B Preferred Stock that may be converted after April
1, 2008 into 77 shares of the  Company's  common  stock  with a  provision  that
adjusts this  conversion  ratio the so that the Series B Preferred Stock will be
convertible into 4.95% of the common shares  outstanding  upon  conversion.  The
Series B Preferred  Stock is also subject to adjustment as necessary so that the
market  value of the common  shares into which the Series B  Preferred  Stock is
convertible  is no less than  $2,515,070.  Effective June 30, 2005, the Series B
Preferred Stock was amended to provide for the final  conversion and elimination
of all these  adjustment  provisions  on December 31,  2005.  The holder of each
share  of  Series B  Preferred  Stock is  entitled  to cast at any  shareholders
meeting the number of votes that  equals the number of common  shares into which
the Series B share could be converted.  The president of Candent  Corporation is
the wife of INSEQ's chairman.  The stock of Candent Corporation is held in trust
for the benefit of its president.

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


<PAGE>
ITEM 12.           CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS (continued)


During the year ended  December 31, 2005  Lawrence  Kreisler,  the father of the
Company's CEO,  excercised  50,000,000 options with exercise price of $0.0005 in
exchange for a  subscription  receivable  of $25,000.  INSEQ 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
INSEQ.  The  agreement  called for INSEQ 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 calls for ongoing services  relative to the development
of INSEQ's  secondary  commodities  trading  platform at the annualized  rate of
$100,000.   The  president  of  Candent  is  the  spouse  of  INSEQ's  chairman.
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.  Additionally,
150,000,000  performance-based  options  exercisable  at $0.001  per share  were
issued to Candent in April 2005.  These options will vest in connection with the
successful  launch by INSEQ of its new secondary  commodities  trading platform.
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.

During  the year  ended  December  31,  2005,  GreenShift  Corporation  advanced
$141,438  to  INSEQ  for  operating   expenses  and  INSEQ  repaid  $145,772  to
GreenShift,  resulting in a balance due from GreenShift of $4,334.  This advance
is unsecured, bears interest at 6% and is considered payable on demand.



<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.

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

     Rosenberg  Rich Baker  Berman & Company,  P.A. was retained by INSEQ as its
     independent  accountant on January 21, 2005. Prior to that date,  Rosenberg
     Rich Baker  Berman & Company had not  performed  any services for Incode or
     its subsidiaries.

         Audit Fees

          Rosenberg  Rich  Baker  Berman &  Company,  P.A.  billed  $9000 to the
          Company for professional  services  rendered for the audit of our 2005
          financial statements.

         Audit-Related Fees

          Rosenberg Rich Baker Berman & Company,  P.A.  billed $0 to the Company
          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 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 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.

INSEQ CORPORATION
By:               /S/      KEVIN KREISLER
                  -----------------------
                           KEVIN KREISLER
                           Chairman and Chief Executive Officer
Date:                      April 17, 2006

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 17, 2006

                  /S/      KEVIN KREISLER
                  -----------------------
By:                        KEVIN KREISLER
                           Director
Date:                      April 17, 2006