-------------------------------------------------------------------------------
                       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 MARCH 31, 2007

                         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 May 21,
2007 was 29,007,072.

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


<PAGE>



                    GS AGRIFUELS CORPORATION AND SUBSIDIARIES
                          (A DEVELOPMENT STAGE COMPANY)
                         QUARTERLY REPORT ON FORM 10QSB
                   FOR THE FISCAL QUARTER ENDED MARCH 31, 2007



<TABLE>

                                TABLE OF CONTENTS

<CAPTION>

                                                                                                  Page No

Part I        Financial Information
Item 1.       Financial Statements (unaudited for March 31, 2007 and 2006)
<S>                                                                                                <C>
              Consolidated Balance Sheet - March 31, 2007 .............. ............................4
              Consolidated Statements of Operations -
                Three Months Ended March 31, 2007 and 2006 ..........................................5
              Consolidated Statements of Cash Flow -
                Three Months Ended March 31, 2007 and 2006 ..........................................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.       Unregistered Sale of Equity Securities and Use of Proceeds............................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 .............................................................................20

</TABLE>


<PAGE>

                         PART I - FINANCIAL INFORMATION

  ITEM 1. FINANCIAL STATEMENTS MARCH 31, 2007 (UNAUDITED) AND 2006 (UNAUDITED)



























<PAGE>

<TABLE>

                    GS AGRIFUELS CORPORATION AND SUBSIDIARIES
                          (A DEVELOPMENT STAGE COMPANY)
                             CONDENSED BALANCE SHEET
                        AS OF MARCH 31, 2007 (UNAUDITED)
<CAPTION>

                                                                         03/31/07
                                                                       ------------
ASSETS:
Current assets:
<S>                                                                    <C>
   Cash ............................................................   $  1,504,416
   Accounts receivable, net of allowance for doubtful accounts of $0        611,089
   Loans receivable - related party ................................        568,958
Inventory - work in progress .......................................        888,073
   Inventory .......................................................      3,262,585
   Supplies ........................................................         16,197
   Deposits ........................................................        269,770
   Deposits - related party ........................................        475,986
   Other current assets ............................................        109,820
   Other current assets - related parties ..........................          9,504
                                                                       ------------
       Total current assets ........................................      7,716,398

   Property, plant and equipment, net ..............................      3,577,040

Other Assets:
   Investments in unconsolidated subsidiaries at cost ..............      2,501,324
     Deferred financing fees .......................................      1,787,301
   Intangible asset - energy technologies ..........................     13,825,000
   Goodwill ........................................................     18,613,442
   Other assets - related party ....................................         25,025
                                                                       ------------
       Total other assets ..........................................     36,752,092
                                                                       ------------

TOTAL ASSETS .......................................................   $ 48,045,530
                                                                       ============

LIABILITIES AND STOCKHOLDERS' EQUITY:
Current liabilities:
   Accounts payable ................................................      1,844,146
   Accrued expenses ................................................        116,513
   Accrued interest ................................................      1,292,684
   Accrued interest - related party ................................         40,513
   Customer deposits ...............................................      3,997,000
   Due to related parties ..........................................        370,080
   Notes payable ...................................................     11,273,437
   Convertible debenture - related party ...........................        124,949
                                                                       ------------
       Total current liabilities ...................................     19,059,322

Long term notes payable ............................................      4,570,804
Long term convertible debentures (net of discount) .................     26,602,908
                                                                       ------------
            Total long term liabilities ............................     31,173,712


TOTAL LIABILITIES ..................................................     50,233,034

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
   Common Stock, par value - $0.0001
       100,000,000 shares Authorized, 29,007,072 shares
         issued and outstanding ....................................          2,901
Additional paid-in capital .........................................     (7,284,492)
Accumulated deficit ................................................     (3,154,850)
Deficit accumulated during development stage .......................     (6,320,051)
                                                                       ------------

Total stockholders' deficiency .....................................     (2,187,504)
                                                                       ------------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY .........................   $ 48,045,530
                                                                       ============

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

<PAGE>
<TABLE>

                    GS AGRIFUELS CORPORATION AND SUBSIDIARIES
                          (A DEVELOPMENT STAGE COMPANY)
                      CONSOLIDATED STATEMENTS OF OPERATIONS
         FOR THE THREE MONTHS ENDED MARCH 31, 2007 AND 2006 (UNAUDITED)
<CAPTION>

                                                                                 Cumulative
                                                                                Amounts Since
                                                                                Inception of
                                                                                Development
                                                                                 Stage 4/1/06
                                                    3/31/07        3/31/06       to 3/31/07
                                                --------------------------------------------
<S>                                            <C>             <C>             <C>
Revenues ...................................   $    418,138    $       --      $    470,368
  Cost of revenues .........................        456,888            --           489,393
                                               ------------    ------------    ------------
     Gross profit ..........................   $    (38,750)   $       --      $    (19,025)

Operating expenses:
    Selling, general and administrative ....        531,918          10,020       1,250,335
    Stock-based compensation ...............      1,884,781            --         1,942,437
    Amortization - intangibles .............        518,288            --           875,000
                                               ------------    ------------    ------------
Total Operating Expenses ...................      2,934,987         (10,020)      4,067,772
                                               ------------    ------------    ------------

Operating Loss .............................   $ (2,973,737)   $    (10,020)   $ (4,086,797)

Other income (expense):
    Amortization of deferred financing costs       (222,975)           --          (453,175)
    Gain on FMV of derivative ..............           --              --           104,067
    Grant income ...........................         76,960            --            76,960
    Miscellaneous income ...................            176            --               176
    Interest expense .......................       (916,491)        (29,734)     (1,905,805)
    Interest expense - related party .......        (17,640)           --           (55,476)
                                               ------------    ------------    ------------
        Total other expense, net ...........     (1,079,970)        (29,734)     (2,233,254)
                                               ------------    ------------    ------------
Loss before provision for income taxes
Provision for income taxes .................     (4,053,707)        (29,734)     (6,320,051)
                                               ------------    ------------    ------------

Net loss ...................................   $ (4,053,707)   $    (39,754)   $ (6,320,051)


Net loss per common share, basic and diluted   $      (0.14)          (0.80)

Weighted average shares of common stock
Outstanding, basic and diluted .............     28,436,826          50,000
                                               ============    ============
</TABLE>



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

<PAGE>
<TABLE>

                    GS AGRIFUELS CORPORATION AND SUBSIDIARIES
                          (A DEVELOPMENT STAGE COMPANY)
                       CONDENSED STATEMENTS OF CASH FLOWS
              FOR THE THREE MONTHS ENDED MARCH 31, 2007 (UNAUDITED)
                              AND 2006 (UNAUDITED)
<CAPTION>

                                                                                               Cumulative
                                                                                              Amounts Since
                                                                                              Inception of
                                                                                              Development
                                                                                              Stage, 4/1/06
                                                              3/31/07          3/31/06          to 3/31/07
                                                             -------------------------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES
<S>                                                            <C>            <C>             <C>
Net loss ...................................................   $(4,053,707)   $   (39,754)    (6,320,051)
Adjustments to reconcile net loss to net cash (used in)
provided by operating activities:
    Depreciation ...........................................         8,534           --            8,534
    Amortization of deferred financing costs ...............       222,724           --          452,924
    Amortization of note discount ..........................        91,219           --          237,588
    Amortization of Energy Technology ......................       518,288           --          875,000
    Issuance of equity securities for services .............     1,884,781           --        1,942,437
    Change in FMV of derivatives ...........................          --             --         (104,067)
    Changes in assets and liabilities:
        Accounts receivable ................................        60,355           --            8,125
        Other current assets ...............................        96,428           --          294,416
        Deposits ...........................................      (125,905)          --         (745,756)
        Customer deposits ..................................     2,342,250           --        2,920,500
        Inventory ..........................................      (190,497)          --       (1,036,834)
        Other ..............................................        97,933           --           97,933
        Accounts Payable ...................................      (841,010)          --         (532,567)
        Accrued interest ...................................       626,145           --        1,296,926
        Accrued expenses ...................................      (156,659)          --          (24,946)
                                                               -----------    -----------    -----------
         Net cash used in operating activities .............       580,879           --         (629,839)
                                                               -----------    -----------    -----------

CASH FLOWS FROM INVESTING ACTIVITIES
   Cash investment in unconsolidated subsidiaries ..........          --             --       (4,501,324)
    Cash outlay for property and equipment .................      (390,983)          --         (390,983)
    Cash acquired from acquisition of subsidiaries .........     1,109,490           --        3,390,427
                                                               -----------    -----------    -----------
         Net cash provided by (used in) investing activities       718,507           --       (1,501,880)
                                                               -----------    -----------    -----------

CASH FLOWS FROM FINANCING ACTIVITIES
    Borrowings from related parties-short term .............        65,261         39,754        195,205
    Issuance (repayment) of convertible
      debentures-related party .............................      (151,653)          --         (113,494)
    Net proceeds from long-term convertible debentures .....          --             --        4,900,000
    Net proceeds from related party convertible debentures .       250,000           --          250,000
    Repayments on Notes Payable ............................      (965,250)          --       (1,595,576)
                                                               -----------    -----------    -----------
                  Net cash provided by financing activities       (801,642)          --        3,636,135

Increase (decrease) in cash ................................       497,744           --        1,504,416
Cash at beginning of period ................................     1,006,672           --             --
                                                               -----------    -----------    -----------
Cash at end of period ......................................   $ 1,504,416    $      --      $ 1,504,416
                                                               ==========     ===========    ===========




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

<PAGE>


>

                    GS AGRIFUELS CORPORATION AND SUBSIDIARIES
                          (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, 2006.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

PRINCIPLES OF CONSOLIDATION

For the period ended March 31, 2007,  the  accompanying  consolidated  financial
statements include all accounts of GS AgriFuels Corporation and its wholly-owned
subsidiaries,   Mean  Green  BioFuels,  Inc.,  NextGen  Acquisition,   Inc.  and
Sustainable Systems, Inc. from March 6, 2007 (date of acquisition) through March
31, 2007. All significant intercompany balances and transactions were eliminated
in consolidation.

COST METHOD OF ACCOUNTING FOR UNCONSOLIDATED SUBSIDIARIES

The Company  accounts for its 10% investment in ZeroPoint Clean Tech, Inc. under
the cost method. Application of this method requires the Company to periodically
review these  investments in order to determine  whether to maintain the current
carrying value or to write off some or all of the investments. 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.
Based on management's assessment, the Company believes there is no impairment at
March 31, 2007.

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 is measured on the
date of stock  issuance or the date an  option/warrant  is granted.  The Company
determined  the fair  market  value of the  warrants/options  issued  under  the
Black-Scholes Pricing Model.  Effective January 1, 2006, the Company adopted the
provisions of SFAS 123(R), 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.

REVENUE RECOGNITION

We recognize  revenue from the sale of equipment when persuasive  evidence of an
arrangement  exists,  title and risk of loss transfers to the customers,  prices
are fixed and  determinable,  and it is reasonably  assured the related accounts
receivable is collectible. Our sales terms primarily are FOB shipping point.

The liability "customer  deposits"  represents amounts invoiced to customers for
deposits and partial  payments on orders or projects not complete for  delivery.
The  revenue,  along with the project  costs,  is  recognized  upon  delivery or
completion of the project for the customer.

RECEIVABLES AND CREDIT CONCENTRATION

Accounts   receivable  are   uncollateralized,   non-interest-bearing   customer
obligations due under normal trade terms  requiring  payment within 30 days from
the invoice  date.  Accounts  receivable  are stated at the amount billed to the
<PAGE>


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

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

customer.   Accounts  receivable  in  excess  of  90  days  old  are  considered
delinquent.  Payments of  accounts  receivable  are  allocated  to the  specific
invoices identified on the customer's remittance advice or, if unspecified,  are
applied to the oldest unpaid invoices.

The carrying amount of accounts receivable has not been reduced by any valuation
allowance as of December 31, 2006.  The  receivables  in question are fairly new
and it is GS  AgriFuels'  view  that  100% will be  collected.  Management  will
consider the need to establish a valuation  allowance and review that  allowance
on a quarterly basis.

PROPERTY AND EQUIPMENT

Property and equipment are depreciated using the  straight-line  method over the
estimated useful lives of the assets.  Leasehold improvements are amortized over
the lesser of the life of the lease or their useful lives.  The Company uses the
straight line method for  amortization  and  depreciation  and  depreciates  its
vehicles over a five year period,  equipment over a 3-18 year period, lease hold
improvements  over a 15-20 year period,  and intangible assets over a 15-20 year
period. Gains and losses on depreciable assets retired or sold are recognized in
the statement of operations in the year of disposal,  and repair and maintenance
expenditures are expensed as incurred.  Property, plant and equipment are stated
at cost  and  include  amounts  capitalized  under  capital  lease  obligations.
Expenditures  for major  renewals  and  improvements  which  extend  the life or
usefulness of the asset, are capitalized.

GOODWILL AND INTANGIBLE ASSETS

GS AgriFuels  accounts for its goodwill and intangible  assets  pursuant to SFAS
No. 142, Goodwill and Other Intangible Assets.  Under SFAS 142, intangibles with
definite lives continue to be amortized on a straight-line basis over the lesser
of their estimated useful lives or contractual  terms.  Goodwill and intangibles
with  indefinite  lives  are  evaluated  at least  annually  for  impairment  by
comparing the asset's  estimated  fair value with its carrying  value,  based on
cash flow methodology.

Intangibles  with definite  lives consist  primarily of developed  technologies,
which have useful  lives and are subject to  impairment  testing in the event of
certain  indicators.  An  impairment  in  the  carrying  value  of an  asset  is
recognized whenever  anticipated future cash flows  (undiscounted) from an asset
are estimated to be less than its carrying  value.  The amount of the impairment
recognized  is the  difference  between the carrying  value of the asset and its
fair value. Based on management's  assessment,  the Company believes there is no
impairment at March 31, 2007.

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.

INVENTORIES

Inventories  are  stated  at the  lower  of  cost or  market,  with  cost  being
determined by the first-in, first-out (FIFO) method. Inventories consist of work
in process used in our biodiesel  production  segment.  Inventory at the oilseed
crush facility  consists of seed commodity at the various stages of manufacture.
The commodity is valued based on the standard contract signed by all the growers
plus the cost of crushing the seed. A physical inventory is performed monthly by
measuring  all the level in the tanks and bins during  each stage.  All the seed
commodity  is weighed on a scale  that is state  certified  as it comes into the
plant and as it leaves the plant in its final stage.

3. STOCKHOLDERS EQUITY

Our  authorized  capital stock  consists of  50,000,000  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 March 31, 2007,  there were 29,007,072  shares of our common
stock outstanding and 37,350 shares of our Series A Preferred Stock outstanding.


<PAGE>

                          CORPORATION AND SUBSIDIARIES
                          (A DEVELOPMENT STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

3. STOCKHOLDERS' EQUITY (continued)

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.

SERIES A PREFERRED STOCK

In 2001 the Company issued shares of Series A Preferred  Stock.  37,350 of those
shares remain  outstanding.  By their terms, they  automatically  converted into
37.35 shares of common stock  (adjusted to reflect the 1-for-1000  reverse stock
split in 2006.  In  November  2006 a claim was made by  certain  holders  of the
Series A Preferred Stock that they are entitled to receive  8,300,000  shares of
common  stock by  reason of  promises  made to them by prior  management  of the
Company and actions taken by the sole  director of the Company in 2003.  Current
management has reviewed the claims and the underlying  facts,  and has concluded
that the claims are not legally  valid.  Negotiations  are  ongoing,  aimed at a
resolution of the claims.

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).

On October 17, 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.

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.
The Management Services Agreement was terminated effective January 1, 2007. As a
result,  the  Company  wrote-off  $126,483  of  prepaid  expense  related to the
Agreement during the three months ended March 31, 2007.

On March 6, 2007, GS AgriFuels  acquired the  remaining  85% of the  outstanding
capital stock of  Sustainable  Systems,  Inc. Under the purchase  agreement,  GS
AgriFuels  issued the  following  performance-based  options:  534,500 five year
options to purchase GS AgriFuels  common stock,  exercisable at $3.50 per share,
267,250 five year options to purchase GS AgriFuels common stock,  exercisable at
$7.00 per share and 133,625 five year  options to purchase GS  AgriFuels  common
stock,  exercisable  at $10.50 per  share.  The fair  value of the  options  was
determined  to be  $1,102,673,  $527,017  and  $255,090,  respectively,  and was
calculated using the Black-Scholes Option Pricing Model.

STOCK WARRANTS

In  conjunction  with  GS  AgriFuels'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 SUBSIDIARIES
                          (A DEVELOPMENT STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

3. STOCKHOLDERS' EQUITY (continued)

In  conjunction  with GS  AgriFuels's  October 30, 2006 issuance of  convertible
debentures to Cornell  Capital,  GS AgriFuels  issued to Cornell Capital 540,000
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  $1,079,460.  The note discount is being  amortized  over the
term of the debenture.

Summarized information about GS AgriFuels' stock options and warrants
outstanding at March 31, 2007 is as follows:

Weighted Average                        Number of Shares      Exercise Price

Outstanding at January 1, 2007           7,665,000              $ 2.35
Granted at fair value                      935,375                5.50
Forfeited                                     --                   --
Exercised                                     --                   --
                                         ---------             -------
Outstanding at March 31, 2007            8,060,375                2.87
<TABLE>

Summarized   information   about  GS  AgriFuels's  stock  options  and  warrants
outstanding at March 31, 2007 is as follows:
<CAPTION>

Exercise Prices  Number of Options   Weighted Average    Weighted Average                       Exercisable
                   Outstanding          Remaining        Exercise Price    -----------------------------------------------
                                    Contractual Life                       Number of Options     Weighted Average Exercise
                                                                                                             Price
--------------------------------------------------------------------------------------------------------------------------
<C>            <C>                      <C>                <C>                 <C>                             <C>
$0.001         1,665,000                5.00               0.001               1,665,000                       0.001
$3.000         6,000,000               10.00               3.000               1,200,000                       3.000
$3.500           534,500                5.00               3.500                 534,500                       3.500
$7.000           267,250                5.00               7.000                 267,250                       7.000
$10.500          133,625                5.00              10.500                 133,625                      10.500
               8,060,375                                                       8,060,375
</TABLE>

The fair value of each option  granted  during 2007 is  estimated on the date of
grant  using  the   Black-Scholes   option-pricing   model  with  the  following
assumptions:

                                                 2007
                                              ---------
Dividend yield                                      --
Expected volatility                               150%
Risk-free interest rate                          4.53%
Expected life                                    5yrs.

4. ACQUISITIONS & MERGERS

GS AgriFuels follows SFAS No. 141, "Business Combinations." Under this standard,
business  acquisitions  are accounted for under the purchase method and goodwill
represents the excess of the purchase price of a business  acquisition  over the
fair market  value of the net assets  acquired at the date of  acquisition.  The
statement also requires the recognition of acquired intangible assets apart from
goodwill if it arises from contractual and other legal rights.  If an intangible
does not arise from contractual or other legal rights, it shall be recognized as
an asset apart from goodwill only if it is capable of being separated or divided
from the acquired entity and sold, transferred, licensed, rented, or exchanged.

On June 7, 2006, the Company acquired Mean Green BioFuels,  Inc., a newly formed
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

<PAGE>

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

4. ACQUISITIONS & MERGERS (continued)

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).  Since the  combination was  consummated  between  entities under
common control,  the transaction was accounted for at book value, and the amount
of  consideration  paid over the book value of assets received of $1,950,601 was
recorded  as a  reduction  of paid in  capital.  Prior to the  acquisition,  the
predecessor  operations of Mean Green BioFuels,  Inc. recorded an operating loss
of $57,573 for the period from January 1, 2006 to May 23, 2006.

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  (one)1 share of GS
AgriFuels  common  stock in return for every one thousand  (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 stock market liquidity for both companies, which can be material to the
future development activities of the combined companies.

On October 30, 2006 GS AgriFuels,  through its subsidiary  NextGen  Acquisition,
Inc.,  completed the  acquisition of NextGen Fuel, Inc. The total purchase price
of $21,204,437  paid  $17,000,000 in cash at closing and notes payable issued to
the sellers for $4,204,437.  The seller notes are payable upon NextGen obtaining
sales of at least $7,500,000 subsequent to the acquisition.  The Company engaged
a third party valuation expert to perform the purchase price allocation, and the
purchase price was allocated as follows:  $2,280,937 to cash; $14,700,000 to the
intangible asset energy technologies,  amortizable over the expected useful life
of seven years; $5,453,816 to goodwill; $153,800 to accounts payable and accrued
expenses; and $1,076,500 to customer deposit liability.  To fund the acquisition
of NextGen, GS AgriFuels issued a $13,000,000  convertible  debenture to Cornell
Capital  Partners and a $6,000,000  Senior Secured Term note to Stillwater Asset
Backed Fund,  LP, the  proceeds  both of which are  detailed  below.  See Note 6
Financing  Arrangements  for  additional  details on the seller  note due to the
NextGen's former shareholders.

On January 16, 2007, GS AgriFuels  executed an agreement with Fulton  Biodiesel,
LLC, a subsidiary of Homeland Energy Biofuels,  LLC ("Homeland  Energy") to form
GS Fulton  Biodiesel LLC ("GS Fulton  Biodiesel").  The  agreement  calls for GS
AgriFuels  to own 80% of this  company  and the  construction  of a ten  million
gallon  per year  biodiesel  plant in  Fulton,  New York which will be the first
commercial-scale  facility in New York.  GS Fulton  Biodiesel  and NextGen Fuel,
Inc. are party to a settlement and services  agreement that requires the payment
of  $660,000 to an  engineering  and design  firm for  technical  services to be
provided for the  construction of the facility.  As of December 31, 2006 NextGen
Fuel,  Inc.  deposited  $220,000 into an escrow  account under the terms of this
agreement.  The  engineering  and  design  firm  subsequently  refused to accept
payment and disputes certain provisions of the settlement and services agreement
and the escrow amount was returned.

On March 6, 2007,  GS  AgriFuels  completed  the  acquisition  of the  remaining
approximately 85% of the outstanding capital stock of Sustainable  Systems,  Inc
(prior to the  acquisition,  the Company had invested  $2,000,000 in Sustainable
Systems  which had been  accounted  for under the cost  method  and  represented
approximately 15% of the outstanding stock). The total negotiated purchase price
of  $12,657,093,  to be paid as follows:  $100,000 in a short term note payable,
notes payable issued to the sellers for $1,900,000,  two  convertible  debenture
issued to the sellers for totaling  $7,104,018,  and $3,553,075 in GS AgriFuels'
common  stock at an agreed upon fair value of $4.50 per share.  The $1.9 million
note is due upon the completion and commissioning of Sustainable's current plant
expansion.  The two $3.55 million debentures are due on the first anniversary of
the closing and the second anniversary of the closing, respectively. The Company
has engaged a third party valuation  expert who is in the process of determining
the purchase  price  allocation.  The excess of the purchase  price over the net
assets has been recorded in Goodwill in the amount of $13,159,626 until
<PAGE>

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

4. ACQUISITIONS & MERGERS (continued)

the identifiable  intangibles can be valued. GS AgriFuels' results of operations
for the period  include the results of  operations of  Sustainable  Systems from
March 6, 2007  through  March 31,  2007.  Proforma  results for the three months
ended March 31, 2007 including  sustainable from January 1, 2007 are revenues of
$1,903,517, net loss of $3,899,904, and loss per share of $0.14.

The  Company  is party to a  Development  Services  Agreement  with  Mean  Green
Biodiesel  of Georgia,  LLC (f/k/a  Cantrell  Winsness  Technologies,  LLC) that
includes  assignment of rights in and to the Company's planned biodiesel project
in Memphis, Tennessee. The terms of this agreement include reimbursement by Mean
Green Biodiesel of Georgia,  LLC of expenses  incurred by the Company both prior
and  subsequent  to the execution of the  Development  Services  Agreement,  the
retention  of 9% equity  ownership  stake by the  Company  in first ten  million
gallon per year facility  developed for Mean Green Biodiesel of Georgia,  LLC at
the site, and the purchase of one ten million  gallon per year biodiesel  system
from NextGen  Fuel,  Inc.  Mean Green  Biodiesel  of Georgia,  LLC is owned by a
former consultant to the Company.  The Company may decide to co-locate a wholly-
or majority-owned biodiesel production facility at the Memphis site.

5. RELATED PARTY TRANSACTIONS

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
was for a term of five years and provided 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, and extend the term of the cash  compensation
of $150,000 per annum  through May 23,  2011.  The fair value of the options was
calculated using the  Black-Scholes  model to be $144,000,  and the Company will
recognize the related expense over the five year term of the management services
agreement. Management fee expense of $8,013 was recognized during the year ended
December  31, 2006 and $126,483 of prepaid  management  fees were  recorded,  of
which $28,800 was considered  short tem and $97,683 was considered long term. GS
AgriFuels  issued  2,025,000  shares to  GreenShift  in  payment  of  $37,500 of
management  fees due in the  second  quarter  of 2006 and to waived  $37,500  of
management fees for the first quarter of 2006. The Management Services Agreement
was terminated  effective  January 1, 2007. As a result,  the Company  wrote-off
$126,483 of prepaid  expense  related to the  Agreement  during the three months
ended March 31, 2007.

SHARE PURCHASE AGREEMENT WITH GREENSHIFT

On June 7, 2006, the Company acquired Mean Green BioFuels,  Inc., a newly formed
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).
Since the combination was consummated between entities under common control, the
transaction  was  accounted for at book value,  and the amount of  consideration
paid over the book value of assets  received  of  $1,950,601  was  recorded as a
reduction  of  paid  in  capital.  Prior  to the  acquisition,  the  predecessor
operations of Mean Green  BioFuels,  Inc.  recorded an operating loss of $57,573
for the period from January 1, 2006 to May 23, 2006.


LOAN TO COMPANY FROM SEAWAY VALLEY FUND

On December 28, 2006,  the Company  issued Seaway Valley Fund, LLC a Convertible
Debenture  due  December  28,  2008 with a face  amount of  $250,000  for monies
received  by the  Company in January  2007 from  Seaway  Valley in the amount of
$250,000.  The terms of the  Convertible  Debenture  are the  following:  (i) an
interest rate of eight percent (8%) payable,  at the option of Seaway Valley, in
cash or registered  common stock in GS AgriFuels  Corporation or any combination
thereof; (ii) shall become due and be payable monthly commencing March 31, 2007,
unless otherwise  waived or deferred by Seaway Valley;  (iii) payment in full or
in part of principal  plus accrued but unpaid  interest  shall be made only upon
demand by Seaway Valley  commencing April 30, 2007; (iv) any unpaid balance,  at
the option of Seaway Valley,  shall become  immediately  due and payable without
notice or  demand  in the  event of  default,  and (v) any  accrued  and  unpaid
interest shall be convertible upon
<PAGE>


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


5. RELATED PARTY TRANSACTIONS (continued)

demand of Seaway  Valley  into  registered  shares of common  stock equal to the
lower  of:  (a)  $3.00  per  share;  or (b)  the  lowest  convertible  debenture
conversion price,  preferred,  common or any other class of stock or convertible
security  issuance  price,  or warrant or option  issuance  price,  issued  from
December  28, 2006 until the time of  conversion(s);  or (c) 100% of the closing
market price as of the date hereof provided that any such conversion price shall
not trigger a lowering of the conversion  price of any convertible  debenture(s)
outstanding  at December 28, 2006. As of the date of this filing,  Seaway Valley
has not exercised his right to convert any  obligations  in GS AgriFuels  common
stock. For the three months ended March 31, 2007, interest expense of $3,616 has
been accrued for this obligation. The controlling member of Seaway Valley is the
Company's President and CEO.

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
technologies that are deployed in ethanol plants to obtain biodiesel  feedstocks
from co-products of ethanol production.

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 third or
fourth quarter of 2007.

NextGen  Fuel,  Inc.,  has an exclusive  manufacturing  agreement  with Warnecke
Design  Service,  Inc.,  for the design,  fabrication,  assembly,  testing,  and
commissioning of NextGen Fuel's biodiesel  production systems.  During the three
months ended March 31, 2007, the Company paid deposits  under the  manufacturing
agreement  totaling  approximately  $126,000 to  Warnecke  during the year ended
December 31, 2006, and had work in process inventory of $888,073, other deposits
of  $475,936,  and  accounts  payable  and accrued  expenses of $362,123  due to
Warnecke at March 31,  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.


The  Company  is party to a  Development  Services  Agreement  with  Mean  Green
Biodiesel  of Georgia,  LLC (f/k/a  Cantrell  Winsness  Technologies,  LLC) that
includes  assignment of rights in and to the Company's planned biodiesel project
in Memphis, Tennessee. The terms of this agreement include reimbursement by Mean
Green Biodiesel of Georgia,  LLC of expenses  incurred by the Company both prior
and  subsequent  to the execution of the  Development  Services  Agreement,  the
retention  of 9% equity  ownership  stake by the  Company  in first ten  million
gallon per year facility  developed for Mean Green Biodiesel of Georgia,  LLC at
the site, and the purchase of one ten million  gallon per year biodiesel  system
from NextGen  Fuel,  Inc.  Mean Green  Biodiesel  of Georgia,  LLC is owned by a
former consultant to the Company.  The Company may decide to co-locate a wholly-
or majority-owned biodiesel production facility at the Memphis site.

6. FINANCING ARRANGEMENTS

The following is a summary of the Company's financing arrangements as of March
31, 2007:

Short-term borrowings
     Short term loans - Greenshift ..................   $   195,205
     Short term loans - affiliate ...................   $   174,875
     Convertible debenture - GreenShift .............   $   124,949
                                                        -----------
             Total short-term borrowings ............   $   495,030

Long term convertible debentures:
     Convertible debenture - Cornell Capital Partners   $ 1,949,631
     Convertible debenture - Cornell Capital Partners   $ 5,500,000
     Convertible debenture - Cornell Capital Partners   $13,000,000

<PAGE>

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

6. FINANCING ARRANGEMENTS (Continued)

Note discounts .................................   $   (950,741)
     Convertible debenture - Sustainable sellers   $  3,552,005
     Convertible debenture - Sustainable sellers   $  3,552,013
                                                   ------------
Total of long term convertible debentures ......   $ 26,602,908

Long-term debt, current portion:
     Note payable - Sustainable Sellers ........   $    100,000
     Note payable - Stillwater .................   $  5,094,000
     Note payable - NextGen sellers ............   $  4,029,437
     Note payable - T Scozzafava ...............   $    250,000
     Note payable - American State Bank ........   $  1,800,000
                                                   ------------
         Total long-term debt, current portion .   $ 11,273,437

Long-term debt, long term portion:
     Note payable - Sustainable sellers ........   $  1,900,000
     Notes Payable - MT Dept of Agriculture ....   $    124,052
     Note Payable - First Community Bank .......   $  1,381,734
     Note Payable - Great Northern Development .   $    300,000
     Note Payable - Great Northern Development .   $    724,162
     Note payable - Great Northern Development .   $    140,857
                                                   ------------
     Total long-term debt, current portion .....   $  4,570,804



The  following  chart  is  presented  to  assist  the  reader  in  analyzing  GS
AgriFuels's ability to fulfill its fixed debt service  requirements of March 31,
2007 and GS AgriFuels' ability to meet such obligations:

Year                                      Amount
-----------------------------------------------------
2007                                     $11,668,467
2008                                       5,452,005
2009                                      24,101,643
2010                                         724,162
2011                                         124,052
2013                                       1,381,734
2016                                         300,000
2020                                         140,857
                                          ----------
Total minimum payments due under current
  and long-term obligations              $43,892,920
                                         ===========

SHORT TERM BORROWINGS:

During the three months ended March 31, 2007, GS AgriFuels  received  $65,261 in
short term loans from GreenShift  Corporation.  These loans bear interest at 8%,
for which  $3,382 in interest  expense was  accrued for the three  months  ended
March 31, 2007.  The total  principal  amount due to  GreenShift  for short term
loans was $195,205 as of March 31, 2007.

SHORT TERM BORROWINGS - AFFILIATE

During 2006, GS CleanTech Corporation,  a subsidiary of GreenShift  Corporation,
paid $174,875 on behalf of GS AgriFuels for services performed during that year.
These  non-interest-bearing  advances  are payable on demand.  GreenShift  is an
approximate 80% shareholder of GS AgriFuels and is controlled by Kevin Kreisler,
Chairman and Chief Executive Officer of GS AgriFuels.

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 was due and payable on December 31, 2006, bearing interest
at 8% per year,  payable  in cash or  convertible  into our  common  shares.  On
December 31, 2006,  this  debenture  was renewed and has a new maturity  date of
December 31, 2007 with a fixed conversion price
<PAGE>

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

6. FINANCING ARRANGEMENTS (Continued)

of $3.00.  The number of issuable common shares upon conversion was 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 did 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.  The note  discount was
fully amortized as of December 31, 2006. During the three months ended March 31,
2007, the Company repaid GreenShift  $151,652 on the debenture.  In exchange for
these  payments the amount of the debenture  owed to  GreenShift  was reduced by
$151,652.  As of March 31, 2007, the principal  balance due on these  debentures
was  $124,949.  For the three months ended March 31, 2007,  interest  expense of
$3,696 for this obligation was incurred and accrued.

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 Securities  Purchase  Agreement was amended on
October 30, 2006 to provide for only the one $5,500,000 debenture,  with certain
modifications  (see below) Under the terms of the Securities  Purchase Agreement
(as amended on October 30, 2006), the Debenture carries an interest rate of 10%,
and principal and interest on the Debenture,  which are due at the maturity date
of June 7, 2009, 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.  If the bid
price of company stock falls below the  conversion  price,  GS AgriFuels has the
right to satisfy the  redemption  obligation by paying cash equal to 120% of the
principal  redeemed,  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 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 Debenture or exercise of the Warrant.  The registration rights
agreement  with  Cornell  Capital  entitles  Cornell to  liquidated  damages for
failure to  register,  and  Cornell  has waived any  liquidated  damages due for
failure to  register.  This is a one time waiver and Cornell  retains its rights
under the  agreement  for future  periods.  For the three months ended March 31,
2007, interest expense of $135,616 for this obligation was incurred and accrued.

Pursuant to the terms of the agreement,  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.  Interest  expense from the  amortization of the
note discount was $2,497 for the three months ended March 31, 2007.

In conjunction with the May 2006 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 10%, and principal and interest on
the  Debenture,  which  are due at the  maturity  date of June 7,  2009,  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.  For the three months ended
March 31, 2007, interest expense of $48,073 for this obligation was incurred and
accrued.

On October  30, 2006 GS  AgriFuels  completed  a sale of  securities  to Cornell
Capital  Partners,  LP pursuant to a Securities  Purchase  Agreement dated as of
October  30,  2006.  The  Agreement  called for  Cornell  to  purchase a Secured
Convertible  Debenture in the principal  amount of $13 million.  In  conjunction
with  this  financing,  the  Company  paid  a  financing  fee of  $1,300,000,  a
structuring  fee of $50,000,  legal fees of $15,000,  and  received net
<PAGE>

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

6. FINANCING ARRANGEMENTS (Continued)

proceeds of $11,635,000 that were used for the acquisition of NextGen Fuel, Inc.
The Secured Convertible Debenture will mature on October 30, 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.  In  consideration  of
Cornell's  investment in the October 30, 2006 Debenture,  GS AgriFuels issued to
Cornell a five year  Warrant to purchase  540,000  common  shares.  The exercise
price is $.001 or 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.  The fair value of the
warrants was  calculated  using the  Black-Scholes  Option Pricing Model and the
Company recorded the $1,079,460 value of the warrants as a discount to the note,
and the note discount is being amortized over the term of the debenture. For the
three months March 31, 2007,  interest expense from the amortization of the note
discount  was  $88,723.  For the three  months  ended March 31,  2007,  interest
expense of $320,548 for this obligation was incurred and accrued.

Commencing  on February 1, 2007,  Cornell  was  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 90% of 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.  Cornell has not  converted  any
portion of the Debentures into stock as of March 31, 2007.

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,  GS
Energy Corporation and Viridis Capital) have also pledged their assets to secure
the Debentures and have guaranteed the Debentures due to Cornell.

CONVERTIBLE DEBENTURE - SEAWAY VALLEY FUND

On December 28, 2006, the Company issued Seaway Valley Fund,  LLC, a Convertible
Debenture  due  December  28,  2008 with a face  amount of  $250,000  for monies
received  in January  2007 by the Company  from  Seaway  Valley in the amount of
$250,000.  The terms of the  Convertible  Debenture  are the  following:  (i) an
interest rate of eight percent (8%) payable,  at the option of Seaway Valley, in
cash or registered  common stock in GS AgriFuels  Corporation or any combination
thereof; (ii) shall become due and be payable monthly commencing March 31, 2007,
unless otherwise  waived or deferred by Seaway Valley;  (iii) payment in full or
in part of principal  plus accrued but unpaid  interest  shall be made only upon
demand by Seaway Valley  commencing April 31, 2007; (iv) any unpaid balance,  at
the option of Seaway Valley,  shall become  immediately  due and payable without
notice or  demand  in the  event of  default,  and (v) any  accrued  and  unpaid
interest  shall be  convertible  upon demand of Seaway  Valley  into  registered
shares of common  stock  equal to the lower of: (a) $3.00 per share;  or (b) the
lowest convertible  debenture conversion price,  preferred,  common or any other
class of stock or  convertible  security  issuance  price,  or warrant or option
issuance price,  issued from December 28, 2006 until the time of  conversion(s);
or (c) 100% of the closing market price as of the date hereof  provided that any
such  conversion  price shall not trigger a lowering of the conversion  price of
any convertible debenture(s) outstanding at December 28, 2006. As of the date of
this filing, Seaway Valley has received neither cash re-payments of principal or
cash  payments  of  interest,  nor has it  exercised  his right to  convert  any
obligations in GS AgriFuels  common stock. For the three months ending March 31,
2007,  interest  expense of $3,616 for this obligation was incurred and accrued.
The controlling member of Seaway Valley is the Company's President and CEO

DEMAND NOTE:  STILLWATER ASSET-BASED FUND, LP

On October 30, 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
<PAGE>

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

6. FINANCING ARRANGEMENTS (Continued)

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,  and in
conjunction  with the financing  NextGen  Acquisition paid an origination fee of
$75,000,  prepaid interest of $300,000,  legal fees of $35,225, and received net
proceeds of $5,589,775.  NextGen  Acquisition used $4,879,236 of the proceeds to
acquire  NextGen Fuel,  Inc.,  made a loan totaling  $568,958 to Warnecke Design
Service,  Inc. (a  subsidiary  of GS Energy,  who is also owned by the Company's
parent, GreenShift Corporation), and repaid GreenShift $141,580 for amounts paid
by GreenShift in connection  with the NextGen Fuel, Inc.  Acquisition.  The Term
Note accrues interest at a rate of 20% per annum.  Monthly payments of principal
and interest are due beginning February 1, 2007, with a monthly principal amount
of at least $300,000 and additional  principal  payments made as a percentage of
cash  receipts of NextGen  Fuel,  Inc. All amounts of principal and interest not
previously  satisfied  will be due on 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.  For the three months
ending March 31, 2007,  interest  expense of $290,225  for this  obligation  was
incurred of which $89,012 was accrued.

DEMAND NOTE - NEXTGEN SELLERS

On October 30, 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
$21,204,437,  of which  $17,000,000  was paid at closing  and demand  notes were
issued to the selling shareholders totaling $4,204,437. $3,204,437 of the demand
notes are due on October 31, 2007 or sooner if NextGen Fuel has realized revenue
of  $7,500,000  subsequent  to the  acquisition  and  there are not  claims  for
indemnification  by GS AgriFuels.  The remaining  $1,000,000  demand note,  with
interest at 6% per annum, is due to a sales consultant and is payable along with
accrued interest upon the payment by customers for biodiesel  production systems
totaling  forty  million  gallons  per year of  production  capacity,  paid on a
pro-rated basis such that the consultant shall receive payments of $250,000 with
each ten million gallon per year system on a pro-rated basis with NextGen Fuel's
receipt of cash payments for such system.

NOTE PAYABLE - SUSTAINABLE SYSTEMS SELLERS

On March 6, 2007, GS AgriFuels  purchased  the remaining 85% of the  outstanding
capital stock of Sustainable Systems,  Inc. Sustainable owns an oilseed crushing
facility in Culbertson, Montana, and is in the business of producing and selling
high oleic safflower, sunflower, and canola and other high value vegetable oils.
The purchase price was $12.6 million of which $100,000 was payable at closing, a
note was issued for $1.9 million and two $3.55 million debentures were issued to
the selling shareholders totaling $9,004,018.  The $1.9 million note is due upon
the completion and commissioning of Sustainable's  current plant expansion which
is expected to be completed in the first quarter of 2008 and accrues interest at
5% per annum to be paid on a pro-rated  basis at maturity.  For the three months
ending  March 31,  2007,  interest  expense  of $6,506 for this  obligation  was
incurred and accrued.

CONVERTIBLE DEBENTURES - SUSTAINABLE SYSTEMS SELLERS

On March 26, 2007, GS AgriFuels  acquired about 85% of the  outstanding  capital
stock of Sustainable Systems,  Inc. for a total purchase price of $12.6 million.
Sustainable owns an oilseed crushing facility in Culbertson,  Montana, and is in
the  business of  producing  and selling high oleic  safflower,  sunflower,  and
canola and other high value  vegetable  oils.  The  Company  issued  convertible
debentures at the closing for $3.55 million due on the first  anniversary of the
closing and another $3.55 million due on the second  anniversary of the closing.
The debentures accrue interest at 5% per annum and are to be paid on a pro-rated
basis on each relevant maturity date. The convertible debentures are convertible
into the Company's  common stock at the option of the holder any time after each
of their  respective  maturity  dates at a rate  equal  to the  volume  weighted
average price of the common stock for the 20 trading days prior to any such date
of conversion,  with a minimum  conversion price of $4.50. If at the time of the
conversion  the market price of the  Company's  common stock is less than $4.50,
the  difference  between  that stock price and $4.50 will be  multiplied  by the
number  of share  due and that  amount  will be paid in  cash.  The  convertible
debentures  may be  redeemed  with  cash by the  Company  at any  time  prior to
conversion by the holder without penalty.  The Company's  obligations  under the
Note and the  convertible  debentures  are secured by the Company's  Sustainable
common  stock  holdings.  For the three months  ending March 31, 2007,  interest
expense of $24,329 for these obligations was incurred and accrued.
<PAGE>

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

6. FINANCING ARRANGEMENTS (Continued)

INVENTORY FINANCING - SUSTAINABLE SYSTEMS

On February 5, 2007,  Sustainable Systems,  Inc., prior to becoming a subsidiary
of GS AgriFuels,  entered into an inventory  financing  agreement for $1,800,000
with American  State Bank. The Agreement  allows  American State Bank a security
interest in all  inventory  and any accounts  acquired  after the  agreement was
signed.  The  Agreement  accrues  interest  at a rate of 10% per annum.  Monthly
payments  consist  only of interest as of March 31,  2007 and  Sustainable  will
start making payments toward the principal in May 2007. All amounts of principal
and interest  remaining  will be due on September 1, 2007.  For the three months
ending March 31, 2007,  interest  expense of $22,764 for these  obligations  was
incurred of which $15,288 was accrued.

NOTE PAYABLE - SUSTAINABLE SYSTEMS

On September 25, 1998, Sustainable Systems, Inc., prior to becoming a subsidiary
of GS AgriFuels, signed a note payable for $1,381,733 with First Community Bank.
The note is secured by an  interest in all the assets of  Sustainable  including
the accounts receivable. The note accrues interest at a rate of 7.68% per annum.
Monthly  payments  consist of principal and interest and a final payment will be
due on September 25, 2013.

NOTES PAYABLE - SUSTAINABLE SYSTEMS

Sustainable   Systems  has  various  notes  payable  with  two  other   lenders.
Sustainable  has signed  three  notes  payable  with the Montana  Department  of
Agriculture  totaling $124,052.  All notes accrue interest at the rate of 3% per
annum with  payments of principal  and interest  beginning  March 6, 20011.  The
notes are secured by an interest in various equipment including eleven pumps and
a solvent recovery system. For the three months ending March 31, 2007,  interest
expense of $918 for these obligations was incurred and accrued

Sustainable  has signed  four notes with  Great  Northern  Development  totaling
$1,165,019.  Three of the notes totaling $440,857 accrue interest at the rate of
6% per annum.  The payment  terms for the notes are as follows:  the $11,301 and
$129,556 notes are to be paid off with 180 monthly payments  beginning  December
15, 2005 with a maturity  date of November 15, 2020 and the $300,000  note is to
be paid off with 120 monthly  payments  beginning March 15, 2006 with a maturity
date of February 15, 2016. The fourth note for $724,162  accrues interest at the
rate of 5% per annum with  payments of  principal  only thru  November  2007 and
principal and interests  payments  until the maturity date of November 15, 2010.
For the three  months  ending March 31,  2007,  interest  expense of $29,364 for
these obligations was incurred and accrued.

7. INVESTMENTS

INVESTMENT IN SUSTAINABLE SYSTEMS UNDER FINANCING AGREEMENT

On September  13, 2006, GS AgriFuels,  Inc.  entered into a financing  agreement
with  Sustainable  Systems,  LLC  whereby  AgriFuels  would  invest  a total  of
$3,000,000 into the company for a 15% stake in the company. As of March 6, 2007,
we had acquired an  approximately  15% interest  through advances of $2,000,000,
accounted for under the cost method. On March 6, 2007, GS AgriFuels acquired the
remaining  additional  85% of the  outstanding  capital  stock for $12.6 million
making Sustainable a wholly-owned subsidiary of the Company.

INVESTMENT IN ZEROPOINT CLEAN TECHNOLOGIES, INC.

In August 2006, GS AgriFuels  entered into a Series A Preferred  Stock  Purchase
Agreement with  ZeroPoint  Clean Tech,  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 Tech, Inc. also issued to GS
AgriFuels  56,900  five year  warrants to purchase  ZeroPoint  Clean Tech,  Inc.
common stock that are exercisable at $32.97 per share.

8. GOVERNMENT GRANTS

On September  28, 2006,  Sustainable  Systems was awarded a $700,000 a Workforce
Innovation  in  Regional  Economic  Development  (WIRED)  grant from the Montana
Department of Commerce  (MDOC).  This grant  reimburses the Company for expenses
related to  training  employees  in gaining  skills and  competencies  needed to
obtain or  upgrade  employment  skills in high  growth  industries  or  economic
sectors.  The Company is required to provide to the MDOC detailed  documentation
regarding the projected  training costs, a hiring and training plan as well as a
commitment to provide the resources necessary for the completion of the training
project. Sustainable [GRAPHIC OMITTED]
<PAGE>
                    GS AGRIFUELS CORPORATION AND SUBSIDIARIES
                          (A DEVELOPMENT STAGE COMPANY)
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

8. GOVERNMENT GRANTS (Continued)

received  $76,960 in grant income during the three months ending March 31, 2007.
The grant is contingent upon the Company  submitting  evidence of the commitment
to the  project  within  six  months of the award,  providing  periodic  project
progress  reports  detailing the status of the project,  percentage  completion,
costs  incurred,  as well as an  evaluation by the MDOC a year from the contract
date.

9. SUBSEQUENT EVENTS

None.

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.  . Readers  should  carefully  review the risk factors  described in
other  documents GS AgriFuels  files from time to time with the  Securities  and
Exchange Commission (the "SEC"), including the Annual Report on Form 10KSB filed
as of December 31, 2006.

OVERVIEW

GS AgriFuels  Corporation  ("we," "our," "us," "GS AgriFuels," or the "Company")
is  a  development  stage  Delaware  corporation  that  manufactures  and  sells
proprietary   agrifuels  and  renewable  energy  production   equipment  and  is
developing  facilities  to  produce  and sell  clean  fuels and energy and other
agriproducts from biomass utilizing  proprietary  technologies and industry know
how. GS AgriFuels also makes both majority and minority investments in companies
with  which  GS  AgriFuels  seeks  to form  strategic  relationships  and  where
management   believes   such   investments   offer  the  potential  for  capital
appreciation.

Concerns  over  climate  change,  continued  growth  in energy  demand,  and the
stability  and  pricing of the  petroleum  markets  are  driving a global  shift
towards   increased   reliance  on   alternative   energy   sources,   including
biomass-derived  fuels. Biomass is the most abundant and only resource available
in the time to satisfy the world's expansively growing demand for carbon-neutral
liquid  fuels.  GS AgriFuels  and its  portfolio  companies  own or hold the use
rights  to  a  number  of  patented  and  patent-pending   biomass   extraction,
preparation,  and  refining  technologies  that  convert  biomass into clean and
renewable energy and fuels.

Our technologies and the technologies of certain portfolio  companies  encompass
several classes of technology,  including  innovative  extraction,  desiccation,
homogenization,   process   intensification,   biodiesel   production,   biomass
gasification, reformation, and catalytic technologies. Our development plans are
based on the use of these technologies to:

     >>   Sell equipment at high margins into selected market segments;

     >>   Acquire  long term  rights to  high-quality  sources of  biomass  with
          low-risk and at low-cost;

     >>   Produce  biomass-derived  energy  and  fuels  out  of  non-traditional
          feedstocks such as corn oil and
         cellulosic biomass;

     >>   Acquire   production  assets  in  mature   agribusinesses  -  such  as
          traditional  corn  ethanol,  oilseed  crushing and other  agriproducts
          processing  facilities - and  synergistically  upgrade these locations
          into integrated multi-feedstock, multi-fuel ("IMF") biorefineries.

We believe that combined  applications of these  technologies  may have wide and
disruptive  application  potential  throughout the landscape of the agriproducts
sector. Our technologies are robust,  scalable,  energy efficient,  modular and,
importantly,  capable of rapid and  cost-effective  "plug-and-play"  integration
into the existing agribusiness infrastructure.

These advantages  converge to potentially  enable the refining of many different
alternative feedstocks into clean and renewable energy and a number of different
clean fuels  cost-effectively  at small scales.  This provides us with,  what we
believe  to be,  highly  valuable  opportunities  to  reduce  commodity  risk by
creating  opportunities to manage  production  assets in response to fluctuating
commodity market conditions.  No single  conventional or new technology or group
of technologies that we are aware of can currently achieve this.

Commercial  scale  early-adopter  and pilot  deployments of our technologies are
currently in operation and are used for ongoing  customer  demonstrations  as we
service our current  biodiesel  equipment  sales  pipeline.  We also rely on our
pilot  deployments to prove out the economics of our own planned fuel production
facilities for prospective financing sources and project partners.

GS AgriFuels is currently  developing  several sites for the construction of our
planned  production  facilities.  Most of our  planned  facilities  will have an
initial nameplate capacity of five (5) or ten (10) million gallons of biodiesel
<PAGE>

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

production and potentially five (5) million gallons of ethanol,  methanol and/or
synthetic diesel production derived from biomass  gasification and gas-to-liquid
technologies.  GS AgriFuels' production plans are based on leveraging technology
and/or geography to establish a feedstock procurement  advantage,  and intend to
accomplish this by: (i) co-locating  agrifuels  production assets directly at or
in proximity to our facility's  source of biomass  feedstock,  such as an animal
processing  facility  or an oil seed  crushing  facility;  and/or (ii) 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  plans are to build a large
number of smaller,  strategically placed or "distributed"  production facilities
at or in proximity to the plants'  source of  feedstocks.  Finally,  the Company
also has and  intends to  continue  to acquire  existing  production  assets and
upgrade  these  assets  through the  implementation  of one or more  proprietary
technologies.

Our  business  model  is  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 five (5)
million and ten (10) million  gallons per year,  although the modular nature and
small  footprint  of the  technology  allow our  customers to rapidly and easily
expand plant production capacity.

Key recent developments include:

     >>   Acquisition of Biodiesel  Technology  Provider.  The Company completed
          the acquisition of biodiesel technology provider,  NextGen Fuel, Inc.,
          which has  developed  and begun  commercialization  of a  proprietary,
          patent-pending  continuous flow biodiesel system.  The systems,  which
          include both direct and transesterification,  are skid mounted and can
          produce five (5) million or ten (10) million gallons per year;

     >>   Sales of Biodiesel  Production  Equipment.  The Company has executed a
          number of contracts to sell NextGen's biodiesel  production systems to
          various clients;

     >>   Acquisition of Production Rights to Corn Oil Extraction  Systems.  The
          Company  entered into an  agreement  with an  affiliate,  GS CleanTech
          Corporation,  to obtain the exclusive biodiesel  production rights for
          corn  oil  extracted   through  the   utilization  of  GS  CleanTech's
          patent-pending Corn Oil Extraction Systems ("COES");

     >>   Acquisition of Feedstock.  The Company has executed agreements for the
          purchase of more than 25 million gallons per year of hedged crude corn
          oil from ethanol facilities at rates equal to about 50% of diesel spot
          prices;

     >>   Development  of  Biodiesel  Production  Facilities.  The  Company  has
          completed  preliminary   engineering  and  permitting  activities  for
          biodiesel  production sites in Fulton, New York,  Memphis,  Tennessee,
          and  Spencerville,  Ohio,  and we are  currently in various  stages of
          negotiations to deploy a number of  majority-owned  corn oil biodiesel
          production  facilities  on-site at several existing ethanol facilities
          in the Mid-Western U.S.;

     >>   Acquisition of Oilseed Crush  Facility.  The Company  acquired 100% of
          the  outstanding  stock of Sustainable  Systems,  Inc., a developer of
          oilseed  crush  facilities  with  currently  one plant in operation in
          Culbertson, Montana that is currently expanding its oilseed extraction
          and  vegetable  oil refining  capability  from 300 tons per day to 600
          tons per day.  Management  intends to locate biodiesel  production and
          other  biomass-derived  energy and fuels production capability on-site
          at this facility;

     >>   Investment in ZeroPoint  Clean Tech, Inc. The Company made a strategic
          investment  in the  development  stage company  ZeroPoint  Clean Tech,
          Inc.,   which  is  developing   for   commercialization   a  range  of
          technologies related to biomass gasification, gas-to-liquid, and water
          evaporation among others; and

     >>   Distribution  Agreement with ZeroPoint Clean Tech, Inc. In conjunction
          with  the  investment  in  ZeroPoint,   the  Company  entered  into  a
          reciprocal sales and marketing  agreement whereby  ZeroPoint  acquired
          the worldwide,  non-exclusive rights to market and sell certain of our
          technologies,   and  GS  AgriFuels  acquired  the  exclusive  use  and
          marketing  rights for  ZeroPoint's  patent  pending  gasification  and
          gas-to-liquids  technology  in the North  American  ethanol  industry.


COMPANY BACKGROUND

     The Company  incorporated in the State of Delaware on February 17, 2000. On
     June 7, 2006,  the Company  acquired  Mean Green  BioFuels,  Inc.,  a newly
     formed company, from GreenShift Corporation. At the closing, GreenShift
<PAGE>

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

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, Inc. to GS AgriFuels Corporation.

In August 2006, GS AgriFuels  acquired an approximate  10% interest in ZeroPoint
Clean  Tech,  Inc.  ("ZeroPoint")  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 and optimize high yields of high-quality  synthesis
gas or "syngas" and can be operated at greater cost  efficiencies  as well as on
smaller scales. As part of the transaction,  GS AgriFuels also received warrants
to acquire  another 4% of  ZeroPoint.  In  conjunction  with the  investment  in
ZeroPoint,  the Company entered into a reciprocal sales and marketing  agreement
(later  amended and updated in February  2007)  whereby  ZeroPoint  acquired the
worldwide,  non-exclusive  rights to market and sell  certain  of the  Company's
technologies,  and GS AgriFuels  acquired the exclusive use and marketing rights
for ZeroPoint's patent pending gasification and gas-to-liquids technology in the
North American ethanol industry.

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.  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, among other related and
third  party  customers,  NextGen  Fuel,  Inc.  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  stock market  liquidity
for both  companies,  which may  positively  impact  Company's  ability to raise
capital in the future if need be.

On October 31, 2006,  GS AgriFuels  purchased  100% of the  outstanding  capital
stock  of  NextGen  Fuel,  Inc.  NextGen  Fuel is  engaged  in the  business  of
developing  and marketing  proprietary  esterification  and  transesterification
biodiesel process technologies.

As of December 31, 2006, the Company had owned 15% of Sustainable  System,  Inc.
as a result of  investing  $2 million in the capital  stock of the  company.  In
March 2007, GS AgriFuels  completed the  acquisition of the remaining 85% of the
outstanding  capital stock of  Sustainable  Systems,  Inc.  Sustainable  Systems
business model is to acquire or build multiple oilseed crush facilities in North
and South America.  Sustainable  currently owns and operates an oilseed crushing
facility in Culbertson,  Montana, which produces and sells high oleic safflower,
sunflower,  canola and other  vegetable  oils.  This  acquisition is designed to
accelerate the  development  of the company's  oilseed crush  biorefineries  and
related  biomass-to-energy  development  projects as well as allow the continued
expansion of and acceleration of the company's  ability to service  customers in
the food grade vegetable oil program.

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.
<PAGE>

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

BUSINESS RISK FACTORS (Continued)

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.

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.

<PAGE>

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

BUSINESS RISK FACTORS (Continued)

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.

              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.



<PAGE>


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

RESULTS OF OPERATIONS
THREE MONTHS ENDED MARCH 31, 2007 VERSUS THE THREE MONTHS ENDED MARCH 31, 2006

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.

REVENUES

Total revenues  related to the oilseed  crushing  facility were $418,138 for the
three months ended March 31, 2007.

COST OF REVENUES

Cost of revenues  for the three months  ended March 31, 2007 were  $456,888.  Of
this  amount,  $452,463  were  related to the  oilseed  crushing  facility,  the
remaining expenses of $4,425 were related to NextGen.

SELLING,GENERAL AND ADMINISTRATIVE EXPENSES

During the three months ended March 31, 2007, GS AgriFuels'  operating  expenses
consisted of $523,384 in selling,  general and administrative costs,  consisting
primarily of legal, consulting and accounting expenses as well as other expenses
related to the development of the Company's biofuels initiatives,  $1,884,781 in
stock-based  compensation  resulting  from  the  issuance  of  performance-based
options to employees and  management of Sustainable  Systems in connection  with
the  acquisition  of that  subsidiary,  and  amortization  of energy  technology
intangibles of $518,288.

From December 2005 to March 2007,  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 $124,949 as of March 31, 2007.

LIQUIDITY AND CAPITAL RESOURCES

At March 31, 2007, GS AgriFuels had current assets  totaling  $7,716,398 and had
current liabilities totaling $23,630,126, resulting in a working capital deficit
of $15,913,728.

On March 6, 2007, GS AgriFuels completed the acquisition of the remaining 85% of
the outstanding  capital stock of Sustainable  Systems,  Inc. The total purchase
price of $12.6  million was paid through $3.6  million in GS  AgriFuels'  common
stock at a price of $4.50 per share, a $1.9 million note due upon the completion
and commissioning of Sustainable's  current plant expansion as well as two $3.55
million  debentures  due on the first  anniversary of the closing and the second
anniversary of the closing, respectively.

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.

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.

<PAGE>

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  them  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 first 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

         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 1st
quarter of 2007.





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  pursuant to Exchange Act Rules
     13a-15(e) and 15d-15(e).

     31.2 Certification  of 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

By:           /S/       THOMAS SCOZZAFAVA
              ---------------------------
                        THOMAS SCOZZAFAVA
                        Chief Executive Officer


Date:         May  21, 2007


By:           /S/       KEVIN KREISLER
              -------------------------
                        KEVIN KREISLER
                        Chief Financial Officer


Date:         May 21, 2007