UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                            -------------------------

                                    FORM 10-Q
                            -------------------------

                QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (D)
                     OF THE SECURITIES EXCHANGE ACT OF 1934
                  FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2009

                          COMMISSION FILE NO.: 0-50469


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


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


One Penn Plaza, Suite 1612, New York, New York                            10119
--------------------------------------------------------------------------------
(Address of principal executive offices)                             (Zip Code)


                                 (212) 994-5374
--------------------------------------------------------------------------------
               (Registrant's telephone number including area code)

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

Indicate by check mark whether the registrant has submitted  electronically  and
posted on its corporate Web site, if any, every  Interactive  Data File required
to be submitted and posted pursuant to Rule 405 of Regulation S-T (ss.232.405 of
this chapter)  during the  preceding 12 months (or for such shorter  period that
the registrant was required to submit and post such files.) Yes X  No.
                                                               ---   ---

Indicate by check mark whether the registrant is a large  accelerated  filer, an
accelerated filer, a non-accelerated  filer, or a smaller reporting company. See
the definitions of "large accelerated  filer,"  "accelerated filer" and "smaller
reporting company" in Rule 12b-2 of the Exchange Act. (Check One)

Large accelerated filer           Accelerated filer
                        ---                                  ---
Non-accelerated filer             Smaller reporting company   X
                        ---                                  ---

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

The  number of  outstanding  shares of common  stock as of August  20,  2009 was
500,000,000.


<PAGE>


<TABLE>

                             GREENSHIFT CORPORATION
                          QUARTERLY REPORT ON FORM 10-Q
                   FOR THE FISCAL QUARTER ENDED JUNE 30, 2009

                                TABLE OF CONTENTS



<CAPTION>
                                                                                                         Page No
Part I - Financial Information
<S>       <C>                                                                                               <C>
Item 1    Financial Statements (unaudited) ..................................................................4

          Condensed Consolidated Balance Sheet as of June 30, 2009 and December 31, 2008(unaudited)..........5

          Condensed Consolidated Statements of Operations for the Three and Six Month Periods
          Ended June 30, 2009(unaudited) and 2008 (unaudited)................................................6

          Condensed Consolidated Statements of Cash Flows for the Six Months Ended
          June 30, 2009 (unaudited) and 2008 (unaudited).....................................................7

          Statement of Stockholders' Equity - Year Ended December 31, 2008 and Six
          Months Ended June 30, 2009.........................................................................8

          Notes to Condensed Consolidated Financial Statements..............................................10

Item 2    Management's Discussion and Analysis of Financial Condition and Results of Operations ............21

Item 3    Quantitative and Qualitative Disclosures about Market Risk........................................27

Item 4    Controls and Procedures ..........................................................................27

Part II - Other Information

Item 1    Legal Proceedings ................................................................................28
...
Item 1A   Risk Factors .....................................................................................28

Item 2    Unregistered Sales of Equity Securities and Use of Proceeds ......................................28

Item 3    Defaults upon Senior Securities ..................................................................28

Item 4    Submission of Matters to a Vote of Security Holders...............................................28

Item 5    Other Information ................................................................................28

Item 6    Exhibits..........................................................................................29


Signatures..................................................................................................29



                                       2
<PAGE>

Basis of Presentation

In  this   Quarterly   Report  on  Form  10-Q,  the  terms  "we,"  "our,"  "us,"
"GreenShift,"  or  the  "Company"  refer  to  GreenShift  Corporation,  and  its
subsidiaries on a consolidated  basis. The term "GreenShift  Corporation" refers
to GreenShift Corporation on a standalone basis only, and not its subsidiaries.

Market and Industry Data Forecasts

This document includes industry data and forecasts that the Company has prepared
based,  in part,  upon data and forecasts  obtained from industry  publications.
Third-party industry publications generally state that the information contained
therein has been  obtained  from  sources  believed to be  reliable,  but do not
guarantee the accuracy and completeness of such information.  In particular,  we
have based much of our  discussion  of the  biodiesel  and  ethanol  industries,
including  government  regulation relevant to the industry and forecasted growth
in demand,  on  information  published  by the  National  Biodiesel  Board,  the
national trade association for the U.S.  biodiesel  industry,  and the Renewable
Fuels  Association,  the national  trade  association  for the U.S. corn ethanol
industry.  Because the National  Biodiesel Board and Renewable Fuels Association
are trade organizations for the U.S. biodiesel and ethanol industries,  they may
present  information  in a manner that is more favorable than would be presented
by an independent source.  Forecasts in particular are subject to a high risk of
inaccuracy, especially forecasts projected over long periods of time.

Forward Looking Statements

We make certain forward-looking statements in this Quarterly Report on Form 10-Q
and  in  the  documents  that  are  incorporated  herein  by  reference.   These
forward-looking  statements  relate to our outlook or expectations for earnings,
revenues,  expenses,  asset  quality  or  other  future  financial  or  business
performance,  strategies or expectations,  or the impact of legal, regulatory or
supervisory  matters  on  our  business,  results  of  operations  or  financial
condition.  Specifically,  forward-looking  statements  may  include  statements
preceded  by,  followed  by  or  that  include  the  words  "estimate,"  "plan,"
"project,"  "forecast,"  "intend,"  "expect,"  "anticipate,"  "believe," "seek,"
"target" or similar  expressions.  These  statements  reflect  our  management's
judgment based on currently available  information and involve a number of risks
and  uncertainties  that could cause actual  results to differ  materially  from
those in the forward-looking  statements.  Future performance cannot be ensured.
Actual  results  may  differ  materially  from  those  in  the   forward-looking
statements. Some factors that could cause our actual results to differ include:

>>   the volatility and uncertainty of commodity prices;

>>   operational disruptions at our facilities;  >> the costs and business risks
     associated with developing new products and entering new markets;

>>   our ability to locate and integrate future acquisitions;

>>   our ability to develop our corn oil  extraction  and  biodiesel  production
     facilities;

>>   the effects of other mergers and  consolidations  in the biofuels  industry
     and unexpected  announcements  or developments  from others in the biofuels
     industry;

>>   the impact of new, emerging and competing technologies on our business;

>>   the  possibility  of one or more of the  markets in which we compete  being
     impacted  by  political,  legal and  regulatory  changes or other  external
     factors over which they have no control;

>>   changes in or elimination of  governmental  laws,  tariffs,  trade or other
     controls  or  enforcement  practices;  >> our  reliance  on key  management
     personnel;

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

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

>>   our ability to implement  additional  financial  and  management  controls,
     reporting  systems  and  procedures  and  comply  with  Section  404 of the
     Sarbanes-Oxley Act, as amended; and

>>   other risks  referenced  from time to time in our filings  with the SEC and
     those  factors  listed  in this  Form 10Q  under  Item 1A,  Risks  Factors,
     beginning on page 39.

You are cautioned not to place undue reliance on any forward-looking statements,
which speak only as of the date of this Form 10-Q,  or in the case of a document
incorporated by reference,  as of the date of that document.  Except as required
by law, we undertake no obligation  to publicly  update or release any revisions
to these forward-looking statements to reflect any events or circumstances after
the date of this Form 10-Q or to reflect the occurrence of unanticipated events.

                                       3
<PAGE>



                         PART I - FINANCIAL INFORMATION

ITEM 1            FINANCIAL STATEMENTS (UNAUDITED)



































                                       4

<PAGE>
                     GREENSHIFT CORPORATION AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEETS
        AS OF JUNE 30, 2009 (UNAUDITED) AND DECEMBER 31, 2008 (RESTATED)
<CAPTION>
                                                                                        6/30/2009       12/31/2008
                                                                                    ------------------------------
ASSETS
Current assets:
<S>                                                                                 <C>              <C>
   Cash .........................................................................   $        --      $      10,028
   Accounts receivable, net of allowance of doubtful accounts of $0 and $46,962 .         136,372          733,768
   Inventories ..................................................................         616,056          616,056
   Cost and earnings in excess of billings ......................................         213,902          175,592
   Project development costs ....................................................         379,355          379,355
   Assets to be disposed, current ...............................................            --          1,006,343
   Prepaid expenses and other assets ............................................         119,996          111,125
                                                                                    -------------    -------------
     Total current assets .......................................................       1,465,682        3,032,267
                                                                                    -------------    -------------
Other Assets:
   Property and equipment, net ..................................................      10,900,870       11,125,547
   Deposits .....................................................................         213,634          213,634
   Construction in progress .....................................................       4,986,892        4,541,554
   Accrued interest receivable ..................................................           1,775             --
   Note receivable ..............................................................         500,000             --
   Intangible assets, net .......................................................          33,845           42,959
   Deferred financing costs, net ................................................         195,593          390,464
   Minority investments .........................................................       2,501,324        2,501,324
   Goodwill .....................................................................            --          7,281,993
   Assets to be disposed, net of current ........................................            --         12,995,691
                                                                                    -------------    -------------
     Total other assets .........................................................      19,333,933       39,093,166
                                                                                    -------------    -------------
TOTAL ASSETS ....................................................................   $  20,799,615    $  42,125,433
                                                                                    =============    =============
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT):
Current liabilities:
   Line of credit ...............................................................   $  11,094,543    $  11,044,838
   Accounts payable and accrued expenses ........................................      14,614,596       14,551,651
   Accrued interest payable .....................................................       6,901,278        6,603,228
   Accrued interest payable - related party .....................................         272,261          179,711
   Billings in excess of earnings ...............................................            --             13,576
   Income tax payable ...........................................................          45,000           45,000
   Current portion of long term debt ............................................       8,383,663        8,785,668
   Liability for derivative instruments .........................................            --               --
   Convertible debenture - related party debt, net of discount ..................       2,175,047        1,900,333
   Current portion of convertible debentures, net of discount ...................      19,477,319       11,792,387
   Other current liabilities ....................................................         521,066          604,587
   Liabilities of discontinued operations, current ..............................         363,228          363,228
   Minority interest in consolidated subsidiaries ...............................         942,001          942,001
   Liabilities to be disposed ...................................................            --          3,526,617
                                                                                    -------------    -------------
     Total current liabilities ..................................................      64,790,003       60,352,825
                                                                                    -------------    -------------
Long term liabilities:
   Long term debt, net of current ...............................................         373,250          964,028
   Asset retirement obligation ..................................................         247,975          247,462
   Liabilities of discontinued operations, ......................................            --         19,328,096
   Convertible debentures, net of current .......................................       8,423,818       21,188,196
                                                                                    -------------    -------------
     Total long term liabilities ................................................       9,045,043       41,727,782
Total liabilities ...............................................................      73,835,046      102,080,607
                                                                                    -------------    -------------
Stockholders' equity (deficit)
   Convertible preferred stock, $0.001 par value, 5,000,000 shares authorized:
     Series B: 2,498,123 and 2,519,219shares issued and outstanding, respectively           2,498            2,519
     Series D: 799,954 and 800,000 shares issued and outstanding, respectively                800              800
     Series E: 0 and 20,000 shares issued and outstanding, respectively .........            --                 20

   Common stock, $0.001 par value, 500,000,000 authorized;
     496,568,541 and 95,144,983, shares issued and outstanding, respectively ....         496,569           95,144
   Additional paid-in capital ...................................................      91,800,779       80,990,940
   Accumulated deficit ..........................................................    (145,336,078)    (141,044,596)
                                                                                    -------------    -------------
     Total stockholders' equity (deficit) .......................................     (53,035,432)     (59,955,173)
                                                                                    -------------    -------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) ............................   $  20,799,615    $  42,125,433
                                                                                    =============    =============

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

</TABLE>
                                       5
<PAGE>
<TABLE>
                     GREENSHIFT CORPORATION AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                 FOR THE SIX MONTHS ENDED JUNE 30, 2009 AND 2008
                                   (UNAUDITED)
<CAPTION>
                                                            Three Months Ended June 30          Six Months Ended June 30
                                                            --------------------------      ----------------------------
                                                                  2009           2008             2009              2008
                                                           ------------    -----------    ------------      ------------
                                                                             (Restated)                       (Restated)
<S>                                                     <C>              <C>              <C>              <C>
Revenue .............................................   $   1,167,457    $   5,961,775    $   2,023,115    $   8,857,574
Cost of revenues ....................................         838,664        2,525,799        1,994,388        4,045,899
                                                        -------------    -------------    -------------    -------------
  Gross profit ......................................         328,793        3,435,976           28,727        4,811,675
                                                        -------------    -------------    -------------    -------------
Operating expenses:
   General and administrative expenses ..............       1,133,422        1,427,946        2,038,742        2,022,717
   Selling expenses .................................           8,816             (383)          21,056           43,676
   Research and development .........................            --             31,606             --             32,207
   Bad debt expense .................................       4,212,855             --          4,212,855             --
   Amortization of intangibles ......................            --            525,000             --          1,050,000
   Impairment of goodwill ...........................            --               --          7,281,993             --
   Stock based compensation .........................            --             32,816             --            336,833
                                                        -------------    -------------    -------------    -------------
     Total operating expenses .......................       5,355,093        2,016,985       13,554,646        3,485,433
                                                        -------------    -------------    -------------    -------------
Income (loss) from operations .......................      (5,026,300)       1,418,991      (13,525,919)       1,326,242
                                                        -------------    -------------    -------------    -------------
Other income (expense):
   Change in fair value of derivative instruments ...            --               --               --               --
   Interest income ..................................           1,775             --              1,775             --
   Loss on disposal and impairment of investments ...            --         (1,077,135)            --         (2,739,735)
   Amortization of debt discount & deferred financing        (281,178)        (538,281)        (376,768)        (910,064)
   Other income (expense) ...........................          55,415           15,545           62,317           45,535
   Conversion liabilities ...........................        (625,856)         (43,937)        (691,862)        (117,554)
   Conversion liabilities- affiliate ................        (121,160)            --           (121,160)            --
   Interest expense - affiliate .....................         (44,784)         (28,079)         (86,785)         (55,676)
   Interest expense .................................      (1,498,924)      (1,533,024)      (2,970,139)      (2,720,164)
                                                        -------------    -------------    -------------    -------------
     Total other income (expense), net ..............      (2,514,711)      (3,204,911)      (4,182,622)      (6,497,658)
                                                        -------------    -------------    -------------    -------------
Loss before minority interest and income taxes ......      (7,541,011)      (1,785,920)     (17,708,541)      (5,171,416)

Minority interest in net loss of
   consolidated subsidiaries ........................            --              6,419             --              6,419
                                                        -------------    -------------    -------------    -------------
Loss before provision for income taxes ..............      (7,541,011)      (1,779,501)     (17,708,541)      (5,164,997)

(Provision for)/benefit from income taxes ...........         402,347            7,019          402,347             --
                                                        -------------    -------------    -------------    -------------
Loss from continuing operations .....................      (7,138,664)      (1,772,482)     (17,306,194)      (5,164,997)
                                                        -------------    -------------    -------------    -------------
Discontinued Operations:
Gain from disposal of discontinued operations .......      14,452,069          (28,079)      14,452,069             --
Loss from discontinued operations ...................         (98,000)        (507,044)      (1,167,356)        (560,072)
                                                        -------------    -------------    -------------    -------------
   Total income (loss)from discontinued operations...      14,354,069         (507,044)      13,284,713         (560,072)
                                                        -------------    -------------    -------------    -------------
Net income (loss) ...................................   $   7,215,405    $  (2,279,526)   $  (4,021,481)   $  (5,725,069)
                                                        =============    =============    =============    =============
Mandatorily Redeemable Preferred Equity .............            --               --           (270,000)            --
                                                        -------------    -------------    -------------    -------------
Net income (loss) attributable to common shareholders   $   7,215,405    $  (2,279,526)   $  (4,291,481)   $ (5,725,069)
                                                        =============    =============    =============    =============
Weighted average common shares outstanding
Basic and diluted ...................................     406,790,648       35,151,574       72,179,740       37,482,710

Earnings (loss) per share

Loss from continuing operations .....................   $       (0.03)   $       (0.05)   $       (0.21)   $       (0.14)
Income (loss) from discontinued operations ..........            0.18            (0.01)            0.16            (0.01)
                                                         -------------    -------------    -------------    -------------
Net loss per share - basic and diluted ..............   $        0.09    $       (0.06)   $       (0.05)   $       (0.15)
                                                        =============    =============    =============    =============
Weighted average common shares outstanding
Basic and diluted ...................................     406,790,648      35,151,574       272,179,740       37,482,710

Earnings (loss) per share

Loss from continuing operations .....................   $       (0.02)   $      (0.05)    $       (0.06)   $       (0.14)
Income (loss) from discontinued operations ..........            0.04           (0.01)             0.05            (0.01)
                                                        -------------    -------------    -------------    -------------
Net loss per share - basic and diluted ..............   $        0.02    $      (0.06)    $       (0.02)   $       (0.15)
                                                        =============    =============    =============    =============

          The notes to the Condensed Consolidated Financial Statements
                   are an integral part of these statements.
</TABLE>
                                       6
<PAGE>
<TABLE>
                     GREENSHIFT CORPORATION AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
           FOR THE SIX MONTHS ENDED JUNE 30, 2009 AND 2008 (UNAUDITED)
<CAPTION>
                                                                      Six months      Six months
                                                                   Ended 6/30/09   Ended 6/30/08
                                                                                      (Restated)
                                                                   ----------------------------
CASH FLOW FROM OPERATING ACTIVITIES
<S>                                                                <C>             <C>
   Net loss......................................................   $ (4,021,391)   $ (5,725,072)

Adjustments to reconcile net loss to net cash
provided by (used in) operating activities
   Depreciation and amortization ...............................        586,205         334,690
   Amortization of intangibles .................................          9,114       1,031,748
   Amortization of debt discount and deferred financing costs ..        698,928         547,536
   Gain on disposal of subsidiary ..............................    (14,452,069)           --
   Change in net assets to be disposed of ......................      5,599,302            --
   Interest from conversion liability...........................        756,631         117,554
   Stock based compensation ....................................           --           336,833
   Accretion of asset retirement obligation ....................            790          58,050
   Loss on disposal of investments .............................           --         2,739,735
   Loss on impairment of goodwill ..............................      7,281,993            --
   Bad debt expense.............................................      4,360,600             772
   Change in minority interest .................................           --           (22,561)
Change in assets and liabilities, net of acquisitions
   Accounts receivable .........................................     (3,763,204)       (119,261)
   Restricted cash .............................................            316        (275,547)
   Prepaid expenses ............................................        106,748         867,281
   Deposits ....................................................        (83,521)       (214,640)
   Inventory ...................................................           --           511,736
   Costs in excess of earnings .................................        (38,303)       (902,173)
   Deferred financing fees .....................................           --           (99,830)
   Accrued interest ............................................      2,907,873       2,013,473
   Accrued interest - related party ............................         92,551         114,238
   Billings in excess of cost ..................................        (13,576)       (934,096)
   Accounts payable and accrued expenses .......................       (326,669)      1,679,511
   Deferred income taxes .......................................           --           (59,630)
   Deferred revenue ............................................           --        (1,082,500)
                                                                   ------------    ------------
     Net cash provided by (used in) operating activities .......       (297,682)        917,797
                                                                   ------------    ------------
CASH FLOW FROM INVESTING ACTIVITIES
   Cash paid for acquisition ...................................           --           (80,000)
   Cash acquired from acquisition ..............................           --              --
   Construction in progress ....................................       (445,338)      (4,039,557)
   Divestiture of subsidiary....................................           --           (317,500)
   Investment in unconsolidated subsidiaries ...................           --               --
   Project development costs ...................................           --           (54,925)
   Additions to and acquisition of property, plant and equipment       (405,740)     (3,040,651)
                                                                   ------------    ------------
     Net cash (used in) investing activities ...................       (851,078)     (7,532,432)
                                                                   ------------    ------------
CASH FLOWS FROM FINANCING ACTIVITIES
   Repayment of line of credit .................................           --              --
   Proceeds from loan receivable - related party ...............       (115,618)           --
   Proceeds from long term debt ................................         39,000            --
   Proceeds from convertible debentures ........................           --           500,000
   Repayment of convertible debentures - related party .........      1,180,579            --
   Repayment of short term borrowings - affiliate ..............           --        (1,461,916)
   Proceeds from line of credit ................................         49,705      10,030,000
      Cash paid to minority shareholders .......................           --          (820,827)
   Repayment of long term debt .................................        (14,610)     (1,593,816)
                                                                   ------------    ------------
     Net cash provided by financing activities .................      1,139,056       6,653,441
                                                                   ------------    ------------
   Net increase (decrease) in cash .............................   $     (9,704)   $    (38,604)
   Cash at beginning of period .................................          9,704         140,214
                                                                   ------------    ------------
   Cash at end of period .......................................   $       --      $    178,823
                                                                   ============    ============

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

</TABLE>
                                     7
<PAGE>
<TABLE>
                     GREENSHIFT CORPORATION AND SUBSIDIARIES
                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
     FOR THE YEAR ENDED DECEMBER 31, 2008 AND SIX MONTHS ENDED JUNE 30, 2009
<CAPTION>
                                                              Series C        Series D         Series E
                             Series A          Series B        Preferred       Preferred         Preferred
                          Preferred Stock  Preferred Stock       Stock           Stock             Stock
                          Shares  Amount   Shares  Amount  Shares  Amount  Shares  Amount    Shares   Amount
                        --------- ------ --------- ------- ------- ------- ------- ------- --------- --------
<S>                     <C>       <C>     <C>       <C>        <C>    <C>  <C>      <C>         <C>      <C>
Balance at 12/31/07     1,254,244 $ 1,254 151,250   $ 151      --      --  800,000  $ 800        --       --
                        ========= ====== ========= ======= ======= ======= ======= ======= ========= ========
Adjustment of                 --     --        --      --      --      --      --      --        --       --
conversion of
subsidiary minority
interest
Write-off of
derivative due to
debt restructure              --     --        --      --      --      --      --      --        --       --
Shares issued for
conversion of                 --     --        --      --      --      --      --      --        --       --
debentures
Adjustment for
transfer of entity            --     --        --      --      --      --      --      --        --       --
under common control
Stock based                   --     --        --      --      --      --      --      --        --       --
compensation
Cancellation of debt          --     --        --      --      --      --      --      --        --       --
- related party
Conversion of          (1,254,244)(1,254)      --      --      --      --      --      --        --       --
minority interest
Repurchase of                 --     --        --      --      --      --      --      --        --       --
subsidiary stock
Cancellation of debt          --     --        --      --      --      --      --      --        --       --
- related party
Conversion of Series
B Preferred Stock to          --     --  (151,250)  (151)      --      --      --      --        --       --
Common
Issuance of Series B
Preferred Stock to            --     --  3,025,333  3,025      --      --      --      --        --       --
create Employee Pool
Partial Conversion of         --     --  (506,114)  (506)      --      --      --      --        --       --
Series B to Common
Conversion of debt            --     --        --      --      --      --      --      --        --       --
Common stock issued           --     --        --      --      --      --      --      --        --       --
for financing fees
Acquisition of                --     --        --      --      --      --      --      --    20,000       20
subsidiary
Priority return on
subsidiary                    --     --        --      --      --      --      --      --        --       --
Capital
Net loss                      --     --        --      --      --      --      --      --        --       --
                        --------- ------ --------- ------- ------- ------- ------- ------- --------- --------
Balance at 12/31/08           --     --  2,519,219 $  2,519    --      --  800,000   $ 800    20,000    $ 20
(restated)
                        ========= ====== ========= ======= ======= ======= ======= ======= ========= ========

Conversion of Series          --     --  (21,096)    (21)      --      --      --      --        --       --
B Preferred Stock to
Common
Shares issued for
conversion of                 --     --        --      --      --      --      --      --        --       --
debentures
Conversion of Series
D Preferred Stock to          --     --        --      --      --      --    (46)      --        --       --
Common
Cancellation of shares        --     --        --      --      --      --      --      --  (20,000)     (20)
Net loss                      --     --        --      --      --      --      --      --        --       --
                        --------- ------ --------- ------- ------- ------- ------- ------- --------- --------
Balance at 6/30/09            --     --  2,498,123 $ 2,498     --      --  799,954  $ 800        --     $ --
                        ========= ====== ========= ======= ======= ======= ======= ======= ========= ========


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

</TABLE>
                                       8
<PAGE>
<TABLE>
                     GREENSHIFT CORPORATION AND SUBSIDIARIES
                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
     FOR THE YEAR ENDED DECEMBER 31, 2008 AND SIX MONTHS ENDED JUNE 30, 2009
<CAPTION>
                                                           Additional
                                                              Paid-in     Accumulated
                                  Common Stock                Capital          Deficit    Total Equity
                          ---------------------------   -------------    -------------   -------------
                               Shares          Amount          Amount          Amount          Amount
                          -----------      ----------   -------------    ------------     -----------
<S>                        <C>           <C>             <C>             <C>             <C>
Balance at 12/31/07 ..     30,693,083    $     30,693    $ 63,502,789    $(93,463,990    $(29,928,303)
                         ============    ============    ============    ============    ============
Adjustment of ........           --              --           183,373            --           183,373
conversion of
subsidiary minority
interest
Write-off of
derivative due to
debt restructure .....           --              --         6,784,743            --         6,784,743
Shares issued for
conversion of ........     11,000,597          11,000         543,657            --           554,657
debentures
Adjustment for
transfer of entity ...           --              --           (27,800)           --           (27,800)
under common control
Stock based ..........        850,000             850          50,550            --            51,400
compensation
Cancellation of debt .           --              --         2,952,968            --         2,952,968
- related party
Conversion of ........         25,084              25           1,229            --              --
minority interest
Repurchase of ........           --              --        (1,950,000)           --        (1,950,000)
subsidiary stock
Cancellation of debt .           --              --           293,085            --           293,085
- related party
Conversion of Series
B Preferred Stock to .      6,797,634           6,798          (6,647)           --              --
Common
Issuance of Series B
Preferred Stock to ...           --              --         7,215,308            --         7,218,333
create Employee Pool
Partial Conversion of      12,652,825          12,653         (12,147)           --              --
Series B to Common
Conversion of debt ...      6,875,000           6,875       1,093,125            --         1,100,000
Common stock issued ..      6,250,000           6,250       1,084,511            --         1,090,761
for financing fees
Acquisition of .......     20,000,760          20,000       2,065,680            --         2,085,700
subsidiary
Priority return on
subsidiary ...........           --              --              --          (675,001)       (675,001)
capital
Restatement - sale ...           --              --        (2,783,484)      3,539,639         765,155
of subsidiary
                         ------------    ------------    ------------    ------------    ------------
Net loss .............           --              --              --       (50,445,244)    (50,445,244)
                         ------------    ------------    ------------    ------------    ------------
Balance at 12/31/08 ..     95,144,983    $     95,144    $ 80,990,940    $(141,044,595)  $(59,955,171)
(restated)
                         ============    ============    ============    ============    ============
                              527,400             527            (506)           --              --
Conversion of Series
B Preferred Stock to
Common

Mandatorily
reddemable preferred .           --              --              --          (270,000)       (270,000)

Shares issued for ....    418,118,139         418,118         889,525            --         1,307,643
conversion of
debentures

  Restatement - sale .           --              --         9,381,191            --         9,381,191
    of subsidiary

Conversion of Series D.       278,781             278            (278)           --              --
Preferred Stock to Common

Stock issued for repayment
Of accounts payable         2,500,000           2,500          12,000            --            14,500
BIG                               --             --         2,085,720            --         2,085,720

Change in conversion
feature due to conversion
liabilities                       --             --           507,890            --           507,890

Cancellation of shares    (20,000,760)        (20,000)     (2,065,700)           --        (2,085,700)
                         ------------    ------------    ------------    ------------    ------------
Net loss .............           --              --              --        (4,021,481)     (4,021,481)
                         ------------    ------------    ------------    ------------    ------------
Balance at 6/30/09 ...    496,568,543    $    496,569    $ 91,800,799    $(145,336,07    $(53,035,432)
                         ============    ============    ============    ============    ============

        The notes to the Condensed Consolidated Financial Statements are
                     an integral part of these statements.
</TABLE>
                                       9
<PAGE>
                     GREENSHIFT CORPORATION AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

1        BASIS OF PRESENTATION

The consolidated interim financial statements included herein have been prepared
by GreenShift  Corporation ("we," "our," "us,"  "GreenShift," or the "Company"),
pursuant to the rules and regulations of the Securities and Exchange  Commission
and, in the opinion of  management,  include all  adjustments  which,  except as
described  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-K for the year ended December
31, 2008.

DIVESTITURES

Biofuel Industries Group, LLC

Effective May 15, 2008,  the Company and Biofuel  Industries  Group,  LLC (d/b/a
NextDiesel(TM)) ("BIG") entered into an Exchange Agreement pursuant to which the
Company exchanged 20,000,000 common shares and 20,000 preferred shares in return
for 100% of the equity of BIG subject to the redemption by BIG of BIG's "Class A
Membership Units" for a total of $9 million preferred equity interest with a 12%
coupon  commencing  January  30,  2009 at a rate  equal to 30% of BIG's net cash
flows (after all operating  costs and regular debt payments have been paid) (the
"Class A Redemption").  The Company's ownership of BIG was subject to rescission
in the event  that:  (a) BIG's loans were not timely  serviced  and kept in good
standing,  (b) certain  guaranty  payments,  to the extent due,  were not timely
made,  and (c) if the Class A  Redemption  payments  were not made to the extent
that they are due. BIG's  agreements  with its senior  creditor,  Citizens Bank,
require  Citizens  Bank to  provide  its  written  consent  to change of control
transactions. Citizens Bank had previously consented to the change of control of
BIG on the condition that the Company closed on its previously-pending financing
agreements  with  CleanBioenergy  Partners,  LLC (see Note 12,  Commitments  and
Contingencies). This financing failed to close as expected in March 2009 despite
the  Company's  compliance  with the  relevant  agreements  with  CleanBioenergy
Partners,  and Citizens Bank consequently  withdrew its consent to the change of
control of BIG. The Company subsequently entered into negotiations in April 2009
to restructure the terms of the BIG acquisition, however, a notice of default of
the  Exchange  Agreement  was  declared  on May 14,  2009 in order  to  maintain
compliance  with BIG's loan  agreements  with Citizens Bank. The Company elected
not to restructure the original acquisition  transaction and instead facilitated
rescission of the original  acquisition  transaction  and the divestiture of BIG
during the second quarter of 2009.  The financial  results of BIG were presented
as discontinued operations as and for the quarter ended March 31, 2009 (see Note
6,  Discontinued  Operations),  and are not included in the Company's results of
continuing operations for the quarter ended June 30, 2009.

Sustainable Systems, Inc.

Effective  June  30,  2009,  GS  AgriFuels  Corporation  and  Carbonics  Capital
Corporation  entered into a Stock Purchase Agreement pursuant to which Carbonics
acquired 100% of the stock of Sustainable Systems,  Inc.  ("Culbertson") from GS
AgriFuels in return for  assumption of $4,000,000 of GS AgriFuels'  indebtedness
to YA Global  Investments,  L.P.  ("YAGI"),  plus any and all  obligations of GS
AgriFuels  that may be in effect in  relation to the  acquisition  by sellers of
Culbertson  (the "Purchase  Obligations").  In connection  with this  Agreement,
Carbonics  issued an amended  and  restated  convertible  debenture  to YAGI for
$4,000,000  due on December 31, 2011.  The Purchase  Obligations  pertain to the
2007  acquisition  by GS  AgriFuels  of  Culbertson  and include  $3,804,287  in
convertible  debentures  and  $1,017,451 in notes payable to the prior owners of
Culbertson.  The terms of the relevant  acquisition  agreements  with said prior
owners are in default  due to the failure by the prior  owners to disclose  that
Culbertson  did not hold  title to its  now-owned  Culbertson,  Montana  oilseed
crushing  facility at the time of the acquisition by GS AgriFuels.  The terms of
the relevant acquisition agreements with the prior owners are in default and are
currently  the subject of a litigation  initiated  by GS  AgriFuels  against the
prior owners.  Carbonics has assumed all rights and  obligations of GS AgriFuels
pertaining to these agreements and this litigation.  Carbonics is majority owned
by the  Company's  majority  shareholder,  Viridis  Capital,  LLC. The financial
results of this subsidiary have been retrospectively omitted from the operations
in accordance with SFAS 141(R),  Appendix D, Business Combinations with Entities
Under Control.

                                       10
<PAGE>

2        NATURE OF OPERATIONS

GreenShift  Corporation  ("we,"  "our," "us,"  "GreenShift,"  or the  "Company")
develops and commercializes clean technologies that facilitate the efficient use
of natural resources.

We  currently  own four  corn oil  extraction  facilities  that are  located  in
Oshkosh,  Wisconsin,  Medina, New York, Marion,  Indiana, and Riga, Michigan. We
have also installed one facility in Albion, Michigan under a modified version of
our market offering where our client paid to build the extraction  facility.  We
have the long-term  right (10 years or more) to buy the oil  extracted  from the
Albion facility but the client retains ownership of the extraction assets and is
paid a higher price for the corn oil extracted than we pay to our other clients.
These  facilities  collectively are designed to extract in excess of 7.3 million
gallons per year. We are currently  focused on securing the capital resources we
need to operate our  existing  facilities  and to build new corn oil  extraction
facilities.

During the six months ended June 30, 2009, we also owned a 10 million gallon per
year  biodiesel  facility  in Adrian,  Michigan  ("BIG")  and an  oilseed  crush
facility in Culbertson, Montana ("Culbertson").  These two facilities were idled
during the first  quarter  2009 due to a lack of working  capital.  The  Company
divested  both of these  facilities  during  the  second  quarter  of 2009.  The
financial  results of these  subsidiaries  have been  presented as  discontinued
operations as and for the quarter ended June 30, 2009 (see Note 6,  Discontinued
Operations).  The Company's  specialty equipment  manufacturing  operations were
also idled  during the six months ended June 30,  2009.  The Company  intends to
liquidate  certain assets of this operation during the third quarter of 2009 but
will scale this operation as needed to fulfill the Company's  growth needs as it
builds, installs and maintains its various corn oil extraction facilities.

SEGMENT DESCRIPTIONS

The  Company's  operations  during  the six  months  ended  June  30,  2009  are
classified into two reportable  business segments:  Equipment & Technology Sales
and Biofuel  Production & Sales.  Each of these segments is organized based upon
the nature of products and services offered.  The Company's remaining operations
are aggregated and classified herein as Corporate.

The  Company's  ongoing  restructuring  activities  resulted in the cessation of
operations  in its former  Culinary Oil  Production & Sales  segment  during the
quarter  ended June 30, 2009.  The Company sells its corn oil as a feedstock for
biofuel  production  or for direct use as a biofuel,  therefore,  the  Company's
continuing corn oil production and sales activities will continue to be recorded
in the Company's  Biofuel  Production & Sales segment  despite the fact that its
former BIG biodiesel  facility was divested  during the second quarter 2009. For
comparative  purposes,  the financial  results of BIG and  Culbertson  have been
presented as discontinued  operations as and for the quarter ended June 30, 2009
(see Note 6, Discontinued Operations).

3        GOING CONCERN

The Company had a working capital deficit of $63,324,321 at June 30, 2009, which
includes  convertible  debentures of $19,477,319,  accrued  interest  payable of
$7,173,539,  related party debt of $39,000, related party convertible debentures
of  $2,175,047,  $3,979,437  in  purchase  obligations,  $552,376  in assets and
$942,001 in minority interest obligations associated with inactive subsidiaries.
The Company's working capital deficit net of these amounts is $30,090,353.

Despite  their  classification  as  current  liabilities,   current  convertible
debentures and accrued  interest  ($26,650,858)  are not  serviceable out of the
Company's  cash flows (the terms of the  convertible  debt require  repayment in
shares of either  GreenShift  Corporation  or GS  AgriFuels  Corporation  common
stock). The purchase  obligations  ($3,979,437),  to the extent due, are tied to
the earnings of the Company's  equipment sales business and can only be serviced
after the Company's senior secured debt has been serviced.


Management  intends to raise capital from debt and equity  transactions  to fund
operations,  to  increase  revenue  and to cut  expenses to reduce the loss from
operations.  There  can be no  assurances  that  the  Company  will  be  able to
eliminate  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.

                                       11
<PAGE>
4        SIGNIFICANT ACCOUNTING POLICIES

MINORITY INTEREST

On January 1, 2009, the Company adopted SFAS No. 160, "Noncontrolling  Interests
in Consolidated Financial  Statements--an  amendment of ARB No. 51," (SFAS 160).
SFAS 160 amends  Accounting  Research Bulletin No. 51,  "Consolidated  Financial
Statements,"   to  establish   accounting   and  reporting   standards  for  the
noncontrolling  interest  in a  subsidiary  and  for  the  deconsolidation  of a
subsidiary. This standard defines a noncontrolling interest, previously called a
minority  interest,  as the portion of equity in a subsidiary not  attributable,
directly or indirectly,  to a parent. SFAS 160 requires, among other items, that
a noncontrolling interest be included in the consolidated statement of financial
position  within equity  separate  from the parent's  equity;  consolidated  net
income  to  be  reported  at  amounts   inclusive   of  both  the  parent's  and
noncontrolling  interest's shares and,  separately,  the amounts of consolidated
net income  attributable  to the parent and  noncontrolling  interest all on the
consolidated statement of operations; and if a subsidiary is deconsolidated, any
retained  noncontrolling  equity investment in the former subsidiary be measured
at fair value and a gain or loss be  recognized in net income based on such fair
value.  Additionally,  SFAS 160 defines a noncontrolling interest as a financial
instrument  issued  by  a  subsidiary  that  is  classified  as  equity  in  the
subsidiary's financial statements. A financial instrument issued by a subsidiary
that is classified as a liability in the subsidiary's financial statements based
on the guidance in other standards is not a controlling  interest  because it is
not an ownership interest.  Based on this definition of noncontrolling  interest
the Company  presented its previously  reported  minority  interest as a current
liability in the accompanying  balance sheets. The presentation  requirements of
SFAS 160 were applied retrospectively.  Other than the change in presentation of
noncontrolling  interests,  the  adoption  of  SFAS  160  had no  impact  on the
Financial Statements.

FINANCIAL INSTRUMENTS

The Company accounted for the convertible debentures in accordance with SFAS No.
150, Accounting for Certain Financial  Instruments with  Characteristics of both
Liabilities  and Equity (SFAS 150), as the  conversion  feature  embedded in the
convertible  debentures  could result in the note principal and related  accrued
interest being converted to a variable number of the Company's common shares.

5        STOCKHOLDERS' EQUITY

SERIES E PREFERRED STOCK

On May 15, 2008,  the Company issued 20,000 shares of the Company's new Series E
Preferred  Stock  (the  "Series  E  Shares")  to  the  BIG   shareholders   (21,
Acquisition, below), which shares are convertible at a fixed rate of 1 preferred
share to 1,000 common shares into a total of 20,000,000 shares of Company common
stock;  provided,  however,  that the Series E Shares shall be convertible  into
Company common shares in proportion to the Company's  earnings before  interest,
taxes,  depreciation  and  amortization  and  non-cash and  non-recurring  items
("EBITDA") and will be fully  convertible into 20,000,000 common shares on a pro
rated  basis as the  Company  achieves  $50,000,000  in EBITDA  during  one year
period.  The holders  would be entitled to cumulative  dividend  rights equal to
that of 1,000 common  shareholders  upon the  declaration of dividends on common
stock, and have voting privileges of one vote to every one common share.  During
the quarter ended June 30, 2009,  the 20,000 shares of Series E Preferred  Stock
were cancelled due to the rescission of the original acquisition transaction and
the divestiture of BIG. At both June 30, 2009 and 2008,  there were no shares of
Series E Preferred Stock issued and outstanding.

COMMON STOCK

From time to time during the six months ended June 30, 2009,  the Company issued
a total of  130,170,452  common  shares  to YA Global  Investments,  LP upon its
conversion of debt and accrued  interest in the amount of $357,061;  153,315,722
common shares to Minority  Interest Fund (II), LLC upon its  conversion  debt in
the amount of $635,582;  134,631,965  common shares to RAKJ Holdings,  Inc. upon
its  conversion of debt in the amount of $315,000;  and,  527,400  common shares
were converted from Series B Preferred Stock for an employee of the Company.

6        DISCONTINUED OPERATIONS

SUSTAINABLE SYSTEMS, INC.

Effective  June  30,  2009,  GS  AgriFuels  Corporation  and  Carbonics  Capital
Corporation  entered into a Stock Purchase Agreement pursuant to which Carbonics
acquired 100% of the stock of Sustainable Systems,  Inc.  ("Culbertson") from GS
AgriFuels in return for  assumption of $4,000,000 of GS AgriFuels'  indebtedness
to YA Global  Investments,  L.P.  ("YAGI"),  plus any and all  obligations of GS


                                       12
<PAGE>

AgriFuels  that may be in effect in  relation to the  acquisition  by sellers of
Culbertson  (the "Purchase  Obligations").  In connection  with this  Agreement,
Carbonics  issued an amended  and  restated  convertible  debenture  to YAGI for
$4,000,000  due on December 31, 2011.  The Purchase  Obligations  pertain to the
2007  acquisition  by GS  AgriFuels  of  Culbertson  and include  $3,804,287  in
convertible  debentures  and  $1,017,451 in notes payable to the prior owners of
Culbertson.  The terms of the relevant  acquisition  agreements  with said prior
owners are in default  due to the failure by the prior  owners to disclose  that
Culbertson  did not hold  title to its  now-owned  Culbertson,  Montana  oilseed
crushing  facility at the time of the acquisition by GS AgriFuels.  The terms of
the relevant acquisition agreements with the prior owners are in default and are
currently  the subject of a litigation  initiated  by GS  AgriFuels  against the
prior owners.  Carbonics has assumed all rights and  obligations of GS AgriFuels
pertaining to these agreements and this litigation.  Carbonics is majority owned
by the  Company's  majority  shareholder,  Viridis  Capital,  LLC. The financial
results of this subsidiary have been retrospectively omitted from the operations
in accordance with SFAS 141(R),  Appendix D Business  Combinations with Entities
Under Common Control.

BIOFUEL INDUSTRIES GROUP, LLC

Effective May 15, 2008,  the Company and Biofuel  Industries  Group,  LLC (d/b/a
NextDiesel(TM)) ("BIG") entered into an Exchange Agreement pursuant to which the
Company exchanged 20,000,000 common shares and 20,000 preferred shares in return
for 100% of the equity of BIG subject to the redemption by BIG of BIG's "Class A
Membership Units" for a total of $9 million preferred equity interest with a 12%
coupon  commencing  January  30,  2009 at a rate  equal to 30% of BIG's net cash
flows (after all operating  costs and regular debt payments have been paid) (the
"Class A Redemption").  The Company's ownership of BIG was subject to rescission
in the event  that:  (a) BIG's loans were not timely  serviced  and kept in good
standing,  (b) certain  guaranty  payments,  to the extent due,  were not timely
made,  and (c) if the Class A  Redemption  payments  were not made to the extent
that they are due. BIG's  agreements  with its senior  creditor,  Citizens Bank,
require  Citizens  Bank to  provide  its  written  consent  to change of control
transactions. Citizens Bank had previously consented to the change of control of
BIG on the condition that the Company closed on its previously-pending financing
agreements  with  CleanBioenergy  Partners,  LLC (see Note 11,  Commitments  and
Contingencies). This financing failed to close as expected in March 2009 despite
the  Company's  compliance  with the  relevant  agreements  with  CleanBioenergy
Partners,  and Citizens Bank consequently  withdrew its consent to the change of
control of BIG. The Company subsequently entered into negotiations in April 2009
to restructure the terms of the BIG acquisition, however, a notice of default of
the  Exchange  Agreement  was  declared  on May 14,  2009 in order  to  maintain
compliance  with BIG's loan  agreements  with Citizens Bank. The Company elected
not to restructure the original acquisition  transaction and instead facilitated
rescission of the original  acquisition  transaction  and the divestiture of BIG
during the second quarter of 2009.  The financial  results of BIG were presented
as discontinued operations as and for the quarter ended March 31, 2009 (see Note
6,  Discontinued  Operations),  and are not included in the Company's results of
operations  for the six months ended June 30, 2009.  During the six months ended
June 30, 2009,  the Company  recorded an impairment of goodwill in the amount of
$7,281,993 and a gain on disposal of net liabilities of $14,452,069.

7         LINES OF CREDIT

Revolving Line of Credit for Construction of Corn Oil Extraction Facilities

On January 25, 2008,  GS COES  (Yorkville  I), LLC, a subsidiary of the Company,
closed  on the  terms of a  Credit  Agreement  with YA  Global  Investments,  LP
("YAGI").  On July 1,  2008,  the  Credit  Agreement  was  amended to extend the
commencement  of  payments  to  YAGI  to  October  1,  2008  and to  extend  all
performance  timelines to December 31,  2008.  On December 11, 2008,  the Credit
Agreement  was  amended to extend the  maturity  date to January  31,  2011,  to
increase the revolving  availability  to  $13,750,000,  and to  restructure  the
repayment  provisions such that amounts  advanced by YAGI would be repaid on the
closing of  financing  from  CleanBioenergy  Partners,  LLC, an  affiliate of GE
Energy  Financial  Services.  The Credit Agreement was issued for the purpose of
constructing  and  installing  corn  oil  extraction  facilities  based  on  the
Company's patented and patent-pending  corn oil extraction  technologies.  While
the revolving availability under the line of credit was increased to $13,750,000
in the December 11, 2008 amendment,  and the Company was otherwise in compliance
with the  amended  terms,  the  Company  was  unable  to access  the  additional
availability.  The balance on the line of credit was  $10,000,000 as of December
31,  2008,  interest is accruing at the rate of 20% per annum,  and the line and
accrued  interest  is  payable at the  maturity  date.  The  December  11,  2008
amendment also added a term allowing YAGI to convert interest and principal into
common  stock of the  Company at a  conversion  price equal to the lesser of (a)
$1.25 or (b) 90% of the  lowest  daily  volume  weighted  average  price for the
twenty  trading  days  preceding   conversion.   The  Company  is  currently  in
discussions   with  YAGI  to   restructure   this  line  of  credit   since  the
CleanBioenergy financing failed to close as expected.

                                       13
<PAGE>
The  Company  accounted  for the YAGI line of credit  dated  January 25, 2008 in
accordance with SFAS No. 150, Accounting for Certain Financial  Instruments with
Characteristics  of both  Liabilities  and Equity (SFAS 150), as the  conversion
feature  embedded in the YAGI Debenture could result in the note principal being
converted to a variable  number of the  Company's  common  shares.  The carrying
amount of the debenture has been restated for the prior year (please see Note 18
Restatement of Prior Years Financials,  below). The Company determined the value
of the  YAGI  line of  credit  at  December  31,  2008 to be  $11,036,554  which
represented  the face  value of the  debenture  plus  the  present  value of the
conversion feature. The liability for the conversion feature shall increase from
its present value of $1,036,554 at December 31, 2008 to its estimated settlement
amount of  $11,111,111  at  December  31,  2010.  An  expense of $8,284 was been
recorded  as  interest  expense  for  the  accretion  of  the  discount  on  the
convertible  note  payable.  As of June 30, 2009, an expense of $49,705 has been
recorded  as  interest  expense  for  the  accretion  of  the  discount  on  the
convertible note payable, thereby increasing the carrying value of the YAGI line
of credit to $10,958,819 at June 30, 2009.

Under the YAGI Debentures,  the Company owes a monthly payment of $250,000.  The
Company  determined  the fair value of the monthly  stream of payments under the
YAGI line of credit at December 31, 2008 to be $3,014,941 which  represented the
face value of the debenture  plus the present value of the  conversion  feature.
The liability for the  conversion  feature shall increase from its present value
of  $3,014,941  at  December  31,  2008 to its  estimated  settlement  amount of
$3,055,556  at December  31, 2010.  An expense of $264,941 was been  recorded as
interest  expense for the  accretion  of the  discount on the  convertible  note
payable.  As of June 30, 2009,  an expense of  $1,666,667  has been  recorded as
interest  expense for the  accretion  of the  discount on the  convertible  note
payable,  for the six months ended June 30, 2009 thereby increasing the carrying
value of the stream of payments owed under the YAGI line of credit to $1,631,801
at June 30, 2009.

To induce YAGI's entry into the Credit  Agreement and in consideration of YAGI's
execution of the Restructuring Agreement described below, the Company issued six
million shares of its common stock to YAGI valued at $1,080,000.  In conjunction
with the  financing GS COES paid  structuring  fees of  $210,000,  legal fees of
$150,000,  monitoring fees of $175,000, due diligence fees of $35,000 as well as
prepaid interest of $250,000.  The balance of deferred  financing fees was $0 at
June 30, 2009.

8        FINANCING ARRANGEMENTS
<TABLE>

The following is a summary of the Company's financing arrangements as of June
30, 2009:
<CAPTION>
Current portion of notes payable:                                                      6/30/2009
                                                                                       ---------
<S>                                                                              <C>
Note payable from NextGen Acquisition to Stillwater                              $       2,071,886
Purchase obligations from NextGen Acquisition to NextGen sellers                         3,979,437
Asset retirement obligation, current                                                           277
Vehicle loans and other short term borrowings                                               46,080
Mortgages and other term notes                                                              81,404
Current portion of notes payable from GreenShift to Bollheimer                             320,000
Current portion of notes payable from GS CleanTech                                         150,000
Current portion of convertible notes payable from GS CleanTech                           1,734,579
                                                                                 -----------------
     Total current portion of notes payable                                      $       8,383,663
                                                                                 =================
Long-term notes payable, net of current maturities:
Mortgages and other term notes                                                   $         373,250
                                                                                 -----------------
     Total long term notes payable, net of current maturities                    $         373,250
                                                                                 =================
Asset retirement obligation:
Asset retirement obligation                                                       $        247,975
                                                                                  ================
Current portion of convertible debentures:
Convertible debenture to YAGI                                                            5,500,000
Convertible debenture to YAGI                                                           12,860,000
Note discounts                                                                           (216,506)
Convertible debenture to JMJ Financial                                                     794,936
Convertible debenture to MIF                                                             2,175,047
Convertible debenture to Acutus                                                            538,889
                                                                                 -----------------
     Total current portion of convertible debentures                             $      21,652,366
                                                                                 =================
Long-term convertible debentures, net of current maturities:
Convertible debenture to YAGI                                                     $      2,084,986
Convertible debenture to YAGI                                                            1,224,063
Convertible debenture to YAGI                                                            2,789,278
YAGI convertible debenture conversion liabilities                                        375,491
Convertible debenture to YAGI                                                            1,950,000
                                                                                 -----------------
     Total long-term portion of convertible debentures                           $       8,423,818
                                                                                 =================
</TABLE>
                                       14
<PAGE>

The convertible debentures noted above are convertible into the common stock of
the following companies:

GreenShift Corporation                             $       11,932,690
GS AgriFuels Corporation                                   18,360,000
                                                   ------------------
     Total                                         $       30,292,690
                                                   ==================

The following chart is presented to assist the reader in analyzing the Company's
ability to fulfill its fixed debt service  requirements  (net of note discounts)
of as of June 30, 2009 and the Company's ability to meet such obligations:

Year                                                   Amount
2009                                              $      27, 282,552
2010                                                       2,799,024
2011                                                       8,448,591
2012                                                         377,250
2013 and thereafter                                          173,656
                                                  ------------------
Total minimum payments due under current and      $       39,081,073
                                                  ==================
long term obligations

9         DEBT AND PURCHASE OBLIGATIONS

On June 9, 2009,  JMJ Financial  Corporation  ("JMJ") issued the Company a 14.4%
promissory  note in the  amount  of  $500,000  (the "JMJ  Note")  in return  for
$600,000 in 12% convertible  debt (the "JMJ  Debenture")  issued by the Company.
The  principal  balance due under the JMJ Note was  $500,000 as of June 30, 2009
and accrued interest receivable under the JMJ Note was $1,775. The principal and
accrued  interest for the JMJ Note and JMJ Debenture  have been  presented as of
June 30,  2009,  at their face  value,  without  offset.  The JMJ  Debenture  is
convertible  into  Company  common  stock at a rate  equal to 70% of the  lowest
closing market price for the Company's  common stock for the twenty trading days
preceding conversion.  The Company accounted for the JMJ Debenture dated June 9,
2009  in  accordance  with  SFAS  No.  150,  Accounting  for  Certain  Financial
Instruments with  Characteristics  of both Liabilities and Equity (SFAS 150), as
the conversion  feature  embedded in the JMJ Debenture  could result in the note
principal being  converted to a variable number of the Company's  common shares.
The Company  determined  the value of the $600,000 JMJ Debenture at June 9, 2009
to be  $793,195  which  represented  the face  value of the  debenture  plus the
present  value of the  conversion  feature.  The  liability  for the  conversion
feature shall  increase from its carrying  value of $193,195 at June 30, 2009 to
its estimated settlement amount of $857,143 at December 31, 2010. As of June 30,
2009,  an  expense of $1,168  has been  recorded  as  interest  expense  for the
accretion of the discount on the convertible note payable. The carrying value of
the $600,000 JMJ Debenture was $794,363 at June 30, 2009.

During  the year  ended  December  31,  2008,  the  Company  issued  convertible
debentures  to Acutus  Capital,  LLC  ("Acutus")  in the amounts of $250,000 and
$235,000, respectively. The convertible debentures to Acutus shall bear interest
at a rate of 20% per year and mature on December 31, 2008 and February 15, 2009,
respectively.  Acutus is entitled to convert the accrued  interest and principal
of the  convertible  debenture  into common stock of the Company at a conversion
price equal to $1.25 per share.  The Company  accounted  for the YAGI  Debenture
dated February 8, 2006 in accordance  with SFAS No. 150,  Accounting for Certain
Financial  Instruments with Characteristics of both Liabilities and Equity (SFAS
150), as the conversion  feature  embedded in the YAGI Debenture could result in
the note principal being converted to a variable number of the Company's  common
shares.  The carrying  amount of the  debenture  has been restated for the prior
year (please see Note 18  Restatement  of Prior Years  Financials,  below).  The
Company  determined the value of the Acutus Debenture at December 31, 2008 to be
$538,469  which  represented  the face value of the  debenture  plus the present
value of the conversion feature.  The liability for the conversion feature shall
increase from its present value of $53,469 at December 31, 2008 to its estimated
settlement amount of $538,889.  As of June 30, 2009, an expense of $420 has been
recorded  as  interest  expense  for  the  accretion  of  the  discount  on  the
convertible  note  payable.  The  carrying  value of the  Acutus  Debenture  was
$485,420 at June 30, 2009.  As of June 30,  2009,  the Company was in default on
the Acutus debenture.  For the six months ended June 30, 2009,  interest expense
of $48,101 for these  obligations was incurred.  The principal  balance of these
notes at June 30, 2009 was $538,889.

                                       15
<PAGE>

During the year ended  December 31, 2008,  the Company  entered into amended and
restated  convertible  debentures  with MIF that total  $1,319,783.  This amount
includes the $410,930 in notes payable that MIF purchased from Viridis, $757,853
in  convertible  debt  that  were  purchased  from  Candent,   and  $500,000  in
convertible  debt  that  was  purchased  from  Acutus  Capital,  as  well  as an
additional  $151,000 in new convertible  debt that MIF purchased during December
2008.  The total  convertible  debentures  due to MIF were  reduced by  $432,932
during the year ended  December  31, 2008,  after MIF  purchased  the  debenture
payable to the Company from EcoSystem  Corporation by reducing the amount of the
convertible  debt the  Company  owed to MIF.  $500,000 of the  convertible  debt
issued to MIF bears interest at a rate of 20% and the balance of the convertible
debentures  shall bear interest at 12% per year and mature on December 31, 2010.
MIF is  entitled  to convert  the  accrued  interest  and  principal  of the MIF
convertible  debenture  into common stock of the Company at a  conversion  price
equal to the lesser of (a) $1.25 per share or (b) 90% of the lowest daily volume
weighted average price for the twenty trading days preceding conversion.  During
the six months ended June 30, 2009,  MIF purchased an  additional  $1,176,100 in
debentures,  converted $635,582 on the amount due into Company common stock, and
sold  $315,000  of the  principal  amount  due to MIF  to  RAKJ  Holdings,  Inc.
("RAKJ").  The Company  accounted for the MIF Debenture in accordance  with SFAS
No. 150,  Accounting for Certain Financial  Instruments with  Characteristics of
both  Liabilities and Equity (SFAS 150), as the conversion  feature  embedded in
the RAKJ  Debenture  could  result in the note  principal  being  converted to a
variable  number of the  Company's  common  shares.  The carrying  amount of the
debenture has been  restated for the prior year (please see Note 18  Restatement
of Prior Years Financials,  below).  The Company determined the value of the MIF
Debenture at December 31, 2008 to be $1,514,201 which represented the face value
of the debenture plus the present value of the conversion feature. The liability
for the conversion  feature shall increase from its present value of $127,350 at
December 31, 2008 to its estimated  settlement  amount of $1,540,945 at December
31,  2010.  As of June 30,  2009,  an  expense of $6,686  has been  recorded  as
interest  expense for the  accretion  of the  discount on the  convertible  note
payable.  The carrying  value of the MIF  Debenture  was  $1,746,029 at June 30,
2009.  Interest expense of $86,786 for these obligations was accrued for the six
months  ended  June  30,  2009.  The  amount  due to MIF at June  30,  2009  was
$2,175,047.

The $315,000  convertible  debt  purchased by RAKJ bears interest at the rate of
12% per year and matures on December 31,  2010.  RAKJ is entitled to convert the
accrued interest and principal of the convertible debenture into common stock of
the Company at a conversion  price equal to the lesser of (a) $1.25 per share or
(b) 50% of the lowest daily volume  weighted  average closing price for the five
trading days preceding  conversion.  During the six months ending June 30, 2009,
RAKJ converted  $315,000 on this debenture.  The Company  accounted for the YAGI
Debenture in  accordance  with SFAS No. 150,  Accounting  for Certain  Financial
Instruments with  Characteristics  of both Liabilities and Equity (SFAS 150), as
the conversion  feature  embedded in the YAGI Debenture could result in the note
principal being  converted to a variable number of the Company's  common shares.
The  carrying  amount of the  debenture  has been  restated  for the prior  year
(please see Note 18 Restatement of Prior Years Financials, below). The liability
for the  conversion  feature shall increase from its present value of $0 at June
30, 2009 to its estimated settlement amount of $315,000.  The Company determined
the  value  of the  RAKJ  Debenture  at  June  30,  2009  to be  $315,000  which
represented  the face  value of the  debenture  plus  the  present  value of the
conversion feature. For the six months ending June 30, 2009, interest expense of
$5,228 for these obligations was incurred.  The principal balance of these notes
at June 30, 2009 was $0.

On September  4, 2008,  the  Company's  subsidiary,  GS  CleanTech  Corporation,
entered into a series of convertible notes totaling $1,734,579.  The notes shall
bear  interest  at a rate  15% per  annum  and  mature  on  December  31,  2010.
Commencing on February 1, 2009,  payments are due at a rate equal to the greater
of the interest  accrued on the unpaid principal or $100,000 times the principal
amount divided by $3,000,000.  Beginning July 1, 2009, payments are due based on
an eighteen month amortization,  with all principal and accrued interest paid on
or  before  December  31,  2010.  The notes are  convertible  into  shares of GS
CleanTech subsidiary preferred stock (par $0.001) at the closing by GS CleanTech
of a planned  Preferred  Stock Financing at a 15% discount to the final terms of
any such  Preferred  Stock  Financing.  If any portion of the note is prepaid in
cash, GS CleanTech shall pay a 10% redemption premium at the time of redemption.
If the Preferred  Stock  Financing  does not close on or before January 1, 2009,
the interest  and  redemption  premium will  increase to 20%. For the six months
ending June 30, 2009,  interest  expense of $149,056 for these  obligations  was
incurred. The balance of the loans was $1,734,579 as of June 30, 2009.

                                       16
<PAGE>
The Company  accounted for the JMJ  Debenture in  accordance  with SFAS No. 150,
Accounting  for  Certain  Financial  Instruments  with  Characteristics  of both
Liabilities  and Equity (SFAS 150), as the conversion  feature  embedded in each
debenture  could  result in the note  principal  being  converted  to a variable
number of the Company's common shares.

10        ASSET RETIREMENT OBLIGATION

Pursuant to SFAS 143, Accounting for Asset Retirement  Obligations,  the Company
has recognized the fair value of the asset retirement obligation for the removal
of its COES systems.  The present value of the estimated asset  retirement costs
has been  capitalized as part of the carrying  amount of the related  long-lived
assets.  The  liability  has been  accreted to its present  value as of June 30,
2009, and the capitalized cost approximated $235,000. The Company has recognized
$869 due to accretion from the acquisition  dates.  The Company has determined a
range of abandonment  dates between  December 2018 and December 2019 and a total
salvage value of $250,000 per system. The following represents the amount of the
retirement obligation at the beginning and the six months ending June 30, 2009:

         Beginning balance at January 1, 2008                 $      60,099
         Liabilities incurred during the period                     187,038
         Liabilities settled during the period                           --
         Accretion of interest                                          623
                                                              -------------
         Ending balance at December 31, 2008                        247,760
         Liabilities incurred during the period                          --
         Liabilities settled during the period                           --
         Accretion of interest                                          513
                                                              -------------
         Ending balance at June 30, 2009                      $     248,273
                                                              =============

11       COMMITMENTS AND CONTINGENCIES

The Company's subsidiaries,  GS AgriFuels Corporation and NextGen Fuel, Inc. are
party to the matter entitled  O'Brien & Gere Limited,  et al v. NextGen Chemical
Processors,  Inc.,  et al.,  which action was filed in the Supreme  Court of the
State of New York. The verified  complaint had sought performance of and damages
relating to certain  service and related  agreements,  plus  attorney's fees and
costs. This matter relates to the provision by plaintiffs of certain engineering
services to NextGen Chemical Processors,  Inc. ("NCP") during 2005 and 2006. NCP
is owned by the former  shareholders of the NextGen Fuel, Inc.,  subsidiary.  On
September  19,  2007,  the  Supreme  Court of the State of New York  dismissed a
significant  portion of O'Brien & Gere's  complaint with  prejudice.  Management
does not believe  that there is a  reasonable  possibility  that the claims made
against  NextGen  Fuel by the  plaintiffs  in this  litigation  indicate  that a
material  loss  has  occurred.  Accordingly,  an  estimate  of  loss  cannot  be
determined  at this time and  therefore,  no accrual has been made in connection
with those claims.

The  Company's  GS  AgriFuels  subsidiary  is party to the  matter  entitled  GS
AgriFuels  Corporation  v.  Chaykin,  et al. The action was filed in the Supreme
Court of the State of New York,  County of New York,  on February  2, 2009.  The
Complaint seeks damages for defendants' fraudulent misrepresentations,  tortious
interference,   breach  of  acquisition   agreements  and  related  claims.  The
defendants  filed a  separate  action  entitled  Max,  et al.  v.  GS  AgriFuels
Corporation,  et al. in response to GS AgriFuels'  Complaint.  The case was only
recently  commenced and  Management is unable to evaluate the  probability of an
unfavorable  outcome at this time.  Accordingly,  an  estimate of loss cannot be
determined  at this time and  therefore,  no accrual has been made in connection
has  assumed  all rights and  obligations  of GS  AgriFuels  pertaining  to this
litigation.  Carbonics is majority owned by the Company's majority  shareholder,
Viridis Capital, LLC.

On December 11, 2008, GreenShift  Corporation entered into a Membership Interest
Purchase and Equity Capital Contribution  Agreement (the "ECAA Agreement").  The
parties to the  agreement  included  GS COES  (Adrian  I),  LLC, a newly  formed
GreenShift  subsidiary,  BIG, GS (NextDiesel I), LLC, a newly formed  GreenShift
subsidiary and CleanBioenergy  Partners, LLC ("CleanBioenergy"),  a newly formed
joint venture company owned by a subsidiary of GE Energy Financial Services ("GE
EFS"),  a  unit  General   Electric  Company  and  a  subsidiary  of  YA  Global
Investments,  L.P. Under the terms of the ECCA Agreement,  CleanBioenergy agreed
to invest up to $38  million in GS  NextDiesel  to help  deploy  twelve corn oil
extraction  facilities  and to double the  capacity of  GreenShift's  10 million
gallon per year  Adrian,  Michigan-based  NextDiesel  biodiesel  refinery  to 20
million gallons per year. The ECCA Agreement was terminated in the first quarter
of 2009. The NextDiesel biodiesel refinery is owned by Biofuel Industries Group,
LLC ("BIG"),  BIG's agreements with its senior creditor,  Citizens Bank, require
Citizens Bank to provide its written consent to change of control  transactions.
Citizens  Bank had  previously  consented to the change of control of BIG on the
condition  that the  Company  closed  on its  prior  financing  agreements  with
CleanBioenergy. This financing failed to close as expected in March 2009 despite
the  Company's  compliance  with the  relevant  agreements,  and  Citizens  Bank

                                       17
<PAGE>
consequently  withdrew  its consent to the change of control of BIG. The Company
subsequently entered into negotiations in April 2009 to restructure the terms of
the BIG acquisition,  however, a notice of default of the Exchange Agreement was
declared  on May 14,  2009 in order  to  maintain  compliance  with  BIG's  loan
agreements  with  Citizens  Bank.  The  original  acquisition   transaction  was
rescinded  during the second quarter of 2009. The financial  results of BIG were
presented as  discontinued  operations as of and for the quarter ended March 31,
2009 (see Note 6, Discontinued Operations) and are not included in the Company's
results of operations for the quarter ended June 30, 2009. The Company wrote-off
$7,281,993 in goodwill  previously  booked in connection with the acquisition of
BIG during the six months ended June 30, 2009. The Company's  divestiture of BIG
resulted  in  the  disposal  of  $13,054,765   and  $27,506,834  in  assets  and
liabilities, respectively.

As of June 30,  2009,  the Company was in  technical  default of certain  senior
secured debt due to YA Global Investments,  L.P. ("YAGI"), which default was due
to the  failure  of the  CleanBioenergy  Partners,  LLC  financing  to  close as
explained  more fully above.  As of June 30, 2009, the Company was in default of
its debt agreement with Acutus Capital,  LLC, and NextGen Acquisition,  Inc, was
in default of its agreements with  Stillwater  Asset Backed Fund, LP. As of June
30,  2009.  The Company is also in default of payments  owed under the  purchase
agreement with Bollheimer  Associates in the amount of $240,000,  and intends to
restructure  the  terms  of  the  relevant   agreement.   The  Company  and  its
subsidiaries are party to numerous collections matters pertaining to outstanding
accounts  payable  due to  vendors.  Under  the  Company's  insurance  programs,
coverage is obtained for catastrophic exposures, as well as those risks required
to be insured by law or contract.  There is a $2,500  deductible  per occurrence
for environmental impairments. Environmental liability insurance is carried with
policy limits of $1,000,000 per occurrence and $2,000,000 aggregate. The Company
is also  involved in various  collection  matters for which  vendors are seeking
payment for services rendered and goods provided. These collection matters total
$2,096,000.

12          GUARANTY AGREEMENT

Both Viridis Capital, LLC ("Viridis"),  the majority shareholder of the Company,
and its sole member,  Kevin Kreisler,  the Company's  chairman,  have guaranteed
nearly all of the Company's senior debt (in the outstanding  amount of about $42
million),  and Viridis has  pledged all of its assets,  including  its shares of
Company Series D Preferred  Stock,  to YA Global  Investments,  LP ("YAGI"),  to
secure the repayment by the Company of its obligations to YAGI.

13       SEGMENT INFORMATION

Segment information is presented in accordance with SFAS 131, "Disclosures about
Segments of an Enterprise and Related  Information." This standard is based on a
management  approach that designates the internal  organization  that is used by
management  for making  operating  decisions  and assessing  performance  as the
sources of the Company's reportable segments.  Operating segments are defined as
components of an enterprise about which financial  information is available that
is  evaluated  on a regular  basis by the  chief  operating  decision-maker,  or
decision-making  groups, in deciding how to allocate  resources to an individual
segment and in assessing performance of the segment.

The  Company's  operations  during the fiscal  quarter  ended June 30,  2009 are
classified into two reportable business segments: Biofuel Production & Sales and
Equipment & Technology Sales. Each of these segments is organized based upon the
nature of products and services offered.  The Company's remaining operations are
aggregated and classified herein as Corporate.  Summarized financial information
about each segment is provided below:
<TABLE>
<CAPTION>
Six months                                            Equipment &          Biofuel
Ended 6/30/09                        Corporate   Technology Sales  Production & Sales      Total
------------------------------------------------------------------------------------------------
<S>                                <C>             <C>             <C>             <C>
Total revenue ..................   $       --      $    288,550    $  1,734,565    $  2,023,115
Cost of revenue ................           --           853,080       1,141,307       1,994,388
                                   ------------    ------------    ------------    ------------
   Gross profit ................           --          (564,530)        593,258          28,727
Operating expenses .............        587,076         356,287      12,611,283      13,554,646
                                   ------------    ------------    ------------    ------------
   Income (loss) from operations       (587,076)       (920,817)    (12,018,025)    (13,525,919)
Other income (expense) .........     (1,329,175)     (1,507,631)     (1,345,816)     (4,182,622)
                                   ------------    ------------    ------------    ------------
   Income (loss) before taxes ..     (1,916,251)     (2,428,449)    (13,363,841)    (17,708,541)
Minority interest ..............           --              --              --              --
                                   ------------    ------------    ------------    ------------
Taxes ..........................           --           402,398            --           402,347
                                   ------------    ------------    ------------    ------------
Gain on sale of  discontinued
Operations .....................           --              --        14,452,069      14,452,069
Net loss from
   discontinued operations $ ...           --      $       --      $ (1,167,356)   $ (1,167,356)
                                   ------------    ------------    ------------    ------------
Net loss .......................   $ (1,916,251)   $ (2,026,051)   $    (79,128)   $ (4,021,481)
                                   ============    ============    ============    ============
</TABLE>
                                       18
<PAGE>

<TABLE>
<CAPTION>
Six months                                       Equipment &             Biofuel
Ended 6/30/08                   Corporate   Technology Sales  Production & Sales          Total
-----------------------------------------------------------------------------------------------
<S>                                <C>             <C>             <C>             <C>
Total revenue ..................   $       --      $  7,752,177    $  1,105,398    $  8,857,575
Cost of revenue ................         43,660       3,178,314         823,925       4,045,899
                                   ------------    ------------    ------------    ------------
   Gross profit ................        (43,660)      4,573,862         281,473       4,811,675
Operating expenses .............      2,311,517         492,838         681,078       3,485,433
                                   ------------    ------------    ------------    ------------
   Income (loss) from operations     (2,355,177)      4,081,024        (399,605)      1,326,242
Other income (expense) .........     (2,704,252)     (2,997,411)       (795,995)     (6,497,685)
                                   ------------    ------------    ------------    ------------
   Income (loss) before taxes ..     (5,059,429)      1,083,613      (1,195,600)     (5,171,416)
Minority interest ..............           --             6,419            --             6,419
                                   ------------    ------------    ------------    ------------
Taxes ..........................           --              --              --              --
                                   ------------    ------------    ------------    ------------
Net loss from
    discontinued operations ....   $       --      $       --      $   (560,072)   $   (560,072)
                                   ------------    ------------    ------------    ------------
Net loss .......................   $ (5,059,429)   $  1,090,032    $ (1,755,672)   $ (5,725,069)
                                   ============    ============    ============    ============
</TABLE>

<TABLE>
<CAPTION>
3 Months                                         Equipment &             Biofuel
Ended 6/30/09                   Corporate   Technology Sales  Production & Sales          Total
-----------------------------------------------------------------------------------------------
<S>                               <C>             <C>             <C>              <C>
Total revenue .................   $       --      $     57,226    $  1,110,231     $  1,167,457
Cost of revenue ...............           --           321,690         516,973          838,664
                                  ------------    ------------    ------------     ------------
   Gross profit ...............           --          (264,464)        593,258          328,793
Operating expenses ............        349,747         152,815       4,852,531        5,355,093
                                  ------------    ------------    ------------     ------------
   Income(loss) from operations       (349,747)       (417,279)     (4,259,273)      (5,026,300)
Other income (expense) ........     (1,078,385)       (757,354)       (678,973)      (2,514,711)
   Loss before taxes ..........     (1,428,132)     (1,174,633)     (4,938,246)      (7,541,011)
Taxes .........................           --           402,398             (51)         402,347
                                  ------------    ------------    ------------     ------------
Gain on sale of  discontinued
Operations ....................           --              --        14,452,069       14,452,069
Net gain (loss) from
   discontinued operations $ ..           --      $       --      $    (98,000)    $    (98,000)
                                  ------------    ------------    ------------     ------------
Net loss attributable to
   common shareholders ........   $ (1,428,132)   $   (772,235)   $  9,415,772     $ (7,215,405)
                                  ============    ============    ============     ============
</TABLE>
<TABLE>
<CAPTION>
Three Months                                     Equipment &             Biofuel
Ended 6/30/08                   Corporate   Technology Sales  Production & Sales          Total
-----------------------------------------------------------------------------------------------
<S>                                <C>             <C>             <C>              <C>
Total revenue ..................   $      --       $ 5,187,749     $   774,027      $ 5,961,775
Cost of revenue ................        29,052       1,865,908         630,839        2,525,799
                                   -----------     -----------     -----------      -----------
   Gross profit ................       (29,052)      3,321,840         143,188        3,435,976
Operating expenses .............     1,333,416          91,832         591,737        2,016,985
                                   -----------     -----------     -----------      -----------
   Income (loss) from operations    (1,362,468)      3,230,008        (448,549)       1,418,991
Other income (expense) .........    (1,149,186)     (1,508,448)       (547,276)      (3,204,910)
                                   -----------     -----------     -----------      -----------
   Income (loss) before taxes ..    (2,511,654)      1,721,560        (995,825)      (1,785,919)
Minority interest ..............         7,019            --              --              7,019
                                   -----------     -----------     -----------      -----------
Taxes ..........................          --             6,419            --              6,419
                                   -----------     -----------     -----------      -----------
Net loss from
continuing operations ..........   $(2,504,635)   $ 1,727,979     $  (995,825)      $(1,772,481)
                                   -----------    -----------     -----------       -----------
Gain (loss) from,
discontinued operations ........          --             --          (507,044)         (507,044)
Preferred dividends ............          --             --              --                --
Net loss .......................   $(2,504,635)   $ 1,727,979     $(1,502,869)      $(2,279,525)
                                   ===========    ===========     ===========       ===========
</TABLE>
                                       19
<PAGE>

14       SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION

The following is a summary of supplemental  disclosures of cash flow information
for the six months ending June 30, 2009 and 2008:
<TABLE>
<CAPTION>
                                                                                        2009                2008
                                                                                ------------      --------------
     Cash paid during the year for the following:
<S>                                                                             <C>               <C>
       Interest                                                                 $         --      $         --
       Income taxes                                                                       --              22,486
                                                                                ------------      --------------
         Total                                                                  $         --      $       22,486
                                                                                ============      ==============
     Acquisition of Bollheimer & Associates with debt                                     --             320,000
     Stock issued for compensation                                                        --             336,833
     Reduction of convertible debentures from disposal
      of investment in GS EnviroServices                                                  --           2,000,000
     Reduction of related party debt and accrued interest from forgiveness                --           2,000,000
     Stock issued for conversion of debt                                           1,307,643                  --
     Acquisition of Biofuels Industries Group, LLC with debt                              --           9,000,000
     JMJ Financial convertible debenture                                             600,000                  --
     JMJ Financial note receivable                                                   500,000                  --
     Reduction of convertible debentures, note payable and accrued
      interest from sale of subsidiary to entity under common control              9,381,191                  --
</TABLE>

15       RELATED PARTY TRANSACTIONS

Minority  Interest  Fund  (II),  LLC  ("MIF")  is party to  certain  convertible
debentures  issued by the Company (see Note 8, Convertible  Debentures,  below).
The managing member of MIF is a relative of the Company's chairman.

16       RESTATEMENT

The Company has restated its financial  statements  for the year ended  December
31, 2008.  During  preparation of this report,  Management  determined  that the
Company's  prior  policies  relating to accounting  for the impact of conversion
features  embedded in the  Company's  various  derivative  securities  should be
revised to be consistent with recent guidance  involving the  interpretation  of
SFAS No. 150, Accounting for Certain Financial  Instruments with Characteristics
of both  Liabilities  and Equity (SFAS 150),  due to the variable  number of the
Company's  common  shares  issuable upon  conversion  of the  company's  various
derivative  securities.   Accordingly,   Management  reviewed  and  revised  its
conclusions regarding the Company's derivative instruments at December 31, 2008.

The following is the effect of the restatement:

                         12/31/08          12/31/08
                      As reported       As restated
                      -----------------------------

Total liabilities   $ 108,947,805    $  73,835,046
Total equity ....   $ (62,559,418)   $ (53,035,432)

<TABLE>
<CAPTION>
                                           Three months ended                           Six month ended
                                                      6/30/08                                   6/30/08
                                 As reported      As restated             As reported       As restated
                                 -----------      -----------             -----------       -----------

<S>                            <C>              <C>                    <C>               <C>
Total other income (expense)   $  (4,288,505)   $  (3,204,910)         $   (8,574,365)   $  (6,497,658)
Net income (loss) ..........   $ ( 2,909,224)   $  (2,279,526)         $   (6,703,631)   $  (5,725,069)
Earnings (loss) per share ..   $       (0.09)   $       (0.06)         $        (0.18)   $       (0.15)

</TABLE>
17         SUBSEQUENT EVENTS

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

                                       20


<PAGE>

ITEM 2    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
          AND RESULTS OF OPERATIONS

OVERVIEW

GreenShift  Corporation  ("we,"  "our," "us,"  "GreenShift,"  or the  "Company")
develops and commercializes  clean  technologies  designed to integrate into and
leverage established  production and distribution  infrastructure to address the
financial  and  environmental  needs of our clients by  decreasing  raw material
needs, facilitating co-product reuse, and reducing waste and emissions.

Our mission is to build  shareholder value by using our technologies to catalyze
disruptive  environmental  gain.  We  believe  that  the  first,  best  and most
cost-effective  way to  achieve  this is to develop  technology-driven  economic
incentives  that  motivate a large  population  of people and  companies to make
incremental environmental contributions that are collectively very significant.

Since our inception in April 2005, we have been focused on the  development  and
commercialization of technologies  designed to create low carbon fuel production
opportunities  capable of shaving  meaningful  amounts of carbon and cost off of
the existing  liquid fuel supply chains.  We originally  invested in an array of
technologies,   including  advanced  reformation  processes,  novel  separation,
extraction  and  preparation  processes,  and  enhanced  chemical,  thermal  and
biological  processes - all with a view  towards  development  of a  financeable
business model that downshifted both the cost structure and the carbon intensity
of liquid fuels.

We  invented  and  then  successfully  developed  and  commercialized  corn  oil
extraction  technology,  a process that  increases  biofuel yields per bushel of
corn by 7% while reducing the energy and greenhouse gas (GHG)  intensity of corn
ethanol production by more than 21% and 29%,  respectively.  There are currently
no other  technologies  that have been  developed for the corn ethanol  industry
that begin to approach these results.  Corn oil extraction  technology is widely
considered  to be the  quickest  path for margin  improvement  for corn  ethanol
producers  today.  More than an estimated  20% of the ethanol  industry is using
corn oil extraction  technology today.  GreenShift's patent applications for its
extraction  technologies  were recently allowed by the U.S. Patent and Trademark
Office, and GreenShift's extraction technologies have recently been cited by the
U.S. EPA in its rulemaking  processes  involving the renewable  fuels  standard.
GreenShift   has  many  more  patents   pending  on  its  extraction  and  other
technologies, including a number of feedstock conditioning, feedstock production
and refining, and energy and carbon mitigation technologies.

We  currently  own four  corn oil  extraction  facilities  that are  located  in
Oshkosh,  Wisconsin,  Medina, New York, Marion,  Indiana, and Riga, Michigan. We
have also installed one facility in Albion, Michigan under a modified version of
our market  offering where our client paid us to build the extraction  facility.
We have the long-term  right to buy the oil extracted  from the Albion  facility
but the client retains  ownership of the extraction  assets and is paid a higher
price  for the  corn  oil  extracted  than we pay to our  other  clients.  These
facilities collectively are designed to extract in excess of 7.3 million gallons
per year. We are currently  focused on securing the capital resources we need to
operate our existing extraction  facilities and to build new corn oil extraction
facilities.

During the six months ended June 30, 2009, we also owned a 10 million gallon per
year  biodiesel  facility in Adrian,  Michigan and an oilseed crush  facility in
Culbertson,  Montana.  These two facilities  were idled during the first quarter
2009 due to a lack of  working  capital,  and then  divested  during  the second
quarter.  Neither  operation is included in the Company's  results of operations
for  the  period  ended  June  30,  2009.  The  Company's   specialty  equipment
manufacturing  operations  were also idled during the first quarter of 2009. The
Company  intends to scale this  operation  as needed to  fulfill  the  Company's
growth  needs  as it  builds,  installs  and  maintains  its  various  corn  oil
extraction facilities.

Plan of Operations

Our plans for 2009  originally  involved the  financing  and  construction  of a
number  of our  corn  oil  extraction  facilities,  the  construction  or  other
internalization  of  biodiesel  refining  capability,   and  the  completion  of
significant  additional  financing to build our contracted backlog of extraction
facilities.  We  closed  on a portion  of the  financing  we needed to build our
initial extraction  facilities in January 2008, we acquired a biodiesel refinery
in May 2008,  and we  executed  a term  sheet in July  2008 and then  definitive
investment  agreements  in December 2008 for in excess of $38 million in project
equity financing to execute on our backlog.

                                       21
<PAGE>
Unprecedented   volatility  in  the  global  financial  and  commodity   markets
intervened  during 2008 and early 2009,  and resulted in the loss of  previously
committed  sources  of  capital.   We  were  consequently   unable  to  complete
construction  and  initiate  production  with the amount of corn oil  extraction
facilities needed to achieve break-even cash flow.

The conditions in the financial  markets during the third and fourth quarters of
2008 resulted in the loss of previously  committed  sources of liquidity  during
the second  half of 2008.  We believe  that these  market  conditions  were also
responsible for the failure of our $38 million project equity financing to close
during  the first  quarter  2009 as called  for by the  relevant  December  2008
investment  agreements.  As a result of these events, we halted all construction
activities, and idled and then divested our biodiesel refining and oilseed crush
operations.

We have arranged for sufficient but costly bridge  financing to cover  essential
overhead needs and we expect to be able to continue to rely on similar financing
for the  foreseeable  future  pending the  resurrection  of our working  capital
resources and the completion of sufficient  construction  financing.  Until this
occurs,  our plan to generate  the cash  resources we need to cover our overhead
and other cash needs is to produce and sell corn oil from our installed  base of
extraction facilities.

We recently received two notices of allowance from the U.S. Patent and Trademark
Office for our corn oil  extraction  technologies.  These  notices of  allowance
provided  notification to the Company that it is entitled to a patent for two of
its several pending corn oil extraction patent applications. We believe that the
issuance of our extraction patents,  the strategic value of feedstock ownership,
and other market circumstances have favorably shifted our market positioning and
made  available  an  increased   array  of  options  to  fully   capitalize  the
construction  of  extraction  facilities  and the  restructuring  of our balance
sheet. We are currently evaluating a number of opportunities in this regard.

Our plans for the balance of 2009 involve the following activities:

>>   Complete the  financing  necessary  to return to positive  cash flow and to
     build as many  additional  extraction  facilities as possible as quickly as
     possible;

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

>>   Focus   exclusively  on  servicing  the  growth  needs  of  our  extraction
     technologies while facilitating the development of other clean technologies
     in our portfolio by entering into and supporting  license  agreements  with
     strategic partners.

Results of Operations
<TABLE>
The following table sets forth, for the periods  presented,  revenues,  expenses
and net income in our condensed consolidated statement of operations, as well as
other key financial and operating data:
<CAPTION>
                                                              Three Months Ended June 30        Six Months Ended June 30
                                                             ---------------------------    ----------------------------
                                                                     2009           2008            2009            2008
                                                             ------------    -----------    ------------    ------------
Summary Statement of Operations:
<S>                                                          <C>             <C>            <C>              <C>
Revenue ..................................................   $  1,167,457    $  5,961,775   $   2,023,115    $  8,857,574
Cost of revenues .........................................       838,664,       2,525,799       1,994,388       4,045,899
                                                             ------------    ------------    ------------    ------------
  Gross profit ...........................................        328,793       3,435,976          28,727       4,811,675

Selling, general and administrative expenses .............      5,355,094       2,016,985      13,554,646       3,485,433
                                                             ------------    ------------    ------------    ------------
   Income (loss) from operations .........................     (5,026,300)      1,418,991     (13,525,919)      1,326,242

Other income (expense),  net .............................      2,514,711      (3,204,910)     (4,182,622)     (6,497,658)
                                                             ------------    ------------    ------------    ------------
   Loss before minority interest and taxes ...............     (7,541,011)     (1,785,920)    (17,708,541)     (5,171,416)

Minority interest in net loss of consolidated subsidiaries           --             6,419            --             6,419
(Provision for) benefit from income taxes ................        402,347           7,019         402,347            --
Income from discontinued operations ......................     14,354,069        (507,044)     13,284,713        (560,072)
Preferred dividends ......................................           --              --          (270,000)           --
                                                             ------------    ------------    ------------    ------------
   Net gain (loss)........................................    $ 7,215,405    $ (2,279,526)   $ (4,291,481)   $ (5,725,069)
                                                             ============    ============    ============    ============
Other financial data:
Net cash flows (used in) provided by operating activities                                        (297,682)      1,294,579
Net cash flows (used in) provided by investing activities                                        (851,078)     (7,222,562)
Net cash flow (used in) provided by financing activities .                                      1,139,056       5,786,332
                                                                                             ------------    ------------
   Net (decrease) increase in cash and cash equivalents ..                                         (9,704)       (141,651)

Other non-GAAP financial performance data:
Operating data:
Corn oil extracted (gallons) .............................      296,727             --            449,514            --
Average gross price of corn oil sold per gallon ($) ......    $    4.59      $      --       $       4.59    $       --
</TABLE>
                                       22
<PAGE>
Three Months Ended June 30, 2009 Compared to Three Months Ended June 30, 2008

Revenues

Total  revenues  for the  three  months  ended  June 30,  2009  were  $1,167,457
representing a decrease of 4,794,318, or 80.4%, over the three months ended June
30, 2008  revenues of  $5,961,775.  Revenue for the three  months ended June 30,
2009  included  $1,110,231  in  biofuel  sales  and  $57,226  in  equipment  and
technology  sales.  In the  comparable  period of last year,  our revenues  were
comprised of $774,027  from the sales of biofuels and  $5,187,748  from sales of
equipment and technology.

Cost of Revenues

Cost of revenues  for the three  months  ended June 30, 2009 were  $838,664,  or
71.8% of revenue compared to $2,525,799, or 42.4% of revenue for the same period
in 2008.  During the three  months ended June 30, 2009,  the  Company's  biofuel
production costs of revenue were $321,690 as compared to $1,894,960 for the same
period in 2008, and were  attributable  to costs  associated  with feedstock and
other raw material  purchases,  transportation and maintenance.  Cost of revenue
for our  equipment  and  technology  sales  business were $516,974 for the three
months ended June 30, 2009 as compared to $630,839 for the same period in 2008.

Revenues in 2009 decreased due to the fact that the Company's biodiesel refinery
and equipment manufacturing  operations were shut down due to the unavailability
of the working capital resources these operations require.

Included  within cost of revenue is  depreciation  and  amortization  expense of
$297,969  and  $100,103  for the three  months  ended June 30,  2009,  and 2008,
respectively.  Depreciation and amortization  expense increased by $197,866 over
the same period in 2008.

Gross Profit

Gross profit for three months ended June 30, 2009 was $328,793,  representing  a
gross margin of 28.2%. This compared to $3,435,976,  representing a gross margin
of 57.6%, from the comparable period in 2008.

Operating Expenses

Operating  expenses  for the three  months  ended June 30, 2009 were  $5,355,093
compared to $2,016,985 for the same period in 2008. Included in the three months
ended June 30, 2009 was $0 in  stock-based  compensation  as compared to $32,816
for the three months ended June 30, 2008. The increase in operating expenses was
primarily  due to the  Company's  changed  business  operations  during  2009 as
compared to 2008.

Interest Expense

Interest  expenses and financing  costs for the three months ended June 30, 2009
were  $1,543,708  and  $1,561,103  for the three  months  ended  June 30,  2008.
Included  in the three  months  ended June 30, 2009 was  $1,543,708  of interest
expense,  consisting  of  $1,498,924  in  accrued  interest,  $44,784 in accrued
interest due to a related party,  and $747,016 in non-cash  expenses  associated
with the conversion  features  embedded in the convertible  debentures issued by
the Company during the three months ended June 30, 2009.

Amortization  of note discount was $281,178 and $538,281,  respectively  for the
three months ended June 30, 2009 and 2008.

Gain Associated with Change in Convertible Liabilities

As of June 30, 2009,  the Company had several  convertible  debentures due to YA
Global Investments,  LP. The Company accounted for the convertible debentures in
accordance with SFAS No. 150, Accounting for Certain Financial  Instruments with
Characteristics  of both  Liabilities  and Equity (SFAS 150), as the  conversion
feature  embedded  in the  convertible  debentures  could  result  in  the  note
principal and related  accrued  interest being converted to a variable number of
the  Company's  common  shares.  We calculate  the fair value of the  conversion
feature  at the time of  issuance  and  record a  conversion  liability  for the
calculated  value. We recognize  interest  expense for the conversion  liability
which is added to the principal of the  debenture.  We also  recognize  interest
expense for accretion of the conversion liability over the term of the note.

                                       23
<PAGE>
Gain Associated with Derivative Instruments

As of June 30, 2009,  the Company had several  convertible  debentures due to YA
Global  Investments,  LP. The conversion feature on these debentures is variable
based on trailing market prices and therefore  contains an embedded  derivative.
We valued the conversion feature at the time of issuance using the Black-Scholes
Model and recorded a note discount and  derivative  liability for the calculated
value.  We recognized  interest  expense for accretion of the note discount over
the term of the note.  The  derivative  liability  was valued at the end of each
reporting period and results in a gain or loss for the change in fair value. Due
to the volatile  nature of our stock the change in the derivative  liability and
the resulting gain or loss was usually  material to our results.  As a result of
the adoption of SFAS No. 150, Accounting for Certain Financial  Instruments with
Characteristics  of both  Liabilities  and Equity  (SFAS  150),  the Company has
written off the derivatives as of June 30, 2009. The derivative  liability as of
June 30, 2009 was $0.

Net Income or Loss

Net loss from  continuing  operations  for the three months ended June 30, 2009,
was $7,138,664 as compared to a loss of $1,772,482 from the same period in 2008.
Gain for discontinued operations was $14,354,069 for the three months ended June
30, 2009 as compared to $507,044 for the three  months ended June 30, 2008.  Net
income for the three months ended June 30, 2009, was $7,215,405 as compared to a
loss of $2,279,526 from the same period in 2008.

The  Company's  net income  during  the three  months  ended  June 30,  2009 was
$7,215,405,  which is increased  from the  $2,279,526  loss recorded in the same
period of 2008.  The primary  reasons for the  magnitude of this net income were
the  $14,451,979  gain on disposal of discontinued  operations,  the adoption of
SFAS No. 150, Accounting for Certain Financial  Instruments with Characteristics
of both  Liabilities  and  Equity  (SFAS  150)which  resulting  in  lower  costs
associated with the conversion  features embedded in the convertible  debentures
as well as the dramatic  reduction in our  operating  activities  as compared to
2008 and expenses  attributable to past financing and restructuring  activities.
The income included the following  non-cash  items:  reversal of amortization of
debt discount and deferred  financing fees of about $281,000,  reversal of prior
loss on change in  derivative  instruments  of  $4,400,000,  loss on  conversion
liabilities of $813,000,  depreciation  expenses of about $300,000,  and accrued
interest of about $1,500,000.

Six months  Ended June 30,  2009  Compared  to Six  months  Ended June 30,  2008
Revenues

Total  revenues  for  the  six  months  ended  June  30,  2009  were  $2,023,115
representing a decrease of 6,834,459,  or 77.2%,  over the six months ended June
30, 2008 revenues of $8,857,574.  Revenue for the six months ended June 30, 2009
included  $1,734,565 in biofuel  sales and $288,550 in equipment and  technology
sales.  In the  comparable  period of last year,  our revenues were comprised of
$1,105,398 from the sales of biofuels and $7,752,176 from sales of equipment and
technology.

Cost of Revenues

Cost of  revenues  for the six months  ended June 30, 2009 were  $1,994,388,  or
98.6% of revenue compared to $4,045,899, or 45.7% of revenue for the same period
in 2008.

During the six months  ended June 30, 2009,  the  Company's  biofuel  production
costs of revenue were  $1,141,307 as compared to $823,925 for the same period in
2008, and were  attributable  to costs  associated  with feedstock and other raw
material  purchases,  transportation  and  maintenance.  Cost of revenue for our
equipment and  technology  sales business were $853,081 for the six months ended
June 30, 2009 as compared to $3,221,974 for the same period in 2008.

Revenues  in 2009  decreased  due to the  dramatic  reduction  in the  Company's
operating  activities  as  compared  to 2008  caused  by the loss of  previously
committed  sources of capital  and the  unavailability  of the  working  capital
resources these operations require.

Gross Profit

Gross  profit for six months  ended June 30, 2009 was  $28,727,  representing  a
gross margin of 1.4%.  This compared to $4,811,675,  representing a gross margin
of 54.3% in the comparable period of the prior year.

Operating Expenses

Operating  expenses  for the six  months  ended June 30,  2009 were  $13,554,646
compared to $3,485,433  for the same period in 2008.  Included in the six months
ended June 30, 2009 was $0 in stock-based  compensation  as compared to $336,833
for the six months ended June 30, 2008.  The increase in operating  expenses was
primarily  due to the  $4,212,855  in bad debt  expense  related  to the sale of
discontinued  operations,  the $7,281,993  impairment of goodwill as well as the
Company's changed business  operations during 2009 as compared to 2008. Included
within operating  expenses is depreciation and amortization  expense of $595,318
and $100,103 for the six months  ended June 30,  2009,  and 2008,  respectively.
Depreciation and amortization expense increased by $495,215 over the same period
in 2008.

                                       24
<PAGE>

Interest Expense

Interest  expenses and other  financing  costs for the six months ended June 30,
2009 were  $3,433,692  and  $3,685,904  for the six months  ended June 30, 2008.
Included  in the six  months  ended June 30,  2009 was  $3,056,924  of  interest
expense,  consisting  of  $2,970,139  in  accrued  interest,  $86,785 in accrued
interest due to a related party,  and $813,022 in non-cash  expenses  associated
with the conversion  features  embedded in the convertible  debentures issued by
the Company during the six months ended June 30, 2009.

Amortization  of deferred  financing  costs and debt  discounts was $376,768 and
$910,064, respectively.

Gain Associated with Change in Convertible Liabilities

As of June 30, 2009,  the Company had several  convertible  debentures due to YA
Global Investments,  LP. The Company accounted for the convertible debentures in
accordance with SFAS No. 150, Accounting for Certain Financial  Instruments with
Characteristics  of both  Liabilities  and Equity (SFAS 150), as the  conversion
feature  embedded  in the  convertible  debentures  could  result  in  the  note
principal and related  accrued  interest being converted to a variable number of
the  Company's  common  shares.  We calculate  the fair value of the  conversion
feature  at the time of  issuance  and  record a  conversion  liability  for the
calculated  value. We recognize  interest  expense for the conversion  liability
which is added to the principal of the  debenture.  We also  recognize  interest
expense for accretion of the conversion liability over the term of the note.

Gain Associated with Derivative Instruments

As of June 30, 2009,  the Company had several  convertible  debentures due to YA
Global  Investments,  LP. The conversion feature on these debentures is variable
based on trailing market prices and therefore  contains an embedded  derivative.
We valued the conversion feature at the time of issuance using the Black-Scholes
Model and recorded a note discount and  derivative  liability for the calculated
value.  We recognized  interest  expense for accretion of the note discount over
the term of the note.  The  derivative  liability  was valued at the end of each
reporting period and results in a gain or loss for the change in fair value. Due
to the volatile  nature of our stock the change in the derivative  liability and
the resulting gain or loss was usually  material to our results.  As a result of
the adoption of SFAS No. 150, Accounting for Certain Financial  Instruments with
Characteristics  of both  Liabilities  and Equity  (SFAS  150),  the Company has
written off the derivatives as of June 30, 2009. The derivative  liability as of
June 30, 2009 was $0.

Net Income or Loss

Net loss from continuing  operations for the six months ended June 30, 2009, was
$17,306,194  as compared to a loss of  $5,164,997  from the same period in 2008.
Gain for  discontinued  operations was $13,284,713 for the six months ended June
30, 2009 as compared  to a loss of  $560,072  for the six months  ended June 30,
2008.  Net loss for the six  months  ended  June 30,  2009,  was  $4,021,481  as
compared to a loss of $5,725,069 from the same period in 2008.

The Company's net loss during the six months ended June 30, 2009 was $4,021,481,
which is increased from the $5,725,069 loss recorded in the same period of 2008.
The  primary  reasons  for the  magnitude  of this  net loss  were the  dramatic
reduction  in  our  operating  activities  as  compared  to  2008  and  expenses
attributable  to past  financing  and  restructuring  activities.  The loss also
included  the  following  non-cash  items:  impairment  charges  relating to the
Biofuels  Industries,  LLC subsidiary of about $7,300,000,  amortization of debt
discount and  deferred  financing  fees of about  $377,000,  loss on  conversion
liabilities of $813,000,  depreciation expenses of about $600,000,  and, accrued
interest of about $3,000,000.

LIQUIDITY AND CAPITAL RESOURCES

Current and Prior Year Activity

The Company had no cash as of June 30,  2009.  Our primary  sources of liquidity
are cash generated from proceeds from issuance of debt and common stock. For the
six months ended June 30, 2009, provided by financing activities was $1,139,056.

Our financial  position and liquidity are, and will be,  influenced by a variety
of factors,  including  our ability to properly  capitalize  our  operating  and
construction activities, our ability to generate cash flows from our operations,
and the level of our outstanding  indebtedness and the interest we are obligated
to pay on this indebtedness.

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<PAGE>

The Company's capital  resources are impacted by changes in accounts  receivable
as a result of revenue fluctuations, economic trends, and collection activities.
At June 30, 2009, accounts  receivable,  net of allowance for doubtful accounts,
totaled $136,372 and inventories totaled $616,056.  Accounts payable and accrued
expenses totaled $14,614,596.

For the six months ended June 30, 2009, we used $851,078 in investing activities
as compared to $7,215,133 used in investing activities for the six months ended
June 30, 2008, and financing activities provided $1,139,056 in cash as compared
to $6,335,941 in cash provided by financing activities during June 30, 2008.

The Company had a working capital deficit of $63,324,321 at June 30, 2009, which
includes  convertible  debentures of $19,477,319,  accrued  interest  payable of
$7,173,539,  related party convertible  debentures of $2,175,047,  $3,979,437 in
purchase  obligations,and  $942,001 in minority interest obligations  associated
with inactive  subsidiaries.  The Company's working capital deficit net of these
amounts is $29,537,977.

Despite  their  classification  as  current  liabilities,   current  convertible
debentures and accrued  interest  ($26,650,858)  are not  serviceable out of the
Company's  cash flows (the terms of the  convertible  debt require  repayment in
shares of either  GreenShift  Corporation  or GS  AgriFuels  Corporation  common
stock). The purchase  obligations  ($3,979,437),  to the extent due, are tied to
the earnings of the Company's  equipment sales business and can only be serviced
after the Company's senior secured debt has been serviced.

Management  intends to raise capital from debt and equity  transactions  to fund
operations,  to  increase  revenue  and to cut  expenses to reduce the loss from
operations.  There  can be no  assurances  that  the  Company  will  be  able to
eliminate  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.

Expected Activity Moving Forward

We intend to fund our  principal  liquidity  and capital  resource  requirements
through new financing activities. The Company has no committed source of capital
that is sufficient to meet all of its  operational  and other regular cash needs
during 2009 and beyond.  Obtaining  this capital is currently  Management's  top
priority.

Cash Flows Provided By Operating Activities

Among our current and known  sources of operating  cash flows are the cash flows
deriving from our existing corn oil extraction  facilities.  We will continue to
market the corn oil we extract as a  feedstock  to third  party  renewable  fuel
producers.

Cash Flows Provided By Financing Activities

We  require  significant  new  equity  and  debt  financing  to  accelerate  the
completion  of  our  previously  idled  other  contracted  corn  oil  extraction
projects. We hope to complete additional financing for this purpose during 2009.
We are also  evaluating  various  opportunities  to restructure  our convertible
debt. We do not know at this time if the  necessary  funds can be obtained or on
what terms they may be available.

Cash Flows Used In Investment Activities

We intend to use our available sources of cash from operations and financing for
2009 to execute on our plan to build as many corn oil  extraction  facilities as
possible, as quickly as possible.


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<PAGE>



ITEM 3    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable.

ITEM 4    CONTROLS AND PROCEDURES

EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

Our principal executive officer and principal financial officer  participated in
and  supervised  the  evaluation of our  disclosure  controls and procedures (as
defined in Rules 13(a)-15(e) and 15(d)-15(e)  under the Securities  Exchange Act
of 1934,  as amended  (the  "Exchange  Act"))  that are  designed to ensure that
information  required  to be  disclosed  by us in the  reports  that  we file is
recorded,  processed,  summarized and reported within the time 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 not 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 have been no changes in the  Company's  internal  control  over  financial
reporting during the most recently completed fiscal quarter that have materially
affected or are reasonably  likely to materially  affect the Company's  internal
control over financial reporting.



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<PAGE>




                           PART II - OTHER INFORMATION

ITEM 1            LEGAL PROCEEDINGS

The Company is party to the matter  entitled  O'Brien & Gere  Limited,  et al v.
NextGen Chemical Processors, Inc., et al., which action was filed in the Supreme
Court of the State of New York. The verified complaint had sought performance of
and damages relating to certain service and related agreements,  plus attorney's
fees and costs.  This matter  relates to the  provision by plaintiffs of certain
engineering  services to NextGen Chemical  Processors,  Inc. ("NCP") during 2005
and  2006.  NCP is owned by the  former  shareholders  of  NextGen  Fuel,  Inc.,
subsidiary.  On September  19, 2007,  the Supreme Court of the State of New York
dismissed a significant  portion of O'Brien & Gere's  complaint with  prejudice.
Management  does not believe  that there is a  reasonable  probability  that the
claims made against NextGen Fuel by the plaintiffs in this  litigation  indicate
that a material  loss has occurred.  Accordingly,  an estimate of loss cannot be
made at this time and no accrual has been made in connection with those claims.

The  Company's  GS  AgriFuels  subsidiary  is party to the  matter  entitled  GS
AgriFuels  Corporation  v.  Chaykin,  et al. The action was filed in the Supreme
Court of the State of New York,  County of New York,  on February  2, 2009.  The
Complaint seeks damages for defendants' fraudulent misrepresentations,  tortious
interference,  breach of acquisition agreements and related claims. GS AgriFuels
initiated  this  litigation  and intends to prosecute the case  vigorously.  The
defendants  filed a  separate  action  entitled  Max,  et al.  v.  GS  AgriFuels
Corporation,  et al. in response to GS AgriFuels'  Complaint.  The case was only
recently  commenced and  Management is unable to evaluate the  probability of an
unfavorable outcome at this time.

ITEM 1A  RISK FACTORS

There was no  material  change  to the risk  factors  recited  in Item 1A of the
Company's Annual Report on Form 10-K for the year ended December 31, 2008..

ITEM 2   UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

From time to time during the six months ended June 30, 2009,  the Company issued
a total of 418,118,139 shares to the Company's various  convertible debt holders
upon their  conversion  of  convertible  debenture  in the  aggregate  amount of
$1,307,643. The sales were exempt pursuant to Section 4(2) of the Securities Act
since the sales  were not made in a public  offering  and were made to an entity
whose principals had access to detailed  information  about the Company and were
acquiring the shares for the entity's own account. There were no underwriters.

ITEM 3   DEFAULTS UPON SENIOR SECURITIES

As of June 30,  2009,  the Company was in  technical  default of certain  senior
secured debt due to YA Global Investments,  L.P. ("YAGI"), which default was due
to the  failure  of the  CleanBioenergy  Partners,  LLC  financing  to  close as
explained more fully in Note 11 to the Company's Condensed Financial  Statements
for the quarter  ended June 30, 2009.  The Company  intends to cure this default
and restructure its debt due to YAGI during 2009.

ITEM 4   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None.

ITEM 5   OTHER INFORMATION

None.


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<PAGE>



ITEM 6   EXHIBITS

The following are exhibits filed as part of GreenShift's Form 10Q for the
quarter ended June 30, 2009:

INDEX TO EXHIBITS

Exhibit

Number                     Description

31.1 Certification    of   Chief    Executive    Officer    pursuant   to   Rule
     13a-14(a)/15d-14(a),   as  adopted   pursuant   to   Section   302  of  the
     Sarbanes-Oxley Act of 2002.

31.2 Certification    of   Chief    Financial    Officer    pursuant   to   Rule
     13a-14(a)/15d-14(a),   as  adopted   pursuant   to   Section   302  of  the
     Sarbanes-Oxley Act of 2002.

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


SIGNATURES

Pursuant to the requirements of Section 13 or 15 (d) of the Securities  Exchange
     Act of 1934, the registrant has duly caused this report to be signed on its
     behalf by the undersigned, thereunto duly authorized on the date indicated.

GREENSHIFT CORPORATION

By

              /S/       KEVIN KREISLER
              ------------------------------------
                        KEVIN KREISLER
                        Chief Executive Officer

              /S/       EDWARD R. CARROLL
              ------------------------------------
                        EDWARD R. CARROLL
                        Chief Financial and Accounting Officer


Date:         August 21, 2009




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