SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C. 20549

                          _________________________

                                 FORM 10-QSB
                          _________________________


               QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (D)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                  FOR THE FISCAL QUARTER ENDED MARCH 31, 2006

                         COMMISSION FILE NO.: 0-50469



                             VERIDIUM CORPORATION
             ------------------------------------------------------
             (Exact name of registrant as specified in its charter)


          Delaware                                        59-3764931
    ----------------------------------------------------------------------
    (State of other jurisdiction of                  (IRS Employer
     incorporation or organization)                   Identification No.)


      535 34th Street, Suite 203, New York, New York         10001
    ----------------------------------------------------------------------
        (Address of principal executive offices)           (Zip Code)


                                (973) 942-7700
               ---------------------------------------------------
               (Registrant's telephone number including area code)


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

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

The number of outstanding shares of common stock as of May 22, 2006 was
249,827,079.

Transitional Small Business Disclosure Format:  Yes  [ ]   No  [X]

<PAGE>

                             VERIDIUM CORPORATION
                        QUARTERLY REPORT ON FORM 10QSB
                  FOR THE FISCAL QUARTER ENDED MARCH 31, 2006

                              TABLE OF CONTENTS

                                                               Page No
Part I	Financial Information

Item 1.	Financial Statements (unaudited for March 31, 2006
         and 2005).................................................3

        Consolidated Balance Sheets - March 31, 2006...............3

	Consolidated Statements of Operations - Three Months
         Ended March 31, 2006 and 2005.............................4

	Consolidated Statements of Cash Flows - Three Months
         Ended March 31, 2006 and 2005.............................5

        Notes to Consolidated Financial Statements.................6

Item 2.	Management's Discussion and Analysis or Plan of
         Operation................................................15

Item 3. Controls and Procedures...................................22

Part II	Other Information

Item 1. Legal Proceedings.........................................23

Item 2. Changes in Securities.....................................23

Item 3. Defaults Upon Senior Securities...........................23

Item 4. Submission of Matters to a Vote of Security Holders.......23

Item 5. Other Information.........................................23

Item 6. Exhibits and Reports on Form 8K...........................23

Signatures                                                        24

<PAGE>                               -2-

                        PART I - FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS (UNAUDITED)

                   VERIDIUM CORPORATION AND SUBSIDIARIES
                        CONSOLIDATED BALANCE SHEET
                        MARCH 31, 2006 (unaudited)

ASSETS:

Current assets:
 Cash                                                   $    163,787
 Restricted cash                                              27,367
 Accounts receivable, net                                  2,407,818
 Inventory                                                   316,323
 Prepaid expenses and other current assets                   187,764
                                                          ----------
 Total current assets                                      3,103,059

Property and equipment, net                                1,404,762

Other Assets:
 Deposits                                                    104,297
 Permits, net                                                186,796
 Goodwill                                                  4,010,303
                                                          ----------
 Total other assets                                        4,301,396
                                                          ----------
TOTAL ASSETS                                             $ 8,809,217
                                                          ==========

LIABILITIES AND STOCKHOLDERS' EQUITY:

Current liabilities:
 Short term borrowings - related party                   $ 1,440,000
 Short term borrowings - other                                18,669
 Accounts payable                                          2,587,199
 Accrued expenses                                          1,246,123
 Net current liabilities of discontinued operations          727,427
 Current maturities of long-term debt                        242,572
 Liability for derivative instruments                      3,225,629
 Billing in excess of earnings                               231,536
 Current portion of convertible debenture -
  related party                                              270,114
 Current portion of convertible debentures - other           334,153
                                                          ----------
 Total Current Liabilities                                10,323,422

Long-term debt, net of current maturities                    343,616
Convertible debentures, net of current portion             1,559,553
                                                          ----------
 Total long term liabilities:                              1,903,169
                                                          ----------
 Total liabilities:                                       12,226,591

Minority interest in consolidated subsidiary                 775,000

Stockholders' equity:
 Convertible preferred stock, $0.001 par value,
  5,000,000 shares authorized:
  Series A: 1,254,244 shares issued and outstanding            1,254
  Series B: 438,650 shares issued and outstanding                439
  Series D: 1,000,000 shares issued and outstanding            1,000
  Common stock, $0.001 par value, 250,000,000
   authorized; 193,605,086 shares issued and
   193,443,820 outstanding                                   193,607
 Deferred compensation                                      (148,625)
 Additional paid-in capital                               46,426,088
 Accumulated deficit                                     (50,602,383)
 Treasury stock at cost, 161,266  shares of
  common stock                                               (63,754)
                                                          ----------
 Total stockholders' equity                               (4,192,374)
                                                          ----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY               $ 8,809,217
                                                          ==========
The notes to the Consolidated Financial Statements are an integral part of
these statements.

<PAGE>                               -3-

                    VERIDIUM CORPORATION AND SUBSIDIARIES
                    CONSOLIDATED STATEMENTS OF OPERATIONS
  FOR THE THREE MONTHS ENDED MARCH 31, 2006 (UNAUDITED) AND 2005 (UNAUDITED)

                                                     3/31/06        3/31/05
                                                   -----------    -----------
Revenues                                          $  3,174,925   $  3,534,648
Cost of revenues                                     2,404,089      2,721,141
                                                   -----------    -----------
Gross profit                                           770,836        813,507

Operating expenses:
 Selling expenses                                      280,857        240,427
 General and administrative expenses                 2,665,330        553,726
                                                   -----------    -----------
Total operating expenses                             2,946,187        794.153
                                                   -----------    -----------
Operating (loss) income                             (2,175,351)        19,354

Other income (expense):
 Change in fair value of derivative instruments        459,150             --
 Forgiveness of interest and finance charges           119,240             --
 Gain on equipment disposal                              5,453          1,836
 Miscellaneous income                                    1,000          7,072
 Interest expense                                   (2,310,406)      (159,455)
                                                   -----------    -----------
Total other income (expense), net                   (1,725,563)      (150,547)
                                                   -----------    -----------

(Loss) income before provision for income taxes     (3,900,914)      (131,194)

Provision for income taxes                               4,309            313
                                                   -----------    -----------
Net loss from continuing operations               $ (3,905,223)  $   (131,507)
                                                   ===========    ===========
Discontinued operations:
 Loss from discontinued operations                      (9,324)      (101,777)
 Gain on disposal of discontinued operations             6,000             --
                                                   -----------    -----------
Total discontinued operations                     $     (3,324)  $   (101,777)
                                                   -----------    -----------
Net loss                                          $ (3,908,547)  $   (233,284)

Preferred dividends                                   (681,594)            --
                                                   -----------    -----------

Net loss attributable to common shareholders      $ (4,590,141)  $         --


Loss per common share, basic and diluted -
 continuing operations                            $      (0.02)  $      (0.01)
Loss per common share, basic and diluted -         -----------    -----------
 discontinued operations                          $         --   $      (0.01)
                                                   -----------    -----------
Net loss per common share, basic and diluted      $      (0.02)  $      (0.01)
                                                   -----------    -----------

Weighted average shares of common stock
 outstanding - basic and diluted                   182,599,567     39,498,720



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

<PAGE>                                -4-


                    VERIDIUM CORPORATION AND SUBSIDIARIES
                    CONSOLIDATED STATEMENTS OF CASH FLOWS
   FOR THE THREE MONTHS ENDED MARCH 31, 2006 (UNAUDITED) AND MARCH 31, 2005
                                  (UNAUDITED)

                                                     3/31/06        3/31/05
                                                   -----------    -----------
CASH FLOWS FROM OPERATING ACTIVITIES
Net (loss) income                                 $ (3,908,547)  $    (81,728)
 Adjustments to reconcile net (loss) income
  to net cash provided by (used in) operating
  activities
  Depreciation and amortization                         56,934         34,217
  Equity issued in exchange for services rendered    2,081,201        187,369
  Change in assets/liabilities of discontinued
   operations                                         (138,068)      (221,972)
  Change in fair value of derivative instruments      (459,150)            --
  Accretion of debt discounts                        2,073,379             --
  Amortization of BCF on debt-related party              5,041             --
  Gain on forgiveness of debt                         (119,240)            --
 Changes in assets and liabilities
  Decrease in restricted cash                            1,887             --
  Accounts receivable                                 (231,435)      (739,484)
  Prepaid expenses and other current assets            (15,382)        11,822
  Inventories                                         (316,323)         3,627
  Accounts payable                                     663,369       (159,074)
  Billings in excess of earnings                       231,536             --
  Accrued expenses                                    (371,961)       263,028
                                                    ----------     ----------
 Net cash (used in) operating activities              (446,759)      (702,195)
                                                    ----------     ----------
CASH FLOWS FROM INVESTING ACTIVITIES
 Deposits                                                  202        (88,799)
 Additions to and acquisition of property,
  plant and equipment                                  (23,904)       (34,431)
 Permits                                                    --          2,499
                                                    ----------     ----------
 Net cash (used in) investing activities               (23,703)      (120,731)
                                                    ----------     ----------
CASH FLOWS FROM FINANCING ACTIVITIES
 Borrowings/(repayment) of short term debt -
  related party                                        723,810       (224,767)
 Repayment to short term borrowings - other             (3,742)            --
 Repayment of long-term debt                           (41,240)       (40,575)
 Repayment of term financing                           (25,000)            --
 Repayment of/proceeds from long-term
  convertible debentures                              (353,707)        46,371
 Proceeds from sale of common stock                         --         11,631
 Proceeds from common stock subscription receivable         --        175,000
                                                    ----------     ----------
 Net cash provided by/(used in) financing activities   300,121        (32,340)
                                                    ----------     ----------

(Decrease) Increase in cash                           (170,341)      (855,266)

Cash at beginning of period                            334,128      1,096,327
                                                    ----------     ----------
Cash at end of period                              $   163,787    $   241,061
                                                    ==========     ==========

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

<PAGE>                               -5-

                     VERIDIUM CORPORATION AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

1.       BASIS OF PRESENTATION

The consolidated interim financial statements included herein have been
prepared by Veridium Corp. ("Veridium" or "the Company"), pursuant to the
rules and regulations of the Securities and Exchange Commission with regard
to Regulation S-B and, in the opinion of management, include all
adjustments which, except as described elsewhere herein, are of a normal
recurring nature, necessary for a fair presentation of the financial
position, results of operations, and cash flows for the periods presented.
The results for interim periods are not necessarily indicative of results
for the entire year. The financial statements presented herein should be
read in connection with the financial statements included in the Company's
Annual Report on Form 10-KSB for the year ended December 31, 2005.

2.       GOING CONCERN

The accompanying consolidated financial statements have been prepared
assuming that the Company will continue as a going concern.  The Company
incurred a loss of $3,908,547 for the three months ended March 31, 2006.
As of March 31, 2006 the Company had $163,787 in cash, and current
liabilities exceeded current assets by $7,220,363 including $3,225,629 in
derivative liabilities.  These matters raise substantial doubt about the
Company's ability to continue as a going concern.

Management's plans include raising additional proceeds from debt and equity
transactions to fund operations and to increase revenue and cut expenses to
reduce the loss from operations.  Management believes that the closure of
the recycling facility in Paterson, New Jersey should achieve these
objectives.  However, there can be no assurances that Veridium will be
successful in this regard or will be able to eliminate both its working
capital deficit and its operating losses.  The accompanying financial
statements do not contain any adjustments which may be required as a result
of this uncertainty.

3.       SIGNIFICANT ACCOUNTING POLICIES

REVENUE RECOGNITION-VERIDIUM INDUSTRIAL DESIGN CORPORATION

Fixed Price Contract revenue is recognized on the percentage-of-completion
method in the ratio that costs incurred bear to estimated costs at
completion. Costs include all direct material and labor costs, and indirect
costs, such as supplies, tools, repairs and depreciation.  Selling, general
and administrative costs are charged to expense as incurred. Profits on
short term contracts are recorded upon substantial completion of the contract.
Other revenue is recorded on the basis of performance of services or shipment
of products.

The asset "costs and estimated earnings in excess of billings on uncompleted
contracts" represents revenues recognized in excess of amounts invoiced. The
liability "billings in excess of costs and estimated earnings on uncompleted
contracts" represents invoices in excess of revenues recognized.

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

4.       STOCKHOLDERS EQUITY

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

<PAGE>                               -6-

                   VERIDIUM CORPORATION AND SUBSIDIARIES
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

4.       STOCKHOLDERS EQUITY (CONTINUED)

SFAS 123, ACCOUNTING FOR STOCK-BASED COMPENSATION. The Company elected to
adopt the modified prospective transition method as provided by SFAS 123(R)
and, accordingly, financial statement amounts for the prior periods presented
in the Form 10-QSB have not been restated to reflect the fair value method of
expensing share-based compensation.

In September 2003, the Company's shareholders approved the Company's 2003
Stock Option/Stock Issuance Plan (the "Plan"). The Plan consists of two
separate equity programs: (i) the Discretionary Option Grant Program and
(ii) the Stock Issuance Program. An aggregate of 5,322,652 shares of Common
Stock were initially reserved for issuance over the term of the Plan. In
addition, the number of shares of Common Stock reserved for issuance under
the Plan automatically increases on the first trading day of January each
calendar year, by an amount equal to eight percent (8%) of the total number
of shares of Common Stock outstanding on the last trading day in December
of the preceding calendar year. Shares subject to any outstanding options
under the Plan which expire or otherwise terminate prior to exercise will
be available for subsequent issuance. However, any shares subject to stock
appreciation rights exercised under the Plan will not be available for
reissuance. Should the exercise price of an option under the Plan be paid
with shares of Common Stock or should shares of Common Stock otherwise
issuable under the Plan be withheld in satisfaction of the withholding
taxes incurred in connection with the exercise of an option or the vesting
of a stock issuance under the Plan, then the number of shares of Common
Stock available for issuance under the Plan will be reduced only by the
gross number of shares for which the option is exercised or which vest
under the stock issuance and not by the net number of shares of  Common
Stock issued to the holder of such option or stock issuance. The Company's
officers and employees, non-employee Board members and independent
consultants in the Company's service or the service of the Company's
subsidiaries (whether now existing or subsequently established) are
eligible to participate in the Plan. The fair market value per share of
Common Stock on any relevant date under the Plan will be deemed to be equal
to the closing bid price per share on that date. Options granted under the
Plan may be either incentive stock options which satisfy the requirements
of Section 422 of the Internal Revenue Code or non-statutory options which
are not intended to meet such requirements.

SUPPLEMENTAL DISCLOSURE FOR STOCK-BASED COMPENSATION

In December 2004, the Financial Accounting Standards Board ("FASB") issued
SFAS No. 123R "Share Based Payment."  This statement is a revision to SFAS
123 and supersedes Accounting Principles Board (APB) Opinion
No. 25,  "Accounting for Stock Issued to Employees," and amends FASB
Statement No. 95, "Statement of Cash Flows".  This statement requires a
public entity to expense the cost of employee services received in exchange
for an award of equity instruments. This statement also provides guidance
on valuing and expensing these awards, as well as disclosure requirements
of these equity arrangements.  This statement is effective as of the
beginning of the first interim or annual reporting period that begins after
December 15, 2005.  The revised SFAS No. 123 may have a material effect on
the Company's results of operations but not on the Company's financial
position.

On March 31, 2006, the Company issued 40,000,000 stock options as part the
stock based employee compensation plan, including 10,000,000 stock options
to Kevin Kreisler, the Company's Chief Executive Officer.  Activity under
the Plan and issuances of warrants to employees for the quarter ended March
31, 2006 is as follows:

                                      Number of          Weighted Average
                                      Shares             Exercise Price
                                      ---------------    ------------------
Outstanding at December 31, 2004        9,700,427         $     0.47
 Granted at fair value                         --                 --
 Forfeited                                     --                 --
 Exercised                                     --                 --
                                       ----------            -------
Outstanding at December 31, 2005        9,700,427         $     0.47
 Granted at fair value                 40,000,000               0.04
 Forfeited                                (22,943)                --
 Exercised                                     --                 --
                                       ----------            -------
Outstanding at March 31, 2006          49,700,427         $     0.12
                                       ==========            =======

<PAGE>                                -7-

                    VERIDIUM CORPORATION AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

5.       RELATED PARTY TRANSACTIONS

CONVERTIBLE DEBENTURES ISSUED TO GREENSHIFT

During the three months ended March 31, 2006, GreenShift loaned an
additional $729,618 to the Company.  This is in addition to a debenture
purchased with the Company in the amount of $280,196 in 2005. The total
amount of short term notes and convertible debentures due to GreenShift at
March 31, 2006 was $1,710,236. Interest in the amount $5,686 is accrued on
the short term note at a rate of 8%.

GREENSHIFT CONVERSION OF PREFERRED STOCK TO COMMON STOCK

On February 10, 2006 GreenShift Corporation converted 1,609,590 shares of
Series A Preferred Stock and Series B Preferred Stock into 63,633,322
shares of common stock.

ISSUANCE OF SERIES D PREFERRED STOCK TO GREENSHIFT

On March 24, 2006 Veridium issued 1,000,000 shares of Series D Preferred
Stock to GreenShift Corporation.  In  consideration  of the  Series D
shares, GreenShift  Corporation  surrendered  750,000  shares  of
Veridium's  Series  C Preferred Stock and 63,633,322 shares of Veridium
common stock.

TRANSACTIONS WITH FAMILY MEMBERS OF KEVIN KREISLER

In February 2006, Serenity Capital, LLC, purchased $500,000 in debt from
GCS Investments.  During the period ended March 31, 2006, Serenity effected
conversions totaling $100,000, corresponding to 5,000,000 shares of the
Company's common stock. Serenity subsequently effected additional
conversions totaling $400,000 during the second quarter 2006 into a total
of 20,000,000 shares of the Company's common stock. Serenity is owned by a
family member of the Company's chairman.

In February 2006, Cyrus Capital, LLC, purchased $500,000 in debt from GCS
Investments.  During the period ended March 31, 2006, Cyrus effected
conversions totaling $280,000, corresponding to 14,000,000 shares of the
Company's common stock. Cyrus subsequently effected additional conversions
totaling $220,000 during the second quarter 2006 into a total of 11,000,000
shares of the Company's common stock. Cyrus is owned by a family member of
the Company's chairman.

6.       FINANCING ARRANGEMENTS

The following is a summary of the Company's financing arrangements as of
March 31, 2006:

                                                           3/31/06
                                                       ---------------
Short-term borrowings
 Vendor composition plans                              $      18,669
 Short term loans - Greenshift                             1,440,000
                                                         -----------
 Total short term borrowings                           $   1,458,669

Current maturities of long-term debt:
 Term financing                                               75,000
 Vehicle loans and other current obligations                 167,572
                                                         -----------
 Total current maturities of long-term debt            $     242,572

Current portion of convertible debentures:
 Convertible debenture - related party                       270,114
 Convertible promissory note - Berger                         78,000
 Convertible debenture - Highgate House Funds, LLC           500,000
 Convertible debenture - Seaway Valley Funds, LLC            200,000
 Convertible debenture - Hudson Capital Partners, LLC        300,000
 Convertible debenture - Serenity Capital, LLC               400,000
 Convertible debenture - Cyrus Capital, LLC                  220,000
 Total Note Discounts                                     (1,363,847)
                                                         -----------
 Total current portion of convertible debentures       $     604,267

Long-term debt:
 Laurus Master Fund, secured minimum borrowing note        1,000,000
 Laurus Master Fund, secured revolving note                  559,553
 Vehicle loans and other current obligations                 343,616
                                                         -----------
 Total long-term debt, net of current maturities       $   1,903,169

<PAGE>                               -8-

                   VERIDIUM CORPORATION AND SUBSIDIARIES
          NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

6.       FINANCING ARRANGEMENTS (CONTINUED)

The following chart is presented to assist the reader in analyzing the
Company's ability to fulfill its fixed debt service requirements as of
March 31, 2006 and the Company's ability to meet such obligations:

      Year                                                Amount
      ----                                               ---------
      2006                                             $ 3,835,005
      2007                                                 127,473
      2008                                                 106,713
      2009                                                  88,622
      2010                                                  50,864
                                                        ----------
      Total minimum payments due under current and
       long-term obligations                           $ 4,208,677
                                                        ==========

SHORT TERM BORROWINGS

During the three months ended March 31, 2006, GreenShift loaned an
additional $729,618 to the Company.  This is in addition to a debenture
purchased with the Company in the amount of $ 280,196 in 2005. The total
amount of short term notes and convertible debentures due to GreenShift at
March 31, 2006 was $1,710,236. Interest is accrued on the short note at a
rate of 8%. GreenShift is an approximate 70% shareholder of Veridium and is
controlled by Kevin Kreisler, Chairman and Chief Executive Officer of
Veridium.

TERM FINANCING

The Company had certain term financing totaling $100,000 as of December 31,
2005.  The balance at March 31, 2006 was $75,000 was due and payable in
March 2006.  This obligation is secured by a first mortgage interest in the
Company's Massachusetts property.  The Company is currently in default of
this obligation.

CONVERTIBLE NOTES - LAURUS MASTER FUND

On March 31, 2004, Veridium closed on a revolving fixed price convertible
facility in the amount of $1.75 million with the Laurus Master Fund (the
"Laurus Financing"). Total financing available with this facility is $2.5
million which consists of the Secured Revolving Note of $1.5 million (the
"Revolving Facility") and a Minimum Borrowing Note for $1.0 million (the
"Minimum Note").  All advances evidenced by these notes are made in
accordance with the terms and provisions of the Security Agreement with
Laurus Fund. Under the Security Agreement, the Minimum Note includes the
requirement to maintain a $1.0 million minimum balance by automatic
transfer of funds, if necessary, from the Revolving Facility. The Revolving
Facility is structured like a standard receivables based line of credit.
The Security Agreement provides that outstanding loans under this facility
cannot exceed the lesser of (a) $2,500,000 less reserves determined by
Laurus, (b) 90% of eligible Accounts Receivable ("Accounts") less the above
reserves and (c) Accounts plus $500,000 less subordinated accounts.  The
notes bear interest at prime plus 5%, subject to a floor of 9%, and a term
of three years.  Veridium may convert debt into equity at a fixed
conversion price equal to $0.43 per share, which price is subject to
adjustment based on reset to a lower conversion price based on offer
prices, which may result in the issuance of additional shares of the
Company's common stock. The proceeds of the Laurus Financing were used to
complete Veridium's recapitalization process and to stimulate increased
cash flows from operations. Veridium is currently in default of this
agreement due to its failure to register certain stock and debentures.
Based on this default the Company accrued $360,000 in liquidating damages
through December 31, 2005, which have been calculated based on the period
of default through that date. This accrual approximated the settlement that
occurred subsequent to March 31, 2006. The debt is also subject to certain
covenants related to incurrence of additional non-trade debt or
restrictions on disposition and protection of collateral. On April 21, 2006
Cornell Capital Partners, LP purchased from Laurus Master Fund, Ltd. the
Secured Minimum Borrowing Note and the Revolving Note that Veridium issued
to Laurus on March 31, 2004. In April of 2006 this debt was purchased by
Cornell Capital, LP and this debt was converted in full (see subsequent
events - Transactions with Cornell Capital Partners, below).

DEMAND NOTE - GCS

On December 19, 2003, Veridium closed on the first installment of a
Convertible Demand Note with GCS Investments, LLC ("GCS"). The note is
payable on demand with a principal balance of $1.0 million at December

<PAGE>                               -9-

                   VERIDIUM CORPORATION AND SUBSIDIARIES
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

6.       FINANCING ARRANGEMENTS (CONTINUED)

31, 2005, and bears interest at the greater of 10% per year or 6% above
prime rate per year. Payments are of interest only and are payable monthly.
The note is secured by a blanket subordinate security position on
substantially all  of Veridium's assets.   GCS's security position has been
subordinated to Laurus's first priority security position (see below).
Conditions precedent of this financing included the conversion of the
majority of Veridium's pre-consolidation debt and other liabilities into
various forms of equity, including all obligations due to Veridium's
officers and its related parties for loans extended to Veridium, deferred
salaries, price-protection agreements in relation to previous loans and
deferred salaries and any other and all liabilities due to Veridium's
officers and related parties. Additionally required were cash-based
management contributions, the unconditional personal guarantee of
Veridium's chairman. Kevin Kreisler, and the conversion by GCS' affiliate
of $1.184 million in debt into the GCS Convertible Preferred Debenture (see
below). The note and any accrued interest thereon are convertible into
common stock of Veridium based on the average closing price for the ten
days prior to such conversion. GCS additionally received detachable
warrants to purchase 500,000 shares of common stock that are exercisable at
$0.40 per share and expire on December 19, 2008. The warrants are
redeemable at the option of the holder if at the time of exercise the
market price is at or above $0.40 per share. The warrants have been
recorded at fair value as a discount to the Convertible Preferred Debenture
(see below).  Veridium received $1.2 million of the funds under the note in
2003 and the balance of $0.3 million in January 2004. The note was modified
in March 2004 in connection with the Laurus Financing.  In April 2004, This
note was reduced by $500,000 in conjunction with the acquisition and
amendment by GCS of the Company's subordinated balloon note previously
payable to R. M. Jones & Company, Inc. ("Jones")(see below). Approximately
four months of interest under this loan in the amount of $42,500 and the
Subordinated Balloon Note (see below) was purchased and converted into
equity by Viridis Capital, LLC, an affiliate of Kevin Kreisler, and
assigned to GreenShift another affiliate of Kevin Kreisler, in December
2004 (see Note 12, Shareholders' Equity, below). During 2005, the note was
modified to reduce the interest rate to 3% effective for the first nine
months of the year, which was determined not to be a material debt
modification. In addition, during 2005, based on the terms of the
conversion option and the redemption feature of the warrants, the Company
determined that this conversion option and the warrants required
reclassification as derivative liabilities.

As of March 31, 2006 this note was converted in full - (see Transactions
Involving Convertible Debentures issued to GCS Investments below).

SUBORDINATED BALLOON NOTE - GCS

In April 2004, Veridium's various outstanding notes issued in connection
with the purchase of the Environmental Services Division of R.M. Jones &
Co., Inc. ("Jones") were consolidated and adjusted in compliance with the
provisions of Letter Agreements with Jones, which resulted in the
repurchase of the debt for $500,000 and 1.25 million common shares.  For
the consideration given, Jones agreed to the assignment of the debt to GCS,
consisting of $1,517,000 plus accrued interest for a total balance of
$1,547,500 (see above). This new note bears interest at the rate of 12% per
year, payable monthly. The principal of the loan is due and payable on
April 5, 2007. This note is secured by the stock of two of Veridium's
subsidiaries: JES-LLC and ESC. Approximately four months of interest under
this loan in the amount of $57,931 and the Demand Note (see above) was
purchased and converted into equity by Viridis Capital, LLC, an affiliate
of Kevin Kreisler, and assigned to GreenShift another affiliate of Kevin
Kreisler, in December 2004. As of March 31, 2006 this note was converted in
full - (see Transactions Involving Convertible Debentures issued to GCS
Investments below).

CONVERTIBLE PREFERRED DEBENTURE - GCS

In December 2003, and in connection with the requirements of the GCS Demand
Note, GCS' affiliates converted $1.184 million in debt into convertible
preferred debt securities of Veridium (the "GCS Debenture"). This
instrument is to be paid at a rate equal to 2% of Veridium's gross annual
revenue on a quarterly basis, provided that such payments, together with
the interest payments paid to GCS on the GCS Demand Note, do not exceed 30%
of Veridium's EBITDA for such year. These payments shall continue to be
made until the sum of all such payments is equal to $1.184 million, at
which time this instrument will automatically convert into 30,000 shares of
Subsidiary Preferred Equity (see Note 8, Minority Interest, below).  During
2005 and 2004, Veridium accrued $52,777 and $76,000 interest respectively
under this debenture.  Interest was accrued at a rate of 10% during the
year 2005.  None of the contingent payments were required to be made during
this period. During 2005, the note was modified to reduce the interest rate
to 3% effective for the first nine months of the year and  payments of
$45,594 were made reducing the principal of the note to $1,138,471.
Detachable options issued concurrently with the financing have been
recorded as a discount to the debt, amortizable over the term of the note.
The maturity date of this note is December 13, 2008. In addition, during
2005, based on the terms of the conversion

<PAGE>                               -10-

                    VERIDIUM CORPORATION AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

6.       FINANCING ARRANGEMENTS (CONTINUED)

option and the redemption feature of the options, the Company determined
that this conversion option required reclassification as a derivative
liability. As of March 31, 2006 this note was converted in full (see
Transactions Involving Convertible Debentures issued to GCS Investments
below).

TRANSACTIONS INVOLVING CONVERTIBLE DEBENTURES ISSUED TO GCS INVESTMENTS

On February 10, 2006, GCS Investments, LLC ("GCS") effected a conversion
against the Senior Debt of $180,000 at $0.02 per share, corresponding to
9,000,000 shares. GCS subsequently sold these shares and received $199,350
in proceeds in March 2006, all of which were credited to amounts due to GCS.

In February 2006, Serenity Capital, LLC, purchased $500,000 in debt from
GCS Investments.  The conversion feature on the debenture due to Serenity
is variable based on trailing market prices and contains an embedded
derivative.  A note discount of $500,000 and a derivative liability of
$1,672,000 were recorded at the assumption date.  Interest expense from
accretion of the debt discount was $136,862 and loss on the fair market
value of the derivative liability was $462,200 for the quarter ended March
31, 2006.  As of March 31, 2006 the derivative liability for debentures due
to Serenity was $962,400.  During the period ended March 31, 2006, Serenity
effected conversions totaling $100,000, corresponding to 5,000,000 shares
of the Company's common stock. Serenity subsequently effected additional
conversions totaling $400,000 during the second quarter 2006 into a total
of 20,000,000 shares of the Company's common stock. Serenity is owned by a
family member of the Company's chairman.

In February 2006, Cyrus Capital, LLC, purchased $500,000 in debt from GCS
Investments.  The conversion feature on the debenture due to Cyrus is
variable based on trailing market prices and contains an embedded
derivative.  A note discount of $500,000 and a derivative liability of
$1,672,000 were recorded at the assumption date.  Interest expense from
accretion of the debt discount was $300,274 and loss on the fair market
value of the derivative liability was $29,320 for the quarter ended March
31, 2006.  As of March 31, 2006 the derivative liability for debentures due
to Cyrus was $529,320.  During the period ended March 31, 2006, Cyrus
effected conversions totaling $280,000, corresponding to 14,000,000 shares
of the Company's common stock. Cyrus subsequently effected additional
conversions totaling $220,000 during the second quarter 2006 into a total
of 11,000,000 shares of the Company's common stock. Cyrus is owned by a
family member of the Company's chairman.

In February 2006, Seaway Valley Fund, LLC, purchased $500,000 in debt from
GCS Investments.  The conversion feature on the debenture due to Seaway is
variable based on trailing market prices and contains an embedded
derivative.  A note discount of $500,000 and a derivative liability of
$1,672,000 were recorded at the assumption date.  Interest expense from
accretion of the debt discount was $318,431 and gain on the fair market
value of the derivative liability was $18,800 for the quarter ended March
31, 2006.  As of March 31, 2006 the derivative liability for debentures due
to Seaway was $481,200.  During the period ended March 31, 2006, Seaway
Valley effected conversions totaling $300,000, corresponding to 15,000,000
shares of the Company's common stock. Seaway Valley subsequently effected
additional conversions totaling $200,000 during the second quarter 2006
into a total of 10,000,000 shares of the Company's common stock.
In February 2006, Hudson Capital Partners, LLC, purchased $500,000 in debt
from GCS Investments.  The conversion feature on the debenture due to
Hudson is variable based on trailing market prices and contains an embedded
derivative.  A note discount of $500,000 and a derivative liability of
$1,751,000 were recorded at the assumption date.  Interest expense from
accretion of the debt discount was $217,378 and loss on the fair market
value of the derivative liability was $266,800 for the quarter ended March
31, 2006.  As of March 31, 2006 the derivative liability for debentures due
to Hudson was $766,800.  During the period ended March 31, 2006, Hudson
effected conversions totaling $200,000, corresponding to 10,000,000 shares
of the Company's common stock. Hudson subsequently effected additional
conversions totaling $300,000 during the second quarter 2006 into a total
of 15,000,000 shares of the Company's common stock.

In March 2006, Highgate House Funds, Ltd., purchased a total of $1,500,000
of GCS' convertible debentures in the Company directly from GCS. The
conversion feature on the debentures due to Cornell is variable based on
trailing market prices and contains an embedded derivative.  A note
discount of $1,016,000 and a derivative liability of $1,016,000 were
recorded at the assumption date.  Interest expense from accretion of the
debt discount was $679,208 and gain on the fair market value of the
derivative liability was $719,000 for the quarter ended March 31, 2006.  As
of March 31, 2006 the derivative liability for debentures due to Cornell
was $297,000.   Highgate effected conversions of $1,000,000 of these
debentures into a total of 27,998,872 shares of common stock during the
period ended March 31, 2006, leaving a balance due to Highgate at March 31,
2006 of $500,000. Highgate subsequently

<PAGE>                               -11-

                   VERIDIUM CORPORATION AND SUBSIDIARIES
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

6.       FINANCING ARRANGEMENTS (CONTINUED)

effected additional conversions totaling $500,000 during the second quarter
2006 into a total of 15,221,993 shares of the Company's common stock.

RELATED PARTY CONVERTIBLE NOTE

During 2005, Veridium borrowed $280,196 from GreenShift Corporation in the
form of a convertible promissory note at a rate of 8%.  The note is due on
September 30, 2006. Based on the terms of the conversion option, the debt
was determined to contain a beneficial conversion feature, recorded as a
discount on the debt of $20,165, amortizable over the term of the debt.
Interest expense of $5,041 has been recorded based on the amortization of
the discount in 2006.  GreenShift is an approximate 70% shareholder of
Veridium and is controlled by Kevin Kreisler, Chairman and Chief Executive
Officer of Veridium.

CONVERTIBLE PROMISSORY NOTE - BERGER

In May 2005, Veridium acquired the assets of NCES.  As part of this
acquisition, Veridium assumed a convertible promissory note in the amount
of $128,000 payable to Robert Berger. This note was due and payable
November 10, 2005. The payee may elect at any time to convert any or all of
the outstanding principal into common stock equal to the amount due divided
by the average closing price of such common stock for the (30) day prior
period to the date of the exercise of this conversion. In November 2005,
the Company made a payment of $50,000 reducing this note to $78,000. The
balance of the note is in default and is immediately due and payable.
Based on the terms of the note, it was determined that the conversion
option was an embedded derivative conversion feature. Accordingly, the
company recognized a liability for this derivative conversion feature of
$52,800, recorded as a debt discount which was fully amortized over the
term of this short term debt in 2005.  The derivative liability was marked
to fair value at March 31, 2006, resulting in an accounting gain for the
change in fair value.

7.       CHANGES IN STOCKHOLDERS' EQUITY

During the first quarter of 2006, various common stock issuances for
services and debt repayments were as follows:  706,942 shares issued to
settle debt amounting to $213,580; 22,394,720 shares issued in exchange for
services amounting to $567,401; 71,998,872 shares were issued for debt
conversions amounting to $1,880,000; 75,973,947 shares were issued for
conversion of 627,122 and 1,207,468 shares, respectively, of Series A and B
preferred stock into common stock, 1,666,667 shares were issued issued for
conversion of subsidiary preferred stock, resulting in a reduction of
minority interest of $50,000; and 63,633,322 shares of common stock and 750
shares of series C preferred stock were retired in exchange 1,000,000
shares of Series D preferred stock (the par value of this issuance were
recorded as a credit to additional paid in capital).

On March 24, 2006, the Company's Board of Directors approved an amendment
to the Company's Certificate of Incorporation. On March 24, 2006, the
holder of a majority of the voting power of the outstanding voting stock
gave its written consent to the amendment. The amendment will be filed and
become effective approximately twenty days after the Company's April 27,
2006 Information Statement is mailed to the shareholders. The effect of the
amendment will be to increase the number of authorized shares of common
stock, $0.001 par value, from 250,000,000 to 500,000,000.

8.       ACQUISITIONS

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

ACQUISITIONS - GREENSHIFT INDUSTRIAL DESIGN CORPORATION

On January 22, 2006, Veridium Corporation (VRDM") acquired 100% of the
stock of GreenShift Industrial Design Corporation and Tornado Trash
Corporation ("TTC") from GreenShift Corporation ("GreenShift") in return
for 10% of the fully diluted stock in Veridium.  GreenShift Corporation
owns approximately 70% of the fully diluted capital stock of Veridium
Corporation, and due to the transfer of assets between related parties
these transfers were

<PAGE>                               -12-

                    VERIDIUM CORPORATION AND SUBSIDIARIES
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

8.       ACQUISITIONS (CONTINUED)

recorded at cost for accounting purposes.  GreenShift Industrial Design
Corporation was subsequently renamed Veridium Industrial Design Corporation
("VIDC").

VIDC is a development stage company that focuses on the engineering and
marketing of green innovations and processes that enhance manufacturing
efficiencies improve resource utilization and minimize waste. VIDC's
mission is to deliver consumer orientated Natural SolutionsTM based on an
array of green technologies and applied engineering expertise that reduce
waste at the source and make it easier for people and businesses to recycle
and reuse resources.  VIDC plans to initially focus on the acquisition,
development and marketing of benchmark green technologies and products that
accomplish the following key goals:

     *  Reduce the volume of waste generated by residential and commercial
        consumers;

     *  Increase the convenience and decrease the cost of recycling by
        residential and commercial consumers; and,

     *  Increase the cost efficiency of processing certain types of
        industrial wastes.

VIDC expects to leverage its portfolio of powerful new green technologies
to generate revenue starting in 2006 from the provision of customized
engineering services to third party clients.

Tornado Trash Corporation ("TTC") is a development stage company formed to
deploy commercial applications of GIDC's innovative green technologies with
the specific goal of minimizing and eliminating the practice of landfill
disposal by converting trash into valuable metals, chemicals, plastics,
fuels and energy. TTC plans to focus on centralized applications of its
technologies at, for example, landfills and transfer stations, and
decentralized applications of its technologies in new green appliances
positioned to residential and commercial consumers.

9.       DISCONTINUED OPERATIONS

On October 24, 2005, the Veridium Board of Directors adopted a plan to
close the Paterson, New Jersey recycling facility operated by American
Metal Recovery Corporation ("AMRC"). The plan included the discontinuation
of the operations of MRTC during 2005, as well. The decision to terminate
operations at the Paterson facility was made due to overall economic factors,
in particular the decreasing volume of inorganic, metal bearing wastes
suitable for recycling.  AMRC has ceased accepting waste and has removed all
hazardous waste from the facility.   AMRC has disposed of all of the equipment
and cleaned the facility as required by regulation and surrendered the
premises on December 31, 2005.  The results of the recycling business are
recorded as discontinued operations, of which the components are as follows:

                                                   2006             2005
                                                ---------        ---------
Net revenues                                    $     353        $ 438,771
Cost of revenues                                    1,881          422,951
                                                 --------         --------
Gross profit                                       (1,458)          15,820

Selling, general and administrative expense         5,079          111,557
                                                 --------         --------
Total                                           $   5,079        $ 111,557

Loss from operations                               (6,537)         (95,737)

Interest expense                                $    (249)       $  (6,040)
Other income and expenses                              --               --
                                                 --------         --------
Loss before provision for income taxes          $  (6,786)       $(101,777)

Total provision for tax                             2,538               --
                                                 --------         --------
Net loss from discontinued operations           $  (9,324)       $(101,777)

Gain on disposal of discontinued operations         6,000          	--
                                                 --------         --------
Total - discontinued operations                 $  (3,324)       $(101,777)


The results presented above for 2006 and 2005 include the operating
activity for the recycling operation for the 3 month period.  Assets and
liabilities of the recycling business were reported as net assets and net
liabilities (current and net of current) of discontinued operations at
March 31, 2006.

<PAGE>                               -13-

                    VERIDIUM CORPORATION AND SUBSIDIARIES
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

9.       DISCONTINUED OPERATIONS (CONTINUED)

Assets and liabilities of discontinued operations as of March 2006
are as follows:

Current liabilities of discontinued operations:
 Accounts payable                                       $   475,384
 Accrued and other liabilities                              251,698
                                                          ---------
Total current liabilities of discontinued operations    $   727,082
                                                          =========

10.      SUBSEQUENT EVENTS

TRANSACTIONS WITH HIGHGATE HOUSE FUNDS

In February and March 2006, Highgate House Funds, Ltd., purchased a total
of $1,500,000 of GCS' convertible debentures in the Company directly from
GCS. Highgate effected conversions of $1,000,000 of these debentures into a
total of 27,998,872 shares of common stock during the period ended March
31, 2006, leaving a balance due to Highgate at March 31, 2006 of $500,000.
Highgate subsequently effected additional conversions totaling $500,000
during the second quarter 2006 into a total of 15,221,993 shares of the
Company's common stock.

TRANSACTIONS WITH CORNELL CAPITAL PARTNERS

Effective April 13, 2006, Veridium entered into a Securities Purchase
Agreement with Cornell Capital Partners, LP, under which Cornell purchased
a Convertible Debenture in the amount of $4,400,000.  The Debenture was
issued as of April 13, 2006.  Cornell paid the $4,400,000 purchase price on
April 19, 2006. The conversion price of the Debenture shall be equal to the
lesser of $0.10 per share or the average of the three lowest closing market
prices of the Company's Common Stock for the thirty days preceding
conversion. Cornell will be entitled to convert the Debenture on the basis
of the conversion price into Veridium common stock, provided that Cornell
cannot convert into shares that would cause Cornell to own more than 4.9%
of Veridium's outstanding common stock. The Debenture will bear interest at
5% per annum.  Accrued interest and the principal amount will be payable on
April 1, 2009. Veridium's obligations under the Debenture are secured by a
pledge of all of its assets, subject to Cornell's agreement to subordinate
its security interest to any line of credit that Veridium obtains from a
bank or other financial institution. The proceeds of the Debenture may only
be used by Veridium to support the deployment by Veridium's wholly owned
subsidiary, Veridium Industrial Design Corporation ("VIDC"), of its various
technologies, specifically including VIDC's Corn Oil Extraction and CO2
BioReactor technologies. The Company agreed to issue to Cornell a five year
Warrant to purchase 10,000,000 common shares at $0.10 per share, a five
year Warrant to purchase 10,000,000 common shares at $0.15 per share, a
five year Warrant to purchase 10,000,000 common shares at $0.20 per share,
a five year Warrant to purchase 20,000,000 common shares at $0.25 per
share, and a five year Warrant to purchase 25,000,000 common shares at
$0.50 per share.

On April 21, 2006 Cornell Capital Partners, LP purchased from Laurus Master
Fund, Ltd. the Secured Minimum Borrowing Note and the Revolving Note that
Veridium issued to Laurus on March 31, 2004.  The aggregate debt, including
accrued interest and penalties, was $2,190,147. Subsequently Veridium
agreed with Cornell Capital Partners to amend the Revolving Note such that
its terms are now identical to the Secured Minimum Borrowing Note.
Veridium also agreed to modify the conversion feature of the two Notes.
The Notes, as modified, may be converted by Cornell Capital Partners into
common stock at a conversion rate equal to the lesser of (a) $0.10 per
share or (b) 90% of the lowest VWAP for the thirty trading days preceding
conversion.

INCREASE IN AUTHORIZED

On March 24, 2006, the Company's Board of Directors approved an amendment
to the Company's Certificate of Incorporation. On March 24, 2006, the
holder of a majority of the voting power of the outstanding voting stock
gave its written consent to the amendment. The amendment will be filed and
become effective approximately twenty days after the Company's Information
Statement is mailed to the shareholders. The effect of the amendment will
be to increase the number of authorized shares of common stock, $0.001 par
value, from 250,000,000 to 500,000,000.

<PAGE>                               -14-

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

FORWARD LOOKING STATEMENTS

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

OVERVIEW

Veridium Corporation  ("we," "our," "us,"  "Veridium," or the "Company") is
an environmental management company providing a variety of services to a
broad client base in both the private and public sectors. We conduct
business throughout the northeastern region of the United States and our
services include:

     *  Environmental Services - we provide transportation, distribution,
        recycling and disposal services specific to the materials and
        processes of our clients, for a wide range of industrial wastes.

     *  Field Services - we provide remedial, industrial cleaning and other
        related services for our clients at their sites and facilities.

Our business is roughly 85 percent distribution and 15 percent field
services.

COMPANY BACKGROUND

The Company was formed in 1984 as KBF Pollution Management, Inc.  ("KPMI")
and was merged with its wholly owned subsidiary, Veridium Corporation in
2003 after completing the acquisition of the former Environmental Services
Division of R.M. Jones & Co., Inc. ("ESD"), Enviro-Safe, Corp. ("ESC"), and
Metal Recovery Transportation, Corp., ("MRTC").  These acquisitions were
completed to form a full service environmental company, operating
throughout the New England, Northeast and Mid-Atlantic States.

As of March 31, 2006 we operated out of four service centers: our RCRA Part
B permitted TSDF in Lowell, Massachusetts; our field service operations in
Sandwich and Milford, Massachusetts; and our technical services center in
Plainville, Connecticut.

Veridium conducts all commercial activities through its subsidiary,
Veridium Environmental Corporation ("VEC").  VEC, in turn, is the sole
owner of ESD, the sole owner of Jones Environmental Services (North East),
Inc., our Massachusetts-based RCRA Part B Treatment, Storage and Disposal
Facility ("TSDF") and Enviro-Safe Corporation ("ESC") our field services
company. Until September 2005 an additional subsidiary, Veridium Recovery
Systems, Inc. ("VRS"), carried on business through its two subsidiaries:
American Metals Recovery, Corp. ("AMRC"), our discontinued New Jersey
recycling operation, and MRTC, our discontinued transportation company.

On January 22, 2006, Veridium Corporation (VRDM") acquired 100% of the
stock of GreenShift Industrial Design Corporation and Tornado Trash
Corporation ("TTC") from GreenShift Corporation ("GreenShift") in return
for 10% of the fully diluted stock in Veridium.  These acquisitions are
part of the Veridium's plans to revitalize its industrial waste recycling
business model following Veridium's discontinuance during 2005 of the AMRC
and MRTC operations.  GreenShift Industrial Design Corporation was
subsequently renamed Veridium Industrial Design Corporation ("VIDC").

VIDC is a development stage company that focuses on the engineering and
marketing of green innovations and processes that enhance manufacturing
efficiencies improve resource utilization and minimize waste. VIDC's
mission is to deliver consumer orientated Natural SolutionsTM based on an
array of green technologies and applied engineering expertise that reduce
waste at the source and make it easier for people and businesses to recycle
and reuse resources.  VIDC plans to initially focus on the acquisition,
development and marketing of benchmark green technologies and products that
accomplish the following key goals:

<PAGE>                               -15-

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

     *  Reduce the volume of waste generated by residential and commercial
        consumers;

     *  Increase the convenience and decrease the cost of recycling by
        residential and commercial consumers; and,

     *  Increase the cost efficiency of processing certain types of
        industrial wastes.

VIDC expects to leverage its portfolio of powerful new green technologies
to generate revenue starting in 2006 from the provision of customized
engineering services to third party clients.

Tornado Trash Corporation ("TTC") is a development stage company formed to
deploy commercial applications of GIDC's innovative green technologies with
the specific goal of minimizing and eliminating the practice of landfill
disposal by converting trash into valuable metals, chemicals, plastics,
fuels and energy. TTC plans to focus on centralized applications of its
technologies at, for example, landfills and transfer stations, and
decentralized applications of its technologies in new green appliances
positioned to residential and commercial consumers.

The table and below discussions should be read in conjunction with Item 1,
Financial Statements, of this report.

                                       Percentage of Total Revenues For the
                                                   Period Ended,
                                              3/31/06       3/31/05

Revenue                                       100.0%          100.0%
Cost of revenue                                75.7            77.0
                                             ------          ------
Gross profit                                   24.3            23.0

Selling expenses                                8.8             6.8
General and administrative expenses            36.0            15.8
Stock based compensation                       48.0             0.0
                                             ------          ------
Total operating expenses                       92.8            22.6
                                             ------          ------
Income (loss) from operations                  (3.4)            0.5

Other Income and Expense                        4.0             0.3
Change in derivative liabilites               (53.7)             --
Interest expense                               (4.6)           (4.5)
                                             ------          ------
Total other income (expense)                  (54.3)           (4.6)
Income (loss) before provision for income
 taxes                                       (122.0)           (3.7)
Provision for income taxes                      0.1              --
                                             ------          ------
Net (loss)                                   (123.0)           (3.7)
                                             ======          ======

BUSINESS RISK FACTORS

There are many important factors that have affected, and in the future
could affect, Veridium's business, including, but not limited to the
factors discussed below, which should be reviewed carefully together with
other information contained in this report.  Some of the factors are beyond
our control and future trends are difficult to predict.

OUR EXTERNAL AUDITORS HAVE ISSUED A GOING CONCERN OPINION RAISING
SUBSTANTIAL DOUBT AS TO THE COMPANY'S ABILITY TO CONTINUE AS A GOING
CONCERN DUE TO THE COMPANY'S HISTORY OF LOSSES, WORKING CAPITAL DEFICIENCY
AND CASH POSITION, WHICH CONDITIONS COULD IMPAIR THE VALUE OF THE COMPANY'S
STOCK.

The accompanying consolidated financial statements have been prepared
assuming that the Company will continue as a going concern.  The Company
incurred a loss of $3,908,547 for the three months ended March 31, 2006.
As of March 31, 2006 the Company had $163,787 in cash, and current
liabilities exceeded current assets by $7,220,363 including $3,225,629 in
derivative liabilities.  These matters raise substantial doubt about the
Company's ability to continue as a going concern.

THE CONVERSION OF OUR CONVERTIBLE DEBENTURES, THE EXERCISE OF OUR
OUTSTANDING WARRANTS AND OPTIONS AND THE COMPANY'S VARIOUS ANTI-DILUTION
AND PRICE-PROTECTION AGREEMENTS COULD CAUSE THE MARKET PRICE OF OUR COMMON
STOCK TO FALL, AND MAY HAVE DILUTIVE AND OTHER EFFECTS ON OUR EXISTING
STOCKHOLDERS.

As of May 22, 2006, the conversion of our outstanding convertible
debentures, and the exercise of our outstanding warrants and options could
result in the issuance of approximately 129 million shares of common stock,
assuming all outstanding warrants and options are currently exercisable,
and taken with the Company's various anti-dilution and price-protection
agreements, are subject to adjustment pursuant to certain anti-dilution and
price-protection

<PAGE>                               -16-

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

provisions.  Such issuances would reduce the percentage of ownership of our
existing common stockholders and could, among other things, depress the
price of our common stock.  This result could detrimentally affect our
ability to raise additional  equity capital.  In addition, the sale of
these additional shares of common stock may cause the market price of our
stock to decrease.

THE COMPANY RECEIVED A FEDERAL GRAND JURY SUBPOENA REQUESTING DOCUMENTS
RELATING TO AN INCIDENT OCCURRING IN FEBRUARY OF 2004 RELATIVE TO THE
COMPANY'S FORMER NEW JERSEY OPERATION; WHILE NO ADDITIONAL INFORMATION IS
AVAILABLE AT THIS TIME ON THIS MATTER, IF THE REVIEW OF THESE DOCUMENTS
LEADS TO A SUCCESSFUL LEGAL ACTION AGAINST THE COMPANY, SUBSTANTIAL
PENALTIES MAY BE IMPOSED.

The Company has received a federal grand jury subpoena from the Middle
District of Pennsylvania requiring the production of original records in
regards to an incident that occurred in February of 2004, where a tanker
truck of liquid wastes, shipped from the Company's New Jersey recycling
facility by a private carrier to a destination in Pennsylvania, overheated
on the highway, causing no injuries, but requiring emergency response
services, including redirecting traffic.  If this investigation leads to
successful legal action against the Company, substantial penalties may be
imposed.

OUR INDUSTRIAL WASTE MANAGEMENT SERVICES SUBJECT US TO POTENTIAL
ENVIRONMENTAL LIABILITY.

Our business of rendering services in connection with management of waste,
including certain types of hazardous waste, subjects us to risks of
liability for damages. Such liability could involve, without limitation,
claims for clean-up costs, personal injury or damage to the environment in
cases in which we are held responsible for the release of hazardous
materials; and claims of employees, customers, or third parties for
personal injury or property damage occurring in the course of our
operations.

We could also be deemed a responsible party for the cost of cleaning any
property which may be contaminated by hazardous substances generated by us
and disposed at such property or transported by us to a site selected by
us, including properties we own or lease.

IF WE CANNOT MAINTAIN OUR GOVERNMENT PERMITS OR CANNOT OBTAIN ANY REQUIRED
PERMITS, WE MAY NOT BE ABLE TO CONTINUE OR EXPAND OUR OPERATIONS.

Our business is subject to extensive, evolving, and increasingly stringent
federal, state, and local environmental laws and regulations.  Such
federal, state, and local environmental laws and regulations govern our
activities regarding the treatment, storage, recycling, disposal, and
transportation of hazardous and non-hazardous waste.  We must obtain and
maintain permits, licenses and/or approvals to conduct these activities in
compliance with such laws and regulations.  Failure to obtain and maintain
the required permits, licenses and/or approvals would result in an
inability to operate certain of our assets and significantly impair our
financial condition.  If we are unable to maintain our currently held
permits, licenses, and/or approvals or obtain any additional permits,
licenses and/or approvals which may be required as we expand our
operations, we may not be able to continue certain of our operations.

CHANGES IN ENVIRONMENTAL REGULATIONS AND ENFORCEMENT POLICIES COULD SUBJECT
US TO ADDITIONAL LIABILITY WHICH COULD IMPAIR OUR ABILITY TO CONTINUE
CERTAIN OPERATIONS DUE TO THE REGULATED NATURE OF OUR OPERATIONS.

Because the environmental industry continues to develop rapidly, we cannot
predict the extent to which our operations may be affected by future
enforcement policies as applied to existing laws, by changes to current
environmental laws and regulations, or by the enactment of new
environmental laws and regulations.  Any predictions regarding possible
liability under such laws are complicated further by current environmental
laws which provide that we could be liable, jointly and severally, for
certain activities of third parties over whom we have limited or no control.

AS OUR OPERATIONS EXPAND, WE MAY BE SUBJECT TO INCREASED LITIGATION WHICH
COULD SIGNIFICANTLY IMPAIR OUR ABILITY TO OPERATE AND OUR FUTURE FINANCIAL
RESULTS BY CAUSING THE COMPANY TO EXPEND SIGNIFICANT AMOUNTS OF TIME,
EFFORT, MONEY AND FOCUS MATTERS NOT DIRECTLY RELATED TO OUR OPERATIONS AND
EXPANSION.

Our operations are regulated by numerous laws regarding procedures for
waste treatment, storage, recycling, transportation and disposal
activities, all of which may provide the basis for litigation against us.
In recent years, the waste treatment industry has experienced a significant
increase in so-called "toxic-tort" litigation as those injured by
contamination seek to recover for personal injuries or property damage.  We
believe that as our operations and activities expand, there will be a
similar increase in the potential for litigation alleging that we are
responsible for

<PAGE>                               -17-

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

contamination or pollution caused by our normal operations, negligence or
other misconduct, or for accidents which occur in the course of our
business activities.  Such litigation, if significant and not adequately
insured against, could impair our ability to fund our operations.
Protracted litigation would likely cause us to spend significant amounts of
our time, effort and money.  This could prevent our management from
focusing on our operations and expansion.

IF WE CANNOT MAINTAIN ADEQUATE INSURANCE COVERAGE, WE WILL BE UNABLE TO
CONTINUE CERTAIN OPERATIONS.

Our business exposes us to various risks, including claims for causing
damage to property and injuries to persons who may involve allegations of
negligence or professional errors or omissions in the performance of our
services.  Such claims could be substantial.  We believe that our insurance
coverage is presently adequate and similar to, or greater than, the
coverage maintained by other companies in the industry of our size.  If we
are unable to obtain adequate or required insurance coverage in the future
or, if our insurance is not available at affordable rates, we would violate
our permit conditions and other requirements of the environmental laws,
rules and regulations under which we operate.  Such violations would render
us unable to continue certain of our operations.  These events would result
in an inability to operate certain of our assets and significantly impair
our financial condition.

OUR OPERATIONS WILL SUFFER IF WE ARE UNABLE TO MANAGE OUR RAPID GROWTH.

We are currently experiencing a period of rapid growth through internal
expansion and strategic acquisitions. This growth has placed, and could
continue to place, a significant strain on our management, personnel and
other resources.  Our ability to grow will require us to effectively manage
our collaborative arrangements and to continue to improve our operational,
management, and financial systems and controls, and to successfully train,
motivate and manage our employees. If we are unable to effectively manage
our growth, we may not realize the expected benefits of such growth, and
such failure could result in lost sales opportunities, lost business,
difficulties operating our assets and could therefore significantly impair
our financial condition.

WE MAY HAVE DIFFICULTY INTEGRATING OUR RECENT ACQUISITIONS INTO OUR
EXISTING OPERATIONS.

Acquisitions will involve the integration of companies that have previously
operated independently from us, with focuses on different geographical
areas.  We may not be able to fully integrate the operations of these
companies without encountering difficulties or experiencing the loss of key
employees or customers of such companies. In addition, we may not realize
the benefits expected from such integration.

KEY PERSONNEL ARE CRITICAL TO OUR BUSINESS AND OUR FUTURE SUCCESS DEPENDS
ON OUR ABILITY TO RETAIN THEM.

Our success depends on the contributions of our key management,
environmental and engineering personnel.  The loss of these officers could
result in lost sales opportunities, lost business, difficulties operating
our assets, difficulties raising additional funds and could therefore
significantly impair our financial condition. Our future success depends on
our ability to retain and expand our staff of qualified personnel,
including environmental technicians, sales personnel and engineers. Without
qualified personnel, we may incur delays in rendering our services or be
unable to render certain services. We may not be successful in our efforts
to attract and retain qualified personnel as their availability is limited
due to the demand of hazardous waste management services and the highly
competitive nature of the hazardous waste management industry.  We do not
maintain key person insurance on any of our employees, officers or
directors.

IF ENVIRONMENTAL REGULATION OR ENFORCEMENT IS RELAXED, THE DEMAND FOR OUR
SERVICES WILL DECREASE.

The demand for our services is substantially dependent upon the public's
concern with, the continuation and proliferation of, the laws and
regulations governing the treatment, storage, recycling, and disposal of
hazardous and non-hazardous waste.  A decrease in the level of public
concern, the repeal or modification of these laws, or any significant
relaxation of regulations relating to the treatment, storage, recycling,
and disposal of hazardous waste would significantly reduce the demand for
our services which could result in lost sales opportunities and lost
business, which could in turn significantly impair our ability to operate
as well as our financial condition. We are not aware of any current federal
or state government or agency efforts in which a moratorium or limitation
has been, or will be, placed upon the creation of new hazardous waste
regulations that would have an adverse effect on us.

SOME OF OUR EXISTING STOCKHOLDERS CAN EXERT CONTROL OVER US AND MAY NOT
MAKE DECISIONS THAT FURTHER THE BEST INTERESTS OF ALL STOCKHOLDERS.

Our officers, directors and principal stockholders (greater that 5%
stockholders) together control approximately 11% of our outstanding common
stock, 33% of our outstanding Series A preferred stock, 49% of our
outstanding Series B preferred stock and 100% of Series D preferred stock.
Series A preferred stock votes on an as converted basis as

<PAGE>                               -18-

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

five shares of common stock and Series B and D preferred stock vote on an
as converted basis as twenty-five shares of common stock. As a result,
these stockholders, if they act individually or together, may exert a
significant degree of influence over our management and affairs and over
matters requiring stockholder approval, including the election of directors
and approval of significant corporate transactions.  In addition, this
concentration of ownership may delay or prevent a change in control of us
and might affect the market price of our common stock, even when a change
in control may be in the best interest of all stockholders.  Furthermore,
the interests of this concentration of ownership may not always coincide
with our interests or the interests of other stockholders and accordingly,
they could cause us to enter into transactions or agreements which we would
not otherwise consider.

OUR COMMON STOCK QUALIFIES AS A "PENNY STOCK" UNDER SEC RULES WHICH MAY
MAKE IT MORE DIFFICULT FOR OUR STOCKHOLDERS TO RESELL THEIR SHARES OF OUR
COMMON STOCK.

Our common stock trades on the OTC Bulletin Board.  As a result, the
holders of our common stock may find it more difficult to obtain accurate
quotations concerning the market value of the stock.  Stockholders also may
experience greater difficulties in attempting to sell the stock than if it
were listed on a stock exchange or quoted on the NASDAQ National Market or
the NASDAQ Small-Cap Market.  Because our common stock does not trade on a
stock exchange or on the NASDAQ National Market or the NASDAQ Small-Cap
Market, and the market price of the common stock is less than $5.00 per
share, the common stock qualifies as a "penny stock." SEC Rule 15g-9 under
the Securities Exchange Act of 1934 imposes additional sales practice
requirements on broker-dealers that recommend the purchase or sale of penny
stocks to persons other than those who qualify as an "established customer"
or an "accredited investor."  This includes the requirement that a broker-
dealer must make a determination on the appropriateness of investments in
penny stocks for the customer and must make special disclosures to the
customer concerning the risks of penny stocks.  Application of the penny
stock rules to our common stock affects the market liquidity of the shares,
which in turn may affect the ability of holders of our common stock to
resell the stock.

THE COMPANY IS SUBJECT TO VARIOUS LAWSUITS WHICH MAY AFFECT THE VALUE OF
OUR STOCK

The Company is involved in a lawsuit with Kerns Manufacturing Corporation
which could substantially dilute the value of the Veridium stock (see item,
Note 7, commitments and contingencies).

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

The preparation of our consolidated financial statements requires us to
make estimates that affect the reported amounts of assets, liabilities,
revenues and expenses. The following are the areas that we believe require
the greatest amount of estimates in the preparation of our financial
statements: allowances for doubtful accounts and legal matters. Prior to
the filing of this Quarterly Report on Form 10QSB, the Company's Audit
Committee reviewed these critical accounting policies and estimates and
discussed them with our management.

We establish an allowance for doubtful accounts to cover accounts
receivable that may not be collectible. In establishing the allowance for
doubtful accounts, we analyze the collectibility of accounts that are large
or past due. In addition, we consider historical bad debts and current
economic trends in evaluating the allowance for doubtful accounts. Accounts
receivable written off in subsequent periods can differ materially from the
allowance for doubtful accounts provided.

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

We attempt to make good faith realistic estimates in providing allowances
for assets and recording liabilities. Our experience has been that
overestimates in one area can occur but are often offset by underestimates
in other areas. While it is probable in the future that unexpected events
could materially affect the results of operations of a future period, we
believe that our risk management protocols would prevent the occurrence of
such an event from having a material impact on our financial condition.

<PAGE>                               -19-

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

THREE MONTHS ENDED MARCH 31, 2006 VERSUS THE THREE MONTHS ENDED MARCH 31, 2005

REVENUES

Total revenues were $3.2 million for the three months ended March 31, 2006,
corresponding to a decrease of $0.4 million, or 11.1% less than the three
months ended March 31, 2005 revenues of $3.5 million. The decrease in
revenues in the first quarter was due to major soil transportation and
disposal project in the amount of $1,089,000 conducted in the first quarter
of 2005. Revenues from discontinued operations of $0 and $438,771 for 2006
and 2005 respectively have been removed from the above figures.

COST OF REVENUES

Cost of revenues for the three months ended March 31, 2006 were $2.4
million, or 75.7% of revenue, as compared to $2.7 million, or 77.0% of
revenue for the same period in 2005. The decrease in the cost of revenues
during the first quarter 2006 was due to decreased sales. Cost of sales
from discontinued operations of $1,811 and $422,952 for 2006 and 2005
respectively have been removed from the above figures.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

Selling, general and administrative expenses for the three months ended
March 31, 2006 were $2.9 million, or 92.8% of revenue, as compared to $0.8
million, or 22.5% of revenue for the same period in 2005. Included in the
first quarter was $2,081,201 of stock based compensation or 65.6% of
revenue. Selling, general and administrative expenses from discontinued
operations of $5,079 and $111,556 for 2006 and 2005 respectively have been
removed from the above figures.

DEPRECIATION AND AMORTIZATION

Depreciation and amortization expenses for the three months ended March 31,
2006 were $71,844, or 3.0% of revenue, as compared to $34,218 or 1.0% of
revenue for the same period in 2005.  Depreciation expense from
discontinued operations of $97,195 for 2005 has been removed from these
figures.

THREE MONTHS ENDED MARCH 31, 2006 VERSUS THE THREE MONTHS ENDED MARCH 31, 2005

INTEREST EXPENSE

Interest expenses for the three months ended March 31, 2006 were $2.3
million, or 72.8% of revenue, as compared to $0.16 million, or 0.05% of
revenue for the same period in 2005. Interest expense for the three months
ended March 31, 2006 for derivatives in the amount of $2,163,713 has been
included in these figures. Interest expense in the amount of $6,039 from
discontinued operations in 2005 has been removed from the above figures.

NET INCOME OR LOSS

Net loss from continuing operations for the three months ended March 31,
2006, was $ 3.9 million, or 123.0% of revenue, as compared to a loss from
continuing operations of $131,507, or 3.72 % of revenue from the same
period in 2005.  Net loss from discontinued operations of $3,324 and
$101,776 for 2006 and 2005 respectively have been removed from the above.
The net loss realized during the period was due primarily to additional
costs for stock based employee compensation and interest on derivative
instruments. We expect that net loss will be eliminated in future periods
as we move out of the less productive first quarter.

LIQUIDITY AND CAPITAL RESOURCES

LIQUIDITY

Our primary sources of liquidity are cash provided by operating, investing
and financing activities, and availability under our various credit
facilities. For the three months ended March 31, 2006, net cash used by our
operating activities was $0.45 million as compared to the net cash used by
our operating activities of about $0.70 million as of the quarter ended
March 31, 2005.

The Company's capital requirements consist of general working capital
needs, scheduled principal and interest payments on debt, obligations and
capital leases and planned capital expenditures. The Company's capital
resources consist primarily of cash generated from operations and proceeds
from issuance of debt and common stock. The Company's capital resources are
impacted by changes in accounts receivable as a result of revenue
fluctuations,

<PAGE>                               -20-

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

economic trends, and collection activities. At March 31, 2006 the Company
had cash of about $163,787. This cash represents a decrease of $77,275 from
the quarter ended March 31, 2005.

CASH FLOWS FOR THE THREE MONTHS ENDED MARCH 31, 2006

Our operating activities during the first quarter 2006 used $0.45 million
in cash. Accounts receivable at March 31, 2006, net of allowance for
doubtful accounts, totaled $2.4 million as compared to the March 31, 2005,
balance of $2.9 million. Accounts payable at March 31, 2006 totaled 2.6
million as compared to the March 31, 2005, balance of $1.7 million. Accrued
expenses at March 31, 2006 totaled $1.2 million as compared to the March
31, 2005 balance of $1.1 million. The increase in accounts payable is
primarily due to the NCES acquisition in May 2005.  The decrease in
accounts receivable is due to the large soil transportation disposal
project conducted in 2005.  The increase in accrued expenses is
attributable to financing activities.

For the three months ended March 31, 2006, we used $0.02 million from
investing activities, and we provided net cash from financing of $.30
million. We used these funds to further provide working capital for
operations. Our financing arrangements are discussed further below in this
Item 2 and in more detail in financing arrangements.

The Company had a negative working capital position of $7.2 million at
March 31, 2006.

STOCKHOLDER MATTERS

Stockholders' impairment was $4.2 million at March 31, 2006, as compared to
$1.1 million of stockholders equity at December 31, 2005.
As of March 31, 2006, the Company did not have sufficient shares of common
stock authorized to accommodate conversion of all outstanding preferred
stock, options, warrants and convertible debt.

On March 24, 2006, the Company's Board of Directors approved an amendment
to the Company's Certificate of Incorporation. On March 24, 2006, the
holder of a majority of the voting power of the outstanding voting stock
gave its written consent to the amendment. The amendment will be filed and
become effective approximately twenty days after the Company's April 27,
2006 Information Statement is mailed to the shareholders. The effect of the
amendment will be to increase the number of authorized shares of common
stock, $0.001 par value, from 250,000,000 to 500,000,000.




<PAGE>                               -21-

ITEM 3.  CONTROLS AND PROCEDURES

EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

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

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

<PAGE>                               -22-

                          PART II - OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

     None.

ITEM 2.  CHANGES IN SECURITIES

     None.

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

     None.

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

     None.

ITEM 5.  OTHER INFORMATION

     None.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

     The following are exhibits filed as part of the Company's Form 10-QSB for
the period ended March 31, 2006:

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

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

<PAGE>                               -23-

                                  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.

                                        VERIDIUM CORPORATION

                                        By: /S/ KEVIN KREISLER
                                        -------------------------------
                                        KEVIN KREISLER
                                        Chairman of the Board, Chief
                                         Executive Officer, Chief
                                         Financial Officer

Date:  May 22, 2006





<PAGE>                              -24-