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                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

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

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


                QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (D)
                     OF THE SECURITIES EXCHANGE ACT OF 1934
                 FOR THE FISCAL QUARTER ENDED SEPTEMBER 30, 2007

                         COMMISSION FILE NO.: 001-16207



                            GS AGRIFUELS CORPORATION
--------------------------------------------------------------------------------
             (Exact name of registrant 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)                             (Zip Code)


                                 (212) 994-5374
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               (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 common  stock as of November  14, 2007 was
29,024,572

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






<PAGE>

<TABLE>

                            GS AGRIFUELS CORPORATION
                         QUARTERLY REPORT ON FORM 10QSB
                 FOR THE FISCAL QUARTER ENDED SEPTEMBER 30, 2007

                                TABLE OF CONTENTS

<CAPTION>
                                                                                                            Page No
Part I            Financial Information

<S>               <C>                                                                                           <C>
Item 1.           Financial Statements (unaudited)...............................................................3
                  Consolidated Balance Sheet -  September 30, 2007 (unaudited)...................................4
                  Consolidated Statements of Operations - for the Three and Nine Months Ended
                    September 30, 2007 (unaudited) and 2006 (unaudited)..........................................6
                  Consolidated Statements of Cash Flows - for the Nine Months Ended
                    September 30, 2007 (unaudited) and 2006 (unaudited)..........................................7
                  Notes to Consolidated Financial Statements.....................................................8
Item 2.           Management's Discussion and Analysis .........................................................23
Item 3.           Controls and Procedures.......................................................................32

Part II           Other Information

Item 1.           Legal Proceedings.............................................................................33
Item 2.           Unregistered Sales of Equity Securities and Use of Proceeds...................................33
Item 3.           Defaults upon Senior Securities...............................................................33
Item 4.           Submission of Matters to a Vote of Security Holders...........................................33
Item 5.           Other Information ............................................................................33
Item 6.           Reports on Form 8K............................................................................33

Signatures
</TABLE>











                                       2
<PAGE>




                         PART I - FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS (UNAUDITED)




































                                       3

<PAGE>


<TABLE>

                    GS AGRIFUELS CORPORATION AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEET
                      AS OF SEPTEMBER 30, 2007 (UNAUDITED)
<CAPTION>
ASSETS
Current assets:
<S>                                                                                  <C>
   Cash ..........................................................................   $    583,945
   Accounts receivable, net of allowance for doubtful accounts of $25,000 ........        825,610
   Loans due from affiliates .....................................................        568,958
   Loans receivable ..............................................................         78,000
   Interest receivable- affiliate ................................................         36,508
   Inventory .....................................................................      1,577,229
   Costs/earnings in excess of billings ..........................................        972,795
   Deposits ......................................................................        287,161
   Other current assets - related party ..........................................         68,602
                                                                                     ------------
            Total current assets .................................................      4,998,808
                                                                                     ------------
Property and equipment, net ......................................................      5,372,106

Other Assets:
   Intangible assets, net ........................................................     12,775,000
   Deferred financing costs, net .................................................      1,416,742
   Investments in unconsolidated subsidiaries, at cost ...........................      2,501,324
   Goodwill, net .................................................................     18,643,485
   Other assets ..................................................................         60,475
                                                                                     ------------
       Total other assets ........................................................     35,397,026
                                                                                     ------------
TOTAL ASSETS .....................................................................   $ 45,767,940
                                                                                     ============
LIABILITIES AND STOCKHOLDERS' EQUITY:
Current liabilities:
   Due to affiliates .............................................................   $    721,936
   Accrued interest payable - affiliate ..........................................         28,678
   Accounts payable and accrued expenses .........................................      3,549,245
   Accrued interest payable ......................................................      2,612,973
   Income taxes payable ..........................................................        253,331
   Deferred revenue ..............................................................         17,751
   Customer deposits .............................................................        805,500
   Current portion of notes payable ..............................................     10,740,032
   Current portion of convertible debentures .....................................      3,552,005
   Debenture payable - related party .............................................        200,684
                                                                                     ------------
       Total current liabilities .................................................     22,482,135
                                                                                     ------------
   Note payable ..................................................................      2,165,169
   Convertible debentures, net of current portion and discount ...................     23,236,382
                                                                                     ------------
       Total long term liabilities ...............................................     25,401,551
                                                                                     ------------
       Total liabilities: ........................................................     47,883,686
                                                                                     ------------
Stockholders' equity:
   Convertible preferred stock, $0.0001 par value, 10,400,000 shares authorized:
     Series A:  400,000 shares authorized and 37,350 shares issued and outstanding              4
     Series C:  10,000,000 shares authorized, 1,000,000 issues and outstanding ...            100
   Common stock, $0.0001 par value, 100,000,000 authorized;
   29,024,572 shares issued and outstanding ......................................          2,902
   Additional paid-in capital ....................................................      8,486,835
   Accumulated deficit ...........................................................    (10,605,587)
                                                                                     ------------
     Total stockholders' equity (deficit) ........................................     (2,115,746)
                                                                                     ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY .......................................   $ 45,767,940
                                                                                     ============
</TABLE>
                                       4
<PAGE>

<TABLE>


                    GS AGRIFUELS CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)
<CAPTION>
                                                           Three Months Ended             Nine Months Ended
                                                                 September 30                  September 30
                                                   --------------------------    --------------------------
                                                         2007            2006            2007          2006
                                                   --------------------------    --------------------------

<S>                                              <C>             <C>             <C>             <C>
Revenue ......................................   $  9,203,674    $       --      $ 11,484,763    $       --
Cost of revenues .............................      5,260,581            --         7,573,885            --
                                                 ------------    ------------    ------------    ------------
  Gross Profit ...............................      3,943,093            --         3,910,878            --

Operating expenses:
Selling, general and administrative expenses..        777,062         202,262       2,219,619         378,166
Stock based compensation .....................         13,123            --         1,897,904            --
  Amortization - Energy Technology ...........        525,000            --         1,575,000            --
                                                 ------------    ------------    ------------    ------------
     Total operating expenses ................      1,315,185         202,262       5,692,523         378,166
                                                 ------------    ------------    ------------    ------------

Operating income (loss) ......................      2,627,908        (202,262)     (1,781,645)       (378,166)

Other income (expense):
  Amortization of deferred financing fees ....       (231,585)        (50,000)       (677,534)        (62,603)
  Change in value of derivatives .............           --           (15,273)           --           (17,396)
  Grant income ...............................        127,303            --           515,242            --
  Miscellaneous income .......................          9,666            --            11,943            --
  Interest Income - related party ............          8,848            --            35,400            --
  Interest expense ...........................     (1,074,320)       (102,009)     (3,019,700)       (182,962)
  Interest expense - related party ...........           --              --           (14,769)           --
                                                 ------------    ------------    ------------    ------------
     Total other (expense)/income, net .......     (1,160,088)       (167,282)     (3,149,418)       (262,961)
                                                 ------------    ------------    ------------    ------------
Income (Loss) before provision for
    income taxes .............................      1,467,820        (369,544)     (4,931,063)       (641,127)

(Provision for)/Benefit from income taxes ....       (253,331)           --          (253,331)           --
                                                 ------------    ------------    ------------    ------------
Net income (loss) ............................   $  1,214,489    $   (369,544)   $ (5,184,394)   $   (641,127)
                                                 ============    ============    ============    ============
Common share, basic and diluted
Income (loss) per share from operations ......   $       0.04    $      (0.17)   $      (0.18)   $      (0.56)
                                                 ============    ============    ============    ============
Weighted average share of common stock
  outstanding, basic and diluted .............     29,012,905       2,217,500      28,589,016       1,149,688
                                                 ============    ============    ============    ============
</TABLE>

                                       5
<PAGE>
<TABLE>
                    GS AGRIFUELS CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)
<CAPTION>
                                                            Nine Months Ended   Nine Months Ended
                                                                 September 30        September 30
                                                                         2007                2006
                                                            -----------------   -----------------
CASH FLOW FROM OPERATING ACTIVITIES
<S>                                                               <C>            <C>
  Net loss ....................................................   $(5,184,394)   $  (641,127)
Adjustments to reconcile net loss to net cash (used in)
   provided by operating activities:
  Depreciation ................................................       115,595           --
  Amortization of deferred financing costs.....................       677,533         62,603
  Amortization of note discount ...............................       276,698         78,492
  Amortization of energy technology ...........................     1,575,000           --
  Issuance of equity securities for services...................     1,897,904         40,139
  Change in FMV of derivatives ................................          --           17,396
  Bad debts ...................................................        25,000           --
Changes in assets and liabilities:
  Accounts receivable .........................................      (179,166)          --
  Other current assets ........................................       129,264         (3,583)
  Deposits ....................................................       332,690           --
  Loan receivable .............................................       (78,000)          --
  Interest receivable - affiliate .............................       (36,508)          --
  Customer deposits ...........................................      (849,250)          --
  Inventory ...................................................     2,381,122           --
  Cost/earnings in excess of billings .........................      (972,795)          --
  Other assets ................................................        66,404        (51,942)
  Accounts payable ............................................     1,946,525         40,790
  Accrued interest ............................................     1,919,507           --
  Income tax payable ..........................................       253,331           --
  Deferred revenue ............................................        17,751           --
  Accrued expenses ............................................       130,608        108,468
                                                                  -----------    -----------
      Net cash provided by (used in) operating activities .....   $ 4,444,820    $  (348,764)
                                                                  -----------    -----------
CASH FLOW FROM INVESTING ACTIVITIES

  Cash investment in unconsolidated subsidiaries ..............          --       (2,501,324)
  Cash outlay for property and equipment ......................    (2,294,975)      (200,000)
  Project Development costs ...................................          --          (20,000)
  Deferred finance costs ......................................       (84,250)          --
  Loans receivable ............................................          --         (500,000)
  Cash acquired from acquisition of subsidiaries ..............     1,088,377           --
                                                                  -----------    -----------
      Net cash provided by (used in) investing activities .....    (1,290,848)    (3,221,324)
                                                                  -----------    -----------
CASH FLOWS FROM FINANCING ACTIVITIES

  Borrowings from related party - short term ..................       417,117           --
  Advances to related parties .................................          --          106,516
  Issuance (repayments) of convertible debentures - related party     (75,918)        34,566
  Net proceeds from long-term convertible debentures ...........       93,246      4,900,000
  Net proceeds from notes payable ..............................      343,349           --
  Repayment of notes payable ...................................   (4,354,493)          --
                                                                  -----------    -----------
      Net cash provided by (used in) financing activities .....    (3,576,699)     5,041,082
                                                                  -----------    -----------
  Net increase (decrease) in cash .............................   $  (422,727)   $ 1,470,994
  Cash at beginning of period .................................     1,006,672           --
                                                                  -----------    -----------
  Cash at end of period .......................................   $   583,945    $ 1,470,994
                                                                  ===========    ===========
</TABLE>
                                       6
<PAGE>
<TABLE>


<CAPTION>

                    GS AGRIFUELS CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                             (UNAUDITED) (CONTINUED)

Supplemental disclosure of cash flow information: Cash paid during the period
for:
<S>                                                                                  <C>        <C>
      Interest ................................................................      140,596         --
      Income taxes ............................................................         --           --

Supplemental statement of non-cash investing and financing activities:

      Issuance of debt and equity for net assets due to Sustainable acquisition   12,657,093         --
      Above consisted of:
                          Notes payable .......................................      100,000         --
                          Common stock ........................................    3,553,075         --
                          Convertible debenture ...............................    9,004,018         --
      Issuance of Series C Preferred Stock upon conversion ....................          100        1,000
      Assumption of convertible debenture pursuant to share
        purchase agreement with parent ........................................         --      1,949,631
      Issuance of warrants upon issuance of convertible debentures ............         --         30,250
Forgiveness of affiliate debt treated as contributed capital ..................    1,189,320         --

</TABLE>






















                                       7
<PAGE>

                    GS AGRIFUELS CORPORATION AND SUBSIDIARIES
                   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.  The  consolidated  entity was a  development
stage company in prior periods.

2        SIGNIFICANT ACCOUNTING POLICIES

PRINCIPLES OF CONSOLIDATION

For the period ended September 30, 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., Sustainable
Systems,  Inc. from March 6, 2007 (date of  acquisition)  through  September 30,
2007 and GS Fulton  Biodiesel,  LLC from  January 16,  2007 (date of  formation)
through   September  30,  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. In
the  nine  months  ended  September  30,  2007,  ZeroPoint  obtained  additional
financing by completing a $4.25 million raise at a valuation that  represented a
38% increase in value as compared to the  valuation  that the Company  completed
its  investment  at. As the  Company  accounts  for its  investment  by the cost
method,  any  increase in value in not  reflected in the  financial  statements.
Based on  management's  assessment of the increase in value from the  additional
financing, the Company believes there is no impairment at September 30, 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 seed commodity 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
oil seed crushing facility recognizes revenue when the product is shipped to the
customer  via truck,  railcar or customer  pickup and the other  criteria  noted
above are met.  During the nine months ended  September  30,  2007,  the oilseed
crushing  facility  provided  rebates to customers  under a planting seed rebate
program.  Of the  $159,000 in total  rebates  recorded  as a reduction  in gross
revenues  for the period  ending  September  30,  2007,  $89,000 was provided to
customers  located in Montana.  Rebates given to these customers were reimbursed
to the company as part of training costs under the WIRED grant from the State of
Montana  during  the  quarter.  The  Company  accounted  for the  rebates  under
EITF-01-9,  which allows an exception to offsetting  gross  revenues for rebates
when the seller  receives a benefit for  providing  the sales  incentive and the
seller can

                                       8
<PAGE>
2        SIGNIFICANT ACCOUNTING POLICIES (Continued)

reasonably estimate the benefit. As a result, the amount of rebates attributable
to Montana  customers  have been recorded as training  expense and have not been
offset against revenue.

We  recognize  revenue  from  the sale of  biodiesel  production  systems  under
contract  accounting  pursuant to Accounting  Research Bulletin No. 45 ( ARB No.
45),  Long-Term  Construction-Type  Contracts,  and  the  guidance  under  AICPA
Statement  of  Position  81-1  ("SOP  81-1"),   Accounting  for  Performance  of
Construction-Type  and Certain  Production-Type  Contracts.  Under the completed
contract  method  income is  recognized  only when a contract  is  completed  or
substantially  completed.  During the period of performance,  billings and costs
are accumulated on the balance sheet, but no profit or income is recorded before
completion or  substantial  completion  of the work.  SOP 81-1 requires that the
percentage of completion method be used in lieu of the completed contract method
when all of the following are present: reasonably reliable estimates can be made
of revenue and costs; the construction contract specifies the parties' rights as
to the goods,  consideration to be paid and received, and the resulting terms of
payment or settlement; the contract purchaser has the ability and expectation to
perform all contractual duties; and the contract contractor has the same ability
and expectation to perform.  During the Company's initial construction projects,
reliable  cost and  revenue  estimates  were not  available  and as a result the
completed contract method was used to recognize  revenue. A substantial  portion
of our revenues for the sale of equipment in the current  quarter was recognized
using the  completed  contract  basis  method of  accounting.  NextGen Fuel Inc.
recognized  $5,611,820  in revenues  under this method during the three and nine
months ended  September  30, 2007.  Management  believes that with the resulting
experience gained from the initial completed  projects,  reliable cost estimates
are now available and all four requirements  under SOP81-1 can now be satisfied.
As a result,  the  balance  of our  revenues  for the sale of  equipment  in the
current  quarter was  recognized  using the  percentage of completion  method of
accounting.  NextGen  Fuel Inc.  recognized  $1,666,805  in revenues  under this
method during the three and nine months ended September 30, 2007. This method of
accounting  results  in the  Company  recognizing  revenue as work on a contract
advances.  Earnings  are  recognized  periodically  based upon our  estimate  of
contract  revenues  and  costs in  providing  the  services  required  under the
contract.  Under this method,  deferred  construction  costs or work in progress
("WIP") is accumulated. At the end the reporting period, if the billings to date
under the contract  exceed the amount of the WIP plus a portion of the estimated
gross profits,  billings in excess of costs and estimated earnings is recognized
as a current  liability.  This  liability  records the  remaining  obligation to
complete the remaining work required under the contract prior to recognizing the
excess billing as revenue. If the accumulated WIP and earned gross profit exceed
the  billings  to date,  costs and  estimated  earnings in excess of billings is
recorded as a current asset.  This asset  represents the portion of the deferred
costs incurred and estimated  earnings that have been earned but not yet billed.
Each  project  is  reviewed  on a  separate  basis.  Any loss on a  contract  is
recognized in full as soon as we determine  that it will occur.  The Company has
the  contracts in place which lists the price of the equipment as well as a list
of add-ons if the  customer  wants to upgrade.  The Company  usually  requires a
substantial  deposit  when  the  contract  is  signed  and  work  begins  on the
equipment.  Notwithstanding  the above,  we  recognize  revenue from the sale of
these systems when  persuasive  evidence of an  arrangement  exists,  prices are
fixed and determinable,  and it is reasonably  assured that any related accounts
receivable is  collectible.  In addition,  revenue under the completed  contract
method is recognized upon delivery.  Delivery related to the systems takes place
when the title and risk of loss  transfers  to the  customers  as defined in the
agreement or by operation of law.

The asset, "costs and earnings in excess of billings", represents deferred costs
incurred and estimated  earnings in excess of amounts billed.  When  applicable,
the  liability,   "billings  in  excess  of  costs  and  estimated  earnings  on
uncompleted contracts," represents billings in excess of revenues recognized.

                                       9
<PAGE>

2        SIGNIFICANT ACCOUNTING POLICIES (Continued)

The liability "customer  deposits"  represents amounts invoiced to customers for
deposits and partial  payments on orders or projects for which  construction has
not commenced.  The revenue,  along with the project costs, is recognized  under
the completed contract or percentage-of-completion  method, as appropriate under
the circumstances.

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
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 been  reduced by a valuation
allowance  that has been set up in the amount  $25,000 as of September 30, 2007.
The receivables in question are fairly new and it is management's  view that all
will be collected. Management will continue to review the valuation allowance on
a quarterly basis.

INVENTORIES

Equipment inventories are stated at the lower of cost or market, with cost being
determined by the first-in,  first-out (FIFO) method.  These inventories consist
of equipment and component  parts not yet assigned to projects in process in our
biodiesel production segment.

Inventory  at the  oilseed  crush  facility  consists of seed  commodity  at the
various stages of manufacture and is stated at the lower of cost or market, with
cost being  determined  at  average  cost under a  process-costing  system.  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 of 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.  The total  Inventory  at
September 30, 2007 of $1,577,229 consisted of $856,898 in Raw Materials, $22,450
in Supplies, $169,000 in Equipment Inventory and $528,881 in Finished Goods.

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  depreciation  and depreciates its vehicles over a five
year period,  equipment over a 3-18 year period and lease hold improvements 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.

The  $1,782,721  increase  in  property  and  equipment  can  be  attributed  to
Sustainable's plant expansion in the amount of $1,753,266, plus increases in the
following  categories:  office  equipment of $676,  machinery  and  equipment of
$28,778.  Depreciation  expense for the nine months ended September 30, 2007 and
2006 was $115,595 and $0,  respectively,  including $76,598 and $0, respectively
for plant depreciation included in Cost of Sales.

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 September  30, 2007.  Intangible  assets with  definite  lives are
amortized over their estimated useful or contract lives.

                                       10
<PAGE>
2        SIGNIFICANT ACCOUNTING POLICIES (Continued)

USE OF ESTIMATES

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

3        STOCKHOLDERS' EQUITY

Our  authorized   capital  stock  consists  of  100,000,000   shares  of  common
stock,10,000,000 shares of Series C Preferred Stock and 400,000 shares of Series
A Preferred  Stock. The Company had agreed that no more than 1,037,350 shares of
GS AgriFuels Preferred Stock will be issued, and that the Company will not issue
any new preferred  shares after the full  conversion or other  reduction of said
1,037,350   shares  pursuant  to  the  employment   agreement  signed  with  Tom
Scozzafava.  The Board of  Directors  is  authorized  to issue the  undesignated
preferred  stock  with any rights and  preferences  that the Board of  Directors
decides are appropriate.  As of September 30, 2007, there were 29,024,572 shares
of our common stock  outstanding,  37,350 shares of our Series A Preferred Stock
outstanding and 1,000,000 shares of our Series C Preferred Stock outstanding

COMMON STOCK

On January 13, 2006 the Board of Directors of GS AgriFuels unanimously adopted a
resolution to amend the Certificate of  Incorporation  to effect a reverse split
of GS  AgriFuels'  outstanding  common stock at a ratio of 1:1000 (the  "Reverse
Split").  The holder of shares representing a majority of the voting power of GS
AgriFuels'  outstanding  voting stock  subsequently  gave written consent to the
resolution.  The Company filed the Amendment to its Certificate of Incorporation
with the  Secretary  of the State of Delaware on May 18,  2006,  and the Reverse
Split was effective as of that date.  All per share amounts in the  accompanying
financial statements have been adjusted to reflect the reverse split.

SERIES A PREFERRED STOCK

In 2001 the Company issued shares of Series A Preferred  Stock.  As of September
30, 2007, 37,350 of those shares remain outstanding.  By their terms, the shares
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

GS AgriFuels has 10,000,000 shares of Series C Preferred Stock  authorized.  The
holders of the Series C  Preferred  Stock are  entitled  to convert the Series C
Shares into 80% of the  outstanding  common stock at the time of conversion.  On
July 6, 2007,  GreenShift  converted  its 6 million stock options (see below) by
agreement into a total of 1,000,000  shares of the Company's  Series C Preferred
Stock. In addition,  GreenShift transferred 378,653 shares of Series C Preferred
Stock to Tom Scozzafava,  in connection with his execution on July 6, 2007 of an
Employment Agreement between GS AgriFuels and Tom Scozzafava,  effective January
1, 2007.  The Company  accrued  $54,526 in  compensation  expense  for  services
performed under the employment agreement during the current period to be settled
by the subsequent transfer of shares. In the employment agreement,  GS AgriFuels
agreed that no more than 1,037,350  shares of GS AgriFuels  Preferred Stock will
be issued,  and that the Company will not issue any new  preferred  shares after
the full conversion or other reduction of said 1,037,350 shares.

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.

                                       11
<PAGE>
3        STOCKHOLDERS EQUITY (Continued)

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'  June  7,  2006  issuance  of  convertible
debentures to YA Global Investments  ("Global" formerly known as Cornell Capital
Partners),  GS  AgriFuels  issued to Global  1,125,000  five  year  warrants  to
purchase GS AgriFuels  common stock that are  exercisable  at $.001 per share to
Global.  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.

In  conjunction  with GS  AgriFuel's  October 30, 2006  issuance of  convertible
debentures to Global,  GS AgriFuels  issued to Global 540,000 five year warrants
to purchase GS AgriFuels common stock that are exercisable at $.001 per share to
YA Global  Investments.  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 September 30, 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 .......................   (6,000,000)              3.00
                                    ----------           --------
Outstanding at September 30, 2007    2,600,375           $   2.87

Summarized information about GS AgriFuels stock options and warrants outstanding
at September 30, 2007 is as follows:
<TABLE>
<CAPTION>
                                                    Weighted                                  Exercisable
                                                    Average                        -------------------------------------
        Exercise Prices             Number of      Remaining       Weighted        Number of Options    Weighted Average
                                     Options      Contractual       Average                             Exercise Price
                                   Outstanding        Life      Exercise Price
-------------------------------------------------------------------------------------------------------------------------
<C>                                    <C>                 <C>            <C>            <C>                       <C>
$0.001                                 1,125,000           5.00           0.001          1,125,000                 0.001
$0.001                                   540,000           5.00           0.001            540,000                 0.001
$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
                                 ----------------                               -----------------------------------------
                                       2,600,375                                         2,600,375
</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

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.

                                       12
<PAGE>

4        ACQUISITIONS (Continued)

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.

GS AgriFuels issued a $13,000,000 convertible debenture to YA Global Investments
(formerly  known as 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 7 - 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 which will  construct a ten million  gallon
per year biodiesel plant in Fulton, New York. GS AgriFuels results of operations
for the period  include the results of  operations of GS Fulton  Biodiesel,  LLC
from January 16, 2007 (date of  acquisition)  through  September  30, 2007.  The
agreement   additionally  calls  for  Homeland  Energy  to  contribute  executed
feedstock and offtake  agreements that are sufficient for the biodiesel facility
to meet its  profitability  goals.  Homeland Energy has not to date  contributed
such agreements.  Construction  activities for this facility will commence after
the Homeland Energy  agreements  have been obtained and sufficient  financing is
secured.  This  facility  is intended  to be  co-located  at the same site as GS
AgriFuels'  wholly-owned GS Northeast Biodiesel  facility.  NextGen is part 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.  GS AgriFuels  is  developing  a second  wholly-owned  ten
million  gallon  per year  biodiesel  plant in  Fulton,  New York (GS  Northeast
Biodiesel")  that is being  designed to convert ten million  gallons per year of
crude corn oil into  biodiesel.  GS AgriFuels is party to an agreement  with its
affiliated corn oil extraction  technology  provider,  GS Ethanol  Technologies,
Inc. for the supply of crude corn oil extracted  from a co-located  corn ethanol
facility and other nearby  facilities.  While the financing for the construction
of the  biodiesel  facility  is  currently  pending,  GS Ethanol  has  commenced
engineering and procurement of its associated corn oil extraction systems.

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  completed  the  acquisition  of the  remaining
approximately 85% of the outstanding capital stock of Sustainable Systems,  Inc.
The total  negotiated  purchase  price was  $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 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  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 as Goodwill in the amount of  $13,189,668  as of September 30, 2007. GS
AgriFuels'  results  of  operations  for  the  period  include  the  results  of
operations of Sustainable Systems from March 6, 2007 through September 30, 2007.

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 but has no
current plans to do so.

                                       13
<PAGE>

5        SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION

Interest  paid  during the nine  months  ended  September  30, 2007 and 2006 was
$178,049 and $0,  respectively.  Non-cash investing  activities  relating to the
acquisition  of  Sustainable  Systems  resulted  in an increase in net assets of
$12,657,093  acquired  by  issuance of notes  payable of  $100,000,  issuance of
common  stock of  $3,553,075  and the  issuance of  debentures  in the amount of
$9,004,018. Non-cash financing activities included the conversion of $250,000 in
accounts payable to a note payable (Sustainable promissory note - see Note 7).

6        RELATED PARTY TRANSACTIONS

MANAGEMENT SERVICES AGREEMENT

In July 2007,  the Company  entered into a Management  Services  Agreement  with
GreenShift  Corporation  under  which  GreenShift  agreed to provide  management
services.  The agreement is for a term of five years and provides for GreenShift
to receive $150,000 per year payable for the management  services.  Is addition,
to the extent that GreenShift's  staff provides services  including  management,
accounting and other general administrative  services, GS AgriFuels will pay for
such  services  at a rate equal to  GreenShift's  cost plus 15% to provide  such
services (the "G&A Services").  All fees shall be either,  at GreenShift's  sole
option, accrued or paid in the form of shares of common stock until such time as
GS AgriFuels generated sufficient positive cash flows to support cash payment of
said amounts.  Additionally, GS AgriFuels shall reimburse GreenShift in cash for
reasonable  and  customary  expenses  incurred  by  GreenShift  with third party
vendors during its performance under the Management Services Agreement.

SHARE PURCHASE AGREEMENT WITH GREENSHIFT

On June 7, 2006, the Company  acquired Mean Green  BioFuels,  Inc., a then newly
formed  company,  from  GreenShift  Corporation.   At  the  closing,  GreenShift
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  shares  and the  Company's  Series B
Preferred Stock, the Company assumed  GreenShift's  obligations  under a Secured
Convertible  Debenture due to YA Global  Investments in the principal  amount of
$1,949,631 and issued to GreenShift 1,000,000 shares of Series C Preferred Stock
(which was subsequently  converted into 26,000,00  shares of common).  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  recorded an operating  loss of $57,573 for the period
from January 1, 2006 to May 23, 2006.

LOAN FROM RELATED PARTY

On  December  28,  2006,  GS  AgriFuels  issued to  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 GS AgriFuels from Seaway Valley in the amount
of $250,000.  This debenture and the accompanying accrued interest in the amount
of $7,726 were paid in full during the nine months ended September 30, 2007. The
controlling  member  of  Seaway  Valley  is GS  AgriFuels'  President  and Chief
Executive Officer.

OTHER RELATED PARTY TRANSACTIONS

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 during 2008.

NextGen Fuel, Inc. has an exclusive manufacturing agreement with Warnecke Design
Service,  Inc., a  subsidiary  of GS Energy,  which is in turn a  subsidiary  of
GreenShift, for the design, fabrication, assembly, testing, and commissioning of
NextGen  Fuel's  biodiesel  production  systems.  During the nine  months  ended
September 30, 2007, GS AgriFuels paid deposits under the manufacturing agreement
totaling approximately $200,000 to Warnecke and had accounts payable and accrued
expenses of $250,620 due to Warnecke at September 30, 2007.

On July 6, 2007,  GreenShift  converted its 6 million stock options into a total
of 1,000,000 shares of the Company's Series C Preferred Stock.

                                       14
<PAGE>

6        RELATED PARTY TRANSACTIONS (Continued)

On July 6, 2007, GS AgriFuels signed an Employment Agreement with Tom Scozzafava
with an effective  date of January 1, 2007.  Under the terms of this  agreement,
Tom  Scozzafava  has been  employed by GS AgriFuels as its  President  and Chief
Executive  Officer.  The  agreement  is for a term of five  years  and  shall be
automatically  renewed for additional one-year terms until either party gives at
least a sixty  date  written  notice  of  termination.  Under  the  terms of the
agreement, Mr. Scozzafava shall be paid an annual salary of $150,000 and will be
eligible to fully  participate in all benefit plans  maintained by GS AgriFuels.
The salary will  increase  to $250,000  per year if GS  AgriFuels  completes  an
equity  financing for  $25,000,000 at a per share valuation of $3.00 or greater.
In  connection  with  the  execution  of the  Employment  Agreement,  GreenShift
Corporation  assigned to Mr. Scozzafava 378,653 shares of GS AgriFuels' Series C
Preferred  Stock. The Company accrued $54,526 in consulting fees related to this
transfer of shares. For the nine months ended September 30, 2007, Mr. Scozzafava
received $104,531 as compensation for past services.

On July 6, 2007, the Company entered into an Exclusive License Agreement with GS
CleanTech Corporation ("Licensor") that was effective January 1, 2007 whereby GS
AgriFuels  has been granted an  exclusive  license  ("License  Grant") to use GS
CleanTech's  corn  oil  extraction   technology  ("COES"),   any  patent  rights
pertaining to the COES and the technology,  inventions and equipment inherent in
the COES for use in the production and sale of fuels derived from biomass or its
precursors.

During  the three  months  ended  September  30,  2007,  GS Energy  revised  its
manufacturing  subsidiary's  policies  relative  to  transactions  with  related
parties. Previously, GS Energy's practice was to charge fixed prices for certain
jobs pertaining to NextGen Fuel Inc. and GS CleanTech Corporation.  The emerging
technology  nature of certain of these jobs made this practice  inefficient  and
cost  prohibitive.  Moving  forward,  GS Energy is billing cost plus 20% for its
design and fabrication services. In addition,  this change in policy was applied
retroactively  to all related party  transactions  during the three months ended
September 30, 2007.

During the three months ended  September  30, 2007,  GS Energy  forgave  related
party  receivables  due from NextGen Fuel Inc., the  wholly-owned  subsidiary of
NextGen  Acquisition,  Inc., in the amount of $1,184,220.  This  transaction was
accounted for as a capital  contribution  from the related party and as a result
was recorded as an increase in the Company's  paid-in capital.  During the three
months ended September 30, 2007,  GreenShift  forgave related party  receivables
due from the Company in the amount of $6,107. This transaction was accounted for
as a capital contribution from the related party and as a result was recorded as
a decrease in the Company's paid-in capital. During the same period,  GreenShift
forgave  related party  interest  receivables  due from Mean Green  Biofuels,  a
wholly-owned  subsidiary  of  the  Company,  in  the  amount  of  $16,422.  This
transaction was accounted for as a capital  contribution  from the related party
and as a result was recorded as an increase in the Company's paid-in capital.

                                       15
<PAGE>
7        FINANCING ARRANGEMENTS

The following is a summary of the Company's financing arrangements as of
September 30, 2007:

Due to affiliates:
Short term borrowings - GreenShift ........................   $     26,189
Short term borrowings - affiliates ........................        695,747
                                                              ------------
     Total due to affiliates ..............................   $    721,936
                                                              ============
Current portion of notes payable:
Note payable - Stillwater .................................      4,200,000
Note payable - NextGen sellers ............................      4,060,032
Note payable - Sustainable sellers ........................      1,900,000
Note payable - First Community Bank .......................        230,000
Note payable - Great Northern Development .................        100,000

Note payable - Sheridan Electric ..........................        250,000
                                                              ------------

  Total current portion of notes payable ..................   $ 10,740,032
                                                              ------------

Current portion of convertible debentures:
GreenShift convertible debenture  (December 2005) .........   $    200,684
Convertible debenture  - Sustainable sellers (March 2007)..      3,552,005
                                                              ------------
     Total current portion of convertible debentures ......   $  3,752,689
                                                              ============
Long-term non-convertible debt:
Note payable - MT Dept of Agriculture .....................        124,052
Note payable - First Community Bank .......................      1,035,196
Note payable - Great Northern Development .................      1,005,921
                                                              ------------
     Total long term non-convertible debt .................   $  2,165,169
                                                              ============
Convertible debentures, non-current:
Global convertible debenture (GS AgriFuels) (February 2006)      1,949,631
Global convertible debenture (GS AgriFuels) (June 2006) ...      5,500,000
Global convertible debenture (GS AgriFuels) (October 2006)      13,000,000
Convertible debenture - Sustainable sellers (March 2007)         3,552,013
Note Discounts ............................................       (765,261)
                                                              ------------
     Total convertible debentures, non-current ............   $ 23,236,383
                                                              ============
CONVERTIBLE DEBENTURES

Seaway Valley Fund, LLC

On  December  28,  2006,  GS  AgriFuels  issued to  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 GS AgriFuels from Seaway Valley in the amount
of $250,000.  This debenture and the accompanying accrued interest in the amount
of $7,726 were paid in full during the nine months ended September 30, 2007. The
controlling  member  of  Seaway  Valley  is GS  AgriFuels'  President  and Chief
Executive Officer.

                                       16
<PAGE>

7        FINANCING ARRANGEMENTS (Continued)

YA Global Investments, LP

In  conjunction  with that  certain  May 2006 Share  Purchase  Agreement  by and
between  GreenShift  and  GS  AgriFuels,   GS  AgriFuels  assumed   GreenShift's
obligations under a Secured Convertible  Debenture due to YA Global Investments,
LP ("Global") 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 Global 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 Global may  acquire at any time is 4.99% of the  outstanding  common
shares.  For the nine months  ended  September  30,  2007,  interest  expense of
$145,822 for this obligation was incurred and accrued.

On June 7,  2006,  Global  purchased  a Secured  Convertible  Debentures  in the
principal amount of $5,500,000, for which the Company paid $600,000 in financing
and  structuring  fees and received cash proceeds of  $4,900,000.  The Debenture
carries an interest rate of 10%, and principal and interest on the Debenture are
due at the maturity date of June 7, 2009. On October 30, 2006 GS AgriFuels  sold
to  Global 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 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.
Principal  and interest on these two  Debentures  may be  converted  into common
stock by Global 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 Global 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 redeem the Debenture by paying cash equal to 120% of
the principal redeemed. GS AgriFuels has agreed to file a registration statement
with the  Securities  and Exchange  Commission to enable Global 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  registration  rights agreement with
Global entitles Global to liquidated damages for failure to register, and Global
has waived any  liquidated  damages due for failure to  register.  This is a one
time  waiver  and  Global  retains  its rights  under the  agreement  for future
periods.  For the nine months  ended  September  30, 2007,  interest  expense of
$411,370 for this obligation was incurred and accrued.

As an inducement to the purchase of the June 2006 Debenture, GS AgriFuels issued
to Global  1,125,000  five year  warrants to purchase GS AgriFuels  common stock
that are  exercisable  at $0.001 per share.  The fair value of the  warrants was
calculated  using  the  Black-Scholes  Option  Pricing  Model  and GS  AgriFuels
recorded the $30,375  value of the warrants as a discount to the note.  The note
discount is being  amortized  over the term of the debenture.  Interest  expense
from the  amortization of the note discount was $7,573 for the nine months ended
September 30, 2007.

In  consideration  of Global's  investment  in the October  2006  Debenture,  GS
AgriFuels  issued to Global a five  year  Warrant  to  purchase  540,000  common
shares.  The  exercise  price is $0.001 or any lower price at which GS AgriFuels
hereafter issues common stock to any third party. The fair value of the warrants
was  calculated  using the  Black-Scholes  Option Pricing Model and GS AgriFuels
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 nine
months ended September 30, 2007,  interest  expense from the amortization of the
note  discount  was  $269,126.  For the nine months  ended  September  30, 2007,
interest expense of $972,329 for this obligation was incurred and accrued.

Commencing on February 1, 2007, Global was entitled to convert into common stock
up to $500,000 of the  principal  amount of the  Debentures  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.  Global has not converted
any portion of the Debentures into stock as of September 30, 2007.

The Debentures are secured by a pledge of all of GS AgriFuels' assets, including
the capital stock of its  subsidiaries.  The  subsidiaries  of GS AgriFuels have
also  pledged  their  assets to secure the  Debentures.  GreenShift  and certain
affiliates  of  GreenShift  (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 Global.

                                       17
<PAGE>
7        FINANCING ARRANGEMENTS (Continued)

GreenShift Corporation

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. Additions
to the debenture through advances by GreenShift on behalf of the Company totaled
$88,607  through  December  31, 2006 for a balance of $276,602 on that date.  On
December 31, 2006,  this debenture in the amount of $276,602 was renewed and has
a new maturity date of December 31, 2007 with a fixed conversion price of $3.00.
The number of issuable common shares upon  conversion  based on the terms of the
original debenture 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 original  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 nine months ended September 30, 2007, the Company repaid GreenShift  $88,313
on the new  debenture.  During the nine months  ended  September  30,  2007,  GS
AgriFuels loaned GreenShift $350,000. During the nine months ended September 30,
2007,  $125,000 of that amount was repaid and the  remaining  balance was offset
against the  debenture  owed to  GreenShift.  Mean  Green,  a  subsidiary  of GS
AgriFuels, owed $222,397 in short term borrowings to GreenShift. This amount was
transferred  to its parent's books (GS AgriFuels) and was added to the debenture
owed to GreenShift.  In exchange for these  reclassifications  and offsets,  the
principal  balance due on these debentures as of September 30, 2007 was $26,189.
For the nine months ended  September  30, 2007,  interest  expense of $5,804 for
this obligation was incurred and accrued.

NOTES PAYABLE

Stillwater Asset Backed Fund, LP

On October 30, 2006,  NextGen  Acquisition,  Inc., a subsidiary  of GS AgriFuels
that was formed to  facilitate  the  acquisition  of NextGen Fuel Inc.,  sold to
Stillwater  Asset-Based  Fund,  LP a Term  Note in the  principal  amount  of $6
million.   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
GS AgriFuels' 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. On July 31, 2007,
NextGen Acquisition,  Inc. entered into Amendment 1 to the Credit Agreement with
Stillwater  Asset-Based  Fund, LP. According the Amendment,  NextGen received an
additional  principal  amount of $555,600.  In conjunction with the refinancing,
NextGen  Acquisition  paid a financing fee of $72,880 and legal fees of $11,000.
According  to the amended  terms,  all amounts of  principal  and  interest  not
previously  satisfied  will be due on December 31, 2008.  Monthly  payments have
been  adjusted as follows:  interest  only August 2007  payment;  September  and
October  2007  payments  would be an amount  equal to the  applicable  Biodiesel
Systems Net Revenue  Repayment  Percentage;  November 2007 through  January 2008
payments would be an amount equal to the $200,000 plus the applicable  Biodiesel
Systems Net Revenue Repayment Percentage; and, payments from February 2008 until
the  Maturity  Date would be an amount  equal to  $300,000  plus the  applicable
Biodiesel  Systems  Net  Revenue  Repayment   Percentage  with  all  outstanding
obligations  due an payable  on the final  Maturity  Date.  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 nine months
ending September 30, 2007,  interest expense of $721,457 for this obligation was
incurred.  The  principal  balance  of  this  note at  September  30,  2007  was
$4,200,000.

NextGen - Selling Shareholders

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

                                       18
<PAGE>
7        FINANCING ARRANGEMENTS (Continued)

and there are no 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.  The principal balance of the note at September 30, 2007 was $4,060,032.
As of September 30, 2007, the Company was in technical  default but both parties
have  verbally  agreed to an  extension  and expect to reduce the  agreement  to
writing during the fourth quarter.

Sustainable Systems - Selling Shareholders

On March 26, 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 approximately $12.6 million of which $100,000 was payable
at  closing,   a  note  was  issued  for  approximately  $1.9  million  and  two
approximately  $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.  It accrues  interest at 5% per annum to
be paid on a pro-rated basis at maturity.  For the nine months ending  September
30,  2007,  interest  expense of $54,137 for this  obligation  was  incurred and
accrued.  One of the convertible  debentures for approximately  $3.55 million is
due on the first  anniversary of the closing.  The other, also for approximately
$3.55 million,  is 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 GS
AgriFuels' 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
conversion  the market price of GS  AgriFuels'  common stock is less than $4.50,
the  difference  between  that stock price and $4.50 will be  multiplied  by the
number of  shares  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.  GS AgriFuels'  obligations  under the
Note and the  convertible  debentures  are secured by GS AgriFuels'  Sustainable
common stock holdings.  For the nine months ending September 30, 2007,  interest
expense of $202,416 for these obligations was incurred and accrued.

Sustainable Systems - Inventory Financing

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.  Initial
monthly  payments  consisted  of  interest  only and  Sustainable  began  making
payments toward the principal in May 2007. All amounts of principal and interest
remaining  were due on September 1, 2007.  The  principal  and the  accompanying
accrued  interest  in the amount of  $138,350  were paid in full during the nine
months ended September 30, 2007.

Sustainable Systems - Accounts Receivable

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.  For the nine months  ending  September  30, 2007,
interest expense of $58,621 for these obligations was incurred.  As of September
30, 2007, the total principal balance on this note was $1,265,196.

Sustainable Systems - Term Notes

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, 2011. The notes
are secured by an interest in various  equipment  including  eleven  pumps and a
solvent recovery system. For the nine months ending September 30, 2007, interest
expense of $2,933 for these obligations was incurred and accrued.

Sustainable has signed four notes with Great Northern  Development  with balance
at September 30, 2007 of  $1,105,921.  Three of the notes  totaling  $426,759 at
September 30, 2007 accrue interest at the rate of 6% per annum. The payment

                                       19
<PAGE>
7        FINANCING ARRANGEMENTS (Continued)

terms for the notes are as follows:  the $11,045  and  $126,514  notes are to be
paid off with 180 monthly payments  beginning  December 15, 2005 with a maturity
date of  November  15,  2020  and the  $289,200  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 $679,162  accrues interest at the rate of 5% per annum
with payments of principal only through November 2007 and principal and interest
payments  until the  maturity  date of November  15,  2010.  For the nine months
ending September 30, 2007, interest expense of $66,061 for these obligations was
incurred $30,301 of that amount was accrued.

On June 4, 2007, Sustainable Systems, Inc. issued an unsecured demand promissory
note in the amount of $250,000 with Sheridan  Electric  Co-Op,  Inc. in exchange
for the same amount of  pre-existing  accounts  payable to the holder.  The note
accrues  interest  at a rate of 6% per annum.  Monthly  payments  are due in the
amount of $1,500  starting June 1, 2007 and shall  continue until March 1, 2010.
Each  payment  shall  first be applied to the accrued  interest  and then to the
principal  balance.  For the nine months  ending  September  30, 2007,  interest
expense of $4,992 for these obligations was incurred.

Related Party - Term Notes

During the nine months ended September 30, 2007, GS AgriFuels  received  $26,189
in short term loans from  GreenShift  Corporation.  These loans bear interest at
8%, for which $777 in interest  expense  was  accrued for the nine months  ended
September  30,  2007.  During the nine  months  ended  September  30,  2007,  GS
Agrifuels loaned  GreenShift  $350,000.  $125,000 of this  non-interest  bearing
advance  was repaid  during the nine  months  ended  September  30, 2007 and the
remaining  balance was offset  against the debenture  owed to  GreenShift..  The
total net principal  amount due from GreenShift for short term loans was $26,189
as of September 30, 2007.

Mean Green, a subsidiary of GS AgriFuels, owed $222,397 in short term borrowings
to GreenShift.  This amount was transferred to its parent's books (GS AgriFuels)
and was added to the debenture  owed to  GreenShift.  The  accompanying  $16,422
accrued  interest that was owed to GreenShift was written off to additional paid
in capital on Mean Green's books and increased the investment by GreenShift.

During  the nine  months  ended,  GS  CleanTech  Corporation,  a  subsidiary  of
GreenShift  Corporation was paid $206,125 on behalf of GS AgriFuels for services
performed during that period.  The total amount due to GS CleanTech  Corporation
was $445,127 as of September 30, 2007. These  non-interest-bearing  advances are
reimbursable  on demand.  GreenShift is an  approximate  80%  shareholder  of GS
CleanTech and is controlled by Kevin Kreisler, Chairman of GS AgriFuels.

8        GOVERNMENT GRANTS

On September 28, 2006,  Sustainable  Systems, a subsidiary of GS AgriFuels,  was
awarded a $700,000 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  Systems will not obligate or
utilize  funds for any  activities  provided  for by the grant until the Company
submits  evidence to MDOC showing  evidence of the firm  commitment of the other
resources  necessary for the completion of the project per the WIRED application
that was approved by MDOC.  All project  funding had to be fully  committed  and
available  and the project had to be ready to proceed  within nine months of the
award of the grant (in April  2007).  MDOC will  evaluate  Sustainable  System's
progress a year from the contract date.

In November  2005,  Sustainable  Systems  was  awarded a $100,000  grant for the
research and development of a hydraulic fluid  technology from Montana grown oil
seed crops from the Montana Board of Research and  Commercialization  Technology
(MBRCT).  The grant  provides  funding to the  Company  for the  development  or
commercialization of new technology resulting from the grant within the State of
Montana.  The  Company  agrees to use the funds to develop the  hydraulic  fluid
project,  and create the agro-economics  necessary to begin processing  linoleic
safflower  seed variety  needed to produce the Company's  BioSeal  product.  The
original grant  terminated on October 26, 2006 but was renewed for an additional
year.  The  Company is  required  to provide  to the MBRCT  quarterly  financial
statements and progress reports.

Sustainable  recognized  $515,242 in grant income under the above grants,  WIRED
$487,327  and MBRCT  $27,915  during  the  period  from  March 6, 2007  (date of
acquisition) to September 30, 2007.

                                       20

<PAGE>

9        GUARANTY AGREEMENT

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

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

     >>   3-year  Secured  Convertible  Debenture  in the  principal  amount  of
          $13,000,000   issued  by  GS  AgriFuels   Corporation   to  YA  Global
          Investments, LP.

GS AgriFuels'  guaranty was secured by a pledge of all its assets.  GS AgriFuels
Corporation  is a subsidiary of  GreenShift  Corporation.  NextGen  Acquisition,
Inc., is a subsidiary of GS AgriFuels Corporation.

10       SEGMENT INFORMATION

GS  AgriFuels  currently  operates  four  business  segments:   Fuel  Production
Equipment  Sales,  Oilseed  Crushing,  Feedstock and Fuel  Production and Sales.
Summarized financial information about each segment is provided below:
<TABLE>
<CAPTION>
                                            Fuel Production          Oilseed      Feedstock & Fuel
3 Months Ended 9/30/07        Corporate     Equipment Sales         Crushing      Production & Sales       Total
------------------------------------------------------------------------------------------------------------------
Revenue
<S>                         <C>                   <C>              <C>                        <C>        <C>
   2007                              --           7,278,426        1,925,248                    --       9,203,674
   2006                              --                  --               --                    --              --

Net Income (Loss)
   2007                     (1,802,154)           3,154,772        (134,055)                    --       1,218,563
   2006                       (369,544)                  --                -                    --       (369,544)

9 Months Ended 9/30/07
Revenue
   2007                              --           7,278,425        4,206,338                    --      11,484,763
   2006                              --                  --               --                    --              --

Net Income (Loss)
   2007                     (8,065,588)           3,200,824        (319,629)                    --     (5,184,394)
   2006                       (641,127)                  --               --                    --       (641,127)
</TABLE>

11       CONTINGENCIES

The Company is party to the matter  entitled  O'Brien & Gere  Limited,  et al v.
NextGen Chemical Processors, Inc., et al., which action was filed in the Supreme
Court of the State of New York.  The  verified  complaint,  which also names the
Company and certain of its affiliates, seeks performance of and damages relating
to certain service and related agreements,  plus attorney's fees and costs. This
matter relates to the provision by plaintiffs of certain engineering services to
NextGen Chemical Processors,  Inc. ("NCP") during 2005 and 2006. NCP is owned by
the former shareholders of our recently acquired NextGen Fuel, Inc., subsidiary.
The Company has responded to the verified  complaint  and denies any  liability.
The Company  estimates  that the legal fees for our defense will be nominal,  if
any, as the sellers have been paying the fees to date.  On  September  19, 2007,
the Supreme Court of the State of New York  dismissed a  significant  portion of
O'Brien & Gere's complaint with prejudice.

12       SUBSEQUENT EVENTS

On October 3, 2007 GS AgriFuels' Board of Directors  appointed Edward R. Carroll
to serve as GS AgriFuels' Chief Financial Officer. At the same time,  GreenShift
Corporation,  the parent of GS AgriFuels,  appointed Mr. Carroll to serve as its
Chief Operating Officer.  GreenShift  Corporation will pay Mr. Carroll an annual
salary of $150,000 for services on behalf of both  GreenShift  and GS AgriFuels,
and will  allocate an  appropriate  portion of the payments to its  intercompany
account  with GS  AgriFuels.  Mr.  Carroll  will  also  receive  a bonus  at the
discretion of the GreenShift Board of Directors.

On October 3, 2007,  Kevin  Kreisler  resigned  from his  position  as the Chief
Financial  Officer for GS  Agrifuels.  On the same date,  the Board of Directors
appointed Mr. Kreisler to the position of Chief Operating Officer.  Mr. Kreisler
will remain a member of the GS AgriFuels Board of Directors.

On October 3, 2007, GS AgriFuels' Board of Directors appointed Thomas Scozzafava
to serve on its Board of Directors.  Mr. Scozzafava has been GS AgriFuels' Chief
Executive Officer since December 2006.

On November 9, 2007, the Company  announced that the proposed  merger between GS
Energy Corporation and Company has been cancelled.

On November 9, 2007,  GS  CleanTech  and GS AgriFuels  agreed to  terminate  the
license  agreement  dated July 1, 2007  pursuant to which GS AgriFuels  had been
obtaining raw materials from GS CleanTech.  GS CleanTech will continue to supply
raw  materials to GS  AgriFuels,  but on terms to be  determined  at the time of
shipment.

On November 9, 2007,  GreenShift  transferred its 60% stake in the Company to GS
CleanTech.  GS CleanTech plans to transfer its corn oil assets to the Company in
return for a term not issued at fair value  after  GreenShift  has  received  an
independent  fairness opinion  relative to the terms of the transfer.  These two
transfers will  consolidate  GreenShift's  extraction  and biodiesel  operations
within the Company.

On November 9, 2007 GreenShift Corporation,  which owns the majority interest in
the Company,  contributed to its capital  24,000,000  shares of the common stock
and 621,347 shares of the Series C preferred stock of the Company,  representing
about 60% of the  outstanding  fully diluted  capital  stock of the Company.  On
November  9,  2007,   GreenShift  also  contributed   tothe  Company's   capital
160,000,000  shares of common stock and 919,000 shares of the Series D preferred
stock of GS Energy  Corporation,  representing  75% of the  outstanding  capital
stock of GS Energy.

After the end of the  third  quarter,  GS  AgriFuels  formed a 67%  owned  joint
venture with Raloston International Brazil LTDA.

                                       21

<PAGE>

ITEM 2.     MANAGEMENT'S DISCUSSION AND ANALYSIS

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  "Description  of  Business - Business  Risk
Factors".   Readers  are  cautioned  not  to  place  undue   reliance  on  these
forward-looking  statements,  which reflect management's opinions only as of the
date  hereof.  We  undertake  no  obligation  to revise or publicly  release the
results of any revision to these forward-looking statements

OVERVIEW OF OUR BUSINESS

GS AgriFuels  Corporation  ("we," "our," "us," "GS AgriFuels," or the "Company")
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.

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.

OPERATIONS AND BUSINESS STRATEGY

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.

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

                                       22
<PAGE>

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.  The first such  acquisition  was of our  Culbertson,
Montana based Sustainable  Systems subsidiary  currently produces and sells high
oleic safflower,  sunflower, cannola and other high-value oils into the culinary
markets in either bulk or packaged  quantities.  Sustainable's bulk products are
available as either crude degummed, refined bleached and deodorized (RBD), or as
RBD  with   winterization.   Sustainable  is  currently  expanding  its  oilseed
extraction and refining capability from 300 tons per day to 600 tons per day. In
addition to expanding  Sustainable's oilseed processing  capabilities in Montana
and at other strategic locations,  we intend to leverage  Sustainable's existing
processing  and  distribution   infrastructure  to  cost-effectively   co-locate
biodiesel and biomass  refining  capabilities  based on our  technologies at the
Culbertson, Montana plant.

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

     >>   Sales of Biodiesel  Production  Equipment.  The Company has executed a
          number of contracts to sell NextGen's biodiesel  production systems to
          various  clients.  Our  contracted  sales  pipeline  for  sales of our
          NextGen  biodiesel   production   systems  to  third  party  biodiesel
          producers currently exceeds $53 million.

     >>   Installation  and  Commissioning  of  Biodiesel  Facilities  Based  on
          NextGen Technology.  GS AgriFuels commissioned two facilities based on
          our  NextGen  biodiesel  technology  during  the  three  months  ended
          September 30, 2007. The first was a 5 million gallon per year facility
          in  Middletown,  Indiana  (www.e-biofuels.com)  and  the  second  a 10
          million    gallon   per   year    facility    in   Adrian,    Michigan
          (www.nextdiesel.net  -   http://greenshift.jgpdev.com/media/).   These
          facilities  are owned by third party clients of GS AgriFuels'  NextGen
          subsidiary.  The  Middletown  client  has  executed  an  agreement  to
          purchase an additional  two 10 million  gallon per year systems (which
          are scheduled for commissioning during the fourth quarter 2007 and the
          first quarter  2008) and the Adrian client has executed  agreements to
          purchase  an  additional  10 million  gallon per year  system and some
          specialized  feedstock  preparation equipment (which are scheduled for
          commissioning  during the first  quarter  2008).  In total,  these two
          clients alone correspond to about $16 million in system sales based on
          our proprietary biodiesel technology.

     >>   Formation of NextGen Biodiesel South America S/A. We recently formed a
          67% owned joint  venture  with  Ralston  International  Brazil LTDA to
          penetrate into the valuable South American  markets.  We are currently
          working through a substantial  pipeline of qualified sales  prospects.
          As  is  the  case  in  the  U.S.  market,  our  expertise  in  process
          engineering  and  alternative  feedstock  extraction,  preparation and
          processing is a significant competitive advantage in these markets.

     >>   Development  of Biodiesel  Production  Facilities.  We have  completed
          preliminary   engineering  and  permitting   activities  for  our  own
          biodiesel  production  facilities  that are going to be  co-located at
          ethanol facilities in New York (10 million gallons per year), Iowa (10
          million  gallons per year) and  Indiana (5 million  gallons per year).
          These facilities are being designed to scale to 20 million gallons per
          year,  30 million  gallons  per year and 10 million  gallons per year,
          respectively.  We are currently in various stages of  negotiations  to
          add a number of  additional  GS-owned  corn oil  biodiesel  production
          facilities on-site at several ethanol facilities.

     >>   Acquisition  of Feedstock.  The Company is party to agreements for the
          purchase of more than 50 million gallons per year of hedged crude corn
          oil from ethanol facilities at rates indexed off of diesel prices.

     >>   Acquisition  of Oilseed  Crush  Facility.  In March 2007,  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.

                                       23
<PAGE>

     >>   Investment in ZeroPoint  Clean Tech,  Inc. In August 2006, 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.

     >>   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.

OUR TECHNOLOGIES

Biodiesel Technology

During 2006,  we acquired and  completed  early stage  commercialization  of our
patent-pending  NextGen Fuel continuous flow biodiesel  technology.  The NextGen
systems, which include both direct and transesterification, are skid mounted and
sized to  produce 5 million or ten 10 million  gallons  of  biodiesel  per year.
Traditional processes typically require several hours to complete the conversion
of qualified  vegetable  oils and animal fats into  biodiesel;  we intensify and
idealize  the  conditions  under  which  this  conversion   occurs  and  we  are
consequently  able to complete the conversion in minutes instead of hours - at a
much  smaller  scale than  traditional  processes,  and at reduced  capital  and
operating costs as compared to traditional processes.  These benefits also allow
us to  efficiently  convert a broader array of feedstocks  than any  traditional
process  that we are aware of.  Since  acquiring  NextGen we have  improved  and
refined   the   technology,   completed   commercialization   and   successfully
commissioned  three systems.  We sell systems based on the NextGen technology to
third party biodiesel producers.  Our contracted sales pipeline for sales of our
NextGen  biodiesel   production  systems  to  third  party  biodiesel  producers
currently exceeds $53 million.

Biomass Gasification - Minority Investment

We  hold  a  minority  stake  in  ZeroPoint  Clean  Tech,   Inc.   ZeroPoint  is
commercializing patent pending and proprietary gasification,  gas to liquids and
fuel  reforming  technology  that  ZeroPoint  management  believes  is the  most
effective  technology  available  for use in  gasifying a wider range of various
biomass materials to create  carbon-neutral energy (gas,  electricity,  ethanol,
diesel  substitutes  and  hydrogen),  clean water and other  valuable  products.
ZeroPoint's  technology is well suited for  distributed  deployments,  making it
highly  applicable  to the  localized  nature of many global  sources of biomass
feedstock.  GS  AgriFuels  holds  the  exclusive  distribution  rights  to  this
technology in the North American Ethanol Production Industry.


                                       24
<PAGE>

RESULTS OF OPERATIONS

THREE MONTHS ENDED  SEPTEMBER  30, 2007 VERSUS THREE MONTHS ENDED  SEPTEMBER 30,
2006

Revenues

Total revenues for the three months ended  September 30, 2007 were $9,203,674 as
compared to $0 for the three months ended  September  30, 2006. Of this revenue,
$1,925,248  was produced by its  subsidiary  Sustainable  Systems,  Inc.,  which
operates an oilseed crushing facility in Culbertson, Montana while $7,278,426 of
the  Company's  revenues  during the three months ended  September 30, 2007 were
produced by NextGen Fuel which  operates the process  engineering  and equipment
manufacturing facility.

Cost of Revenues

Cost of revenues for the three months ended  September 30, 2007 were  $5,260,582
as compared  to $0 for the same  period in 2006.  Of this total cost of revenue,
$1,946,792  of the  reported  cost of  revenues  was  attributable  to  expenses
incurred by  Sustainable  Systems and  $3,313,790  was  attributable  to NextGen
Fuels. The Company acquired control of Sustainable  Systems on March 6, 2007 and
has  consolidated  the financial  results of Sustainable  Systems only from that
date forward.

Operating Expenses

During the three months ended September 30, 2007, the Company incurred operating
expenses totaling  $1,315,185 as compared to $202,262 for the three months ended
June 30, 2006.  Operating  expenses for the three months  September  30, 2007 as
compared  to 2006 was  composed  of  $790,185  and  $202,262,  respectively,  in
selling,  general and administrative expenses and $525,000 and $0, respectively,
due to the amortization of intangibles.

Interest Expense

Interest  expense for the three months ended  September 30, 2007 was $1,065,356,
representing an increase of $882,394 from $182,962 for the same period in 2006.

Net Income or Loss

Net income during the three months ended September 30, 2007 was  $1,214,489,  an
increase  from the  $167,282  loss  recorded  in the same  period  of 2006.  The
provision  for income tax expense for the three months ended  September 30, 2007
was $253,331 as compared to $0 for the same period in 2006.

NINE MONTHS ENDED SEPTEMBER 30, 2007 VERSUS NINE MONTHS ENDED SEPTEMBER 30, 2006

Revenues

Total revenues for the nine months ended September 30, 2007 were  $11,484,763 as
compared to $0 revenues for the nine months ended  September  30, 2006.  Of this
revenue,  $4,206,338 was produced by its subsidiary  Sustainable Systems,  Inc.,
which  operates  an oilseed  crushing  facility  in  Culbertson,  Montana  while
$7,278,425 of the Company's  revenues during the nine months ended September 30,
2007 were produced by NextGen Fuel which  operates the process  engineering  and
equipment manufacturing facility.

Cost of Revenues

Cost of revenues for the nine months ended  September 30, 2007 were  $7,573,885,
or 66% of revenue compared to $0 for the same period in 2006. Of this total cost
of revenue,  $4,125,490  of the reported  cost of revenues was  attributable  to
expenses  incurred by Sustainable  Systems and $3,448,395  was  attributable  to
NextGen Fuel. The Company  acquired  control of Sustainable  Systems on March 6,
2007 and has consolidated the financial results of Sustainable Systems only from
that date forward.

Operating Expenses

Operating expenses for the nine months ended September 30, 2007 were $5,692,523,
or 50% of revenue compared to $378,166 for the same period in 2006.  Included in
the nine  months  ended  September  30,  2007  was  $1,897,904  in  stock  based
compensation as compared to $0 for the nine months ended September 30, 2006. The
increase in operating  expenses is due  primarily to increases in personnel  and
other  overhead  related  to  the  Company's  process   engineering,   feedstock
production, oilseed crush and equipment manufacturing as well as amortization of
deferred financing fees and amortization of the energy technology.

                                       25
<PAGE>

Interest Expense

Interest  expense for the nine months ended  September 30, 2007 was  $3,025,503,
representing  an increase of  $2,842,541  from  $182,962  for the same period in
2006.

Net Income or Loss

Net loss from  operations  for the nine months ended  September  30,  2007,  was
$5,184,394  as compared  to a loss from  operations  of  $641,127  from the same
period in 2006.  The net loss for the nine months ended  September  30, 2007 was
due  primarily to  increased  operating  expenses for new business  initiatives,
interest  and  amortization   charges   associated  with  financing  and  energy
technology  and issuance of stock based  compensation.  The provision for income
tax  expense  for the nine  months  ended  September  30,  2007 was  $253,331 as
compared to $0 from the same period in 2006.

The two primary  reasons for the  magnitude of the nine month loss were expenses
attributable  to the  transition  from  technology  development to mature market
execution and expenses attributable to past financing activities.  Specifically,
during the recent nine month period the Company  incurred  substantial  expenses
attributable to:

     >>   Technology development activities; and

     >>   One-time  equity grants to employees and  consultants  in lieu of cash
          compensation.

Management  expects the magnitude of those items of expense to be non-recurring,
although the future effect of adjusting  derivatives to market value will depend
on future changes in the stock prices of GS AgriFuels and its  subsidiaries.  To
clarify  the  effect of these  one-time  charges  and  financing  charges  on GS
AgriFuels'   results,   the  following   table   reconciles   the  reported  net
income/(loss)  of GS AgriFuels and its subsidiaries on an  unconsolidated  basis
with adjusted EBITDA (a non-GAAP measure of performance):

3 Months Ended 9/30/07
--------------------------------------------
Income (Loss)                $     1,214,489
Interest                           1,065,356
Depreciation & Amortization          233,509
Amortization of technology           525,000
Stock-based Compensation                  --
Other Non-recurring Items                  -
Taxes                                253,331-
--------------------------------------------
Adjusted EBITDA              $     3,291,685

9 Months Ended 9/30/07
--------------------------------------------
Income (Loss)                $   (5,184,394)
Interest                           3,025,503
Depreciation & Amortization          665,851
Amortization of technology         1,575,000
Stock-based Compensation           1,897,904
Other Non-recurring Items                  -
Taxes                                253,331
--------------------------------------------
Adjusted EBITDA              $     2,233,195

LIQUIDITY AND CAPITAL RESOURCES

Although  we  incurred a net loss of  $5,184,394  during the nine  months  ended
September 30, 2007,  our  operations  produced  $4,444,820 in net positive cash.
This apparent anomaly is attributable to the fact that we received $9,946,500 in
customer deposits during the period as well as the deferral of accrued interest.
These deposits provided us the cash necessary to sustain our operations.  On the
other hand,  the use of that cash to sustain  operations  to date means that the
revenue we will realize when we fulfill the contracts with those  customers will
not be matched by equivalent cash flow. As a result,  we will have to find other
sources of cash to sustain us as we fulfill those contracts in future months.

The Company's aggregate debt service obligations at September 30, 2007 are shown
in the following table:
<TABLE>
<CAPTION>
        Contractual                                    Less Than                                             Over
        Obligations                        Total          1 Year        1-3 Years       4-5 Years         5 Years
        ------------------------ ---------------- --------------- ---------------- --------------- ---------------
<S>                                   <C>              <C>             <C>             <C>                <C>
        YA Global Investments         20,449,631             -0-        7,449,631      13,000,000             -0-
        Stillwater                     4,420,000       4,200,000              -0-             -0-             -0-
        Next-Gen Sellers               4,060,032       4,060,032              -0-             -0-             -0-
        Sustainable Sellers            9,004,018       5,452,005        3,552,013             -0-             -0-
        Other                          2,945,850       1,279,700          224,000         776,942         665,211
        Total                         40,659,534      14,991,737       11,225,644      13,776,942         665,211
</TABLE>
                                       26
<PAGE>

At September 30, 2007, GS AgriFuels had current assets  totaling  $4,998,808 and
had current  liabilities  totaling  $22,482,135,  resulting in a working capital
deficit of $17,483,327.  In addition,  $14,492,721 was attributable to notes and
debentures due within the next twelve months.  We expect to be able to refinance
or defer payment of a large portion of that debt. For these reasons,  we believe
that our working  capital is  sufficient  to fund our  operations  as  currently
constituted for the next twelve months.

Management   expects  the  construction  of  GS  AgriFuels'  first   facilities,
corresponding to more than 25 million gallons per year of fuel production,  will
require a total of about  $75.0  million in capital,  consisting  of about $70.0
million in  capital  costs and about $5.0  million  in working  capital.  At the
current  prices  for  biodiesel,  annual  production  of 25  million  gallon  of
biodiesel  would generate more than an estimated $75 million in annual  revenue.
The accuracy of those  estimates will depend on the market price of biodiesel 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.

UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL INFORMATION FOR ACQUISITIONS

The following unaudited pro forma consolidated  financial  information  presents
the  combined  results  of  operations  of the  Company  as if  the  Sustainable
acquisition   had  occurred  on  January  1,  2007.   The  unaudited  pro  forma
consolidated financial information is not intended to represent or be indicative
of the  consolidated  results of  operations of the Company that would have been
reported  had the  acquisition  been  completed as of the dates  presented,  and
should  not be taken as  representative  of the future  consolidated  results of
operations of the Company.  Summarized  unaudited pro forma consolidated results
were as follows:
<TABLE>
<CAPTION>
                                                               Three Months Ended                  Nine Months Ended
                                                                     September 30                      September 30
                                                   ------------------------------    ------------------------------
                                                            2007             2006             2007             2006
                                                   ------------------------------    ------------------------------
<S>                                                  <C>             <C>              <C>               <C>
Revenue                                              $ 9,203,674     $       --        $12,949,571      $      --
Net income (loss) applicable to shareholders           1,218,563        (369,544)       (5,030,591)       (641,127)

Basic income (loss) per share                        $      0.04            (.17)            (0.18)          (0.56)
</TABLE>

OFF-BALANCE SHEET ARRANGEMENTS

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

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

In February, 2007, FASB issued SFAS No. 159, The Fair Value Option for Financial
Assets and Financial  Liabilities including an amendment of FAS 115, or FAS 159.
This statement  provides  companies with an option to report selected  financial
assets and  liabilities  at fair value.  This  statement is effective for fiscal
years  beginning after November 15, 2007 with early adoption  permitted.  We are
assessing FAS No. 159 and have not yet  determined  the impact that the adoption
of FAS No. 159 will have on our results of operations or financial position,  if
any.

In September 2006, the FASB issued  Statement of Financial  Accounting  Standard
("SFAS") No. 157 Fair Value  Measurements.  This  statement  defines fair value,
establishes a fair value hierarchy to be used in generally  accepted  accounting
principles and expands disclosures about fair value measurements.  Although this
statement  does not require  any new fair value  measurements,  the  application
could change  current  practice.  The  statement  is effective  for fiscal years
beginning  after  November 15, 2007.  The Company is  currently  evaluating  the
impact of this statement to its financial position and results of operations.

                                       27
<PAGE>

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS

BUSINESS RISK FACTORS

You should carefully consider the risks described below before buying our common
stock.  If any of the risks described  below actually  occurs,  that event could
cause the trading  price of our common stock to decline,  and you could lose all
or part of your investment.

                       I. Risks Attendant to Our Business

We may be unsuccessful at developing profitable facilities.

GS AgriFuels was a start-up company up until the second quarter of 2007. Only in
June 2006 did we obtain the funds  necessary to initiate  operations.  Before we
begin to  generate  revenue,  we will have to obtain  sites for our  facilities,
obtain the necessary  permits and licenses to construct the  facilities,  retain
qualified contractors,  engineers and architects,  employ a qualified staff, and
obtain the business relationships  necessary to insure a supply of raw materials
and a market for our end  product.  Many  factors  could cause our efforts to be
defeated; including both factors that we already anticipate and factors that may
surprise us.

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

In order to complete  construction  of our planned  facilities,  we will have to
obtain  equity and senior debt  financing  equal to our  aggregate  construction
costs.  This  currently  corresponds  to about  $3.00 per  gallon  of  installed
extraction and biodiesel capacity.  Estimated construction costs for the planned
facilities  include  $30  million  for the Iowa  facility,  $30  million for the
Northeast  plant and $15  million  for the  Marion  plant.  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.

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<PAGE>
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.

The market  for  alternative  energy  sources  is  undetermined,  and may not be
adequate for sustain prices at a profitable level.

Most of our  subsidiaries  are  involved in the  development  or  production  of
alternative  energy,  or are  providing  services to  companies  involved in the
production  of  alternative  energy.  Their  success will depend on the level of
market  acceptance of alternative  energy sources.  The marketing of alternative
energy  sources on a national  scale is a  phenomenon  new to this  decade.  The
portion of U.S. energy  represented by alternative energy sources is still quite
small.  It is not  possible to predict with  assurance  how large the market for
alternative  energy sources will become. If it has not developed to a sufficient
breadth when our  subsidiaries  are ready to market their products and services,
the price at which  alternative  energy can be sold will be  limited,  which may
make it impossible for one or more of our subsidiaries to operate profitably.

The fiscal  efficiencies  of highly  capitalized  competitors in the alternative
energy  field could defeat the efforts of our  subsidiaries  to capture a viable
market share.

The  business of producing  alternative  energy is a  capital-intense  business,
requiring substantial capital resources. Relative to many of the participants in
this  industry,  our  capital  resources  are  miniscule.  The  costs  that  our
subsidiaries  incur in obtaining  capital are  substantially  greater per Dollar
than  the  cost  incurred  by  large  scale  enterprises  in  the  industry.  If
competition  reduces the prices  available for alternative  energy sources,  our
dependence on expensive  capital sources may prevent us from lowering our prices
to  meet  the  competition.  This  situation  could  cause  one or  more  of our
subsidiaries to be unable to compete effectively.

                 II. Risks Attendant To Our Corporate Structure

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

Thomas  Scozzafava and Kevin Kreisler are the Chief Executive  Officer and Chief
Operating Officer,  respectively, of GS AgriFuels. Together they are responsible
for  strategizing not only our business plan but also the means of financing it.
If either  of these  officers  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 the departed officer could be retained.

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

GS AgriFuels is a subsidiary of GreenShift Corporation, which currently controls
over 92% of the voting  power in GS  AgriFuels.  GreenShift  Corporation  is the
parent of several corporations involved in the development and implementation of
environmentally  responsible  technologies,  and has significant  investments in
several others.  GreenShift  intends to foster cooperation among its affiliates,
so as to gain the  benefits of  intellectual  cross-fertilization,  economies of
scale, and captive markets. 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 The Market For Our Common Stock.

The resale of shares acquired by YA Global Investments, LP from GS AgriFuels may
reduce the market price of GS AgriFuels' shares.

GS  AgriFuels  has  sold  to YA  Global  Investments  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. YA Global Investments 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 YA Global  Investments  may reduce  the market  price for GS
AgriFuels common stock.

Existing  shareholders may experience  significant dilution from our issuance of
shares to the holders of our convertible debentures.

We have  issued  convertible  debentures  to a number  of  entities  in order to
finance the development of our business. The issuance of shares on conversion of
these debentures or on exercise of the warrants issued to YA Global  Investments
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  debentures are converted on the basis
of the  contemporaneous  market  price.  If our stock  price is lower,  then our
existing stockholders would experience greater dilution.

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<PAGE>

There is a very limited market for our common stock.

Only a very small portion of our outstanding  shares are held by persons who are
not  affiliated  with GS  AgriFuels.  For that  reason,  there is a very limited
market  for our  common  stock.  On most days its  trading  volume is only a few
thousand shares.  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 few 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 25% 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.

























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<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 or officers and principal
financial officer, to allow timely decisions regarding required disclosure.  The
Company's chief executive officer and chief financial  officer  determined that,
as of the  end of  the  period  covered  by  this  report,  these  controls  and
procedures  are adequate and  effective in alerting  them in a timely  manner to
material  information  relating  to the  Company  required to be included in the
Company's periodic SEC filings.

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


















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<PAGE>

                           PART II - OTHER INFORMATION

ITEM 1.   LEGAL PROCEEDINGS

The Company is party to the matter  entitled  O'Brien & Gere  Limited,  et al v.
NextGen Chemical Processors, Inc., et al., which action was filed in the Supreme
Court of the State of New York.  The  verified  complaint,  which also names the
Company and certain of its affiliates, seeks performance of and damages relating
to certain service and related agreements,  plus attorney's fees and costs. This
matter relates to the provision by plaintiffs of certain engineering services to
NextGen Chemical Processors,  Inc. ("NCP") during 2005 and 2006. NCP is owned by
the former shareholders of our recently acquired NextGen Fuel, Inc., subsidiary.
The Company has responded to the verified  complaint  and denies any  liability.
The Company  estimates  that the legal fees for our defense will be nominal,  if
any, as the sellers have been paying the fees to date.  On  September  19, 2007,
the Supreme Court of the State of New York  dismissed a  significant  portion of
O'Brien & Gere's complaint with prejudice.

ITEM 2.   UNREGISTERED SALES 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 nine months ended September 30, 2007.

ITEM 3.   DEFAULTS UPON SENIOR SECURITIES

None.

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

None.

ITEM 5.   OTHER INFORMATION

Item 1.02  Termination of a Material Definitive Agreement

On November 9, 2007 GS  CleanTech  and GS  AgriFuels  agreed to  terminate  the
license  agreement  dated July 1, 2007  pursuant to which GS AgriFuels  had been
obtaining raw materials from GS CleanTech.  GS CleanTech will continue to supply
raw  materials to GS  AgriFuels,  but on terms to be  determined  at the time of
shipment.

ITEM 6.  EXHIBITS

The following are exhibits filed as part of the Company's Form 10-QSB for the
period ended September 30, 2007:

Exhibit Number             Description

     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.)

                                       32

<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:                   November 14, 2007

              /S/       EDWARD CARROLL
              ---------------------------------
                        EDWARD CARROLL
                        Chief Financial Officer


Date:                   November 14, 2007






















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