--------------------------------------------------------------------------------
                       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 SEPTEMBER 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
November 14, 2006 was 28,217,500.

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

                                      -1-

<PAGE>



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


<TABLE>


                                TABLE OF CONTENTS

<CAPTION>

                                                                                                 Page No
                                                                                                 -------

Part I        Financial Information
<S>           <C>                                                                                  <C>
Item 1.       Financial Statements (unaudited for September 30, 2006 and 2005)
                 Consolidated Balance Sheet - September 30, 2006 ...................................4
                 Consolidated Statements of Operations -
                   Three and Nine Months Ended September 30, 2006 and 2005 .........................5
                 Consolidated Statements of Cash Flow - Nine Months Ended
                   September 30, 2006 and 2005 .....................................................6
                 Notes to Consolidated Financial Statements ........................................7
Item 2.       Management's Discussion and Analysis or Plan of Operation ...........................14
Item 3.       Controls and Procedures .............................................................19

Part II       Other Information
Item 1.       Legal Proceedings....................................................................20
Item 2.       Changes in Securities................................................................20
Item 3.       Defaults Upon Senior Securities......................................................20
Item 4.       Submission of Matters to a Vote of Security Holders..................................20
Item 5.       Other Information....................................................................20
Item 6.       Exhibits and Reports of Form 8K......................................................20


</TABLE>






                                      -2-

<PAGE>


                         PART I - FINANCIAL INFORMATION

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































                                      -3-
<PAGE>

<TABLE>

                     GS AGRIFUELS CORPORATION AND SUBSIDIARY
                          (A DEVELOPMENT STAGE COMPANY)
                           CONSOLIDATED BALANCE SHEET
                      AS OF SEPTEMBER 30, 2006 (UNAUDITED)
<CAPTION>

                                                                                  09/30/06
                                                                              ----------------
ASSETS:
Current assets:
<S>                                                                               <C>
  Cash ........................................................................   $ 1,470,994
  Loan Receivable .............................................................       500,000
  Deposit on equipment ........................................................       200,000
                                                                                  -----------

   Total current assets .......................................................     2,170,994
Other assets:
  Investment in unconsolidated subsidiary at cost .............................     2,501,324
  Project development costs ...................................................        20,000
  Deferred financing fees .....................................................       537,398
  Other assets ................................................................        55,525
                                                                                  -----------
           Total Other Assets .................................................     3,114,247
                                                                                  -----------

TOTAL ASSETS ..................................................................   $ 5,285,241
                                                                                  ===========

LIABILITIES AND STOCKHOLDERS' DEFICIENCY
Current liabilities:
   Accounts payable ...........................................................       202,369
   Accrued expenses ...........................................................        90,379
   Accrued interest - related party ...........................................        22,177
   Due to related party .......................................................       106,516
   Convertible debentures - related party (net of discount) ...................       196,396
   Derivative liability .......................................................       122,052
                                                                                  -----------
       Total current liabilities ..............................................   $   739,889
                                                                                  -----------
   Long term convertible debenture - (net of discount) ........................     7,419,256
                                                                                  -----------

TOTAL LIABILITIES .............................................................   $ 8,159,145
                                                                                  -----------

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 - $0.001 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 ...........................................................    (2,898,612)
Deficit accumulated during development stage ..................................      (601,373)
                                                                                  -----------
       Total stockholders' deficiency .........................................    (2,873,904)
                                                                                  -----------

   TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIENCY .............................   $ 5,285,241
                                                                                  ===========
             The notes to the Condensed Financial Statements are an
                       integral part of these statements.

                                      -4-
</TABLE>


<PAGE>
<TABLE>

                     GS AGRIFUELS CORPORATION AND SUBSIDIARY
                          (A DEVELOPMENT STAGE COMPANY)
                      CONSOLIDATED STATEMENTS OF OPERATIONS
       FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2006 (UNAUDITED)
                              AND 2005 (UNAUDITED)



<CAPTION>

                                                                                                       Cumulative
                                                                                                       Amounts Since
                                                                                                       Inception of
                                                 FOR THE THREE MONTHS       FOR THE NINE MONTHS        Development
                                                       ENDING                     ENDING               Stage 4/1//06
                                               9/30/06        9/30/05       9/30/06      9/30/05       to 9/30/06
                                            -----------    -----------    -----------   ----------     -----------


<S>                                         <C>            <C>            <C>            <C>            <C>
Revenues: ...............................   $      --      $      --      $      --      $      --      $      --
                                                                                                        -----------
Cost of Revenues ........................          --             --             --             --             --
                                            -----------    -----------    -----------    -----------    -----------
Gross Profit ............................          --             --             --             --             --

Operating Expenses:
Selling, General and Administrative .....       202,262        114,016        378,166        262,260        367,557
                                            -----------    -----------    -----------    -----------    -----------
Total operating expenses ................       202,262        114,016        378,166        262,260        367,557
                                            -----------    -----------    -----------    -----------    -----------

Operating (loss) income .................      (202,262)      (114,016)      (378,166)      (262,260)      (367,557)

Other income (expense):
    Interest expense ....................      (102,009)          --         (182,962)          --         (153,228)
    Change in value of derivatives ......       (15,273)          --          (17,396)          --          (17,985)
    Amortization of financing fees ......       (50,000)          --          (62,603)          --          (62,603)
                                            -----------    -----------    -----------    -----------    -----------
        Total other income (expense) ....      (167,282)          --         (262,961)          --         (233,816)
                                            -----------    -----------    -----------    -----------    -----------

Income (Loss) before provision for
    income taxes ........................      (369,544)      (114,016)      (641,127)      (262,260)      (601,373)

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

Net Loss ................................   $  (369,544)   $  (114,016)   $  (641,127)   $  (269,022)   $  (601,373)
                                            ===========    ===========    ===========    ===========    ===========

Earnings (loss) per share attributable to
  common shareholders operations ........   $     (0.17)   $     (2.28)   $     (0.56)   $     (5.38)          --
Weighted average share of common
stock outstanding basic and dilutive ....     2,217,500         50,000      1,149,688         50,000           --



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

</TABLE>


                                      -5-
<PAGE>
<TABLE>

                     GS AGRIFUELS CORPORATION AND SUBSIDIARY
                          (A DEVELOPMENT STAGE COMPANY)
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
            FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2006 (UNAUDITED)
                              AND 2005 (UNAUDITED)
<CAPTION>

                                                                                                       Cumulative
                                                                                                        Amounts Since
                                                                                                        Inception of
                                                                                                        Development
                                                                                                        Stage, 4/1/06
                                                                            9/30/06        9/30/05       to 9/30/06
                                                                          ----------     ----------     ------------
CASH FLOWS FROM OPERATING ACTIVITIES
<S>                                                                      <C>            <C>               <C>
Net loss .............................................................   $  (641,127)   $  (269,022)      (601,373)
Adjustments to reconcile net loss to net cash (used in)
provided by operating activities:
    Amortization of deferred financing costs .........................        62,603           --           62,603
    Amortization of note discount ....................................        78,492           --           78,492
    Change in fair market value of derivatives .......................        17,396           --           16,806
    Issuance of stock for services ...................................        40,139           --           40,139
    Changes in assets and liabilities:
        Amounts due from related parties .............................       (51,942)          --          (51,942)
        Prepaid expenses and other current assets ....................        (3,583)       222,000         (3,583)
        Accounts Payable .............................................        40,790         47,022         57,790
        Accrued expenses .............................................       108,468           --           79,324
                                                                         -----------    -----------    -----------
         Net cash (used in) provided by operating activities .........      (348,764)          --         (321,744)
                                                                         -----------    -----------    -----------

CASH FLOWS FROM INVESTING ACTIVITIES
    Investment in unconsolidated subsidiary ..........................    (2,501,324)          --       (2,501,324)
    Deposits on equipment ............................................      (200,000)          --         (200,000)
    Loans receivable .................................................      (500,000)          --         (500,000)
    Project development costs ........................................       (20,000)          --          (20,000)
                                                                         -----------    -----------    -----------
         Net cash used in investing activities .......................    (3,221,324)          --       (3,221,324)
                                                                         -----------    -----------    -----------

CASH FLOWS FROM FINANCING ACTIVITIES
    Borrowings from related party-short term .........................       106,516           --          106,516
    Issuance of convertible debentures-related party .................        34,566           --            7,546
     Issuance of long-term convertible debentures ....................     4,900,000           --        4,900,000
                                                                         -----------    -----------    -----------
         Net cash (used in) provided by financing activities .........     5,041,082           --        5,014,062
                                                                         -----------    -----------    -----------

(Decrease) Increase in cash ..........................................     1,470,994           --        1,470,994
Cash at beginning of period ..........................................          --             --             --
                                                                         -----------    -----------    -----------
Cash at end of period ................................................   $ 1,470,994    $      --      $ 1,470,994
                                                                         ===========    ===========    ===========


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 .................................   $     1,000           --      $     1,000
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>
                                      -6-
<PAGE>

                     GS AGRIFUELS CORPORATION AND SUBSIDIARY
                          (A DEVELOPMENT STAGE COMPANY)
             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.


2.  SIGNIFICANT ACCOUNTING POLICIES

PRINCIPLES OF CONSOLIDATION

For the period ended September 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  September 30, 2006 include the accounts of Mean
Green BioFuels, Inc. beginning June 7, 2006 (See Note 4).

COST METHOD OF ACCOUNTING FOR UNCONSOLIDATED SUBSIDIARIES

The Company  accounts for its 10%  investment in ZeroPoint  Clean  Technologies,
Inc. under the cost method.  Application of this method  requires the Company to
periodically  review this  investment in order to determine  whether to maintain
the current carrying value or to write off some or all of the investment.  While
the Company uses some objective  measurements in its review,  the review process
involves a number of judgments on the part of the  Company's  management.  These
judgments  include   assessments  of  the  likelihood  of  ZeroPoint  to  obtain
additional  financing,  to achieve future milestones,  make sales and to compete
effectively  in its  markets.  In making these  judgments  the Company must also
attempt to anticipate  trends in ZeroPoint's  industry as well as in the general
economy.  There can be no  guarantee  that the  Company  will be accurate in its
assessments and judgments.  To the extent that the Company is not correct in its
conclusion it may decide to write down all or part of the investment.

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 September 30, 2006, there were 2,217,500 shares of our common
stock outstanding, 1,000,000 shares of our Series C Preferred Stock outstanding,
and 37,350 shares of our Series A Preferred Stock outstanding.

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.  All per share amounts in the  accompanying
financial statements have been adjusted to reflect the reverse split.

                                      -7-
<PAGE>

                     GS AGRIFUELS CORPORATION AND SUBSIDIARY
                          (A DEVELOPMENT STAGE COMPANY)
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)


3.  STOCKHOLDERS EQUITY (CONTINUED)

SERIES A PREFERRED STOCK

On  August  19,  2005,  the  Board of  Directors,  pursuant  to the terms of the
certificate of designation,  converted 37,350 shares of Series A Preferred Stock
into 7,692  shares of common  stock.  The  certificates  for the shares  will be
issued in the fourth quarter of 2006.

SERIES C PREFERRED STOCK

In conjunction  with the June 7, 2006 Mean Green  BioFuels,  Inc. share purchase
agreement  with  GreenShift  Corporation,  the  Company's  parent  (See Note 4),
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 September
30,  2006,  there  were  1,000,000  shares  of  our  Series  C  Preferred  Stock
outstanding.

SHARE BASED PAYMENT

The Company  accounts for stock grants and stock options 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 stock
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 (See Note 5).

                                      -8-
<PAGE>

                     GS AGRIFUELS CORPORATION AND SUBSIDIARY
                          (A DEVELOPMENT STAGE COMPANY)
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

3.  STOCKHOLDERS EQUITY (CONTINUED)


The following is a table of stock options and warrants outstanding as September
30, 2006:
<TABLE>
<CAPTION>
                                                            Number of Shares        Weighted Average
                                                                                     Exercise Price
                                                           ----------------         ---------------
<S>                       <C>                                                        <C>
   Outstanding at January 1, 2006                                    --              $         --
     Granted at fair value                                     7,125,000                      2.53
     Forfeited                                                       --                        --
     Exercised                                                       --                        --
                                                          --------------             --------------
  Outstanding at September 30, 2006                            7,125,000                      2.53
</TABLE>

Summarized information about GS AgriFuels's stock options outstanding at
September 30, 2006 is as follows:
<TABLE>
<CAPTION>
                                                     Weighted                                   Exercisable
                                                      Average
         Exercise Prices             Number of       Remaining       Weighted       --------------------------------------
                                      Options       Contractual       Average       Number of Options   Weighted Average
                                    Outstanding        Life       Exercise Price                         Exercise Price
--------------------------------------------------------------------------------------------------------------------------
<C>                                     <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            3.00                --                    --
                                  ----------------                                ----------------------------------------
                                        7,125,000                                         1,125,000                 0.001
</TABLE>

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
number of issuable  common shares upon  conversion is equal to the amount of the
note divided by the average of the three  lowest  closing  market  prices of the
stock  during  the thirty  trading  days  preceding  conversion,  provided  such
issuance does not give  GreenShift  more than a 4.95%  ownership of the Company.
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 nine months
ended  September 30, 2006,  GreenShift paid $34,566 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 $34,566.
As of September 30, 2006,  the  principal  balance due on these  debentures  was
$222,561 prior to note discounts.  For the nine months ended September 30, 2006,
interest  expense of $13,593  for this  obligation  was  incurred  and  accrued.
Interest  expense from the amortization of the note discount was $79,492 for the
nine months ended September 30, 2006, and the unamortized  note discount totaled
$26,164 as of September 30, 2006.

DERIVATIVE LIABILITY

In accordance with SFAS 133 and EITF 00-19,  the conversion  feature  associated
with the $222,560 convertible  debenture represents an embedded derivative.  The
Company has  recognized  the embedded  derivative in the amount of $122,052 as a
liability in the accompanying balance sheet and has measured it at its estimated
fair value as of September 30, 2006.

                                      -9-
<PAGE>

                     GS AGRIFUELS CORPORATION AND SUBSIDIARY
                          (A DEVELOPMENT STAGE COMPANY)
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)


4.   RELATED PARTY TRANSACTIONS (CONTINUED)

SHORT TERM BORROWINGS FROM GREENSHIFT

During the three months ended September 30, 2006, GS AgriFuels received $106,516
in short term loans from  GreenShift  Corporation.  These loans bear interest at
5%, for which  $4,797 in interest  expense was accrued for the nine months ended
September 30, 2006. The total principal  amount due to GreenShift for short term
loans was $106,516 as of September 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.  The  Company  accrued  $37,500 of expense
related to the  Management  Services  Agreement  during the three  months  ended
September 30, 2006.

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.

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

                                      -10-
<PAGE>

                     GS AGRIFUELS CORPORATION AND SUBSIDIARY
                          (A DEVELOPMENT STAGE COMPANY)
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)


5.   FINANCING ARRANGEMENTS

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


      Short-term borrowings
      Short term loans - GreenShift ..................   $   106,516
Convertible debenture - GreenShift ...................       222,560
Note Discounts .......................................       (26,164)
                                                         -----------
      Total short term borrowings ....................   $   302,912

      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


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

       Year                                              Amount
      -----                                           -----------
      2006                                            $   106,516
      2007                                                196,396
      2008                                                   --
      2009                                              7,419,256
                                                      -----------
      Total minimum payments due under current and
      long-term obligations                           $ 7,722,168
                                                      ===========

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 GS AgriFuels
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 subsidiaries:  Mean Green BioFuels,  Inc., Mean Green Biodiesel #1, Inc.,
Mean Green  Biodiesel #2, Inc.,  and Mean Green  Biodiesel #3, Inc. GS AgriFuels
has agreed to file a
                                      -11-
<PAGE>

                     GS AGRIFUELS CORPORATION AND SUBSIDIARY
                          (A DEVELOPMENT STAGE COMPANY)
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

5.   FINANCING ARRANGEMENTS (CONTINUED)

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.

6.   LOANS RECEIVABLE AND INVESTMENTS

FINANCING AGREEMENT

On September  13, 2006, GS AgriFuels,  Inc.  entered into a financing  agreement
with  Sustainable  Systems,  LLC  whereby  AgriFuels  will  invest  a  total  of
$3,000,000 into the company.  As part of the agreement,  GS AgriFuels  completed
bridge loan  financing  in the amount of  $500,000.  Upon closing, the  $500,000
bridge loan will be converted to equity as a credit to the total investment.  GS
AgriFuels will receive 3,121,688 shares of Series A Preferred  Convertible stock
representing 20% of Sustainable Systems, LLC's outstanding stock.

INVESTMENT IN ZEROPOINT CLEAN TECHNOLOGIES, INC.

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

7.   SUBSEQUENT EVENTS

ACQUISITION OF NEXTGEN FUEL, INC.

On October 31, 2006, a wholly-owned subsidiary of GS AgriFuels purchased 100% of
the outstanding  capital stock of NextGen Fuel, Inc.  NextGen Fuel is engaged in
the   business   of   developing    and    distributing    esterification    and
transesterification  biodiesel  process  technologies.  The  purchase  price was
approximately  $21,300,000,  of  which  17,000,000  was  paid  at  closing.  The
remaining  $4,300,000  will be payable on October 31,  2007 if NextGen  Fuel has
realized revenue of at least $7,500,000  subsequent to the acquisition and there
are no claims for indemnification by GS AgriFuels.

On October 31, 2006 NextGen  Acquisition,  Inc.,  a  subsidiary  of GS AgriFuels
which was formed to facilitate the acquisition of NextGen Fuel Inc., completed a
sale of securities to Stillwater  Asset-Based  Fund, LP pursuant to a Securities
Purchase  Agreement  dated as of October  27,  2006.  The  Agreement  called for
Stillwater  to purchase a Term Note in the principal  amount of $6 million.  The
Term Note was  purchased  by  Stillwater  on October  31,  2006 for a payment of
$5,867,500.  The Term Note accrues interest at a rate of 20% per annum.  Monthly
payments of  principal  and  interest are due  beginning  February 1, 2007.  All
amounts of principal and interest not previously satisfied will be due on

                                      -12-
<PAGE>

                     GS AGRIFUELS CORPORATION AND SUBSIDIARY
                          (A DEVELOPMENT STAGE COMPANY)
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

7.   SUBSEQUENT EVENTS (CONTINUED)

December 31, 2007. The  obligations of NextGen  Acquisition  Inc. under the Term
Note have been  guaranteed  by GS  AgriFuels  and by the  following  affiliates:
GreenShift Corporation, GS Energy Corporation, GS CleanTech Corporation, NextGen
Fuel,  Inc.,  Warnecke  Design  Services,  Inc. and Warnecke  Rentals,  LLC (the
"Guarantors").  Each of the  Guarantors  has  pledged  its  assets to secure its
guaranty.

CONVERSION OF SERIES C PREFERRED STOCK INTO COMMON STOCK

On October 18, 2006 GreenShift  Corporation converted 1,000,000 shares of Series
C Preferred  Stock,  representing  100% of the issued and  outstanding  Series C
Preferred Stock, into 26,000,000 shares of common stock.

GS ENERGY CORPORATION MERGER TRANSACTION

On October 18, 2006, GS Energy Corporation and GS AgriFuels Corporation executed
an Agreement  and Plan of Merger.  Pursuant to the terms and  conditions  of the
Merger  Agreement,  GS Energy will merge with and into GS  Acquisition,  Inc., a
newly formed  special  purpose  subsidiary of GS  AgriFuels.  As a result of the
merger, GS Energy common stock shareholders will receive 1 share of GS AgriFuels
common stock in return for every 1,000 shares of GS Energy  common stock held at
the time of the  closing  of the Merger  which  equals  approximately  2,500,000
shares  of  GS  AgriFuels  common  stock.  GreenShift  Corporation,  which  owns
preferred stock in GS Energy will receive GS AgriFuels Series D Preferred Stock.
The  closing  of the  merger  will  occur  after  approval  of the merger by the
shareholders of GS Energy.

GS Energy owns a specialty manufacturing company, Warnecke Design Service, Inc.,
which  currently  provides  manufacturing  services for NextGen.  A merger of GS
Energy with GS  AgriFuels  is expected to be  strategic  to both  companies  for
several  reasons,  including:  (a) the  integration  of  NextGen's  and Warnecke
Design's  businesses  can be  expected  to enhance  operating  margins  for both
companies while establishing an immediate stream of revenues and earnings for GS
AgriFuels;  and (b)  merging  GS Energy  and GS  AgriFuels  can be  expected  to
increase  liquidity  for both  companies,  which can be  material  to the future
development activities of the combined companies.

CONVERTIBLE DEBENTURES - CORNELL CAPITAL

On October  31, 2006 GS  AgriFuels  completed  a sale of  securities  to Cornell
Capital  Partners,  LP pursuant to a Securities  Purchase  Agreement dated as of
October  25,  2006.  The  Agreement  called for  Cornell  to  purchase a Secured
Convertible  Debenture in the principal amount of $13 million. The Debenture was
purchased  by Cornell on October 31 for a payment of  $11,635,000.  The  Secured
Convertible  Debenture will mature on October 25, 2009.  Interest will accrue on
the  Debenture  at the rate of 10% per annum and will be payable on the maturity
date.  If the  market  price  of GS  AgriFuels  common  stock  is less  than the
conversion  price,  GS  AgriFuels  can  redeem  the  Debenture  for  120% of its
principal  amount.  Cornell will be entitled to convert the accrued interest and
principal amount of the Debenture into GS AgriFuels common stock at a conversion
price of $3.00 (or any lower price at which GS AgriFuels hereafter issues common
stock to any third party). The maximum number of shares that Cornell may acquire
at any time is 4.99% of the outstanding common shares.

Commencing  on February 1, 2007,  Cornell  will also be entitled to convert into
common stock up to $500,000 of the principal amount of the Debentures (including
the  $5,500,000  Debenture  sold to Cornell on June 6, 2006) during any calendar
month at a conversion  price equal to the lowest daily Volume  Weighted  Average
Price during the thirty trading days preceding conversion. However, GS AgriFuels
may opt to redeem the portion of the  Debentures  offered for conversion in this
manner by paying 120% of the amount converted.

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

In consideration of Cornell's  investment in the October 31, 2006 Debenture,  GS
AgriFuels  issued to Cornell a five year  Warrant  to  purchase  540,000  common
shares.  The  exercise  price is $.001or any lower  price at which GS  AgriFuels
hereafter  issues common stock to any third party.  GS AgriFuels has also agreed
to file a registration  statement with the Securities and Exchange Commission to
enable  Cornell to resell to the public any shares of GS AgriFuels  common stock
it acquires on conversion of the Debentures or exercise of the Warrant.

                                      -13-
<PAGE>


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

FORWARD LOOKING STATEMENTS

In  addition  to  historical   information,   this  Quarterly   Report  contains
forward-looking statements, which are generally identifiable by use of the words
"believes,"  "expects,"  "intends,"   "anticipates,"  "plans  to,"  "estimates,"
"projects," or similar expressions. These forward-looking statements are subject
to certain  risks and  uncertainties  that could cause actual  results to differ
materially from those  reflected in these  forward-looking  statements.  Factors
that might  cause such a  difference  include,  but are not  limited  to,  those
discussed in the section entitled "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  manufactures  and  sells
proprietary  agrifuels  production  equipment  and is  developing  facilities to
produce and sell clean fuels from agriproducts in innovative ways.

We believe in the tremendous  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-feedstock   and   multi-fuel   production
capabilities  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 refining of many forms of biomass
into clean fuels at Integrated Multi-Fuel ("IMF") production facilities.

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

     >>   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  agrifuel  production  plans  are  based  on  leveraging  technology  and/or
geography  to  establish  a  feedstock  procurement  advantage.   We  intend  to
accomplish this by co-locating  agrifuel  production assets directly at a source
of  biomass  feedstock,  such as an animal  processing  facility  or an oil seed
crushing facility,  and/or by taking advantage of technologies that enable us to
obtain and process  feedstocks that other producers cannot process,  such as the
corn  ethanol   co-product  known  as  distillers  dried  grain.  Our  long-term
production  plan  is to  build  a  large  number  of  smaller,  distributed  IMF
production  facilities and to build out additional production capability at each
facility as appropriate.

Our  development  plans  are also  based on our sales of  proprietary  agrifuels
production equipment to third party biodiesel and other agrifuels producers.  We
intend  to  provide  our  equipment  sales  clients  with  financial  and  other
assistance  relative to their respective projects and we plan to consider making
equity and other  investments  in  qualified  projects.  Our  current  equipment
offerings include turn-key  biodiesel  production plants rated for 5 million and
10 million gallons per year.

                                      -14-
<PAGE>

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

COMPANY BACKGROUND

The Company was  incorporated  in the State of Delaware on February 17, 2000. 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.

In August  2006,  GS  AgriFuels  acquired  a 10%  interest  in  ZeroPoint  Clean
Technologies,  Inc.  ZeroPoint is in the process of building a commercial  scale
pilot unit of its  proprietary  biomass  gasification,  gas to liquids  and fuel
reforming  technology.  This  technology  is  designed to  standardize  variable
biomass  feeds and  optimize  high  yields  of  high-quality  syngas  and can be
operated at greater cost efficiencies as well as on smaller scales.

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 equity and senior debt financing  equal to our aggregate  construction
costs.  This  currently  corresponds  to about  $25,000,000.  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.

                                      -15-
<PAGE>

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR 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 92% 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.

                                      -16-

<PAGE>

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

BUSINESS RISK FACTORS (Continued)

                  III. Risks attendant to our relationship with
                            Cornell Capital Partners

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 1,665,000 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.

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.


                                      -17-
<PAGE>


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

RESULTS OF  OPERATIONS  NINE  MONTHS  ENDED  SEPTEMBER  30, 2006 VERSUS THE NINE
MONTHS ENDED SEPTEMBER 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 business  that it
operated  prior to 2003.  During the nine months ended  September  30, 2006,  GS
AgriFuels  incurred  $378,166 in  selling,  general  and  administrative  costs,
consisting  primarily of legal and accounting expenses as well as other expenses
related to the development of the Company's biofuels initiatives.

From  December  2005  to  September  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  $222,561 as of  September  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.  Interest  expense  attributable  to the  amortization  of the  note
discount was $78,493 for the nine months ended  September 30, 2006. At September
30, 2006 the current liability for the fair value of the embedded derivative was
$122,052.

LIQUIDITY AND CAPITAL RESOURCES

At September 30, 2006, GS AgriFuels had current assets  totaling  $2,170,994 and
had  current  liabilities  totaling  $739,889,  resulting  in a working  capital
surplus of $1,431,105.

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.

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.

On October 31, 2006 GS AgriFuels completed the sale of a $13,000,000 convertible
debenture,  for which the company received  proceeds of $11,635,000,  to Cornell
Capital Partners pursuant to a Securities Purchase Agreement dated as of October
25, 2006.  The terms of the debenture  are equal to the terms and  conditions of
the June 7, 2006 Cornell  Debenture  noted above.  The new  Securities  Purchase
Agreement  replaces any additional  financing  commitments  from Cornell Capital
under the June 7, 2006 Securities Purchase Agreement.

On October 31, 2006 NextGen  Acquisition,  Inc., a newly formed subsidiary of GS
AgriFuels,  completed a sale of securities to  Stillwater  Asset-Based  Fund, LP
pursuant to a Securities  Purchase  Agreement  dated as of October 27, 2006. The
Agreement  called for Stillwater to purchase a Term Note in the principal amount
of $6 million.  The Term Note was  purchased by  Stillwater  on October 31 for a
payment  of  $5,867,500.  The Term Note  accrues  interest  at a rate of 20% per
annum.  Monthly  payments of  principal  and  interest  are due,  commencing  on
February 1, 2007.  The amount of each  principal  payment is variable based on a
percentage of NextGen's cash receipts but in no case will be less than $300,000.

The  proceeds of  $17,502,500  from the October  31,  2006  Cornell  Capital and
Stillwater financings were used to acquire NextGen Fuel, Inc.

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.  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.  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 committed  capital.  We are
currently  investigating  the  availability  of both  equity and debt  financing
necessary to complete the  Company's  current  projects.  We do not know at this
time if the  necessary  funds  can be  obtained  nor on what  terms  they may be
available.

                                      -18-
<PAGE>

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR 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 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 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 third fiscal quarter that has materially  affected
or is reasonably likely to materially affect the Company's internal control over
financial reporting.







                                      -19-
<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

         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 3rd
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

     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.)




                                      -20-
<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:         November 14, 2006

                                      -21-