# UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_________________________



# FORM 10

- Q/A

(Amendment No. 1)

_________________________

QUARTERLY REPORT PURSUANT TO S ECTION 13 OR 15 (D)

OF THE SECURITIES EX CHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2009

COMMISSION FILE NO .: 0

- 50469



# GREENSHIFT CORPORATION

(Exact name of registrant as specified in its charter)

Delaware 59

- 3764931

(State of other jurisdiction of IRS Employer

incorporation or organization) Identi fication No.)

One Penn Plaza, Suite 1612, New York, New York 10119

(Address of principal executive offices) (Zip Code)

(212) 994

- 5374

(Registrant ’ s telephone number including area code)

Check mark whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities

Exchange Act of 1934 during the past 12 months (or for such shorter period that the registrant as required to file

such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X. No

__

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if

any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S

- T

(§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required

to submit and post such files.) Yes X No ___

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non

- ac celerated filer,

or a smaller reporting company. See the definitions of ―large accelerated filer,‖ ―accelerated filer‖ and ―smaller

reporting company‖ in Rule 12b

- 2 of the Exchange Act. (Check One)

Large accelerated filer Accelerated filer

__ Non

- accelerated filer Small er reporting company X

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 August 20

, 2009 was 500,000,000.2 

### Amendment No. 1

This Amendment No.1 on Form 10

- Q/A, which amends and restates items identified below with respect to the Form

10

- Q, filed by GreenShift Corporation ("we" or "the Company") with the Securities and Exchange Commissi on (the

"SEC") on August 20, 2009 (the "Original Filing"), is being filed in order to:

Include restated financial statements, as described in Note 17 to the financial statements;

Amend Item 2 (―Management’s Discussion‖) to conform to the restated financi al statements;

Amend Item 4 (―Controls and Procedures‖) to reflect the modification to management’s assessment of its

disclosure controls and procedures caused by the restatement and to provide further disclosures;

The following under Item 2, (―Management’ s Discussion‖) was modified as follows due to the restatement:

the paragraph titled Expenses Associated with Change in Convertible Liabilities was added;

the paragraph titled Gain Associated with Derivative Instruments was deleted;

the Contractual Commitme nts table was updated.

The following under Item 1, (―Financial Statements and Supplementary Schedules‖) was modified as

follows due to the restatement:

o Report of Independent Registered Public Accounting Firm was updated to reflect restatement;

o Note 2, Goi ng Concern was updated;

o Under Note 3, Significant Accounting Policies, the Financial Instruments section was modified as

well as the Financial Measurements section;

o Note 7, Line of Credit was modified by moving a paragraph to Note 9, Debt and Purchase

Obli gations;

o Under Note 9, Debt and Purchase Obligations, the sections explain the Acutus Debenture and the

MIF Debenture were modified due to the restatement;

o Note 17 Restatements was added to outline the changes that were made to the financial statements.

N one of the other disclosures in this Report have been amended or updated. For updated information about

GreenShift Corporation, please refer to the more recent filings made with the SEC.3 

### GREENSHIFT CORPORATION

QUARTERLY REPORT ON FORM 10

- Q

FOR THE FIS CAL QUARTER ENDED JUNE 30, 2009

TABLE OF CONTENTS

Page No

Part I

– Financial Infor mation

Item 1 Financial Statements (unaudited)

................................ ................................ ................................ .......... 4

Condensed Consolidated Balance Sheet as of June 30, 2009 and December 31, 2008 (unaudited)

........ 5

Condensed Consolidated Statements of Operations for the Three and Six Month Period s

Ended June 30 , 2009(unaud ited) and 2008 (unaudited)

................................ ................................ .......... 6

Condensed Consolidated Statements of Cash Flows for the Six Months Ended

June 30, 2009 (unaudited) and 2008 (unaudited)

................................ ................................ .................... 7

Statement of Stockholders’ Equity

– Year Ended December 31, 2008 and Six

Months Ended June 30 , 2009

................................ ................................ ................................ .................. 8

Notes to Condensed Consolidated Financial Statements

................................ ................................ ...... 10

Item 2 Management’s Discussion and Analysis of Financial Condition and Results of Operations

.............. 21

Item 3 Quantitative and Qualitative Disclosures about Market Risk

................................ ............................... 27

Item 4 Controls and Procedures

................................ ................................ ................................ ...................... 27

Part II

– Other Information

Item 1 Legal Proceedings

................................ ................................ ................................ ............................... 28

Item 1A Risk Factors

................................ ................................ ................................ ................................ ......... 28

Item 2 Unregistered Sales of Equity Securities and Use of Proceeds

................................ ............................. 28

Item 3 Defaults upon Senior Securities

................................ ................................ ................................ .......... 28

Item 4 Submission of Matters to a Vote of Security Holders

................................ ................................ .......... 28

Item 5 Other Information

................................ ................................ ................................ ................................ 28

Item 6 Exhibits

................................ ................................ ................................ ................................ ................. 29

Signatures 304



### Basis of Presentation

In this Quarterly Re port on Form 10

- Q, the terms ―we,‖ ―our,‖ ―us,‖ ― GreenShift ,‖ or the ―Company‖ refer to

GreenShift Corporation , and its subsidiaries on a consolidated basis. The term ―GreenShift Corporation‖ refers to

GreenShift Corporation on a standalone basis only, and not its subsidiaries.

Market and Industry Data Forecasts

This document include s industry data and forecasts that the Company has prepared based, in part, upon data and

forecasts obtained from industry publications. Third

- party industry publications generally state that the information

contained therein has been obtained from sources believed to be reliable, but do not guarantee the accuracy and

completeness of such information. In particular, we have based much of our discussion of the biodiesel and ethanol

industries , including government regulation relevant to the industry and fore casted growth in demand, on

information published by the National Biodiesel Board, the national trade association for the U.S. biodiesel industry

, and the Renewable Fuels Association, the national trade association for the U.S. corn ethanol industry . Becau se the

National Biodiesel Board and Renewable Fuels Association are trade organization s for the U.S. biodiesel and

ethanol industries

, they may present information in a manner that is more favorable than would be presented by an

independent source. Forecas ts in particular are subject to a high risk of inaccuracy , especially forecasts projected

over long periods of time.

Forward Looking Statements

We make certain forward

- looking statements in this Quarterly Report on Form 10

- Q and in the documents that are

i ncorporated herein by reference. These forward

- looking statements relate to our outlook or expectations for

earnings, revenues, expenses, asset quality or other future financial or business performance, strategies or

expectations, or the impact of legal, r egulatory or supervisory matters on our business, results of operations or

financial condition. Specifically, forward

- looking statements may include statements preceded by, followed by or

that include the words ― estimate, ‖ ― plan, ‖ ― project, ‖ ― forecast, ‖ ― i ntend, ‖ ― expect, ‖ ― anticipate, ‖ ― believe, ‖ ― seek, ‖

― target ‖ or similar expressions. These statements reflect our management ’ s judgment based on currently available

information and involve a number of risks and uncertainties that could cause actual results to differ materially from

those in the forward

- looking statements. Future performance cannot be ensured. Actual results may differ materially

from those in the forward

- looking statements. Some factors that could cause our actual results to differ include:

 the volatility and uncertainty of commodity prices;

 operational disruptions at our facilities;

 the costs and business risks associated with developing new products and entering new markets;

 our ability to locate and integrate future acquisitions;

 our abili ty to develop our corn oil extraction and biodiesel production facilities ;

 the effects of other mergers and consolidations in the biofuels industry and unexpected announcements or

developments from others in the biofuels industry;

 the impact of new, emergi ng and competing technologies on our business;

 the possibility of one or more of the markets in which we compete being impacted by political, legal and

regulatory changes or other external factors over which they have no control;

 changes in or elimination of governmental laws, tariffs, trade or other controls or enforcement practices;

 our reliance on key management personnel;

 limitations and restrictions contained in the instruments and agreements governing our indebtedness;

 our ability to raise additional capital and secure additional financing;

 our ability to implement additional financial and management controls, reporting systems and procedures

and comply with Section 404 of the Sarbanes

- Oxley Act, as amended; and

 other risks referenced from time to time in our filings with the SEC and those factors listed in this Form

10Q under Item 1A, Risks Factors , beginning on page 39.

You are cautioned not to place undue reliance on any forward

- looking statements, which speak only as of the date of

this Form 10

- Q , o r in the case of a document incorporated by reference, as of the date of that document. Except as

required by law, we undertake no obligation to publicly update or release any revisions to these forward

- looking

statements to reflect any events or circumsta nces after th e date of this Form 10

- Q or to reflect the occurrence of

unanticipated events.5 

### PART I

– FINANCIAL INFORMATIO N

ITEM 1 FINANCIAL STATEMENTS (UNAUDITED)6 

### GREENSHIFT CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEET S

AS OF JUNE 3 0, 2009 (UNAUDITED) AND DECEMBER 31

, 200 8

RESTATED RESTATED

6/30/2009 12/31/ 20 0 8

ASSETS

Current assets:

Cash $

-- $ 10,028

Accounts receivable, net of allowance of doubtful accounts of $0 and $46,962 136,372 733,768

I nventories 616,056 616,056

Cost and earnings in excess of billings 213,902 175,592

Project development costs 379,355 379,355

Assets to be disposed, current

-- 1,006,343

Prepaid expenses and other assets 119,997 111,125

Total current assets 1,465,682 3,032,267

Other Assets:

Property and equipment, net 10,900,870 11,125,547

Deposits 213,634 213,634

Construction in progress 4,986,892 4,541,554

Accrued interest receivable 1,775

--

Note receivable 500,000

-- Intangible assets , net 33,845 42,959

Deferred financing costs, net 195,593 390,464

Minority investments 2,501,324 2,501,324

Goodwill

-- 7,281,993

Assets to be disposed, net of current

-- 12,995,691

Total other assets 19,333,933 39,093,166

TOTAL ASSETS $ 20,799,615 $ 42,125,433

LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT):

Current liabilities:

Line of credit $ 11,094,543 $ 11,044,838

Accounts payable and accrued expenses 14,614,59 5 14,551,651

Accrued interest payable 6,907,043 6,603,228

Accru ed interest payable

– related party 266,496 179,711

Billings in excess of earnings

-- 13,576

Income tax payable 45,000 45,000

Current portion of long term debt 8,383,663 8,785,668

Convertible debenture

- related party debt, net of discount 2, 158,195 1,900,333

Current portion of convertible debentures, net of discount 19,477,319 11,792,387

Other current liabilities 521,067 604,587

Liabilities of discontinued operations, current 363,228 363,228

Liabilities due to shareholders 932,328 932,328

Liabilities to be disposed

-- 3,526,617

Total current liabilities 64,763,47 7 60,343,152

Long term liabilities:

Long term debt, net of current 373,250 964,028

Asset retirement obligation 247,975 247,462

Liabilities to be disposed, n on

- current

-- 19,328,095

Convertible debenture s , net of current 8,428,340 21,188,196

Total long term liabilities 9,049,565 41,727,781

Total liabilities 73,813,042 102,070,933

Equity:

Stockholders’ equity (deficit)

Convertible preferred stock , $0.001 par value, 5,000,000 shares authorized:

Series A: 0 shares issued and outstanding, respectively

-- -- Series B: 2,498,123 and 2,519,219shares issued and outstanding, respectively 2,498 2,519

Series C: 0 shares issued and outstanding

-- -- Series D: 799,954 and 800,000 shares issued and outstanding, respectively 800 800

Series E: 0 and 20,000 shares issued and outstanding, respectively

-- 20

Common stock, $0.001 par value, 500,000,000 authorized;

496,568,541 and 95,14 4,983, shares issued and outstanding, respectively 496,569 95,144

Additional paid

- in capital 87,711,017 76,878,929

Accumulated deficit ( 141,233,984 ) ( 136,932,585 )

Total stockholders’ equity (deficit) (53, 023,100 ) (59 ,955,173 )

Non

- contr olling interest in subsidiary 9,673 9,673

Total equity (deficit) (53, 013,427 ) (59 ,945,500 )

TOTAL LIABILITIES AND EQUITY (DEFICIT) $ 20,799,615 $ 42,125,433

The notes to the Condensed Consolidated Financial Statements are an integral part of th ese statements.7 

### GREENSHIFT CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE SIX MONTHS ENDED JUNE 30, 2009 AND 200 8

(UNAUDITED)

RESTATED RESTATED RESTATED RESTATED

Three Months En ded June 30 Six Months Ended June 30

2009 200 8 2009 200 8

Revenue $ 1,177,026 $ 5,961,775 $ 2,032,684 $ 8,857,574

Cost of revenues 838,664 2,525,799 1,994,388 4,045,899

Gross profit 338,362 3,435,976 38,296 4,811,675

Op erating expenses:

General and administrative expenses 1 ,030,158 1,427,946 1,935,478 2, 022,717

Selling expenses 8,816 (383) 21,056 43,676

Research and development

-- 31,606

-- 32,207

Bad debt expense 4,315,204

-- 4,315,204

--

Amortization o f intangibles

-- 525,000

-- 1,050,000

Loss on disposal of equipment 28,985

-- 28,985

-- Impairment of goodwill

-- -- 7,281,993

-- Stock based compensation

-- 32,816

-- 336,833

Total operating e xpenses 5,383,163 2,016,985 13,582,715 3,485,433

Income (loss) from operations (5,044,801) 1, 418,991 (13,544,419) 1,326,242

Other income (expense):

Change in fair value of derivative instruments

-- -- -- --

Interest income 1,775

-- 1,775

-- Loss on disposal and impairment of investments

-- (1,077,135)

-- (2,739,735)

Amortization of debt discount & deferred financing (189,958) (527,150) (376,768) (990,152)

Other income (expense) 73,91 4 15,545 80,81 6 45,535

Conversion liabilities ( 289,997 ) (73,525) ( 696,384 ) (120,595)

Conversion liabilities

- affiliate (64,631)

-- (126,555)

-- Interest expense

- affiliate (44,784) (28,079) (86,785) (55,676)

Interest expense ( 1,498,92 3 ) (1,533,024) (2,970,139) (2,720,164)

Total other income (expense), net (2, 012,604 ) (3,223,368) (4, 174,040 ) (6,580,787)

Loss before minority interest and income taxes ( 7,057,405 ) (1,804,378) (17, 718,459 ) (5,254,545)

Minority inte rest in net loss of consolidated subsidiaries

-- 6,419

-- 6,419

Loss before provision for income taxes ( 7,057,405 ) (1,797,959) (17, 718,459 ) (5,248,126)

(Provision for)/benefit from income taxes 402,347 7,019 402,347

--

Loss from continuing operations (6,655,058) ( 1,790,940 ) (17,316,112 ) (5,248,126 )

Discontinued Operations:

Gain from disposal of discontinued operations 14,452,069

-- 14,452,069

-- Income (l oss ) from discontinued operations 555,568 (507,044) (1,167,356) (560,072)

Total income (loss) from discontinued operations 15,007,637 (507,044) 13,284,713 (560,072)

Net income (loss) $ 8,352,579 $ ( 2,297,984 ) $ ( 4,031,399 ) $ (5, 808,198 )

Mandatorily Redeemable Preferred Equity

-- -- (270,000)

--

Net income (loss) attributable to common shareholders $ 8,352,579 $ ( 2,279,984 ) $ ( 4,301,399 ) $ (5, 808,198 )

Weighted average common shares outstanding

Basic and diluted 406,790,648 35,151,574 272,179,740 37,482,710

Earnings (loss) per share

Loss from cont inuing operations $ (0.02) $ (0.05) $ (0.06) $ (0.14)

Income (loss) from discontinued operations 0.04 (0.01) ( 0.05 ) (0.01)

Net income ( loss ) per share

– basic and diluted $ 0.02 $ (0.06) $ (0.01) $ (0.15)

The notes to the Condensed Consolidated Fina ncial Statements are an integral part of these statements.8 

### GREENSHIFT CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE SIX MONTHS E NDED JUNE 30, 2009 A ND 2008 (UNAUDITED)

RESTATED RESTA TED

Six months Six months

Ended 6/30/09 Ended 6/30/08

CASH FLOW FROM OPERATING ACTIVITIES

Net loss $ (4, 031,399 ) $ ( 5 ,808,198 )

Adjustments to reconcile net loss to net cash

provided by (used in) operating activities

Depreciation and amorti zation 586,205 334,690

Amortization of intangibles 9,114 1,031,748

Amortization of debt discount and deferred financing costs 642,537 627,623

Gain on di sposal of subsidiary (14,451,979 )

-- Change in net assets to be disposed of 5,599,302

-- Interest from conversion liability 818,418 120,593

Stock based compensation

-- 336,833

A c cretion of asset retirement obligation 790 58,050

Loss on disposal of investment

-- 2,739,735

Loss on impairment of goodwill 7,281,993

-- Bad debt exp ense 4,360,600 722

Change in minority interest

-- (22,561)

Change in assets and liabilities, net of acquisitions

Accounts receivable (3,763,204) ( 1 19,6 61 )

Restricted cash 316 (275,547)

Prepaid expenses 106,748 867,281

Deposits (83,521) (214,640)

Inventory

-- 511,736

Costs in excess of earnings ( 38,303 ) (90 2 ,173)

Deferred financing fees

-- (99,830)

Accrued interest 2, 913,638 2,0 13 ,4 73

Accrued interest

– related party 86,785 114,238

Billings in excess of cost (13,576) (9 34,096)

Accounts payable and accrued expenses (326, 57 9 ) 1

, 679,511

Deferred income taxes

-- (59,630)

Deferred revenue

-- (1,082,500)

Net cash provided by (used in) operating activities (297, 682 ) 917,797

CASH FLOW FROM INVESTING ACTIVITIES

Cas h paid for acquisition

-- (80,000)

Cash acquired from acquisition

-- -- Construction in progress ( 445,338 ) (4,039,557)

Divestiture of subsidiary

-- (317,500)

Investment in unconsolidated subsidiaries

-- -- Project development costs

-- (54 ,925)

Additions to and acquisition of property, plant and equipment ( 405,740 ) (3,040

, 650 )

Net cash (used in) investing activities ( 851,078 ) (7, 532, 632 )

CASH FLOWS FROM FINANCING ACTIVITIES

Repayment of line of credit

-- --

Proceeds from loan r eceivable

– related party (115,618)

-- Proceeds from long term debt 39,000

--

Proceeds from convertible debentures

-- 500,000

Repayment of convertible debentures

– related party 1,180,579

-- Repayment of short term borrowings

– affiliate

-- ( 1,461,916)

Proceeds from line of credit 49,705 10,030,000

Cash paid to minority shareholders

-- (820,827)

Repayment of long term debt ( 14,610 ) ( 1,593,816 )

Net cash provided by financing activities 1,139,056 6,335, 4 41

Net increase (decre ase) in cash $ ( 9,704 ) $ ( 38,604 )

Cash at beginning of period 9,704 140,218

Cash at end of period $

-- $ 178,823

The notes to the Condensed Consolidated Financial Statements are an integral part of these statements.9 

### GREENSHIFT CORPORATION AND SU BSIDIARIES

CONSOLIDATED STATEME NTS OF STOCKHOLDERS’ EQUITY

FOR THE YEAR ENDED D ECEMBER 31, 2008 AND SIX MONTHS ENDED JUN E 30, 2009

Series A Preferred Stock Series B Preferred

Stock Series C Preferred

Stock Series D Preferred

Stock Series E Preferred

Stock

Shares Amount Shares Amount Shares Amoun

t Shares Amount Shares Amount

Balance at 12/31/07 , Restated 1,254,244 $ 1,254 151,250 $ 151

-- -- 800,000 $ 800

-- --

Adjustment of conversion of subsidiary

minority interest -- -- -- -- -- -- -- -- -- --

Write

- off of derivative due to debt restructure

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

Shares issued for conversion of debentures

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

Adjustment for transfer of entity under

common control -- -- -- -- -- -- -- -- -- --

Stock based comp ensation

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

Cancellation of debt

– related party

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

Conversion of minority interest (1,254,244) (1,254)

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

Repurchase of subsidiary stock

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

Cancellat ion of debt

– related party

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

Conversion of Series B Preferred Stock to

Common -- -- (151,250) (151)

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

Issuance of Series B Preferred Stock to create

Employee Pool -- -- 3,025,333 3,025

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

Parti al Conversion of Series B to Common

-- -- (506,114) (506)

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

Conversion of debt

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

Common stock issued for financing fees

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

Acquisition of subsidiary

-- -- -- -- -- -- -- -- 20,000 2 0

Priority return on subsidiary c apital

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

Net loss

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

Balance at 12/ 31 / 08 ,R estated

-- -- 2,519,219 $ 2,519

-- -- 800,000 $ 800 20,000 $ 20

Conversion of Series B Preferred Stock to

Common -- -- ( 21,096) (21)

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

Shares issued for conversion of debentures

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

Conversion of Series D Preferred Stock to

Common -- -- -- -- -- -- (46)

-- -- --

Cancellation of shares

-- -- -- -- -- -- -- -- (20,000) (20)

Net lo ss

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

Balance at 6/ 30 / 09 , Restated

-- -- 2,498,123 $ 2,498

-- -- 799,954 $ 800

-- $

--

The notes to the Condensed Consolidated Financial Statements are an integral part of these statements.10 

### GREENSHIFT CORPORATION AND S UBSIDIARIES

CONSOLIDATED STATEME NTS OF STOCKHOLDERS’ EQUITY

FOR THE YEAR ENDED D ECEMBER 31, 2008 AND SIX MONTHS ENDED JUN E 30, 2009

Common Stock Non

- controlling

interest in

subsidiary Additional Paid

in Capital Accumulated

Deficit Total Equity

Share s Amount Amount Amount Amount Amount

Balance at 12/31/07 , Restated 30,693,083 $ 30,693

-- $ 66,175,522 $( 91,821,644 ) $(25,613,224)

Non

- controlling interest investment in subsidiary

-- -- 25,000

-- -- 25,000

Adjustment of conversion of subsidiary minority interest

-- -- -- 183,373

-- 183,373

Shares issued for conversion of debentures 11,000,597 11,000

-- 543,657

-- 554,657

Adjustment for transfer of entity under common control

-- -- -- (27,800)

-- (27,800)

Stock based compensation 850,000 850

-- 50,550

-- 51,400

Cancellation of debt

– related party

-- -- -- 2

, 952

, 968

-- 2,952,968

Conversion of minority interest 25,084 25

-- 1,229

-- --

Repurchase of subsidiary stock

-- -- -- (1,950,000)

-- (1,950,000)

Cancellation of debt

– related party

-- -- -- 293 ,085

-- 293,085

Conversion of Series B Preferred Stock to Common 6,797,634 6,798

-- (6,647)

-- --

Issuance of Series B Preferred Stock to create Employee Pool

-- -- -- 7,215,308

-- 7,218,333

Partial Conversion of Series B to Common 12,652,825 12,653

-- (12,147)

-- --

Conversion of debt 6,875,000 6,875

-- 1,093,125

-- 1,100,000

Common stock issued for financing fees 6,250,000 6,250

-- 1,084,511

-- 1,090,761

Acquisition of subsidiary 20,000,760 20,000

-- 2,065,680

-- 2,085,700

Restatement

– to omit SS I results due to sale of subsidiary

-- -- -- (2,783,485) 3,539,639 756,154

Priority return on subsidiary

capital -- -- -- -- (6 7 5,001) (6 7 5,001)

Net loss

-- -- (15,327)

-- ( 47,975,579 ) ( 47,990,906 )

Balance at 12/ 31 /0 8 ,R estated 95,144,983 $95,144 $9,673 $ 76,878,929 $( 136,932,585 ) $( 59,945,500 )

Conversion of Series B Preferred Stock to Common 527,400 527

-- (506)

-- --

Mandatorily redeemable preferred

-- -- -- -- (270,000) (270,000)

Shares issued for conversion of debentures 418,118,139 418,118

-- 889, 525

-- 1,307,643

S ale of subsidiary

-- -- -- 11,548,622

-- 11,548,622

Stock issued for repayment of accounts payable 2,500,000 2,500

-- 12,000

-- 14,500

Change in conversion feature due to conversion liabilities

-- -- -- 448,42 6

- - 448,42 6

Conversion of Series D Preferred Stock to Common 278,781 279

-- (279)

-- --

Cancellation of shares (20,000,760) (20,000)

-- (2,065,700)

-- (2,085,720)

Net loss

-- -- -- -- ( 4,031,399 ) ( 4,031,399 )

Balance at 6/ 30 /0 9 , Restated 496,568,543 $496 ,569 $9,673 $ 87,711,017 $( 141,233,984 ) $( 53,013,427 )

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

### GREENSHIFT AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

11 

### 1 BASIS OF PRESENTATIO N

The consolidated interim financial statements included herein have been p repared by GreenShift Corporation ( ― we, ‖

― our, ‖ ― us, ‖ ― GreenShift, ‖ or the ― Company ‖ ) , pursuant to the rules and regulations of the Securities and Exchange

Commission and, in the opinion of management, include all adjustments which, except as described els ewhere

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

- K for the year ended December 31, 2008

.

DIVESTITURES

Biofuel Industries Group, LLC

Effecti ve May 15, 2008, the Company and Biofuel Industries Group, LLC (d/b/a NextDieselTM) (―BIG‖) entered

into an Exchange Agreement pursuant to which the Company exchanged 20,000,000 common shares and 20,000

preferred shares in return for 100% of the equity of BIG subject to the redemption by BIG of BIG’s ―Class A

Membership Units‖ for a total of $9 million preferred equity interest with a 12% coupon commencing January 30,

2009 at a rate equal to 30% of BIG’s net cash flows (after all operating costs and regular de bt payments have been

paid) (the ―Class A Redemption‖). The Company’s ownership of BIG was subject to rescission in the event that: (a)

BIG ’s loans were not timely serviced and kept in good standing, (b) certain guaranty payments , to the extent due,

were n ot timely made, and (c) if the Class A Redemption payments were not made to the extent that they are due.

BIG ’s agreements with its senior creditor, Citizens Bank, require Citizens Bank to provide its written consent to

change of control transactions. Citi zens Bank had previously consented to the change of control of BIG on the

condition that the Company closed on its previously

- pending financing agreements with CleanBioenergy Partners

, LLC (see Note 12, Commitments and Contingencies ). This financing failed to close as expected in March 2009

despite the Company’s compliance with the relevant agreements with CleanBioenergy Partners , and Citizens Bank

consequently withdrew its consent to the change of control of BIG. The Company subsequently entered into

negot iations in April 2009 to restructure the terms of the BIG acquisition, however, a notice of default of the

Exchange Agreement was declared on May 14, 2009 in order to maintain compliance with BIG’s loan agreements

with Citizens Bank. The Company elected no t to restructure the original acquisition transaction and i nstead

facilitated rescission of the original acquisition transaction and the divestiture of BIG during the second quarter of

2009

. T he financial results of BIG were presented as discontinued opera tions as and for t he quarter ended March 31

, 2009 (see Note 6

, Discontinued Operations )

, and are not included in the Company’s results of continuing operations

for the quarter ended June 30, 2009.

Sustainable Systems, Inc.

Effective June 30, 2009, GS AgriF uels Corporation and Carbonics Capital Corporation entered into a Stock

Purchase Agreement pursuant to which Carbonics acquired 100% of the stock of Sustainable Systems, Inc.

(―Culbertson‖) from GS AgriFuels in return for assumption of $4,000,000 of GS Agr iFuels’ indebtedness to YA

Global Investments, L.P. (―YAGI‖), plus any and all obligations of GS AgriFuels that may be in effect in relation to

the acquisition by sellers of Culbertson (the ―Purchase Obligations‖). In c onnection with this Agreement

, Carbon ics

issued an amended and restated convertible debenture to YAGI for $4,000,000 due on December 31, 2011. The

Purchase Obligations pertain to the 2007 acquisition by GS AgriFuels of Culbertson and include $3,804,287 in

convertible debentures and $1,017,451 in notes payable to the prior owners of Culbertson. The terms of the relevant

acquisition agreements with said prior owners are in default due to the failure by the prior owners to disclose that

Culbertson did not hold title to its now

- owned Culbertson, M ontana oilseed crushing facility at the time of the

acquisition by GS AgriFuels. The terms of the relevant acquisition agreements with the prior owners are in default

and are current ly the subject of a litigation initiated by GS AgriF uels against the prior owners. Carbonics has

assumed all rights and obligations of GS AgriFuels pertaining to these agreements and t his litigation. Carbonics is

majority owned by the Company's majority shareholder, Viridis Capital, LLC

. T he financial results of this

subsidiary have been retrospectively omitted from the operations in accordance with SFAS 141(R), Appendix D,

Business Combinations with Entities Under Common Control.

2 NATURE OF OPERATIONS

GreenShift Corporation (―we,‖ ―our,‖ ―us,‖ ―GreenShift,‖ or the ―Company‖) develops and commercializes clean

technologies that facilitate the efficient use of natural resources.

We currently own four corn oil extraction facilities that are located in Oshkosh, Wisconsin, Medina, New York,

Marion, Indiana, and Riga, Michigan. We h ave also installed one facility in Albion, Michigan under a modified

### GREENSHIFT AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

12 

### version of our market offering where our client paid to build the extraction facility. We have the long

- term right (10

years or more) to buy the oil extracted from the Albion facility but the client retains ownership of the extraction

assets and is paid a higher price for the corn oil extracted than we pay to our other clients. The se facilities

collectively are designed to extract in excess of 7.3 million gallons per year . We are currently focused on securing

the capital resources we need to operate our existing facilities and to build new corn oil extraction facilities

.

During the six months ended June 30, 2009 , we also owned a 10 million gallon per year biodiesel facility in Adrian,

Mich igan (―BIG‖) and an oilseed crush facility in Culbertson, Montana (― Culbertson ‖) . These two facilities were

idled during the first quarter 2009 due to a lack of working capital. The Company divested both of these facilities

during the second quarter of 200 9. T he financial results of these subsidiaries have been presented as discontinued

operations as and for t he quarter ended June 30, 2009 (see Note 6

, Discontinued Operations )

. The Company’s

specialty equipment manufacturing operations were also idled durin g the six months ended June 30, 2009. The

Company intends to liquidate certain assets of this operation during the third quarter of 2009 but will scale this

operation as needed to fulfill the Company’s growth needs as it builds, installs and maintains its various corn oil

extraction facilities

.

SEGMENT DESCRIPTIONS

The Company’s operations during the six months ended June 30 , 2009 are classified into two reportable business

segments: Equipment & Technology Sales and Biofuel Production & Sales. Each of the se segments is organized

based upon the nature of products and services offered. The Company’s remaining operations are aggregated and

classified herein as Corporate.

The Company’s ongoing restructuring activities resulted in the cessation of operations i n its former Culinary Oil

Production & Sales segment during the quarter ended June 30, 2009. The Company sells its corn oil as a feedstock

for biofuel production or for direct use as a biofuel, therefore, the Company’s continuing corn oil production and

sa les activities will continue to be recorded in the Company’s Biofuel Production & Sales segment despite the fact

that its former BIG biodiesel facility was divested during the second quarter 2009

. For comparative purposes, the

financial results of BIG and Culbertson have been presented as discontinued operations as and for t he quarter ended

June 30, 2009 (see Note 6

, Discontinued Operations )

.

3 GOING CONCERN

The Company had a working capital deficit of $ 63, 297,79 5 at June 30, 2009, which includes convertib le debentures

of $ 19, 477,319 , accrued interest payable of $ 7, 173,539 , related party debt of $39,000, related party convertible

debentures of $ 2, 158,195 , $3,979,437 in purchase obligations. The Company’s working capital deficit net of these

amounts is $ 30,4 70,305

.

Despite their classification as current liabilities

, current convertible debentures and accrued interest ($ 28,809,053 )

are not serviceable out of the Company’s cash flows (the terms of the convertible debt require repayment in shares

of either Gre enShift Corporation or GS AgriFuels Corporation common stock). The purchase obligations

($3,979,437), to the extent due, are tied to the earnings of the Company’s equipment sales business and can only be

serviced after the Company’s senior secured debt has been serviced.

Management intends to raise capital from debt and equity transactions to fund operations, to increase revenue and to

cut expenses to reduce the loss from operations. There can be no assurances that the Company will be able to

eliminate bot h its working capital def icit and its operating losses. The accompanying financial statements do not

contain any adjustments which may be required as a result of this uncertainty

.

4 SIGNIFICANT ACCOUNTING POLICIES

MINORITY INTEREST

On January 1, 2009, the Company adopted SFAS No. 160, ―Noncontrolling Interests in Consolidated Financial

Statements

— an amendment of ARB No. 51,‖ (SFAS 160). SFAS 160 amends Accounting Research Bulletin

No. 51, ― Consolidated Financial Statements,‖ to establish accounting and repo rting standards for the noncontrolling

interest in a subsidiary and for the deconsolidation of a subsidiary. This standard defines a noncontrolling interest,

previously called a minority interest, as the portion of equity in a subsidiary not attributable, directly or indirectly, to

a parent. SFAS 160 requires, among other items, that a noncontrolling interest be included in the consolidated

statement of financial position within equity separate from the parent’s equity; consolidated net income to be

reporte d at amounts inclusive of both the parent’s and noncontrolling interest’s shares and, separately, the amounts

of consolidated net income attributable to the parent and noncontrolling interest all on the consolidated statement of

operations; and if a subsid iary is deconsolidated, any retained noncontrolling equity investment in the former

### GREENSHIFT AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

13 

### subsidiary be measured at fair value and a gain or loss be recognized in net income based on such fair value.

Additionally, SFAS 160 defines a noncontrolling interest as a financial instrument issued by a subsidiary that is

classified as equity in the subsidiary’s financial statements. A financial instrument issued by a subsidiary that is

classified as a liability in the subsidiary’s financial statements based on the guidan ce in other standards is not a

controlling interest because it is not an ownership interest. Based on this definition of noncontrolling interest the

Company presented its previously reported minority interest as a current liability in the accompanying bal ance

sheets. The presentation requirements of SFAS 160 were applied retrospectively. Other than the change in

presentation of noncontrolling interests, the adoption of SFAS 160 had no impact on the Financial Statements.

FAIR VALUE MEASUREME NTS

Effective January 1, 2008, the Company adopted Statement of Financial Accounting Standards (SFAS) No. 157,

Fair Value Measurements. This Statement defines fair value for certain financial and nonfinancial assets and

liabilities that are recorded at fair value, estab lishes a framework for measuring fair value, and expands disclosures

about fair value measurements. This guidance applies to other accounting pronouncements that require or permit fair

value measurements. On February 12, 2008, the FASB finalized FASB Staff Position (FSP) No. 157

- 2, Effective

Date of FASB Statement No. 157. This Staff Position delays the effective date of SFAS No. 157 for nonfinancial

assets and liabilities to fiscal years beginning after November 15, 2008 and interim periods within those fi scal years,

except for those items that are recognized or disclosed at fair value in the financial statements on a recurring basis

(at least annually). The adoption of SFAS No. 157 had no effect on the Company’s consolidated financial position

or results o f operations.

The Company accounted for the convertible debentures in accordance with SFAS No. 150, Accounting for Certain

Financial Instruments with Characteristics of both Liabilities and Equity (SFAS 150), as the conversion feature

embedded in the conv ertible debentures could result in the note principal and related accrued interest being

converted to a variable number of the Company’s common shares.

The Company adopted the provisions of Statement of Financial Accounting Standards (SFAS) No. 157, Fair Value

Measurements, which is effective for fiscal years beginning after November 15, 2007, and interim periods within

those fiscal years. Under FASB Statement No. 157, a framework was established for measuring fair value in

generally accepted accounting pr inciples (GAAP), and expands disclosures about fair value measurements. The

Company measured the fair value of the preferred equity interest outstanding at September 30, 2008 since the

number of common shares issuable under the Company’s Series E convertib le preferred stock was indeterminable

during the nine months then ended. The value at September 30, 2008 was determined to be $9,000,000, measured

using significant unobservable inputs (Level 3) using the present value of the shares based on the average fa ir

market value of the Company’s stock for the three days before and after the acquisition date.

The Company partially adopted SFAS 157 on January 1, 2008, delaying application for non

- financial assets and

non

- financial liabilities as permitted. This stat ement establishes a framework for measuring fair value, and expands

disclosures about fair value measurements. SFAS 157 establishes a fair value hierarchy that prioritizes the inputs to

valuation techniques used to measure fair value into three levels as f ollows:

• Level 1

— quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has

the ability to access as of the measurement date. Financial assets and liabilities utilizing Level 1 inputs include

active exchange

- traded securities and exchange

- based derivatives.

• Level 2

— inputs other than quoted prices included within Level 1 that are directly observable for the asset or

liability or indirectly observable through corroboration with observable market data. Fin ancial assets and

liabilities utilizing Level 2 inputs include fixed income securities, non

- exchange

- based derivatives, mutual

funds, and fair

- value hedges.

• Level 3

— unobservable inputs for the asset or liability only used when there is little, if an y, market activity for

the asset or liability at the measurement date. Financial assets and liabilities utilizing Level 3 inputs include

infrequently

- traded, non

- exchange

- based derivatives and commingled investment funds, and are measured

using present val ue pricing models.

Fair Value

As of June 30, 2009 Level 1 Level 2 Level 3 Total

Embedded conversion liabilities $

- $

-- $ 2, 138,837 $ 2, 138,837

The following table reconciles, for the period ended D ecember 31, 2008, the beginning and ending balances for

financial instruments that are recognized at fair value in the consolidated financial statements:

Balance of Embedded Conversion Liability at December 31, 2008 1, 764,322

### GREENSHIFT AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

14 

### Present Value of beneficial conversion features of new debentures 752,496

Reductions in fair value due to principal conversions ( 448,424 )

Accretion adjustments to fair value

- beneficial conversion features 70,443

Balance at June 30, 2009 $ 2, 138,837

The fair value of the convers ion features are calculated at the time of issuance and the Company records a

conversion liability for the calculated value. The Company recognizes interest expense for the conversion liability

which is added to the principal of the debenture. The Company also recognizes interest expense for accretion of the

conversion liability to fair value over the term of the note.

The Company adopted SFAS No. 150, Accounting for Certain Financial Instruments with Characteristics of both

Liabilities and Equity (SFAS 15 0), as the conversion feature embedded in each debenture could result in the note

principal being converted to a variable number of the Company’s common shares.

FINANCIAL INSTRUMENTS

The Company accounted for the convertible debentures in accordance with S FAS No. 150, Accounting for Certain

Financial Instruments with Characteristics of both Liabilities and Equity (SFAS 150), as the conversion feature

embedded in the convertible debentures could result in the note principal and related accrued interest being

converted to a variable number of the Company’s common shares.

The Company accounted for the convertible debentures in accordance with SFAS No. 150, Accounting for Certain

Financial Instruments with Characteristics of both Liabilities and Equity (SFAS 15 0), as the conversion feature

embedded in the convertible debentures could result in the note principal and related accrued interest being

converted to a variable number of the Company’s common shares.

5 STOCKHOLDERS’ EQUITY

SERIES E PREFERRED S TOCK

On Ma y 15, 2008, the Company issued 20,000 shares of the Company’s new Series E Preferred Stock (the ―Series E

Shares‖) to the BIG shareholders (21, Acquisition , below), which shares are convertible at a fixed rate of 1 preferred

share to 1,000 common shares in to a total of 20,000,000 shares of Company common stock; provided, however, that

the Series E Shares shall be convertible into Company common shares in proportion to the Company’s earnings

before interest, taxes, depreciation and amortization and non

- cash and non

- recurring items (―EBITDA‖) and will be

fully convertible into 20,000,000 common shares on a pro rated basis as the Company achieves $50,000,000 in

EBITDA during one year period. The holders would be entitled to cumulative dividend rights equal to that of 1,000

common shareholders upon the declaration of dividends on common stock, and have voting privileges of one vote to

every one common share. During the quarter ended June 30, 2009, the 20,000 shares of Series E Preferred Stock

w ere cancelled due to the rescission of the original acquisition transaction and the divestiture of BIG. At both June

30, 2009 and 2008, there were no shares of Series E Preferred Stock issued and outstanding

.

COMMON STOCK

From time to time during the six months ended Jun e 30, 2009, the Company issued a total of 130,170,452 common

shares to YA Global Investments, LP upon its conversion of debt and accrued interest in the amount of $357,061;

153,315,722 common shares to Minority Interest Fund (II), LLC upon its conversion d ebt in the amount of

$635,582; 134,631,965 common shares to RAKJ Holdings, Inc. upon its conversion of debt in the amount of

$315,000; and, 527,400 common shares were converted from Series B Preferred Stock for an employee of the

Company.

The only condit ions in which the Company would be required to redeem its convertible preferred stock for cash

would be in the event of a liquidation of the Company or in the event of a cash

- out merger of the Company.

6 DISCONTINUED OPERATIONS

SUSTAINABLE SYSTEMS, INC.

Effective June 30, 2009, GS AgriFuels Corporation and Carbonics Capital Corporation entered into a Stock

Purchase Agreement pursuant to which Carbonics acquired 100% of the stock of Sustainable Systems, Inc.

(―Culbertson‖) from GS AgriFuels in return for assumption of $4,000,000 of GS AgriFuels’ indebtedness to YA

Global Investments, L.P. (―YAGI‖), plus any and all obligations of GS AgriFuels that may be in effect in relation to

the acquisition by sellers of Culbertson (the ―Purchase Obligations‖). In conn ection with this Agreement

, Carbonics

issued an amended and restated convertible debenture to YAGI for $4,000,000 due on December 31, 2011. The

### GREENSHIFT AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

15 

### Purchase Obligations pertain to the 2007 acquisition by GS AgriFuels of Culbertson and include $3,804,287 in

con vertible debentures and $1,017,451 in notes payable to the prior owners of Culbertson. The terms of the relevant

acquisition agreements with said prior owners are in default due to the failure by the prior owners to disclose that

Culbertson did not hold ti tle to its now

- owned Culbertson, Montana oilseed crushing facility at the time of the

acquisition by GS AgriFuels. The terms of the relevant acquisition agreements with the prior owners are in default

and are currently the subject of a litigation initiated by GS AgriFuels against the prior owners. Carbonics has

assumed all rights and obligations of GS AgriFuels pertaining to these agreements and this litigation. Carbonics is

majority owned by the Company's majority shareholder, Viridis Capital, LLC . T he fin ancial results of this

subsidiary have been retrospectively omitted from the operations in accordance with SFAS 141(R), Appendix D

Business Combinations with Entities Under Common Control. The financial results of Culbertson have been

omitted from the Com pany’s results of operations for the six months ended June 30, 2009 and the December 31,

2008 balance sheet has been restated as well.

BIOFUEL INDUSTRIES G ROUP, LLC

Effective May 15, 2008, the Company and Biofuel Industries Group, LLC (d/b/a NextDiesel TM) (―BIG‖) entered

into an Exchange Agreement pursuant to which the Company exchanged 20,000,000 common shares and 20,000

preferred shares in return for 100% of the equity of BIG subject to the redemption by BIG of BIG’s ―Class A

Membership Units‖ for a to tal of $9 million preferred equity interest with a 12% coupon commencing January 30,

2009 at a rate equal to 30% of BIG’s net cash flows (after all operating costs and regular debt payments have been

paid) (the ―Class A Redemption‖). The Company’s ownershi p of BIG was subject to rescission in the event that: (a)

BIG’s loans were not timely serviced and kept in good standing, (b) certain guaranty payments, to the extent due,

were not timely made, and (c) if the Class A Redemption payments were not made to th e extent that they are due.

BIG ’s agreements with its senior creditor, Citizens Bank, require Citizens Bank to provide its written consent to

change of control transactions. Citizens Bank had previously consented to the change of control of BIG on the

cond ition that the Company closed on its previously

- pending financing agreements with CleanBioenergy Partners,

LLC (see Note 1 1

, Commitments and Contingencies ). This financing failed to close as expected in March 2009

despite the Company’s compliance with the relevant agreements with CleanBioenergy Partners, and Citizens Bank

consequently withdrew its consent to the change of control of BIG. The Company subsequently entered into

negotiations in April 2009 to restructure the terms of the BIG acquisition, however

, a notice of default of the

Exchange Agreement was declared on May 14, 2009 in order to maintain compliance with BIG’s loan agreements

with Citizens Bank. The Company elected not to restructure the original acquisition transaction and instead

facilitated rescission of the original acquisition transaction and the divestiture of BIG during the second quarter of

2009

. T he financial results of BIG were presented as discontinued operations as and for t he quarter ended March 31,

2009 (see Note 6

, Discontinued Op erations ) , and are not included in the Company’s results of operations for the six

months ended June 30, 2009. During the six months ended June 30 , 2009, the Company recorded an impairment of

goodwill in the amount of $7,281,993

, bad debt expense of $4,315 ,204 related to accounts receivable consisting of

equipment and corn oil that is owed by BIG and a gain on disposal of net liabilities of $14,452,069.

7 LINES OF CREDIT

Revolving Line of Credit for Construction of Corn Oil Extraction Facilities

On Janua ry 25, 2008, GS COES (Yorkville I), LLC, a subsidiary of the Company, closed on the terms of a Credit

Agreement with YA Global Investments, LP (―YAGI‖). On July 1, 2008, the Credit Agreement was amended to

extend the commencement of payments to YAGI to Oc tober 1, 2008 and to extend all performance timelines to

December 31, 2008. On December 11, 2008, the Credit Agreement was amended to extend the maturity date to

January 31, 2011, to increase the revolving availability to $13,750,000, and to restructure th e repayment provisions

such that amounts advanced by YAGI would be repaid on the closing of financing from CleanBioenergy Partners,

LLC, an affiliate of GE Energy Financial Services. The Credit Agreement was issued for the purpos e of constructing

and i nsta lling corn oil extraction facilities based on the Company’s patented and patent

- pending corn oil extraction

technologies. While the revolving availability under the line of credit was increased to $13,750,000 in the December

11, 2008 amendment, and the Com pany was otherwise in compliance with the amended terms, the Company was

unable to access the additional availability. The principal balance on the line of credit was $10,000,000 as of

December 31, 2008, interest is accruing at the rate of 20% per annum, a nd the line and accrued interest is payable at

the maturity date. The December 11, 2008 amendment also added a term allowing YAGI to convert interest and

principal into common stock of the Company at a conversion price equal to the lesser of (a) $1.25 or ( b) 90% of the

lowest daily volume weighted average price for the twenty trading days preceding conversion . The Company is

currently in discussions with YAGI to restructure this line of credit since the CleanBioenergy financing failed to

close as expected

.

### GREENSHIFT AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

16 

### The Company accounted for the YAGI line of credit dated January 25, 2008 in accordance with SFAS No. 150,

Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity (SFAS 150), as the

conversion feature embedded in th e YAGI line of credit could result in the principal being converted to a variable

number of the Company’s common shares. The carrying amount of the line has been restated for the prior year

(please see Note 1 8 Restatement s , below). T he Company determined t he value of the YAGI line of credit at issuance

to be $ 11, 044,838 which represented the face value of the principal plus the present value of the conversion feature.

The liability for the conversion feature shall increase from its present value of $ 1, 044,8 38 at issuance to its

estimated settlement value of $1,111,111 at December 31, 2010

. For the six months ended June 30, 2009, an

expense of $ 49,705 has been recorded as interest expense for the accretion of the present value discount on the line

of credit

, thereby increasing the carrying value of the YAGI line of credit to $ 11,094,543 at June 30, 2009.

To induc e YAGI's entry into the Credit Agreement and in consideration of YAGI's execution of the Restructuring

Agreement described below, the Company issued six million shares of its common stock to YAGI valued at

$1,080,000. In conjunction with the financing GS COES paid structuring fees of $210,000, legal fees of $150,000,

monitoring fees of $175,000, due diligence fees of $35,000 as well as prepaid interes t of $250,000. The balance of

deferred financing fees was $ 0 at June 30, 2009.

The Company does not have any ratios or covenants in conjunction with the YAGI debt. The Company is currently

in default on the agreements due to the failure of the GE transac tion.

8 FINANCING ARRANGEMENTS

The following is a summary of the Company’s financing arrangements as of June 30, 2009:

Current portion of notes payable: 6/30/2009

Note payable from NextGen Acquisition to Stillwater $ 2,071,886

Purchase obligations from NextGen Acquisition to NextGen sellers 3,979,437

Asset retirement obligation, current 277

Vehicle loans and other short term borrowings 46,080

Mortgages and other term notes 81,404

Current portion of notes payable from GreenShift to Bollheimer 320,000

Current portion of notes payable from GS CleanTech 150,000

Current portion of convertible notes payable from GS CleanTech 1,734,579

Total current portion of notes payable $ 8,383,663

Long

- term notes payable , net of current maturities:

Mortgages and other term notes $ 373,250

Total long term notes payable, net of current maturities $ 373,250

Asset retirement obligation:

Asset retirement obligation $ 247, 975

Current portion of convertible debentures:

Convertible debenture to YAGI 5, 500,000

Convertible debenture to YAGI 12,860,000

Note discounts ( 216,506 )

Convertible debenture to JMJ Financial 7 94,936

Convertible debenture to Carbonics Capital 378,111

Convertible debenture to MIF 1,780,084

Convertible debenture to Acutus 538,889

Total current portion of convertible debentures $ 21,635,515

Long

- term convertible debenture s, net of current maturities :

Convertible debenture to YAGI $ 2,084,986

Convertib le debenture to YAGI 1,224,063

Convertible debenture to YAGI 2,789,278

YAGI convertible debenture conversion liabilities 380,013

Convertible debenture to YAGI 1,950,000

Total long

- term portion of convertible debentures $ 8, 428,340



### The following principal amounts of convertible debentures noted above are convertible into the common stock of

the following companies:

GreenShift Corporation $ 11

, 915,838

GS AgriFuels Corporation 18,360,000

Total $ 30,2 75,838

### GREENSHIFT AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

17 

### The follow ing chart is presented to assist the reader in analyzing the Company’s ability to fulfill its fixed debt

service requirements (net of note discounts) of as of June 30, 2009 and the Company’s ability to meet such

obligations:

Year Amount

2009 $ 27, 282,55 2

2010 2, 782,172

2011 8, 448,591

2012 377,250

2013 and thereafter 173,656

Total minimum payments due under current and long

term obligations $ 3 9,06 4,221



### 9 DEBT AND PURCHASE OB LIGATIONS

On June 9, 2009, JMJ Financial Corporation (―JMJ‖) issue d the Company a 14.4% promissory note in the amount of

$ 5 00,000 (the ―JMJ Note‖) in return for $ 6 00,000 in 12% convertible debt (the ―JMJ Debenture‖) issued by the

Company. The principal balance due under the JMJ Note was $500,000 as of June 30, 2009 and a ccrued interest

receivable under the JMJ Note was $1,775. T he principal and accrued interest for the JMJ N ote and JMJ Debenture

have been presented as of June 30, 2009, at their face value, without offset

. The JMJ Debenture is convertible into

Company com mon stock at a rate equal to 70% of the lowest closing market price for the Company’s common stock

for the twenty trading days preceding conversion. The Company accounted for the JMJ Debenture dated June 9,

2009 in accordance with SFAS No. 150, Accounting for Certain Financial Instruments with Characteristics of both

Liabilities and Equity (SFAS 150), as the conversion feature embedded in the JMJ Debenture could result in the note

principal being converted to a variable number of the Company’s common shares

. The Company determined the

value of the $600,000 JMJ Debenture at June 9, 2009 to be $793, 768 which represented the face value of the

debenture plus the present value of the conversion feature. The liability for the conversion feature shall increase

from its carrying value of $193, 768 at June 30, 2009 to its estimated settlement amount of $ 257,904 at June 11,

2012

. For the three months ended June 30, 2009, an expense of $1,168 has been recorded as interest expense for the

accretion of the value of the co nversion liability . The carrying value of the $600,000 JMJ Debenture was $794, 936

at June 30, 2009.

During the year ended Decembe r 31, 2008, the Company issued convertible debenture s to Acutus Capital, LLC

(―Acutus ‖) in the amount s of $ 250,000 and $235,00 0, respectively. The convertible debentures to Acutus shall bear

interest at a rate of 20% per year and mature on December 31, 2008 and February 15, 2009, respectively. Acutus is

entitled to convert the accrued interest and principal of the convertible d ebenture into common stock of the

Company at a conversion price equal to $1.25 per share. The Company accounted for the d ebenture s in accordance

with SFAS No. 150, Accounting for Certain Financial Instruments with Characteristics of both Liabilities and

Eq uity (SFAS 150), as the conversion feature embedded in the d ebenture s could result in the note principal being

converted to a variable number of the Company’s common shares. T he Company determined the fair value of the

Acutus d ebenture s at December 31, 200 8 to be $ 538, 469 which represented the face value of the debenture plus the

present value of the conversion feature. The liability for the conversion feature shall increase from its present value

of $ 53,469 at December 31, 2008 to its estimated settlement amount of $53,889. As of June 30, 2009, an expense of

$ 420 has been recorded as interest expense for the accretion of the value of the conversion liability . The carrying

value of the Acutus Debenture was $ 538,889 at June 30, 2009. As of June 30, 2009, the Company was in default on

the Acutus debenture. For the six months end ed June 30, 2009, interest expense of $ 48,101 for these obligations was

incurred.

During the year ended December 31, 2008, the Company entered into amended and restated convertible debe ntures

with MIF that total $1, 319 ,783. This amount includes the $410,930 in notes payable that MIF purchased from

Viridis, $757,853 in convertible debt that were purchased from Candent, and $500,000 in convertible debt that was

purchased from Acutus Capit al, as well as an additional $151,000 in new convertible debt that MIF purchased

during December 2008. The total convertible debentures due to MIF were reduced by $432,932 during the year

ended December 31, 2008, after MIF purchased the debenture payable t o the Company from EcoSystem

Corporation by reducing the amount of the convertible debt the Company owed to MIF bringing the year

- end

balance to $1,386,851

. $500,000 of the convertible deb t issued to MIF bear s interest at a rate of 20% and the

balance of the convertible debentures shall bear interest at 12% per year and mature on December 31, 2010. MIF is

entitled to convert the accrued interest and principal of the MIF convertible debenture into common stock of the

Company at a conversion price equal to the lesser of (a) $1.25 per share or (b) 90% of the lowest daily volume

weighted average price for the twenty trading days preceding conversion. During the six months ended June 30,

2009, MIF purchased an additional $ 1, 188,600 in debentures , converted $ 635 ,582 on the amount due into Company

### GREENSHIFT AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

18 

### common stock, and sold $315,000 of the principal amount due to MIF to RAKJ Holdings, Inc. (―RAKJ‖). The

Company accounted for the MIF Debenture in accordance with SFAS No. 150, Accounting for Certain Financial

Instrument

s with Characteristics of both Liabilities and Equity (SFAS 150), as the conversion feature embedded in

the MIF Debenture could result in the note principal being converted to a variable number of the Company’s

common shares. The carrying amount of the deb enture has been restated for the prior year (please see Note 1 8

Restatement s , below). T he Company determined the value of the MIF Debenture at December 31, 2008 to be

$ 1,514,201 which represented the face value of the debenture of $1,386,851 plus the prese nt value of the conversion

feature. During the six months ended June 30, 2009, the Company recognized an additional conversion liability at

present value of $ 115,981 for additional funding received, recognized a reduction in conversion liability at present

value of $ 98,690 for the conversion s and reco r ded an expense of $ 3,888 as interest expense for the accretion of the

present value o f the conversion liability for the six months . The carrying value of the MIF Debenture was

$ 1, 780,084 at June 30, 2009 , incl uding principal of $ 1,631,555 and the value of the conversion liability

. The

liability for the conversion feature shall increase from its present value o f $ 148,529 at June 30, 2009 to its estimated

settlement value of $137,994 at December 31, 2010. Inte rest expense of $86,786 for these obligations was accrued

for the six months ended June 30, 2009.

The $315,000 convertible debt purchased by RAKJ bears interest at the rate of 12% per year and matures on

December 31, 2010. RAKJ is entitled to convert the accrued interest and principal of the convertible debenture into

common stock of the Company at a conversion price equal to the lesser of (a) $1.25 per share or (b) 50% of the

lowest daily volume weighted average closing price for the five trading days pr eceding conversion. During the six

months ending June 30, 2009, RAKJ converted $ 315,000 on this debenture. The Company accounted for the RAKJ

Debenture in accordance with SFAS No. 150, Accounting for Certain Financial Instruments with Characteristics of

b oth Liabilities and Equity (SFAS 150), as the conversion feature embedded in the RAKJ Debenture could result in

the note principal being converted to a variable number of the Company’s common shares. For the six months

ending June 30 , 200 9 , interest expens e of $ 5,228 for these obligations was incurred. The principal balance of these

notes at June 30 , 200 9 was $0.

On September 4 , 2008, the Company’s subsidiary, GS CleanTech Corporation, entered into a series of convertible

notes totaling $1,734,579. The n otes shall bear interest at a rate 15% per annum and mature on December 31, 2010.

Commencing on February 1, 2009, payments are due at a rate equal to the greater of the interest accrued on the

unpaid principal or $100,000 times the principal amount divide d by $3,000,000. Beginning July 1, 2009, payments

are due based on an eighteen month amortization, with all principal and accrued interest paid on or before December

31, 2010. The notes are convertible into shares of GS CleanTech subsidiary preferred sto ck (par $0.001) at the

closing by GS CleanTech of a planned Preferred Stock Financing at a 15% discount to the final terms of any such

Preferred Stock Financing. If any portion of the note is prepaid in cash, GS CleanTech shall pay a 10% redemption

premiu m at the time of redemption. If the Preferred Stock Financing does not close on or before January 1, 2009,

the interest and redemption premium will increase to 20%. For the six months ending June 30 , 2009, interest

expense of $ 149,056 for these obligatio ns was incurred. The balance of the loans was $1,734,579 as of June 30

, 2009.

The Company accounted for the JMJ Debenture in accordance with SFAS No. 150, Accounting for Certain

Financial Instruments with Characteristics of both Liabilities and Equity (SF AS 150), as the conversion feature

embedded in each debenture could result in the note principal being converted to a variable number of the

Company’s common shares.

Under the YAGI Debentures, the Company owes a monthly payment of $250,000. The Company det ermined the fair

value of the monthly stream of payments under the YAGI debentures at December 31, 2008 to be $ 3,028,424 which

represented the face value of the monthly payments plus the present value of the conversion feature. For the six

months ended Ju ne 30, 2009, the Company recognized an additional conversion liability value of $ 127,747 due to

additional installments becoming due, recognized a reduction in value of the conversion liability of $ 34,734 for

conversions of principal and recorded $ 8,576 as interest expense for the accretion of value on the conversion

liability

. The value of the conversion feature underlying the stream of payments owed under the YAGI debentures

was $ 380,014 at June 30 , 2009 (please see Note 18 Restatements , below)

.

10 ASSE T RETIREMENT OBLIGAT ION

Pursuant to SFAS 143, Accounting for Asset Retirement Obligations , the Company has recognized the fair value of

the asset retirement obligation for the removal of its COES systems. The present value of the esti mated asset

retiremen t costs has been capitalized as part of the carrying amount of the related long

- lived assets. The liability has

been accreted to its present value as of June 30 , 2009, and the capitalized cost approximated $ 235,000 . The

Company has recognized $869 due to a ccretion from the acquisition dates. The Company has determin ed a range of

### GREENSHIFT AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

19 

### abandonment dates between December 20 18 and December 20 19 and a total salvage value of $ 250,000 per system

. The following represents the amount of the retirement obligation at the b eginning and the six months ending June

30, 2009 :

Beginning balance at January 1, 2008 $ 60,099

Liabilities incurred during the period 187,038

Liabilities settled during the period

--

Accretion of interest 623

Ending balance at December 31, 2008 247,760

Liabilities incurred during the period

-- Liabilities settled during the period

--

Accretion of interest 513

Ending balance at June 30 , 2009 $ 248,273



### 11 COMMITMENTS AND CONTINGENCIES

The Company’ s subsidiaries, GS AgriFuels Corporation and NextGen Fuel, Inc. are 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 had sought 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. (―N CP‖) during 2005 and 2006. NCP is owned

by the former shareholders of the NextGen Fuel, Inc., subsidiary. 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. Mana gement

does not believe that there is a reasonable possibility that the claims made against NextGen Fuel by the plaintiffs in

this litigation indicate that a material loss has occurred. Accordingly, an estimate of loss cannot be determined at

this time an d therefore

, no accrual has been made in connection with those claims.

The Company’s GS AgriFuels subsidiary is party to the matter entitled GS AgriFuels Corporation v. Chaykin, et al

. The action was filed in the Supreme Court of the State of New York, Co unty of New York, on February 2, 2009.

The Complaint seeks damages for defendants' fraudulent misrepresentations, tortious interference, breach of

acquisition agreements and related claims. The defendants filed a separate action entitled Max, et al. v. GS

AgriFuels Corporation, et al . in response to GS AgriFuels’ Complaint. The case was only recently commenced and

Management is unable to evaluate the probability of an unfavorable outcome at this time

. Accordingly, an estimate

of loss cannot be determined a t this time and therefore, no accrual has been made in connection with this

contingency , however, Carbonics Capital Corporation (see Note 6

, Discontinued Operations, above) has assumed all

rights and obligations of GS AgriFuels pertaining to t his litigati on. Carbonics is majority owned by the Company's

majority shareholder, Viridis Capital, LLC

.

On December 11, 2008, GreenShift Corporation entered into a Membership Interest Purchase and Equity Capital

Contribution Agreement (the ―ECAA Agreement‖). The par ties to the agreement included GS COES (Adrian I),

LLC, a newly formed GreenShift subsidiary, BIG, GS (NextDiesel I), LLC, a newly formed GreenShift subsidiary

and CleanBioenergy Partners, LLC (―CleanBioenergy‖), a newly formed joint venture company owned by a

subsidiary of GE Energy Financial Services (―GE EFS‖), a unit General Electric Company and a subsidiary of YA

Global Investments, L.P. Under the terms of the ECCA Agreement, CleanBioenergy agreed to invest up to $38

million in GS NextDiesel to help d eploy twelve corn oil extraction facilities and to double the capacity of

GreenShift’s 10 million gallon per year Adrian, Michigan

- based NextDiesel biodiesel refinery to 20 million gallons

per year. The ECCA Agreement was terminated in the first quarter of 2009

. The NextDiesel biodiesel refinery is

owned by Biofuel Industries Group, LLC (―BIG‖), BIG’s agreements with its senior creditor, Citizens Bank, require

Citizens Bank to provide its written consent to change of control transactions. Citizens Bank had previously

consented to the change of control of BIG on the condition that the Company closed on its prior financing

agreements with CleanBioenergy. This financing failed to close as expected in March 2009 despite the Company’s

compliance with the relevant agreements, and Citizens Bank consequently withdrew its consent to the change of

control of BIG. The Company subsequently entered into negotiations in April 2009 to restructure the terms of the

BIG acquisition, however, a notice of default of the Exchange Agreement was declared on May 14, 2009 in order to

maintain compliance with BIG’s loan agreements with Citizens Bank. The original acquisition transaction was

rescinded during the second quarter of 2009. The financial results of BIG were presented as disc ontinued operations

as of and for the quarter ended March 31, 2009 (see Note 6, Discontinued Operations ) and are not included in the

Company’s results of operations for the quarter ended June 30, 2009 . The Company wrote

- off $7,281,993 in

goodwill previousl y booked in connection with the acquisition of BIG during the six months ended June 30, 2009.

The Company’s divestiture of BIG resulted in the disposal of $13, 054,765 and $ 27,506,834 in assets and liabilities,

respectively.

### GREENSHIFT AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

20 

### As of June 30, 2009, the Company was in default of its debt agreement with Acutus Capital, LLC, and NextGen

Acquisition, Inc

. was in default of its agreements with Stillwater Asset Backed Fund, LP. As of June 30 , 2009 , t he

Company is also in default of payments owed under the purchase a greement with Bollheimer Associates in the

amount of $240,000, and intends to restructure the terms of the relevant agreement. The Company and its

subsidiaries are party to numerous collections matters pertaining to outstanding accounts payable due to vend ors. Under the Company’s insurance programs, coverage is obtained for catastrophic exposures, as well as those risks

required to be insured by law or contract. There is a $2,500 deductible per occurrence for environmental

impairments. Environmental liabil ity insurance is carried with policy limits of $1,000,000 per occurrence and

$2,000,000 aggregate. The Company is also involved in various collection matters for which vendors are seeking

payment for services rendered and goods provided. These collection m atters total $2,096,000.

1 2 GUARANTY AGREEMENT

Both Viridis Capital, LLC (―Viridis‖), the majority shareholder of the Company, and its sole member, Kevin

Kreisler, the Company’s chairman, have guaranteed nearly all of the Company’s senior debt (in the outs tanding

amount of about $ 42 million ), and Viridis has pledged all of its assets, including its share s of Company Series D

Preferred Stock, to YA Global Investments, LP (―YAGI‖), to secure the repayment by the Company of its

obligations to YAGI

.

1 3 SEGME NT INFORMATION

Segment information is presented in accordance with SFAS 131, ― Disclosures about Segments of an Enterprise and

Related Information .‖ This standard is based on a management approach that designates the internal organization

that is used by ma nagement for making operating decisions and assessing performance as the sources of the

Company’s reportable segments. Operating segments are defined as components of an enterprise about which

financial information is available that is evaluated on a regu lar basis by the chief operating decision

- maker, or

decision

- making groups, in deciding how to allocate resources to an individual segment and in assessing

performance of the segment.

The Company’s operations during the fiscal quarter ended June 30, 2009 a re classified into two reportable business

segments: Biofuel Production & Sales and Equipment & Technology Sales

. Each of these segments is organized

based upon the nature of products and services offered. The Company’s remaining operations are aggregated and

classified herein as Corporate. Summarized financial information about each segment is provided below:

Six months Equipment & Biofuel

Ended 6/30/09 Corporate Technology Sales Production & Sales Total

Total revenue $

-- $ 298,119 $ 1,734,565 $ 2, 032,684

Cost of revenue

-- 853,080 1,141,307 1,994,388

Gross profit

-- ( 554,961 ) 593,258 38,296

Operating expenses 587,076 384,356 12,611,283 13,582,715

Income (loss) from operations (587,076 ) ( 939,317 ) ( 12,018,02 5 ) ( 13,544,419 )

Other income (expense) ( 1,289,389 ) (1, 489,131 ) (1, 395,520 ) ( 4,174,041 )

Income (loss) before taxes ( 1,876,465 ) ( 2,428,449 ) ( 13,413,546 ) ( 17,718,460 )

Minority interest

-- -- -- --

Taxes

-- 402,398 (51) 402,347

Gai n o n sale of discontinued

Operations

-- -- 14,452,069 14,452,069

Net loss from discontinued operations $

-- $

-- $ (1 ,167,356 ) $ (1, 167,356 )

Net loss $ ( 1,876,465 ) $ ( 2,026,051 ) $ ( 128,884 ) $ ( 4,031,399)

Six months Equipment & Biofuel

Ended 6/30/08 Corporate Technology Sales Production & Sales Total

Total revenue $

-- $ 7,752,177 $ 1,105,398 $ 8,857,575

Cost of revenue 43,660 3,178,314 823,925 4,045,899

Gross profit (43,660) 4,573,862 281,473 4,811,675

Operating expenses 2, 311,517 492,838 681,078 3,485,433

Income (loss) from operations (2,355,177) 4,081,024 (399,605) 1,326,242

Other income (expense) ( 2

, 787,381 ) (2,997,411) (795,995) ( 6, 580,787 )

Income (loss) before taxes (5, 142,558 ) 1,083,613 (1,195,60 0) ( 5,254,545 )

Minority interest

-- 6,419

-- 6,419

Taxes

-- -- -- --

Net loss from

discontinued operations $

-- $

-- $ (560,072) $ (560,072)

Net gain ( loss ) $ (5, 142,558 ) $ 1,090,032 $ (1,755,672) $ ( 5, 808,198 )

### GREENSHIFT AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

21 3 Months Equipmen t & Biofuel

Ended 6/30/09 Corporate Technology Sales Production & Sales Total

Total revenue $

-- $ 66,795 $ 1,110,231 $ 1, 177,026

Cost of revenue

-- 321,690 516,973 838,664

Gross profit

-- ( 254,896 ) 593,258 338,362

Operating expenses 35 1,424 179,207 4,852,531 5, 383,163

Income (loss) from operations ( 51,424 ) ( 434,103 ) (4,259,273) ( 5,044,800 )

Other income (expense) (567,664 ) ( 738,854 ) ( 706,086 ) (2,012,604 )

Loss before taxes (919,089 ) (1, 172,957 ) (4 ,963,098 ) (7,057,4 04 )

Taxes

-- 402,398 (51) 402,347

Gain on sale of discontinued o perations

-- -- 14,452,069 14,452,069

Income (loss) from discontinued operations $

-- $

-- $ 555,568 $ 555,568

Net gain ( loss ) attributable to common

shareholders $ (919,089 ) $ ( 770,559 ) $ 10,042,227 $ 8,352,579

Three Months Equipment & Biofuel

Ended 6/30/08 Corporate Technology Sales Production & Sales Total

Total revenue $

-- $ 5,187,749 $ 774,027 $ 5,961,775

Cost of revenue 29,052 1,865,908 630,839 2,525,799

Gro ss profit (29,052) 3,321,840 143,188 3,435,976

Operating expenses 1, 333,416 91,832 591,737 2, 016,985

Income (loss) from operations (1, 362,468 ) 3,230,008 (448,549) 1,4 18,991

Other income (expense) (1, 149,186 ) (1,508,448) (547,276) (3, 204,910 )

Income (loss) before taxes (2, 511,654 ) 1,721,560 (995,825) ( 1,785,919 )

Minority interest 7,019

-- -- 7,019

Taxes

-- 6,419

-- 6,419

Net loss from

continuing operations $ (2, 504,635 ) $ 1,727,979 $ (995,825) $ ( 1,772,481 )

Gain (loss) from,

discontinued operations

-- -- ( 507,044 ) ( 507,044 )

Preferred dividends

-- -- -- --

Net gain ( loss ) $ (2, 504,635 ) $ 1,727,979 $ (1,5 02,869 ) $ (2, 279,525 )



### 1 4 SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION

The following is a summary of supplemental disclosures of cash flow information for the six months ending June

30, 2009 and 2008 :

2009 2008

Cash paid during the year for the following:

Interest $

-- $

--

Income taxes

-- 22,486

Total $

-- $ 22,486

Acquisition o f Bollheimer & Asso ciates with debt

-- 320,000

Stock issued for compensation

-- 336,833

Reduction of convertible debentures from disposal of investment in GS EnviroServices

-- 2,000,000

Reduction of related party debt and accrued interest from forgiveness

-- 2, 000,000

Stock issued for conversion of debt 1,307,643

-- Acquisition of Biofuels Industries Group, LLC with debt

-- 9,000,000

JMJ Financial convertible debenture 600,000

--

JMJ Financial note receivable 500,000

--



### 1 5 RELATE D PARTY TRANSACTIONS

Minority Interest Fund (II), LLC (―MIF‖) is party to certain convertible debentures issued by the Company (see

Note 8

, Convertible Debentures

, above ). The managing member of MIF is a relative of the Company’s chairman.

16 RESTAT E MENT

The Company has restated its financial statements for the six months ended June 3 0 , 2009 and 200 8. Management ’s

calculations relating to accounting for the impact of conversion features embedded in the Company's various

derivative securities under SFAS No. 150, Accounting for Certain Financial Instruments with Characteristics of

both Liabilities and Equity (SFAS 150) increase by $4,522

.

The Company also restated the for the six months ended June 3 0 , 2009 and 200 8 to reflect the disposition of one of

its subsidiaries (―Culbertson‖) to a company under common control ( Carbonics Capital Corporation ). The financial

results of Culbertson have been omitted from the Company’s results of operations for the six months ended June 30,

2009 and the Decembe r 31, 2008 balance sheet and statement of stockholder’s equity have been restated as well.

### GREENSHIFT AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

22 

### The change due to the disposition of Culbertson resulted in an increase of additional paid in capital of $2,783,484 as

well as a decrease of retained earnings of $3 ,539,639.

The Company also took this opportunity to restate its financial statements to reclass certain expenses within the

income statement. As a result of the reclassification, t he following items were adjusted : revenue increased by

$ 9,569; g eneral and administrative expenses decreased by $103,264 while bad debt expense increased by $102,349;

gain on disposal of equipment increased by $28,985 and other income (expense) increased by $18,499.

In addition, the Company has reclassified certain obligations due to subsidiary shareholders that were presented as

―Minority Interest‖ in prior financial statements to more properly classify these obligations as current liabilities, and

reclassified the actual amount of noncontrolling interest in subsidiary capital as equity to conform to the adoption of

SFAS 160, Noncontrolling Interests in Consolidated Financial Statements

— an amendment of ARB No. 51

.

The following shows the effect of the restatements on the financial statements:

6/30/09 6/30/09 12/31/08 12/31/08

Balance Sheets: As reported As restated As reported As restated

Line of credit $ $ $10,000,000 $11,044,838

Convertible debentures, current 11,665,309 11,792,387

Convertible debentures, related party 2,175,047 2,158,195 1 ,512,325 1,900,333

Liability for derivative instruments 3,869,771

-- Liability due to shareholders

-- 932,328

-- 932,328

Convertible debentures, net of current 20,726,439 21,188,196

Minority interest 942,001

-- 942,001

--

Additio nal paid

- in capita l 91,800,779 87,711,017 83,774,424 79,878,929

Accumulated deficit (145,336,078) (141,229,463) (146,432,325) (136,932,585)

Non

- controlling interest

in subsidiary

-- 9,673

-- 9,673

6/30/09 6/30/09 6/30/08 6/30/0 8

Statements of Operations: As reported As restated As reported As restated

Revenues $ 2,023,115 $ 2,032,684 $

-- $

-- General and administrative expenses 2,038,742 1,935,478

-- -- Bad debt expense 4,212,855 4,315,204

-- -- Gain on disposal of equipment

-- 28,985

-- -- Other income (expense) 62,317 80,816

-- -- Change in fair value

- derivatives

-- -- 319,829

--

Amortization of debt discount (2,115,055) ( 990,152 )

Conversion liabilities (691,862) (696,384)

-- (120,5 95)

Conversion liabilities

– affiliate (121,160) (126,555)

-- --

Loss from continuing operations (17,306,194) (17, 316,112 ) (6,703,631) (5,248,126)

Net income (loss) (4,291,481) (4, 301,398 ) (6,703,631) (5,808,198)

Earnings (loss) per share:

Continuing operations $ (0.06) $ (0.06) $ (0.18) $ (0.14)

Discontinued operations $ 0.05 $ 0.05 $

-- $ (0.01)

Total, basic and diluted $ (0.01) $ (0.01) $ (0.18) $ (0.15)

6/30/09 6/30/09 6/3 0/08 6/30/08

Statements of Stockholders’ Equity: As reported As restated As reported As restated

Beginning balance, paid

- in capital

-- -- 63,502,789 66,175,522

Write

- off of derivative due to

debt restructure

-- -- 6,784,743

--

Net loss (4,291,481) (4, 301,398 ) (52,293,334) (47,975,579)

### GREENSHIFT AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

23 6/30/09 6/30/09 6/30/08 6/30/08

Statements of Cash Flows: As reported As restated As reported As restated

Net loss from co ntinuing operations $ (4,021,481) $ (4, 031,399 ) $(6,703,631) $(5,808,198)

Amortization of debt discount

and deferred financing costs 698,928 642,537 1748,748 990,152

Change in fair value of derivatives (319,829)

--

Interest f rom conversion liabilities

-- 818,418

-- 120,595



### 1 7 SUBSEQUENT EVENTS

The Company issued 3,431,459 common shares upon the conversion of debt between April 1, 2009 and August 17,

2009.24



### ITEM 2 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITI ON AND

RESULTS OF OPERATIONS

OVERVIEW

GreenShift Corporation (―we,‖ ―our,‖ ―us,‖ ― GreenShift ,‖ or the ―Company‖) develop s and commercialize s clean

technologies designed to integrate into and leverage established production and distribution infrastructure to address

the financial and environmental needs of our clients by decreasing raw material needs, facilitating co

- product reuse,

and reducing waste and emissions.

Our mission is to build shareholder value by using our technologies to catalyze disruptive e nvironmental gain. We

believe that the first, best and most cost

- effective way to achieve this is to develop technology

- driven economic

incentives that motivate a large population of people and companies to make incremental environmental

contributions that are collectively very significant.

Since our inception in April 2005, we have been focused on the development and commercialization of technologies

designed to create low carbon fuel production opportunities capable of shaving meaningful amounts of carbon and

cost off of the existing liquid fuel supply chains. We originally invested in an array of technologies, including

advanced reformation processes, novel separation, extraction and preparation processes, and enhanced chemical,

thermal and biological pro cesses

– all with a view towards development of a financeable business model that

downshifted both the cost structure and the carbon intensity of liquid fuels.

We invented and then successfully developed and commercialized corn oil extraction technology, a process that

increases biofuel yields per bushel of corn by 7% while reducing the energy and greenhouse gas (GHG) intensity of

corn ethanol production by more than 21% and 29%, respectively. There are currently no other technologies that

have been develo ped for the corn ethanol industry that begin to approach these results. Corn oil extraction

technology is widely considered to be the quickest path for margin improvement for corn ethanol producers today

. More than an estimated 20% of the ethanol industry is using corn oil extraction technology today. GreenShift’s

patent applications for its extraction technologies were recently allowed by the U.S. Patent and Trademark Office,

and GreenShift’s extraction technologies have recently been cited by the U.S. EP A in its rulemaking processes

involving the renewable fuels standard. GreenShift has many more patents pending on its extraction and other

technologies, including a number of feedstock conditioning, feedstock production and refining, and energy and

carbon mitigation technologies.

We currently own four corn oil extraction facilities that are located in Oshkosh, Wisconsin, Medina, New York,

Marion, Indiana, and Riga, Michigan. We have also installed one facility in Albion, Michigan under a modified

version of our market offering where our client paid us to build the extraction facility. We have the long

- term right

to buy the oil extracted from the Albion facility but the client retains ownership of the extraction assets and is paid a

higher price for the corn oil extracted than we pay to our other clients. The se facilities collectively are designed to

extract in excess of 7.3 million gallons per year

. We are currently focused on securing the capital resources we need

to operate our existing extraction facilitie s and to build new corn oil extraction facilities

.

During the six months ended June 30 , 2009, we also owned a 10 million gallon per year biodiesel facility in Adrian,

Michigan and an oilseed crush facility in Culbertson, Montana. These two facilities were idled during the first

quarter 2009 due to a lack of working capita l, and then divested during the second quarter. Neither operation is

included in the Company’s results of operations for the period ended June 30, 2009. The Company’s specialty

equipment ma nufacturing operations were also idled during the first quarter of 2009. The Company intends to scale

this operation as needed to fulfill the Company’s growth needs as it builds, installs and maintains its various corn oil

extraction facilities

.

Plan of Operations

Our plans for 2009 originally involved the financing and construction of a number of our corn oil extraction

facilities, the construction or other internalization of biodiesel refining capability, and the completion of significant

additional fin ancing to build our contracted backlog of extraction facilities. We closed on a portion of the financing

we needed to build our initial extraction facilities in January 2008, we acquired a biodiesel refinery in May 2008,

and we executed a term sheet in Ju ly 2008 and then definitive investment agreements in December 2008 for in

excess of $38 million in project equity financing to execute on our backlog.

U nprecedented volatility in the global financial and commodity markets intervened during 2008 and early 2009, and

resulted in the loss of previously committed sources of capital. We were consequently unable to complete25



### construction and initiate production with the amount of corn oil extraction facilities needed to achieve break

- even

cash flow.

The condition s in the financial markets during the third and fourth quarters of 2008 resulted in the loss of previously

committed sources of liquidity during the second half of 2008. We believe that these market conditions were also

responsible for the failure of our $ 38 million project equity financing to close during the first quarter 2009 as called

for by the relevant December 2008 investment agreements. As a result of these events, we halted all construction

activities , and idled and then divested our biodiesel refi ning and oilseed crush operations.

We have arranged for sufficient but costly bridge financing to cover essential overhead needs and we expect to be

able to continue to rely on similar financing for the foreseeable future pending the resurrection of our w orking

capital resources and the completion of sufficient construction financing. Until this occurs, our plan to generate the

cash resources we need to cover our overhead and other cash needs is to produce and sell corn oil from our installed

base of extra ction facilities.

We recently received two notices of allowance from the U.S. Patent and Trademark Office for our corn oil

extraction technologies. These notices of allowance provided notification to the Company that it is entitled to a

patent for two of i ts several pending corn oil extraction patent applications. We believe that the issuance of our

extraction patents, the strategic value of feedstock ownership, and other market circumstances have favorably

shifted our market positioning and made available an increased array of options to fully capitalize the construction

of extraction facilities and the restructuring of our balance sheet. We are currently evaluating a number of

opportunities in this regard.

Our plans for the balance of 2009 involve the foll owing activities:

 Complete the financing necessary to return to positive cash flow and to build as many additional extraction

facilities as possible as quickly as possible;

 Reduce the substantial majority of our convertible and other debt; and,

 Focus excl usively on servicing the growth needs of our extraction technologies while facilitating the

development of other clean technologies in our portfolio by entering into and supporting license

agreements with strategic partners

.

Results of Operations

The follo wing table sets forth, for the periods presented, rev enues, expenses and net income in our condensed

consolidated statement of operations , as well as other key financial and operating data:

Three Months Ended June 30 Six Months Ended June 30

2009 20 08 2009 2008

Summary Statement of Operations :

Revenue $ 1, 177,026 $ 5,961,775 $ 2, 032,684 $ 8,857,574

Cost of revenues 838,664, 2,525,799 1,994,388 4,045,899

Gross profit 338,362 3,435,976 38,296 4,811,675

Selling, general and administrative expenses 5, 383,163 2, 016,985 13,582,715 3,485,433

Income (loss) from operations ( 5,044,801 ) 1,4 18,991 ( 13,544,419) 1,326,242

Other income (expense), net ( 2, 010,343) (3, 223,368 ) (4,174,040 ) ( 6,580,787 )

Loss before minori ty interest and taxes (7,055,144 ) ( 1,804,378 ) (1 7,718,459 ) (5, 254,545 )

Minority interest in net loss of consolidated subsidiaries

-- 6,419

-- 6,419

(Provision for) benefit from income taxes 402,347 7,019 402,347

-- Income from discontinued ope rations 15,007,637 (507,044) 13,284,713 (560,072)

Net income ( loss ) $ 8,352,579 $ (2, 279,984 ) $ ( 4,031,399 ) $ (5, 808,198 )

Other financial data :

Net cash flows (used in) provide d by operating activities

-- -- (297,682) 917,797

Net cash flows (used in) provided by investing activities

-- -- (851,078) (7,532,63 2 )

Net cash flow (used in) provided by financing activities

-- -- 1,139,056 6, 335 ,441

Net (decrease) increase in cash and cash equivalents

-- -- (9,704) ( 38,604 )

Other non

- GAAP financial performance data :

Operating data :

Corn oil extracted (gallons) 296,727

-- 449,514

-- Average gross price of corn oil sold per gallon ($) $ 4.59 $

-- $ 4.59 $

--26



### Three Mo nths Ended June 30 , 2009 Compared to Three Months Ended June 30 , 2008

Revenues

Total revenues for the three months ended June 30 , 2009 were $1, 177,026 representing a decrease of 4, 784,749 , or

80. 3 %, over the three months ended June 30, 2008 revenues of $5 ,961,775. Revenue for the three months ended

June 30, 2009 included $1,110,231 in biofuel sales and $ 66,795 in equipment and technology sales. In the

comparable period of last year, our revenues were comprised of $774,027 from the sales of biofuels and $5 ,187,748

from sales of equipment and technology.

Cost of Revenues

Cost of revenues for the three months ended June 30, 2009 were $ 838,664 , or 71.8 % of revenue compared to

$2, 252 ,799, or 42.4% of revenue for the same period in 2008. During the three months ended June 30, 2009, the

Company’s biofuel production costs of revenue were $ 516,973 as compared to $ 630,839 for the same period in

2008, and were attributable to costs associated with feedstock and other raw material purchases, transportation and

mainten ance. Cost of revenue for our equipment and technology sales business were $ 321,690 for the three months

ended June 30, 2009 as compared to $ 1,865,908 for the same period in 2008.

Revenues in 2009 decreased due to the fact that the Company’s biodiesel r efinery and equipment manufacturing

operations were shut down due to the unavailability of the working capital resources these operations require.

Included within cost of revenue is depreciation and amortization expense of $297,969 and $100,103 for the th ree months ended June 30, 2009, and 2008, respectively. Depreciation and amortization expense increased by $197,866

over the same period in 2008.

Gross Profit

Gross profit for three months ended June 30, 2009 was $ 338,362 , representing a gross margin of 28. 7 %. This

compared to $3,435,976, representing a gross margin of 57.6% , from the comparable period in 2008.

Operating Expenses

Operating expenses for the three months ended June 30, 2009 were $ 5, 383,163 compared to $2, 016

, 985 for the same

period in 20 08. Included in the three months ended June 30, 2009 was $0 in stock

- based compensation as compared

to $32,816 for the three months ended June 30, 2008. The greatest increase in operating expenses , $4,315,204 in bad

debt expense, was related to the account s receivable due from BIG for equipment and corn oil provided by various

subsidiaries of the Company. The Company has set up an allowance for bad debt for the total amount due.

Interest Expense

Interest expenses and financing costs for the three months ended June 30, 2009 were $ 1, 89 6,075 and $ 1, 634,629 for

the three months ended June 30, 2008. Included in the three months ended June 30, 2009 was $ 1,543,708 of interest

expense, consisting of $ 1,498,924 in accrued interest, $ 44,784 in accrued interest due to a related party, and

$ 35 2,367 in non

- cash expenses associated with the conversion features embedded in the convertible debentures

issued by the Company during the three months ended June 30, 2009.

Amortization of note discount was $ 185,564 and $ 527,15 0 , respectively for the three months ended June 30, 2009

and 2008.

Expenses Associated with Change in Convertible Liabilities

As of June 30, 2009, the Company had several convertible debentures due to YA Global Investments, LP. The

Company accounted for the convertible debentures in accordance with SFAS No. 150, Accounting for Certain

Financial Instruments with Characteristics of both Liabilities and Equity (SFAS 150), as the conversion feature

embedded in the convertible debentures could result in the n ote principal and related accrued interest being

converted to a variable number of the Company’s common shares. We calculate the fair value of the conversion

feature at the time of issuance and record a conversion liability for the calculated value. We rec ognize interest

expense for the conversion liability which is added to the principal of the debenture. We also recognize interest

expense for accretion of the conversion liability over the term of the note. The additional value for the conversion

feature s of $ 354,628 for the three months ended June 30, 2009 have been recognized within other income (expense)

as Changes in conversion liabilities in the accompanying financial statements, including $ 64,631 for related party

debt.27



### Net Income or Loss

Net loss f rom continuing operations for the three months ended June 30, 2009

, was $ 6,65 2,796 as compared to a loss

of $ 1, 790,940 from the same period in 2008. Gain for discontinued operations was $ 14,354,069 for the three

months ended June 30, 2009 as compared to $ 507,044 for the three months ended June 30 , 2008. Net income for the

three months ended June 30 , 2009, was $ 7, 701,272 as compared to a loss of $ 2,279, 984 from the same period in

2008.

The Company’s net income during the three months ended June 30, 2009 w as $ 7, 701,272 , which is increased from

the $ 2,279, 984 loss recorded in the same period of 2008. The primary reasons for the magnitude of this net loss were

the dramatic reduction in our operating activities as compared to 2008 and expenses attributable to past financing

and restructuring activities. The income included the following non

- cash items: reversal of amortization of debt

discount and deferred financing fees of about $ 189 ,000

, loss on conversion liabilities of $ 354 ,000

, depreciation

expenses of abo ut $300,000

, and accrued interest of about $1,500,000.

Six months Ended June 30 , 2009 Compared to Six months Ended June 30 , 2008

Revenues

Total revenues for the six months ended June 30, 2009 were $2, 032,684 representing a decrease of $ 6, 824,890 , or

77 .1 %, over the six months ended June 30, 2008 revenues of $8,857,574. Revenue for the six months ended June

30, 2009 included $1,734,565 in biofuel sales and $ 298,119 in equipment and technology sales. In the comparable

period of last year, our revenues we re comprised of $1,105,398 from the sales of biofuels and $7,752,176 from sales

of equipment and technology.

Cost of Revenues

Cost of revenues for the six months ended June 30

, 2009 were $1,994,388, or 98.6 % of revenue compared to

$4,045,899, or 45.7% of revenue for the same period in 2008.

During the six months ended June 30, 2009, the Company’s biofuel production costs of revenue were $1,141,307 as

compared to $823,925 for the same period in 2008, and were attributable to costs associated with feedstoc k and

other raw material purchases, transportation and maintenance. Cost of revenue for our equipment and technol ogy

sales business were $853,081 for the six months ended June 30, 2009 as compared to $ 3, 178,314 for the same period

in 2008.

Revenues in 2 009 decrease d due to the dramatic reduction in the Company’s operating activities as compared to

2008 caused by the loss of previously committed sources of capital and the unavailability of the working capital

resources these operations require.

Gross Pro fit

Gross profit for six months ended June 30, 2009 was $ 38,296 , representing a gross margin of 1 .9 %. This compared

to $4,811,675, representing a gross margin of 54.3% in the comparable period of the prior year.

Operating Expenses

Operating expenses for the six months ended June 30, 2009 were $ 13, 582,715 compared to $3,485,433 for the same

period in 2008. Included in the six months ended June 30, 2009 was $0 in stock

- based compensation as compared to

$336,833 for the six months ended June 30, 2008. The gr eatest increase in operating expenses, $4,315,204 in bad

debt expense, was related to the accounts receivable due from BIG for equipment and corn oil provided by various

subsidiaries of the Company. The Company has set up an allowance for bad debt for the total amount due. Included

within operating expenses is depreciation and amortization expense of $595,318 and $100,103 for the six months

ended June 30, 2009, and 2008, respectively. Depreciation and amortization expense increased by $ 4 95,215 over

the s ame period in 2008.

Interest Expense

Interest expenses and financing costs for the six months ended June 30, 2009 were $ 3, 875,342 and $ 2,896,435 for

the six months ended June 30, 2008. Included in the six months ended June 30, 2009 was $3,056,9 24 of i nterest

expense, consisting of $2,970,139 in accrued interest, $86,785 in accrued interest due to a related party, and

$ 818,417 in non

- cash expenses associated with the conversion features embedded in the convertible debentures

issued by the Company during the six months ended June 30, 2009.28



### Amortization of deferred financing costs and debt discounts was $ 376,768 and $ 990,152 , respectively.

Expenses Associated with Change in Convertible Liabilities

As of June 30, 2009, the Company had several convertibl e debentures due to YA Global Investments, LP. The

Company accounted for the convertible debentures in accordance with SFAS No. 150, Accounting for Certain

Financial Instruments with Characteristics of both Liabilities and Equity (SFAS 150), as the conver sion feature

embedded in the convertible debentures could result in the note principal and related accrued interest being

converted to a variable number of the Company’s common shares. We calculate the fair value of the conversion

feature at the time of is suance and record a conversion liability for the calculated value. We recognize interest

expense for the conversion liability which is added to the principal of the debenture. We also recognize interest

expense for accretion of the conversion liability ov er the term of the note. The additional value for the conversion

features of $ 822,939 for the six months ended June 30, 2009 have been recognized within other income (expense) as

Changes in conversion liabilities in the accompanying financial statements, including $ 126,555 for related party

debt.

Net Income or Loss

Net loss from continuing operations for the six months ended June 30, 2009 , was $ 17, 311,589 as compared to a loss

of $5, 248,126 from the same period in 2008. Gain for discontinued operations wa s $ 13,284,713 for the six months

ended June 30, 2009 as compared to a loss of $560,072 for the six months ended June 30 , 2008. Net loss for the six

months ended June 30 , 2009, was $ 4, 031,399 as compared to a loss of $ 5, 808,198 from the same period in 2008.

T he Company’s net loss during the six months ended June 30, 2009 was $4, 031,399

, which 

### is increased from the

$5, 808,198 loss recorded in the same period of 2008. The primary reasons for the magnitude of this net loss were the

dramatic reduction in our o perating activities as compared to 2008 and expenses attributable to past financing and

restructuring activities . The loss also included the following non

- cash items: impairment charges relating to the

Biofuels Industries, LLC subsidiary of about $7,3 00, 00 0

, amortization of debt discount and deferred financing fees

of about $ 194 ,000

, loss on conversion liabilities of $ 822,000

, depreciation expenses of about $600,000

, and, accrued

interest of about $3,000,000.

LIQUIDITY AND CAPITA L RESOURCES

Current and Pr ior Year Activity

The Company had no cash as of June 30, 2009. Our primary source s of liquidity are cash generated from proceeds

from issuance of debt and common stock. For the six months ended June 30, 2009, provided by financing activities

was $ 1,139,056

.

Our financial position and liquidity are, and will be, influenced by a variety of factors, including our ability to

properly capitalize our operating and construction activities, our ability to generate cash flows from our operations

, and the level of ou r outstanding indebtedness and the interest we are obligated to pay on this indebtedness.

The Company ’ s capital resources are impacted by changes in accounts receivable as a result of revenue fluctuations,

economic trends, and collection activities. At Ju ne 30, 2009, accounts receivable, net of allowance for doubtful

accounts, totaled $ 136,372 and inventories totaled $616,056. Accounts payable and accrued expenses totaled

$14,614,596.

For the six months ended June 30, 2009, we used $ 851,078 in investing ac tivities as compared to $ 7, 532,633 used in

investing activities for the six months ended June 30, 2008, and financing activities provided $ 1,139,056 in cash as

compared to $6, 3 3 5 ,441 in cash provided by financing activities during June 30, 2008.

The Compa ny had a working capital deficit of $ 63, 297,795 at June 30, 2009, which includes convertible debentures

of $ 19, 477,319 , accrued interest payable of $7,17 3,539 , related party convertible debentures of $ 2, 158,195

, related

party debt of $39,000, $3,979,437 in purchase obligations and $ 9,673 in minority interest obligations associated

with inactive subsidiaries . The Company’s working capital deficit net of these amounts is $ 30,460,632

.

Despite their classification as current liabilities

, current convertible de bentures and accrued interest ($ 28,809,053 )

are not serviceable out of the Company’s cash flows (the terms of the convertible debt require repayment in shares

of either GreenShift Corporation or GS AgriFuels Corporation common stock). T he purchase obligati ons ($3,979,437), to the extent due, are tied to the earnings of the Company’s equipment sales business and can only be

serviced after the Company’s senior secured debt has been serviced

.29



### Management intends to raise capital from debt and equity transactio ns to fund operations

, to increase revenue and to

cut expenses to reduce the loss from operations. There can be no assurances that the Company will be able to

eliminate both its working capital def icit and its operating losses. The accompanying financial s tatements do not

contain any adjustments which may be required as a result of this uncertainty

.

Expected Activity Moving Forward

We intend to fund our principal liquidity and capital resource requirements through new financing activities. The

Company has n o committed source of capital that is sufficient to meet all of its operational and other regular cash

needs during 200 9 and beyond. Obtaining this capital is currently Management’s top priority.

Cash Flows Provided By Operating Activities

Among our curren t and known sources of operating cash flows are the cash flows deriving from our existing corn oil

extraction facilities. We will continue to market the corn oil we extract as a feedstock to third party renewable fuel

producers.

Cash Flows Provided By Fi nancing Activities

We require significant new equity and debt financing to accelerate the completion of our previously idled other

contracted corn oil extraction projects. We hope to complete additional financing for this purpose during 2009 . We

are also e valuating various opportunities to restructure our convertible debt. We do not know at this time if the

necessary funds can be obtained or on what terms they may be available.

Cash Flows Used In Investment Activities

We intend to use our available sources of cash from operations and financing for 2009 to execute on our plan to

build as many corn oil extraction facilities as possible, as quickly as possible

.30



### ITEM 3 QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable.

ITEM 4 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 pe riods 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 in effective in alerting them in a timely manner to

material information relating to the Company required to be inclu ded in the Company’s periodic SEC filings

because it did not have a sufficient number of personnel with an appropriate level of knowledge of and experience in

generally accepted accounting principles in the United States of America (U.S. GAAP) that are app ropriate to the

Company’s financial reporting requirements.

Subsequent to filing the Quarterly Report, management determined to change its policies for accounting of the

derivative securities that the Company has issued. While the Company has restated the financial statements in this

amended Report to conform with this new policy, the use of the Company's long

- standing prior policy for

accounting of the Company's derivative securities was not itself due to any inadequacy in the Company's controls.

However, because the Company did not have a sufficient number of personnel with an appropriate level of

knowledge of and experience in generally accepted accounting principles in the United States of America (U.S.

GAAP) that are appropriate to the Company’s financi al reporting requirements , the Company's controls and

procedures were ineffective as of June 30, 2009.

There have been no changes in the Company’s internal control over financial reporting during the most recently

completed fiscal quarter that have materia lly affected or are reasonably likely to materially affect the Company’s

internal control over financial reporting.31 

### PART II

– OTHER INFORMATION

ITEM 1 LEGAL PROCEEDINGS

The Company is party to the matter entitled O’Brien & Gere Limited, et al v. NextGe n Chemical Processors, Inc., et

al. , which action was filed in the Supreme Court of the State of New York. The verified complaint had sought

performance of and damages relating to certain service and related agreements, plus attorney’s fees and costs. Thi s

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 NextGen Fuel, Inc., subsidiary. On

September 19, 2007, the Suprem e Court of the State of New York dismissed a significant portion of O’Brien &

Gere’s complaint with prejudice. Management does not believe that there is a reasonable probability that the claims

made against NextGen Fuel by the plaintiffs in this litigatio n indicate that a material loss has occurred.

Accordingly, an estimate of loss cannot be made at this time and no accrual has been made in connection with those

claims.

The Company ’s GS AgriFuels subsidiary is party to the matter entitled GS AgriFuels Cor poration v. Chaykin, et al

. The action was filed in the Supreme Court of the State of N ew York, County of New York, on February 2, 2009.

The Complaint seeks damages for defendants' fraudulent misrepresentations, t ortious interference, breach of

acquisition a greements and related cl aims. GS AgriFuels initiated this litigation and intends to prosecute the case

v igorously. The defendants filed a separate action entitled Max, et al. v. GS AgriFuels Corporation, et al . in response

to GS AgriFuels’ Complaint. The case was only recently commenced and Management is unable to evaluate the

probability of an unfavorable outcome at this time

.

ITEM 1A RISK FACTORS

There was no material change to the risk factors recited in Item 1A of the Company’s Annual Report on Form 1 0

- K

for the year ended December 31, 2008.

.

ITEM 2 UNREGISTERED SALES O F EQUITY SECURITIES AND USE OF PROCEEDS

From time to time during the six months ended June 30, 2009

, the Company issued a total of 481,118,139 shares to

the Company’s various convertib le debt holders upon their conversion of convertible debenture in the aggregate

amount of $ 1,307,643 . The sales were exempt pursuant to Section 4(2) of the Securities Act since the sales were not

made in a public offering and were made to an entity whose p rincipals had access to detailed information about the

Company and were acquiring the shares for the entity’s own account. There were no underwriters.

ITEM 3 DEFAULTS UPON SENIOR SECURITIES

As of June 30, 2009, the Company was in technical default o f certain senior secured debt due to YA Global

Investments, L.P. ("YAGI"), which default was due to the failure of the CleanBioenergy Partners, LLC

financing to close as explained more fully in Note 11 to the Company's Condensed Financial Stateme nts for the

quarter ended June 30, 2009. The Company intends to cure this default and restructure its debt due to YAGI during

2009.

ITEM 4 SUBMISSION OF MATTER S TO A VOTE OF SECUR ITY HOLDERS

None.

ITEM 5 OTHER INFORMATION

None.32



### ITEM 6 EXHIBITS

The following are exhibits filed as part of GreenShift ’ s Form 10 Q for the quarter ended June 30, 2009 :

INDEX TO EXHIBITS

Exhibit

Number Description

31.1 Certification of Chief Executive Officer pursuant to Rule 13a

- 14(a)/15d

- 14(a), as adopted

pur suant to Section 302 of the Sarbanes

- Oxley Act of 2002.

31.2 Certification of Chief Financial Officer pursuant to Rule 13a

- 14(a)/15d

- 14(a), as adopted pursuant

to Section 302 of the Sarbanes

- Oxley Act of 2002.

32.1 Certification of Chief Execut ive Officer and Chief Financial Officer pursuant to 18 U.S.C.

Section 1350, as adopted pursuant to the Sarbanes

- Oxley Act of 2002.

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.

GREENSHIFT CORPORATION

By

/S/ KEVIN KREISLER

KEVIN KREISLER

Chief Executive Officer

/ S/ EDWARD R. CARROLL

EDW ARD R. CARROLL

Chief Financial and Accounting Officer

Date: October 16, 200933



### Exhibit 31.1

CERTIFICATION OF QUARTERLY REPORT

I, KEVIN KREISLER , certify that:

1. I have reviewed this Quarterly Report on Form 10 Q/A (Amendment No. 1) of GreenShift

C orporation ;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to

state a material fact necessary to make the statements made, in light of the circumstances under which

such statements were made, not mislea ding with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this

report, fairly present in all material respects the financial condition, results of operations and ca sh

flows of the registrant as of, and for, the periods presented in this report;

4. The registrant ’ s other certifying officer(s) and I are responsible for establishing and maintaining

disclosure controls and procedures (as defined in Exchange Act Rules 13a

- 1 5(e) and 15d

- 15(e)) and

internal controls over financial reporting (as defined in Exchange Act Rules 13a

- 15(f) and 15d

- 15(f))

for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and

procedures to be designed under our supervision, to ensure that material information relating to the

registrant, including its consolidated subsidiaries, is made known to us by others within those

entities, particularly during the period in which this report is being prepared;

b. Designed such internal controls over financial reporting, or caused such internal controls over

financial reporting to be designed under our supervision, to provide reasonable assurance

regarding the reliability of financial reporting and the p reparation of financial statements for

external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant ’ s disclosure controls and procedures and presented in

this report our conclusions about the effectiveness of the disclosure controls and procedures, as of

the end of the period covered by this report based on such evaluation; and,

d. Disclosed in this report any change in the registrant ’ s internal control over financial reporting that

occurred duri ng the registrant ’ s most recent fiscal quarter (the registrant ’ s fourth fiscal quarter in

the case of an annual report) that has materially affected, or is reasonably likely to materially

affect, the registrant ’ s internal control over financial reporting.

5. The registrant ’ s other certifying officer(s) and I have disclosed, based on our most recent evaluation of

internal control over financial reporting, to the registrant ’ s auditors and the Company ’ s Board of

Directors of the registrant ’ s board of directors (o r persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control

over financial reporting which are reasonably likely to adversely affect the registrant ’ s ability to

record , process, summarize and report financial information; and,

b. Any fraud, whether or not material, that involves management or other employees who have a

significant role in the registrant ’ s internal control over financial reporting.

/S/ KEVIN KREISLER

KEVIN KREISLER

Chief Executive Officer

Date: October 16 , 200934



### Exhibit 31.2

CERTIFICATION OF QUARTERLY REPORT

I, EDWARD CARROLL , certify that:

1. I have reviewed this Quarterly Repor t on Form 10 Q/A (Amendment No. 1) of GreenShift Corporation ;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to

state a material fact necessary to make the statements made, in light of the circumstances under which such

statements were made, not misleading with respect t o the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report,

fairly present in all material respects the financial condition, results of operations and cash flows of the

reg istrant as of, and for, the periods presented in this report;

4. The registrant ’ s other certifying officer(s) and I are responsible for establishing and maintaining disclosure

controls and procedures (as defined in Exchange Act Rules 13a

- 15(e) and 15d

- 15(e)) and internal controls

over financial reporting (as defined in Exchange Act Rules 13a

- 15(f) and 15d

- 15(f)) for the registrant and

have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and

procedures to be designed unde r our supervision, to ensure that material information relating to

the registrant, including its consolidated subsidiaries, is made known to us by others within those

entities, particularly during the period in which this report is being prepared;

b. Designe d such internal controls over financial reporting, or caused such internal controls over

financial reporting to be designed under our supervision, to provide reasonable assurance

regarding the reliability of financial reporting and the preparation of finan cial statements for

external purposes in accordance with generally accepted accounting principles

c. Evaluated the effectiveness of the registrant ’ s disclosure controls and procedures and presented in

this report our conclusions about the effectiveness of the disclosure controls and procedures, as of

the end of the period covered by this report based on such evaluation; and,

d. Disclosed in this report any change in the registrant ’ s internal control over financial reporting that

occurred during the registrant ’ s most recent fiscal quarter (the registrant ’ s fourth fiscal quarter in

the case of an annual report) that has materially affected, or is reasonably likely to materially

affect, the registrant ’ s internal control over financial reporting.

5. The registrant ’ s oth er certifying officer(s) and I have disclosed, based on our most recent evaluation of

internal control over financial reporting, to the registrant ’ s auditors and the Company ’ s Board of Directors

of the registrant ’ s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control

over financial reporting which are reasonably likely to adversely affect the registrant ’ s ability to

record, process, summarize and report financial information; and,

b. Any fraud, whether or not material, that involves management or other employees who have a

significant role in the registrant ’ s internal control over financial reporting.

/S/ ED WARD R. CARROLL

ED WARD R. CARROLL

Chief Financial Officer

Date: October 16 , 200935



### Exhibit 32.1

CERTIFICATION OF PERIODIC REPORT

Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes

- Oxley Act of 2002, each of

the undersigned officers of GreenShift Co rporation (the ― Company ‖ ), certifies that:

1. The Quarterly Report on Form 10 Q/A (Amendment No. 1) of the Company for the period ended June 30,

2009 (the ― Report ‖ ) fully complies with the requirements of Section 13(a) or 15(d) of the Securities

Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and

results of operations of the Company.

Dated : October 16 , 2009 /S/ KEVIN KREISLER

KEVIN KREISLER

Chief Executive Officer

/S/ ED WARD R. CARROLL

ED WARD R. CARROLL

Chief Financial Officer

This certification is made solely for the purpose of 18 U.S.C. Section 1350, subject to the knowledge standard

contained therein, and not for any other purpose.