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

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

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


                QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (D)
                     OF THE SECURITIES EXCHANGE ACT OF 1934
                   FOR THE FISCAL QUARTER ENDED JUNE 30, 2006

                         COMMISSION FILE NO. : 001-16207



                            GS AGRIFUELS CORPORATION
--------------------------------------------------------------------------------
        (Exact name of Small Business Issuer as specified in its charter)


Delaware                                                            98-0226479
--------------------------------------------------------------------------------
(State of other jurisdiction of                               (IRS Employer
incorporation or organization)                               Identification No.)


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


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





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

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

The number of outstanding shares of $0.0001 par value common stock as of August
21, 2006 was 2,217,500.

Transitional Small Business Disclosure Format:  Yes  No  X









<PAGE>




                            GS AGRIFUELS CORPORATION
                         QUARTERLY REPORT ON FORM 10QSB
                   FOR THE FISCAL QUARTER ENDED JUNE 30, 2006



<TABLE>

                                TABLE OF CONTENTS

<CAPTION>

                                                                                                 Page No

Part I     Financial Information
<S>                                                                                                <C>

Item 1.    Financial Statements (unaudited for June 30, 2006 and 2005)
              Consolidated Balance Sheet - June 30, 2006............................................4
              Consolidated Statements of Operations -
                 Three and Six Months Ended June 30, 2006 and 2005 .................................5
              Consolidated Statements of Cash Flow -
                 Six Months Ended June 30, 2006 and 2005 ...........................................6
              Notes to Consolidated Financial Statements ...........................................7
Item 2.    Management's Discussion and Analysis or Plan of Operation ..............................11
Item 3.    Controls and Procedures ................................................................17

Part II    Other Information
Item 1.    Legal Proceedings ......................................................................19
Item 2.    Changes in Securities ..................................................................19
Item 3.    Defaults Upon Senior Securities ........................................................19
Item 4.    Submission of Matters to a Vote of Security Holders ....................................19
Item 5.       Other Information ...................................................................19
Item 6.       Exhibits and Reports of Form 8K .....................................................19

</TABLE>

















<PAGE>


                         PART I - FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS JUNE 30, 2006 (UNAUDITED) AND 2005 (UNAUDITED)







<PAGE>

<TABLE>

                     GS AGRIFUELS CORPORATION AND SUBSIDIARY
                           CONSOLIDATED BALANCE SHEET
                         AS OF JUNE 30, 2006 (UNAUDITED)
<CAPTION>

                                                                     06/30/06
                                                                   ------------
ASSETS:
Current assets:
<S>                                                                <C>
   Cash ........................................................   $ 4,885,990
                                                                   -----------
   Total current assets ........................................     4,885,990
Other assets:
  Project development costs ....................................        20,000
  Deferred financing fees ......................................       587,397
  Other assets .................................................        30,100
                                                                   -----------
           Total Other Assets ..................................        50,100
                                                                   -----------

TOTAL ASSETS ...................................................   $ 5,523,487
                                                                   ===========

LIABILITIES AND STOCKHOLDERS' DEFICIENCY
Current liabilities:
   Accounts payable ............................................       156,203
   Accrued expenses ............................................        17,629
   Accrued interest - related party ............................        15,082
   Due to related party ........................................       105,929
   Convertible debentures - related party (net of discount) ....       206,970
   Derivative liability ........................................       106,779
                                                                   -----------
       Total current liabilities ...............................             $
                                                                   -----------
                                                                       608,592

   Long term convertible debenture - (net of discount) .........     7,419,256
                                                                   -----------

TOTAL LIABILITIES ..............................................   $ 8,027,848
                                                                   -----------

Stockholders' deficiency:
   Preferred Stock, par value - $0.0001
     Series A convertible preferred stock, par value - $0.0001
       400,000 shares authorized, 37,350 shares
         issued and outstanding 4 Series C convertible
         preferred stock, par value - $0.0001 10,000,000 shares
       authorized, 1,000,000 shares issued and outstanding 1,000
   Common Stock, par value - $0.0001
       100,000,000 shares Authorized, 2,217,500
         shares issued and outstanding .........................           222
   Additional paid-in capital ..................................      (624,855)
Accumulated deficit ............................................    (2,898,613)
Deficit accumulated during development stage ...................      (231,829)
                                                                   -----------
       Total stockholders' deficiency ..........................    (2,504,361)

   TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIENCY ..............   $ 5,523,487
                                                                   ===========



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


<PAGE>

<TABLE>

                    GS AGRIFUELS CORPORATION AND SUBSIDIARY
                      CONSOLIDATED STATEMENTS OF OPERATIONS
          FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2006 (UNAUDITED)
                              AND 2005 (UNAUDITED)
<CAPTION>

                                                                                                 Cumulative
                                                                                                Amounts Since
                                                                                                 Inception of
                                              FOR THE THREE MONTHS        FOR THE SIX MONTHS     Development
                                                   ENDING                     ENDING             Stage 4/1//06
                                             6/30/06      6/30/05      6/30/06     6/30/05       to 6/30/06
                                             -------      -------      -------     -------       ----------

<S>                                         <C>          <C>          <C>          <C>          <C>
Revenues: ...............................   $    --      $    --      $    --      $    --      $    --

                                                                                                ---------
Cost of Revenues ........................        --           --           --           --           --
                                            ---------    ---------    ---------    ---------    ---------
Gross Profit ............................        --           --           --           --           --


Operating Expenses:
Selling, General and Administrative .....     181,200       74,244      191,220      148,244      181,200
                                                         ---------    ---------    ---------    ---------
Total operating expenses ................     181,200       74,244      191,220      148,244      181,200
                                            ---------    ---------    ---------    ---------    ---------

Operating (loss) income .................    (181,200)     (74,244)    (191,220)    (148,244)    (181,200)

Other income (expense):
    Interest expense ....................     (50,630)        --        (80,363)        --        (50,630)
                                            ---------    ---------    ---------    ---------    ---------
        Total other income (expense)t ...     (50,630)     (74,244)     (80,363)        --        (50,630)
                                            ---------    ---------    ---------    ---------    ---------

Income (Loss) before provision for
    income taxes ........................    (231,829)     (74,244)    (271,583)     (74,244)    (231,829)

Provision for income taxes, net .........        --         (6,762)        --         (6,762)        --
                                            ---------    ---------    ---------    ---------    ---------

Net Loss ................................   $(231,829)   $ (81,006)   $(271,583)   $(155,006)   $(231,829)
                                            =========    =========    =========    =========    =========

Earnings (loss) per share attributable to
  common shareholders - continuing
  operations ............................   $   (0.38)   $   (1.62)   $   (0.45)   $   (3.10)   $    --
Weighted average share of common
stock outstanding basic and dilutive ....     603,917       50,000      603,917       50,000         --



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

</TABLE>


<PAGE>

<TABLE>


                     GS AGRIFUELS CORPORATION AND SUBSIDIARY
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
               FOR THE SIX MONTHS ENDED JUNE 30, 2006 (UNAUDITED)
                              AND 2005 (UNAUDITED)
<CAPTION>

                                                                                                         Cumulative
                                                                                                         Amounts Since
                                                                                                         Inception of
                                                                                                         Development
                                                                                                         Stage, 4/1/06
                                                                            6/30/06       6/30/05        to 6/30/06
                                                                            -------       -------        ----------
CASH FLOWS FROM OPERATING ACTIVITIES
<S>                                                                      <C>            <C>               <C>
Net loss .............................................................   $  (271,583)   $  (155,006)      (231,829)
Adjustments to reconcile net loss to net cash (used in)
provided by operating activities:
    Amortization of deferred financing costs .........................        12,603           --           12,603
    Amortization of note discount ....................................        26,164           --           26,164
    Change in fair market value of derivatives .......................         3,302           --            2,712
    Issuance of stock for services ...................................        40,139           --           40,139
    Changes in assets and liabilities:
        Amounts due from related parties .............................       (30,100)          --          (30,100)
        Prepaid expenses and other current assets ....................          --          148,000           --
        Accounts Payable .............................................        (5,376)         7,006         11,625
        Accrued expenses .............................................        53,609           --           24,465
                                                                         -----------    -----------    -----------
         Net cash (used in) provided by operating activities .........      (171,242)          --          144,222
                                                                         -----------    -----------    -----------

CASH FLOWS FROM INVESTING ACTIVITIES
    Project development costs ........................................       (20,000)          --          (20,000)
                                                                         -----------    -----------    -----------
         Net cash used in investing activities .......................       (20,000)          --          (20,000)
                                                                         -----------    -----------    -----------

CASH FLOWS FROM FINANCING ACTIVITIES
    Borrowings from related party-short term .........................       105,929           --          105,929
    Issuance of convertible debentures-related party .................        71,303           --           44,283
    Issuance of long-term convertible debentures .....................     4,900,000           --        4,900,000
                                                                         -----------    -----------    -----------
         Net cash (used in) provided by financing activities .........     5,077,232           --        5,050,212
                                                                         -----------    -----------    -----------

(Decrease) Increase in cash ..........................................     4,885,990           --        4,885,990
Cash at beginning of period ..........................................          --             --             --
                                                                         -----------    -----------    -----------
Cash at end of period ................................................   $ 4,885,990    $      --      $ 4,885,990
                                                                         ===========    ===========    ===========


SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION

Cash paid during the period for:
   Interest ..........................................................   $      --      $      --      $      --
   Income Taxes ......................................................   $      --      $      --      $      --


SUPPLEMENTAL DISCLOSURE OF NON-CASH FINANCING AND INVESTING ACTIVITIES

Issuance of Series C Preferred Stock .................................   $        30           --      $        30
Assumption of convertible debenture pursuant to share
  purchase agreement with parent .....................................     1,949,631           --        1,949,631
Issuance of warrants upon issuance of convertible debentures .........        30,250           --           30,250

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

<PAGE>

                     GS AGRIFUELS CORPORATION AND SUBSIDIARY
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

1.  BASIS OF PRESENTATION

The consolidated interim financial statements included herein have been prepared
by GS AgriFuels Corporation.  "GS AgriFuels" or "the Company"),  pursuant to the
rules and  regulations of the Securities and Exchange  Commission with regard to
Regulation S-B and, in the opinion of management, include 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.  The results for interim
periods  are not  necessarily  indicative  of results for the entire  year.  The
financial  statements  presented  herein should be read in  connection  with the
financial  statements included in the Company's Annual Report on Form 10-KSB for
the year ended December 31, 2005.

PRINCIPLES OF CONSOLIDATION

For the  period  ended June 30,  2006 the  accompanying  consolidated  financial
statements include all accounts of GS AgriFuels Corporation and its wholly-owned
subsidiary,  Mean Green Biofuels, Inc. All significant intercompany balances and
transactions  were  eliminated  in  consolidation.  The  consolidated  financial
statements for the period ended June 30, 2006 include the accounts of Mean Green
Biofuels, Inc. beginning June 7, 2006.

2.  SIGNIFICANT ACCOUNTING POLICIES

NATURE OF OPERATIONS

GS AgriFuels is a Delaware  corporation  that is in its development  stage.  The
Company was formerly  named Hugo  International  Telecom,  Inc.,  and on May 18,
2006,  changed its name to GS AgriFuels  Corporation.  GS AgriFuels owns certain
proprietary  technology  that will enable us to  manufacture  clean fuels,  both
biodiesel and ethanol,  from a variety of agricultural  feedstocks in integrated
facilities.

At March 31, 2006, when it last filed  financial  statements with the Securities
and Exchange Commission,  GS AgriFuels was a shell company. It had not conducted
any business  operations since 2002 and had no material assets.  In June 2006,GS
AgriFuels sold a Secured  Convertible  Debenture to Cornell Capital Partners and
received net proceeds of $4,900,000. GS AgriFuels is currently using those funds
to develop its initial production facilities.

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.


3.  STOCKHOLDERS EQUITY

Our authorized  capital stock  consists of  100,000,000  shares of common stock,
10,000,000  shares of Series C Preferred  Stock,  and 400,000 shares of Series A
Preferred  Stock.  The Board of Directors is  authorized  to issue the preferred
stock with any rights and  preferences  that the Board of Directors  decides are
appropriate. As of June 30, 2006, there are 2,217,500 shares of our common stock
outstanding,  1,000,000 shares of our Series C Preferred Stock outstanding,  and
37,500 shares of our Series A Preferred Stock.

COMMON STOCK

On January 13, 2006 the Board of Directors of GS AgriFuels unanimously adopted a
resolution to amend the Certificate of  Incorporation  to effect a reverse split
of GS  AgriFuels'  outstanding  common  stock at a ratio of 1:1000  (the"Reverse
Split").  The holder of shares representing a majority of the voting power of GS
AgriFuels'  outstanding  voting stock  subsequently  gave written consent to the
resolution.  The Company filed the Amendment to its Certificate of Incorporation
with the  Secretary  of the State of Delaware on May 18,  2006,  and the Reverse
Split was  effective as of that date.  As of June 30, 2006,  there are 2,217,500
shares of our common stock outstanding.



<PAGE>


                     GS AGRIFUELS CORPORATION AND SUBSIDIARY
               NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)


3.  STOCKHOLDERS EQUITY (CONTINUED)

SERIES A PREFERRED STOCK

On August 19, 2005,  the Board of Directors  authorized the conversion of 37,350
shares of Series A  Preferred  Stock into 7,692  shares of common  stock.  These
shares will be converted in the third quarter of 2006.

SERIES C PREFERRED STOCK

In conjunction  with the June 7, 2006 Mean Green  BioFuels,  Inc. share purchase
agreement with GreenShift,  GreenShift surrendered 300,000 of Series B Preferred
Stock (which was  convertible  into 67% of the  Company's  fully-diluted  common
stock).  In exchange for the Mean Green BioFuels shares and the Company's Series
B Preferred Stock, the Company assumed GreenShift's  obligations under a Secured
Convertible Debenture due to Cornell Capital Partners in the principal amount of
$1,949,631 and issued to GreenShift 1,000,000 shares of Series C Preferred Stock
(which are convertible into 80% of the Company's fully-diluted common stock).

GreenShift  Corporation  owns all of the outstanding  Series C Preferred  Stock.
GreenShift is entitled to convert the Series C Preferred  Stock into the greater
of (a)  15,000,000  common shares or (b) a number of shares of common stock that
will equal 80% of GS  AgriFuels'  fully-diluted  common stock after  conversion.
GreenShift  Corporation also controls 80% of the voting power in GS AgriFuels by
reason of its ownership of the Series C Preferred  Stock. The Series C Preferred
Stock has a  liquidation  preference  equal to $0.001  per  share.  The Series C
Preferred  Stock does not accrue  dividends,  but the holder will be entitled to
80% of any dividend  declared with respect to the common  stock.  As of June 30,
2006, there are 1,000,000 shares of our Series C Preferred Stock outstanding.

SHARE BASED PAYMENT

The Company  accounts for stock,  stock  options and stock  warrants  issued for
services  and  compensation  by  employees  under  the fair  value  method.  For
non-employees, the fair market value of the Company's stock on the date of stock
issuance or option/grant  is used. The Company  determines the fair market value
of the warrants/options  that are issued under the Black-Scholes  Pricing Model.
Effective  January 1, 2006,  the Company  adopted the provisions of Statement of
Financial   Accounting  Standards  (SFAS)  123R,   SHARE-BASED  PAYMENT,   which
establishes  accounting for equity instruments  exchanged for employee services.
Under the provisions of SFAS 123(R),  share-based  compensation cost is measured
at the grant date, based on the fair value of the award, and is recognized as an
expense over the  employee's  requisite  service  period  (generally the vesting
period of the equity grant). Prior to January 1, 2006, the Company accounted for
share-based  compensation to employees in accordance with Accounting  Principles
Board (APB)  Opinion  No. 25,  ACCOUNTING  FOR STOCK  ISSUED TO  EMPLOYEES,  and
related  interpretations.  The Company also followed the disclosure requirements
of SFAS 123, ACCOUNTING FOR STOCK-BASED COMPENSATION.

STOCK OPTIONS

On May 23,  2006,  GS  AgriFuels  entered  into an amended  management  services
agreement  with  GreenShift  that  provides  for the issuance to  GreenShift  of
6,000,000 five year options to purchase GS AgriFuels  common stock,  exercisable
at $3.00 per share,  at the later of December  31, 2006 or the  commencement  of
construction of a biodiesel  plant. The fair value of the options was determined
to be $144,000, and was calculated using the Black-Scholes Option Pricing Model.
In accordance with EITF 96-18, Accounting for Equity Instruments That Are Issued
to Other Than Employees for Acquiring,  or in Conjunction with Selling, Goods or
Services, the options will be recorded when the performance condition is met.

STOCK WARRANTS

In  conjunction  with  GS  AgriFuel's  June  7,  2006  issuance  of  convertible
debentures to Cornell Capital,  GS AgriFuels issued to Cornell Capital 1,125,000
five year warrants to purchase GS AgriFuels common stock that are exercisable at
$.001 per share to Cornell Capital Partners.  The fair value of the warrants was
calculated using the Black-Scholes Option Pricing Model and the Company recorded
a note discount of $30,375.  The note discount is being  amortized over the term
of the debenture.

<PAGE>

                  GS AGRIFUELS CORPORATION AND SUBSIDIARY
               NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)

3.  STOCKHOLDERS EQUITY (CONTINUED)

<TABLE>
<CAPTION>

The following is a table of stock options and warrants outstanding as June 30,
2006:

                                                    Number of Shares        Weighted Average
                                                                            Exercise Price
                                                    ----------------        ---------------
<S>                                                     <C>                     <C>
   Outstanding at March 31, 2006                             --              $        --
     Granted at fair value                               7,125,000                   2.53
     Forfeited                                               --                       --
     Exercised                                               --                       --
                                                       ------------            -----------
 Outstanding at June 30, 2006                           7,125,000                   2.53
</TABLE>


<TABLE>

Summarized information about GS AgriFuels's stock options outstanding at June
30, 2006 is as follows:
<CAPTION>

                                                     Weighted                                   Exercisable
                                                      Average                       Number of Options   Weighted Average
         Exercise Prices             Number of       Remaining       Weighted                            Exercise Price
                                      Options       Contractual       Average
                                    Outstanding        Life       Exercise Price
--------------------------------------------------------------------------------------------------------------------------
<S>                                 <C>                  <C>            <C>           <C>                       <C>
$0.001                              1,125,000            5.00           0.001         1,125,000                 0.001
$3.00                               6,000,000            5.00           3.000                --                    --
                                    7,125,000                                         7,125,000

</TABLE>


Options  exercisable  at June 30, 2006 were  1,125,000  with a weighted  average
exercise price of $0.001 per share. The fair value of each option granted during
2006 is  estimated on the date of grant using the  Black-Scholes  option-pricing
model with the following assumptions:

                                                                2006
                                                              --------
Dividend yield                                                     --
Expected volatility                                              150%
Risk-free interest rate                                         5.15%
Expected life                                                  5 yrs.



4.   RELATED PARTY TRANSACTIONS

CONVERTIBLE DEBENTURES ISSUED TO GREENSHIFT

On December 29, 2005,  the Company issued an $187,995  convertible  debenture in
exchange for its outstanding liability to GreenShift  Corporation.  The $187,995
convertible  debenture is due and payable on December 31, 2006, bearing interest
at 5% per year,  payable  in cash or  convertible  into our common  shares.  The
company  determined that the variable price conversion  feature on the debenture
was an  embedded  derivative,  and  recorded  a  note  discount  and  derivative
liability of $104,657 at December 31, 2005. During the six months ended June 30,
2006,  GreenShift paid $71,303 on behalf of the Company for current  liabilities
and operating  expenses.  In exchange for these  payments the Company  issued to
GreenShift  additional  convertible  debentures totaling $71,703. As of June 30,
2006, the principal  balance due on these  debentures was $259,298 prior to note
discounts.  For the six months ended June 30, 2006,  interest  expense of $9,194
for  this  obligation  was  incurred  and  accrued.  Interest  expense  from the
amortization  of the note discount was $52,328 for the six months ended June 30,
2006, and the unamortized note discount totaled $52,328 as of June 30, 2006.

DERIVATIVE LIABILITY

In accordance with SFAS 133 and EITF 00-19,  the conversion  feature  associated
with the $259,298 convertible  debenture represents an embedded derivative.  The
Company has  recognized  the embedded  derivative in the amount of $106,779 as a
liability in the accompanying balance sheet and has measured it at its estimated
fair value as of June 30, 2006.


<PAGE>

                     GS AGRIFUELS CORPORATION AND SUBSIDIARY
               NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)


4.   RELATED PARTY TRANSACTIONS (CONTINUED)

SHORT TERM BORROWINGS FROM GREENSHIFT

During the three months ended June 30, 2006, GS AgriFuels  received  $105,929 in
short term loans from GreenShift  Corporation.  These loans bear interest at 5%,
for which $2,101 in interest expense was accrued for the three months ended June
30, 2006. The total principal  amount due to GreenShift for short term loans was
$105,929 as of June 30, 2006.

SHARE PURCHASE AGREEMENT WITH GREENSHIFT

On June 7, 2006, the Company acquired Mean Green BioFuels,  Inc., a newly formed
shell  company,  from  GreenShift  Corporation.   At  the  closing,   GreenShift
Corporation  surrendered to the Company 300,000 shares of the Company's Series B
Preferred Stock (which was convertible  into 67% of the Company's  fully-diluted
common stock).  In exchange for the Mean Green BioFuels shares and the Company's
Series B Preferred Stock, the Company assumed  GreenShift's  obligations under a
Secured  Convertible  Debenture due to Cornell Capital Partners in the principal
amount of  $1,949,631  and  issued to  GreenShift  1,000,000  shares of Series C
Preferred Stock (which are convertible  into 80% of the Company's  fully-diluted
common  stock).  Due to the  related  party  nature  of the  transaction  it was
accounted for at book value, and the amount of consideration  paid over the book
value of assets  received of  $1,949,631  was recorded as a reduction of paid in
capital.

MANAGEMENT SERVICES AGREEMENT WITH GREENSHIFT

In August 2005, the Company  entered into a Management  Services  Agreement with
GreenShift  Corporation  under  which  GreenShift  agreed to provide  management
assistance,  financial support, and business development services. The agreement
is for a term of five years and provides for GreenShift to receive  $150,000 per
year  payable  in cash or the  Company's  common  stock.  On May 23,  2006,  the
management  services  agreement  with  GreenShift  was  amended to  include  the
issuance of 6,000,000 options to purchase GS AgriFuels common stock at $3.00 per
share at the  later  to  occur  of  December  31,  2006 or the  commencement  of
construction of a biodiesel  plant. In June 2006 GS AgriFuels  issued  2,025,000
shares of common stock to GreenShift Corporation in consideration for $37,500 of
services provided by GreenShift under its management services agreement with the
Company.

OTHER RELATED PARTY TRANSACTIONS

GS  AgriFuels  is  party  to an  agreement  with  GS  CleanTech  Corporation,  a
subsidiary of GreenShift,  pursuant to which GS CleanTech  provides GS AgriFuels
with technology rights,  engineering services, and right of first refusal rights
to  purchase  GS  CleanTech's  inventory  of clean  fuel  feedstocks.  Under the
agreement,  GS AgriFuels holds the exclusive rights to the use of GS CleanTech's
biodiesel and ethanol production technologies.

5.   FINANCING ARRANGEMENTS

The following is a summary of the Company's financing arrangements as of June
30, 2006:

                                                           6/30/06
                                                         ------------
     Short-term borrowings
      Short term loans - GreenShift ..................   $   105,929
Convertible debenture - GreenShift ...................       259,298
Note Discounts .......................................       (52,328)
                                                         -----------
      Total short term borrowings ....................   $   312,899

      Long term convertible debentures:
      Convertible debenture - Cornell Capital Partners     1,949,631
      Convertible debenture - Cornell Capital Partners     5,500,000
      Note Discounts .................................       (30,375)
                                                         -----------
      Total of long term convertible debentures ......   $ 7,419,256


<PAGE>


                     GS AGRIFUELS CORPORATION AND SUBSIDIARY
               NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)

 5.   FINANCING ARRANGEMENTS (CONTINUED)

The following chart is presented to assist the reader in analyzing the Company's
ability to fulfill its fixed debt service requirements as of June 30, 2006 and
the Company's ability to meet such obligations:

                   Year                               Amount
                   -----                            ----------
                   2006                             $   105,929
                   2007                                 206,970
                   2008                                    --
                   2009                               7,419,256
                                                    -----------
                   Total minimum payments due
                   under current and
                   long-term obligations            $ 7,732,155
                                                    ===========

CONVERTIBLE DEBENTURES - CORNELL CAPITAL

On June 7, 2006, GS AgriFuels entered into a Securities  Purchase Agreement with
Cornell  Capital  Partners LP  ("Cornell")  under  which  Cornell  committed  to
purchase $22,000,000 in Secured Convertible Debentures.  The first Debenture, in
the principal amount of $5,500,000 was purchased by Cornell on June 7, 2006, for
which the company paid $600,000 in financing and  structuring  fees and received
cash proceeds of $4,900,000.  The second Debenture, also in the principal amount
of  $5,500,000  will be  purchased on or before  September  30, 2006 if Hugo has
obtained a  commitment  for senior  debt  financing  for the  construction  of a
biodiesel  manufacturing plant. The third Debenture,  in the principal amount of
$11,000,000,  will be purchased when construction of the biodiesel manufacturing
plant  commences.  Under the terms of the  Securities  Purchase  Agreement,  the
Debentures  carry an  interest  rate of 5%, and  principal  and  interest on the
Debenture may be converted  into common stock by Cornell  Capital  Partners at a
conversion price equal to $3.00 per common share.  However, the conversion price
will be reduced to equal any price at which GS AgriFuels hereafter issues common
stock or derivative  securities.  The maximum  number of shares that Cornell may
acquire  at any time is 4.99% of the  outstanding  common  shares.  Cornell  can
demand that GS AgriFuels redeem up to $550,000 per month of the principal amount
of the  Debenture  during any  calendar  month.  GS  AgriFuels  can  satisfy the
redemption  obligation by paying cash equal to 120% of the principal redeemed or
by issuing common stock valued at the lowest daily volume weighted average price
during the thirty  trading days  preceding the  redemption.  The  Debentures are
secured by a pledge of all of GS AgriFuels' assets,  including the capital stock
of its  subsidiary  Mean  Green  BioFuels,  Inc.  and the  capital  stock of the
subsidiaries  of Mean Green  BioFuels,  Inc. GS  AgriFuels  has agreed to file a
registration  statement with the  Securities  and Exchange  Commission to enable
Cornell  to resell to the  public any  shares of GS  AgriFuels  common  stock it
acquires on conversion of the Debentures or exercise of the Warrant.

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

In conjunction with the share purchase  agreement with GreenShift,  GS AgriFuels
assumed  GreenShift's  obligations under a Secured Convertible  Debenture due to
Cornell Capital  Partners in the principal  amount of $1,949,631.  The Debenture
carries  an annual  interest  rate of 5%,  and  principal  and  interest  on the
Debenture may be converted  into common stock by Cornell  Capital  Partners at a
conversion price equal to $3.00 per common share.  However, the conversion price
will be reduced to equal any price at which GS AgriFuels hereafter issues common
stock or derivative  securities.  The maximum  number of shares that Cornell may
acquire at any time is 4.99% of the outstanding common shares.

<PAGE>


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

FORWARD LOOKING STATEMENTS

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

OVERVIEW

GS AgriFuels  Corporation  ("we," "our," "us," "GS AgriFuels," or the "Company")
is a development  stage Delaware  corporation  that is developing  facilities to
produce  and sell clean  fuels from  agriproducts  in  innovative  new ways that
enable producers of agriproducts,  their local communities and consumers to save
money, reduce pollution and contribute to energy independence.

We  believe  in the  potential  of  renewable  fuels,  but our  view is that the
domestic  clean fuels  industry  faces  significant  challenges  over the coming
years. Among other challenges, the biodiesel sector faces high concentrations of
risk in the soy  markets  and the  corn-derived  ethanol  sector is facing  both
increasing corn prices and decreasing distillers dried grains prices.

Our belief is that these risks can be mitigated with  feedstock  diversification
and with the use of proprietary  new  technologies  and production  improvements
that  facilitate  integrated  multi-fuel  production  capability  at  relatively
small-scales. Our business model incorporates elements of each.

From a technology  standpoint,  we currently  have little  interest in enzymatic
processes.  Instead,  our  plans  are  based on the  application  of a number of
proprietary    technologies,    including   innovative   desiccation,    process
intensification,  gasification,  catalytic,  and  carbon  capture  technologies,
synergistically  at small-scales to enable the  cost-effective  refining of many
forms of biomass into clean fuels.

Our  technologies  enable us to manufacture  clean fuels,  including  biodiesel,
ethanol,   methanol  and  synthetic  diesel,  from  a  variety  of  agricultural
feedstocks in integrated facilities.

>>   Process  Intensification.  Our biodiesel  production  technology  leverages
     innovative  process  intensification  techniques to accelerate  and enhance
     traditional  biodiesel  reaction  kinetics,  thus decreasing  process time,
     reducing energy and raw material needs, and increasing product quality.

>>   Biomass  Gasification.  Our biomass gasification  technology is designed to
     standardize variable biomass feeds and optimize high yields of high-quality
     syngas in real-time with increased  capital and operating cost efficiencies
     at smaller  scales as compared to traditional  technologies.  The output of
     our gasifier can be used to generate  electricity  or catalyzed into liquid
     fuels such as  ethanol  or diesel  substitutes  with a  catalytic  chemical
     reaction called the Fischer-Tropsch process.

We are currently  developing  several sites for the  construction of our planned
production  facilities.  Most of our  planned  facilities  will have an  initial
nameplate  capacity of 10 million  gallons of biodiesel and 5 million gallons of
ethanol,  methanol and/or  synthetic  diesel.  The first of these  facilities is
being  designed  to be  scalable  to  45  million  gallons  of  biodiesel  and a
proportionate amount of ethanol.

Our  long-term  development  plan  is  to  build  a  large  number  of  smaller,
distributed  clean  fuels  production  facilities  and to build  out  additional
production capability at each facility as appropriate.


<PAGE>


ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS AND PLAN OF OPERATION (CONTINUED)

COMPANY BACKGROUND

Hugo  International  Telecom,  Inc. was a holding company.  It no longer has any
operating   subsidiaries.   In  the  past  its  operating   subsidiaries,   Hugo
International  Limited, and Hugo International Ltd. supplied cellular telephone,
radio and wireless data communications solutions to business customers primarily
in the British Isles who sought to improve  their  customer  service  levels and
control their communications costs. Both of these operating  subsidiaries are no
longer in  operation.  Hugo  Ireland  was closed in 2002 and Hugo  International
limited was wound down in 2003.  The Company lost  significant  capabilities  of
influencing the day to day operations from the administrator in October of 2001.
The Company  incorporated  in the State of  Delaware  on  February  17, 2000 and
acquired our now defunct Hugo  International  Limited  operating  subsidiary  on
February 24, 2000 and our defunct Hugo Ireland  operating  subsidiary on July 1,
2001.

On June 7, 2006, the Company acquired Mean Green BioFuels,  Inc., a newly formed
shell  company,  from  GreenShift  Corporation.   At  the  closing,   GreenShift
Corporation  also  surrendered  to the Company  300,000  shares of the Company's
Series B Preferred Stock (which was convertible into 67% of the Company's fully-
diluted  common stock).  In exchange for the Mean Green BioFuels  shares and the
Company's Series B Preferred Stock, the Company assumed GreenShift's obligations
under a Secured  Convertible  Debenture due to Cornell  Capital  Partners in the
principal amount of $1,949,631,  and issued to GreenShift  Corporation 1,000,000
shares  of Series C  Preferred  Stock  (which  are  convertible  into 80% of the
Company's fully-diluted common stock). On July 27, 2006, the Company changed the
name from Hugo International Telecom, In. to GS AgriFuels Corporation.

BUSINESS RISK FACTORS

There are many  important  factors that have  affected,  and in the future could
affect GS AgriFuels 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.

                       I. Risks attendant to our business

We may be unsuccessful at developing profitable facilities.

     GS  AgriFuels  is a start-up  company.  Only in June 2006 did we obtain the
funds necessary to initiate operations.  Before we begin to generate revenue, we
will have to obtain sites for our facilities,  obtain the necessary  permits and
licenses to construct the facilities,  retain qualified  contractors,  engineers
and architects,  employ a qualified staff, and obtain the business relationships
necessary to insure a supply of raw  materials and a market for our end product.
Many factors could cause our efforts to be defeated, including both factors that
we already anticipate and factors that may surprise us.

We may be unable to obtain the financing required to construct our planned
facilities.

     In order to complete  construction of our planned facilities,  we will have
to obtain senior debt financing equal to about 40% of our aggregate construction
costs.  This  currently  corresponds  to about  $15,000,000.  At present we have
received no  commitment  for those funds,  nor do we know whether the  financing
will be available on terms that will allow us to operate  profitably.  If we are
unable to obtain the necessary financing, our business will fail.

     Our  failure  to  manage  our  growth  effectively  could  prevent  us from
achieving  profitability.  Our strategy  envisions a period of rapid growth that
may impose a significant burden on our administrative and operational resources.
The growth of our business, and in particular, the completion of construction of
our  planned  clean  fuel  production   facilities,   will  require  significant
investments  of  capital  and  management's  close  attention.  Our  ability  to
effectively  manage  our growth  will  require  us to  substantially  expand the
capabilities of our  administrative  and  operational  resources and to attract,
train, manage and retain qualified management,  technicians and other personnel.
We may be unable to do so. In addition,  our failure to successfully  manage our
growth could result in our sales not increasing  commensurately with our capital
investments.  If we are unable to successfully  manage our growth,  our business
may fail.



<PAGE>


ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS AND PLAN OF OPERATION (CONTINUED)

BUSINESS RISK FACTORS (Continued)

If federal legislation that puts imported alternative fuels at a disadvantage is
repealed,  competition from foreign-produced  ethanol could significantly reduce
our revenues.

     At the present time, most of the financial  benefits and subsidies that the
federal  government  provides  to  spur  the  use of  agrifuels  are  denied  to
foreign-produced  agrifuels.  However, there is substantial pressure on Congress
to eliminate the exclusion of foreign-produced agrifuels from those benefits. If
imported    ethanol   were   given   the   same    legislative    treatment   as
domestically-produced  biodiesel,  the  likely  result  would  be a  significant
reduction in the market price of ethanol. This would have the effect of reducing
our revenues and reducing or eliminating our profits.

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

     The alternative fuels industry is growing rapidly.  As a result, the number
of individuals with experience in the industry is considerably  smaller than the
number of jobs available for such individuals. We will have to offer substantial
incentives in order to obtain the services of individuals with useful experience
in the production of biodiesel and ethanol.  As a result, our labor costs may be
greater than they would be in a less dynamic industry.  On the other hand, if we
are unable to employ the qualified  individuals  that we will need, our business
may fail.

We may engage in hedging transactions and other risk mitigation strategies that
could harm our results.

     In an attempt to partially  offset the effects of volatility of fuel prices
and prices for  agricultural  products,  we may enter into contracts to supply a
portion of our  biodiesel  and ethanol  production  or purchase a portion of our
feedstock  requirements  on a forward basis and may also engage in other hedging
transactions  involving  exchange-traded  futures  contracts for feedstocks from
time to time. The financial  statement  impact of these  activities is dependent
upon, among other things, the prices involved and our ability to sell sufficient
products  to use all of the  feedstocks  for  which we have  futures  contracts.
Hedging  arrangements also expose us to the risk of financial loss in situations
where the other party to the hedging  contract  defaults on its  contract or, in
the case of exchange-traded  contracts,  where there is a change in the expected
differential  between  the  underlying  price in the hedging  agreement  and the
actual prices paid or received by us. Hedging  activities can themselves  result
in losses when a position is  purchased  in a declining  market or a position is
sold in a rising market.

                      II. Risks attendant to our management

Our business development would be hindered if we lost the services of our
Chairman.

     Kevin Kreisler is the Chairman of GS AgriFuels. Mr. Kreisler is responsible
for  strategizing not only our business plan but also the means of financing it.
If Mr.  Kreisler  were to leave GS  AgriFuels  or become  unable to fulfill  his
responsibilities,  our business  would be  imperiled.  At the very least,  there
would be a delay in the development of GS AgriFuels until a suitable replacement
for Mr. Kreisler could be retained.

Related party transactions may occur on terms that are not favorable to GS
AgriFuels.

     GS AgriFuels is a subsidiary of  GreenShift  Corporation,  which  currently
controls over 98% of the voting power in GS AgriFuels. GreenShift Corporation is
the  parent  of  several   corporations   involved   in  the   development   and
implementation of environmentally responsible technologies,  and has significant
investments in several others.  GreenShift  intends to foster  cooperation among
its affiliates, so as to gain the benefits of intellectual  cross-fertilization,
economies of scale, and captive markets.  For example, GS AgriFuels is currently
party to an agreement with GS CleanTech Corporation, a majority-owned subsidiary
of  GreenShift,  pursuant to which GS AgriFuels  will  purchase corn oil from GS
CleanTech.   GreenShift   will  not  obtain   independent   evaluations  of  the
transactions between its subsidiaries.  Therefore,  it may occur that GreenShift
will cause GS  AgriFuels to enter into  transactions  with  affiliates  on terms
which are less beneficial to GS AgriFuels than it might obtain in an arms-length
transaction.



<PAGE>



ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS AND PLAN OF OPERATION (CONTINUED)

BUSINESS RISK FACTORS (Continued)

                  III. Risks attendant to our relationship with
Cornell Capital Partners

Our Ability to Implement Our Business Plan is Dependent Upon Cornell Capital.

     Cornell  Capital  has  provided  $4.9  million  in  funding  pursuant  to a
Securities  Purchase Agreement dated as of June 7, 2006. However, in the future,
we will be reliant upon the ability of Cornell  Capital to provide an additional
$15 million  pursuant to the Securities  Purchase  Agreement.  In the event that
Cornell  Capital  is unable  to  fulfill  its  commitment  under the  Securities
Purchase  Agreement,  for whatever reason,  we will not be able to implement our
business plan.

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

     GS AgriFuels has contracted to sell to Cornell Capital Partners a series of
Convertible  Debentures  that Cornell  Capital may convert into shares of common
stock. The Debentures are convertible at $3.00 per share, although under certain
circumstances  they may also be converted at 90% of the market price at the time
of conversion. Cornell Capital Partners may also acquire 1,125,000 of the shares
by exercising a Warrant to purchase  shares at $0.001 per share.  It is possible
that resale of shares by Cornell  Capital  Partners  may reduce the market price
for GS AgriFuels common stock.

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

     The issuance of shares on conversion of the Secured  Convertible  Debenture
or on  exercise of the  Warrant to  Purchase  Common  Stock will have a dilutive
impact on our stockholders. As a result, our net income per share could decrease
in future  periods,  and the market price of our common stock could decline.  In
addition,  the lower our stock price is, the more shares of common stock we will
have to issue if the Debenture is converted on the basis of the  contemporaneous
market price. If our stock price is lower, then our existing  stockholders would
experience greater dilution.

             IV. Risks attendant to the market for our common stock.

There is a very limited market for our common stock

     The  number of shares  of our  common  stock  held by  persons  who are not
affiliated with GS AgriFuels is less than 200,000.  For that reason,  there is a
very limited market for our common stock.  On most days it does not trade.  If a
more substantial market for our stock does not develop, shareholders may find it
difficult to sell their shares when they wish to do so.

If we are unable to obtain a listing on the OTC Bulletin Board, the market for
our common stock will be limited.

     The common  stock of GS  AgriFuels  is  currently  quoted  only on the Pink
Sheets.  Only a limited  number of brokers  will sell Pink Sheet stocks to their
clients.  As a  result,  most Pink  Sheet  stocks  have  limited  liquidity.  GS
AgriFuels  intends to cooperate with a market maker in applying for a listing on
the OTC Bulletin  Board.  We do not know,  however,  how soon we will be able to
obtain a listing.  Nor are we assured that our  application  will be accepted by
the OTC  Bulletin  Board.  If we are  unable  to obtain  an OTC  Bulletin  Board
listing,  or if it is delayed  for a lengthy  period,  shareholders  may find it
difficult to sell our stock.

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

     GS  AgriFuels  at the present  time has fewer than  200,000  shares held by
persons who are not affiliated with GS AgriFuels and only a very small number of
market makers.  As a result,  the market price for our common stock is volatile.
It seldom trades, and when it does, the price may increase or decrease by 50% in
one day.  Unless and until the market for our common stock grows and stabilizes,
the common  shares you  purchase  will  remain  illiquid.  A  shareholder  in GS
AgriFuels  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.

<PAGE>


ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS AND PLAN OF OPERATION (CONTINUED)

CRITICAL ACCOUNTING POLICIES AND ESTIMATES


The preparation of our  consolidated  financial  statements  requires us to make
estimates that affect the reported amounts of assets, liabilities,  revenues and
expenses.  The  following  are the areas that we believe  require  the  greatest
amount of estimates in the preparation of our financial statements.

As described  more fully in Note 7 to the financial  statements,  Contingencies,
above,  we are  subject  to  legal  proceedings,  which we have  assumed  in our
consolidation  process.  Accruals are established for legal matters when, in our
opinion,  it is probable  that a  liabilities  exists and the  liability  can be
reasonably estimated.  Estimates of the costs associated with dispute settlement
are adjusted as facts emerge.  Actual  expenses  incurred in future  periods can
differ materially from accruals established.




<PAGE>



ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS AND PLAN OF OPERATION (CONTINUED)

RESULTS OF OPERATIONS
THREE  MONTHS ENDED JUNE 30, 2006 VERSUS THE THREE MONTHS ENDED JUNE 30, 2005

GS AgriFuels was a shell  company,  without any business  operations,  from 2003
until June 2006. During that time, its expenses  consisted of (a) administration
expenses,  and (b) write-offs of assets  remaining  from the  telecommunications
business that it operated prior to 2003. During the quarter ended June 30, 2006,
GS AgriFuels  incurred $181,200 in selling,  general and  administrative  costs,
consisting  primarily  or payments of legal and  accounting  expenses as well as
amortization of financing costs and note discounts related to the debenture.

From  December  to  June  2006 GS  AgriFuels  issued  a  series  of  convertible
debentures to compensate  GreenShift  Corporation  for  management  services and
expenses it incurred on behalf of GS AgriFuels.  The aggregate  principal amount
of the  debentures  was  $259,298  as of June 30,  2006.  However,  because  the
debentures  can be  converted  into common  stock at variable  prices,  they are
deemed to contain an embedded  derivative.  GS AgriFuels is amortizing  the fair
market value of the embedded derivative over the life of the debentures.  In the
first  quarter of 2006,  GS AgriFuels  incurred an interest  expense of $29,734,
most of which was attributable to the  amortization of the embedded  derivative.
At March 31, 2006 there remained  $104,067 on the balance sheet  attributable to
the value of the  embedded  derivative,  all of which will be  amortized  during
2006. In the second quarter of 2006, GS AgriFuels  incurred an interest  expense
of $48,528,  most of which was  attributable to the amortization of the embedded
derivative.  At June 30,  2006 there  remained  $106,779  on the  balance  sheet
attributable  to the  value of the  embedded  derivative,  all of which  will be
amortized  during  2006.  In June 2006 GS  AgriFuels  borrowed  $5,500,000  from
Cornell  Capital  Partners  for the  purpose of  building  biodiesel  production
facilities.

LIQUIDITY AND CAPITAL RESOURCES

At June 30, 2006, GS AgriFuels had current  assets  totaling  $4,885,990 and had
current liabilities totaling $608,592, resulting in a working capital surplus of
$4,277,398.

On June 7, 2006, GS AgriFuels entered into a Securities Purchase Agreement with
Cornell Capital Partners. The Agreement is designed to provide mezzanine
financing to enable GS AgriFuels to develop its first two clean fuels production
facilities. The first payment of $4,900,000 was made on June 7, 2006. A second
payment, totaling $4,950,000, is due on or before September 30, 2006 but only if
GS AgriFuels has obtained a commitment for the senior debt that will be
necessary to build the Tennessee facility. The final payment by Cornell Capital
Partners, totaling $9,900,000, will be made when construction of the Tennessee
facility commences.

In June 2006, GS AgriFuels assumed  responsibility for payment of a $1.9 million
debenture  issued by GreenShift to Cornell  Capital  Partners.  The terms of the
debenture  are  equal to the terms and  conditions  of the June 7, 2006  Cornell
Debenture noted above.

Management  expects the  construction  of GS  AgriFuels'  first two  facilities,
corresponding  to up to 30 million  gallons  per year of fuel  production,  will
require a total of about $25.0  million,  consisting  of about $20.0  million in
capital  costs  and about  $5.0  million  in  working  capital.  We expect to be
carrying  about  $15.0  million  in total  debt when our  production  of ethanol
commences. At the current prices for biodiesel and ethanol, annual production of
20 million  gallons of biodiesel and 10 million gallons of ethanol will generate
an  estimated  $85 million in annual  revenue,  and  management  expects that GS
AgriFuels  will realize $15.0 million in pre-tax net income on that revenue.  If
those expectations are realized,  GS AgriFuels will have no difficulty servicing
$15.0 million in debt.  However,  the accuracy of those estimates will depend on
the market price of biodiesel and ethanol at the time we initiate production. If
competition  reduces  the  market  price of  alternative  fuels,  the  resulting
shortfall in meeting our revenue estimates will cause an equivalent shortfall in
meeting our gross profit estimate. In that event, we could find ourselves unable
to service our debt.

At the present  time,  GS AgriFuels  has no source of capital other than Cornell
Capital Partners. We are currently  investigating the availability of the senior
debt  financing  necessary to release the second  investment by Cornell  Capital
Partners. We do not know at this time if the necessary funds can be obtained nor
on what terms they may be available.

<PAGE>

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS AND PLAN OF OPERATION (CONTINUED)

OFF-BALANCE SHEET ARANGEMENTS

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.

ITEM 3. CONTROLS AND PROCEDURES

EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

Our principal  executive officer and principal  financial and accounting officer
participated  in and supervised  the  evaluation of our disclosure  controls and
procedures (as defined in Rules 13(a)-15(e) and 15(d)-15(e) under the Securities
Exchange  Act of 1934,  as amended  (the  "Exchange  Act")) that are designed to
ensure that  information  required to be  disclosed by us in the reports that we
file is recorded,  processed,  summarized  and reported  within the time periods
specified  in  the  Securities  and  Exchange   Commission's  rules  and  forms.
Disclosure  controls and procedures include,  without  limitation,  controls and
procedures  designed to ensure that the information  required to be disclosed by
us in the  reports  that we file or  submit  under  the Act is  accumulated  and
communicated to our  management,  including our principal  executive  officer or
officers and principal  financial officer,  to allow timely decisions  regarding
required  disclosure.  The Company's chief executive officer and chief financial
officer  determined  that,  as of the end of the period  covered by this report,
these  controls and  procedures  are adequate and effective in alerting him in a
timely manner to material  information relating to the Company that are required
to be included in the Company's periodic SEC filings.

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










<PAGE>




                           PART II - OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

None.

ITEM 2.  UNREGISTERED SALE OF EQUITY SECURITIES AND USE OF PROCEEDS

         (c) Unregistered sales of equity securities

     In June 2006 GS  AgriFuels  issued  2,025,000  shares  of  common  stock to
GreenShift Corporation.  The securities were issued in consideration for $37,500
of services provided by GreenShift under its management  services agreement with
the Company.  The sale was exempt  pursuant to Section 4(2) of the Act since the
sale  was not  made  in a  public  offering  and was  made  to an  entity  whose
executives had access to detailed  information  about GS AgriFuels and which was
acquiring the shares for its own account. There were no underwriters.


     In June 2006 GS AgriFuels  issued  47,500 shares of common stock to each of
three individuals,  for a total of 142,500 shares. The securities were issued in
consideration  for  consulting  services  previously  provided.  The shares were
valued at $2,637 based on the fair value of the shares on the date of grant. The
sales were exempt  pursuant to Section  4(2) of the Act since the sales were not
made in a public  offering  and  were  made to  individuals  who had  access  to
detailed  information about GS AgriFuels and were acquiring the shares for their
own accounts. There were no underwriters.

         None.

         (e) Purchases of equity securities

     The  Company  did not  repurchase  any of its equity  securities  that were
registered  under  Section  12 of the  Securities  Exchange  Act  during the 2nd
quarter of 2006.





ITEM 3.           DEFAULTS UPON SENIOR SECURITIES

None.

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

None.

ITEM 5.           OTHER INFORMATION

None.

ITEM 6.           EXHIBITS

3-a  Amended Certificate of Designation of Series D Preferred Stock

31.1 Certification  of Chief  Executive  Officer  and  Chief  Financial  Officer
     pursuant to Exchange Act Rules 13a-15(e) and 15d-15(e)

32.1 Certification  of Chief  Executive  Officer  and  Chief  Financial  Officer
     pursuant to 18 U.S.C.  Section 1350, as adopted  pursuant to Section 906 of
     the Sarbanes-Oxley Act of (2002.)




<PAGE>
                                   SIGNATURES


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

GS AGRIFUELS CORPORATION

                 /S/ Kevin Kreisler
                 -------------------------------
                     Kevin Kreisler
                     Chief Executive Officer and Chief Financial Officer

Date:                August 21, 2006