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

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

                                  FORM 10-KSB/A
                                 Amendment No. 1
                            -------------------------


                    ANNUAL REPORT UNDER SECTION 13 OR 15 (D)
                     OF THE SECURITIES EXCHANGE ACT OF 1934
                   FOR THE FISCAL YEAR ENDED DECEMBER 31, 2006

                          COMMISSION FILE NO.: 0-32143



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


Delaware                                                         22-3328734
--------------------------------------------------------------------------------
(State of other jurisdiction of                                (IRS Employer
incorporation or organization                                Identification No.)

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

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

Securities registered pursuant to Section 12(b) of the Act: None.

Securities registered pursuant to Section 12(g) of the Act: Common Stock, $0.001
par value.

Check whether the issuer is not required to file reports  pursuant to Section 13
or 15(d) of the Exchange Act. ?

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 __.

Check if there is no disclosure of delinquent  filers in response to Item 405 of
Regulation S-B contained in this form, and no disclosure  will be contained,  to
the best of the  registrant's  knowledge,  in  definitive  proxy or  information
statements  incorporated  by  reference  in Part III of this Form  10-KSB or any
amendment to this Form. (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
                                    ---    ---

State issuer's revenues for its most recent fiscal year:  $17,850,452

The  number of  outstanding  shares of  common  stock as of April 16,  2007 was:
146,608,401.  Based on the closing price of the  Registrant's  common stock, the
aggregate  market  value  of the  voting  stock  held by  non-affiliates  of the
Registrant as of April 16, 2006 was $10,451,926.







<PAGE>







                                EXPLANATORY NOTE

RESTATEMENT OF FINANCIAL STATEMENTS


This  Amendment  No.  1 on  Form  10-KSB/A,  which  amends  and  restates  items
identified  below  with  respect  to  the  Form  10-KSB,   filed  by  GreenShift
Corporation ("we" or "the Company") with the Securities and Exchange  Commission
(the "SEC") on April 18, 2007 (the "Original Filing"), is being filed to reflect
the  restatement of our financial  statements for the fiscal year ended December
31, 2006.

As previously  announced,  our management,  on July 26, 2007, concluded that the
Company's  previously  filed  financial  statements  as of and  for  year  ended
December 31, 2006,  should no longer be relied upon as a result of the Company's
determination that it was liable for approximately  $498,000 of convertible debt
along with approximately $59,000 of related derivative liabilities at October 9,
2006, the reverse merger date, and at December 31, 2006. In addition, management
reviewed and revised its  conclusions  regarding its  derivative  instruments at
December 31, 2006.  This  conclusion  was based upon  conversations  between the
Company and its independent  auditors (Rosenberg Rich Baker Berman, CPA). During
this process,  management and the Board of Directors of the Company were alerted
to the facts and  circumstances  related to the  Company's  liability  for these
debts and the revisions to the derivative  calculations.  Authorized officers of
the  Company  discussed  this  matter  with  the  Company's  independent  public
accounting  firm who  agreed  that the  Company's  previously  issued  financial
statements  described  above could not be relied upon and needed to be restated.
See "Note 23 -  Restatement"  in the Notes to Financial  Statements  for further
details.  This Form 10-KSB/A also amends the disclosure under "Item 8a. Controls
and Procedures" in the Original Filing.

This Form  10-KSB/A  only  amends and  restates  certain  information  in Item 6
(Management's  Discussion  And  Analysis Of Financial  Condition  And Results Of
Operation), Item 7 (Financial Statements) and Item 8a (Controls and Procedures),
and  Item 13  (Exhibits  and  Reports  on  Form  8K),  and  such  amendment  and
restatement  with respect to Items 6 and 7 only reflect the  restatement  of the
financial  statements as described above.  Except for the foregoing  amended and
restated information,  this Form 10-KSB/A continues to describe conditions as of
the date of the Original Filing,  and the disclosures  contained herein have not
been updated to reflect events, results or developments that have occurred after
the  Original  Filing,  or to modify or update  those  disclosures  affected  by
subsequent events.  Among other things,  forward-looking  statements made in the
Original Filing have not been revised to reflect events, results or developments
that have  occurred or facts that have become  known to us after the date of the
Original  Filing  (other  than  the  restatement),   and  such   forward-looking
statements should be read in their historical context. This Form 10-KSB/A should
be read in conjunction  with the Company's  filings made with the SEC subsequent
to the Original Filing, including any amendments to those filings


                                       2
<PAGE>




<TABLE>

                             GREENSHIFT CORPORATION

                          ANNUAL REPORT ON FORM 10KSB/A
                   FOR THE FISCAL YEAR ENDED DECEMBER 31, 2006


                                TABLE OF CONTENTS


<CAPTION>

                                                                                                         Page No
Part I
<S>         <C>                                                                                            <C>
Item 1      Description of Business .........................................................................4
Item 2      Description of Properties.......................................................................13
Item 3      Legal Proceedings...............................................................................13
Item 4      Submission of Matters to a Vote of Security Holders ............................................13

Part II
Item 5      Market for Registrant's Common Equity and Related Stockholder Matters ..........................14
Item 6      Management's Discussion and Analysis of Financial Condition and Results of Operations...........15
Item 7      Financial Statements ...........................................................................28
Item 8      Changes and Disagreements with Accountants on Accounting and Financial Disclosure ..............72
Item 8A     Controls and Procedures ........................................................................72

Part III
Item 9      Directors, Executive Officers, Promoters, Control Persons and Corporate Governance; Compliance
                 with Section 16(a) of the Exchange Act   ..................................................73
Item 10    Executive Compensation ..........................................................................75
Item 11    Security Ownership of Certain Beneficial Owners and Related Stockholder Matters .................75
Item 12    Certain Relationships and Related Transactions and Director Independence.........................75

Part IV
Item 13    Exhibits and Reports on Form 8K .................................................................77
Item 14    Principal Accountant Fees and Services ..........................................................78

Signatures..................................................................................................79

</TABLE>






















                                       3


<PAGE>

                           Forward Looking Statements

In  addition  to   historical   information,   this   Annual   Report   contains
forward-looking statements, which are generally identifiable by use of the words
"believes,"  "expects,"  "intends,"   "anticipates,"  "plans  to,"  "estimates,"
"projects," or similar expressions. These forward-looking statements are subject
to certain  risks and  uncertainties  that could cause actual  results to differ
materially from those  reflected in these  forward-looking  statements.  Factors
that might  cause such a  difference  include,  but are not  limited  to,  those
discussed  in the section  entitled,  "Description  of Business - Business  Risk
Factors".   Readers  are  cautioned  not  to  place  undue   reliance  on  these
forward-looking  statements,  which reflect management's opinions only as of the
date  hereof.  We  undertake  no  obligation  to revise or publicly  release the
results of any  revision to these  forward-looking  statements.  Readers  should
carefully review the risk factors described in other documents  GreenShift files
from time to time with the  Securities  and  Exchange  Commission  (the  "SEC"),
including  the  Quarterly  Reports on Form 10QSB to be filed by us in the future
fiscal years.

                                     PART I

ITEM 1.  DESCRIPTION OF BUSINESS

SUMMARY

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

We face environmental challenges today that are the collective result of several
generations  of  industrial  development.  These  challenges  did not  originate
because of this development, per se, but rather because of mismanagement of both
natural  resources  and, in many cases,  the  non-utilization  of the production
byproducts (commonly called "waste").

The  resolution to the  challenges  we currently  face will not likely come from
changes in consumer  behavior and shifts in patterns of consumption,  but rather
from the management of resources in the production of what is consumed, which we
feel will,  predictably,  be driven by motive of profit.  Therefore,  GreenShift
focuses its core activities on investing in, developing internally, or acquiring
technologies  that  advance  profits,  either  through  cost-savings  or revenue
increases, and result in cleaner and more efficient methods of production.

Take a  standard  dry  mill  ethanol  plant  for  example.  In most  US  ethanol
production facilities corn is trucked in and then milled and mashed. Ultimately,
about 33% of the mass of that corn is  converted  to  ethanol  through  standard
alcohol  distillation.  Another  33% of the mass is  released  as CO2 during the
fermentation  process.  The final 33% is primarily  cellulosic  materials called
"distillers  grain",  and it currently  cannot be converted into ethanol.  These
distiller  grains are typically  sold at relatively  lower value as animal feed.
GreenShift intentionally sought to target, capture and utilize the byproducts of
the process  (i.e.  "waste")  and  increase  the value of these  byproducts.  To
address the standard dry mill ethanol  process,  our  portfolio  companies  have
developed  or  acquired  the rights to a number of  technologies  that can:  (i)
extract higher value corn oil from lower value distillers  grains;  (ii) convert
that  corn  oil  into  biodiesel;   (iii)  convert  various  biomass  (including
distillers  grains) into energy or fuels;  and (iv)  potentially  capture CO2 to
grow another  biomass,  which could  potentially  be converted  into  additional
energy.  To  establish  these  technologies,  each  must  stand on its own as an
economically feasible "add on" - each driving additional profitability.

Besides increasing the profits to the ethanol plant, the positive  externalities
or environmental impact of the above ethanol-specific  technologies are: (i) the
production of more renewable,  cleaner  burning fuels that can further  displace
petroleum,  and (ii) the potential  reduction of carbon emissions at the ethanol
plant   itself.   Although   certain  of  the  above   technologies   are  still
development-stage,  the  approach  is a model  for the  prototypical  GreenShift
solution.

We  believe  that  across  the  industrial  landscape  there  exists  tremendous
environmental gain potential by simply making it easier and more  cost-effective
to use renewable  sources of energy,  to burn cleaner fuels,  and to utilize and
transform "waste" into more valuable commodities. We accomplish this by:

     >>   developing and implementing  incremental  advances in technologies and
          business practices
     >>   that leverage established  infrastructure and distribution channels to
          enable increased and sustainable profits
     >>   by decreasing the consumption of natural  resources and the generation
          of wastes and emissions.

These incremental shifts forward in both economic and environmental gain - these
green shifts - are at the core of our  philosophy and they are the basis for our
primary  operations:  GS CleanTech,  GS AgriFuels,  GS Energy,  GS Carbon and GS
EnviroServices (see Item I, Description of Business - Operations, below).

                                       4

<PAGE>

GreenShift began  operations as a closed-end  management  investment  company on
April 1, 2005 after we acquired  majority  equity stakes in the  predecessors to
our GS CleanTech and GS Energy  subsidiaries  and filed an election on Form N54A
pursuant to Section 54 of the  Investment  Company Act of 1940 (the "40 Act") to
be regulated as a business  development company ("BDC"). We conducted operations
as a BDC from April 1, 2005 through July 1, 2006.  During this time, we acquired
our initial  technology  portfolio,  we purchased  majority equity stakes in the
development  stage and  operating  companies  that would  eventually  become our
platform companies,  and we completed a number of minority equity investments in
companies that we believed to be strategic to our mission.

On July 1,  2006,  we filed  Form N54C  pursuant  to Section 54 of the 40 Act to
withdraw  our  election to be  regulated  as a BDC.  This  decision  was in part
prompted  by the fact that the  majority  of our  resources  were  allocated  to
managing  the  operating   activities  of  our  majority-owned   holdings.   The
de-election  changed the nature of our business from an investment  and business
development  company to an active  operating  company.  We commenced  efforts to
restructure  our holdings and investments at the time of this  de-election.  The
primary purpose of this  restructuring was to organize our holdings according to
a  sector-specific   approach,   within  `pure-play'   platform  companies  with
investment  theses  that are both  distinct  and  consistent  with  GreenShift's
overall mission.  Today, our majority-held companies are currently generating in
excess of $30 million in sales and hold over 30 patents and pending  patents for
clean  technologies  that  Management  believes  to have  wide  and  potentially
disruptive  application  potential.  Our current corporate structure is provided
here:
<TABLE>
<CAPTION>

Company                                                                                               Percent Owned
-------------------------------------------------------------------------------------------------------------------
<S>                                                                                                             <C>
>>       GS CleanTech Corporation (OTC Bulletin Board: GSCT)                                                    80%

>>       GS Industrial Design, Inc.                                                                            100%
>>       GS Ethanol Technologies, Inc.                                                                         100%
>>       GS Carbon Dioxide Technologies, Inc.                                                                  100%
>>       Tornado Trash Corporation                                                                             100%

>>       GS CleanTech Ventures, Inc.                                                                           100%
>>       General Hydrogen Corporation                                                                            3%
>>       Ovation Products Corporation                                                                           12%

>>       GS EnviroServices Corporation (OTC Bulletin Board: TDSM)                                               55%
>>       EnviroSafe Corporation                                                                                100%
>>       EnviroSafe Corporation (NE)                                                                           100%

>>       GS AgriFuels Corporation (OTC Bulletin Board: GSGF)                                                    80%

>>       Mean Green BioFuels, Inc.                                                                             100%
>>       GS Fulton Biodiesel, LLC                                                                               80%
>>       Mean Green Biodiesel (TN), Inc.                                                                       100%
>>       Mean Green Biodiesel (OH), Inc.                                                                       100%

>>       NextGen Fuel, Inc.                                                                                    100%

>>       Sustainable Systems, Inc.                                                                             100%
>>       Montola Growers, Inc.                                                                                 100%

>>       ZeroPoint Clean Tech, Inc.                                                                             10%

>>       GS Energy Corporation (OTC Bulletin Board: GSEG)                                                       80%

>>       GS Manufacturing, Inc.                                                                                100%
>>       Warnecke Design Services, Inc.                                                                        100%
>>       Warnecke Rentals, LLC                                                                                 100%

>>       GS Carbon Corporation (OTC Bulletin Board: GSCR)                                                       85%

>>       GS Carbon Trading, Inc.                                                                               100%
>>       Sterling Planet, Inc.                                                                                  10%
>>       TerraPass, Inc.                                                                                        10%

>>       General Ultrasonics Corporation                                                                        70%

>>       General Carbonics Corporation                                                                         100%

>>       Air Cycle Corporation                                                                                  30%
</TABLE>

We recently  announced our plans to (1) merge GS AgriFuels and GS Energy and (2)
merge GreenShift, GS CleanTech and GS Carbon.


                                       5
<PAGE>


Under the terms of the GS AgriFuels - GS Energy merger agreement,  holders of GS
Energy  common stock will receive 1 share of GS AgriFuels  common stock for each
1,000  shares  owned in GS  Energy.  This  corresponds  to a total of about  2.5
million new shares of GS AgriFuels common stock that will be issued to GS Energy
common stock shareholders upon the closing of the merger.

Under the terms of the  GreenShift - GS CleanTech - GS Carbon merger  agreement,
holders of GS CleanTech  common stock will receive 1 share of GreenShift  common
stock for each 3 shares owned in GS  CleanTech,  and holders of GS Carbon common
stock will receive 1 share of GreenShift common stock for each 3 shares owned in
GS  Carbon.  This  corresponds  to a total of about  110,000,000  new  shares of
GreenShift  common stock that will be issued to the holders of GS CleanTech  and
30,000,000 shares to the holders of GS Carbon

While we believe that we need to organize our various  operating  activities  in
distinct  platform  companies,  we have  come to  believe  that  these  platform
companies should not each be separate public platforms. GreenShift believes that
both of the above mergers will be strategic for several reasons, including:

     >>   the reduction of operational overlap and redundancies,

     >>   the promotion of a unified vision among our employees,

     >>   the  reduction  of  confusion  to  third  parties  such as  customers,
          vendors, creditors, shareholders and other stakeholders,

     >>   the reduction of the focus,  capital,  and other resources required to
          administer  multiple  public  entities  as a result  of the  decreased
          complexity, and

     >>   increasing  the  ability  of our  management  to  focus  on  enhancing
          earnings,  strengthening  the Company's  balance  sheet,  and creating
          value for our shareholders.

Subject  to  the  approval  of GS  Energy's,  GS  CleanTech's  and  GS  Carbon's
shareholders, our pro forma corporate structure upon the completion of the above
mergers is provided below:
<TABLE>
<CAPTION>
Company                                                                                     Pro Forma Percent Owned
--------------------------------------------------------------------------------------------------------------------
<S>                                                                                         <C>
>>       GS AgriFuels Corporation (OTC Bulletin Board: GSGF)                                Majority Owned - Public

>>       Mean Green BioFuels, Inc.                                                                             100%
>>       GS Fulton Biodiesel, LLC                                                                               80%
>>       Mean Green Biodiesel (TN), Inc.                                                                       100%
>>       Mean Green Biodiesel (OH), Inc.                                                                       100%

>>       NextGen Fuel, Inc.                                                                                    100%

>>       Sustainable Systems, Inc.                                                                             100%
>>       Montola Growers, Inc.                                                                                 100%

>>       ZeroPoint Clean Tech, Inc.                                                                             10%

>>       GS Manufacturing, Inc.                                                                                100%
>>       Warnecke Design Services, Inc.                                                                        100%
>>       Warnecke Rentals, LLC                                                                                 100%

>>       GS EnviroServices Corporation (OTC Bulletin Board: TDSM)                           Majority Owned - Public
>>       EnviroSafe Corporation                                                                                100%
>>       EnviroSafe Corporation (NE)                                                                           100%

>>       GS CleanTech Corporation                                                            Wholly Owned - Private
>>       GS Industrial Design, Inc.                                                                            100%
>>       GS Ethanol Technologies, Inc.                                                                         100%
>>       GS Carbon Dioxide Technologies, Inc.                                                                  100%
>>       Tornado Trash Corporation                                                                             100%

>>       GS Carbon Corporation                                                               Wholly Owned - Private
>>       General Ultrasonics Corporation                                                                        70%
>>       General Carbonics Corporation                                                                         100%

>>       GS CleanTech Ventures, Inc.                                                         Wholly Owned - Private
>>       General Hydrogen Corporation                                                                            3%
>>       Ovation Products Corporation                                                                           12%
>>       Sterling Planet, Inc.                                                                                  10%
>>       TerraPass, Inc.                                                                                        10%
>>       Air Cycle Corporation                                                                                  30%
</TABLE>

                                       6

<PAGE>

OPERATIONS AND BUSINESS STRATEGY

Our technology and business development efforts to date have been focused on the
following   activities:    (a)   technology    acquisition,    development   and
commercialization  (GS  CleanTech),  (b) provision of engineering (GS CleanTech)
and manufacturing (GS Energy) services  incidental to our technologies,  (c) the
formation  and  capitalization  of a  commercialization  entity to  implement  a
go-to-market strategy for the first wave of our technologies (GS AgriFuels), and
(d) clean technology research and development.

In addition, we provide manufacturing (GS Energy) and diversified  environmental
engineering  management  services (GS  EnviroServices)  to third party  clients.
These activities constituted the majority of our sales for 2006 but are expected
to decreases as a  percentage  of our overall  sales as we continue to implement
our technology commercialization plans.

Technology Acquisition

We acquired and currently own or otherwise hold certain rights to a number of
important clean technologies through our various platform operating companies,
some of which are listed here:
<TABLE>
<CAPTION>

Technology                             Status                          IP Rights                       Owned By
----------------------------------------------------------------------------------------------------------------
<S>                                    <C>                             <C>                           <C>
Corn Oil Extraction                    Patent-Pending                  Owned                         GS CleanTech
Flash Desiccation/Homogenization       Patented                        Exclusive License             GS CleanTech
Carbon Dioxide Bioreactor              Patented/Patent-Pending         Exclusive License/Owned       GS CleanTech
Integrated Multi-Fuels Production      Patent-Pending                  Owned                         GS CleanTech
Biodiesel Production                   Patent-Pending                  Owned                         GS AgriFuels
Biomass Gasification                   Patent-Pending                  Limited Exclusive Rights(*)   GS AgriFuels
Ultrasonic Reformation                 Patent-Pending                  Owned                         GS Carbon
Carbon Nanostructure Composites        Patent-Pending                  Owned                         GS Carbon
<FN>

(*)  GS AgriFuels holds the exclusive  distribution rights to this technology in
     the  North  American  Ethanol  Production  Industry.  This  technology  was
     developed by GS AgriFuels' portfolio company, ZeroPoint Clean Tech, Inc.
</FN>
</TABLE>

Technology Development and Early-Stage Commercialization

Our technology development and early-stage  commercialization  activities during
2006 were implemented by GS CleanTech and focused on implementing a go-to-market
strategy  for  the  commercialization  of GS  CleanTech's  corn  oil  extraction
technology ("COES"). These activities included:

>>   securing agreements for the sale of early adopter  installations of COES at
     targeted qualified clients;

>>   the installation of COES at these early adopter clients;

>>   the roll-out of GS CleanTech's  current  technology  usage program where GS
     CleanTech's clients can use our technology for no up-front cost;

>>   the  execution  of term sheets and  letters of intent  with GS  CleanTech's
     prospective  usage  clients to  validate  the  offering  and to  facilitate
     early-stage financing for GS CleanTech's commercialization program;

>>   the conversion of GS CleanTech's letters of intent into executed agreements
     for deployments of COES under our usage program; and

>>   the  installation of our technology at GS CleanTech's  clients'  facilities
     under the usage program.

During 2006, GS CleanTech commissioned operations of its first two early-adopter
COES  installations  at two dry mill  ethanol  production  facilities  where the
technology  currently  extracts  corn oil at the combined  rate of more than 2.5
million gallons per year.

In total, GS CleanTech's  current  executed  contracts in its usage program will
produce more than 25 million  gallons of corn oil for conversion  into biodiesel
fuel as the  relevant  extraction  systems are fully  installed  during 2007 and
2008. GS CleanTech is currently  deploying  several of these extraction  systems
and  expects to  commission  the first of these new  systems in April  2007.  GS
CleanTech is currently  servicing an  extensive  sales  pipeline for  additional
deployments of the COES technology and Management expects that GS CleanTech will
execute agreements  corresponding to significant  additional volumes of corn oil
during 2007.

During 2006, GS AgriFuels  completed  the  acquisition  of biodiesel  technology
provider, NextGen Fuel, Inc., which had developed and began commercialization of
a proprietary,  patent-pending  continuous  flow biodiesel  system.  The NextGen
systems, which include both direct and transesterification, are skid mounted and
can produce  five (5) million or ten (10) million  gallons per year.  NextGen is
currently  servicing a substantial sales pipeline for the NextGen technology and
has  executed  contracts to sell  NextGen's  biodiesel  production  systems to a
number of clients.

                                       7
<PAGE>

In  August   2006,   GS   AgriFuels   made  a   strategic   investment   in  the
development-stage  company  ZeroPoint Clean Tech,  Inc., which is developing and
commercializing a range of technologies  related to biomass  gasification,  fuel
reforming,  gas-to-liquid,  and  water  evaporation.  In  conjunction  with  the
investment  in  ZeroPoint,  GS AgriFuels  entered  into a  reciprocal  sales and
marketing  agreement  whereby  ZeroPoint  acquired the  non-exclusive  rights to
market and sell certain of our  technologies in  international  markets,  and GS
AgriFuels acquired the exclusive use and marketing rights for ZeroPoint's patent
pending gasification,  fuel reforming and gas-to-liquids technology in the North
American ethanol industry.  ZeroPoint is currently developing a commercial-scale
pilot facility to demonstrate the capabilities of this technology.

GS  CleanTech's  focus for much of 2007 will remain  resolved on delivering  its
technologies  to the  ethanol  production  industry.  As GS  CleanTech  achieves
budgeted  milestones in our ethanol program we intend to shift our focus towards
the  extraction,  beneficiation  and  refining  of other  co-products  and waste
products in other agriproducts based industries,  the municipal waste processing
industry and the power generation industry.

Technology-Driven Engineering and Manufacturing Services

GS CleanTech's  management and staff possesses  significant  process engineering
expertise  across  multiple  engineering  and  process  technology  disciplines,
including civil, chemical, mechanical, environmental and electrical engineering,
vegetable oil processing and refining,  waste  processing,  power generation and
production of various  agriproducts.  GS CleanTech's  business model is based on
the  provision of process  engineering,  equipment  sales and plant  development
services  incidental  to  GS  CleanTech's  technology  transfer  activities.  GS
CleanTech  relies on GS  Energy's  specialty  metal  manufacturing  capabilities
relative to these efforts.

GS Energy's  manufacturing  group,  Warnecke Design Services,  Inc., is run by a
team of seasoned custom equipment manufacturers and engineers. Warnecke provides
custom  equipment  manufacturing  services  for its  clients  including  machine
design,  machine  building,  control system  electronics  and  programming,  and
maintenance  support  services.  Warnecke  currently  services  clients  in  the
biofuels, automotive,  electronics, lighting, plastics, rubber and food products
industries.

In addition to providing  GreenShift's  various platform companies with advanced
prototyping and pilot equipment manufacturing  services,  Warnecke fabricates GS
CleanTech's  COES and other  technology  deployments  (including GS  CleanTech's
flash desiccation and bioreactor technologies),  GS AgriFuels' NextGen biodiesel
production systems,  and has provided  significant  services to ZeroPoint in the
fabrication and commissioning of its current pilot facility.  Management expects
that Warnecke will provide all of GS CleanTech's  and GS AgriFuels'  fabrication
needs for the foreseeable future.

GS   AgriFuels   has   initiated   development   for  and  intends  to  build  a
commercial-scale  NextGen biodiesel  production  facility at a site proximate to
Warnecke's manufacturing  operations.  When complete, this facility will be used
to showcase the NextGen  technology for prospective  third-party  clients and to
generate revenues from the production and sale of biodiesel.

Formation of  Commercialization  Platform  and  Implementation  of  Go-to-Market
Strategy

We believe that the impact of our  technologies  becomes more  significant as we
move  through  early  stage   commercialization  and  into  maturity  with  each
technology,  and that  GreenShift can maximize the value of several of the above
technologies  by  facilitating  its direct use of those  technologies to produce
clean fuels and energy from biomass. In an effort to accomplish this, GreenShift
formed  GS  AgriFuels  during  2005  specifically  to  implement  a  coordinated
go-to-market strategy to achieve this.

GS  AgriFuels'  development  plans are based on the use of  several  classes  of
technology,  including  innovative  extraction,   desiccation,   homogenization,
process   intensification,    biodiesel   production,    biomass   gasification,
reformation, and catalytic technologies to:

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

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

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

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

We believe that combined  applications of these  technologies  may have wide and
disruptive  application  potential  throughout the landscape of the agriproducts
sector. Our technologies are robust,  scalable,  energy efficient,  modular and,

                                       8
<PAGE>

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

GS  AgriFuels'  production  plans  are  based on  leveraging  technology  and/or
geography to establish a feedstock procurement  advantage.  GS AgriFuels intends
to accomplish this by: (i) co-locating  agrifuels  production assets directly at
or in  proximity  to  its  sources  of  biomass  feedstock,  such  as an  animal
processing  facility  or an oil seed  crushing  facility;  and/or (ii) by taking
advantage  of  technologies  that  enable GS  AgriFuels  to obtain  and  process
feedstocks  that  other  producers  cannot  process,  such as the  corn  ethanol
co-product known as distillers dried grain.

GS AgriFuels has completed preliminary engineering and permitting activities for
biodiesel production sites in New York, Tennessee, and Ohio, and GS AgriFuels is
currently in various stages of negotiations to deploy a number of majority-owned
corn oil biodiesel production facilities on-site at several existing ethanol
facilities in the Mid-Western U.S.

Most of GS AgriFuels' planned facilities will have an initial nameplate capacity
of five (5) or ten (10) million gallons of biodiesel  production and potentially
five (5) million gallons of ethanol, methanol and/or synthetic diesel production
derived from biomass gasification and gas-to-liquid technologies.

GS AgriFuels long-term  production plans are to build a large number of smaller,
strategically placed or "distributed"  production  facilities at or in proximity
to the plants'  source of  feedstocks  such as GS  AgriFuels  recently  acquired
Sustainable  Systems,  Inc.,  subsidiary.  Sustainable is a developer of oilseed
crush  facilities with one plant currently in operation in Culbertson,  Montana.
Sustainable  is currently  expanding  its oilseed  extraction  and vegetable oil
refining  capability from 300 tons per day to 600 tons per day at this plant and
GS AgriFuels intends to layer in biodiesel production and other  biomass-derived
energy and fuels  production  capability  on-site at  Sustainable in conjunction
with the completion of this expansion.

Clean Technology Research and Development

In  addition to the above,  we were also  involved in  technology  research  and
development   activities  during  2006.  These  were  predominantly  focused  on
developing our  early-stage  pilot carbon dioxide  bioreactor (GS CleanTech) and
ultrasonic reformation (GS Carbon) technologies.

GS CleanTech's patented bioreactor technology was developed at Ohio University's
Ohio Coal Research Center with funding from the U.S.  Department of Energy.  The
bioreactor uses algae to consume exhaust carbon dioxide emissions,  sunlight and
water to grow new algae,  giving off pure oxygen and water vapor in the process.
If properly  cultivated,  the algae  doubles in mass daily and are harvested for
conversion  into  clean  fuels as they grow to  maturity.  The  resultant  algal
biomass can either be routed for biodiesel  production (for high fat strains) or
gasification (for either high starch or high cellulose strains). GS CleanTech is
currently  developing its first commercial scale pilot bioreactor  system and is
ultimately  seeking  to  cost  effectively  commercialize  its  use  at  ethanol
facilities to further enhance corn to clean fuel conversion efficiencies.

GS  Carbon's   patent-pending   ultrasonic   reformation   process  uses  water,
carbon-based  materials  and high  intensity  ultrasonic  energies to synthesize
clean  burning  fuels and  other  materials.  Testing  and  development  of this
technology  at GS Carbon's  testing  laboratory  initiated  after  acquiring the
technology during 2006. In 2007, we anticipate extensive further testing as well
as an analysis of the economic viability of the technology.

Our plans for the  commercialization  of both of these technologies,  as well as
others  in our  portfolio,  are  very  similar  to how we have  implemented  the
commercialization  process for the COES technology and the go-to-market strategy
for GS AgriFuels.  In addition,  a key aspect of our  go-to-market  strategy for
these technologies is to forge strategic partnerships with qualified companies.

Environmental Engineering and Management Services

GS EnviroServices is a diversified  environmental services company that provides
industrial and hazardous waste management  services,  environmental  engineering
services,  and site remediation services. GS EnviroServices' focus is to provide
its clients  with  value-added,  environmentally  conscious  and  cost-effective
hazardous waste management services based on its efficient management of wastes.

GS  EnviroServices'  growth  strategy  is to expand its  geographic  base,  both
through increased sales activities and acquisitions,  and to add new services in
the area of technology implementation utilizing unique technologies developed by
affiliated GreenShift companies. We believe that our technologies will enable GS
EnviroServices  to  differentiate  itself from  standard  environmental  service

                                       9
<PAGE>

providers.  GS  EnviroServices'  ambition is to provide its services  across the
full range of needs of its  industrial and  government  clients with  particular
emphasis on technology-driven energy and water resource conservation.

Minority Investments

We recently  acquired  stakes in ZeroPoint  Clean Tech,  Inc. (10%;  owned by GS
AgriFuels),  Sterling Planet,  Inc. (10%; owned by GS Carbon),  TerraPass,  Inc.
(10%;  owned  by GS  Carbon),  General  Hydrogen  Corporation  (3%;  owned by GS
CleanTech),  Ovation Products  Corporation  (12%; owned by GS CleanTech) and Air
Cycle Corporation (30%; owned by GS Carbon).

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

Sterling Planet,  Inc. has established a strong reputation as the premier market
maker  for  renewable  energy  certificates.  Sterling  has sold  over 4 billion
kilowatt hours of renewable energy certificates since its inception.  The energy
underlying those  certificates  represents  enough energy to power 350,000 homes
for a full year and offset 2.6 million tons of carbon  dioxide.  Sterling Planet
currently services an impressive array of clients including Alcoa, The Coca-Cola
Company, DuPont, Delphi Corporation, Duke University,  University of Utah, Nike,
Pitney Bowes, U.S.  Environmental  Protection  Agency, the U.S. General Services
Administration,   the   Homeland   Security   Department,   Western  Area  Power
Administration,  New  York  State  Energy  Research  and  Development  Authority
(NYSERDA),  the U.S. Army, Staples,  Whirlpool Corporation,  the World Resources
Institute and over 150 other companies. GS Carbon holds a 10% stake in Sterling.

By  issuing a  "TerraPass"  to its  members,  TerraPass  utilizes  its  members'
voluntary  contributions to promote global energy  efficiency and greenhouse gas
reduction through targeted  projects.  It is through these clean energy projects
that TerraPass counterbalances  pollution from its members' vehicles.  TerraPass
recently  partnered with Ford Motor Company in a program called "Greener Miles,"
which allows  consumers to calculate  the amount of carbon  dioxide  produced by
their car in one year of driving, and then to purchase a TerraPass linked to the
cost of  producing an amount of clean energy  equivalent  to the carbon  dioxide
produced.  Individual purchases range from $29.95 to $79.95 annually,  depending
on the type of vehicle, amount of carbon dioxide emitted and miles traveled, and
the funds are used to invest in U.S. based renewable energy projects.  GS Carbon
holds a 10% stake in TerraPass.

General Hydrogen  Corporation is a leading developer of hydrogen fuel cell-based
power systems for electric  forklifts,  industrial  vehicles and other  off-road
equipment. General Hydrogen has right-sized fuel cell technology to a scale that
enables  their  commercially  viable  today.  Their  business  model is based on
replacing  lead-acid  batteries  in  centralized  industrial  applications  with
high-performance  power packs that contain a Ballard fuel cell.  They capitalize
effectively  on  existing  plant  infrastructure  while  creating  a  realizable
economic return on an impressively short payback period for their clients.

Ovation Products  Corporation is a  development-stage  company with patented and
proprietary  technologies  involving new  implementations  of vapor  compression
distillation.  Ovation has invested over $9 million  developing  technology that
offers  dramatic price and  performance  advantages  over competing  clean water
technologies.  Ovation is finalizing the development of its initial product, the
Clean Water  Appliance - a  fire-hydrant  sized  appliance  that can generate 25
gallons of pure water per hour from a variety of dirty water input  sources at a
cost  of  approximately  $0.004  per  gallon,  or  about  1.2%  of the  cost  of
traditional home distillation methods.

GS Carbon holds a 30% stake in Air Cycle, a lamp,  ballast,  battery and e-waste
recycling  company.  Air  Cycle's  Bulb  Eater(R)  product  line  crushes  spent
fluorescent  lamps  into  small  fragments  and  compacts  them  into  55-gallon
containers  which  are then  shipped  for  recycling.  Air  Cycle's  EasyPak(TM)
Recycling  Program is offered as an alternative for customers who generate spent
lamps, batteries,  and/or ballasts and cannot meet Air Cycle's quantity minimums
for bulk pick-ups.  Small shipments are instead  shipped through  pre-paid FedEx
transportation services.

MARKET OVERVIEW AND COMPETITION

The ethanol industry has grown significantly over the last few years,  expanding
production  capacity from about 1.3 billion gallons in 1997 to about 4.0 billion
gallons in 2005. As of January 1, 2006,  ethanol  accounted for approximately 3%
of the  U.S.  gasoline  fuel  supply.  As of April  2006,  the  Renewable  Fuels
Association  (the "RFA")  estimated  that  ethanol  facilities  with  capacities
exceeding an additional 2 billion gallons per year were under construction. Over
37 billion gallons of petroleum diesel are used for domestic transportation each
year in the U.S. The total demand for diesel fuel  approaches 50 billion gallons
per year when construction,  farming and other off-road uses are considered.  By

                                       10
<PAGE>

comparison,  the current  production  of  biodiesel  in the U.S is less than 100
million  gallons per year,  but the  production  and use of biodiesel is growing
rapidly.  According  to the  National  Biodiesel  Board,  biodiesel  sales  have
increased  from about 2 million  gallons  in 2000 to over 50 million  gallons in
2005.

For  many  years,  most  chemical  wastes  generated  in the  United  States  by
industrial  processes have been handled on-site at the  generators'  facilities.
Over the past 30 years,  increased  public  awareness of the harmful  effects of
unregulated  disposal of hazardous  wastes on the environment and health has led
to federal,  state and local  regulation  of waste  management  activities.  The
statutes  regulating  the  management  of chemical  wastes  include the Resource
Conservation  and  Recovery  Act,  the  Toxic  Substances  Control  Act  and the
Comprehensive  Environmental  Response,  Compensation and Liability Act of 1980.
These  statutes are primarily  administered  by the United States  Environmental
Protection Agency and often delegated to states.

Environmental laws and regulations impose stringent standards for the management
of hazardous wastes and provide penalties for violators.  In addition,  based on
these laws and  regulations,  generators  and others are  subject to  continuing
liability for past disposal and  environmental  degradation.  As a result of (1)
the increased  liability  exposure  associated  with chemical  waste  management
activities,  (2) a corresponding  decrease in the  availability of insurance and
significant  cost increases in  administering  compliance,  and (3) the need for
facility capital improvements, many generators of hazardous wastes have found it
uneconomical  to maintain  their own  treatment  and disposal  facilities  or to
develop and  maintain the  technical  expertise  necessary to assure  regulatory
compliance.  Accordingly,  many  generators  have sought to have their hazardous
wastes managed by firms that possess or have access to the appropriate treatment
and  disposal  facilities,  as well as the  expertise  and  financial  resources
necessary  to attain  and  maintain  compliance  with  applicable  environmental
regulatory requirements.

At the same time,  governmental  regulation  has  resulted in a reduction of the
number of  facilities  available  for  hazardous  waste  treatment,  storage  or
disposal,  as many  facilities  have been  unable to meet the  strict  standards
imposed by the environmental laws and regulations.  It is in this market that GS
CleanTech Corporation is growing,  offering efficient environmental services and
effective recycling as an alternative to disposal of hazardous wastes.

LAWS AND REGULATIONS

Energy Policy Act

The Energy Policy Act of 2005  established  minimum  annual volumes of renewable
fuel to be used by petroleum refiners in the fuel supply. The annual requirement
grows  to  7.5  BGY by  2012.  The  Energy  Policy  Act  removed  the  oxygenate
requirements for  reformulated  gasoline that were put in place by the Clean Air
Act. The Energy Policy Act also included anti-backsliding  provisions,  however,
that require refiners to maintain  emissions quality standards in the fuels that
they produce, thus providing a source for continued need for ethanol.

Tax Incentives

Gasoline  distributors  who blend ethanol with gasoline receive a federal excise
tax credit for each  gallon of ethanol  they blend.  The federal  Transportation
Efficiency Act of the 21st Century, or TEA-21,  extended this ethanol tax credit
first  passed in 1979  through  2007.  The  American  Jobs  Creation Act of 2004
extended  the  subsidy  again to 2010 by allowing  distributors  to take a $0.51
excise  tax  credit  for each  gallon of  ethanol  they  blend.  We cannot  give
assurance  that the tax  incentives  will be renewed in 2010 or, if renewed,  on
what terms they will be renewed.

Clean Air Act

The use of  ethanol  as an  oxygenate  is  driven,  in  part,  by  environmental
regulations.  The federal Clean Air Act requires the use of oxygenated  gasoline
during winter months in areas with unhealthy levels of carbon monoxide.

Renewable Fuels Standard

Adopted  on August 8, 2005 as part of the  Energy  Policy  Act of 2005,  the RFS
establishes minimum nationwide levels of renewable fuels (ethanol,  biodiesel or
any other  liquid  fuel  produced  from  biomass or biogas)  to be  included  in
gasoline,  increasing  from 4.0 billion gallons of RFS mandated usage in 2006 to
7.5 billion gallons by 2012. The RFA expects that ethanol should account for the
largest share of renewable fuels produced and consumed under the RFS.

Ban on Use of MTBE

Due to their  availability  and cost,  ethanol and MTBE had been the two primary
additives  that  were  used  to meet  the  federal  Clean  Air  Act's  oxygenate
requirements.  Because MTBE could be blended  with  gasoline at the refinery and
transported via pipeline (and was produced from petroleum  derivatives),  it was
initially the preferred oxygenate ingredient used by the petroleum industry.  In
contrast,  ethanol's  affinity  for water makes it more  difficult  to transport
ethanol blended gasoline through existing petroleum pipelines since the presence
of water in the pipelines  (which often  results from the previous  transport of
diesel fuel) could  result in the ethanol  separating  from the gasoline  during
transport.  Therefore,  ethanol  has  historically  been  transported  at higher
expense via truck, rail or barge to a terminal for blending with gasoline and

                                       11
<PAGE>


then  transported  via truck to the customer.  In recent years,  public  concern
about  MTBE  contamination  of water  supplies  grew as a result  of leaks  from
underground  storage  tanks and pipes.  Twenty-five  states have now banned,  or
significantly limited, the use of MTBE, including California and New York. Since
most of the states that consumed significant amounts of oxygenated gasoline have
already  banned  or  limited  the use of  MTBE,  the  potential  for  additional
significant  growth in ethanol  consumption  as a result of the  prohibition  or
significant limitation on the use of MTBE is limited.

Tariff on Imported Ethanol

In 1980,  Congress imposed a tariff on foreign produced ethanol to encourage the
development of a domestic, corn-derived ethanol supply. This tariff was designed
to prevent the federal tax  incentive  from  benefiting  non-U.S.  producers  of
ethanol.  The $0.54 per gallon tariff was  scheduled to expire in 2007,  but was
extended in late 2006 until January 1, 2009.  Ethanol  imports from 24 countries
in Central  America and the  Caribbean  Islands are exempt from the tariff under
the Caribbean Basin Initiative, which provides that specified nations may export
an aggregate of 7.0% of U.S.  ethanol  production  per year into the U.S.,  with
additional  exemptions  from ethanol  produced  from  feedstock in the Caribbean
region over the 7.0% limit.  As a result of new plants under  development in the
Caribbean  region,  we believe imports from there will continue,  subject to the
limited  nature of the exemption.  In addition,  there is a flat 2.5% ad valorem
tariff on all imported ethanol.

ENVIRONMENTAL MATTERS

Our planned new production facilities will be subject to various federal,  state
and local  environmental  laws and regulations,  including those relating to the
discharge of materials into the air, water and ground; the generation,  storage,
handling,  use,  transportation  and  disposal of hazardous  materials;  and the
health and safety of our employees. These laws, regulations and permits also can
require expensive  pollution  control equipment or operational  changes to limit
actual or potential  impacts to the  environment.  A violation of these laws and
regulations  or permit  conditions  can  result in  substantial  fines,  natural
resource  damage,   criminal  sanctions,   permit  revocations  and/or  facility
shutdowns.  We do not  anticipate a material  adverse  effect on our business or
financial   condition   as  a  result  of  our  efforts  to  comply  with  these
requirements.  Operating expenses to meet regulatory requirements, including all
environmental  permits,  will be an integral part of operating costs.  Costs for
compliance  with   environmental  laws  include  safety  and  health  protection
measures,  controls  limiting air emissions and effluent  discharges,  emergency
response capabilities, storm water management, recordkeeping and training.

CUSTOMERS

The  Company's   customers  are  currently   comprised  of  ethanol  facilities,
developers of renewable fuel production  facilities who purchase our proprietary
biodiesel  production  equipment,  industrial  manufacturers  that  purchase our
specialty  equipment  and  related  manufacturing  services,  and more than five
hundred active industrial and governmental  clients that generate many thousands
of different industrial wastes.

INTELLECTUAL PROPERTIES

We acquired and currently own or otherwise hold certain rights to a number of
patented and/or patent-pending clean technologies through our various platform
operating companies, some of which are listed here:
<TABLE>
<CAPTION>
Technology                             Status                          IP Rights                           Owned By
-------------------------------------------------------------------------------------------------------------------
<S>                                    <C>                             <C>                             <C>
Corn Oil Extraction                    Patent-Pending                  Owned                           GS CleanTech
Flash Desiccation/Homogenization       Patented                        Exclusive License               GS CleanTech
Carbon Dioxide Bioreactor              Patented/Patent-Pending         Exclusive License/Owned         GS CleanTech
Integrated Multi-Fuels Production      Patent-Pending                  Owned                           GS CleanTech
Biodiesel Production                   Patent-Pending                  Owned                           GS AgriFuels
Biomass Gasification                   Patent-Pending                  Limited Exclusive Rights(*)     GS AgriFuels
Ultrasonic Reformation                 Patent-Pending                  Owned                              GS Carbon
Carbon Nanostructure Composites        Patent-Pending                  Owned                              GS Carbon
<FN>
(*)  GS AgriFuels holds the exclusive  distribution rights to this technology in
     the  North  American  Ethanol  Production  Industry.  This  technology  was
     developed by GS AgriFuels' portfolio company, ZeroPoint Clean Tech, Inc.
</FN>
</TABLE>

EMPLOYEES

As of December 31, 2006, GreenShift and its majority held companies employed 133
employees.  In addition to its  executive  officers,  the Company  employs sales
personnel,   staff  engineers,   facilities  and  operations  managers,  process
managers,  maintenance managers,  administrative  personnel and general facility
technicians. There is no union representation for any of our employees.

                                       12
<PAGE>

ITEM 2.  DESCRIPTION OF PROPERTIES

Greenshift Corporation currently maintains office at One Penn Plaza, Suite 1612,
New York,  NY. The lease for this space  expires in May of 2011. We paid $74,867
in rent during 2006. We believe  these offices will be sufficient  for our needs
for the foreseeable future.

ITEM 3.  LEGAL PROCEEDINGS

GS CleanTech was party to the matter entitled Kerns  Manufacturing  Corp. v. KBF
Pollution  Management  Inc.  (the "Kerns  Matter").  The action was filed in the
Supreme Court of the State of New York, August 14, 2003. The verified  complaint
sought  performance  of certain  agreements  between the plaintiffs and KPMI and
GSCT, plus attorney's fees and costs.  This matter related to the acquisition of
Vulcan Waste  Systems,  Inc. from Kerns  Manufacturing  Corp.  and the breach by
Kerns of the terms and  conditions  of the relevant  acquisition  agreement.  On
February 28, 2007,  GS CleanTech  entered into a settlement of the Kerns Matter.
The total settlement of $1,500,000 is payable in two  installments;  $500,000 on
March 31, 2007 and  $1,000,000  on June 30, 2007.  As of December 31, 2006,  the
Company has accrued  $1,500,000  for the  settlement  of this matter.  The first
installment of $500,000 due was paid on March 31, 2007.

GS AgriFuels is party to the matter entitled O'Brien & Gere Limited,  et. al. v.
NextGen  Chemical  Processors,  Inc.,  et.  al.,  which  action was filed in the
Supreme Court of the State of New York. The verified complaint, which also names
GS AgriFuels and certain of its  affiliates,  seeks  performance  of and damages
relating to certain  service and related  agreements,  plus  attorney's fees and
costs. This matter relates to the provision by plaintiffs of certain engineering
services to NextGen Chemical Processors,  Inc. ("NCP") during 2005 and 2006. NCP
is owned by the former shareholders of our recently acquired NextGen Fuel, Inc.,
subsidiary.  GS AgriFuels has responded to the verified complaint and denies any
liability.

GS CleanTech assumed and is party to various material administrative  compliance
proceedings for which GS CleanTech has accrued $189,333 in potential expenses.

GS Energy's  subsidiary,  Warnecke Design Services,  Inc., is a named party in a
complaint against a customer of the company in which an engineering company that
performed services for that customer alleges non-payment of services,  breach of
contract, and the disclosure of trade secrets. The Company intends to vigorously
defend  itself  against  this  complaint  and does  not  currently  have  enough
information to assess the likely outcome of this matter

GS AgriFuels is party to the matter entitled O'Brien & Gere Limited,  et. al. v.
NextGen  Chemical  Processors,  Inc.,  et.  al.,  which  action was filed in the
Supreme Court of the State of New York. The verified complaint, which also names
GS AgriFuels and certain of its  affiliates,  seeks  performance  of and damages
relating to certain  service and related  agreements,  plus  attorney's fees and
costs. This matter relates to the provision by plaintiffs of certain engineering
services to NextGen Chemical Processors,  Inc. ("NCP") during 2005 and 2006. NCP
is owned by the former shareholders of our recently acquired NextGen Fuel, Inc.,
subsidiary.  GS AgriFuels has responded to the verified complaint and denies any
liability.

GS  Carbon's  General  Ultrasonics  subsidiary  is party to the matter  entitled
LeBlanc v.  Tomoiu.,  et. al.,  which action was filed in the Superior  Court of
Connecticut.  The verified complaint, which also names GreenShift and certain of
its affiliates, seeks damages relating to the acquisition by General Ultrasonics
of  the  stock  of H2  Energy  Solutions,  Inc.  from  substantially  all of its
shareholders,  as well as attorney's  fees and costs.  General  Ultrasonics  has
responded to the verified complaint and denies any liability.

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

None.









                                       13

<PAGE>


ITEM 5.  MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED SHAREHOLDER MATTERS

Greenshift Corporation's Common Stock trades on the OTC Bulletin Board under the
symbol "GSHF." The following table sets forth,  for the periods  indicated,  the
range of high and low closing bid prices for the  Company's  Common Stock during
the past two years as reported by the National Association of Securities Dealers
composite feed or other qualified  inter-dealer  quotation medium.  The reported
bid quotations reflect  inter-dealer  prices without retail markup,  markdown or
commissions, and may not necessarily represent actual transactions.

--------------------------------------------------------------------------------
Period                                                    High            Low
--------------------------------------------------------------------------------
2006 First Quarter                                        .163           .084
2006 Second Quarter                                       .373           .136
2006 Third Quarter                                        .19            .102
2006 Fourth Quarter                                       .15             .09

2005 First Quarter                                        1.70            .07
2005 Second Quarter                                       .16             .02
2005 Third Quarter                                        .37             .03
2005 Fourth Quarter                                       .24             .09

Title of Class                                   Approximate Number of Holders
Common Stock, 0.001 par value                   of Record as of April 16, 2007
                                                           149

The number of holders  does not give effect to  beneficial  ownership  of shares
held in the street name of stock  brokerage  houses or clearing  agents and does
not necessarily reflect the actual ownership of the shares.

DIVIDENDS

We have no present intention of paying dividends in the foreseeable  future. Our
policy  for the time  being is to  retain  earnings  and  utilize  the funds for
operations and growth.  Future dividend policies will be determined by the Board
of Directors based on our earnings,  financial  condition,  capital requirements
and other existing conditions.

SALE OF UNREGISTERED SECURITIES

Greenshift  Corporation did not sell any unregistered  equity  securities during
the 4th quarter of 2006.


REPURCHASE OF EQUITY SECURITIES

Greenshift Corporation did not repurchase any of its equity securities that were
registered  under  Section 12 of the  Securities  Act during the 4th  quarter of
2006.

                                       14
<PAGE>

ITEM   6.     MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

FORWARD LOOKING STATEMENTS

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

SUMMARY

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

We face  environmental  challenges  today that are the collective  by-product of
several generations of industrial development. These challenges do not originate
because of this development but rather because of how we, as an economy, consume
natural resources and manage the by-products of those resources.

The  resolution to the  challenges we currently  face is not likely to come from
compulsory  changes to how we consume things,  but rather from the  cost-savings
and increased profits that flow from consuming things more efficiently by virtue
of innovation and the intelligent use of technology.

Take standard corn derived ethanol production as an example;  corn is harvested,
milled, mashed,  fermented and distilled into 200 proof fuel-grade ethanol. From
a fuel production standpoint,  this process is 67% inefficient.  In other words,
only one third of each bushel of corn is converted  into ethanol.  Another third
is exhausted out of the fermentation  stage of the process in the form of carbon
dioxide and the final third ends up in a cellulosic  material called  distillers
grain  which  is sold as an  animal  feed.  Increasing  corn to fuel  conversion
efficiencies,  even  incrementally,  at any point in this process will  increase
fuel production,  reduce costs, reduce plant emissions and enable more consumers
to  use  less  fossil  fuels  and  more  ethanol  -  a  clean,   green   burning
carbon-neutral fuel.

GreenShift acquires,  develops and commercializes technologies that reduce these
types of  inefficiencies.  Our approach for ethanol  producers  exemplifies  the
prototypical  GreenShift  solution:  we focus on the distillers grain and carbon
dioxide by-products and we seek to increase fuel yields by implementing  robust,
scalable and cost-effective "plug-and-play" technologies directly on-site at the
ethanol producer's facility to increase the value of these by-products.

Our current  commercial  offerings,  which extract corn oil out of the grain and
convert it into  biodiesel,  increase  fuel clean fuel  yields to 3 gallons  per
bushel from 2.8 gallons per bushel. We also are supporting the commercialization
of  technologies  to convert the remainder of the distillers  grain biomass (and
other  locally  available  biomass  such as  corn  stover)  into  carbon-neutral
synthetic fuels (which can increase yields to more than 4.2 gallons per bushel),
and the research and development of a process to capture and convert the exhaust
carbon dioxide into an algal biomass for conversion into additional  clean fuels
(which can increase fuel yields even higher).

We believe that tremendous  environmental gains can be realized simply by making
it easy and  cost-effective  to use renewable sources of energy, to burn cleaner
fuels, and to reduce waste just by consuming natural resources more efficiently.

Our ambition is to catalyze the rapid realization of disruptive environmental
gains by creating valuable opportunities for a great many people and companies
to use resources more efficiently and to be more profitable. To accomplish this,
we target and reduce or eliminate consumption inefficiencies by

>>   developing  and  implementing  incremental  advances  in  technologies  and
     business practices

>>   that  leverage  established  infrastructure  and  distribution  channels to
     enable increased and sustainable profits

>>   by decreasing the  consumption  of natural  resources and the generation of
     wastes and emissions.

These incremental shifts forward in both economic and environmental gain - these
green shifts - are at the core of our  philosophy and they are the basis for our
primary  operations:  GS CleanTech,  GS AgriFuels,  GS Energy,  GS Carbon and GS
EnviroServices (see Item I, Description of Business - Operations, below).

                                       15

<PAGE>


Our technology and business development efforts to date have been focused on the
following   activities:    (a)   technology    acquisition,    development   and
commercialization  (GS  CleanTech),  (b) provision of engineering (GS CleanTech)
and manufacturing (GS Energy) services  incidental to our technologies,  (c) the
formation  and  capitalization  of a  commercialization  entity to  implement  a
go-to-market strategy for the first wave of our technologies (GS AgriFuels), and
(d) clean technology research and development.

In addition, we provide manufacturing (GS Energy) and diversified  environmental
engineering  management  services (GS  EnviroServices)  to third party  clients.
These activities constituted the majority of our sales for 2006 but are expected
to decreases as a  percentage  of our overall  sales as we continue to implement
our technology commercialization plans.

Technology Acquisition

We acquired and  currently own or otherwise  hold certain  rights to a number of
important clean technologies  through our various platform operating  companies,
some of which are listed here:
<TABLE>
<CAPTION>

Technology                             Status                          IP Rights                           Owned By
-------------------------------------------------------------------------------------------------------------------
<S>                                    <C>                             <C>                             <C>
Corn Oil Extraction                    Patent-Pending                  Owned                           GS CleanTech
Flash Desiccation/Homogenization       Patented                        Exclusive License               GS CleanTech
Carbon Dioxide Bioreactor              Patented/Patent-Pending         Exclusive License/Owned         GS CleanTech
Integrated Multi-Fuels Production      Patent-Pending                  Owned                           GS CleanTech
Biodiesel Production                   Patent-Pending                  Owned                           GS AgriFuels
Biomass Gasification                   Patent-Pending                  Limited Exclusive Rights(*)     GS AgriFuels
Ultrasonic Reformation                 Patent-Pending                  Owned                              GS Carbon
Carbon Nanostructure Composites        Patent-Pending                  Owned                              GS Carbon
<FN>

(*)  GS AgriFuels holds the exclusive  distribution rights to this technology in
     the  North  American  Ethanol  Production  Industry.  This  technology  was
     developed by GS AgriFuels' portfolio company, ZeroPoint Clean Tech, Inc.
</FN>
</TABLE>

Technology Development and Early-Stage Commercialization

Our technology development and early-stage  commercialization  activities during
2006 were implemented by GS CleanTech and focused on implementing a go-to-market
strategy  for  the  commercialization  of GS  CleanTech's  corn  oil  extraction
technology ("COES"). These activities included:

>>   securing agreements for the sale of early adopter  installations of COES at
     targeted qualified clients;
>>   the installation of COES at these early adopter clients;
>>   the roll-out of GS CleanTech's  current  technology  usage program where GS
     CleanTech's clients can use our technology for no up-front cost;
>>   the  execution  of term sheets and  letters of intent  with GS  CleanTech's
     prospective  usage  clients to  validate  the  offering  and to  facilitate
     early-stage financing for GS CleanTech's commercialization program;
>>   the conversion of GS CleanTech's letters of intent into executed agreements
     for deployments of COES under our usage program; and
>>   the  installation of our technology at GS CleanTech's  clients'  facilities
     under the usage program.

During 2006, GS CleanTech commissioned operations of its first two early-adopter
COES  installations  at two dry mill  ethanol  production  facilities  where the
technology  currently  extracts  corn oil at the combined  rate of more than 2.5
million gallons per year.

In total, GS CleanTech's  current  executed  contracts in its usage program will
produce more than 25 million  gallons of corn oil for conversion  into biodiesel
fuel as the  relevant  extraction  systems are fully  installed  during 2007 and
2008. GS CleanTech is currently  deploying  several of these extraction  systems
and  expects to  commission  the first of these new  systems in April  2007.  GS
CleanTech is currently  servicing an  extensive  sales  pipeline for  additional
deployments of the COES technology and Management expects that GS CleanTech will
execute agreements  corresponding to significant  additional volumes of corn oil
during 2007.

During 2006, GS AgriFuels  completed  the  acquisition  of biodiesel  technology
provider, NextGen Fuel, Inc., which had developed and began commercialization of
a proprietary,  patent-pending  continuous  flow biodiesel  system.  The NextGen
systems, which include both direct and transesterification, are skid mounted and
can produce  five (5) million or ten (10) million  gallons per year.  NextGen is
currently  servicing a substantial sales pipeline for the NextGen technology and
has  executed  contracts to sell  NextGen's  biodiesel  production  systems to a
number of clients.

                                       16
<PAGE>
In  August   2006,   GS   AgriFuels   made  a   strategic   investment   in  the
development-stage  company  ZeroPoint Clean Tech,  Inc., which is developing and
commercializing a range of technologies  related to biomass  gasification,  fuel
reforming,  gas-to-liquid,  and  water  evaporation.  In  conjunction  with  the
investment  in  ZeroPoint,  GS AgriFuels  entered  into a  reciprocal  sales and
marketing  agreement  whereby  ZeroPoint  acquired the  non-exclusive  rights to
market and sell certain of our  technologies in  international  markets,  and GS
AgriFuels acquired the exclusive use and marketing rights for ZeroPoint's patent
pending gasification,  fuel reforming and gas-to-liquids technology in the North
American ethanol industry.  ZeroPoint is currently developing a commercial-scale
pilot facility to demonstrate the capabilities of this technology.

GS  CleanTech's  focus for much of 2007 will remain  resolved on delivering  its
technologies  to the  ethanol  production  industry.  As GS  CleanTech  achieves
budgeted  milestones in our ethanol program we intend to shift our focus towards
the  extraction,  beneficiation  and  refining  of other  co-products  and waste
products in other agriproducts based industries,  the municipal waste processing
industry and the power generation industry.

Technology-Driven Engineering and Manufacturing Services

GS CleanTech's  management and staff possesses  significant  process engineering
expertise  across  multiple  engineering  and  process  technology  disciplines,
including civil, chemical, mechanical, environmental and electrical engineering,
vegetable oil processing and refining,  waste  processing,  power generation and
production of various  agriproducts.  GS CleanTech's  business model is based on
the  provision of process  engineering,  equipment  sales and plant  development
services  incidental  to  GS  CleanTech's  technology  transfer  activities.  GS
CleanTech  relies on GS  Energy's  specialty  metal  manufacturing  capabilities
relative to these efforts.

GS Energy's  manufacturing  group,  Warnecke Design Services,  Inc., is run by a
team of seasoned custom equipment manufacturers and engineers. Warnecke provides
custom  equipment  manufacturing  services  for its  clients  including  machine
design,  machine  building,  control system  electronics  and  programming,  and
maintenance  support  services.  Warnecke  currently  services  clients  in  the
biofuels, automotive,  electronics, lighting, plastics, rubber and food products
industries

In addition to providing  GreenShift's  various platform companies with advanced
prototyping and pilot equipment manufacturing  services,  Warnecke fabricates GS
CleanTech's  COES and other  technology  deployments  (including GS  CleanTech's
flash desiccation and bioreactor technologies),  GS AgriFuels' NextGen biodiesel
production systems,  and has provided  significant  services to ZeroPoint in the
fabrication and commissioning of its current pilot facility.  Management expects
that Warnecke will provide all of GS CleanTech's  and GS AgriFuels'  fabrication
needs for the foreseeable future.

GS   AgriFuels   has   initiated   development   for  and  intends  to  build  a
commercial-scale  NextGen biodiesel  production  facility at a site proximate to
Warnecke's manufacturing  operations.  When complete, this facility will be used
to showcase the NextGen  technology for prospective  third-party  clients and to
generate revenues from the production and sale of biodiesel.

Formation of  Commercialization  Platform  and  Implementation  of  Go-to-Market
Strategy

We believe that the impact of our  technologies  becomes more  significant as we
move  through  early  stage   commercialization  and  into  maturity  with  each
technology,  and that  GreenShift can maximize the value of several of the above
technologies  by  facilitating  its direct use of those  technologies to produce
clean fuels and energy from biomass. In an effort to accomplish this, GreenShift
formed  GS  AgriFuels  during  2006  specifically  to  implement  a  coordinated
go-to-market strategy to achieve this.

GS  AgriFuels'  development  plans are based on the use of  several  classes  of
technology,  including  innovative  extraction,   desiccation,   homogenization,
process   intensification,    biodiesel   production,    biomass   gasification,
reformation, and catalytic technologies to:

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

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

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

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

We believe that combined  applications of these  technologies  may have wide and
disruptive  application  potential  throughout the landscape of the agriproducts
sector. Our technologies are robust, scalable, energy efficient, modular

                                       17
<PAGE>

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

GS  AgriFuels'  production  plans  are  based on  leveraging  technology  and/or
geography to establish a feedstock procurement  advantage.  GS AgriFuels intends
to accomplish this by: (i) co-locating  agrifuels  production assets directly at
or in  proximity  to  its  sources  of  biomass  feedstock,  such  as an  animal
processing  facility  or an oil seed  crushing  facility;  and/or (ii) by taking
advantage  of  technologies  that  enable GS  AgriFuels  to obtain  and  process
feedstocks  that  other  producers  cannot  process,  such as the  corn  ethanol
co-product known as distillers dried grain.

GS AgriFuels has completed preliminary engineering and permitting activities for
biodiesel production sites in New York, Tennessee, and Ohio, and GS AgriFuels is
currently in various stages of negotiations to deploy a number of majority-owned
corn oil biodiesel production facilities on-site at several existing ethanol
facilities in the Mid-Western U.S.

Most of GS AgriFuels' planned facilities will have an initial nameplate capacity
of five (5) or ten (10) million gallons of biodiesel  production and potentially
five (5) million gallons of ethanol, methanol and/or synthetic diesel production
derived from biomass gasification and gas-to-liquid technologies.

GS AgriFuels long-term  production plans are to build a large number of smaller,
strategically placed or "distributed"  production  facilities at or in proximity
to the plants'  source of  feedstocks  such as GS  AgriFuels  recently  acquired
Sustainable  Systems,  Inc.,  subsidiary.  Sustainable is a developer of oilseed
crush  facilities with one plant currently in operation in Culbertson,  Montana.
Sustainable  is currently  expanding  its oilseed  extraction  and vegetable oil
refining  capability from 300 tons per day to 600 tons per day at this plant and
GS AgriFuels intends to layer in biodiesel production and other  biomass-derived
energy and fuels  production  capability  on-site at  Sustainable in conjunction
with the completion of this expansion.

Clean Technology Research and Development

In  addition to the above,  we were also  involved in  technology  research  and
development   activities  during  2006.  These  were  predominantly  focused  on
developing our  early-stage  pilot carbon dioxide  bioreactor (GS CleanTech) and
ultrasonic reformation (GS Carbon) technologies.

GS CleanTech's patented bioreactor technology was developed at Ohio University's
Ohio Coal Research Center with funding from the U.S.  Department of Energy.  The
bioreactor uses algae to consume exhaust carbon dioxide emissions,  sunlight and
water to grow new algae,  giving off pure oxygen and water vapor in the process.
If properly  cultivated,  the algae  doubles in mass daily and are harvested for
conversion  into  clean  fuels as they grow to  maturity.  The  resultant  algal
biomass can either be routed for biodiesel  production (for high fat strains) or
gasification (for either high starch or high cellulose strains). GS CleanTech is
currently  developing its first commercial scale pilot bioreactor  system and is
ultimately  seeking  to  cost  effectively  commercialize  its  use  at  ethanol
facilities to further enhance corn to clean fuel conversion efficiencies.

GS  Carbon's   patent-pending   ultrasonic   reformation   process  uses  water,
carbon-based  materials  and high  intensity  ultrasonic  energies to synthesize
clean  burning  fuels and  other  materials.  Testing  and  development  of this
technology  at GS Carbon's  testing  laboratory  initiated  after  acquiring the
technology during 2006. In 2007, we anticipate extensive further testing as well
as an analysis of the economic viability of the technology.

Our plans for the  commercialization  of both of these technologies,  as well as
others  in our  portfolio,  are  very  similar  to how we have  implemented  the
commercialization  process for the COES technology and the go-to-market strategy
for GS AgriFuels.  In addition,  a key aspect of our  go-to-market  strategy for
these technologies is to forge strategic partnerships with qualified companies.

Environmental Engineering and Management Services

GS EnviroServices is a diversified  environmental services company that provides
industrial and hazardous waste management  services,  environmental  engineering
services,  and site remediation services. GS EnviroServices' focus is to provide
its clients  with  value-added,  environmentally  conscious  and  cost-effective
hazardous waste management services based on its efficient management of wastes.

GS  EnviroServices'  growth  strategy  is to expand its  geographic  base,  both
through increased sales activities and acquisitions,  and to add new services in
the area of technology implementation utilizing unique technologies developed by
affiliated GreenShift companies. We believe that our technologies will enable GS
EnviroServices  to  differentiate  itself from  standard  environmental  service
providers.  GS  EnviroServices'  ambition is to provide its services  across the
full range of needs of its industrial and government clients with

                                       18
<PAGE>



particular emphasis on technology-driven energy and water resource conservation.

Minority Investments

We recently  acquired  stakes in ZeroPoint  Clean Tech,  Inc. (10%;  owned by GS
AgriFuels),  Sterling Planet,  Inc. (10%; owned by GS Carbon),  TerraPass,  Inc.
(10%;  owned  by GS  Carbon),  General  Hydrogen  Corporation  (3%;  owned by GS
CleanTech),  Ovation Products  Corporation  (12%; owned by GS CleanTech) and Air
Cycle Corporation (30%; owned by GS Carbon).

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

Sterling Planet,  Inc. has established a strong reputation as the premier market
maker  for  renewable  energy  certificates.  Sterling  has sold  over 4 billion
kilowatt hours of renewable energy certificates since its inception.  The energy
underlying those  certificates  represents  enough energy to power 350,000 homes
for a full year and offset 2.6 million tons of carbon  dioxide.  Sterling Planet
currently services an impressive array of clients including Alcoa, The Coca-Cola
Company, DuPont, Delphi Corporation, Duke University,  University of Utah, Nike,
Pitney Bowes, U.S.  Environmental  Protection  Agency, the U.S. General Services
Administration,   the   Homeland   Security   Department,   Western  Area  Power
Administration,  New  York  State  Energy  Research  and  Development  Authority
(NYSERDA),  the U.S. Army, Staples,  Whirlpool Corporation,  the World Resources
Institute and over 150 other companies. GS Carbon holds a 10% stake in Sterling.

By  issuing a  "TerraPass"  to its  members,  TerraPass  utilizes  its  members'
voluntary  contributions to promote global energy  efficiency and greenhouse gas
reduction through targeted  projects.  It is through these clean energy projects
that TerraPass counterbalances  pollution from its members' vehicles.  TerraPass
recently  partnered with Ford Motor Company in a program called "Greener Miles,"
which allows  consumers to calculate  the amount of carbon  dioxide  produced by
their car in one year of driving, and then to purchase a TerraPass linked to the
cost of  producing an amount of clean energy  equivalent  to the carbon  dioxide
produced.  Individual purchases range from $29.95 to $79.95 annually,  depending
on the type of vehicle, amount of carbon dioxide emitted and miles traveled, and
the funds are used to invest in U.S. based renewable energy projects.  GS Carbon
holds a 10% stake in TerraPass.

General Hydrogen  Corporation is a leading developer of hydrogen fuel cell-based
power systems for electric  forklifts,  industrial  vehicles and other  off-road
equipment. General Hydrogen has right-sized fuel cell technology to a scale that
enables  their  commercially  viable  today.  Their  business  model is based on
replacing  lead-acid  batteries  in  centralized  industrial  applications  with
high-performance  power packs that contain a Ballard fuel cell.  They capitalize
effectively  on  existing  plant  infrastructure  while  creating  a  realizable
economic return on an impressively short payback period for their clients.

Ovation Products  Corporation is a  development-stage  company with patented and
proprietary  technologies  involving new  implementations  of vapor  compression
distillation.  Ovation has invested over $9 million  developing  technology that
offers  dramatic price and  performance  advantages  over competing  clean water
technologies.  Ovation is finalizing the development of its initial product, the
Clean Water  Appliance - a  fire-hydrant  sized  appliance  that can generate 25
gallons of pure water per hour from a variety of dirty water input  sources at a
cost  of  approximately  $0.004  per  gallon,  or  about  1.2%  of the  cost  of
traditional home distillation methods.

GS Carbon holds a 30% stake in Air Cycle, a lamp,  ballast,  battery and e-waste
recycling  company.  Air  Cycle's  Bulb  Eater(R)  product  line  crushes  spent
fluorescent  lamps  into  small  fragments  and  compacts  them  into  55-gallon
containers  which  are then  shipped  for  recycling.  Air  Cycle's  EasyPak(TM)
Recycling  Program is offered as an alternative for customers who generate spent
lamps, batteries,  and/or ballasts and cannot meet Air Cycle's quantity minimums
for bulk pick-ups.  Small shipments are instead  shipped through  pre-paid FedEx
transportation services.

                                       19

<PAGE>


ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION



                   Risk Factors That May Affect Future Results

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

                       I. Risks Attendant to our Business

We Have Lost Money  Historically Which Means That We May Not Be Able to Maintain
Profitability.

We have historically lost money and future losses may occur. Accordingly, we may
experience  liquidity  and cash flow  problems if we are not able to improve our
operating  performance or raise  additional  capital as needed and on acceptable
terms.

Most of our Subsidiaries are Implementing New Business Plans, Which Make the
Results of their Business Uncertain.

Some of our  subsidiaries,  such as GS  AgriFuels  or General  Ultrasonics,  are
development stage enterprises that are only now implementing the first stages of
their business plans. Others among our subsidiaries,  such as GS CleanTech or GS
Energy, have been in business for several years, but have recently substantially
revised  their  business  plans.  Most of our  subsidiaries  will be  engaged in
businesses  in the  coming  year that are  substantially  different  from  their
business  operations  in  prior  years.  This  revolution  in the  focus  of our
operations   means  that  the  success  of  our  several   enterprises  will  be
speculative. Our subsidiaries will face the uncertainty that accompanies any new
business venture.  If we have not planned adequately for  contingencies,  one or
more of our  subsidiaries  could fail, which would have a negative effect on our
overall financial results.

We Have Limited  Experience  Running Our Businesses Which May Hamper Our Ability
to Make Effective Management Decisions.

A  significant  portion of our  operations  have been acquired or started in the
last 24 months.  Therefore,  our experience in operating the current business is
limited.  Further,  we intend to pursue  additional  acquisitions to further the
development  of our clean  technology,  agrifuels,  and  environmental  services
businesses.  Most of our senior  executives are recently hired and consequently,
internal  communication and business-decision  making processes are evolving. We
may react too  slowly or  incorrectly  to trends  that may emerge and affect our
business.  Our future success depends on the ability of the senior executives to
establish an effective organizational structure and to make effective management
decisions despite their limited experience.

Some of Our Businesses  Are Based on Unproven  Revenue  Generation  Models Which
Means That We May Not Achieve Anticipated Revenues

Our  revenue  models,   especially  for  our  clean   technology  and  agrifuels
businesses, are new and evolving. Our ability to generate revenue depends, among
other things,  on our ability to provide quality products,  effectively  install
equipment,  and secure  suppliers and customers.  Because some of our businesses
are  either  newly  formed or  acquired,  based on  emerging  opportunities  and
technologies,  we have limited experience with our revenue models.  There can be
no  assurance  that the  projects  will be  successfully  completed  or that the
completed projects will provide the anticipated revenues. Accordingly, there can
be no assurance  that our business  revenue models will be successful or that we
can sustain revenue growth or maintain profitability.

The Market  for  Alternative  Energy  Sources  is  Undetermined,  and May Not Be
Adequate for Sustain Prices at a Profitable Level.

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

                                       20

ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION


The Fiscal  Efficiencies  of Highly  Capitalized  Competitors in the Alternative
Energy  Field Could Defeat the Efforts of Our  Subsidiaries  to Capture a Viable
Market Share.

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

The Business Plans of most of our  Subsidiaries  Will Fail if They are Unable to
Obtain Substantial Additional Capital on Acceptable Terms.

Most of our  subsidiaries  have  developed  business  plans  that  will  require
significant  amounts of capital  for  development  of  research  and  production
facilities  and/or  marketing.  The  availability  of that capital on acceptable
terms  will  depend  on many  factors,  such  the flux of the  U.S.  and  global
economies,  global energy prices,  the success of investors in other alternative
energy ventures, and the success of our other enterprises.  If GreenShift and/or
our subsidiaries are not able to obtain the capital necessary to implement their
business  plans,  or cannot obtain capital on terms that make the business plans
viable, the under-funded subsidiaries will fail.

We may be unable to employ  and  retain  the  qualified  personnel  that will be
necessary for our success.

The alternative  fuels industry is growing rapidly.  As a result,  the number of
individuals  with  experience in the industry is  considerably  smaller than the
number of jobs available for such individuals. We will have to offer substantial
incentives in order to obtain the services of individuals with useful experience
in the production of biodiesel and ethanol.

As a result, our labor costs may be greater than they would be in a less dynamic
industry.  On  the  other  hand,  if we  are  unable  to  employ  the  qualified
individuals that we will need, our business may fail.

                II. Risks Attendant to our Corporation Structure

We will be Unable to Service our Debts if Our  Subsidiaries  Default in Settling
their Obligations to Us.

We have incurred  substantial  debt  obligations  and will continue to do so, in
order to fund the operations of our subsidiaries.  Since we carry on no business
at the level of our parent  corporation,  our  ability to service  our own debts
will  depend  on the  cash  flow  from our  subsidiaries.  If one or more of our
subsidiaries becomes unable to pay its debts to GreenShift,  we may be forced to
default  on our  own  debt  obligations.  Such a  default  could  result  in the
liquidation  of a portion of our assets,  most likely at less than their  market
value.

We will be Contingently Liable for the Debts of Some of our Subsidiaries.

We recently  guaranteed  $19  million in debt  incurred  by our  subsidiary,  GS
AgriFuels Corporation.  In order for our subsidiaries to obtain the capital that
will be  required  for their  growth,  it is likely  that in the  future we will
provide guarantees of other debts incurred by our subsidiaries. These guarantees
will subject our assets to the risk of the failure of a subsidiary whose debt we
have guaranteed.  If, for example, we were forced to satisfy our guarantee of GS
AgriFuels  debt,  to do so we  would  have  to  liquidate  our  holdings  in our
successful  subsidiaries.  Such  a  result  could  eliminate  the  value  of our
shareholders' investments.

Our business development could be hindered if we lost the services of our Chief
Executive Officer.

Kevin Kreisler is the Chief  Executive  Officer of GreenShift and of each of its
primary subsidiaries.  Mr. Kreisler is responsible for strategizing not only our
business plan but also the means of financing it. If Mr.  Kreisler were to leave
us or become  unable to fulfill  his  responsibilities,  our  business  would be
imperiled.  At the  very  least,  there  would  be a  substantial  delay  in the
development of our plans until a suitable  replacement for Mr. Kreisler could be
retained.

Viridis  Capital LLC has the ability to  determine  all  matters  submitted  for
stockholder approval, and its interests may differ from other stockholders.

Viridis Capital,  LLC is owned by Kevin Kreisler,  our chief executive  officer.
Viridis Capital owns capital stock in GreenShift that gives it the power to cast
80% of the votes at any meeting of our shareholders. Accordingly, Viridis

                                       21


<PAGE>

ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

can determine the outcome of any corporate transaction or other matter submitted
to   our   stockholders   for   approval,   including   mergers,   acquisitions,
consolidations  and the sale of all or substantially all of our assets.  Viridis
also has the power to prevent or cause a change in  control.  The  interests  of
Viridis may differ from the  interests  of the other  stockholders,  which could
prevent  actions  from  being  taken  that  might  be in the best  interests  of
GreenShift.

          III. Risks Factors Attendant to Ownership of our Common Stock

The resale of shares  acquired by Cornell  Capital  Partners from GreenShift may
reduce the market price of GreenShift' shares.

Cornell Capital Partners owns convertible debentures issued by GreenShift, which
will permit it to acquire  GreenShift  common stock and resell it to the public.
At the  current  market  price,  Cornell  Capital  Partners  could  convert  its
debentures  into over 50% of our  outstanding  common stock. It is possible that
resale of shares by  Cornell  Capital  Partners  will  significantly  reduce the
market price for GreenShift common stock.


Existing  shareholders may experience  significant dilution from our issuance of
shares to Cornell Capital Partners.


The  issuance of shares on  conversion  of the  convertible  debentures  held by
Cornell Capital Partners will have a dilutive impact on our  stockholders.  As a
result,  our net income per share  could  decrease  in future  periods,  and the
market price of our common stock could decline. In addition, the lower our stock
price  is,  the  more  shares  of  common  stock  we will  have to  issue if the
debentures are converted on the basis of the  contemporaneous  market price.  If
our stock  price is  lower,  then our  existing  stockholders  would  experience
greater dilution.

We will be quoted on the OTC Bulletin Board for the immediate future.

We currently do not meet the eligibility  requirements for listing on the NASDAQ
Stock  Market.  Until we meet those  standards  and are accepted into the NASDAQ
Stock Market,  or unless we are successful in securing a listing on the American
Stock Exchange or some other  exchange,  our common stock will be quoted only on
the OTC Bulletin  Board.  Such a listing is considered less  prestigious  than a
NASDAQ Stock Market or an exchange  listing,  and many brokerage  firms will not
recommend  Bulletin Board stocks to their clients.  This situation may limit the
liquidity of your shares.

Our common stock price may be volatile.

The trading price of our common stock may fluctuate substantially. The price of
the common stock may be higher or lower than the price you pay for your shares,
depending on many factors, some of which are beyond our control and may not be
directly related to our operating performance. These factors include, but are
not limited to, the following:

o    price and volume  fluctuations  in the  overall  stock  market from time to
     time;

o    significant volatility in the market price and trading volume of securities
     traded on the OTC Bulletin Board companies;

o    actual or  anticipated  changes  in our  earnings  or  fluctuations  in our
     operating results.

As a result of these  factors,  you cannot be assured that when you are ready to
sell your  shares,  the market price will  accurately  reflect the value of your
shares or that you will be able to obtain a reasonable price for your shares.

                                       22

<PAGE>



THE TWELVE MONTHS ENDED DECEMBER 31, 2006 VERSUS THE
TWELVE MONTHS ENDED DECEMBER 31, 2005
<TABLE>

Revenues
<CAPTION>

2006                                      Corporate      CleanTech (1)   CleanFuels     CleanEnergy (2)     Other        Total
                                    -----------------------------------------------------------------------------------------------
<S>                                      <C>             <C>              <C>            <C>                           <C>
Revenue from external customers              -           14,435,387       52,230         3,362,835            -        17,850,452

Inter-segment Revenue                        -                 -              -          2,481,964 (3)        -         2,481,964
                                     ----------------------------------------------------------------------------------------------
Total                                        -           14,435,387       52,230         5,844,799            -        20,332,416
                                    -----------------------------------------------------------------------------------------------
2005
                                    -----------------------------------------------------------------------------------------------
Total Revenue                        3,939,607           13,962,113           -          2,427,196            -        20,328,916
                                    -----------------------------------------------------------------------------------------------
<FN>
(1)  The amounts  include of GS CleanTech  Corporation,  GreenWorks  Engineering
     Corporation and GS Carbon Corporation.
(2)  The amounts include of GS Energy Corporation and TDS (Telemedicine), Inc.
(3)  Amount includes revenue earned by GS Energy Corporation through sales to GS
     Agrifuels  Corporation  and  GS  Cleantech  Corporation.  The  intersegment
     revenue of $2,481,964 eliminated at consolidations.
</FN>
</TABLE>

CORPORATE

Total  revenue were $3.9 million for the year ended  December 31, 2005,  from GS
EnviroServices,  Inc.  (f/k/a  GreenWorks  Corporation).  On  July 1,  2006,  GS
CleanTech assumed from GreenShift  Corporation,  100% of the outstanding capital
stock  of  GS  Enviro  Services,   Inc.  (f/k/a  GreenWorks   Corporation).   GS
EnviroServices,   Inc.  owns  an   enviromental   engineering   busiess   called
Enviro-Services (of Delaware) Corporation.

CLEANTECH

Total  revenues  were  $14.4  million  for the year  ended  December  31,  2006,
corresponding  to an increase of $0.4  million,  or 3.0%,  over 2005 revenues of
$14.0 million.  The increase in revenues  realized during 2006 was primarily due
to the addition of operating  activities of a company acquired during January of
2006 which  accounted  for $515,549 in revenues or 4% of total  revenue in 2006.
Total revenues in 2005 included a major soil transportation and disposal project
with our  Environmental  Services  division of $1.6  million.  Net of this major
project,  and revenues from the acquisition during 2006, the company realized an
increase in its in base  business of $1.5 million.  Increased  revenues from the
addition of operating  activities  and increase in base business are expected to
continue in 2007. Revenues from the discontinued  operations of $3.7 million and
$6.3  million for 2006 and 2005  respectively  have been  removed from the above
figures.

CLEAN FUELS

GS AgriFuels was a shell company,  without any business  operations,  from 2003.
During the year  ended  December  31,  2006,  the  Company  recorded  revenue of
$52,230.

CLEAN ENERGY

Total  revenues  were  $5,844,799  for the year ended  December  31,  2006,  and
$2,427,196 for the twelve months ended December 31, 2005.

All revenues  realized  during the year ended  December 31, 2006 were due to the
operating activities of our subsidiary,  Warnecke Design Services, Inc. ("WDS").
WDS  has   traditionally   engaged  in  the   engineering   and  fabrication  of
manufacturing equipment for large domestic and international manufacturers,  and
revenues for the year ended  December 31, 2006 related  primarily to orders from
that customer base.

WDS is currently  executing a growth plan targeted at designing and  fabricating
processing  equipment for the biofuels industry.  This plan includes engineering
and fabrication  services for both nonaffiliated  companies and GS AgriFuels and
its wholly owned subsidiary NextGen Fuels, and GS CleanTech Corporation. Both of
these  companies  are  controlled  through  an 80% or  greater  ownership  by GS
Energy's parent company,  Greenshift  Corporation.  Although the company expects
increases  in revenue from these areas of  expansion,  there can be no assurance
that the growth plan can be successfully implemented.

                                       23




<PAGE>
ITEM 6.   MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

Cost of Revenues

Cost of  revenues  for the twelve  months  ended  December  30,  2006 were $14.7
million,  or 83% of revenue compared to $14.9 million, or 73% of revenue for the
same period in 2005.  Costs of revenues  from  discontinued  operations  of $2.1
million  and $5.3  million for the twelve  months  ended  December  31, 2006 and
December 31, 2005, respectively,  were excluded from these figures. The increase
in cost of  revenues  as a  percentage  of sales was  primarily  related  to the
completion of low margin projects at the Company's GS Energy  subsidiary,  whose
revenue and cost of revenue  increased as a blended  percentage of the Company's
total sales. A breakdown of cost of revenue by segment is as follows:

CLEANTECH

Cost of revenues  for the year ended  December 31, 2006 were $10.8  million,  or
74.5% of revenue, as compared to $10.5 million, or 74.9% of revenue in 2005. The
change  in  cost  of  revenues  is  primarily  attributable  to the  major  soil
transportation  and  disposal  project  noted  above.  This  project was done at
margins considerably lower than our base business.  Cost of revenue without this
project was 73.0% in 2005.  Cost of sales from the  discontinued  operations  of
$2.1 million and $5.3 million for 2006 and 2005  respectively  have been removed
from the above figures.

CLEANENERGY

Cost of revenues  for the year ended  December 31, 2006 was  $4,428,955,  all of
which were  attributable to WDS. Cost of revenues included direct labor costs of
$1,263,679,  purchased  components  and other  direct costs of  $2,641,927,  and
indirect labor and manufacturing overhead of $523,349.  Cost of revenues for the
year ended December 31, 2005 was $2,084,966

Operating Expenses

Operating  expenses  for the twelve  months  ended  December 31, 2006 were $11.1
million,  or 62% of revenue compared to $9.0 million,  or 44% of revenue for the
same period in 2005.  Included in the twelve months ended  December 31, 2006 was
$2.7 million in stock based compensation, equal to 15% of revenue as compared to
$3.1 million for the twelve  months ended  December 31, 2005, or 15% of revenue.
The  increase in operating  expenses is due  primarily to increases in personnel
and other overhead related to the Company's clean technology and renewable fuels
segments.   Selling,   general  and  administrative  expense  from  discontinued
operations of $1.3 million and $1.7 million for 2006 and 2005 respectively, were
excluded from the above figures. A breakdown of cost of revenue by segment is as
follows:

CLEANTECH

     GS CleanTech

     Selling,  general and  administrative  (SG&A)  expenses  for the year ended
     December  31, 2006 were $7.0  million or 48.4% of  revenue,  as compared to
     $4.7  million,  or 33.3% of revenue in 2005.  Included in SG&A  expenses in
     2006 was 2,249,400 in stock based compensation. 2005 SG&A expenses included
     an impairment of Goodwill in the amount of $532,000. Net of the stock based
     compensation in 2006 and impairment of goodwill in 2005,  selling,  general
     and administrative  expenses overall have increased by $0.6 million in 2006
     and can be  attributed to the  acquisition  in January 2006. We expect that
     the  percentage  of these costs will decrease as a percentage of revenue in
     future  periods.   Selling,   general  and  administrative   expenses  from
     discontinued  operations of $1.3 million and $1.7 million for 2006 and 2005
     respectively have been removed from the above figures.

     GS Carbon

     Selling,  general and  administrative  expenses for the period  January 14,
     2006 through  December 31, 2006 were  $888,841  which amount was  primarily
     attributable  to the operating  activities of our research and  development
     unit, General Ultransonics Corporation.


CLEAN ENERGY

Selling,  general and  administrative  expenses for the year ended  December 31,
2006 were 1,800,620 and for the year ending  December 31, 2005 were  $1,772,834.
Selling,  general and  administrative  expenses are expected to remain high as a
percentage of sales until such time that the Company can achieve  enough revenue
growth and obtain the economies of scale necessary to support these expenses.

                                       24
<PAGE>

Interest Expense

Interest expense for the twelve months ended December 31, 2006 was $1.9 million,
representing  an increase of $0.8  million from $1.1 million for the same period
in 2005.  Interest expense from discontinued  operations for twelve months ended
December 31, 2006 and 2005 in the amount of $0.1 and $0.2 million  respectively,
were excluded from the above figures.  A breakdown of cost of revenue by segment
is as follows:

CLEANTECH

     GS CleanTech

     Interest  expenses for the year ended  December 31, 2006 were $0.7 million,
     or 5.0% of  revenue,  as compared  to $0.5  million,  or 3.8% of revenue in
     2005.  Increase in  interest  is  attributable  to GS  CleanTech's  various
     financings  completed  during 2006.  Interest expense from the discontinued
     operations  of $137,936 in 2006 and  $161,116 in 2005 has been removed from
     the above figures.

     GS Carbon

     Interest  expenses and financing costs for the year ended December 31, 2006
     were  $171,094 and was  primarily  attributable  to our existing  financing
     agreements  with Cornell  Capital  Partners,  LLP and Highgate House Funds,
     Ltd.

CLEAN ENERGY

Interest  expenses and financing costs for the year ended December 31, 2006 were
$326,849 and for the year ended  December 31, 2005 were  $385,626.  The interest
expense was primarily  attributable to our financing agreements with Cornell and
Highgate.

We incurred  $83,653 in amortization of financing costs during the twelve months
ended  December  31,  2006.  These  expenses  represent  the costs  incurred  in
connection  with the  Highgate  and Cornell  Debentures  and the fees we paid to
compensate the parties associated with these financing transactions.

The interest  expenses and financing  costs noted above are expected to decrease
in future  quarters due to the fact the Cornell  Debentures  were converted into
common stock and the Highgate  Debentures  were assumed by GreenShift.  Interest
expense  and  financing  costs could  increase in future  periods if the Company
obtains new debt or equity financing.

Expenses Associated with Derivative Instruments

Gains from the change in the fair market value of  derivative  liabilities  were
$3.4 million for the twelve  months ended  December  31, 2006.  Amortization  of
deferred financing costs and debt discounts was $7.3 million and $0.4 million in
2006 and 2005, respectively.

Net Income or Loss

Net loss from  continuing  operations  for the twelve months ended  December 31,
2006, was $17.4 million as compared to a loss from continuing operations of $5.5
million from the same period in 2005.  Income from  discontinued  operations was
$0.4 million for twelve  months ended  December 31, 2006 and a loss for the same
period in 2005 of $3.9 million.  Net loss of $16.4 million for the twelve months
ended  December 31, 2006 was due primarily to increased  operating  expenses for
new business  initiatives,  interest and  amortization  charges  associated with
financing, and issuance of stock based compensation.
<TABLE>

Segment Loss:
<CAPTION>

         Corporate       CleanTech (1)       CleanFuels      CleanEnergy (2)        Other              Total
         ---------       -------------       ----------      ---------------        -----              -----
<C>     <C>              <C>                 <C>               <C>                 <C>             <C>
2006    (1,649,936)      (11,313,560)        (2,292,047)       (1,023,150)         (143,002)       (16,421,695)

2005    (1,577,144)       (4,740,202)          (280,805)       (1,726,702)               -         (8,324,853)
<FN>
(1)  The amounts  include of GS CleanTech  Corporation,  GreenWorks  Engineering
     Corporation and GS Carbon Corporation.
(2)  The amounts include of GS Energy Corporation and TDS (Telemedicine), Inc.
</FN>
</TABLE>

                                       25
<PAGE>


CLEANTECH

     GS CleanTech

     The total net loss from  continuing  operations the year ended December 31,
     2006 was $10.2 million or (70.9)% of revenue, as compared to a loss of $1.8
     million, or (12.9)% of revenue in 2005. Included in the 2006 net loss was a
     settlement  in  the  amount  of   $1,500,000,   a  loss  of  $4,267,826  in
     amortization of debt discounts, a loss of $436,667 for the write down of an
     investment,  $2,417,918 of warrants  issued  associated with financing with
     Cornell Capital,  LP and $1,520,000 of related party option issuances.  The
     majority  of the  loss  in 2005  was  attributable  to a write  off of $0.5
     million of goodwill associated with the environmental  services operations.
     The income of $0.4  million and loss of $3.5  million  incurred in 2006 and
     2005 respectively  from discontinued  operations have been removed from the
     above figures.

     GS Carbon

     The net loss for the year ended  December  31, 2006 was  $310,365.  The net
     loss incurred was due to the expenses and other factors described above.

CLEAN FUELS

GS AgriFuels was a shell  company,  without any business  operations  during the
year. During that time, its expenses consisted of (a)  administration  expenses,
and (b) write-offs of assets  remaining from the business that it operated prior
to 2003. During the twelve months ended December 31, 2006, GS AgriFuels incurred
$1,385.253 in selling, general and administrative costs, consisting primarily of
amortization of intangibles,  consulting,  legal and accounting expenses as well
as  other  expenses  related  to  the  development  of  the  Company's  biofuels
initiatives.  GS Agrifuels incurred  $1,287,675 in the amortization of financing
related costs and the fair market value of the  debenture-related  derivative as
well as interest  expense,  offset by a gain from the write-down of a derivative
liability of $104,657.

CLEAN ENERGY

The net loss for the year ended  December  31, 2006 was  $1,023,150  and for the
year ended  December 31, 2005 was  $1,876,262.  The net loss incurred was due to
the expenses and other factors described above.

DERIVATIVE LIABILITIES

As of December  31, 2006 we had several  convertible  debentures  due to Cornell
Capital.  The  conversion  feature  on these  debentures  is  variable  based on
trailing market prices and therefore contains an embedded  derivative.  We value
the conversion feature at the time of issuance using the Black-Scholes Model and
record a note discount and  derivative  liability for the calculated  value.  We
recognize  interest  expense for accretion of the note discount over the term of
the note. The derivative liability is 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, as well as the stock of our subsidiaries, the change in the
derivative  liability and the resulting gain or loss is usually  material to our
results.

The principal  amount on our  convertible  debentures due to Cornell Capital was
$32.7 million as of December 31, 2006 and the unamortized note discount was $8.3
million.  For the year r ended December 31, 2006, we recognized interest expense
for  accretion of the debt discount of $7.3 million and a gain for the change in
fair  value  of the  derivative  of  $3.4  million  for  these  debentures.  The
derivative liability as of December 31, 2006 was $8.8 million for debentures due
to Cornell Capital.





                                       26

<PAGE>


ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

LIQUIDITY AND CAPITAL RESOURCES

Our primary  source of liquidity is cash  provided by  operating,  investing and
financing  activities.  For the twelve months ended  December 31, 2006, net cash
used by our operating activities was $8.2 million as compared $6 million for the
twelve months ended December 31, 2005.

The Company's  capital  requirements  consist of general  working capital needs,
scheduled  principal  and  interest  payments on debt,  obligations  and capital
leases and planned capital expenditures. The Company's capital resources consist
primarily of cash generated  from  operations and proceeds from issuance of debt
and common  stock.  The Company's  capital  resources are impacted by changes in
accounts  receivable as a result of revenue  fluctuations,  economic trends, and
collection activities. At December 31, 2006 the Company had cash of $2 million.

Cash Flows for the Year Ended December 31, 2006

Our operating  activities  during the twelve months of 2006 used $8.2 million in
cash. At December 31, 2006, Accounts  receivable,  net of allowance for doubtful
accounts,  totaled $2.6 million and inventories  totaled $1.5 million.  Accounts
payable and accrued  expenses  totaled  $8.2  million.  The increase in accounts
payable is primarily due to the  acquisition  of and GSID in January 2006 and GS
Clean Tech Ventures in July of 2006.  The increase in  inventories is due to the
acquisition of GSID in January 2006.

For the  twelve  months  ended  December  31,  2006,  we used $4.9  million  for
investing  activities,  and we obtained cash from financing  activities of $14.3
million.  We used these funds to further  provide working capital for operations
and to invest in our subsidiaries.

The Company had a working capital deficit of $29.7 million at December 31, 2006,
which includes derivative liabilities of $7.7 million and convertible debentures
of $6.3 million, net of discounts.

At the present  time,  GreenShift  has no source of  committed  capital.  We are
currently  investigating  the  availability  of both  equity and debt  financing
necessary to complete the  Company's  current  projects.  We do not know at this
time if the  necessary  funds  can be  obtained  nor on what  terms  they may be
available.






                                       27
<PAGE>

ITEM 7.  FINANCIAL STATEMENTS
<TABLE>
<CAPTION>

                                                                                                           Page No
FINANCIAL STATEMENTS

<S>                                                                                                            <C>
     Report of Independent Registered Public Accounting Firm....................................................29

     Consolidated Balance Sheets................................................................................30

     Consolidated Statements of Operations......................................................................32

     Consolidated Statements of Stockholders' Equity............................................................33

     Consolidated Statements of Cash Flows......................................................................35

     Notes to Consolidated Financial Statements.................................................................37

</TABLE>
























                                       28

<PAGE>


ITEM 7.  FINANCIAL STATEMENTS (CONTINUED)


 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM



To the  Board of  Directors  and  Stockholders  of  GreenShift  Corporation  and
Subsidiaries:

We have  audited  the  accompanying  consolidated  balance  sheet of  GreenShift
Corporation  and  Subsidiaries,  as  of  December  31,  2006,  and  the  related
consolidated  statements of operations,  stockholders' equity and cash flows for
the years ended December 31, 2006 and 2005.  These financial  statements are the
responsibility of the Company's management.  Our responsibility is to express an
opinion on these financial statements based on our audit.

We conducted  our audits in  accordance  with  standards  of the Public  Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements  are free of material  misstatement.  The company is not  required to
have,  nor were we engaged to perform,  an audit of its  internal  control  over
financial reporting.  Our audit included  consideration of internal control over
financial  reporting  as  a  basis  for  designing  audit  procedures  that  are
appropriate  in the  circumstances,  but not for the  purpose of  expressing  an
opinion on the  effectiveness  of the company's  internal control over financial
reporting.  Accordingly,  we express  no such  opinion.  An audit also  includes
examining,  on a test basis,  evidence supporting the amounts and disclosures in
the  financial  statements.  An audit also  includes  assessing  the  accounting
principles  used  and  significant  estimates  made  by  management,  as well as
evaluating the overall  financial  statement  presentation.  We believe that our
audit provide a reasonable basis for our opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all  material  respects,  the  consolidated  financial  position  of  GreenShift
Corporation  and  Subsidiaries  as of December  31, 2006,  and the  consolidated
results of their  operations  and their cash flows for the years ended  December
31, 2006 and 2005 in conformity with accounting principles generally accepted in
the United States of America.

The accompanying  consolidated  financial statements have been prepared assuming
that the Company will continue as a going  concern.  As more fully  discussed in
Note 2 to the  financial  statements,  the  Company  has  suffered  losses  from
operations and has a working capital  deficiency as of December 31, 2006.  These
conditions  raise  substantial  doubt  about its  ability to continue as a going
concern.  Management's  plans in regard to these  matters are also  described in
Note 2. The  consolidated  financial  statements do not include any  adjustments
that might result from the outcome of this uncertainty.

As discussed in Note 23 to the Financial  Statements,  the Company  restated its
financial  statements because it determined that it was liable for approximately
$498,000  of  convertible   debt  along  with  $59,000  of  related   derivative
liabilities  at October 9, 2006,  the reverse  acquisition  date, and to correct
errors in its derivative and warrant liabilities at December 31, 2006.


                                       /s/ Rosenberg Rich Baker Berman & Co.


Bridgewater, New Jersey
April 17, 2007, except for Note 23, as to
  which the date is October 10, 2007

                                       29
<PAGE>

<TABLE>
<CAPTION>

                     GREENSHIFT CORPORATION AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEET
                                DECEMBER 31, 2006
                           (As Restated, See Note 23)





 ASSETS

Current assets:
<S>                                                                           <C>
Cash ......................................................................   $ 2,006,131
Accounts receivable, net ..................................................     2,572,522
Accounts receivable - affiliate, net ......................................        49,561
Costs and estimated earnings in excess of billings on uncompleted contracts       204,262
Inventory .................................................................     1,458,203
Assets of discontinued operations .........................................       961,249
Prepaid expenses and other current assets .................................       268,741
                                                                              -----------
Total current assets ......................................................     7,520,669

Net fixed assets ..........................................................     4,043,441

Other assets:
Investment in unconsolidated subsidiary - cost method .....................     7,937,383
Investment in unconsolidated subsidiary - equity method ...................       303,077
Project development costs .................................................       270,473
Deferred financing fees ...................................................     2,480,247
Intangible assets and license agreements ..................................    14,803,597
Non-current assets of discontinued operations .............................       344,632
Deposits ..................................................................       541,838
Goodwill ..................................................................    10,753,554
                                                                              -----------
Total other assets ........................................................    37,434,801
                                                                              -----------

TOTAL ASSETS ..............................................................   $48,998,911
                                                                              ===========
</TABLE>












                                       30
<PAGE>


<TABLE>

<CAPTION>

                     GREENSHIFT CORPORATION AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEET
                          DECEMBER 31, 2006 (CONTINUED)
                           (As Restated, See Note 23)

  LIABILITIES AND STOCKHOLDERS' DEFICIENCY

  Current liabilities:
<S>                                                        <C>
  Accounts payable .....................................   $  3,643,307
   Accrued expenses ....................................      4,512,848
  Due to related party .................................        240,202
  Current portion of convertible debentures ............      3,877,645
  Convertible debentures - related party ...............      2,375,763
  Derivative liability .................................      7,708,546
  Notes payable and short-term borrowings ..............     10,122,522
  Current maturities of long term debt .................        227,036
  Income taxes payable .................................          2,250
   Billings in excess of cost and estimated
     Earnings on uncompleted contracts .................         21,381
  Deferred revenue .....................................      1,654,750
  Liabilities of discontinued operations ...............      2,866,972
                                                           ------------
  Total current liabilities ............................     37,253,222

  Long term convertible debenture, net of discount .....     20,977,122
  Long term convertible debenture, related party .......        340,126
  Long term debt, net of current maturities ............        628,479
  Discontinuance of operation, net of current ..........        893,624
  Other long term liability ............................         11,174
                                                           ------------
  Total long term liabilities ..........................     22,850,525
                                                           ------------

  TOTAL LIABILITIES ....................................     60,103,747

  Minority interest in consolidated subsidiary .........      1,123,832

  STOCKHOLDERS' DEFICIENCY

  Preferred stock, Series C, par $0.001,
     1,000,000 authorized, issued and outstanding ......          1,000
Common Stock, Par $.01, 200,000,000 authorized,
     118,225,849 issued and outstanding ................        118,225
  Additional paid-in-capital ...........................     58,694,969
  Accumulated deficit ..................................    (71,042,862)
                                                           ------------
  Total stockholders' deficiency .......................    (12,228,668)
                                                           ------------


          TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIENCY   $ 48,998,911
                                                           ============


            The notes to the consolidated financial statements are an
                       integral part of these statements.
</TABLE>

                                       31
<PAGE>
<TABLE>

                     GREENSHIFT CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
           FOR THE YEARS ENDED DECEMBER 31, 2006 AND DECEMBER 31, 2005
<CAPTION>

                                                   12/31/2006        12/31/2005
                                                  ------------------------------
                                                           (As Restated)
                                                           (See Note 23)

<S>                                              <C>              <C>
Revenue ......................................   $  17,850,452    $  20,328,916
Cost of revenues .............................      14,730,691       14,923,009
Gross profit .................................       3,119,761        5,405,907
                                                 -------------    -------------

Operating expenses:
Selling expenses .............................       1,157,782        2,633,453
General and administrative expenses ..........       7,006,024        3,293,574
Research and development .....................         231,785             --
Stock-based compensation .....................       2,728,827        3,081,249
                                                 -------------    -------------
Total operating expenses .....................      11,124,418        9,008,276
                                                 -------------    -------------
Loss from operations .........................      (8,004,657)      (3,602,369)
                                                 -------------    -------------

Other income (expense):
Fees and other income ........................         225,000          125,000
Other expense from settlements ...............      (1,500,000)         199,794
Change in fair value of derivative instruments       3,438,214         (199,479)
Interest and dividend income .................            --             26,272
Interest expense .............................      (1,944,023)      (1,126,241)
Amortization expense, intangible assets ......        (397,018)         (60,032)
Amortization of debt discount ................      (7,345,298)        (390,835)
Impairment of goodwill and intangible assets .      (1,746,624)        (532,088)
Miscellaneous income (expense) ...............        (150,204)          46,394
Forgiveness of interest and finance charges ..         480,290             --
Gain (loss) on extinguishment of debt ........            --              7,248
Write down of investment .....................        (436,667)            --
Gain (loss) on equipment disposal ............         (30,380)          48,139
                                                 -------------    -------------
Total other expense, net .....................      (9,406,710)      (1,855,828)
                                                 -------------    -------------

Loss before provision for income taxes .......     (17,411,367)      (5,458,197)

Provision for income taxes ...................          (9,420)         (19,915)
                                                 -------------    -------------

Loss income from continuing operations .......     (17,420,787)      (5,478,112)

Income (loss) from discontinued operations ...         359,283       (3,910,429)
Net loss before minority interest ............     (17,061,504)      (9,388,541)

Minority interest ............................         639,809        1,063,688
                                                 -------------    -------------

Net loss .....................................   $ (16,421,695)   $  (8,324,853)
                                                 -------------    -------------


Net loss per common share, basic and diluted .   $       (0.15)   $       (0.13)
                                                 =============    =============

Weighted average shares of common stock
  outstanding, basic and diluted .............     110,911,972       63,542,787
                                                 =============    =============

            The notes to the consolidated financial statements are an
                       integral part of these statements.
</TABLE>

                                       32
<PAGE>
<TABLE>

                     GREENSHIFT CORPORATION AND SUBSIDIARIES
                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
           FOR THE YEARS ENDED DECEMBER 31, 2006 AND DECEMBER 31, 2005

<CAPTION>


                                                                    Series B Preferred Stock            Common Stock
                                                                      Shares        Amount         Shares      Amount
                                                                    ----------------------------------------------------
<S>                                                              <C>          <C>             <C>           <C>
Balance at 1/1/05 ..........................................           --     $       --      2,669,398     $       2,669
Balance at 1/1/05 - Entities that were acquired under
   common control during 2005 ..............................           --             --             --              --
Issuance of preferred stock in acquisition of subsidiary ...      1,000,000          1,000           --              --
Stock issued for services ..................................           --             --        5,945,877           5,946
Issuance of common stock upon conversion of debt ...........           --             --       57,476,474          57,476
Issuance of common stock for acquisitions in subsidiaries ..           --             --       48,900,000          48,900
Issuance of common stock for cash ..........................           --             --        2,189,752           2,190
Subsidiary equity transactions absorbed by the Company .....           --             --             --              --
Discount on debt (TDS) .....................................           --             --             --              --
Majority interest in variable interest entity upon
   Company's initial investment ............................           --             --             --              --
Loss from variable interest entity, net of minority interest           --             --             --              --
Deferred compensation arrangement within variable ..........           --             --             --              --
   interest entity .........................................           --             --             --              --
Net loss ...................................................           --             --             --              --
                                                                  ---------------------------------------------------------

Balance, December 31, 2005 .................................      1,000,000          1,000    117,181,501         117,181

Common stock issued for services ...........................           --             --        3,437,000           3,437
Issuance of common stock upon conversion of debt ...........           --             --       32,005,000          32,005
Issuance of common stock for acquisitions in subsidiaries ..           --             --        8,699,348           8,699
Issuance of common stock for cash ..........................           --             --        3,203,000           3,203
Common stock returned ......................................           --             --      (46,300,000)        (46,300)
Issuance of debt ...........................................           --             --             --              --
Subsidiary equity transactions absorbed by the Company .....           --             --             --              --
To eliminate deficit in variable interest entity ...........           --             --             --              --
Net loss ...................................................           --             --             --              --
                                                                                                             ------------

Balance, December 31, 2006, as Restated, See Note 23 .......      1,000,000   $      1,000    118,225,849    $    118,225
                                                                                                             ============


</TABLE>






                                       33
<PAGE>

<TABLE>

                     GREENSHIFT CORPORATION AND SUBSIDIARIES
                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
           FOR THE YEARS ENDED DECEMBER 31, 2006 AND DECEMBER 31, 2005



<CAPTION>

                                                                                                  Deficit in          Total
                                                                 Additional      Cumulative     Variable Interest  Stockholders'
                                                              Paid-In-Capital     Deficit           Entity            Equity
                                                            --------------------------------------------------------------------

<S>                                                            <C>               <C>             <C>             <C>
Balance at 1/1/05 ..........................................   $  1,609,760      (6,073,046)           --        (4,460,617)
Balance at 1/1/05 - Entities that were acquired under
   common control during 2005 ..............................     37,418,645     (40,223,268)           --        (2,804,623)
Issuance of preferred stock in acquisition of subsidiary ...           --              --              --             1,000
Stock issued for services ..................................      1,647,226            --              --         1,653,172
Issuance of common stock upon conversion of debt ...........      2,377,829            --              --         2,435,305
Issuance of common stock for acquisitions in subsidiaries ..      3,869,600            --              --         3,918,500
Issuance of common stock for cash ..........................        354,865            --              --           357,055
Subsidiary equity transactions absorbed by the Company .....       (245,932)           --              --          (245,932)
Discount on debt (TDS) .....................................       (101,462)           --              --          (101,462)
Majority interest in variable interest entity upon
   Company's initial investment ............................           --              --           (20,127)        (20,127)
Loss from variable interest entity, net of minority interest           --              --          (324,370)       (324,370)
Deferred compensation arrangement within variable
   interest entity .........................................           --              --          (150,000)
Net loss ...................................................           --        (8,324,853)           --        (8,324,853)
                                                                ------------------------------------------------------------

Balance, December 31, 2005 .................................     46,930,531     (54,621,167)       (494,497)     (8,066,952)
                                                                -------------------------------------------------------------
Common stock issued for services ...........................        455,189            --              --           458,626
Issuance of common stock upon conversion of debt ...........      2,868,566            --              --         2,900,571
Issuance of common stock for acquisitions in subsidiaries ..        519,301            --              --           528,000
Issuance of common stock for cash ..........................        265,866            --              --           269,069
Common stock returned ......................................         46,300            --              --
                                                                ------------------------------------------------------------
Issuance of debt ...........................................        909,776            --              --           909,776
Subsidiary equity transactions absorbed by the Company .....      7,727,596            --              --         7,727,596
Loss from variable interest entity, net of minority interest           --              --          (435,659)       (435,659)
Additional investment by company ...........................           --              --           (98,000)        (98,000)
To eliminate deficit in variable interest entity ...........     (1,028,156)           --         1,028,156            --
Net loss ...................................................           --       (16,421,695)           --       (16,421,695)
                                                               -------------------------------------------------------------
Balance, December 31, 2006, as Restated, See Note 23 .......   $ 58,694,969    $(71,042,862)   $       --      $(12,228,668)
                                                               ============================================================







            The notes to the consolidated financial statements are an
                       integral part of these statements.
</TABLE>










                                       34

<PAGE>

<TABLE>

                     GREENSHIFT CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                      FOR THE YEARS ENDED DECEMBER 31, 2006

<CAPTION>

                                                              12/31/06     12/31/05
                                                                  (As Restated)
                                                                  (See Note 23)
                                                            ----------------------------
CASH FLOWS FROM OPERATING ACTIVITIES
<S>                                                         <C>             <C>
Net Loss ................................................   $(16,421,695)   $ (8,324,853)
Adjustments to reconcile net loss to net cash (used in)
   provided by operating activities:
     Debt issuance for related party payable ............           --           370,142
     Depreciation and amortization ......................        889,013         628,601
     Forgiveness of the registration rights penalty .....       (480,290)           --
     Write down of long term investment .................        436,667            --
     Bad debt recovery ..................................           --            83,270
     Stock-based compensation ...........................      2,728,827       3,081,249
     Change in allowance for doubtful accounts ..........        (10,935)           --
     Change in net assets of discontinued operations ....       (924,086)     (2,428,262)
     (Gain) loss on disposal of fixed assets ............         30,380         (48,139)
     Amortization of debt discounts .....................      7,345,298         390,835
     Change in fair value of derivative instruments .....     (3,438,214)        199,479
     Impairment of goodwill and intangible assets .......      1,746,624         532,088
     Write down of inventories ..........................           --             3,627
     Deferred income taxes ..............................           --           (18,485)
     Income from equity method investments ..............        (18,667)           --
     Gain on extinguishment of debt .....................           --            (7,248)
     Minority interest ..................................       (639,809)     (1,063,688)
     Changes in assets and liabilities,
       Accounts Receivable ..............................     (1,004,523)        347,824
       Costs and estimated earnings in excess of billings        281,334        (711,473)
       Deferred financing costs .........................           --           (68,000)
       Inventories ......................................     (1,399,777)          5,690
       Deposits .........................................       (659,712)        (89,064)
       Prepaid expenses and other current assets ........        201,143         (61,481)
       Billings in excess of earnings ...................         40,659         (36,644)
       Accounts payable .................................        377,408         349,830
       Customer deposits ................................        578,250            --
       Estimated losses on contracts in progress ........           --            24,190
       Deferred Revenue .................................           --           (67,508)
       Other Liabilities ................................           --            57,752
       Accrued expenses .................................      2,318,206         842,125
       Change in investment payable .....................       (215,000)           --
                                                             -----------    ------------
       Net cash used in operating activities ............     (8,238,899)     (6,008,143)
                                                             -----------    ------------


CASH FLOWS FROM INVESTING ACTIVITIES
     Construction in progress ...........................     (1,550,411)       (371,948)
     Project development costs ..........................       (270,473)           --
     Investment in unconsolidated subsidiary ............     (4,501,324)        277,824
     Cash acquired from acquisition of subsidiaries .....      2,280,937            --
     Patents ............................................        (46,797)           --
     Additions to and acquisition of PPE ................       (583,044)        (73,370)
     Acquisition of technology license ..................       (261,328)           --
     Proceeds from sale of fixed assets .................           --            38,530
                                                             -----------    ------------
       Net cash used in investing activities ............     (4,932,440)       (128,964)
                                                             -----------    ------------
</TABLE>

                                       35

<PAGE>

<TABLE>

                     GREENSHIFT CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                FOR THE YEARS ENDED DECEMBER 31, 2006 (CONTINUED)
<CAPTION>

                                                                                              12/31/06         12/31/05
                                                                                           --------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES
<S>                                                                                        <C>             <C>
     Increase (Decrease) in restricted cash ............................................   $     29,254    $    (29,254)
     Advances from related parties, net ................................................        963,820            --
     Proceeds of convertible debentures ................................................     14,756,014       7,475,900
     Proceeds from collection of stock subscriptions ...................................           --           175,000
     Repayment of stock subscription receivable ........................................           --            (1,000)
     Repayment of convertible debentures ...............................................           --          (619,435)
     Proceeds from notes payable - non-affiliated parties ..............................           --           176,852
     Repayment of notes payable ........................................................     (1,128,207)     (1,093,627)
     Repayment of investment payable ...................................................       (325,000)           --
     Net activity in line of credit ....................................................          1,300            --
     Redemption of common stock ........................................................           --          (290,624)
     Redemption of preferred stock .....................................................           --          (234,930)
     Deferred financing fees ...........................................................       (310,760)         61,927
     Proceeds from issuance of common stock ............................................        269,069         341,931
                                                                                            -----------    ------------
       Net cash provided by financing activities .......................................     14,255,490       5,962,740
                                                                                            -----------    ------------

     (Decrease) increase in cash .......................................................      1,084,171        (174,367)

     Cash at beginning of period .......................................................        921,960       1,096,327

Cash at end of period ..................................................................      2,006,131         921,960

Cash paid during the period for interest ...............................................   $    811,571    $    542,144
Minority interest converted into common stock ..........................................   $     50,000    $       --

Supplemental disclosure of non-cash investing and financing activities:
     Net asset acquired in exchange for convertible debenture ..........................     13,204,437            --
     Common stock issued upon settlement of payables ...................................         33,580          41,750
     Common stock issued upon conversion of preferred stock ............................           --             8,500
     Value of warrants issued for in connection with Cornell Capital, LLC ..............      2,417,918            --
     Value of beneficial conversion feature on convertible debt ........................           --            20,165
     Value of beneficial conversion feature on convertible preferred stock .............        681,594       3,647,083
     Equity issued for financing costs .................................................        162,000            --
     Common stock issued for convertible debentures ....................................      1,559,378            --
     Debt issued in connection with deferred financing costs ...........................        455,000            --
     Acquisition of equipment and/or vehicles with long term debt ......................         71,417         306,565
     Convertible debenture conversions into common stock ...............................           --           404,122
     Other long-term debt conversions into common stock ................................           --         2,110,000
     Payables settled in stock .........................................................           --            33,580
     Vehicles purchased via financing ..................................................           --            71,145
     Net asset acquired including goodwill, excluding cash equivalents .................           --           574,978
     Less: Short term note payable issued ..............................................           --          (128,000)
     Less: Fair value of common stock issued ...........................................           --           (75,000)
     Net cash paid at acquisition ......................................................           --           371,978
     Conversion of debenture into common stock .........................................           --            54,365
     Subscription receivable from exercise of options ..................................           --            25,000
     Issuance of stock options for financing fees ......................................           --           176,485
     Issuance of preferred Series C stock for convertible debt assumption ..............           --           400,000
     Issuance of common shares for acquisition of SRTI .................................           --         1,956,521
      Increase in additional paid in capital for investment in unconsolidated subsidiary           --            50,000
     Value of beneficial conversion feature on convertible debt ........................           --           186,447
     Value of warrants issued with convertible debentures ..............................           --           144,448

            The notes to the consolidated financial statements are an
                       integral part of these statements.
</TABLE>

                                       36
<PAGE>





                     GREENSHIFT CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1        NATURE OF OPERATIONS

GreenShift   Corporation  (the  "Company")  began  operations  as  a  closed-end
management  investment  company  on April 1,  2005  after the  Company  acquired
majority equity stakes in the  predecessors to the Company's GS CleanTech and GS
Energy subsidiaries and filed an election on Form N54A pursuant to Section 54 of
the Investment  Company Act of 1940 (the "40 Act") to be regulated as a business
development  company  ("BDC").  The Company  conducted  operations as a BDC from
April 1, 2005 through July 1, 2006.  During this time, the Company  acquired its
initial   technology   portfolio,   purchased  majority  equity  stakes  in  the
development  stage and  operating  companies  that would  eventually  become the
Company's  platform  companies,  and the Company  completed a number of minority
equity  investments  in  companies  that were  believed to be  strategic  to the
Company's mission.

On July 1, 2006,  the Company  filed Form N54C  pursuant to Section 54 of the 40
Act to withdraw its election to be regulated as a BDC. This decision was in part
prompted by the fact that the majority of the Company's resources were allocated
to  managing  the  operating  activities  of its  majority-owned  holdings.  The
de-election  changed the nature of the Company's business from an investment and
business  development  company  to an  active  operating  company.  The  Company
commenced  efforts to  restructure  its holdings and  investments at the time of
this de-election.  The primary purpose of this restructuring was to organize the
Company's holdings according to a sector-specific  approach,  within `pure-play'
platform  companies with investment theses that are both distinct and consistent
with GreenShift's overall mission.

During the year ended December 31, 2006 the Company's operations were
administered through the following companies:
<TABLE>
<CAPTION>

Company                                                                                              Business Model
-----------------------------------------------------------------------------------------------------------------------------------
<S>      <C>                                                           <C>
>>       GS CleanTech Corporation (OTC Bulletin Board: GSCT)               Clean Technology and Process Engineering
>>       GS AgriFuels Corporation (OTC Bulletin Board: GSGF)                       Clean Fuels Production and Sales
>>       GS Energy Corporation (OTC Bulletin Board: GSEG)               Clean Energy Equipment Production and Sales
>>       GS Carbon Corporation (OTC Bulletin Board: GSCR)                  Decarbonization Research and Development
>>       GS EnviroServices Corporation (OTC Bulletin Board: TDSM)                 Environmental Management Services
</TABLE>

2        GOING CONCERN

The accompanying  consolidated  financial statements have been prepared assuming
that the Company will continue as a going concern.  The Company  incurred a loss
of $16,421,695 for the year ended December 31, 2006. As of December 31, 2006 the
Company's current liabilities exceeded current assets by $29,732,553 and it used
cash in operations of $8,238,899.  These matters raise  substantial  doubt about
the Company's ability to continue as a going concern.

Management's  plans  include  raising  additional  proceeds from debt and equity
transactions  to fund  operations  and to increase  revenue and cut  expenses to
reduce the loss from  operations.  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.

3        SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

References  to  the  "FASB",  "SFAS","SAB",  and  "EITF"  herein  refer  to  the
"Financial  Accounting  Standards  Board,"  "Statements of Financial  Accounting
Standards,"  "SEC Staff  Accounting  Bulletin," and "Emerging Issues Task Force"
respectively.

PRINCIPLES OF CONSOLIDATION

For the period ended December 31, 2006, the accompanying  consolidated financial
statements  include  all  accounts  of the  Company  and its  subsidiaries.  All
significant   intercompany   balances  and   transactions   were  eliminated  in
consolidation.

USE OF ESTIMATES

The  preparation  of  consolidated   financial  statements  in  conformity  with
accounting  principles  generally  accepted  in the  United  States  of  America
requires  management to make estimates and assumptions  that affect the reported
amounts  of  assets,  liabilities,   revenues,   expenses,  and  disclosures  of
contingencies  during the  reporting  period.  Actual  results could differ from
management's estimates.

                                       37
<PAGE>

The Company  recognizes  revenue  when  persuasive  evidence  of an  arrangement
exists, delivery has occurred or services have been rendered, the price is fixed
or determinable, and collection is reasonably assured.

The Company  provides  environmental  services that involve  transportation  and
disposal of industrial waste.  Revenues for the  transportation  and disposal of
waste using Company resources that are disposed of at a third party location are
recognized  when the waste is  delivered to the third party for  processing  and
disposal. Revenues for the transportation and disposal of industrial waste using
a third party that is disposed of at the third party location is recognized when
the waste is delivered to the third party for processing and disposal.  Revenues
for the  transportation  and disposal of industrial waste that is disposed of at
the Company's  facility is recognized when the Company has received the waste at
its facility due to the fact that the customer has no additional recourse and no
additional services are provided to the customer after the waste is received.

Revenue  from  fixed  priced  contracts  is  recognized  on  the  percentage  of
completion  method,  measured by the  percentage of actual costs incurred to the
estimated  costs to complete.  Changes in job performance and job conditions may
affect total  estimated costs and result in revisions to costs and revenues that
affect future periods.  Provisions for estimated losses on uncompleted contracts
are made in the period in which such losses are determined.

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

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

Revenues from cost-plus-fee  projects (time and material jobs) are recognized at
billable hourly rates as the services are rendered. Other revenue is recorded on
the basis of performance of services or shipment of products.

FAIR VALUE OF FINANCIAL INSTRUMENTS

The carrying  amounts  reported in the balance sheet as of December 31, 2006 for
cash equivalents,  accounts receivable, other receivables, accounts payable, and
accrued  expenses  approximate fair value because of the immediate or short-term
maturity of these  financial  instruments.  The fair value of notes  payable and
long-term  debt  approximates  their  carrying value as the stated or discounted
rates of the debt reflect  recent  market  conditions.  It was not  practical to
estimate  the fair  value of the  convertible  debt due to the  nature  of these
items.  These  estimates  would be based on the  carrying  amounts,  maturities,
effective interest rates and volatility of the Company's stock. The Company does
not believe it is practical due to the  significant  volatility of the Company's
stock.

Fair value estimates are made at a specific point in time, based on the terms of
the financial  instrument.  These estimates are subjective in nature and involve
uncertainties  and  matters of  significant  judgment  and  therefore  cannot be
determined with precision.  Changes in assumptions  could  significantly  affect
these estimates.

INVENTORIES

Inventories  are  stated  at the  lower  of  cost or  market,  with  cost  being
determined by the first-in,  first-out (FIFO) method. Inventories consist of raw
materials ($611,866) used in our process engineering segment and work in process
($846,337) used in our biodiesel production segment.

RESEARCH AND DEVELOPMENT COSTS

Research and  development  costs are charged to operations when incurred and are
included  in  operating  expenses.  The  amounts  charged  in 2006 and 2005 were
$231,785 and $0 respectively.

RECEIVABLES AND CREDIT CONCENTRATION

Accounts   receivable  are   uncollateralized,   non-interest-bearing   customer
obligations due under normal trade terms  requiring  payment within 30 days from
the invoice  date.  Accounts  receivable  are stated at the amount billed to the
customer.   Accounts  receivable  in  excess  of  90  days  old  are  considered
delinquent.  Payments of  accounts  receivable  are  allocated  to the  specific
invoices identified on the customer's remittance advice or, if unspecified,  are
applied to the oldest unpaid invoices.

                                       38
<PAGE>
The carrying amount of accounts  receivable is reduced by a valuation  allowance
that  reflects  the  Company's  best  estimate  of the  amounts  that may not be
collected.  This  estimate  is based on reviews of all  balances in excess of 90
days  from  the  invoice  date.  Based  on this  assessment  of  current  credit
worthiness,  the Company estimates the portion, if any, of the balance that will
not be collected.  Management  also  considers the need for  additional  general
reserves and reviews its valuation allowance on a quarterly basis.

Accounts receivable at December 31, 2006 are as follows:

Accounts receivable                                             2,758,334
Less: allowance for doubtful accounts                            (185,812)
                                                                ---------
Accounts receivable, net                                       $2,572,522
                                                               ==========

EARNINGS (LOSS) PER SHARE

Basic  earnings per share is computed  based on the weighted  average  number of
common shares  outstanding  during the period.  Diluted earnings per share gives
effect to all dilutive  potential common shares  outstanding during this period.
Potential common shares include shares issuable upon exercise of warrants.

At December  31, 2006  outstanding  warrants to  purchase  the  Company's  stock
totaled  45,000,000.  Such warrants are excluded from the Company's diluted loss
per share computation for the years ended December 31, 2006 and 2005 because the
Company  incurred a loss from  operations  for both periods and the inclusion of
the warrants has an anti-dilutive effect on loss per share.

PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment is recorded at cost, including costs as determined
by the allocation of the purchase price in business  acquisitions  accounted for
using the purchase  method,  and depreciated  over their estimated  useful lives
using the  straight-line  method for  financial  statement  purposes.  Estimated
useful lives in years for  depreciation  are as follows:  25 to 40 for buildings
and  improvements;  7 to 12 for  machinery  and  equipment;  5 to 8 for computer
systems;  7 to  10  for  furniture  and  fixtures.  Additions,  betterments  and
replacements are capitalized, while expenditures for repairs and maintenance are
charged to operations  when incurred.  As units of property are sold or retired,
the related cost and accumulated depreciation are removed from the accounts, and
any resulting gain or loss is recognized in income.

IMPAIRMENT OF LONG-LIVED ASSETS

The Company follows  Statement of Financial  Accounting  Standards  ("SFAS") No.
144,  "Accounting for the Impairment or Disposal of Long-Lived Assets." SFAS No.
144 requires  that  long-lived  assets,  including  property and  equipment,  be
reviewed for impairment  whenever  events or changes in  circumstances  indicate
that their carrying amount may not be recoverable.  Assets to be disposed of are
reported at the lower of the carrying amount or fair value,  less costs to sell.
Impairment is measured as the difference  between carrying value and fair market
value.  Fair value is based on  appraised  values or  estimated  sales values of
similar assets in recent  transactions.  SFAS No. 144 also requires companies to
separately report discontinued  operations for a component of an entity that has
been disposed of or is classified as held for sale.

GOODWILL AND INTANGIBLE ASSETS

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

Intangibles  with  definite  lives  consist  primarily of patents and  developed
technologies,  which have useful lives and are subject to impairment  testing in
the event of certain indicators. An impairment in the carrying value of an asset
is recognized  whenever  anticipated  future cash flows  (undiscounted)  from an
asset  are  estimated  to be less than its  carrying  value.  The  amount of the
impairment  recognized is the difference between the carrying value of the asset
and its fair value.

                                       39
<PAGE>

At December 31, 2006,  the Company's  balance sheet included  intangible  assets
with an  aggregate  carrying  value of  approximately  $25,557,151  representing
approximately  52% of total assets and including  $10,753,554 in goodwill.  This
goodwill was recorded in connection with the series of acquisitions completed by
the  Company  since  April 1, 2005.  Generally  accepted  accounting  principles
require  that the Company  assess the fair values of acquired  entities at least
annually in order to  identify  any  impairment  in the  values.  However,  on a
quarterly  basis,  management  is alert for events or  circumstances  that would
indicate that,  more likely than not, the fair value of a reporting  segment has
been reduced below its carrying  amount.  If there is a  determination  that the
fair  value of an  acquired  entity is less than the  corresponding  net  assets
amount,  including goodwill, an impairment loss would be identified and recorded
at that time.

DEFERRED FINANCING CHARGES AND DEBT DISCOUNTS

Deferred finance costs represent costs which may include direct costs paid to or
warrants issued to third parties in order to obtain long-term financing and have
been  reflected as other assets.  Costs  incurred with parties who are providing
the actual long-term  financing,  which generally include the value of warrants,
fair value of the  derivative  conversion  feature,  or the  intrinsic  value of
beneficial   conversion  features  associated  with  the  underlying  debt,  are
reflected as a debt discount.  These costs and discounts are generally amortized
over the life of the related debt.  Amortization  expense related to these costs
and discounts was  $7,345,298 and $390,835 for the years ended December 31, 2006
and 2005, respectively.

DERIVATIVE FINANCIAL INSTRUMENTS

Statement of Financial  Accounting  Standards  (SFAS) No. 133,  "Accounting  for
Derivative  Instruments  and Hedging  Activities," as amended and EITF Issue No.
00-19,   "Accounting  for  Derivative  Financial  Instruments  Indexed  to,  and
Potentially  Settled in, a Company's Own Stock,"  require all  derivatives to be
recorded  on the balance  sheet at fair  value.  The  embedded  derivatives  are
separately  valued and  accounted  for on our balance sheet with changes in fair
value  recognized  during the period of change as a separate  component of other
income/expense.  Fair values for exchange-traded  securities and derivatives are
based on quoted market  prices.  The pricing model we use for  determining  fair
value of our derivatives is the Black Scholes Pricing Model.  Valuations derived
from this model are subject to ongoing  internal and external  verification  and
review.  The model uses  market-sourced  inputs such as interest rates and stock
price volatilities. Selection of these inputs involves management's judgment and
may impact net income.

LIMITATIONS

Fair value  estimates  are made at a specific  point in time,  based on relevant
market  information  and  information  about  the  financial  statement.   These
estimates  are  subjective  in nature and involve  uncertainties  and matters of
significant judgment and therefore cannot be determined with precision.  Changes
in assumptions could significantly affect the estimates.

CASH AND CASH EQUIVALENTS

The Company considers cash and equivalents to be cash and short-term investments
with original maturities of three months or less from the date of acquisition.

The Company  maintains cash balances with financial  institutions  that at times
may exceed the limits insured by the Federal Deposit Insurance Corporation.

WARRANTY RESERVE

The Company  warranties  its  equipment  for defects in design,  materials,  and
workmanship  generally  for a period 12 months  from the date placed in service.
Provision for estimated  warranty  costs is recorded as incurred and is included
in cost of goods sold.

STOCK BASED COMPENSATION

The Company  accounts for stock,  stock  options and stock  warrants  issued for
services  and  compensation  by  employees  under  the fair  value  method.  For
non-employees,  the fair market value of the Company's  stock is measured on the
date of stock  issuance or the date an  option/warrant  is granted.  The Company
determined  the fair  market  value of the  warrants/options  issued  under  the
Black-Scholes Pricing Model.  Effective January 1, 2006, the Company adopted the
provisions of SFAS 123(R), SHARE-BASED PAYMENT, which establishes accounting for
equity instruments exchanged for employee services. Under the provisions of SFAS
123(R),  share-based  compensation  cost is measured at the grant date, based on
the fair value of the award, and is recognized as an expense over the employee's
requisite  service  period  (generally  the vesting period of the equity grant).
Prior to January 1, 2006, the Company accounted for share-based compensation to

                                       40
<PAGE>

employees in accordance with Accounting  Principles  Board (APB) Opinion No. 25,
ACCOUNTING  FOR STOCK  ISSUED TO  EMPLOYEES,  and related  interpretations.  The
Company also followed the disclosure  requirements  of SFAS 123,  ACCOUNTING FOR
STOCK-BASED COMPENSATION.  The Company elected to adopt the modified prospective
transition  method  as  provided  by SFAS  123(R)  and,  accordingly,  financial
statement  amounts for the prior  periods  presented in the Form 10-KSB have not
been  restated  to  reflect  the fair  value  method  of  expensing  share-based
compensation.

NEW ACCOUNTING PRONOUNCEMENTS

In February 2006, the Financial  Accounting  Standards  Board (FASB) issued SFAS
No. 155,  "Accounting for Certain Hybrid  Financial  Instruments".  SFAS No. 155
amends FASB  Statements  No. 133,  Accounting  for  Derivative  Instruments  and
Hedging  Activities,  and No. 140,  Accounting  for  Transfers  and Servicing of
Financial  Assets and  Extinguishments  of  Liabilities  and permits  fair value
remeasurement  for any hybrid  financial  instrument  that  contains an embedded
derivative that otherwise would require bifurcation.

SFAS No. 155 is effective for all financial  instruments  acquired,  issued,  or
subject to a remeasurement (new basis) event occurring after the beginning of an
entity's first fiscal year that begins after September 15, 2006. Management does
not expect the  implementation of this new standard to have a material impact on
the Company's financial position, results of operations and cash flows.

In March  2006,  the FASB  issued  SAFS No. 156  "Accounting  for  Servicing  of
Financial  Asset".  SFAS No. 156 amends FASB Statement No. 140,  "Accounting for
Transfers and Servicing of Financial Assets and Extinguishments of Liabilities",
with respect to the accounting for separately  recognized  servicing  assets and
servicing liabilities.

SFAS No. 156 is effective as of the  beginning of an entity's  first fiscal year
that  begins  after   September  15,  2006.   Management  does  not  expect  the
implementation  of this new standard to have a material  impact on the Company's
financial position, results of operations and cash flows.

In September 2006, the FASB issued SFAS No. 157, "Fair Value Measurements". SFAS
No. 157 defines fair value,  establishes a framework for measuring fair value in
generally accepted  accounting  principles (GAAP), and expands disclosures about
fair value measurements.

SFAS No. 157 is  effective  for  financial  statements  issued for fiscal  years
beginning  after  November 15,  2007,  and interim  periods  within those fiscal
years.  Management  does not expect the  implementation  of this new standard to
have  a  material  impact  on  the  Company's  financial  position,  results  of
operations and cash flows.

On September  13,  2006,  the SEC released  Staff  Accounting  Bulletin No. 108,
"Considering  the  Effects  of  Prior  Period   Misstatements  When  Quantifying
Misstatements in Current Year Financial Statements.", which provides guidance on
the  consideration  of the effects of prior year  misstatements  in  quantifying
current year  misstatements  for the purpose of a  materiality  assessment.  The
standard is effective for the first annual financial statements for fiscal years
beginning  after  November 15, 2006.  The Company is currently  considering  the
effect of implementing the requirements of this standard.

On  February  3, 2006,  the FASB  issued  FASB Staff  Position  FSP FAS  123R-4,
"Classification   of  Options  and  Similar   Instruments   Issued  as  Employee
Compensation  That Allow for Cash Settlement Upon the Occurrence of a Contingent
Event." This FASB Staff Position (FSP) addresses the  classification  of options
and  similar  instruments  issued as employee  compensation  that allow for cash
settlement upon the occurrence of a contingent  event.  The guidance in this FSP
amends  paragraphs  32 and  A229 of  FASB  Statement  No.  123  (revised  2004),
Share-Based Payment

On October  10,  2006,  the FASB  issued  FASB Staff  Position  FSP FAS  123R-5,
"Amendment of FASB Staff  Position FAS 123R-1.  " This FASB Staff Position (FSP)
addresses  whether a modification  of an instrument in connection with an equity
restructuring  should be considered a modification  for purposes of applying FSP
FAS  123(R)-1,   "Classification  and  Measurement  of  Freestanding   Financial
Instruments  Originally  Issued in Exchange  for  Employee  Services  under FASB
Statement No. 123(R)."

On  February  3, 2006,  the FASB  issued  FASB Staff  Position  FSP FAS  123R-6,
"Technical  Corrections of FASB Statement No. 123(R). " This FASB Staff Position
(FSP) addresses certain technical corrections of FASB Statement No. 123 (revised
2004), Share-Based Payment.

The Company's implementation of the FASB Staff Positions on FAS 123R issued on
2006 did not have a material impact on the Company's financial position, results
of operations and cash flows.

                                       41
<PAGE>



INCOME TAXES

Income taxes are  accounted for under the asset and  liability  method,  whereby
deferred income taxes are recorded for temporary  differences  between financial
statement carrying amounts and the tax basis of assets and liabilities. Deferred
tax assets and  liabilities  reflect the tax rates  expected to be in effect for
the  years in which  the  differences  are  expected  to  reverse.  A  valuation
allowance  is  provided  if it is more  likely  than not that some or all of the
deferred  tax asset will not be  realized.  Deferred  income tax  assets,  which
relate  primarily to net operating loss  carry-forwards  and  differences in the
bases of property,  equipment  and  intangible  assets,  , have been offset by a
valuation  allowance  for the same amount for all  financial  statement  periods
presented.

LOAN AND DEBT SECURITIES

For loans and debt securities, fair value generally approximates cost unless the
borrower's  enterprise value,  overall financial condition or other factors lead
to a determination of fair value at a different amount.

When  the  Company  issues  nominal  cost  warrants  or free  equity  securities
("nominal cost equity"),  the Company allocates its cost basis in its investment
between  its  debt  securities  and  its  nominal  cost  equity  at the  time of
origination. At that time, the original issue discount basis of the nominal cost
equity is recorded by increasing the cost basis in the equity and decreasing the
cost basis in the related debt securities.

ENVIRONMENTAL LIABILITIES

Environmental  liabilities  include accruals for the estimates of GS CleanTech's
obligations  associated  with remedial  environmental  matters at GS CleanTech's
facilities and pending  administrative matters assumed in GS CleanTech's various
acquisitions.  Accruals are adjusted if and as further  information  relative to
the underlying obligations develop or circumstances change.

EQUITY AND COST METHOD INVESTMENTS

The Company  uses the equity  method of  accounting  for  investments  in equity
securities  in  which  it has  more  than a 20%  interest,  but  does not have a
controlling  interest and is not the primary  beneficiary.  The Company uses the
cost method of accounting for investments in equity securities in which it has a
less than 20% equity  interest and  virtually no influence  over the  investee's
operations.


42


<PAGE>

 4       FINANCING ARRANGEMENTS
<TABLE>
<CAPTION>

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

Notes payable and short-term borrowings:
<S>                                                                               <C>
   Note payable - Stillwater ..................................................   $  6,000,000
   Note payable - NextGen sellers .............................................      4,204,437
   Vendor composition plans ...................................................         20,018
   Loan payable-overdraft line ................................................          1,300
   Loan payable-Lakeland Bank .................................................         41,329
   Note discounts .............................................................       (144,564)
                                                                                  ------------
     Total  notes payable and short term borrowings ...........................   $ 10,122,522
                                                                                  ============

Current maturities of long-term debt:

   Vehicle loans and other installment loans ..................................   $    160,032
   Mortgages and other term notes .............................................         67,004
                                                                                  ------------
      Total current maturities of long-term debt ..............................   $    227,036
                                                                                  ============

Current portion of convertible debentures:
   Cornell Capital convertible debenture (July 2005) ..........................   $    465,000
   Cornell Capital convertible debenture (October 2005) .......................      1,010,000
   Cornell Capital convertible debenture (February 2006) ......................      1,150,369
   Cornell Capital convertible debenture (April 2006) .........................      1,900,000
   Cornell Capital convertible debenture (April 2006) .........................      2,102,147
   Convertible debenture - Candent Corporation ................................      2,375,763
   Convertible debenture - Serenity Capital, LLC ..............................        211,523
   Convertible debenture - Cyrus Capital, LLC .................................        100,000
   Note discounts .............................................................     (3,061,394)
                                                                                  ------------
       Total current portion of convertible debentures ........................   $  6,253,408
                                                                                  ============

Long-term debt:
   Vehicle loan, net of current ...............................................   $    265,983
   Mortgages payable and other term notes, net of current portion .............        362,496
                                                                                  ------------
      Total long-term debt ....................................................   $    628,479
                                                                                  ============

Convertible debentures, non-current
   Cornell Capital convertible debenture (April 2006) .........................   $  4,400,000
   Cornell Capital convertible debenture (February 2006) ......................      1,949,631
   Cornell Capital convertible debenture (March 2006) .........................      1,212,329
   Cornell Capital convertible debenture (June 2006) ..........................      5,500,000
   Cornell Capital convertible debenture (October 2006) .......................     13,000,000
   Candent Corporation convertible debenture ..................................        340,126
   Convertible debenture - Former officer of GS Carbon ........................        157,948
   Note Discounts .............................................................     (5,242,786)
                                                                                  ------------
     Total convertible debentures, non-current ................................   $ 21,317,248
                                                                                  ============

The convertible debentures noted above are convertible into the common stock of
the following companies at December 31, 2006:

     GreenShift ...............................................................   $  5,001,132
                                                                                  ============

     GS CleanTech .............................................................   $  8,713,670
                                                                                  ============

      GS AgriFuels ............................................................   $ 20,449,631
                                                                                  ============

      GS Carbon ...............................................................   $ 18,874,490
                                                                                  ============
</TABLE>


                                       43
<PAGE>



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 December 31, 2006 and the Company's ability to meet such obligations:

Year                                                        Amount
----                                                        ------
2007                                                   $  17,101,040
2008                                                       2,052,320
2009                                                      19,050,125
2010                                                          91,808
2011 and thereafter                                          253,400
                                                       -------------
Total minimum payments due under current
and long-term obligations                              $ 38,548,693
                                                       =============

SHORT TERM BORROWING - LOAN PAYABLE LAKELAND BANK:

The Company has a variable interest rate line of credit with Lakeland Bank (7.5%
at December,  2006), which had an outstanding  balance of $41,329 as of December
31, 2006.

VEHICLE LOANS

The Company has vehicle  loans with  varying  interest  rates from 0% to 11.45%.
These loans have maturity  dates that range from February 2007 to December 2012.
As of December 31, 2006,  vehicle notes totaled $426,015 with $160,032 currently
due.

CORNELL CAPITAL CONVERTIBLE DEBENTURES - GREENSHIFT

In July 2005  Cornell  Capital  Partners  purchased  $565,000 in 5%  convertible
debentures,  and in October 2005 Cornell purchased an addition  $1,475,000 in 5%
convertible  debentures.  These  debentures are  convertible  into  GreenShift's
common stock at the lesser of $0.10 per share or the average of the three lowest
closing market prices of GreenShift's common stock for the thirty days preceding
conversion  provided  that  the  Cornell  may not  convert  any  portion  of its
debentures  where such  conversion  would bring the  shareholder to greater than
4.95% of  GreenShift's  outstanding  common  stock.  During  the  quarter  ended
September 30, 2006,  Cornell  effected  conversions on the July 2005 and October
2005 debentures of $100,000 and $465,000,  respectively. As of December 31, 2006
the balances due for the July 2005 and October 2005  debentures are $465,000 and
$1,010,000, respectively.

On  February  7, 2006 and April 15,  2006,  ,  Cornell  purchased  an  aggregate
$3,050,360 in 5%  debentures of which  $1,150,369 is due on February 7, 2008 and
$1,900.000  is due on April 15,  2008.  These  debenture  are  convertible  into
GreenShift's common stock at the lesser of $0.10 per share or the average of the
three lowest closing market prices of  GreenShift's  common stock for the thirty
days  preceding  conversion  provided  that that the Cornell may not convert any
portion of its debentures  where such conversion  would bring the shareholder to
greater than 4.95% of GreenShift's outstanding common stock.

CANDENT CONVERTIBLE DEBENTURE - GREENSHIFT

As of  December  31,  2006 the  total  amount  due to  Candent  Corporation  was
$2,375,763,  which amount is convertible into Company common stock at the lesser
of $0.10 per share or the average of the three lowest  closing  market prices of
the  Company's  common stock for the thirty days  preceding  conversion,  with a
conversion  price floor of $.005,  provided that Candent may not receive  shares
issuable upon any permissible  conversion of any portion of its debentures where
such  conversion  would  bring the  shareholder  to  greater  than  4.95% of the
Company's  outstanding common stock. The former president of Candent is the wife
of the Company's chairman.  All of the issued and outstanding capital stock held
by Candent is in trust for the benefit of its former president.

CORNELL CAPITAL CONVERTIBLE DEBENTURES - GS CLEANTECH

On April 13, 2006,  GS CleanTech  entered into a Securities  Purchase  Agreement
with Cornell Capital  Partners,  LP, under which Cornell purchased a Convertible
Debenture in the amount of  $4,400,000.  GS CleanTech  paid $440,000 in deferred
finance costs and $15,000 in structuring fees as part of this  transaction.  The
conversion  price of the  Debenture is equal to the lesser of $0.10 per share or
90% of the volume weighted average price of GS CleanTech's  common stock for the
thirty days preceding  conversion.  Cornell is entitled to convert the Debenture
on the basis of the conversion  price into GS CleanTech  common stock,  provided
that Cornell  cannot  convert  into shares that would cause  Cornell to own more
than 4.99% of GS  CleanTech's  outstanding  common stock.  The  Debenture  bears
interest at 5% per annum.  Accrued  interest  and the  principal  are payable on
April 1, 2009. GS CleanTech's  obligations  under the Debenture are secured by a
pledge of all of its assets,  subject to Cornell's  agreement to subordinate its
security interest to any line of credit that GS CleanTech obtains from a bank or
other financial institution. The proceeds of the

                                       44
<PAGE>
Debenture  may only be used by GS  CleanTech  to support  the  deployment  by GS
CleanTech's wholly owned subsidiary, GS Industrial Design, Inc. ("GSID"), of its
various technologies,  specifically including GSID's Corn Oil Extraction and CO2
BioReactor technologies. In connection with the debenture GS Cleantech issued to
Cornell a five year Warrant to purchase  7,500,000 common shares of GS CleanTech
at $0.10 per share, a five year Warrant to purchase  7,500,000  common shares of
GS  CleanTech  at $0.15 per share,  a five year  Warrant to purchase  15,000,000
common  shares of GS  CleanTech  at $0.20 per  share,  a five  year  Warrant  to
purchase  20,000,000  common  shares  of GS  CleanTech  at $0.25 per  share.  GS
CleanTech  may redeem the  debentures at any time for an amount equal to 120% of
the outstanding  principal and accrued interest.  The conversion feature on this
debenture due to Cornell Capital Partners, LP (dated April 13, 2006) is variable
based on trailing  market  prices and  contains an embedded  derivative.  A note
discount of $4,400,000 and a derivative  liability of $14,958,108  were recorded
at the  assumption  date. As of December 31, 2006 the balance due for debentures
due to Cornell Capital Partners,  LP was $4,400,000 and interest of $157,055 has
been accrued.

GS AgriFuels has agreed to file a registration statement with the Securities and
Exchange  Commission to enable  Cornell to resell to the public any shares of GS
AgriFuels common stock it acquires on conversion of the Debenture or exercise of
the Warrant.  The  registration  rights  agreement with Cornell Capital entitles
Cornell to  liquidated  damages for failure to register,  and Cornell has waived
any  liquidated  damages due for failure to register for the year ended December
31,  2006.  This is a one time waiver and Cornell  retains its rights  under the
agreement for future periods.

On April 21, 2006 Cornell  Capital  Partners,  LP purchased  from Laurus  Master
Fund,  Ltd. the Secured  Minimum  Borrowing  Note and the  Revolving  Note.  The
aggregate  debt,  including  accrued  interest and  penalties,  was  $2,193,047.
Subsequently  GS  CleanTech  agreed with Cornell  Capital  Partners to amend the
Revolving  Note such that its terms are now  identical  to the  Secured  Minimum
Borrowing Note. The debenture bears interest at a rate of the prime lending rate
plus 5%. GS CleanTech  also agreed to modify the  conversion  feature of the two
Notes. The Notes, as modified, may be converted by Cornell Capital Partners into
common stock of GS  CleanTech  at a  conversion  rate equal to the lesser of (a)
$0.10 per share or (b) 90% of the lowest volume  weighted  average price for the
thirty  trading  days  preceding  conversion.  The  conversion  feature  on this
debenture due to Cornell Capital Partners, LP (dated April 13, 2006) is variable
and  contains an  embedded  derivative.  A note  discount  of  $2,193,047  and a
derivative liability of $18,444,715 were recorded at the assumption date. On May
2, 2006,  Cornell Capital Partners,  LP effected  conversions  totaling $90,900,
corresponding  to 3,000,000 shares of the Company's common stock. As of December
31, 2006 the balance due for debentures due to Cornell Capital Partners,  LP was
$2,102,147 and interest of $196,858 has been accrued.

On July 1, 2006, GS CleanTech assumed from GreenShift  Corporation,  100% of the
outstanding   capital  stock  of  GS  EnviroServices,   Inc.  (f/k/a  GreenWorks
Corporation) and 100% of the outstanding capital stock of GS CleanTech Ventures,
Inc. GS EnviroServices,  Inc. which owns an environmental  engineering  business
called  Enviro-Sciences (of Delaware)  Corporation.  GS CleanTech Ventures holds
equity stakes in General Hydrogen Corporation,  General Ultrasonics Corporation,
Ovation Products  Corporation,  and Aerogel Composite,  Inc. In exchange for the
shares in GS  EnviroServices  and GS CleanTech  Ventures,  GS CleanTech  assumed
GreenShift's  obligation of a Securities Purchase Agreement with Cornell Capital
Partners, LP in the principal amount of $1,949,631. The Note is convertible into
GS  CleanTech's  common stock at the lesser of $0.10 per share or the average of
the three lowest closing  market prices of GS  CleanTech's  common stock for the
thirty days preceding  conversion  provided that the shareholder may not convert
any portion of its debentures  where such conversion would bring the shareholder
to greater than 4.95% of GS CleanTech's  outstanding common stock, in which case
the  relevant  number of  conversion  shares  are held in escrow by the  Company
pending compliance with this limitation.  The Debenture will bear interest at 5%
per annum. Accrued interest and the principal amount will be payable on April 1,
2008. The conversion  feature on this debenture due to Cornell Capital Partners,
LP (dated April 17, 2006) is variable  and  contains an embedded  derivative.  A
note  discount of  $1,471,740  and a  derivative  liability of  $1,471,740  were
recorded at the assumption date. As of December 31, 2006 the balance due for the
debenture due to Cornell  Capital  Partners,  LP was  $1,949,631 and interest of
$47,500 has been accrued.

In the first  quarter  of 2006,  five  parties  assumed GS  CleanTech  debt's of
$3,500,000 from another  convertible debt holder of the company. In exchange for
these debt  assumptions  the  company  issued  convertible  debentures  totaling
$3,500,000 to these parties.  Below is the breakdown of these  transactions  for
parties who assumed the debt, and were issued a new convertible debenture.

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<PAGE>


SERENITY CAPITAL

In  February  2006 GS  CleanTech  issued a  $500,000  convertible  debenture  to
Serenity  Capital,  LLC  ("Serenity")  in exchange for Serenity's  assumption of
$500,000 in debt.  The debenture is convertible at the lesser of $0.02 or 80% of
the average closing market price of GS CleanTech  common stock prior to the date
of  conversion.  A note  discount  of $500,000  and a  derivative  liability  of
$1,672,500 were recorded at the assumption  date.  During the year 2006 Serenity
effected  conversions  totaling $288,477 into a total of 14,423,880 shares of GS
CleanTech  common  stock.  During  the year  ended 2006  interest  expense  from
accretion  of the debt  discount  was  $464,465  and the gain on the fair market
value of the derivative  liability was $1,401,372.  As of December 31, 2006, the
principal  amount due on the debenture  was  $211,523.  Interest is accrued at a
rate of 5% on the  principal  balance.  As of  December  31,  2006,  $11,667  of
interest is accrued on this  debenture.  Serenity is owned by a family member of
the Company's chairman.

CYRUS CAPITAL

In February 2006 GS CleanTech issued a $500,000 convertible debenture to Cyrus
Capital, LLC ("Cyrus") in exchange for Cyrus's assumption of $500,000 in debt.
The debenture is convertible at the lesser of $0.02 or 80% of the average
closing market price of GS CleanTech common stock prior to the date of
conversion A note discount of $500,000 and a derivative liability of $1,672,000
were recorded at the assumption date. During the year 2006, Cyrus effected
conversions totaling $400,000 into a total of 20,000,000 shares of GS CleanTech
common stock. As of December 31, 2006, principal amount due on the debenture was
$100,000. Interest is accrued at a rate of 5% on the principal balance. As of
December 31, 2006, $4,644 of interest is accrued on this debenture. Cyrus is
owned by a family member of the Company's chairman.

SEAWAY VALLEY FUND

In February 2006 GS CleanTech issued a $500,000 convertible  debenture to Seaway
Valley Fund, LLC  ("Seaway") in exchange for Seaway's  assumption of $500,000 in
debt.  The debenture is convertible at the lesser of $0.02 or 80% of the average
closing  market  price  of GS  CleanTech  common  stock  prior  to the  date  of
conversion. A note discount of $500,000 and a derivative liability of $1,672,000
were recorded at the assumption  date.  During the year ended December 31, 2006,
Seaway Valley effected  conversions totaling $500,000 into a total of 25,000,000
shares of GS CleanTech common stock. Interest was accrued at a rate of 5% on the
principal  balance.  As of December 31, 2006 the  debenture due to Seaway Valley
was fully converted. Seaway Valley is owned by an employee of the Company.

HUDSON CAPITAL PARTNERS

In February 2006 GS CleanTech issued a $500,000 convertible  debenture to Hudson
Capital Partners, LLC ("Hudson") in exchange for Hudson's assumption of $500,000
in debt.  The  debenture  is  convertible  at the  lesser of $0.02 or 80% of the
average  closing market price of GS CleanTech  common stock prior to the date of
conversion. A note discount of $500,000 and a derivative liability of $1,751,000
were recorded at the assumption  date.  During the year ended December 31, 2006,
Hudson effected  conversions totaling $500,000 into a total of 25,000,000 shares
of GS  CleanTech  common  stock.  Interest  was  accrued  at a rate of 5% on the
principal balance. As of December 31, 2006 the debenture due to Hudson was fully
converted. Hudson is owned by an employee of the Company.

HIGHGATE HOUSE FUNDS

In February  2006 GS  CleanTech  issued a  $1,500,000  convertible  debenture to
Highgate House Funds, Ltd. ("Highgate") in exchange for Highgate's assumption of
$500,000 in debt. The debenture is convertible 80% of the average closing market
price  of the GS  CleanTech  common  stock  for ten  days  prior  to the date of
conversion.  A  note  discount  of  $1,016,000  and a  derivative  liability  of
$1,016,000 were recorded at the assumption date.  During the year ended December
31, 2006,  Highgate  effected  conversions  totaling  $1,500,000 into a total of
43,220,865  shares of GS CleanTech common stock.  Interest was accrued at a rate
of 5% on the  principal  balance.  As of December 31, 2006 the  debenture due to
Highgate was fully converted.

CORNELL CAPITAL CONVERTIBLE DEBENTURES - GS AGRIFUELS

On June 7, 2006, GS AgriFuels entered into a Securities  Purchase Agreement with
Cornell  Capital  Partners LP  ("Cornell")  under  which  Cornell  committed  to
purchase $22,000,000 in Secured Convertible Debentures.  The first Debenture, in
the principal amount of $5,500,000 was purchased by Cornell on June 7, 2006, for
which the company paid $600,000 in financing and  structuring  fees and received
cash proceeds of $4,900,000.  The Securities  Purchase  Agreement was amended on
October 30, 2006 to provide for only the one $5,500,000 debenture,  with certain
modifications (see below).  Under the terms of the Securities Purchase Agreement
(as amended on October 30, 2006), the Debenture carries an interest rate of 10%,
and principal and interest on the Debenture,  which are due at the maturity date
of June 7, 2009, may be converted into common stock by Cornell Capital  Partners
at a conversion price equal to $3.00 per common share.  However,  the conversion
price will be reduced to equal any price at which GS

                                       46
<PAGE>

AgriFuels  hereafter issues common stock or derivative  securities.  The maximum
number  of  shares  that  Cornell  may  acquire  at any  time  is  4.99%  of the
outstanding  common  shares.  If the bid price of company  stock falls below the
conversion  price,  GS  AgriFuels  has  the  right  to  satisfy  the  redemption
obligation by paying cash equal to 120% of the principal redeemed.  For the year
ended December 31, 2006,  interest  expense of $313,425 for this  obligation was
incurred  and  accrued.  The  Debentures  are  secured  by a pledge of all of GS
GreenShift's  assets,  including the capital stock of all its  subsidiaries.  GS
AgriFuels has agreed to file a  registration  statement  with the Securities and
Exchange  Commission to enable  Cornell to resell to the public any shares of GS
AgriFuels common stock it acquires on conversion of the Debenture or exercise of
the Warrant.  The  registration  rights  agreement with Cornell Capital entitles
Cornell to  liquidated  damages for failure to register,  and Cornell has waived
any  liquidated  damages due for failure to register for the year ended December
31,  2006.  This is a one time waiver and Cornell  retains its rights  under the
agreement for future periods.

Pursuant to the terms of the agreement,  GS AgriFuels issued 1,125,000 five year
warrants to purchase GS AgriFuels common stock that are exercisable at $.001 per
share to Cornell  Capital  Partners.  The options were issued to Cornell Capital
Partners in conjunction  with the Company's June 7, 2006 issuance of convertible
debentures.   The  fair  value  of  the  warrants  was   calculated   using  the
Black-Scholes Option Pricing Model and the Company recorded the $30,375 value of
the warrants as a discount to the note, and the note discount is being amortized
over the term of the debenture.  Interest  expense from the  amortization of the
note discount was $5,770 for the year ended December 31, 2006.

In conjunction with the May 2006 Share Purchase  Agreement with  GreenShift,  GS
AgriFuels assumed GreenShift's obligations under a Secured Convertible Debenture
due to Cornell  Capital  Partners in the  principal  amount of  $1,949,631.  The
Debenture  carries an annual interest rate of 10%, and principal and interest on
the  Debenture,  which  are due at the  maturity  date of June 7,  2009,  may be
converted into common stock by Cornell  Capital  Partners at a conversion  price
equal to $3.00 per common share.  However,  the conversion price will be reduced
to equal  any  price at which GS  AgriFuels  hereafter  issues  common  stock or
derivative securities.  The maximum number of shares that Cornell may acquire at
any time is 4.99% of the outstanding  common shares. For the year ended December
31,  2006,  interest  expense of $111,102 for this  obligation  was incurred and
accrued.

On October  30, 2006 GS  AgriFuels  completed  a sale of  securities  to Cornell
Capital  Partners,  LP pursuant to a Securities  Purchase  Agreement dated as of
October  30,  2006.  The  Agreement  called for  Cornell  to  purchase a Secured
Convertible  Debenture in the principal  amount of $13 million.  In  conjunction
with  this  financing,  the  Company  paid  a  financing  fee of  $1,300,000,  a
structuring fee of $50,000,  legal fees of $15,000, and received net proceeds of
$11,635,000 that were used for the acquisition of NextGen Fuel, Inc. The Secured
Convertible  Debenture will mature on October 30, 2009.  Interest will accrue on
the  Debenture  at the rate of 10% per annum and will be payable on the maturity
date.  If the  market  price  of GS  AgriFuels  common  stock  is less  than the
conversion  price,  GS  AgriFuels  can  redeem  the  Debenture  for  120% of its
principal  amount.  Cornell will be entitled to convert the accrued interest and
principal amount of the Debenture into GS AgriFuels common stock at a conversion
price of $3.00 (or any lower price at which GS AgriFuels hereafter issues common
stock to any third party). The maximum number of shares that Cornell may acquire
at any  time is 4.99%  of the  outstanding  common  shares.  For the year  ended
December 31, 2006, interest expense of $220,597 for this obligation was incurred
and accrued.

In consideration of Cornell's  investment in the October 30, 2006 Debenture,  GS
AgriFuels  issued to Cornell a five year  Warrant  to  purchase  540,000  common
shares.  The  exercise  price is $.001 or any lower price at which GS  AgriFuels
hereafter  issues common stock to any third party.  GS AgriFuels has also agreed
to file a registration  statement with the Securities and Exchange Commission to
enable  Cornell to resell to the public any shares of GS AgriFuels  common stock
it acquires on conversion of the Debentures or exercise of the Warrant. The fair
value of the warrants was  calculated  using the  Black-Scholes  Option  Pricing
Model  and the  Company  recorded  the  $1,079,460  value of the  warrants  as a
discount to the note, and the note discount is being  amortized over the term of
the debenture.  Interest  expense from the amortization of the note discount was
$62,106 for the year ended December 31, 2006

Commencing  on February 1, 2007,  Cornell  will also be entitled to convert into
common stock up to $500,000 of the principal amount of the Debentures (including
the  $5,500,000  Debenture  sold to Cornell on June 6, 2006) during any calendar
month at a conversion  price equal to 90% of the lowest  daily  Volume  Weighted
Average Price during the thirty trading days preceding  conversion.  However, GS
AgriFuels may opt to redeem the portion of the Debentures offered for conversion
in this manner by paying 120% of the amount converted.

The  Debentures  are  secured  by a  pledge  of  all of GS  AgriFuels's  assets,
including the capital stock of its subsidiaries: Mean Green BioFuels, Inc., Mean
Green Biodiesel #1, Inc., Mean Green Biodiesel #2, Inc. and Mean Green Biodiesel
#3, Inc. The  subsidiaries  of GS AgriFuels  have pledged their assets to secure
the Debentures.  GreenShift Corporation, the parent of GS AgriFuels, and certain
subsidiaries of GreenShift Corporation (including GS

                                       47
<PAGE>

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

DEMAND NOTE:  STILLWATER ASSET-BASED FUND, LP

On October 30, 2006,  NextGen  Acquisition,  Inc., a subsidiary  of GS AgriFuels
which was formed to facilitate the acquisition of NextGen Fuel Inc., completed a
sale of securities to Stillwater  Asset-Based  Fund, LP pursuant to a Securities
Purchase  Agreement  dated as of October  27,  2006.  The  Agreement  called for
Stillwater  to purchase a Term Note in the principal  amount of $6 million.  The
Term Note was purchased by Stillwater  on October 31, 2006,  and in  conjunction
with the  financing  NextGen  Acquisition  paid an  origination  fee of $75,000,
prepaid interest of $300,000,  legal fees of $35,225,  and received net proceeds
of $5,589,775.  NextGen  Acquisition  used $4,879,236 of the proceeds to acquire
NextGen Fuel,  Inc.,  made a loan totaling  $568,958 to Warnecke Design Service,
Inc. (a  subsidiary  of GS Energy,  who is also owned by the  Company's  parent,
GreenShift  Corporation),  and repaid  GreenShift  $141,580  for amounts paid by
GreenShift in connection with the NextGen Fuel, Inc. Acquisition.  The Term Note
accrues  interest at a rate of 20% per annum.  Monthly payments of principal and
interest are due beginning  February 1, 2007, with a monthly principal amount of
at least $300,000 and additional principal payments made as a percentage of cash
receipts  of NextGen  Fuel,  Inc.  All amounts of  principal  and  interest  not
previously  satisfied  will be due on December  31,  2007.  The  obligations  of
NextGen Acquisition Inc. under the Term Note have guaranteed by GS AgriFuels and
by the following affiliates:  GreenShift Corporation,  GS Energy Corporation, GS
CleanTech  Corporation,  NextGen Fuel, Inc., Warnecke Design Services,  Inc. and
Warnecke Rentals, LLC (the "Guarantors"). Each of the Guarantors has pledged its
assets to secure its guaranty.

DEMAND NOTE - NEXTGEN SELLERS

On October 30, 2006, a wholly-owned subsidiary of GS AgriFuels purchased 100% of
the outstanding  capital stock of NextGen Fuel, Inc.  NextGen Fuel is engaged in
the   business   of   developing    and    distributing    esterification    and
transesterification  biodiesel  process  technologies.  The  purchase  price was
$21,204,437,  of which  $17,000,000  was paid at closing  and demand  notes were
issued to the selling shareholders totaling $4,204,437. $3,204,437 of the demand
notes are due on October 31, 2007 or sooner if NextGen Fuel has realized revenue
of  $7,500,000  subsequent  to the  acquisition  and  there are not  claims  for
indemnification  by GS AgriFuels.  The remaining  $1,000,000  demand note,  with
interest at 6% per annum, is due to a sales consultant and is payable along with
accrued interest upon the payment by customers for biodiesel  production systems
totaling  forty  million  gallons  per year of  production  capacity,  paid on a
pro-rated basis such that the consultant shall receive payments of $250,000 with
each ten million gallon per year system on a pro-rated basis with NextGen Fuel's
receipt of cash payments for such system.

CORNELL CAPITAL CONVERTIBLE DEBENTURES - GS CARBON

On March 23, 2006, GS Carbon entered into a Securities  Purchase  Agreement (the
"Agreement"),  with Cornell Capital  Partners,  LP.,  ("Cornell"),  and Highgate
House Funds, Ltd. ("Highgate") (Cornell and Highgate collectively, "Buyers"). In
connection  with this  Agreement,  Highgate  surrendered  the  First and  Second
Debentures for conversion into new 10% Secured Convertible  Debentures amounting
to  $1,062,329  (including  accrued  interest of $62,329) and Cornell  purchased
additional secured  convertible  debentures  amounting to $150,000 for the total
purchase price of $1,212,329 (the "Purchase  Price").  The debentures are due on
March 23, 2009. In connection  with the  Agreement,  DirectView  paid  Yorkville
Advisors LLC a fee equal to $15,000 and a structuring fee to Yorkville  Advisors
LLC of $5,000 from the proceeds of the Closing.  Accordingly, GS Carbon received
net  proceeds  of  $130,000.  Each of the  10%  Secured  Convertible  Debentures
provides for interest in the amount of 10% per annum and are  convertible at the
lesser of  $0.015 or 85% of the  lowest  closing  bid price of GS Carbon  common
stock during the 10 trading days immediately preceding the conversion date.

GS Carbon at its  option  shall have the right,  with  three (3)  business  days
advance  written notice (the  "Redemption  Notice"),  to redeem a portion or all
amounts  outstanding  under the 10% Secured Debenture prior to the Maturity Date
provided that the Closing Bid Price of the Company's  common stock,  as reported
by  Bloomberg,  LP, is less than the Fixed  Conversion  Price at the time of the
Redemption  Notice.  GS Carbon shall pay an amount equal to the principal amount
being redeemed plus a redemption premium ("Redemption  Premium") equal to twenty
percent  (20%) of the principal  amount being  redeemed,  and accrued  interest,
(collectively referred to as the "Redemption Amount").


                                       48

<PAGE>

In connection  with this  Agreement,  GS Carbon issued to the Buyer  warrants to
purchase  409,000,000 shares of the GS Carbon's Common Stock (the "Warrants") in
such  amounts  as  follows:   100,000,000  exercisable  at  $0.01,   165,000,000
exercisable at $0.0035 and 144,000,000 exercisable at $0.004.

In order to secure its obligations under the secured  convertible  debenture and
related  documents,  GS Carbon  has  granted  the  debenture  holders a security
interest  in all  of  its  assets  and  property,  and  GS  Carbon  has  pledged
250,000,000  shares of its common stock. A certificate  representing the pledged
shares  together  with a stock power has been  deposited  in escrow with a third
party. If GS Carbon should default under the Securities Purchase Agreement,  10%
convertible secured debentures or the related transactional documents,  Highgate
House  Funds,  Ltd. is entitled to voting,  dividend and other rights over these
pledged  shares,  and may take  possession  of and sell the  pledged  shares  to
satisfy GS Carbon's  obligations  to the debenture  holders.  A  foreclosure  by
Highgate  House  Funds,  Ltd. of the pledged  shares could result in a change of
control  of GS  Carbon.  Upon the  satisfaction  or  conversion  of the  secured
convertible  debentures,  the  pledged  shares will be returned to GS Carbon for
cancellation and return to its treasury.

Under  the  terms of the  Securities  Purchase  Agreement,  secured  convertible
debentures  and warrants,  no  conversion  of the  debentures or exercise of the
warrants may occur if a conversion  or exercise  would result in Highgate  House
Funds, Ltd. and any of its affiliates  beneficially owning more than 4.99% of GS
Carbon's  outstanding  common  shares  following  such  conversion  or exercise.
Highgate House Funds, Ltd. may waive this provision upon 65 days prior notice to
GS Carbon.

GS Carbon has agreed to file a  registration  statement  covering  the shares of
common stock underlying the securities  issued no later than April 25, 2006, and
will use its best efforts to have the registration  statement declared effective
with the Securities and Exchange  Commission  within 90 days of the filing date.
If GS Carbon does not meet the scheduled filing and effectiveness  dates, it has
agreed to pay liquidated damages of 2% per 30-day period following the scheduled
filing and effective date for the registration statement which, at the option of
the investors,  may either be in cash or common stock of GS Carbon.  GS Carbon's
previous  registration  statement was withdrawn earlier in March 2006. GS Carbon
did not file the registration  statement and liquidated damages began to accrue.
Accrued estimated  registration  rights penalties of $480,290 were assumed by GS
Carbon upon its recapitalization.  As part of a December 18, 2006 agreement,  GS
Carbon agreed to extend the deadlines for registration, filing and effectiveness
set forth in the Registration  Rights Agreement to April 1, 2007, for filing and
June 30, 2007 effectiveness.  In addition,  Highgate and Cornell agreed to waive
the remedies they were entitled to as of December 18, 2006. The Company recorded
waiver of the  registration  rights penalty of $480,290 through the Statement of
Income for the year ended December 31, 2006.

GS Carbon determined that the conversion  feature of the convertible  debentures
represents an embedded  derivative  since the debentures are convertible  into a
variable  number  of  shares  upon  conversion.   Accordingly,  the  convertible
debentures are not considered to be  conventional  debt under EITF 00-19 and the
embedded  conversion feature must be bifurcated from the debt host and accounted
for as a derivative liability.

CONVERTIBLE DEBENTURE - GS CARBON

On August 30,  2006,  Candent  Corporation  ("Candent")  purchased  $255,077  of
convertible  debt previously  issued by the GS Carbon to an  unaffiliated  third
party.  The  Convertible  Debenture  provides for no interest and is convertible
into the GS  Carbon's  common  stock at the lesser of (a) 0.001 per share or (b)
the amount of this  debenture  to be  converted  divided  by 90% of the  closing
market  price of the Maker's  common  stock for the day prior to the date of the
exercise  of such  conversion  right.  Candent  will be  entitled to convert the
debenture  on the basis of the  conversion  price  into the GS  Carbon's  common
stock, provided that Candent cannot convert into shares that would cause Candent
to own  more  4.9%  of the  Company's  outstanding  common  stock.  The  Candent
debenture  matured on December 31,  2006.  As of December 31, 2006 GS Carbon has
not been notified by Candent to demand payment of the convertible debenture. The
former  president of Candent is the wife of GS Carbon's  former Chief  Executive
Officer.

On August 30, 2006,  Candent  purchased  $85,049 of convertible  debt previously
issued by the GS Carbon to a former officer of GS Carbon,  the principal balance
of which debt was originally $242,997.  These convertible debentures provide for
no interest and conversion  into GS Carbon's common stock at a rate equal to 90%
of the closing market price of GS Carbon's common stock for the day prior to the
date of the exercise of such conversion  right.  Each holder will be entitled to

                                       49
<PAGE>

convert  their  debenture  on the  basis  of the  conversion  price  into the GS
Carbon's common stock, provided that each holder cannot convert into shares that
would cause that holder to own more than 4.9% of GS Carbon's  outstanding common
stock.  Each  debenture  matured on December 31,  2006.  During  February  2007,
Candent  purchased $25,000 of the former officer debenture and Cornell purchased
the  Candent  debenture  of $85,049  and the  $132,948  remaining  on the former
officer's debenture.  The terms of the purchased debentures were not changed. As
of  December  31,  2006 GS Carbon has not been  notified  by any party to demand
payment of the convertible debentures.

GS Carbon  determined  that the  conversion  feature of the assumed  convertible
debentures represent an embedded derivative since the debentures are convertible
into a variable  number of shares  upon  conversion.  Accordingly,  the  assumed
convertible  debentures  are not considered to be  conventional  debt under EITF
00-19 and the embedded  conversion feature must be bifurcated from the debt host
and accounted for as a derivative  liability.  The embedded  derivative  feature
created  by the  variable  conversion  meets the  criteria  of SFAS 133 and EITF
00-19,  and should be accounted  for as a separate  derivative.  At December 31,
2006 the fair  value  of the  conversion  derivative  liability  created  by the
assumed debentures calculated using the Black-Scholes model was $59,031. For the
period of inception  (January 14, 2006) to December 31, 2006 the unrealized loss
on the derivative instruments created by these debentures were $147.

5         DERIVATIVES

In accordance  with SFAS No. 133,  "Accounting  for Derivative  Instruments  and
Hedging  Activities"  and  EITF  00-19  "Accounting  for  Derivative   Financial
Instruments  Indexed to, and Potentially Settled in, a Company's Own Stock", the
conversion features associated with the convertible  debentures are variable and
contain an  embedded  derivative  that  requires  bifurcation  from their  hosts
contacts.  The company has recognized the embedded derivatives as a liability at
the date the debentures  were issued.  As of December 31, 2006 the change in the
fair value of the  derivative  resulted  in an  accounting  gain of  $3,438,214.
Amortization  of the debt discount  totaled  $7,342,987 in 2006. The unamortized
portion  of the debt  discount  related to the  derivatives  was  $4,534,914  at
December 31, 2006.  As of December  31, 2006,  the fair value of the  derivative
liabilities was $7,708,546.

















                                       50

<PAGE>



6           PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment (PP&E) of continuing operations is comprised of
the following:


Land                                                       $275,000
Buildings                                                   940,058
Leasehold improvements                                      514,070
Construction in progress                                  1,550,411
Furniture and fixtures                                       82,007
Automobiles                                                 838,655
Computer software and equipment                             232,890
Machinery and equipment                                     467,285
                                                            -------
Property, plant and equipment                             4,900,376

Less:   Accumulated depreciation                          (856,935)
                                                          ---------

Property, plant and equipment, net                       $4,043,441
                                                         ==========

In May  2003,  and in  connection  with  its  two  acquisitions  of  Enviro-Safe
Corporation and Enviro-Safe  Corporation (NE), GS CleanTech  Corporation assumed
certain  non-interest-bearing  term financing. The outstanding principal balance
was secured by a first mortgage  interest in GS CleanTech's  Lowell, MA property
(see buildings above). As of December 31, 2006 the Company has paid this debt in
full.

As of December 31, 2006,  all property and equipment  serves as  collateral  for
debt.

Depreciation charged to operations,  which includes amortization of assets under
capital  lease,  was $349,882 and $207,600 for the years ended December 31, 2006
and 2005,  respectively.  Depreciation  expense from discontinued  operations of
$4,377  and  $244,630   for  the  years  ended   December  31,  2006  and  2005,
respectively, have been excluded from these figures.

Discontinuance  of operations at GS CleanTech's  recycling  facility resulted in
the  impairment of fixed assets  located at this facility  during the year 2005.
Net assets of $1,187,333 were written down to zero as of September 30, 2005.

7        GOODWILL AND INTANGIBLE ASSETS

The Company reviews its Goodwill  annually at December 31 each year for possible
impairment and more  frequently if events or changes in  circumstances  indicate
Goodwill might be impaired.  The fair value of the Company's  reporting units is
analyzed using a discounted  cash flow valuation  approach.  The discounted cash
flow calculation is made utilizing various  assumptions and estimates  regarding
future revenues and expenses, cash flow and discount rates. The assumptions used
are  sometimes  significantly  different  than  historical  results  due  to the
Company's current business initiatives.  If the Company fails to achieve results
in line with the assumptions used,  intangible assets may be impaired.  Possible
impairment may exist if the fair value  computed using the discounted  cash flow
valuation  approach  is lower than the  carrying  amount of the  reporting  unit
(including goodwill).  Further analysis would be required if possible impairment
exists by comparing the implied fair value of the reporting  unit,  which is the
excess of the fair value of the  reporting  unit over  amounts  assigned  to the
reporting units assets and liabilities,  to the carrying amount of goodwill.  If
the carrying  amount of the reporting  unit goodwill is greater than the implied
fair value,  an impairment  loss equal to the  difference  would be recorded and
goodwill would be written down.

Intangible assets at December 31, 2006 include the following:

       Energy technology                                $   14,700,000
       Technology license                                      261,328
       Patent                                                   50,000
       Permits                                                 216,500
       Accumulated amortization                               (424,231)
                                                         --------------
          Intangible Assets, net                         $   14,803,597
                                                         ==============

                                       51

<PAGE>

Amortization of intangible assets was $397,018 and $9,052 for the years ended
December 31, 2006 and 2005 respectively.

Estimated amortization expense for future years is as follows:

        2007                                             $   2,146,893
        2008                                                 2,146,893
        2009                                                 2,146,893
        2010                                                 2,146,893
        2011                                                 2,143,811
        Thereafter                                           4,072,214
                                                         -------------
           Total                                         $  14,803,597
                                                         =============


On October 24, 2005,  the GS  CleanTech's  Board of Directors  adopted a plan to
close the Paterson,  New Jersey  recycling  facility  operated by American Metal
Recovery  Corporation  ("AMRC").  The plan included the  discontinuation  of the
operations  of MRTC during 2005.  The decision to  terminate  operations  at the
Paterson  facility was made due to overall economic  factors,  in particular the
decreasing  volume of inorganic,  metal bearing  wastes  suitable for recycling.
AMRC has ceased  accepting  waste and has removed all  hazardous  waste from the
facility.  AMRC has disposed of all of the equipment and cleaned the facility as
required by  regulation  and  surrendered  the premises on December 31, 2005. At
December 31, 2005, GS Cleantech  determined that the fair value of the reporting
unit associated with the New Jersey facility was zero.  Based on this assessment
the goodwill of $532,088 associated with this reporting unit was fully impaired.

On October 18, 2006,  the Company  acquired  100% of the issued and  outstanding
common shares of Separation  and Recovery  Technologies,  Inc.  (`SRTI') from GS
Energy  Corporation.  The Company recorded  $1,556,521 of goodwill based on this
transaction.  At December 31,  2006,  the Company  determined  that there was no
future economic benefit in the SRTI assets  purchased and accordingly  concluded
that the entire goodwill of $1,556,521 was impaired.

Costs  associated  with  the  development  of the GS  Energy  website  had  been
capitalized,  to be amortized  over a five year period.  In the third quarter of
2006, Management determined that the website did not represent a future economic
benefit  and the entire  remaining  balance of  $190,103  was  written off as of
December 31, 2006. The  impairment on the  intangible  assets is included in the
Company's CleanEnergy segment.

Impairment  of  goodwill  and  intangible  assets  include  in the  Consolidated
Statement of Operations at December 31, 2006 and 2005 is as follows:

                                            2006                2005

Impairment of intangible assets             $190,103             $-

Impairment of goodwill                     1,556,521           532,088
                                        -------------      -----------
                                          $1,746,624          $532,088
                                        =============      ===========


8      STOCK WARRANTS

The Company's  February 7, 2006 financing with Cornell Capital partners provides
that if GreenShift at any time ceases to be registered as a Business Development
Company,  GreenShift will issue to Cornell and to Highgate House Funds five year
Warrants to purchase  45,000,000 common shares. The warrants will permit Cornell
and  Highgate  House  Funds to  purchase  15,000,000  shares at $.15 per  share,
15,000,000 shares at $.20 per share, and 15,000,000 shares at $.25 per share. On
June 30, 2006 GreenShift filed notification of the withdrawal of its election to
be  registered  as a  Business  Development  Company  and under the terms of the
financing issued 45,000,000 warrants to Cornell Capital.

                                       52
<PAGE>






Summarized information about GreenShift's stock warrants outstanding at December
31, 2006 is as follows:

                                 Number of Shares Weighted Average
                                                  Exercise Price
                                 ----------------------------------

Outstanding at December 31, 2004   $      --     $       --
   Granted at fair value .......          --             --
   Forfeited ...................          --             --
   Exercised ...................          --             --
                                   -----------   ----------
Outstanding at December 31, 2005          --     $       --
   Granted at fair value .......    45,000,000         0.20
   Forfeited ...................          --             --
   Exercised ...................          --             --
                                   -----------   -----------
Outstanding at December 31, 2006   $45,000,000   $     0.20
                                   ===========   ==========

All of the above noted warrants were exercisable as of December 31, 2006.



9        STOCKHOLDERS EQUITY

SERIES C PREFERRED STOCK

On February 15, 2006  GreenShift  filed a Certificate of Designation  creating a
class of  1,000,000  shares of Series C  Preferred  Stock.  The  Certificate  of
Designation was corrected by a Certificate of Correction  filed on September 11,
2006. The holder of all 1,000,000 shares of Series C Preferred Stock may convert
it  into  common  shares  representing  80%  of  the  GreenShift  common  shares
outstanding  after  conversion,  but  only if,  at the  time of the  conversion,
GreenShift is not registered with the SEC as a Business Development Company. The
holder  of the  Series C  Preferred  Stock  may cast  the  number  of votes at a
shareholders  meeting or by  written  consent  that  equals the number of common
shares into which the Preferred  Stock is convertible on the record date for the
shareholder  action.  In the  event  that the  Board  of  Directors  declares  a
dividend,  the holder of each share of Series C Preferred  Stock will  receive a
dividend  equal to the dividend  that would be payable if the Series C Preferred
Stock  were  converted  into  common  stock.  In the event of a  liquidation  of
GreenShift, the holder of a share of Series C Preferred Stock will receive $.001
and have no further participation in the liquidation.


















                                       53

<PAGE>


CONVERSION OF SERIES B PREFERRED STOCK TO SERIES C PREFERRED STOCK

On February 15, 2006 GreenShift  Interim Corp.  surrendered all of its 1,000,000
shares of Series B Preferred Stock. In exchange, GreenShift issued to GreenShift
Interim Corp all 1,000,000  authorized shares of Series C Preferred Stock. Kevin
Kreisler,  GreenShift's  Chief Executive  Officer,  is the sole owner of Viridis
Capital, LLC, which owns all the equity in GreenShift Interim Corp.

CANCELLATION OF COMMON STOCK

On February 17, 2006 GreenShift  Interim Corp.  surrendered to GreenShift all of
the 46,300,000 shares of GreenShift common stock in its name.

10       INVESTMENT - UNCONSOLIDATED SUBSIDIARIES

INVESTMENT IN SUSTAINABLE SYSTEMS UNDER FINANCING AGREEMENT (GS AGRIFUELS)

On September  13, 2006, GS AgriFuels,  Inc.  entered into a financing  agreement
with  Sustainable  Systems,  LLC  whereby  AgriFuels  will  invest  a  total  of
$3,000,000 into the company. As part of the agreement,  as of December 31, 2006,
GS AgriFuels  completed bridge loan financing in the amount of $2,000,000.  Upon
closing,  the total  advances  will be credited to the total  investment  and GS
AgriFuels will receive 3,121,688 shares of Series A Preferred  Convertible stock
representing  20% of Sustainable  Systems,  LLC's  outstanding  stock.  See Note
22-Subsequent Events for information  regarding the Company's acquisition of and
contract for the sale of a biodiesel system to Sustainable Systems.

INVESTMENT IN ZEROPOINT CLEAN TECHNOLOGIES, INC. (GS AGRIFUELS)

In August 2006, GS AgriFuels  entered into a Series A Preferred  Stock  Purchase
Agreement  with  ZeroPoint  Clean  Technologies,  Inc.  under which GS AgriFuels
agreed to  purchase  113,800  shares of Series A Preferred  Stock,  representing
approximately  10% of the capital  stock of  ZeroPoint,  at a purchase  price of
$21.98  per  share.   In  conjunction   with  the  Agreement,   ZeroPoint  Clean
Technologies,  Inc.  also issued to GS  AgriFuels  56,900 five year  warrants to
purchase ZeroPoint Clean Technologies, Inc. common stock that are exercisable at
$32.97 per share.

INVESTMENTS AT COST

The Company accounts for the following investments under the cost method:

ZeroPoint Clean Technologies, Inc.           10%             $ 2,501,325
Sustainable Systems, Inc                     12%               2,000,000
Ovation Products Corp.                       12%               1,000,000
General Hydrogen Corp.                        3%                 500,000
Tornado Trash                                --                     295
Sterling Planet, Inc.                        10%               1,685,333
Terrapass, Inc.                              10%                 250,430
                                                             -----------
                                                             $ 7,937,383

Application of the cost method requires the Company to periodically  review this
investment in order to determine  whether to maintain the current carrying value
or to write  off some or all of the  investment.  While  the  Company  uses some
objective  measurements in its review,  the review process  involves a number of
judgments  on the part of the  Company's  management.  These  judgments  include
assessments of the likelihood of the investments to obtain additional financing,
to achieve  future  milestones,  make sales and to  compete  effectively  in its
markets.  In making these  judgments the Company must also attempt to anticipate
trends in the  industries  as well as in the  general  economy.  There can be no
guarantee that the Company will be accurate in its assessments and judgments. To
the extent that the Company is not  correct in its  conclusion  it may decide to
write down all or part of the investment.

During the third quarter 2006, GS Energy Corp.  advanced  Sterling Planet,  Inc.
loans of $250,752. These amounts are non-interest bearing and due upon demand.

During the year ended December 31, 2006, management determined its investment of
$436,667  in its 30%  investment  in Aerogel  Corp.  to be  impaired  and it was
written off.

                                       54
<PAGE>
EQUITY METHOD INVESTMENT

The Company holds a 30%  investment in Air Cycle  Corporation  since 2005. It is
being  carried as a value of $303,077 as of December 31, 2006.  The Company uses
the equity method of accounting for investments in equity securities in which it
has more than a 20% interest,  but does not have a  controlling  interest and is
not the primary beneficiary.

11       OPERATING LEASE COMMITMENTS

The Company has leases on certain office space and equipment under operating
leases which expire through May 31, 2011. The following is a schedule of future
minimum lease payments:


                         2007                     $  200,100
                         2008                        153,900
                         2009                        105,375
                         2010                         90,000
                         2011                         37,500
                                                   ---------
                    Total                         $  586,875
                                                   =========

12       RETIREMENT PLAN

One of the Company's subsidiaries has a deferred compensation plan (401(k) plan)
from under which  eligible  employees are permitted to elect the amount of their
salary  deferrals,  subject to certain  statutory  limitations.  Currently,  the
Company's subsidiary provides a 10% match on all eligible employee deferrals and
at its  option,  may  add a  profit  share  match.  The  gross  401(k)  matching
contribution  expense  (before  reductions  from  forfeitures)  for years  ended
December 31, 2006 and 2005 was $5,887 and $5,389 respectively.

13 INCOME TAXES

The Company has incurred  losses,  which have generated net operating loss carry
forwards for the Company as of December 31, 2006.  These loss carry forwards are
subject to limitation in future years should  certain  ownership  changes occur.
For the years ended December 31, 2006 and 2005, the Company's effective tax rate
differs from the federal  statutory rate principally due to net operating losses
and other temporary differences for which no benefit was recorded. The provision
for income  taxes for the years ended  December  31, 2006 and 2005  consisted of
state income tax provisions. Deferred tax assets are as follows:



                                                12/31/2006         12/31/2005

  Deferred Tax Asset:

  Net operating loss carry forwards         $     11,766,000   $   13,939,000

  Total deferred tax assets                       11,766,000       13,939,000

  Less: Valuation allowance                      (11,766,000)     (13,939,000)

  Net deferred tax asset                     $          --      $        --

The Company  has federal net  operating  loss  carry-forwards  of  approximately
$32,063,000 which expire through December 31, 2026.



                                       55
<PAGE>



14       UNCOMPLETED PROJECTS
<TABLE>
<CAPTION>

Costs and billings on uncompleted projects as of December 31, 2006 are
summarized as follows:

<S>                                                                                      <C>
   Costs incurred on uncompleted projects                                                $    2,300,180
   Estimated earnings (losses)                                                                  521,768
   Less:  Billings to date                                                                  (2,587,360)
                                                                                         --------------

     Totals                                                                              $      234,588
                                                                                         ==============


Included in the accompanying balance sheets under the following captions:

   Costs and estimated earnings (losses) in excess of billings on uncompleted projects   $      204,262
   Billings in excess of costs and estimated earnings on uncompleted contracts                 (21,381)
                                                                                         --------------

Net                                                                                      $      182,881
                                                                                         ==============
</TABLE>

15        MINORITY INTEREST

As a  condition  precedent  to GS  CleanTech's  closing of the Senior  Loan,  GS
CleanTech's   pre-consolidation  New  World  Recycling  ("NWR")  notes  totaling
$925,000  ("the NWR Debt") were,  on December 19,  2003,  converted  into 92,500
shares of a non-voting  class of  preferred  equity in GS  CleanTech's  American
Metals Recovery,  Corp. ("AMRC")  subsidiary,  the Subsidiary  Preferred Equity,
with a par value of $0.001.  Subsidiary Preferred Equity holders were to receive
a quarterly dividend ranging from 3% to 5% of AMRC's annualized revenue, limited
to 30% of AMRC's operating income.  AMRC failed to generate  operating income in
2006 and 2005,  therefore no dividends  were payable in December  2006 and 2005.
The  shares  could  not be  liquidated  or  transferred.  Shares  of  Subsidiary
Preferred  Equity could be converted at the holder's option at fixed  conversion
price  based on average  closing  price for the 60 day trading  period  prior to
April 2, 1999.  There was no  expiration  date  associated  with the  conversion
option.  In December 2004,  $100,000 of the Minority Interest was converted into
500,000 shares of GS CleanTech's common stock and a five-year option to purchase
250,000 shares of GS CleanTech's common stock at $0.10 per share.

In February 2006, $50,000 of the Minority Interest was converted into $1,666,667
shares of GS CleanTech's common stock at $0.03 per share.

The remaining  balance of the NWR debt totaling  $775,000 is due to be converted
into 7,750,000  shares of GS CleanTech's  common stock. At December 31, 2006 the
Company  also has a  minority  interest  balance of  $348,832  for its GS Energy
minority interest shareholders.

17       SEGMENT INFORMATION

GreenShift   currently  operates  five  business  segments:   Corporate,   Clean
Technology Services, Clean Fuel Production and Sales, Clean Energy Manufacturing
and Sales,  and Other  Segments.  The basis of  organization  of each segment is
based upon the Company's  business  models,  which include clean  technology and
process   engineering,   clean  fuel  production  and  sales  and  clean  energy
productions and sales.

Summarized financial information about each segment is as follows:

                                       56
<PAGE>


<TABLE>

For the Twelve months ended 12/31/2006:
<CAPTION>

                                              Corporate    CleanTech (1)   CleanFuels    CleanEnergy (2)     Other         Total
                                             -----------------------------------------------------------------------------------
<S>                                           <C>           <C>                <C>         <C>             <C>          <C>
Revenue from external customers .........          --       14,435,387         52,230      3,362,835(3)        --       17,850,452

Intersegment revenues ...................          --             --             --        2,481,964           --        2,481,964
Interest revenue ........................          --             --             --             --             --             --
Interest expense ........................      (227,482)       763,491      1,057,475        350,539           --        1,944,023

Depreciation and amortization ...........          --          235,061           --          513,524           --          748,585

Segment loss ............................    (1,649,936)   (11,313,560)    (2,292,047)    (1,023,150)      (143,002)   (16,421,695)
Other significant non-cash items:
Shares based compensation ...............       479,426      2,249,401           --             --               --       2,728,827
Derivative instruments gain/(loss) ......     1,657,306      1,574,828        104,657        101,423             --       3,438,214
Amortization of debt discounts ..........     1,648,331      5,155,183        586,912        (45,128)            --       7,345,298


Segment assets ..........................       462,352     16,951,635     28,926,051      2,658,873             --      48,998,911

For the Twelve months ended 12/31/2005:

                                              Corporate    CleanTech (1)   CleanFuels    CleanEnergy (2)      Other         Total
                                              -------------------------------------------------------------------------------------
Revenue .................................         --       17,901,720           --        2,427,196             --      20,328,916
Inter-segment revenues ..................         --             --             --             --               --            --
Interest revenue ........................         --             --             --             --               --            --
Interest expense ........................      235,462        660,156           --          230,623             --       1,126,241
Depreciation and amortization ...........         --             --             --           60,032             --          60,032

Segment loss ............................   (1,577,144)    (4,740,202)      (280,805)    (1,726,702)            --      (8,324,853)
Other significant non cash items: .......          --
Shares based compensations ..............     1,653,172       436,644           --          991,433             --       3,081,249
Derivative instruments gain/(loss) ......     (265,679)        66,200           --             --               --        (199,479)
Amortization of debt discounts ..........         --          229,461           --          161,374             --         390,835

Segment assets ..........................    3,730,178     10,380,376           --        4,895,334              --      19,005,888
<FN>

(1)  The amounts  include of GS CleanTech  Corporation,  GreenWorks  Engineering
     Corporation and GS Carbon Corporation.
(2)  The amounts include of GS Energy Corporation and TDS (Telemedicine), Inc.
(3)  Amount includes revenue earned by GS Energy Corporation through sales to GS
     Agrifuels  Corporation  and  GS  Cleantech  Corporation.  The  intercompany
     segment revenue recorded per accrual basis of accounting.
</FN>
</TABLE>

                                       57
<PAGE>

18       ACQUISITIONS

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

GS CLEANTECH  CORPORATION (F/K/A VERIDIUM CORPORATION) AND GS ENERGY CORPORATION
(F/K/A INSEQ CORPORATION AND INCODE TECHNOLGIES CORPORATION)

On April 1, 2005, the Company  acquired about 55% of the issued and  outstanding
capital stock of GS CleanTech  Corporation  (f/k/a  Veridium  Corporation)  from
GreenShift Interim Corporation and its sole shareholder, Viridis Capital, L.L.C.
(collectively,  "Viridis"),  an  affiliate  of  Kevin  Kreisler,  the  Company's
chairman  and chief  executive  officer,  and 70% of the issued and  outstanding
capital stock of GS Energy  Corporation (f/k/a INSEQ Corporation) from Incandent
Capital,  L.L.C.  ("Incandent"),  another affiliate of Kevin Kreisler, in return
for 46.3 million shares of the Company's common stock, 1.0 million shares of the
Company's Series B Preferred Stock, and the assumption by the Company of certain
convertible debt (collectively,  the "Assumed Liabilities").  For reasons mostly
involving administrative efficiency, the consideration the Company paid for both
the GS CleanTech and GS Energy securities was paid to just Viridis as opposed to
both  Viridis  and  Incandent  on a pro  rated  basis.  The  Company's  Series B
Preferred  Stock  issued to  Viridis  in this  transaction  was  convertible  on
December  31, 2006 into the lesser of 50 million  shares of common stock or that
number of shares of commons stock which,  when added to Viridis'  other holdings
in the Company,  were to be equal to 80% of the outstanding common stock on that
date.

On April 1, 2005  GreenShift  entered into a Share  Purchase and Sale  Agreement
with GreenShift Interim  Corporation and its sole shareholder,  Viridis Capital,
L.L.C.  Kevin  Kreisler,  the sole  member  of  Viridis  Capital,  is the  Chief
Executive Officer of GreenShift.

Pursuant  to  the  Share  Purchase  and  Sale  Agreement,   GreenShift   Interim
transferred to GreenShift on April 1, 2005 equity securities representing 55% of
the fully-diluted common stock of GS CleanTech  Corporation (OTCBB: GSCT). Kevin
Kreisler is the Chairman of GS CleanTech Corporation.

The specific securities transferred by GreenShift Interim to GreenShift were:

     a.   7,106,382 shares of GS CleanTech common stock;
     b.   627,122 shares of GS CleanTech Series A Preferred Stock;
     c.   966,968 shares of GS CleanTech Series B Preferred Stock;
     d.   750,000 shares of GS CleanTech Series C Preferred Stock;
     e.   an  option  to  purchase  187,500  shares  of GS  CleanTech  Series  B
          Preferred Stock at $4.00 per share; and
     f.   an  option  to  purchase  375,000  shares  of GS  CleanTech  Series  C
          Preferred Stock at $4.00 per share.

In exchange for the GS CleanTech securities, GreenShift delivered the following
to GreenShift Interim :

     a.   46,300,000 shares of GreenShift common stock;
     b.   1,000,000  shares of  non-voting  Series B Preferred  Stock,  which is
          convertible  on  December  31,  2006 into the lesser of  (i)50,000,000
          shares of common  stock or (ii) that number of shares of common  stock
          which,  when added to other common stock owned by GreenShift  Interim,
          will equal 80% of the outstanding common stock on that date; and
     c.   an assumption of GreenShift  Interim's  obligation to Cornell  Capital
          Partners,  L.P.  under  a 5%  Secured  Convertible  Debenture  in  the
          principal amount of $2,000,000 dated December 22, 2004.

                                       58

<PAGE>


GS ENERGY CORPORATION (F/K/A INSEQ CORPORATION
  AND INCODE TECHNOLGIES CORPORATION)

On April 1, 2005  GreenShift  entered into a Share  Purchase and Sale  Agreement
with Incandent  Capital,  L.L.C.  The sole member of Incandent  Capital is Kevin
Kreisler, GreenShift's Chairman and Chief Executive Officer.

Pursuant to the Share  Purchase and Sale  Agreement,  on April 1, 2005 Incandent
Capital sold to GreenShift  1,000,000  shares of Series A Preferred  Stock of GS
Energy Corporation.  (OTCBB: GSEG). The Series A Preferred Stock was convertible
into  875,000,000  shares of GS Energy  common  stock,  representing  64% of the
outstanding  equity in GS Energy.  Kevin  Kreisler,  GreenShift's  Chairman,  is
Chairman of GS Energy  Corporation.  James Grainer,  GreenShift's  President and
Chief Financial  Officer,  is President and Chief Financial Officer of GS Energy
Corporation.  The purchase price paid by GreenShift to Incandent Capital for the
Incode Technologies shares was $1.00.

GS AGRIFUELS CORPORATION (F/K/A HUGO INTERNATIONAL TELECOM, INC.)

On August 20, 2005, the Company acquired 300,000 shares of GS Agrifuels
Corporation Series B Preferred Stock for $300,000.

The following summary highlights the assets acquired and liabilities assumed as
of August 20, 2005:

Prepaid and other current assets ....................   $ 98,667
Goodwill ............................................    383,856
                                                        --------
      Total assets acquired .........................   $482,523
                                                        --------

Accounts payable ....................................   $182,223
Accrued expenses ....................................        300
                                                        --------
                         Total liabilities assumed ..   $182,523
                                                        --------

                                 Total purchase price   $300,000
                                                        ========

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

ACQUISITIONS - SUBSEQUENT EVENTS

In March 2007, GS AgriFuels  completed the acquisition of  approximately  87% of
the outstanding  capital stock of Sustainable  Systems,  Inc. As of December 31,
2006, GS AgriFuels effectively owned 13% of Sustainable System, Inc. as a result
of investing $2 million in the capital stock of the company. Sustainable Systems
owns an oilseed crushing facility in Culbertson,  Montana and is in the business
of  producing  and selling  high oleic  safflower,  sunflower,  canola and other
vegetable  oils.  This  acquisition is designed to accelerate the development of
the  company's  oilseed  crush  biorefineries  and  related  biomass  to  energy
development   projects  as  well  as  allow  the  continued   expansion  of  and
acceleration  of the  company's  ability to service  customers in the food grade
vegetable oil program.

                                       59

<PAGE>

19  RELATED PARTY TRANSACTIONS

TRANSACTIONS WITH VIRIDIS CAPITAL, L.L.C.

On March 31, 2005, the Company  acquired about 55% of the issued and outstanding
capital stock of GS CleanTech  Corporation  (f/k/a  Veridium  Corporation)  from
Viridis  Capital,  L.L.C.  ("Viridis"),  an  affiliate  of Kevin  Kreisler,  the
Company's  chairman  and chief  executive  officer,  and 70% of the  issued  and
outstanding  capital stock of GS Energy  Corporation  (f/k/a INSEQ  Corporation)
from  Incandent  Capital,  L.L.C.  ("Incandent"),  another  affiliate  of  Kevin
Kreisler,  in return for 46.3 million shares of the Company's  common stock, 1.0
million shares of the Company's  Series B Preferred Stock, and the assumption by
the Company of certain liabilities due to Cornell Capital Partners, LP, Lakeland
Bank, Candent Corporation,  Serenity Capital, LLC, certain convertible debenture
holders and Mr. Kreisler (collectively,  the "Assumed Liabilities"). The Company
common and  preferred  stock  issued at closing were worth an aggregate of about
$3.47 million and the Assumed  Liabilities  totaled about $2.98  million,  for a
total of about $6.54 million. The GS CleanTech and GS Energy securities acquired
from Viridis and  Incandent  were  collectively  worth about $7.37 million as of
April 1, 2005.  For reasons  mostly  involving  administrative  efficiency,  the
consideration  the  Company  paid  for  both  the GS  CleanTech  and  GS  Energy
securities  was paid to just Viridis as opposed to both Viridis and Incandent on
a pro rated basis.  The Company's  Series B Preferred Stock issued to Viridis in
this  transaction  was  convertible  on December  31, 2006 into the lesser of 50
million  shares of common stock or that number of shares of commons stock which,
when added to Viridis' other holdings in the Company, were to be equal to 80% of
the outstanding common stock on that date.

On August 22, 2005,  Viridis Capital,  LLC,  ("Viridis") and the Company entered
into an agreement  pursuant to which Viridis  agreed to surrender its 47,440,678
shares of common stock in the Company and eliminate its 80% dilution  protection
in return for the  Company's  agreement  to amend its Series B  preferred  stock
(originally issued on March 31, 2005) to provide for a fixed face value equal to
80% of  GreenShift's  Net Asset Value  ("NAV") upon  closing,  voting rights and
preferences on dividend payments that are fixed at 80% until conversion, and the
right to convert the amended  preferred stock into the Company's common stock at
a rate equal to the Company's NAV per share upon closing.

On February 15, 2006, Viridis  surrendered all of its 1,000,000 shares of Series
B Preferred  Stock.  In  exchange,  GreenShift  issued to Viridis all  1,000,000
authorized  shares of Series C Preferred  Stock.  Viridis  also  surrendered  to
GreenShift all of the 47,440,678  shares of GreenShift  common stock in its name
on the same date. The holder of all 1,000,000 shares of Series C Preferred Stock
may convert it into common  shares  representing  80% of the  GreenShift  common
shares outstanding after conversion, but only if, at the time of the conversion,
GreenShift is not registered with the SEC as a Business Development Company. The
holder  of the  Series C  Preferred  Stock  may cast  the  number  of votes at a
shareholders  meeting or by  written  consent  that  equals the number of common
shares into which the Preferred  Stock is convertible on the record date for the
shareholder  action.  In the  event  that the  Board  of  Directors  declares  a
dividend,  the holder of each share of Series C Preferred  Stock will  receive a
dividend  equal to the dividend  that would be payable if the Series C Preferred
Stock  were  converted  into  common  stock.  In the event of a  liquidation  of
GreenShift,  the  holder of a share of Series C  Preferred  Stock  will  receive
$0.001 and have no further participation in the liquidation.

During the year ended December 31, 2005, Viridis Capital, LLC, purchased from GS
CleanTech a $75,000 debt payable to Lakeland Bank and subsequently assigned this
debt to GreenShift,  another affiliate of Kevin Kreisler.  Lakeland Bank has not
released GS CleanTech Corporation of this debt obligation. The balance due as of
December 31, 2007 was $58,828.

TRANSACTIONS WITH ACUTUS CAPITAL, L.L.C.

On April 1,  2005,  the  Company  and its  wholly-owned  subsidiary,  GreenWorks
Corporation, entered into an Option Agreement with Acutus Capital, L.L.C. Acutus
Capital was the owner of 1,140,769 shares of the Company's  common stock,  which
correlated to 25% of the  outstanding  common stock as of March 31, 2005 (and 1%
as of December  31,  2006).  The Option  Agreement  affords  Acutus the right to
exchange its common  stock in the Company for  1,000,000  shares of  GreenWorks,
which shares represent,  subject to further  investments by the Company,  40% of
the equity in GreenWorks.  The Option  Agreement  further  provides that, in the
event of the death or incapacity of Kevin  Kreisler,  Acutus will have the right
to exchange its common shares in the Company for 1,575,000 shares of GreenWorks,
representing  51% of the outstanding  shares.  The Option  Agreement  expires on
March 31, 2015.  The Option  Agreement  had  previously  included an  adjustment
provision  that  operated to keep  Acutus'  holdings in the Company  constant at
4.99% of the issued and outstanding common stock of the Company. The

                                       60
<PAGE>

Option  Agreement  had been  entered into prior to the  Company's  filing of its
election  to be  regulated  as a BDC under the 1940  Act.  Prior to filing  this
election,  the Company's board of directors required and Acutus consented to the
cancellation of this provision.

CANDENT CONVERTIBLE DEBENTURE - GREENSHIFT

During  the years  ended  December  31,  2006 and 2005,  GreenShift  Corporation
received financing from Candent  Corporation.  As of December 31, 2006 the total
principal  amount due to Candent  Corporation  was  $2,375,763,  which amount is
convertible  into  Company  common stock at the lesser of $0.10 per share or the
average of the three lowest closing market prices of the Company's  common stock
for the thirty  days  preceding  conversion,  with a  conversion  price floor of
$0.005,  provided that the Company is not  registered as a business  development
company under Section 54 of the Investment Company Act of 1940, as amended; and,
provided further that in the event conversions are subsequently  permissible the
shareholder may not receive shares  issuable upon any permissible  conversion of
any portion of its debentures  where such conversion would bring the shareholder
to greater than 4.95% of the Company's  outstanding  common stock, in which case
the  relevant  number of  conversion  shares  are held in escrow by the  Company
pending compliance with this limitation.

During the years ended December 31, 2006 and 2005,  Candent converted a total of
$403,499  and  $575,000  in  debt  into   4,587,086   and   20,311,636   shares,
respectively, of the Company's common stock.

The former president of Candent is the spouse of the Company's chairman.  All of
the issued  and  outstanding  capital  stock of Candent is held in trust for the
benefit of its former president.

SERENITY CONVERTIBLE DEBENTURE - GREENSHIFT

During  2005,  Serenity  purchased  a  total  of  $1,073,444  in 5%  convertible
debentures  from the  Company.  These  debentures  were  converted  in full into
22,309,918  shares of the Company's  common stock during the year ended December
31, 2005. Serenity is owned by a relative of the Company's  chairman.  In August
2005,  GreenShift's  chairman  purchased  3,100,000  of these  shares  for about
$295,000, which shares were then surrendered to GreenShift and retired.

TRANSACTIONS WITH OUR CHAIRMAN AND CHIEF EXECUTIVE OFFICER

During 2005,  GreenShift  received  $217,844 in non-interest  bearing short term
loans from Kevin Kreisler,  the Company's  chairman and chief executive officer,
of which  $144,804 were repaid during 2005 and $73,040  contributed to equity by
Mr. Kreisler as of December 31, 2005.

During the year ended  December 31, 2006 Kevin  Kreisler,  the  Company's  Chief
Executive Officer, received 12,500,000 shares of GS Energy for services provided
to GS Energy.

TRANSACTIONS WITH OUR PRESIDENT AND CHIEF FINANCIAL OFFICER

The  Company  was party to a  consulting  agreement  in the  original  amount of
$150,000 with its president and chief financial officer,  James Grainer, for Mr.
Grainer's  services  from  prior to  April 1,  2005  relative  to the  Company's
formation. As of February 2006, the amount due to Mr. Grainer was paid in full.

In the fourth  quarter of 2006,  GS Energy  cancelled  all  outstanding  options
previously  issued to officers during 2006 and 2005, and issued shares of common
stock as a replacement  award.  James Grainer's  225,000,000  remaining  options
previously  received for rendering  consulting  and  management  services,  were
cancelled and replaced with  120,000,000  shares of common stock.  In accordance
with FASB 123R,  the shares of common stock were deemed a replacement  award and
inasmuch as the Black-Scholes  valuation of the options did not exceed the value
of the shares on the grant date no additional expense was recorded.

During the year ended December 31, 2006 James Grainer received 12,500,000 shares
for consulting and management  services  provided to GS Energy.  During the year
ended December 31, 2005 Mr. Grainer received  125,000,000  shares for consulting
and management services provided to GS Energy.

TRANSACTIONS WITH CANDENT CORPORATION

GS Energy  Corporation  entered  into an "IT  Services  Agreement"  with Candent
Corporation dated January 2, 2005, and amended March 31, 2005, for the provision
of technical and customer service support for GS Energy

                                       61
<PAGE>
Corporation.  The agreement called for GS Energy Corporation to issue to Candent
$50,000  in cash or stock in  payment  for  services  provided  during the first
quarter  2005.  The IT  Services  Agreement  also  called for  ongoing  services
relative to the  development of GS Energy  Corporation's  secondary  commodities
trading  platform at the annualized  rate of $100,000.  150,000,000  shares were
issued to Candent at an average price of $0.0007 per share for services rendered
in  prior  periods  and  during  2005.  150,000,000   performance-based  options
exercisable  at $0.0005  per share were  issued to Candent in April  2005.  This
agreement was cancelled as of December 31, 2005.

On March 13,  2006  Candent  Corporation  surrendered  to GS Energy  Corporation
251,507 shares of Series B Preferred Stock that GS Energy  Corporation issued to
Candent  Corporation  in  2004.  The  251,507  shares  represented  all  of  the
outstanding shares of Series B Preferred Stock. The Series B Preferred Stock was
convertible  into 4.95% of the outstanding GS Energy  Corporation  common stock,
and the holder had the right to receive additional shares until the market value
of the GS Energy Corporation  shares received on conversion totaled  $2,750,000.
Candent  surrendered  the  shares  in  response  to the  decision  by GS  Energy
Corporation  management  to  terminate  the business  operations  that GS Energy
Corporation acquired from Candent in exchange for the Series B preferred shares.

During the year ended December 31, 2006, Candent Corporation loaned $250,000 to
GS Carbon.

During 2005,  GS CleanTech  utilized  the  services of Candent  Corporation  for
development and  administration of its various management  information  systems.
Such services  approximated  $44,000 for 2005, based on prevailing  market rates
for  services,  some amounts were paid in part with  2,016,578  shares of the GS
CleanTech's common stock.

The former  president of Candent is the wife of the Company's  chairman.  All of
the issued  and  outstanding  capital  stock of Candent is held in trust for the
benefit of its former president.

SEVERENCE AGREEMENT

GS CleanTech  is party to a severance  agreement  with  Lawrence  Kreisler  that
included  the  following  salient  terms:  100 percent of his salary of $150,000
through  December 31, 2004, 50 percent of his salary through  December 31, 2006,
and medical benefits until the age of 65. In December of 2005, Lawrence Kreisler
received  7,374,796 shares of GS CleanTech's  stock to satisfy these obligations
in full.

TRANSACTIONS WITH SERENITY CAPITAL

In July 2005, Serenity Capital,  LLC received 1,139,248 shares of GS CleanTech's
common stock pursuant to its prior anti dilution agreements with GS CleanTech.

During the year ended December 31, 2005, Serenity exercised 50,000,000 GS Energy
options with exercise price of $0.0005 in exchange for a subscription receivable
of $25,000.

GS Energy entered into a consulting  agreement  with Serenity dated January,  2,
2005,  and amended  March 31, 2005,  for the  provision of  consulting  services
related to the distribution of industrial  commodities and commodity  valuation.
The agreement called for GS Energy to issue to Serenity certain cash or stock in
payment for the services,  payable upon the provision of such  services.  During
the year ended December 2005 GS Energy issued 150,000,000 shares to Serenity for
services  performed  under this  agreement.  The  agreement  with  Serenity  was
cancelled during the year ended December 31, 2005

In  February  2006,   Serenity  purchased  from  GCS  Investments   $500,000  in
convertible  debt issued by GS  CleanTech.  During the year ended  December  31,
2006,  Serenity  effected  conversions   totaling  $200,000,   corresponding  to
10,000,000  shares  of the GS  CleanTech's  common  stock.  The sole  member  of
Serenity is a relative of the Company's chairman.

TRANSACTIONS WITH FORMER GS CLEANTECH OFFICERS

During  September of 2005, James Green resigned as President and Chief Executive
Officer of GS  CleanTech.  He also  resigned  from the Board of  Directors of GS
CleanTech in September of 2005. Since September 2005 Mr. Green has continued his
position as President of Enviro-Safe  Corporation  and  Enviro-Safe  Corporation
(NE),  Inc. (f/k/a Jones  Environmental  Services (NE),  Inc.).  During 2006 and
2005, Mr. Green  received  $151,375 and $156,923 in salaries,  respectively.  In
2005,  Mr.  Green also  received a bonus in  December  of  $100,000  paid by the
receipt of 5,000,000 shares of the Company's common stock. During the year ended
2006 Mr.  Green  also  received  $166,667  as final  payment of debt due from GS
CleanTech's acquisition of ESC in 2003.

Richard  Krablin  resigned as a member of the Board of Directors of GS CleanTech
in September of 2005. He resigned as Chief Compliance Officer of GS CleanTech in
December of 2005. He currently is retained as a

                                       62
<PAGE>

consultant  by GS  CleanTech.  During 2005,  Mr.  Krablin  received  $131,134 in
salaries under his employment  agreement  which called for an annual base salary
of $150,000.  Mr.  Krablin also  received a bonus in December of 2005 of $25,000
paid by the  receipt of  1,250,000  shares of GS  CleanTech  Corporation  Common
Stock. In 2006 Mr. Krablin received $76,000 in GS CleanTech stock options.

TRANSACTIONS WITH FORMER GS CLEANTECH DIRCECTORS

In September of 2005, Stephen Lewen and James Hanrahan resigned as members of GS
CleanTech's  Board of Directors.  During 2005,  Stephen Lewen and James Hanrahan
received 109,166 and 149,734 shares, respectively, for their services as members
of the  Board of  Directors.  In 2006,  Mr.  Hanrahan  received  $152,000  in GS
CleanTech stock options.

During 2005, a family member of Kevin Kreisler received salaries of $72,700.

TRANSACTIONS WITH CYRUS CAPITAL

GS Energy entered into a consulting  agreement  with Cyrus  Capital,  LLC, dated
January,  2, 2005,  and amended March 31, 2005,  for the provision of consulting
services  related to the  distribution  of industrial  commodities and commodity
valuation.  The agreement called for GS Energy to issue to Cyrus certain cash or
stock in payment for the services,  payable upon the provision of such services.
During the year ended December 2005 GS Energy issued  50,000,000 shares to Cyrus
for  services  performed  under this  agreement.  The  agreement  with Cyrus was
cancelled during the year ended December 31, 2005.

In February 2006,  Cyrus purchased from GCS Investments  $500,000 in convertible
debt issued by GS Clean Tech.  During the period  ended  March 31,  2006,  Cyrus
effected  conversions  totaling $280,000,  corresponding to 14,000,000 shares of
the GS CleanTech's  common stock.  During the second quarter 2006 Cyrus effected
additional conversions totaling $120,000 into a total of 6,000,000 shares of the
GS CleanTech's  common stock. The sole member of Cyrus is a family member of the
Company's chairman.

TRANSACTION WITH SEAWAY VALLEY FUND

In February  2006,  Seaway  Valley Fund,  LLC,  purchased  from GCS  Investments
$500,000  in  convertible  debt  issued by GS  CleanTech.  During the year ended
December 31, 2006, Seaway Valley effected  conversions  totaling $500,000 into a
total of  25,000,000  shares of the Company's  common stock.  As of December 31,
2006,  accrued  interest of $1,083 was forgiven and the  debenture due to Seaway
Valley was fully  converted.  The sole member of Seaway Valley is an employee of
GreenShift Corporation.

TRANSACTION WITH HUDSON CAPITAL PARTNERS

In February 2006, Hudson Capital Partners,  LLC,  purchased from GCS Investments
$500,000  in  convertible  debt  issued by GS  CleanTech.  During the year ended
December 31, 2006, Hudson effected conversions totaling $500,000 into a total of
25,000,000  shares of the GS CleanTech's  common stock. As of December 31, 2006,
accrued  interest of $1,208 was forgiven and the debenture due to Hudson Capital
Partners,  LLC was fully  converted.  The sole  member of Hudson  Capital  is an
employee of GreenShift Corporation.

OTHER RELATED PARTY TRANSACTIONS

During June 2005, the president of Warncecke  Design Service,  Inc.  ("WDS"),  a
subsidiary of GS Energy,  advanced  $50,000 to WDS, which loan was unsecured and
is due in full on demand  along with  interest  accruing at 6% per annum.  As of
December 31, 2006, the balance due to the WDS's president is $145,000.

20 DISCONTINUED OPERATIONS

As of December 31, 2006, the GS CleanTech Board of Directors  adopted a plan for
the sale of the Company's  engineering facility located in Mount Arlington,  New
Jersey  operated  by  EnviroSciences  Inc.  The assets and  liabilities  of this
operation are presented as discontinued operations in the accompanying financial
statements.

On October 24, 2005, the GS CleanTech  Corporation  Board of Directors adopted a
plan to close the Paterson,  New Jersey recycling  facility operated by American
Metal Recovery  Corporation  ("AMRC").  The plan included the discontinuation of
the  operations of Metal Recovery  Transportation  Corporation  ("MRTC")  during
2005, as well. The decision to terminate operations at the Paterson facility was
made due to overall  economic  factors,  in particular the decreasing  volume of
inorganic,  metal  bearing  wastes  suitable  for  recycling.  AMRC  has  ceased
accepting waste

                                       63

<PAGE>


and has removed all hazardous waste from the facility. AMRC has disposed of all
of the equipment and cleaned the facility as required by regulation and
surrendered the premises on December 31, 2005. The results of the recycling
business are recorded as discontinued operations.
<TABLE>

The components of discontinued operations are as follows:
<CAPTION>
                                                                                  2006               2005
                                                                       ---------------    ---------------
<S>                                                                    <C>                <C>
Net revenues                                                           $     3,678,232    $     6,313,885
Cost of revenues                                                             2,135,293          5,264,112
                                                                       ---------------    ---------------
           Gross profit                                                      1,542,939          1,049,773

Selling, general, and administrative expense                                 1,265,985          1,734,595
                                                                       ---------------    ---------------
           Income (loss) from operations                                       276,954          (684,822)

Impairment of assets                                                   $            --    $   (2,872,140)
Interest expense                                                             (137,936)          (161,116)
Other income and expenses                                                      248,334            163,973
                                                                       ---------------    ---------------
           Total other income and expense                                      110,398        (2,869,283)
           Income (loss) before provision for income taxes             $       387,352    $   (3,554,105)

Total provision for tax                                                         28,069              1,501
                                                                       ---------------    ---------------
           Net loss from discontinued operations                       $       359,283    $   (3,555,606)
                  Gain on disposal of discontinued operations                      ---             54,651
                                                                       ---------------    ---------------
                   Total - discontinued operations                     $       359,283    $   (3,500,955)
                                                                       ==================================
</TABLE>

The results presented above for 2006 and 2005 include the operating activity for
the discontinued operations for the 12 month period. Assets and liabilities of
the discontinued businesses were reported as net assets and net liabilities
(current and net of current) of discontinued operations at December 31, 2006.
The net fixed assets and the net intangible assets totaling $2,958,876 were
written down to zero based upon the assets and intangibles site-specific to our
Paterson, New Jersey facility.
<TABLE>
<CAPTION>

Assets and liabilities of discontinued operations as of December 31, 2006 are as
follows:

Current assets of discontinued operations:
<S>                                                                                      <C>
       Cash                                                                              $       109,177
     Accounts Receivable, net                                                                    446,446
     Other current assets                                                                        405,626
                                                                                         ---------------
     Total current assets of discontinued operations                                     $       961,249
                                                                                         ---------------

Net non-current assets of discontinued operations:
        Net fixed assets                                                                 $        56,881
     Other assets                                                                                287,751
                                                                                         ---------------
     Total current assets of discontinued operations                                     $       344,632
                                                                                         ---------------

Total assets of discontinued operations                                                  $     1,305,881
                                                                                         ===============

Current liabilities of discontinued operations:
     Accounts payable                                                                    $       774,538
     Line of credit                                                                            1,196,972
     Accrued Expenses                                                                            449,895
     Other accrued and liabilities                                                               445,567
                                                                                         ---------------
Total current liabilities of discontinued operations                                     $     2,866,972
                                                                                         ---------------

Non-current liabilities of discontinued operations                                               893,624
                                                                                          --------------

Total liabilities of discontinued operations                                             $     3,780,596
                                                                                         ---------------

Net assets of discontinued operations                                                    $   (2,474,715)
                                                                                         ===============
</TABLE>

                                       64

<PAGE>
21       COMMITMENTS AND CONTINGENCIES

                     GS AGRIFUELS SERIES A PREFERRED STOCK

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

LEGAL MATTERS

GS CleanTech was party to the matter entitled Kerns  Manufacturing  Corp. v. KBF
Pollution  Management  Inc.  (the "Kerns  Matter").  The action was filed in the
Supreme Court of the State of New York, August 14, 2003. The verified  complaint
sought  performance  of certain  agreements  between the plaintiffs and KPMI and
GSCT, plus attorney's fees and costs.  This matter related to the acquisition of
Vulcan Waste  Systems,  Inc. from Kerns  Manufacturing  Corp.  and the breach by
Kerns of the terms and  conditions  of the relevant  acquisition  agreement.  On
February 28, 2007,  GS CleanTech  entered into a settlement of the Kerns Matter.
The total settlement of $1,500,000 is payable in two  installments;  $500,000 on
March 31, 2007 and  $1,000,000  on June 30, 2007.  As of December 31, 2006,  the
Company has accrued  $1,500,000  for the  settlement  of this matter.  The first
installment of $500,000 due was paid on March 31, 2007.

GS AgriFuels is party to the matter entitled O'Brien & Gere Limited,  et. al. v.
NextGen  Chemical  Processors,  Inc.,  et.  al.,  which  action was filed in the
Supreme Court of the State of New York. The verified complaint, which also names
GS AgriFuels and certain of its  affiliates,  seeks  performance  of and damages
relating to certain  service and related  agreements,  plus  attorney's fees and
costs. This matter relates to the provision by plaintiffs of certain engineering
services to NextGen Chemical Processors,  Inc. ("NCP") during 2005 and 2006. NCP
is owned by the former shareholders of our recently acquired NextGen Fuel, Inc.,
subsidiary.  GS AgriFuels has responded to the verified complaint and denies any
liability.

GS  Carbon's  General  Ultrasonics  subsidiary  is party to the matter  entitled
LeBlanc v.  Tomoiu.,  et. al.,  which action was filed in the Superior  Court of
Connecticut.  The verified complaint, which also names GreenShift and certain of
its affiliates, seeks damages relating to the acquisition by General Ultrasonics
of  the  stock  of H2  Energy  Solutions,  Inc.  from  substantially  all of its
shareholders,  as well as attorney's  fees and costs.  General  Ultrasonics  has
responded to the verified complaint and denies any liability.

GS CleanTech assumed and is party to various material administrative  compliance
proceedings for which GS CleanTech has accrued $189,333 in potential expenses.

GS Energy's  subsidiary,  Warnecke Design Services,  Inc., is a named party in a
complaint against a customer of the company in which an engineering company that
performed services for that customer alleges non-payment of services,  breach of
contract, and the disclosure of trade secrets. The Company intends to vigorously
defend  itself  against  this  complaint  and does  not  currently  have  enough
information to assess the likely outcome of this matter.

OTHER CONTINGENCIES

GS  CleanTech  Corporation  is  subject  to  various  regulatory   requirements,
including the  procurement of requisite  licenses and permits at its facilities.
These  licenses and permits  without which GS  CleanTech's  operations  would be
adversely  affected are subject to periodic  renewal.  GS CleanTech  Corporation
anticipates that, once a license or permit is issued with respect to a facility,
the license or permit  will be renewed at the end of its term if the  facility's
operations are in compliance with the applicable regulatory requirements.

GS EnviroServices,  Inc. owns property in Lowell, Massachusetts, the location of
our RCRA permitted  Treatment,  Storage and Disposal  Facility  (TSDF).  Per the
requirements  of the permit  associated  with the operation of this facility,  a
third party  evaluation  is  conducted  on a yearly  basis to evaluate the costs
associated  with  the  retirement  of  this  asset.  Per  the  outcome  of  this
evaluation, $90,000 has been placed in a trust with the Massachusetts Department
of Environmental Protection listed as beneficiary.  The Company has included the
$90,000 in this trust as part of deposits in other assets.

Under GS CleanTech's  insurance programs,  coverage is obtained for catastrophic
exposures, as well as those risks required to be insured by law or contract. The
deductible   per   occurrence   for   environmental   impairments   is  $25,000.
Environmental  liability  insurance is carried with policy  limits of $1,000,000
per occurrence and $2,000,000 aggregate.

                                       65
<PAGE>
Viridis  Capital,  LLC,  an  affiliate  of  Kevin  Kreisler,  purchased  from GS
CleanTech a $58,828 debt payable from to Lakeland Bank and assigned this debt to
GreenShift,  another affiliate of Kevin Kreisler. Lakeland Bank has not released
GS CleanTech Corporation of this debt obligation.

EMPLOYMENT AGREEMENTS

GS CleanTech is party to an employment agreement with David Winsness with a five
year term commencing on January 1, 2007. The annual base salary of $150,000 is a
draw  against fees and  royalties  due from the Amended  Technology  Acquisition
Agreement (see Commitments and Contingencies - License Agreements).  This salary
is  payable  in the form of  registered  common  stock  until  such time as GSCT
generates  sufficient  positive cash flows to support this salary. On January 1,
2007, Mr. Winsness was issued 10% of the fully diluted capital stock issuable in
Series D Preferred  Stock.  These preferred  shares vest in pro-rata to the Corn
Oil Extraction System  deployments up to 50 million gallons per year. Non vested
shares are forfeitable upon termination.

GS CleanTech is party to an employment  agreement  with Greg Barlage with a five
year term commencing on January 1, 2007. The annual base salary of $125,000 is a
draw  against fees and  royalties  due from the Amended  Technology  Acquisition
Agreement (see Commitments and Contingencies - License Agreements).  This salary
is  payable  in the form of  registered  common  stock  until  such time as GSCT
generates  sufficient  positive cash flows to support this salary. On January 1,
2007, Mr.  Barlage was issued 5% of the fully diluted  capital stock issuable in
Series D Preferred  Stock.  These preferred  shares vest in pro-rata to the Corn
Oil Extraction System  deployments up to 50 million gallons per year. Non vested
shares are forfeitable upon termination.

GS CleanTech  is party to an  employment  agreement  with Whit Davis with a five
year term commencing on January 1, 2007. The annual base salary of $125,000 is a
draw  against fees and  royalties  due from the Amended  Technology  Acquisition
Agreement (see Commitments and Contingencies - License Agreements).  This salary
is  payable  in the form of  registered  common  stock  until  such time as GSCT
generates  sufficient  positive cash flows to support this salary. On January 1,
2007,  Mr. Davis was issued 5% of the fully diluted  capital  stock  issuable in
Series D Preferred  Stock.  These preferred  shares vest in pro-rata to the Corn
Oil Extraction System  deployments up to 50 million gallons per year. Non vested
shares are forfeitable upon termination.

GS  CleanTech  is party to an  employment  agreement  with  James  Green,  which
agreement  calls for an annual base salary of  $175,000,  and  reimbursement  of
expenses, use of a Company automobile, periodic bonuses, four weeks vacation and
participation  in  any  employee  benefits  provided  to  all  employees  of  GS
CleanTech.

CONSULTING AGREEMENTS

GS CleanTech is party to a consulting  agreement  with  Corporate  Environmental
Performance. Corporate Environmental Performance is a contractor to GS CleanTech
associated  with  the  developments  of  the  biodiesel  facility   development.
Compensation  for  this  consulting  agreement  is  $150,000  per  year  plus  a
discretionary bonus provision (determined  annually).  The owner of this company
is the former Chief Compliance Officer of the Company Mr. Richard Krablin.

GS AgriFuel's  subsidiary NextGen Fuel, Inc. is a party to consulting agreements
with three of the founders and former  shareholders  of NextGen  Fuel,  Inc. The
agreements  with  two of the  consultants  are for the  provision  of  technical
services  related to  design,  engineering,  sales,  technical  assistance,  and
obtaining patents for NextGen Fuel's biodiesel  production systems,  and require
an  aggregate  payment of $5,000 per month for one year.  The  agreement  with a
third  consultant  is for the  provision  of sales and  marketing  services  for
NextGen  Fuel's  biodiesel  production  systems.  This  agreement  calls  for  a
commission  payment  of 3% for the  first  $30,000,000  in sales and 5% of sales
thereafter, a cash bonus of $1,000,000 upon the execution and full collection of
the first  $30,000,000 in sales and an additional  $1,500,000 upon the execution
and full  collection of  $50,000,000  in sales,  and full payment seller note of
$1,000,000  issued to this consultant upon the payment by customers for the sale
of  biodiesel  production  systems  equaling  forty  million  gallons  of annual
production capacity.

CUSTOMER AGREEMENTS

GS CleanTech has agreements with five customers to construct corn oil extraction
facilities  as part of its  technology  transfer  services.  These  technologies
include the Corn Oil Extraction and the Biodiesel Process technologies which

                                       66
<PAGE>

are used to extract and produce corn oil derived biodiesel fuel. GS CleanTech is
party to performance guarantees for each of these agreements.  In the event that
corn oil yields are under projected  amounts,  GS CleanTech has 90 - 120 days to
cure or  remove  the  extraction  facilities  at its own  cost.  In the event GS
CleanTech fails to either cure or remove the extraction facilities, the customer
can cause GS CleanTech to remove the extraction facility at its own cost. If the
yield deficiency is due to the process installed by the customer, the extraction
facility can be removed by GS CleanTech.  Each of the Customer  agreements has a
purchase  option  whereby the Customer can purchase the facility  after  minimum
rental period.  The purchase price of the facility will decline over  successive
periods  until a minimum price is reached.  After the facility is purchased,  GS
Cleantech will provide services at a contract price. GS CleanTech has warrantied
that the  extraction  facilities  will perform within  projected  specifications
within the first year.  As of December 31, 2006 GS CleanTech has not accrued any
warranty expenses related to these  agreements.  GS CleanTech has the continuing
right under these  agreements  to purchase  all corn oil  extracted  for minimum
initial terms  ranging from five to ten years and, in any event,  for so long as
the extraction facilities continue to be in operation.

INTELLECTUAL PROPERTY

GS CleanTech is party to a royalty bearing  license  agreement for US Patent No.
6,667,171  (see Note 4 -  Goodwill  and  Intangible  Assets).  GS  CleanTech  is
responsible  for 100% of the costs to  protect  the  patent  rights.  Under this
agreement,  GS CleanTech must develop a pilot plant within two years and revenue
generating commercial  application of the process within three years relative to
utility power generating sources.

In  addition,  GS  CleanTech  purchased  all  intellectual  property  rights  in
connection  with GS  CleanTech's  corn oil extraction  technology  from Cantrell
Winsness Technologies,  LLC ("CWT"). Under the agreement, GS CleanTech agreed to
sell a minimum number of extraction  facilities  over a period of several years.
In the event GS CleanTech fails to meet these  provisions,  they have the option
to cure by prepaying  the certain fees payable  under the  agreement  that would
have  been due for the  minimum  number  of  systems  they  were to sell,  or GS
CleanTech  can  assign the  technology  back to CWT and  receive  the grant of a
non-exclusive license to the technology.  GS CleanTech employees David Winsness,
Whit Davis, and Greg Barlage  surrendered their shares and other equity owned in
CWT in  connection  with  the GS  CleanTech's  purchase  of the  technology.  In
consideration  for this, and the development of the technology,  these employees
were  assigned  15.83%  each  for any of  amounts  payable  under  the  relevant
agreement.

22       SUBSEQUENT EVENTS

GREENSHIFT MERGER AGREEMENT

On April 3, 2007, GreenShift Corporation, GS CleanTech Corporation and GS Carbon
Corporation executed an Agreement and Plan of Merger.  Pursuant to the terms and
conditions  of the Merger  Agreement,  GS CleanTech  will merge with and into GS
CleanTech  Acquisition,  Inc.,  a newly formed  special  purpose  subsidiary  of
GreenShift,  and GS CArbon will merge into GS Carbon Acquisition,  Inc., another
newly formed special purpose  subsidiary of GreenShift (see Note 21 - Subsequent
Events).

An additional pending merger involves  GreenShift's  majority owned GS AgriFuels
Corporation and GS Energy Corporation. Once all mergers are complete, GreenShift
will have two majority-owned  public subsidiaries,  GS AgriFuels Corporation and
GS EnviroServices Corporation (f/k/a TDS (Telemedicine),  Inc.). GreenShift will
include the  subsidiaries of GS CleanTech,  GS Carbon,  and a number of minority
held  investments.  GreenShift  currently  owns 80% of the  capital  stock of GS
CleanTech and about 85% of the capital stock of GS Carbon.  GreenShift  believes
that both of the above mergers will be strategic for several reasons, including:

     >>   the reduction of operational overlap and redundancies,

     >>   the promotion of a unified vision among our employees,

     >>   the  reduction  of  confusion  to  third  parties  such as  customers,
          vendors, creditors, shareholders and other stakeholders,

     >>   the reduction of the focus,  capital,  and other resources required to
          administer  multiple  public  entities  as a result  of the  decreased
          complexity, and

     >>   increasing  the  ability  of our  management  to  focus  on  enhancing
          earnings,  strengthening  the Company's  balance  sheet,  and creating
          value for our shareholders.





                                       67
<PAGE>
The  foregoing  descriptions  of the  transactions  planned to be  completed  by
GreenShift,  GS  CleanTech,  GS  AgriFuels,  GS Energy  and GS Carbon are only a
summary and are  qualified in their  entirety by reference to the  documents and
exhibits filed on Form 8-K.

COMMON STOCK SHARE ISSUANCES

In February 2007, GS CleanTech  Corporation  issued a total of 27,642,241 shares
of Common  stock in payment of  convertible  debt.  15,576,120  shares of Common
Stock were issued to related  parties and include  10,576,120  shares  issued to
Serenity  Capital,  LLC, and  5,000,000  shares issued to Cyrus  Capital,  LLC,.
12,066,121  shares were  issued to Cornell  Capital  Partners,  LP in payment of
convertible debt.  Further  information  about the Convertible  Secured Notes is
included in Note 8, Financing Arrangements.

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

On March 13, 2007,  GS AgriFuels  Corporation  executed an agreement to purchase
approximately 85% of the outstanding capital stock of Sustainable  Systems,  Inc
for a total purchase price of about $12.6 million.  As of December 31, 2006, the
Company  effectively  owned  13% of  Sustainable  System,  Inc.  as a result  of
investing $2 million in the capital  stock of the company.  Sustainable  owns an
oilseed  crushing  facility in  Culbertson,  Montana,  and is in the business of
producing  and selling high oleic  safflower,  sunflower,  canola and other high
value vegetable oils.  Sustainable is currently expanding its oilseed extraction
and refining capability from 300 tons per day to 600 tons per day.

GS AgriFuels and GS CleanTech have entered into a Development Services Agreement
with Mean Green Biodiesel of Georgia, LLC (f/k/a Cantrell Winsness Technologies,
LLC)  that  includes  assignment  of  rights  in and to  the  Company's  planned
biodiesel  project in Memphis,  Tennessee.  The terms of this agreement  include
reimbursement  by Mean Green Biodiesel of Georgia,  LLC of expenses  incurred by
both GS AgriFuels and GS CleanTech both prior and subsequent to the execution of
the Development  Services Agreement,  the retention of 9% equity ownership stake
by GS AgriFuels in first ten million gallon per year facility developed for Mean
Green Biodiesel of Georgia, LLC at the site, and the purchase of one ten million
gallon per year biodiesel system from NextGen Fuel, Inc. Mean Green Biodiesel of
Georgia, LLC is owned by a former consultant to GS CleanTech. In addition to the
contract  price,  GS CleanTech  is  contingently  responsible  to pay 10 million
shares of GS CleanTech Common Stock as penalty if construction does not commence
on or before  September  30,  2007.  GS  AgriFuels  may  decide to  co-locate  a
wholly-or  majority-owned  biodiesel  production  facility on-siteat the Memphis
site.

CONVERTIBLE DEBENTURE - THOMAS SCOZZAFAVA

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

                                       68

<PAGE>


On February 26, 2007, the Company entered into a Securities  Purchase  Agreement
(the  "February  2007 CCP  Agreement"),  with  Cornell  Capital  Partners,  LP.,
("Cornell").  In  connection  with  the  February  2007 CCP  Agreement,  Cornell
purchased secured convertible debentures amounting to $1,125,000 due on February
26, 2009.

In connection  with the February 2007 CCP Agreement,  the Company paid Yorkville
Advisors,  LLP a fee equal to $15,000 and a  structuring  fee of $5,000 from the
proceeds of the  closing.  Accordingly,  the Company  received  net  proceeds of
$1,000,000.  These  fees were  treated as a discount  on the  February  2007 CCP
Agreement  and  beginning  on  February  27, 2007 are being  amortized  over the
February 2007 CCP Agreement  term. The February 2007 CCP Agreement  provides for
interest in the amount of 10% per annum and  conversion  rights at the lesser of
$0.05 or 85% of the  lowest  closing  bid price of the  Company's  common  stock
during the 10  trading  days  immediately  preceding  the  conversion  date.  In
connection  with the  February  2007 CCP  Agreement,  the Company  issued to the
Cornell warrants to purchase 50,000,000 shares of the Company's common stock.

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

On March 13, 2007,  GS AgriFuels  Corporation  executed an agreement to purchase
approximately 85% of the outstanding capital stock of Sustainable  Systems,  Inc
for a total purchase price of about $12.6 million.  As of December 31, 2006, the
Company  effectively  owned  13% of  Sustainable  System,  Inc.  as a result  of
investing $2 million in the capital  stock of the company.  Sustainable  owns an
oilseed  crushing  facility in  Culbertson,  Montana,  and is in the business of
producing  and selling high oleic  safflower,  sunflower,  canola and other high
value vegetable oils.  Sustainable is currently expanding its oilseed extraction
and refining capability from 300 tons per day to 600 tons per day.

NOTE 23 - RESTATEMENT

The Company has restated its financial  statements  for the year ended  December
31, 2006.

On July 26,  2007,  GS Carbon  determined  that it was liable for  approximately
$498,000  of  convertible  debt  along  with  approximately  $59,000  of related
derivative  liabilities  at October 9, 2006,  the date GS Carbon went  through a
reverse merger, and at December 31, 2006. The following outlines the changes:

     1.   A  subsidiary  of the GS  Carbon  that  was  spun-off  in 2006  issued
          convertible  debt in the  principal  amount of $498,074  several years
          ago.  Management  of GS Carbon was  presented  with  evidence that the
          convertible  debentures along with the related derivative liability of
          $58,884 for the conversion  features  related to these debentures were
          liabilities  of the GS  Carbon on the  October  9,  2006,  the date GS
          Carbon  went  through  a reverse  merger.  GS  Carbon  calculated  the
          derivative  liability to be $59,031 on the conversion  feature related
          to these  debentures  at December 31, 2006 and incurred an  unrealized
          loss  of $147  for  the  year  ended  December  31,  2006.  GS  Carbon
          originally  did not book  the long  term  convertible  debentures  and
          related  derivative  liability at the reverse merger date and did book
          the unrealized loss on these derivative instruments for the year ended
          December 31, 2006.

In  addition  GS Carbon  reviewed  and revised  its  conclusions  regarding  its
derivative instruments at December 31, 2006. The following outlines the changes:

     1.   The expected  term used in the  Black-Scholes  model used to calculate
          derivative  liability  of  $531,333 at  December  31, 2006  related to
          conversion  feature  on  GS  Carbons's  Highgate/Cornell   convertible
          debenture was ten days. The unrealized gain on derivative  instruments
          related to the conversion  feature on the  Highgate/Cornell  debenture
          was  $801,367  for  the  year  ended  December  31,  2006.  GS  Carbon
          originally  used  an  expected  term  of 2.25  years  in the  original
          Black-Scholes   model  used  to  calculate  the  original   derivative
          liability of $1,474,827  and recorded a unrealized  loss of derivative
          instruments of $142,127 for the year ended December 31, 2006.

                                       69

<PAGE>


     2.   The  1,652,000  warrants  attached  to  GS  Carbon's  Highgate/Cornell
          convertible   debenture  were   determined  not  to  be  a  derivative
          instrument  under  accounting  principles  generally  accepted  in the
          United States of America.  GS Carbon originally  recorded a derivative
          liability  of  $1,230,330  and  $198,193  at October 9, 2006  (reverse
          merger date) and December 31, 2006,  respectively,  and an  unrealized
          gain on  derivative  instruments  of  $1,032,137  for the  year  ended
          December 31, 2006.

The impact of these adjustments of the Company's financial results as originally
reported  at  December  31,  2006 and for the year ended  December  31,  2006 is
summarized below:

                                   As Reported      As Restated

Current liabilities ..........   $ 38,335,878    $ 37,253,222

Total liabilities ............   $ 60,688,329    $ 60,103,747

Total Stockholders' Deficiency   $(12,813,250)   $(12,228,668)

Net loss .....................   $ 16,332,905    $ 16,421,695



























                                       70
<PAGE>


                     GREENSHIFT CORPORATION AND SUBSIDIARIES

ITEM 8.     CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
            FINANCIAL DISCLOSURE
None.

ITEM 8A.    CONTROLS AND PROCEDURES

EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

Our principal executive 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.

In connection with that  evaluation,  the Company's chief executive  officer and
chief financial officer determined that:

o    The recently  discovered debts of GS Carbon Corporation that are the reason
     for the  restatement in this amended filing were incurred prior to the 2006
     acquisition   of  a  controlling   interest  in  GS  Carbon  by  GreenShift
     Corporation

o    In connection  with the  acquisition of control by  GreenShift,  a complete
     change in management  occurred.  No person who had knowledge of those debts
     remained associated with GS Carbon on March 31, 2007.

o    As soon as management became aware of the debts, it disclosed its awareness
     of the debts in the Annual  Report on Form 10-KSB for 2006 and commenced an
     investigation of the debts.

In addition  the Company  reviewed  and revised its  conclusions  regarding  its
derivative  instruments  at December 31, 2006 based on subsequent  review of the
facts and circumstances that existed at December 31, 2006.

Based on the foregoing analyses, the Company's chief executive officer and chief
financial  officer  concluded that there was a flaw in the Company's  disclosure
controls  and  procedures  as of March 31, 2007 to the extent that the books and
records of GS Carbon  Corporation  for the periods prior to the  acquisition  of
control by GreenShift were  incomplete and there was no employee  remaining from
the period prior to the acquisition  who could provide  information to the chief
executive officer and chief financial officer regarding the missing information.

Except as set forth above,  the Company's  chief  executive  officer  determined
that,  as of the end of the period  covered by this report,  these  controls and
procedures  are  adequate and  effective  in alerting him in a timely  manner to
material  information  relating  to the  Company  required to be included in the
Company's periodic SEC filings.


CHANGES IN INTERNAL CONTROLS

There were no significant changes,  including any corrective actions with regard
to significant deficiencies and material weaknesses, in our internal controls or
in other factors that could  significantly  affect  internal  controls since the
date of the most recent  evaluation  of these  controls by the  Company's  chief
executive officer and chief financial officer.


                                       71

<PAGE>



                     GREENSHIFT CORPORATION AND SUBSIDIARIES
                                    PART III

ITEM 9.  DIRECTORS AND EXECUTIVE OFFICERS

Name                      Age      Position
--------------------------------------------------------------------------------
Kevin Kreisler             34    Chairman, Chief Executive Officer

Kurt Gordon                39    Director

David Winsness             38    Director

James Grainer              52    President, Chief Financial Officer

Kevin  Kreisler - Mr.  Kreisler is the founder of  GreenShift.  Mr.  Kreisler is
currently  the Chairman of the Board and Chief  Executive  Officer of GreenShift
Corporation,  and he serves as Chairman of the Board and Chief Executive Officer
of  several  of  GreenShift's  companies.  Previously,  Mr.  Kreisler  worked at
GreenShift's GS CleanTech  Corporation,  where he served as vice-president  from
1998 to 2000, president from 2000 to 2002, and chief executive officer from 2002
to February 2005. Mr.  Kreisler is a graduate of Rutgers  University  College of
Engineering  (B.S.,  Civil  and  Environmental   Engineering,   1994),   Rutgers
University Graduate School of Management (M.B.A.,  1995), and Rutgers University
School of Law (J.D.,  1997).  Mr.  Kreisler is  admitted to practice  law in New
Jersey and the United States District Court for the District of New Jersey.

David Winsness - Mr.  Winsness,  GS CleanTech's  Chief  Executive  Officer,  was
previously  GS  CleanTech's  President  and Chief  Operational  officer in which
position he led the commercialization effort for GS CleanTech technologies.  Mr.
Winsness  has  spearheaded  the  addition  of over a dozen  patented  and patent
pending  technologies to GS CleanTech's  portfolio,  six of which were developed
and  authored  directly  by Mr.  Winsness,  including  GS  CleanTech's  Corn Oil
Extraction  Technology.  Mr. Winsness is a graduate of Clemson University (B.S.,
Mechanical  Engineering) and he has spent his  professional  career as a process
engineer in the chemical,  food,  pharmaceutical  and power generation  markets.
Prior to accepting a position with GS CleanTech,  Mr.  Winsness  served as chief
technology  officer and eventually chief executive officer of Vortex Dehydration
Technology where he directed the research,  development and commercialization of
a technology that is now GS CleanTech's Tornado Generator(TM).

Kurt Gordon- Mr. Gordon was previously the chief financial  officer of Mobilepro
Corp.  (OTC  Bulletin  Board:   MOBL),  a  wireless   technology  and  broadband
communications  company.  Additionally  he was the chief  financial  officer  of
TARGUS Information Corporation, which has pioneered the development of real time
intelligence  providing  businesses  access to information  about businesses and
consumers who contact them by telephone,  Internet and wireless devices.  Gordon
was a key  contributor  during the largest  revenue and employee growth phase of
TARGUS'  history.  He has over 14 years of experience in finance and  operations
with special focus on growing entrepreneurial environments. He previously served
as a public accountant and consultant in the  Entrepreneurial  Services group of
Ernst & Young. Kurt Gordon received his  undergraduate  degree in accounting and
information  systems from  Virginia  Tech and is a certified  public  accountant
(CPA). Kurt's initial term on our board expires on December 31, 2005.

James L. Grainer - Mr.  Grainer has made his career in the fields of  investment
banking and financial management and accounting. Since December 2004 Mr. Grainer
has  served  as  the  President  and  Chief  Financial   Officer  of  Greenshift
Corporation. At the same time, beginning in October 2004, Mr. Grainer has served
as the  President  and Chief  Financial  Officer of  GreenShift  Corporation,  a
publicly-held  company business development company.  From 2003 until June 2004,
Mr.  Grainer  was the  Chief  Financial  Officer  of Polo  Linen,  where  he was
responsible  for that  company's  financial  management  and was involved in all
aspects  of  strategic  management.  From 2001 until  2003 Mr.  Grainer  was the
Managing Director of Investment Banking and Head of the Investment Banking Group
at Zanett  Securities,  a merchant  banking firm located in New York City.  From
1992 until 2001 Mr. Grainer was a Managing  Director in the  Investment  Banking
Group at Prudential  Securities,  where he served as a member of the  Management
Committee  for the  Prudential  Securities  Private  Equity  Fund and held other
financial  management  positions.  Prior to joining Prudential  Securities,  Mr.
Grainer  was  employed as a Senior  Manager by  Deloitte & Touche,  where he was
actively  involved  in managing  all aspects of  Deloitte's  tax  practice.  Mr.
Grainer is licensed as a certified public accountant in the State of New York.

NOMINATING AND AUDIT COMMITTEE

The Board of Directors has an audit  committee  that is comprised of Curt Gordon
and David  Winsness.  Mr.  Gordon serves as the chairman of the  committee.  Mr.
Gordon qualifies as an "audit committee  financial expert" within the definition
given by the Regulations of the Securities and Exchange Commission, by reason of
his experience in public accounting and as a chief financial officer.

                                       72
<PAGE>

The Board of Directors  has a  compensation  committee  that is comprised of Mr.
Kevin  Kreisler,  Curt Gordon and David  Winsness.  Mr.  Winsness  serves as the
chairman of the committee.

CODE OF ETHICS

The Company does not have a written code of ethics  applicable  to its executive
officers.  The Board of  Directors  has not  adopted  a  written  code of ethics
because there are only two members of management.

SHAREHOLDER COMMUNICATIONS

The Board of  Directors  will not adopt a  procedure  for  shareholders  to send
communications  to the Board of  Directors  until it has  reviewed the merits of
several alternative procedures.

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

None of the  officers,  directors or  beneficial  owners of more than 10% of the
Company's  common stock failed to file on a timely basis the reports required by
Section 16(a) of the Exchange Act during the year ended December 31, 200.

ITEM 10.          EXECUTIVE COMPENSATION

The  following  table  sets  forth   compensation   information  for  Greenshift
Corporation's  executive officers during the years indicated as relevant.  As of
December 31, 2006, no executive  officer held shares of exercisable  options for
Greenshift Corporation's Common Stock.
<TABLE>
<CAPTION>

Name and Principal Position                 Annual Compensation              Long-term Compensation        All Other
                                                                                                        Compensation
---------------------------------------------------------------------------------------------------------------------
                                  Year       Salary      Bonus        Other          Shares Granted
---------------------------------------------------------------------------------------------------------------------
<S>                                 <C>   <C>        <C>             <C>               <C>           <C>
Kevin Kreisler                      2006  $      --  $  10,914         --              1,136,256     $           --
Chairman and Chief Executive Officer2005         --         --         --                     --                 --
                                    2004         --         --         --                     --                 --

James Grainer                       2006  $ 150,000  $  10,914         --                     --     $           --
President and Chief Financial Officer2005    84,000         --         --                     --                 --
                                    2004     56,000         --         --                     --                 --

Kurt Gordon                         2006  $      --  $      --         --                     --     $           --
Director                            2005         --         --         --                     --                 --
                                    2004         --         --         --                     --                 --

David Winsness                      2006  $      --  $  30,000         --                     --     $           --
Director                            2005         --     30,000         --                     --                 --
                                    2004         --         --         --                     --                 --
</TABLE>


EMPLOYMENT AGREEMENTS

GreenShift's relationships with its officers are on an at-will basis.

COMPENSATION OF DIRECTORS

Our directors are reimbursed for out-of-pocket  expenses incurred on our behalf.
One director,  Mr. Kurt Gordon,  receives $7,500 per quarter in compensation for
services rendered.

ITEM 11.   SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following  table sets forth certain  information  regarding the  "beneficial
ownership"  of the  Company's  Common  Stock as of April 16, 2007 by each of the
Company's directors and executive officers,  all current directors and executive
officers  as a  group,  and  persons  or  groups  owning  more  than  5% of  the
outstanding  Common Stock. In computing the number of shares  beneficially owned
by a person and the percentage ownership of that person,  shares of common stock
subject  to  options  or  warrants  held  by  that  person  that  are  currently
exercisable  or  exercisable  within  60  days of the  date  hereof  are  deemed
outstanding.  Except as indicated in the footnotes to this table and pursuant to
applicable community property laws, each stockholder named in the table has sole
voting and  investment  power with respect to the shares set forth opposite such
stockholder's  name.  On  March  30,  2006  there  were  146,608,401  shares  of
GreenShift  common stock issued and  outstanding as well as 1,000,000  shares of
Series C  Preferred  Stock.  The  following  table  sets forth the number of the
Company's shares beneficially owned by each person who, as of the closing,  will
own beneficially  more than 5% of either class of the Company's voting stock, as
definition  given by the Regulations of the Securities and Exchange  Commission,
by  reason  of his  experience  in public  accounting  and as a chief  financial
officer well as the ownership of such shares by each director of the Company and
the shares beneficially owned by the new directors as a group.

                                       73
<PAGE>
<TABLE>
<CAPTION>

Name and Address of Beneficial Owner          Amount and Nature of Beneficial Ownership  Percent and Class of Stock
--------------------------------------------------------------------------------------------------------------------
<S>                                                                    <C>                       <C>
James Grainer                                                          1,143,756                >1% Common Stock

Kevin Kreisler                                                               -0-                 0% Common Stock
                                                                       1,000,000         100% Series C Preferred

Current executive officers and directors as a group (2 persons)        1,143,756                >1% Common Stock
                                                                       1,000,000         100% Series C Preferred
</TABLE>

ITEM 12.          CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND
                  DIRECTOR  INDEPENDENCE


RELATED PARTY TRANSACTIONS

Greenshift Transfer of Shares of Common Stock

During the period ended December 31, 2006,  Greenshift  Corporation  (the parent
company)  transferred  588,235 shares of its common stock to the Corporation the
Company's  subsidiary ESI with a cost basis of $30,000.  The Company  realized a
gain on the sale of these  marketable  securities of $105,645 and is included in
additional paid in capital.

Greenshift Conversion of Preferred Stock to Common

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

Issuance of Series D Preferred Stock to Greenshift

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

On July 1, 2006, GS CleanTech acquired from its majority shareholder, GreenShift
Corporation,  100% of the outstanding  capital stock of GS EnviroServices,  Inc.
(f/k/a GreenWorks  Corporation) and 100% of the outstanding  capital stock of GS
CleanTech Ventures,  Inc. In exchange for the shares in GS EnviroServices and GS
CleanTech Ventures, GS CleanTech assumed GreenShift's  obligations under certain
debentures in the principal  amount of $1,900,000.  GS CleanTech has also agreed
to amend the Series D Preferred  Stock now held by  GreenShift  to increase  the
portion of GS CleanTech's  equity represented by the Series D shares from 70% to
80%.

MERGER AGREEMENT WITH GS AGRIFUELS

On October 18, 2006, GS Energy Corporation and GS AgriFuels Corporation executed
an Agreement and Plan of Merger (the "Merger Agreement").  Pursuant to the terms
and  conditions of the Merger  Agreement,  GS Energy will merge with and into GS
Acquisition, Inc., a newly formed special purpose subsidiary of GS AgriFuels. As
a result of the merger, GS Energy common stock shareholders will receive 1 share
of GS  AgriFuels  common  stock in return  for every  1,000  shares of GS Energy
common stock held at the time of the closing of the Merger.  GS Energy preferred
stock  shareholders  will receive GS AgriFuels  preferred  stock with rights and
preferences  substantially  identical to their GS Energy shares.  The closing of
the merger will occur after  approval  of the merger by the  shareholders  of GS
Energy.

GS Energy owns a specialty manufacturing company, Warnecke Design Service, Inc.,
which  currently  provides  manufacturing  services  for  NextGen.  GS AgriFuels
acquired NextGen on October 30, 2006. A merger of GS Energy with GS AgriFuels is
expected to be strategic to both companies for several reasons,  including:  (a)
the integration of NextGen's and Warnecke Design's businesses can be expected to
enhance  operating  margins for both companies  while  establishing an immediate
stream of revenues and earnings for GS AgriFuels;  and (b) merging GS Energy and
GS AgriFuels can be expected to increase liquidity for both companies, which can
be material to the future development activities of the combined companies.  The
foregoing  descriptions of the  transaction  contemplated by GS AgriFuels and GS
Energy are only a summary and are  qualified  in their  entirety by reference to
the documents filed as exhibits to this Current Report.


                                       74
<PAGE>

OTHER RELATED PARTY TRANSACTIONS

GS  AgriFuels  is  party  to an  agreement  with  GS  CleanTech  Corporation,  a
subsidiary of GreenShift,  pursuant to which GS CleanTech  provides GS AgriFuels
with technology rights,  engineering services, and right of first refusal rights
to  purchase  GS  CleanTech's  inventory  of clean  fuel  feedstocks.  Under the
agreement,  GS AgriFuels holds the exclusive rights to the use of GS CleanTech's
biodiesel and ethanol production technologies.

In August 2006 GS Agrifuels paid a $200,000  deposit to Warnecke Design Service,
Inc.  for the purchase of a NextGen  Fuel 10 million  gallon per year  biodiesel
system.  The total  purchase  price for this  system  is  $3,200,000,  and it is
expected that GS Agrifuels will take delivery of the system in the first quarter
of 2007. GreenShift Corporation, the Company's majority shareholder, is also the
majority shareholder of GS Energy Corporation.  Warnecke Design Service, Inc. is
a wholly owned subsidiary of GS Energy Corporation.

DIRECTOR INDEPENDENCE

Kurt Gordon is the only member of our Board of Directors who is independent,  as
"independent" is defined in the rules of the NASDAQ National Market System.




















                                       75
<PAGE>



                                     PART IV

ITEM 13.          EXHIBITS

Index to Exhibits

Exhibit
Number                 Description

     3-a  Certificate of Incorporation,  as amended through January 2000 - filed
          as an  exhibit  to  the  Registration  Statement  on  Form  10-SB  and
          incorporated herein by reference.

     3-a(1)  Certificate  of Amendment of  Certificate  of  Incorporation  dated
          January 8, 2003 - filed as an  exhibit  to the  Annual  Report on Form
          10-KSB for the year ended December 31, 2003 and incorporated herein by
          reference.

     3-a(2)  Certificate  of Amendment of  Certificate  of  Incorporation  dated
          December 2004 - filed as an exhibit to the Current  Report on Form 8-K
          dated December 27, 2004 and incorporated herein by reference.

     3-a(3) Certificate of Amendment of Certificate  of  Incorporation  filed on
          May 16, 2005 and incorporated herein by reference.

     3-a(4)  Certificate  of  Designation,  Preferences  and  Rights of Series C
          Preferred Stock of GreenShift Corporation - filed as an exhibit to the
          Current  Report on Form 8-K dated  February 15, 2006 and  incorporated
          herein by reference.

     3-a(4) Certificate of Correction of Certificate of Designation, Preferences
          and Rights of Series C Preferred  Stock of  GreenShift  Corporation  -
          filed as an exhibit to the Current Report on Form 8-K/A (Amendment No.
          1) dated Februry 15, 2006 and incorporated herein by reference.


     3-b  Bylaws - filed as an exhibit  to the  Registration  Statement  on Form
          10-SB And incorporated herein by reference.

     10-a Guaranty Agreement dated October 25, 2006 among Stillwater Asset-Based
          Fund, LP and  GreenShift  Corporation,  GS AgriFuels  Corporation,  GS
          Energy Corporation and GS CleanTech Corporation Corporation - filed as
          an exhibit to the  Current  Report on Form 8-K dated  October 31, 2006
          and incorporated herein by reference.


     10-b Security   Agreement   dated  October  25,  2006  between   Stillwater
          Asset-Based Fund, LP and GreenShift  Corporation - filed as an exhibit
          to the  Current  Report  on  Form  8-K  dated  October  31,  2006  and
          incorporated herein by reference. .

     10-c Security   Agreement   dated  October  25,  2006  among  GS  AgriFuels
          Corporation,  its  subsidiaries,  GreenShift  Corporation,  GS  Energy
          Corporation and GS CleanTech Corporation and Cornell Capital Partners,
          LP - filed as an  exhibit  to the  Current  Report  on Form 8-K  dated
          October 31, 2006 and incorporated herein by reference. .

     10-d Form of Secured Convertible  Debenture due February 8, 2009 - filed as
          an exhibit to the Company's  Current Report on Form 8-K dated February
          2, 2006 and incorporated herein by reference..

     10-e Second Amended and Restated Security  Agreement dated February 2, 2006
          between GreenShift Corporation and Cornell Capital Partners, LP- filed
          as an  exhibit  to the  Company's  Current  Report  on Form 8-K  dated
          February 2, 2006 and incorporated herein by reference.

     10-f Second Amended and Restated Stock Pledge  Agreement  dated February 2,
          2006 among  GreenShift  Corporation,  Cornell  Capital  Partners,  LP,
          Highgate  House  Funds,  Ltd.  and David  Gonzalez,  Esq-  filed as an
          exhibit to the Company's  Current Report on Form 8-K dated February 2,
          2006 and incorporated herein by reference.


                                       76
<PAGE>

Index to Exhibits (Continued)


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    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.



ITEM 14.          PRINCIPAL ACCOUNTANT FEES AND SERVICES

INDEPENDENT AUDITOR FEES


Audit Fees

Rosenberg  Rich Baker Berman & Company,  P.A.  billed  $35,875 for  professional
services  rendered for the audit of our 2006 financial  statements and review of
the financial statements included in our 2006 10-KSB filings. For the year ended
2005, $17,000 was billed for services rendered.

Audit-Related Fees

Rosenberg  Rich Baker Berman & Company,  P.A.  billed  $34,620 to the Company in
2006 and $0 in 2005 for services that are reasonably  related to the performance
of the audit or review of the quarterly financial statements.

Tax Fees

Rosenberg Rich Baker Berman & Company, P.A. billed $10,000 in 2006 and $2,000 to
the Company in 2005 for professional  services rendered for tax compliance,  tax
advice and tax planning.

All Other Fees

Rosenberg  Rich Baker Berman & Company,  P.A.  billed  $10,000 to the Company in
2005 for services not described  above.  It is the policy of the Company's Board
of Directors that all services other than audit, review or attest services, must
be pre-approved by the Board of Directors.  All of the services  described above
were approved by the Audit Committee.

















<PAGE>


                                   SIGNATURES

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

GREENSHIFT CORPORATION

By:             /S/      KEVIN KREISLER
                -----------------------
                         KEVIN KREISLER
                         Chairman and Chief Executive Officer
Date:                    April 18, 2007

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following  persons on behalf of the  registrant and
in the capacities and on the dates indicated.

                /S/      KEVIN KREISLER
                ------------------------
                         KEVIN KREISLER
                         Director, Chief Executive Officer
Date:                    April 18, 2007

                /S/      JAMES L. GRAINER
                -------------------------
                         JAMES L. GRAINER
                         Chief Financial Officer
                         Chief Accounting Officer
                         April 18, 2007

                /S/      KURT GORDON
                ------------------------
                         KURT GORDON
                         Director
Date:                    April 18, 2007

                /S/      DAVID WINSNESS
                -------------------------
                         DAVID WINSNESS
                         Director
Date:                    April 18, 2007