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

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

                                   FORM 10-K/A
                                (Amendment No. 1)
                            -------------------------

                 ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (D)
                     OF THE SECURITIES EXCHANGE ACT OF 1934
                   FOR THE FISCAL YEAR ENDED DECEMBER 31, 2008

                          COMMISSION FILE NO.: 0-28887



                          CARBONICS CAPITAL CORPORATION
--------------------------------------------------------------------------------
             (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, New York                       10119
--------------------------------------------------------------------------------
(Address of principal executive offices)                             (Zip Code)

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


Indicate by check mark if the registrant is a well-known seasoned issuer, as
defined in Rule 406 of the Securities Act.    Yes    No X
                                                 ---   ---
Indicate by check mark if the registrant is not required to file reports
pursuant to Section 13 or Section 15(d) of the Act.    Yes    No  X
                                                           ---   ---

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

Indicate by check mark if disclosure of delinquent  filers  pursuant to Item 405
of  Regulation  S-K  (ss.  229.405)  is not  contained  herein,  and will not be
contained,  to the  best of  registrant's  knowledge,  in  definitive  proxy  or
information  statements  incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K. [ ]

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

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

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

The number of  outstanding  shares of common stock and value of the voting stock
held by non-affiliates of the Registrant as of April 14, 2009 was 133,179,491.



<PAGE>
                                 Amendment No. 1

This Amendment No.1 on Form 10-K/A,  which amends and restates items  identified
below with  respect to the Form 10- K, filed by  Carbonics  Capital  Corporation
("we" or "the Company") with the Securities and Exchange  Commission (the "SEC")
on April 14, 2009 (the "Original Filing"), is being filed to in order to:

     o    Include restated  financial  statements as described in Note 12 to the
          financial statements;

     o    Amend Item 8A, Controls and Procedures, to reflect the modification to
          management's  assessment  of its  disclosure  controls and  procedures
          caused by the restatement and to provide further disclosures;

     o    Amend Item 7,  Management's  Discussion  and Analysis,  to reflect the
          amended financial statements and otherwise as follows:

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

          o    the paragraph titled Gain Associated with Derivative  Instruments
               was deleted;

          o    the breakdown of working capital deficit was updated

     o    Amend the  following  notes  under Item 8,  Financial  Statements  and
          Supplementary Schedules, to reflect the amended financial statements:

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

          o    Note 1, Acquisition, was updated with respect to the terms of the
               Stock Purchase Agreement between the Company and GS AgriFuels;

          o    Note 3, Going  Concern,  was  updated to  restate  the  Company's
               working capital deficit;

          o    Note  4,   Significant   Accounting   Policies,   the   Financial
               Instruments  section was  modified as well as the New  Accounting
               Pronouncements section

          o    Note 5,  Financing  Arrangements,  was  updated  to  restate  the
               schedule of financial obligations;

          o    Note 6, Embedded Derivatives, was deleted; and,

          o    Note 12, Restatement,  was added to outline the changes that were
               made to the financial statements.

None of the other  disclosures in this Report have been amended or updated.  For
updated  information about the Company,  please refer to the more recent filings
made with the SEC.















                                       2
<PAGE>





                          CARBONICS CAPITAL CORPORATION
                            ANNUAL REPORT ON FORM 10K
                   FOR THE FISCALYEAR ENDED DECEMBER 31, 2008
<TABLE>

                                TABLE OF CONTENTS

<CAPTION>
                                                                                                          Page
Part I
<S>         <C>                                                                                             <C>
Item 1      Business ........................................................................................4
Item 1A     Risk Factors.....................................................................................5
Item 2      Description of Properties........................................................................7
Item 3      Legal Proceedings................................................................................7
Item 4      Submission of Matters to a Vote of Security Holders .............................................7

Part II
Item 5      Market for Registrant's Common Equity, Related Stockholder Matters
              and Issuer Purchase of Equity Securities ......................................................8
Item 6      Selected Financial Data
Item 7      Management's Discussion and Analysis.............................................................9
Item 8      Financial Statements and Supplementary Data.....................................................11
Item 9      Changes and Disagreements with Accountants on Accounting and Financial Disclosure ..............23
Item 9A     Controls and Procedures ........................................................................23
Item 9B     Other Information...............................................................................25

Part III
Item 10     Directors, Executive Officers and Corporate Governance  ........................................25
Item 11     Executive Compensation .........................................................................25
Item 12     Security Ownership of Certain Beneficial Owners and Management and
            Related Stockholder Matters ....................................................................26
Item 13     Certain Relationships and Related Transactions and Director Independence .......................26
Item 14     Principal Accountant Fees and Services .........................................................28

Part IV
Item 15     Exhibits and Financial Statement Schedules .....................................................28

Signatures..................................................................................................34

</TABLE>








                                       3
<PAGE>



                                     PART I

Basis of Presentation

In this Annual  Report on Form 10-K,  the terms "we," "our," "us,"  "Carbonics,"
"Carbonics Corporation" or the "Company" refer to Carbonics Capital Corporation,
and its  subsidiaries  on a  consolidated  basis.  The term  "Carbonics  Capital
Corporation"  refers to  Carbonics  Capital  Corporation  on a stand alone basis
only, and not its subsidiaries.

Forward Looking Statements

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

     >>   the volatility and uncertainty of commodity prices;

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

     >>   our ability to locate and integrate future acquisitions;

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

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

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

     >>   our reliance on key management personnel;

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

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

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

     >>   other risks  referenced  from time to time in our filings with the SEC
          and  those  factors  listed  in this  Form 10K  under  Item 1A,  Risks
          Factors, beginning on page 24.

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


                                       4
<PAGE>



ITEM 1     BUSINESS

OVERVIEW

We develop  renewable  energy projects that facilitate the more efficient use of
carbon in energy supply chains. Our development activities during 2008 primarily
involved  evaluation  of a number of different  chemical and other  technologies
designed to separate carbon dioxide from exhaust for conversion into value-added
carbonaceous products.

We  are  party  to a  technology  commercialization  agreement  with  GreenShift
Corporation,  which  company  is  majority  owned by our  majority  shareholder,
Viridis  Capital,  LLC,  pursuant  to which  GreenShift  has  agreed to  provide
commercialization support services and access to GreenShift's rights to sell and
use a proprietary  biomass  gasification  technology in fields of use outside of
the corn ethanol industry.  Carbonics will pay GreenShift a royalty equal to 10%
of the pre-tax net income generated by Carbonics through use of this technology.

Our strategic plan also involves the  acquisition  of accretive  assets and cash
flows that are strategic to our technology development efforts. We are currently
evaluating a number of qualified  opportunities  that produce the raw  materials
needed for our  technologies,  or that have the  infrastructure we need to scale
our  technologies,  or that have the  ability to refine the  products we produce
with our  technologies  into  finished  goods.  Our plan in this  respect  is to
leverage  the  targeted  assets  and cash  flows to defray  our  technology  and
financing risk as we commercialize our technologies.

INTELLECTUAL PROPERTIES

Carbonics,  Carbonics  Capital  Corporation,  and the  "Carbonics  Logo" are the
registered trademarks of Carbonics Capital Corporation.

Carbonics is party to a technology  commercialization agreement with GreenShift,
pursuant to which  GreenShift  has agreed to provide  commercialization  support
services and access to GreenShift's rights to sell and use a proprietary biomass
gasification  technology in fields of use outside of the corn ethanol  industry.
This technology was developed by ZeroPoint Clean Tech,  Inc., a renewable energy
technology  and project  development  company.  ZeroPoint  believes  that it has
developed a highly efficient biomass  gasification process capable of converting
biomass into renewable synthesis gas to create carbon-neutral energy. Additional
information is available online at www.zeropointcleantech.com.

EMPLOYEES

As of December 31, 2008,  Carbonics Capital employed 2 at will employees.  There
is no union representation for any of our employees.

ITEM 1A  RISK FACTORS

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

There is  substantial  doubt  concerning  our  ability  to  continue  as a going
concern.

Carbonics had a loss from continuing  operations of $6,383,036 during the twelve
months ended December 31, 2008,  and had $0 in cash at December 31, 2008.  These
matters  raise  substantial  doubt  about our  ability  to  continue  as a going
concern.  Management's plans include raising  additional  proceeds from debt and
equity transactions and completing strategic acquisitions.

We are  implementing  new business  plans which make the results of our business
uncertain.

Our limited  operating  history makes it difficult  for  potential  investors to
evaluate our business.  Therefore, our proposed operations are subject to all of
the risks inherent in the initial expenses, challenges, complications and delays
frequently  encountered in connection with the formation of any new business, as
well as those risks that are  specific to the  biodiesel,  ethanol and  culinary
oils industry in general. Investors should evaluate an investment in our company
in light of the problems and uncertainties  frequently  encountered by companies
attempting  to develop  markets for new  products,  services  and  technologies.
Despite best efforts, we may never overcome these obstacles to achieve financial
success.  Our business is speculative and dependent upon the  implementation  of
our business  plan, as well as our ability to enter into  agreements  with third
parties for necessary  financing,  the provision of necessary feedstock sources,
engineering, procurement and construction services and the sale and distribution
of our biodiesel  fuel on terms that will be  commercially  viable for us. There
can be no assurance  that our efforts will be successful or result in revenue or
profit. There is no assurance that we will earn significant revenues or that our
investors will not lose their entire investment.

                                       5
<PAGE>


The fiscal efficiencies of highly capitalized competitors in biotechnology could
defeat our efforts to capture a viable market share.

The business of developing new  biotechnologies  is a capital-intense  business,
requiring  substantial  capital  resources.  The  costs  that  we may  incur  in
obtaining capital are substantially greater per dollar than the cost incurred by
large scale  enterprises in the industry.  This  situation  could cause us to be
unable to compete effectively.

The  exercise of our  outstanding  warrants  and options and  Carbonics  Capital
Corporation's various anti-dilution and price-protection  agreements could cause
the market  price of our common stock to fall,  and may have  dilutive and other
effects on our existing stockholders.

The  exercise  of our  outstanding  warrants  and  options  could  result in the
issuance of up to 1,438,516  shares of common  stock,  assuming all  outstanding
warrants and options are currently exercisable.  Such issuances would reduce the
percentage of ownership of our existing  common  stockholders  and could,  among
other  things,  depress  the  price  of our  common  stock.  This  result  could
detrimentally  affect  our  ability  to  raise  additional  equity  capital.  In
addition,  the sale of these  additional  shares of  common  stock may cause the
market price of our stock to decrease.

We lack capital to fund our operations.

During the twelve months ended December 31, 2008 our operations used $607,566 in
cash, but our debt service  obligations  required cash in excess of that amount.
Loans from some of our shareholders  and the issuance of convertible  debentures
funded our debt service.  Those  individuals may not be able to continue to fund
our operations or our debt service.

Our failure to attract qualified engineers and management personnel could hinder
our success.

Our ability to attract and retain  qualified  engineers  and other  professional
personnel  when we need them will be a major  factor in  determining  our future
success.  There is a very  competitive  market  for  individuals  with  advanced
engineering  training,  and we are not  assured  of  being  able to  retain  the
personnel we will need.

Key personnel are critical to our business and our future success depends on our
ability to retain them.

Our success depends on the contributions of our key management,  and engineering
personnel.  The loss of these officers could result in lost sales opportunities,
lost  business,   difficulties   operating  our  assets,   difficulties  raising
additional  funds  and  could  therefore   significantly  impair  our  financial
condition.  Our future  success  depends on our ability to retain and expand our
staff  of  qualified  personnel,   including  environmental  technicians,  sales
personnel and engineers.  Without  qualified  personnel,  we may incur delays in
rendering our

Viridis  Capital  can  exert  control  over us and may not make  decisions  that
further the best interests of all stockholders.

Viridis Capital,  LLC controls 100% of our outstanding Series C preferred stock.
The preferred  shares are convertible into 80% of our Common Stock. As a result,
Viridis exerts a significant degree of influence over our management and affairs
and over  matters  requiring  stockholder  approval,  including  the election of
directors and approval of significant corporate transactions.  In addition, this
concentration  of  ownership  may delay or prevent a change in control of us and
might affect the market price of our common stock, even when a change in control
may be in the best interest of all stockholders.  Furthermore,  the interests of
this  concentration  of ownership may not always  coincide with our interests or
the  interests of other  stockholders  and  accordingly,  they could cause us to
enter into transactions or agreements which we would not otherwise consider.

Investing in our stock is highly  speculative  and you could lose some or all of
your investment.

The value of our common stock may decline and may be affected by numerous market
conditions, which could result in the loss of some or the entire amount invested
in our stock. The securities  markets  frequently  experience  extreme price and
volume  fluctuations  that affect  market  prices for  securities  of  companies
generally and very small capitalization companies such as us in particular.

The volatility of the market for Carbonics Capital  Corporation common stock may
prevent a shareholder from obtaining a fair price for his shares.

The common stock of Carbonics  Corporation is quoted on the OTC Bulletin  Board.
It is impossible to say that the market price on any given day reflects the fair
value of Carbonics Corporation, since the price sometimes moves up or down by

                                       6
<PAGE>

50% or more in a week's time. A shareholder in Carbonics  Corporation  who wants
to sell his shares,  therefore, runs the risk that at the time he wants to sell,
the market price may be much less than the price he would consider to be fair.

Our common stock  qualifies as a "penny stock" under SEC rules which may make it
more difficult for our stockholders to resell their shares of our common stock.

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

Only a small portion of the investment  community  will purchase  "penny stocks"
such as our common stock.

Carbonics  Corporation  common  stock is defined  by the SEC as a "penny  stock"
because it trades at a price less than  $5.00 per share.  Carbonics  Corporation
common stock also meets most common  definitions  of a "penny  stock,"  since it
trades for less than $1.00 per share. Many brokerage firms will discourage their
customers from purchasing  penny stocks,  and even more brokerage firms will not
recommend a penny stock to their customers.  Most  institutional  investors will
not invest in penny stocks.  In addition,  many  individual  investors  will not
consider a purchase of a penny stock due,  among other  things,  to the negative
reputation  that attends the penny stock market.  As a result of this widespread
disdain  for  penny  stocks,  there  will  be a  limited  market  for  Carbonics
Corporation  common stock as long as it remains a "penny  stock." This situation
may limit the liquidity of your shares.

ITEM 2     DESCRIPTION OF PROPERTIES

Carbonics  Capital  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 $0 in rent  during  2008.  During  2008 we are being  permitted  to use the
premises for no charge by GreenShift Corporation, the primary tenant. We believe
these offices will be sufficient for our needs for the foreseeable future.

ITEM 3     LEGAL PROCEEDINGS

None.

ITEM 4   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None.









                                       7
<PAGE>
                                     PART II

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

Carbonics  Capital  Corporation's  Common Stock trades on the OTC Bulletin Board
under the symbol  "CICS."  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.
<TABLE>
<CAPTION>
Period                                                    High                       Low
----------------------------------------------------------------------------------------
<C>                                                       <C>                    <C>
2007 First Quarter                                        2.61                      1.70
2007 Second Quarter                                       1.76                      0.50
2007 Third Quarter                                        1.08                      0.58
2007 Fourth Quarter                                       0.76                      0.24

2008 First Quarter                                       0.030                    0.0200
2008 Second Quarter                                      0.004                    0.0040
2008 Third Quarter                                       0.004                    0.0040
2008 Fourth Quarter                                      0.002                    0.0012

Title of Class              Approximate Number of Holders of Record as of April 14, 2008
Common Stock, 0.001 par                                                              145
</TABLE>

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.

REVERSE SPLIT

On February 11, 2008, the Company completed a 1 for 20 reverse stock-split.  All
stock prices,  share  amounts,  per share  information,  stock options and stock
warrants in this Report reflect the reverse stock split.

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

Carbonics  Capital  Corporation did not sell any unregistered  equity securities
during the 4th quarter of 2008.

REPURCHASE OF EQUITY SECURITIES

Carbonics  Capital  Corporation did not repurchase any of its equity  securities
that were  registered  under  Section  12 of the  Securities  Act during the 4th
quarter of 2008.

ITEM 6.              SELECTED FINANCIAL DATA

Not applicable.


                                       8
<PAGE>



ITEM 7     MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND
           RESULTS OF OPERATIONS

We develop  renewable  energy projects that facilitate the more efficient use of
carbon in energy supply chains. Our development activities during 2008 primarily
involved  evaluation  of a number of different  chemical and other  technologies
designed to separate carbon dioxide from exhaust for conversion into value-added
carbonaceous products.

We  are  party  to a  technology  commercialization  agreement  with  GreenShift
Corporation,  which  company  is  majority  owned by our  majority  shareholder,
Viridis  Capital,  LLC,  pursuant  to which  GreenShift  has  agreed to  provide
commercialization support services and access to GreenShift's rights to sell and
use a proprietary  biomass  gasification  technology in fields of use outside of
the corn ethanol industry.  Carbonics will pay GreenShift a royalty equal to 10%
of the pre-tax net income generated by Carbonics through use of this technology.

Our strategic plan also involves the  acquisition  of accretive  assets and cash
flows that are strategic to our technology development efforts. We are currently
evaluating a number of qualified  opportunities  that produce the raw  materials
needed for our  technologies,  or that have the  infrastructure we need to scale
our  technologies,  or that have the  ability to refine the  products we produce
with our  technologies  into  finished  goods.  Our plan in this  respect  is to
leverage  the  targeted  assets  and cash  flows to defray  our  technology  and
financing risk as we commercialize our technologies.

RESULTS OF OPERATIONS

Year Ended December 31, 2008 Compared to Year Ended December 31, 2007

Revenues

There were no revenues from  continuing  operations  for the year ended December
31, 2008 or for the twelve months ended December 31, 2007.

All revenues realized in discontinued  operations during the year ended December
31,  2007  were due to the  operating  activities  of our  former  subsidiaries,
GreenShift  Corporation,  GS EnviroServices,  Inc., GS AgriFuels Corporation and
EcoSystem Corporation.

Cost of Revenues

There was no cost of revenues  for the year ended  December  31, 2008 or for the
year ended December 31, 2007.

All cost of revenues  realized in discontinued  operations during the year ended
December  31,  2007  were  due  to  the  operating   activities  of  our  former
subsidiaries,  GreenShift  Corporation,  GS  EnviroServices,  Inc., GS AgriFuels
Corporation and EcoSystem Corporation.

Selling, General and Administrative Expenses Operating Expenses

Selling,  general and administrative expenses during the year ended December 31,
2008 totaled $448,531, including $203,531 in selling, general and administrative
expenses and $245,000 in stock based  compensation.  In the comparable period of
the prior year, selling, general and administrative expenses totaled $4,777,553,
including  $2,189,158  in  selling,  general  and  administrative  expenses  and
$2,588,396  in stock based  compensation  attributable  to selling,  general and
administrative  expenses.  Selling,  general and administrative  expenses during
2008 primarily  consisted of accounting and legal fees,  office related expenses
as  well  as  costs  associated  with  payroll.  Due  to the  divestment  of our
operations at the end of 2007, selling,  general and administrative  expenses in
2008 consisted of development costs associated with our planned future projects.
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.

Interest Expense

Interest  expense for the twelve  months ended  December 31, 2008 was  $177,425,
representing an increase of $56,037 from $121,388 for the same period in 2007.

Expenses Associated with Change in Convertible Liabilities

As of December 31, 2008, the Company had several  convertible  debentures due to
YA Global Investments,  LP. The Company accounted for the convertible debentures
in accordance with SFAS No. 150,  Accounting for Certain  Financial  Instruments
with  Characteristics  of  both  Liabilities  and  Equity  (SFAS  150),  as  the

                                       9
<PAGE>

conversion  feature  embedded in the convertible  debentures could result in the
note principal and related accrued interest being converted to a variable number
of the Company's  common  shares.  We calculate the fair value of the conversion
feature  at the time of  issuance  and  record a  conversion  liability  for the
calculated  value. We recognize  interest  expense for the conversion  liability
which is added to the principal of the  debenture.  We also  recognize  interest
expense for accretion of the conversion liability over the term of the note. The
additional  value for the  conversion  features of $5,757,079 for the year ended
December 31, 2008 have been recognized  within Other Income (Expense) as Changes
in conversion liabilities in the accompanying financial statements.

Net Income or Loss

Net loss from  continuing  operations  for the twelve months ended  December 31,
2008,  was  $6,383,036  as  compared  to a loss from  continuing  operations  of
$13,144,286  from the same period in 2007. The Company  transferred its interest
in all of its  subsidiaries to GreenShift  Corporation  during the twelve months
ended  December  31,  2007  resulting  in a loss  on  disposal  of  discontinued
operations of  $28,741,853  for the twelve months ended  December 31, 2007 which
was  excluded  from the above  figures.  Net loss of  $6,383,036  for the twelve
months ended December 31, 2008 as compared to a net loss of $41,886,139  for the
same  period  in 2007  was due  primarily  to the  loss on the  disposal  of its
subsidiaries as well as increased operating expenses,  interest and amortization
charges associated with financing, and issuance of stock based compensation.

Liquidity and Capital Resources

The Company had $10,267,094 in liabilities at the end of the twelve months ended
December 31, 2008, and may need to obtain additional  financing to satisfy these
obligations.

Our primary  sources of liquidity  are cash  provided by investing and financing
activities.  For the twelve months ended December 31, 2008, net cash used in our
operating activities was $607,566. 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 proceeds from issuance of debt
and common stock. The Company plans to fund ongoing  operations during 2008 with
a  combination  of proceeds  from the issuance of debt and equity as well as the
repayment to the Company of loans receivable and other amounts due.

Cash Flows

Our operating  activities  during the twelve months ended December 31, 2008 used
$607,566 in cash. At December 31, 2008,  accounts  payable and accrued  expenses
totaled  $591,511.  At December 31, 2008 the Company had $0 cash. For the twelve
months ended December 31, 2008,  investing  activities  provided $0 in cash, and
cash from financing  activities of provided $607,566.  The Company had a working
capital deficit of $9,880,962 at December 31, 2008,  which includes  convertible
debentures of $9,235,713.

At the present time,  Carbonics Capital 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.

Off Balance Sheet Arrangements

None.



                                       10
<PAGE>



ITEM 8            FINANCIAL STATEMENTS AND SUPPLEMENTARY SCHEDULES


<TABLE>
<CAPTION>
                                                                                                     Page No
FINANCIAL STATEMENTS
<S>                                                                                                      <C>
Report of Independent Registered Public Accounting Firm...................................................11

Consolidated Balance Sheet ...............................................................................12

Consolidated Statements of Operations ....................................................................13

Consolidated Statements of Stockholders' Equity...........................................................14

Consolidated Statements of Cash Flows.....................................................................15

Notes to Consolidated Financial Statements ...............................................................16
</TABLE>






























                                       11

<PAGE>




             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and
Stockholders of Carbonics Corporation

We have audited the accompanying  balance sheets of Carbonics  Corporation as of
December 31, 2008 and 2007, and the related statements of income,  stockholders'
equity and cash flows for each of the years in the  two-year  period then ended.
Carbonics   Corporation's   management  is  responsible   for  these   financial
statements.  Our  responsibility  is to express  an  opinion on these  financial
statements based on our audits.

We conducted our audits in accordance  with the 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,   assessing  the  accounting  principles  used  and
significant  estimates  made by  management,  as well as evaluating  the overall
financial  statement  presentation.   We  believe  that  our  audits  provide  a
reasonable basis for our opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all material  respects,  the financial  position of Carbonics  Corporation as of
December 31, 2008 and 2007, and the results of its operations and its cash flows
for each of the years in the  two-year  period  then  ended in  conformity  with
accounting principles generally accepted in the United States of America.

The  accompanying  financial  statements  have been  prepared  assuming that the
Company will continue as a going concern.  As more fully  discussed in Note 3 to
the financial  statements,  the Company has suffered  losses from operations and
has a working capital deficiency as of December 31, 2008. 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 3. The  financial
statements do not include any adjustments  that might result from the outcome of
this uncertainty.

As discussed in Note 12, the financial statements as of and for the year ended
December 31, 2008 have been restated.


                                   /s/ Rosenberg Rich Baker Berman & Company

Somerset, New Jersey

April 15, 2009, except for Note 12 as to which the date is January 14, 2010




                                       12
<PAGE>

<TABLE>

                          CARBONICS CAPITAL CORPORATION
                                  BALANCE SHEET
                                DECEMBER 31, 2008
<CAPTION>
                                                                         RESTATED         RESTATED
                                                                       12/31/2008       12/31/2007
                                                                    ------------------------------
ASSETS
Current Assets:
<S>                                                                 <C>              <C>
   Cash                                                             $        --      $        --
   Note receivable - related party                                        386,132        2,948,831
   Interest receivable - related party                                       --            196,832
                                                                    -------------    -------------
      Total current assets                                                386,132        3,145,663

Furniture and equipment - net                                                --             69,628

   Deposits                                                                  --             32,515
                                                                    -------------    -------------

TOTAL ASSETS                                                        $     386,132    $   3,247,806
                                                                    =============    =============

LIABILITIES AND STOCKHOLDERS' DEFICIENCY

Current Liabilities:

   Accounts payable and accrued expenses                            $     591,511    $   1,064,672
   Liabilities to be settled in stock                                        --            407,333
   Accrued interest                                                       439,870          262,445
   Convertible debentures                                               9,235,713        3,605,467
   Current maturities of long term debt                                      --             26,329
                                                                    -------------    -------------
      Total current liabilities                                        10,267,094        5,366,246
                                                                    -------------    -------------

   TOTAL LIABILITIES                                                   10,267,094        5,366,246
                                                                    -------------    -------------

Preferred stock
   Series C, par $0.001, 1,000,000 shares authorized,
   805,767 and 974,140 issued and outstanding                                 806              974
Common stock, par $0.001, 500,000,000 authorized
   127,279,406 and 9,549,649 issued and outstanding, respectively         127,279            9,549
Additional paid-in capital                                            125,027,231      126,524,280
Accumulated deficit                                                  (135,036,278)    (128,653,242)
                                                                    -------------    -------------
   Total stockholders' deficiency                                      (9,880,962)      (2,118,439)
                                                                    -------------    -------------

TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIENCY                      $     386,132    $   3,247,806
                                                                    =============    =============


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

                                       13
<PAGE>

<TABLE>
                          CARBONICS CAPITAL CORPORATION
                            STATEMENTS OF OPERATIONS
                 FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007
<CAPTION>

                                                            RESTATED         RESTATED
                                                                2008             2007
                                                       ------------------------------
<S>                                                    <C>              <C>
Revenue                                                $        --      $        --
Cost of revenues                                                --               --
                                                       -------------    -------------
  Gross profit                                                  --               --
                                                       -------------    -------------

Operating expenses:
   General and administrative expenses                       203,532        2,189,157
    Stock based compensation                                 245,000        2,588,396
                                                       -------------    -------------
     Total operating expenses                                448,531        4,777,553
                                                       -------------    -------------

Operating loss                                              (448,531)      (4,777,553)
                                                       -------------    -------------

Other income (expense):
   Amortization of deferred financing costs and
     debt discount                                              --           (330,519)
   Loss on impairment of assets                                 --         (6,395,879)
   Loss on extinguishment of debt                               --               --
   Settlement expense                                           --           (267,056)
   Change In fair value of conversion features            (5,757,079)      (1,251,891)
   Interest expense                                         (177,425)        (121,388)
                                                       -------------    -------------
     Total other income (expense)                         (5,934,504)      (8,366,733)

Loss before provision for income taxes                    (6,383,036)     (13,144,286)

Provision  for income taxes                                     --               --

Net loss from continuing operations                       (6,383,036)     (13,144,286)
                                                       -------------    -------------

Discontinued operations:
Loss from discontinued operations                               --        (32,171,517)
Gain on disposal of discontinued operations                     --          3,429,664
                                                       -------------    -------------
   Total discontinued operations                                --        (28,741,853)
                                                       -------------    -------------

Net Loss                                               $  (6,383,036)   $ (41,886,139)
                                                       =============    =============

Common share, basic and diluted
income (loss) per share from continuing operations     $       (0.06)   $       (1.47)

Common share, basic and diluted
income (loss) per share from discontinued operations   $        --      $       (3.22)
                                                       -------------    -------------

Common share, basic and diluted
income (loss) per share                                $       (0.06)   $       (4.70)
                                                       =============    =============

Weighted average share of common stock
   outstanding, basic and diluted                        100,532,324        8,919,229
                                                       =============    =============


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

</TABLE>



                                       14
<PAGE>

<TABLE>


                          CARBONICS CAPITAL CORPORATION
                     STATEMENTS OF STOCKHOLDERS' DEFICIENCY
                 FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007

<CAPTION>
                                                             Series C Preferred Stock               Common Stock
                                                               Shares          Amount          Shares          Amount

<S>                                                         <C>          <C>                <C>          <C>
Balance, December 31, 2006                                  1,000,000    $      1,000       5,911,292    $      5,911
                                                         ============    ============    ============    ============

Issuance of common stock upon conversion of debt                 --              --           274,414             274
Stock issued for compensation                                    --              --         1,412,500           1,413
Liabilities to be settled in stock                               --              --              --              --
Stock compensation included in discontinued operations           --              --           698,191             698
Conversion of Series C Preferred into common stock            (25,860)            (26)      2,006,202           2,006
Warrants issued for deferred financing fees                      --              --              --              --
Stock issued in consideration of cancellation of debt            --              --           513,250             513
Forgiveness of affiliate debt                                    --              --              --              --
Issuance of note payable in consideration of
  cancellation of shares                                         --              --        (1,263,250)         (1,263)
Cancellation of shares by related party                          --              --            (3,333)             (3)
Distribution of subsidiaries to GreenShift                       --              --              --
                                                         ------------    ------------    ------------    ------------
Property distribution to shareholders                            --              --              --              --
Net loss                                                         --              --              --
                                                         ------------    ------------    ------------    ------------


Balance, December 31, 2007 (restated)                         974,140    $        974       9,549,266    $      9,549
                                                         ============    ============    ============    ============

Issuance of common stock upon conversion of debt                 --              --         9,730,140           9,730
Stock issued for services                                        --              --         3,000,000           3,000
Stock issued for compensation                                    --              --        10,000,000          10,000
Conversion of Series C Preferred into common stock           (168,373)           (168)     95,000,000          95,000
Forgiveness of affiliate debt                                    --              --              --              --
Net loss                                                         --              --              --
                                                         ------------    ------------    ------------    ------------

Balance, December 31, 2008 (restated)                         805,767    $        806     127,279,406    $    127,279
                                                         ============    ============    ============    ============


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




                                       15
<PAGE>

<TABLE>


                          CARBONICS CAPITAL CORPORATION
                     STATEMENTS OF STOCKHOLDERS' DEFICIENCY
                 FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007



<CAPTION>
                                                                                                       Total
                                                                Additional       Cumulative    Stockholders'
                                                           Paid-In-Capital          Deficit           Equity
                                                           -------------------------------------------------

<S>                                                          <C>              <C>              <C>
Balance, December 31, 2006                                   $  58,695,961    $ (72,561,616)   $ (13,858,744)
                                                             =============    =============    =============

Issuance of common stock upon conversion of debt                   209,814             --            210,088
Stock issued for compensation                                    2,560,146             --          2,561,559
Liabilities to be settled in stock                                (407,333)            --           (407,333)
Stock compensation included in discontinued operations             794,489             --            795,187
Conversion of Series B Preferred into common stock                 (40,098)            --            (38,118)
Warrants issued for deferred financing fees                        266,361             --            266,361
Stock issued in consideration of cancellation of debt            2,126,068             --          2,126,581
Forgiveness of affiliate debt                                      108,763             --            108,763
Issuance of note payable in consideration of
  cancellation of share                                           (732,587)            --           (733,850)
Cancellation of shares by related party                                 67             --                 64
Distribution of subsidiaries to GreenShift                      62,942,629      (12,601,487)      50,341,142
Property distribution to shareholders                                 --         (1,604,000)      (1,604,000)
Net loss                                                              --        (41,886,139)     (43,372,453)
                                                             -------------    -------------    -------------

Balance, December 31, 2007 (restated)                        $ 126,524,280    $(128,653,242)   $  (2,118,439)
                                                             =============    =============    =============

Issuance of common stock upon conversion of debt                    53,370             --             63,100
Stock issued for services                                           87,000             --             90,000
Stock issued for compensation                                      190,000             --            200,000
Conversion of Series B Preferred into common stock                 (94,832)            --               --
Change in conversion feature due to conversion liabilities          63,733             --             63,733
Forgiveness of affiliate debt                                   (1,796,320)            --         (1,796,320)
Net income (loss)                                                     --         (6,383,036)      (6,383,036)
                                                             -------------    -------------    -------------
Balance, December 31, 2008 (restated)                        $ 125,027,231    $(135,036,278)   $  (9,880,962
                                                             =============    =============    =============






              The notes to the financial statement are an integral
                           part of these statements.


</TABLE>

                                       16

<PAGE>

<TABLE>


                          CARBONICS CAPITAL CORPORATION
                            STATEMENTS OF CASH FLOWS
                 FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007
<CAPTION>
                                                                                  RESTATED         RESTATED
                                                                                      2008             2007
                                                                             -------------    -------------
CASH FLOW FROM OPERATING ACTIVITIES
<S>                                                                           <C>             <C>
   Net loss from continuing operations                                        $ (6,383,035)   $(13,144,286)
   Net loss from discontinued operations                                              --       (28,741,853)

Adjustments to reconcile net loss to net cash used in operating activities:
   Depreciation and amortization                                                    59,235          33,527
   Amortization of debt discount and deferred financing fees                          --           330,519
   Stock based compensation                                                        245,000       2,588,396
   Impairment of investments                                                          --         6,395,879
   Stock for services                                                               60,000            --
   Changes in conversion features                                                5,757,079       1,251,891

Changes in Assets and Liabilities
   Assets of discontinued operations                                                  --        46,913,175
   Prepaid expenses and other current assets                                          --            25,811
   Accounts payable                                                               (122,925)        168,740
   Accrued expenses                                                               (432,850)        306,945
   Interest payable - affiliates                                                   177,415         229,047
   Deposits                                                                         32,515            --
   Liabilities of discontinued operations                                             --       (17,358,201)
                                                                              ------------    ------------
      Net cash (used in) operating activities                                     (607,566)     (1,000,410)
                                                                              ------------    ------------

CASH FLOWS FROM FINANCING ACTIVITIES

   Issuances (Repayments) of short-term borrowings                                 (66,628)        (61,042)
   Repayment of convertible debentures                                             (10,547)     (1,060,542)
   Proceeds from convertible debentures - related parties                          684,741       1,500,231
   Proceeds from convertible debentures                                               --           493,000
                                                                              ------------    ------------
      Net cash provided by financing activities                                    607,566         871,647
                                                                              ------------    ------------

   Net increase (decrease) in cash                                                    --          (128,763)

   Cash at beginning of period                                                        --           128,763
                                                                              ------------    ------------

   Cash at end of period                                                      $       --      $       --
                                                                              ============    ============


              The notes to the financial statement are an integral
                           part of these statements.

</TABLE>


                                       17
<PAGE>



                          CARBONICS CAPITAL CORPORATION
                          NOTES TO FINANCIAL STATEMENTS

1        BASIS OF PRESENTATION

OVERVIEW

We develop  renewable  energy projects that facilitate the more efficient use of
carbon in energy supply chains. Our development activities during 2008 primarily
involved  evaluation  of a number of different  chemical and other  technologies
designed to separate carbon dioxide from exhaust for conversion into value-added
carbonaceous products.

We  are  party  to a  technology  commercialization  agreement  with  GreenShift
Corporation,  which  company  is  majority  owned by our  majority  shareholder,
Viridis  Capital,  LLC,  pursuant  to which  GreenShift  has  agreed to  provide
commercialization support services and access to GreenShift's rights to sell and
use a proprietary  biomass  gasification  technology in fields of use outside of
the corn ethanol industry.  Carbonics will pay GreenShift a royalty equal to 10%
of the pre-tax net income generated by Carbonics through use of this technology.

Our strategic plan also involves the  acquisition  of accretive  assets and cash
flows that are strategic to our technology development efforts. We are currently
evaluating a number of qualified  opportunities  that produce the raw  materials
needed for our  technologies,  or that have the  infrastructure we need to scale
our  technologies,  or that have the  ability to refine the  products we produce
with our  technologies  into  finished  goods.  Our plan in this  respect  is to
leverage  the  targeted  assets  and cash  flows to defray  our  technology  and
financing risk as we commercialize our technologies.

2        NATURE OF OPERATIONS

COMPLETION OF NAME CHANGE AND REVERSE STOCK SPLIT

Effective  February  11,  2008,  the Company  changed  its name from  GreenShift
Corporation to Carbonics Capital Corporation (f/k/a GreenShift  Corporation) and
completed a 1 for 20 reverse stock split. All stock prices,  share amounts,  per
share  information,  stock options and stock warrants in this Report reflect the
reverse split.

RESTRUCTURING

On November 9, 2007, the Company  completed a series of transactions,  including
the transfer to  GreenShift  Corporation  of  Carbonics'  stakes in GS AgriFuels
Corporation  and  EcoSystem  Corporation.  GreenShift  assumed all of Carbonics'
intercompany,  affiliate  related party notes payable and receivable,  all trade
payables,  and all  receivables,  but did not assume Carbonics debt to YA Global
Investments,  LP. In exchange,  GreenShift issued to Carbonics a promissory note
in the aggregate net amount of $2,948,831  (the "Carbonics  Note").  On December
12, 2007,  Carbonics  distributed  1,000,000 shares of GS  EnviroServices,  Inc.
common stock, 2,000,000 shares of EcoSystem Corporation common stock, and all of
what was then  Carbonics' 80% stake in GreenShift on a pro-rated basis to all of
Carbonics'  shareholders.  To accomplish the distribution,  Carbonics  converted
200,000 shares of GreenShift  Series D Preferred Stock into 20,800,000 shares of
GreenShift  common stock,  which it distributed to the minority  shareholders of
GreenShift,  and  distributed  800,000  shares of GreenShift  Series D Preferred
Stock to Viridis Capital, LLC, Carbonics' majority shareholder.  Kevin Kreisler,
the sole member of Viridis Capital,  is the Chairman and Chief Executive Officer
of the Company.

FORGIVENESS OF RELATED PARTY DEBT

During the year ended December 31, 2008,  the company  waived  $2,000,000 of the
debenture  receivable from  GreenShift  Corporation.  Additionally,  the company
waived interest receivable from GreenShift in the amount of $196,832, as well as
other related company notes receivable of $6,821 in the first quarter of 2008.

3        GOING CONCERN

The  accompanying  financial  statements  have been  prepared  assuming that the
Company  will  continue  as a  going  concern.  The  Company  had a net  loss of
$6,383,036  for the twelve months ended December 31, 2008 and had an accumulated
deficit and  negative  cash flow from  operations.  As of December  31, 2008 the
Company's  current  liabilities  exceeded  current assets by  $9,880,962.  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 and completing strategic acquisitions.


                                       18
<PAGE>



4        SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

PRINCIPLES OF CONSOLIDATION

For  the  year  ended  December  31,  2008,  the  company  had  no  consolidated
subsidiaries.  For the year ended  December  31,  2007,  the  operations  of all
consolidated companies are reflected in the discontinued operations.  During the
fourth  quarter  2007,  the Company  divested  100% of its interest in EcoSystem
Corporation, GS AgriFuels Corporation,  GS EnviroServices,  Inc., and GreenShift
Corporation (See note 10).

USE OF ESTIMATES

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

STOCK BASED COMPENSATION

The  Company  accounts  for stock and stock  options  issued  for  services  and
compensation to employees under SFAS 123(r). For non-employees,  the fair market
value of the Company's  stock on the date of stock issuance or  option/grant  is
used.  The Company  determines the fair market value of options issued under the
Black-Scholes  Pricing Model.  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).

BASIC AND DILUTED EARNINGS PER SHARE ("EPS")

Basic  (loss)  earnings  per share is  computed  by  dividing  net income by the
weighted  average  common shares  outstanding  during a period.  Diluted  (loss)
earnings per share is based on the treasury stock method and includes the effect
from potential  issuance of common stock such as shares issuable pursuant to the
exercise of stock  options,  assuming  the  exercise of all  in-the-money  stock
options. Common share equivalents have been excluded where their inclusion would
be anti-dilutive.

FURNITURE AND EQUIPMENT

Furniture and equipment are depreciated using the straight-line  method over the
estimated  useful lives of the assets.  Gains and losses on  depreciable  assets
retired  or sold  are  recognized  in  statement  of  operations  in the year of
disposal,  and repair and  maintenance  expenditures  are  expensed as incurred.
Property, plant and equipment are stated at cost.

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.

RECENT ACCOUNTING PRONOUNCEMENTS

In 2007, the Financial  Accounting  Standards  Board (FASB) issued  Statement of
Financial   Accounting   Standard   (SFAS)  No.  141  (revised   2007)  Business
Combinations.   This  Statement   replaces  FASB  Statement  No.  141,  Business
Combinations.  This  Statement  requires  an acquirer  to  recognize  the assets
acquired,  the  liabilities  assumed,  and any  non-controlling  interest in the
acquiree at the acquisition date, measured at their fair values as of that date,
with limited exceptions specified in the Statement.

SFAS No. 141  (revised) is effective  for  business  combinations  for which the
acquisition  date is on or after the  beginning  of the first  annual  reporting
period  beginning on or after December 15, 2008.  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.

                                       19
<PAGE>

In February  2007,  the  Financial  Accounting  Standards  Board  (FASB)  issued
Statement  of  Financial  Accounting  Standard  (SFAS) No. 159,  "The Fair Value
Option for Financial Assets and Financial Liabilities" including an amendment of
FASB  Statement No. 115 with respect to  improvement  of financial  reporting of
certain  investments  in debt and  equity  securities.  This  Statement  permits
entities to choose to measure many financial instruments and certain other items
at fair value.  The  objective  is to improve  financial  reporting by providing
entities with the opportunity to mitigate volatility in reported earnings caused
by measuring related assets and liabilities  differently without having to apply
complex hedge  accounting  provisions.  This Statement is expected to expand the
use of fair value  measurement,  which is consistent with the Board's  long-term
measurement objectives for accounting for financial instruments.

FAIR VALUE OF FINANCIAL INSTRUMENTS

The carrying  amounts  reported in the balance sheet as of December 31, 2008 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.

Effective January 1, 2008, the Company adopted Statement of Financial Accounting
Standards (SFAS) No. 157, Fair Value  Measurements.  This Statement defines fair
value for certain  financial and  nonfinancial  assets and liabilities  that are
recorded at fair value,  establishes a framework for measuring  fair value,  and
expands  disclosures  about fair value  measurements.  This guidance  applies to
other accounting  pronouncements that require or permit fair value measurements.
On February 12, 2008,  the FASB  finalized  FASB Staff Position (FSP) No. 157-2,
Effective  Date of FASB  Statement  No.  157.  This  Staff  Position  delays the
effective date of SFAS No. 157 for nonfinancial assets and liabilities to fiscal
years  beginning after November 15, 2008 and interim periods within those fiscal
years,  except for those items that are recognized or disclosed at fair value in
the financial statements on a recurring basis (at least annually).  The adoption
of SFAS No. 157 had no effect on the Company's  consolidated  financial position
or results of operations.

The Company partially adopted SFAS 157 on January 1, 2008, delaying  application
for  non-financial  assets and  non-financial  liabilities  as  permitted.  This
statement  establishes  a  framework  for  measuring  fair  value,  and  expands
disclosures  about fair value  measurements.  SFAS 157  establishes a fair value
hierarchy that  prioritizes  the inputs to valuation  techniques used to measure
fair value into three levels as follows:

o    Level 1 -- quoted  prices  (unadjusted)  in active  markets  for  identical
     assets or liabilities  that the Company has the ability to access as of the
     measurement date. Financial assets and liabilities utilizing Level 1 inputs
     include active exchange-traded securities and exchange-based derivatives.

o    Level 2 -- inputs other than quoted prices included within Level 1 that are
     directly  observable  for the asset or liability or  indirectly  observable
     through  corroboration  with observable  market data.  Financial assets and
     liabilities  utilizing  Level 2 inputs  include  fixed  income  securities,
     non-exchange-based derivatives, mutual funds, and fair-value hedges.

o    Level 3 --  unobservable  inputs for the asset or liability  only used when
     there is little,  if any, market activity for the asset or liability at the
     measurement date. Financial assets and liabilities utilizing Level 3 inputs
     include infrequently-traded,  non-exchange-based derivatives and commingled
     investment funds, and are measured using present value pricing models.

The  following  table  presents  the embedded  derivative,  the  Company's  only
financial   assets  measured  and  recorded  at  fair  value  on  the  Company's
Consolidated Balance Sheets on a recurring basis and their level within the fair
value hierarchy during the year ended December 31, 2008:
<TABLE>
<CAPTION>
                                                                              Fair Value
As of December 31, 2008                                Level 1         Level 2         Level 3          Total
-----------------------------------------------------------------------------------------------------------------
<S>                                                   <C>             <C>          <C>              <C>
Embedded conversion liabilities                       $   --          $  --        $ 6,945,237      $ 6,945,237
</TABLE>
                                       20
<PAGE>

The  following  table  reconciles,  for the year ended  December 31,  2008,  the
beginning and ending balances for financial  instruments  that are recognized at
fair value in the consolidated financial statements:

Balance of Embedded Conversion Liability at December 31, 2006    $      --
Present Value of beneficial conversion features of debentures      1,251,891
                                                                  -----------
Balance of embedded  conversion liability at December 31, 2007     1,251,891
Reductions in fair value due to principal conversions                (63,733)
Present Value of beneficial conversion features of debentures      5,757,079
                                                                  -----------
Balance at December 31, 2008                                     $ 6,945,237
                                                                 ===========

The valuation of the derivatives are calculated using a complex binomial pricing
model that is based on changes in the volatility of our shares, our stock price,
the probability of a reduction in exercise and conversion price, and the time to
conversion of the related financial instruments. See No3e 6 for more information
on the valuation methods used.

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.

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.

DEFERRED FINANCING COSTS 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. On April 2, 2007,  YA Global  Investment,  LP
declared certain debentures to be in default (See Note 5). As a result, deferred
financing  fees  related  to these  debentures  were  deemed  to be  permanently
impaired and were written off to amortization expense.

Amortization expense related to these costs and discounts was $0 and $330,519
for the years ended December 31, 2008 and 2007, respectively.

5        FINANCING ARRANGEMENTS
<TABLE>
The  following  is a  summary  of the  Company's  financing  arrangements  as of
December 31, 2008:
<CAPTION>
Current portion of convertible debentures:
<S>                                                                            <C>
YAGI convertible debenture payable from Carbonics Capital issued October 2005  $ 602,907
YAGI convertible debenture payable from Carbonics Capital issued July 2005       570,000
YAGI convertible debenture payable from Carbonics Capital issued April 2006
                                                                                1,117,569
Convertible debenture conversion liabilities                                   $6,945,237
                                                                               ----------
   Total current convertible debentures                                        $9,235,713
                                                                               ==========
</TABLE>
                                       21

<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, 2008 and the Company's ability to meet such obligations:

Year                                                       Amount
-----------------------------------------------------------------
2009                                                  $ 2,290,476
                                                -     -----------
Total minimum payments due under current and          $ 2,290,476
                                                      ===========
long term obligations

CONVERTIBLE DEBENTURES

YA Global Investments, LP

On April 2, 2007 YA Global Investments,  LP ("YAGI") declared certain debentures
issued by the Company to YAGI to be in default for the failure by the Company to
maintain  an  effective  registration  statement  as  required  by the  Investor
Registration Rights Agreement executed  contemporaneous with the issuance of the
debentures.  The Debentures are  unconditionally  guaranteed by Viridis Capital,
LLC  ("Viridis"),  a  wholly-owned  affiliate of Kevin  Kreisler,  the Company's
chairman and chief executive officer (the "Guaranty").

In  addition,  on April 2, 2007 the  Company,  YAGI and Viridis  entered  into a
Forbearance Agreement,  pursuant to which YAGI agreed to forbear from exercising
the remedies  available to it under the Debentures and the related  security and
stock pledge agreements,  which would have included the liquidation by YAGI of a
portion  of the  Company's  holdings.  The  terms of the  Forbearance  Agreement
provided that YAGI shall instead accept, convert and liquidate sufficient shares
of Viridis'  Series C  Preferred  Stock in the  Company to  facilitate  the full
repayment of the  Debentures.  YAGI shall accept the Series C Preferred Stock in
tranches, and it shall not convert a tranche until it has sold 80% of the shares
of Company common stock issuable upon  conversion of the previous  tranche.  Any
such conversions shall be subject to the ownership  limitations specified in the
Debentures  (i.e.,  limitations  to  ownership  of no  more  than  4.9%  of  the
outstanding  capital  stock of the Company.  YAGI shall apply the net  proceeds,
which are defined in the Forbearance  Agreement as 90% of the lowest closing bid
price for the  Company's  common stock for the five trading days  preceding  the
conversion  date  of the  Series  C  shares,  to the  full  satisfaction  of the
Company's  obligations  under the  Debentures in the following  priorities:  (a)
first, to accrued  interest on the most recently issued  Debenture,  (b) then to
principal on the most recently issued Debenture, (c) then to accrued interest on
the next most recently issued Debenture,  (d) then to principal on the next most
recently issued Debenture,  and so forth until all of the Company's  obligations
under the Debentures have been satisfied in full.

On June 26, 2007,  Carbonics entered into a Securities  Purchase Agreement (this
"Agreement"),  with YAGI.  In connection  with this  Agreement,  YAGI  purchased
secured convertible  debentures  amounting to $570,000 due on June 26, 2009. The
June 26,  2007 YAGI  debentures  provide  for  interest in the amount of 12% per
annum and are  convertible  at the lesser of $0.60 or 90% of the lowest  closing
bid price of  Carbonics'  common stock  during the 30 trading  days  immediately
preceding  the  conversion  date.  YAGI will be entitled to convert the June 26,
2007  debenture  on the basis of the  conversion  price into  Carbonics'  common
stock,  provided  that YAGI cannot  convert into shares that would cause YAGI to
own more 4.9% of Carbonics Capital's outstanding common stock.

In addition,  Carbonics  issued to YAGI a warrant to purchase  500,000 shares of
Carbonics  Capital's  common stock at $1.00 per share.  The value of the warrant
was  calculated  to be $570,000 at the time of the  issuance  using the guidance
found in APB Opinion 14,  "Accounting for Convertible  Debt and Debt issued with
Detachable Stock Purchase Warrants" and was recorded as a discount. The discount
is amortized to interest  expense over the term of the loan using the  effective
interest method of amortization.

The  Company  accounted  for  the  YAGI  Debenture  dated  October  12,  2005 in
accordance with with SFAS No. 150, Accounting for Certain Financial  Instruments
with  Characteristics  of  both  Liabilities  and  Equity  (SFAS  150),  as  the
conversion  feature  embedded  in the YAGI  Debenture  could  result in the note
principal being  converted to a variable number of the Company's  common shares.
The  carrying  amount of the  debenture  has been  restated  for the prior  year
(please see Note 12, Restatement of Prior Years Financials,  below). The Company
determined the value of the YAGI Debenture at December 31, 2008 to be $3,014,535
which  represented the face value of the debenture plus the present value of the
$2,411,628  conversion  feature less a reduction in the conversion  liability at
present value of $10,100 for the conversions that occurred during the year.

The  Company  accounted  for  the  YAGI  Debenture  dated  February  8,  2006 in
accordance with with SFAS No. 150, Accounting for Certain Financial  Instruments
with  Characteristics  of  both  Liabilities  and  Equity  (SFAS  150),  as  the
conversion  feature  embedded  in the YAGI  Debenture  could  result in the note
principal being  converted to a variable number of the Company's  common shares.
The  carrying  amount of the  debenture  has been  restated  for the prior  year
(please see Note 12 Restatement of Prior Years Financials,  below).  The Company
determined the value of the YAGI Debenture at December 31, 2008 to be $5,587,845
which  represented the face value of the debenture plus the present value of the
$4,470,276  conversion  feature less a reduction in the conversion  liability at
present value of $53,633 for the conversions that occurred during the year.

The  Company  accounted  for  the  YAGI  Debenture  dated  October  12,  2005 in
accordance with with SFAS No. 150, Accounting for Certain Financial  Instruments
with  Characteristics  of  both  Liabilities  and  Equity  (SFAS  150),  as  the
conversion  feature  embedded  in the YAGI  Debenture  could  result in the note
principal being  converted to a variable number of the Company's  common shares.
The  carrying  amount of the  debenture  has been  restated  for the prior  year
(please see Note 12 Restatement of Prior Years Financials,  below).  The Company
determined  the value of the YAGI  Debenture at December 31, 2008 to be $633,333

                                       22
<PAGE>

which  represented the face value of the debenture plus the present value of the
$63,333 conversion feature.

On January 25,  2008,  a financing  was  completed  that  resulted in  Carbonics
becoming  the  guarantor of the debts of several of its former  affiliates.  The
beneficiary  of the  guarantees was YA Global  Investments,  LP ("YAGI"),  which
committed to extend  credit to those  affiliates.  As of December 31, 2008,  the
outstanding principal and accrued interest of the debt was $44,330,307.

On August 14, 2008,  certain Secured  Convertible  Debentures  between Carbonics
Capital Corporation and YA Global Investments,  L.P. were amended.  The maturity
date of the following  Secured  Convertible  Debentures have been extended until
December 31, 2011: a debenture dated October 12, 2005 in the original  principal
amount of  $1,475,000;  a  debenture  dated  February  8,  2006 in the  original
principal  amount of  $3,050,369;  and a  debenture  dated June 26,  2007 in the
original principal amount of $570,000.

6        INCOME TAXES

The Company adopted the provisions of FASB  Interpretation  No. 48,  "Accounting
for  Uncertainty in Income  Taxes-An  Interpretation  of FASB Statement No. 109,
Accounting  for Income Taxes" ("FIN 48"), on January 1, 2007. As a result of the
implementation of FIN 48, the Company  recognized no material  adjustment in the
liability for unrecognized income tax benefits.  At the adoption date of January
1, 2007,  and at December 31, 2007,  there were no  unrecognized  tax  benefits.
Interest and penalties  related to uncertain tax positions will be recognized in
income tax expense.  As of December 31, 2008,  no interest  related to uncertain
tax positions had been accrued.

The Company has incurred  losses,  which have generated net operating loss carry
forwards for the Company as of December 31, 2008.  These loss carry forwards are
subject to limitation in future years should  certain  ownership  changes occur.
For the years ended December 31, 2008 and 2007, 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, 2008 and 2007  consisted of
state income tax provisions. Deferred tax assets are as follows:

                                      12/31/2008      12/31/2007
                                      --------------------------
Deferred Tax Asset:
Net operating loss carry forwards   $ 87,956,000    $ 78,223,000
                                    ============    ============
Total deferred tax assets             32,300,000      28,700,000
Less: Valuation allowance            (32,300,000)    (28,700,000)
                                    ------------    ------------
Net deferred tax asset              $       --      $       --
                                    ============    ============

7     STOCK OPTIONS

Summarized information about the Company's stock options outstanding at December
31, 2008 is as follows:

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

Outstanding at January 31, 2007           $3,318,748        $     0.05
   Granted at fair value                        --                 --
   Forfeited                                    --                 --
   Exercised                                    --                 --
                                         -----------        ----------

Outstanding at December 31, 2007                --                 --
   Granted at fair value                        --                 --
    Forfeited                                   --                 --
  Exercised                                     --                 --
                                        -----------         ----------

Outstanding at December 31, 2008         $3,318,748         $    0.05
                                        ===========         ==========

All of the above noted options were exercisable as of December 31, 2008.

                                       23
<PAGE>
STOCK BASED COMPENSATION

The  Company  accounts  for stock and stock  options  issued  for  services  and
compensation by employees under the fair value method.  For  non-employees,  the
fair  market  value of the  Company's  stock on the  date of stock  issuance  or
option/grant  is used.  The  Company  determined  the fair  market  value of the
options issued under the  Black-Scholes  Pricing Model.  The Company adopted the
provisions  of  Statement  of  Financial   Accounting   Standards   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). The
Company used the following  assumptions in its  calculation:  Dividend yield $0;
Expected volatility 99.86%; Risk-free interest rate 4.94%; Expected life 1 year.
The  Company  recorded  expenses  of  $34,884 in 2007  related to the  3,212,354
options that were issued. No options were issued in 2008.

COMMON STOCK

During the twelve months ended  December 31, 2008, the Company issued a total of
10,000,000  shares of Common Stock,  $0.001 par value, for services  provided to
the Company.  The Company's  directors,  David Winsness and Kurt Gordon received
3,000,000 and 2,000,000 of these shares, respectively.

The shares were issued at $0.02,  the market price as of the date of issuance on
April 23,  2008 for a total  value of  $200,000.  During the nine  months  ended
September 30, 2008,  Viridis  Capital LLC converted  168,373  shares of Series C
Preferred  Stock into a total of 95,000,000  shares of Common Stock,  $0.001 par
value.

8        RELATED PARTY TRANSACTIONS

REDUCTION OF DEBT PAYABLE TO RELATED PARTIES

Effective March 31, 2008, the Company waived  $2,000,000 of note receivable from
GreenShift,  which  note was  issued in  connection  with the  November  9, 2007
transfer of GS AgriFuels  Corporation  and EcoSystem  Corporation  to GreenShift
Corporation.  This  reduction  was in part  attributable  to the  fact  that the
appraised value of GS AgriFuels,  which appraisal was completed during the first
quarter  of 2008,  was  assessed  to be less than the total  debt  payable by GS
AgriFuels,   and  the  fact  that  GreenShift  realized  impairment  charges  of
$11,153,816  relating to the impairment of GS AgriFuels' NextGen Fuel, Inc., and
Sustainable Systems, Inc. subsidiaries.

9        DISCONTINUED OPERATIONS

During the fourth  quarter  2007,  the Company  divested 100% of its interest in
EcoSystem Corporation,  GS AgriFuels Corporation,  GS EnviroServices,  Inc., and
GreenShift Corporation.  In exchange GreenShift issued to Carbonics a promissory
note in the aggregate amount of $2,948,831 (the "Carbonics Note"). The principal
and interest on the Carbonics  Note,  which accrues at the per annum rate of 8%,
are due and payable in full on December 31, 2008.  On July 1, 2007,  the Company
sold its interest in Seaway Valley  Corporation  in return for the assumption of
certain legacy liabilities of GS Carbon.

As a  result  of the  above  transactions,  the  Company  realized  a loss  from
discontinued  operations  of $0 and  $32,171,517  for the  twelve  months  ended
December 31, 2008 and 2007, respectively.  Additionally,  the Company realized a
gain on the disposal of GS Carbon in the amount of $3,429,664. The net effect of
the  divesture  of  EcoSystem   Corporation,   GS  AgriFuels   Corporation,   GS
EnviroServices,  Inc. and GreenShift  Corporation was recorded in  stockholders'
equity  as this was a  transfer  between  entities  under  common  control.  The
components of  discontinued  operations for the twelve months ended December 31,
2008 and 2007 are as follows:
<TABLE>
<CAPTION>
                                                                2008           2007
                                                     ---------------   --------------
<S>                                                  <C>               <C>
Revenues                                             $          --     $ 29,985,351
Cost of revenues                                                --       24,062,095
                                                     ---------------   ------------
   Gross profit                                                 --        5,923,256

Selling, general and administrative expense                     --       15,324,513

Loss from operations                                            --       (9,401,257)

Interest expense                                                --       (5,233,177)
Other income and expenses, net                                  --      (19,958,944)
                                                     ---------------   ------------
   Total other income and expense                               --      (25,192,121)

Income before provision for income taxes                        --      (34,593,378)

Total provision for tax                                         --          (46,605)
                                                     ---------------   ------------

Net income (loss) from continuing operations                    --             --
                                                     ---------------   ------------
<PAGE>


Income (loss) from discontinued operations                      --          (13,225)
Gain (loss) on disposal of discontinued operations              --        2,481,691
                                                     ---------------   ------------
Gain on disposal of discontinued operations                     --        2,468,466
                                                     ---------------   ------------

Net loss                                             $          --     $(32,171,517)
                                                     ===============   ============
</TABLE>

The results presented above for 2008 and 2007 include the operating activity for
the   discontinued   operations  for  the  twelve  month  periods  of  EcoSystem
Corporation,  GS AgriFuels Corporation,  GS EnviroServices,  Inc. and GreenShift
Corporation.  The operating  activity of GS Carbon is included in the year ended
December 31, 2007.

10          WARRANTS

The Company's February 7, 2006 financing with YA Global Investment, LP provides
that Carbonics will issue to YA Global five year Warrants to purchase 2,250,000
common shares. The warrants will permit YA Global to purchase 750,000 shares at
$3.00 per share, 750,000 shares at $4.00 per share, and 750,000 shares at $5.00
per share. On June 30, 2006, Carbonics issued 2,250,000 warrants to YA Global.
<TABLE>
Summarized information about GreenShift's stock warrants outstanding at December
31, 2008 is as follows:
<CAPTION>
                                                               Number of           Weighted Average
                                                                  Shares             Exercise Price
                                                           ----------------------------------------
<S>                                                        <C>                    <C>
Outstanding at December 31, 2006                               2,500,000              $        4.00
   Granted at fair value                                         250,000                       1.00
   Forfeited                                                        --                          --
   Exercised                                                        --                          --
                                                           --------------             -------------

Outstanding at December 31, 2007                               2,750,000              $        4.00
   Granted at fair value                                            --                          --
   Forfeited                                                        --                          --
   Exercised                                                        --                          --
                                                            ------------              -------------

Outstanding at December 31, 2008                           $   2,750,000              $        3.45
                                                           =============              =============

All of the above noted warrants were exercisable as of December 31, 2008.
</TABLE>

11       STOCKHOLDERS EQUITY

COMPLETION OF NAME CHANGE AND REVERSE STOCK SPLIT

Effective  February  11,  2008,  the Company  changed  its name from  GreenShift
Corporation to Carbonics Capital Corporation (f/k/a GreenShift  Corporation) and
completed a 1 for 20 reverse stock split. All stock prices,  share amounts,  per
share  information,  stock options and stock warrants in this Report reflect the
reverse split.

RESTRUCTURING

On November 9, 2007, the Company  completed a series of transactions,  including
the transfer to  GreenShift  Corporation  of  Carbonics'  stakes in GS AgriFuels
Corporation  and  EcoSystem  Corporation.  GreenShift  assumed all of Carbonics'
intercompany,  affiliate  related party notes payable and receivable,  all trade
payables,  and all  receivables,  but did not assume Carbonics debt to YA Global
Investments,  LP. In exchange,  GreenShift issued to Carbonics a promissory note
in the aggregate net amount of $2,948,831  (the "Carbonics  Note").  On December
12, 2007,  Carbonics  distributed  1,000,000 shares of GS  EnviroServices,  Inc.
common stock, 2,000,000 shares of EcoSystem Corporation common stock, and all of
what was then  Carbonics' 80% stake in GreenShift on a pro-rated basis to all of
Carbonics'  shareholders.  To accomplish the distribution,  Carbonics  converted
200,000 shares of GreenShift  Series D Preferred Stock into 20,800,000 shares of
GreenShift  common stock,  which it distributed to the minority  shareholders of
GreenShift,  and  distributed  800,000  shares of GreenShift  Series D Preferred
Stock to Viridis Capital, LLC, Carbonics' majority shareholder.  Kevin Kreisler,
the sole member of Viridis Capital,  is the Chairman and Chief Executive Officer
of the Company.

                                       25
<PAGE>

FORGIVENESS OF RELATED PARTY DEBT

During the year ended December 31, 2008,  the company  waived  $2,000,000 of the
debenture  receivable from  GreenShift  Corporation.  Additionally,  the company
waived interest receivable from GreenShift in the amount of $196,832, as well as
other related company notes receivable of $6,821 in the first quarter of 2008.

COMMON STOCK

During  the  year  ended  December  31,  2008,  the  Company  issued  a total of
10,000,000  shares of Common Stock,  $0.001 par value, for services  provided to
the Company.  The Company's  directors,  David Winsness and Kurt Gordon received
3,000,000 and 2,000,000 of these shares, respectively.

The shares were issued at $0.02,  the market price as of the date of issuance on
April 23, 2008 for a total value of $200,000. During the year ended December 31,
2008,  Viridis Capital LLC converted  168,373 shares of Series C Preferred Stock
into a total of 95,000,000 shares of Common Stock, $0.001 par value.

SERIES C PREFERRED STOCK

On February 15, 2006 Carbonics  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  Carbonics  common  shares
outstanding  after  conversion,  but  only if,  at the  time of the  conversion,
Carbonics 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
Carbonics,  the holder of a share of Series C Preferred Stock will receive $.001
and have no further participation in the liquidation.

CONVERSIONS

During the year ended December 31, 2008,  Viridis Capital LLC converted  168,373
shares of Series C Preferred  Stock into a total of 95,000,000  shares of Common
Stock, $0.001 par value.

During the year ended  December  31,  2008,  holders of the certain  convertible
securities  converted  amounts  totaling $63,100 into 9,730,140 shares of common
stock.

12       RESTATEMENTS

The Company has restated its financial  statements  for the years ended December
31, 2007 and 2008. Subsequent to the filing of the original financial statements
for the  years  then  ended,  Management  determined  that the  Company's  prior
policies  relating to accounting for the impact of conversion  features embedded
in the  Company's  various  derivative  securities  should have been  changed to
conform  with  recent  guidance  under  EITF  08-04,   Transition  Guidance  for
Conforming  Changes  to Issue No.  98-5,  involving  application  of  conforming
changes  from the  issuance of SFAS No. 150,  Accounting  for Certain  Financial
Instruments with  Characteristics of both Liabilities and Equity (SFAS 150). Due
to the variable  number of the Company's  common shares issuable upon conversion
of certain of the company's derivative securities,  such instruments should have
been  accounted  for  as  liabilities  under  SFAS  150  during  2008  based  on
interpretive  guidance in EITF 08-04. During 2008, the Company had accounted for
such instruments as derivative  instruments  under SFAS No. 133,  Accounting for
Derivative  Instruments  and Hedging  Activities,  by bifurcating the conversion
features  from the related host  contracts and  recognizing  them at fair value,
amortizing the related debt discounts,  and recognizing gain or loss for changes
in fair value of the conversion  features.  Management  believes that accounting
for these  conversion  features as liabilities  under SFAS 150 is the preferable
accounting  treatment.  In accordance with SFAS No. 154,  Accounting Changes and
Error  Corrections,  the Company has restated the financial  statements  for the
year  ended  December  31,  2008 to  reflect  the  adoption  of this  change  in
accounting,  and has  restated  the  financial  statements  for the  year  ended
December  31,  2007  through   retrospective   application  of  this  accounting
interpretation to prior periods in accordance with this standard.

                                       26
<PAGE>
<TABLE>

The following shows the effect of the restatements on the financial statements:
<CAPTION>

                                               12/31/08                12/31/08                   12/31/07                12/31/07
Balance Sheets:                             As reported             As restated                As reported             As restated
                                    ----------------------------------------------------------------------------------------------
<S>                                       <C>                     <C>                        <C>                     <C>
Convertible debentures, current           $   2,006,387           $   9,235,713              $   1,490,247           $   3,605,467
Liability for derivative instruments         10,310,380                    --                    1,781,903                    --
Accumulated deficit                        (138,053,599)           (135,036,278)              (128,319,925)           (128,653,242)


                                               12/31/08                12/31/08                   12/31/07                12/31/07
Statements of Operations:                   As reported             As restated                As reported             As restated
                                    ----------------------------------------------------------------------------------------------
Loss on fair value-derivatives            $  (8,528,477)          $        --                $    (637,817)          $        --
Amortization of debt discount                  (579,240)                   --                   (2,130,031)               (330,519)
Change in conversion liabilities                   --                (5,757,079)                       --               (1,251,891)

Loss from continuing operations              (9,733,673)             (6,383,035)               (14,329,724)            (13,144,286)

Net income (loss)                            (9,733,673)             (6,383,035)               (43,071,577)            (41,886,139)

Earnings (loss) per share:
Continuing operations                     $       (0.00)          $       (0.06)             $       (1.61)          $       (1.47)
Discontinued operations                   $       (0.00)          $       (0.00)             $       (3.22)          $       (3.22)

Total, basic and diluted                  $       (0.00)          $       (0.06)             $       (4.83)          $       (4.70)

                                               12/31/08                12/31/08                   12/31/07                12/31/07
Statements of Stockholders' Equity:         As reported             As restated                As reported             As restated
                                          ------------------------------------------------------------------------------------------
Change in conversion feature due
  to conversion liabilities                        --                    63,733                        --                     --
Net loss                                  $  (9,733,673)          $  (6,383,035)          $    (43,071,577)          $ (41,886,139)


                                               12/31/08                12/31/08                   12/31/07                12/31/07
Statements of Cash Flows:                   As reported             As restated                As reported              As restated
                                       ---------------------------------------------------------------------------------------------
Net loss from continuing operations        $ (9,733,673)          $  (6,383,035)           $   (14,329,724)          $ (13,144,286)
Amortization of debt discount
  and deferred financing costs                  579,240                    --                    2,130,031                 330,519
Change in fair value of derivatives           8,528,477                    --                      637,817                    --
Interest from conversion liabilities               --                 5,757,079                       --                 1,251,891

</TABLE>
                                       27
<PAGE>

ITEM 9   CHANGES AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
                  AND FINANCIAL DISCLOSURE

None.

ITEM 9A  CONTROLS AND PROCEDURES

EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

(a)      Evaluation of disclosure controls and procedures

The term  "disclosure  controls and procedures"  (defined in SEC Rule 13a-15(e))
refers to the  controls and other  procedures  of a company that are designed to
ensure that  information  required to be  disclosed  by a company in the reports
that it files under the Securities  Exchange Act of 1934 (the "Exchange Act") is
recorded,  processed,  summarized and reported, within time periods specified in
the rules and  forms of the  Securities  and  Exchange  Commission.  "Disclosure
controls and procedures"  include,  without limitation,  controls and procedures
designed to ensure that information required to be disclosed by a company in the
reports  that it files or submits  under the  Exchange  Act is  accumulated  and
communicated to the company's management,  including its principal executive and
principal  financial  officers,  or persons  performing  similar  functions,  as
appropriate to allow timely decisions regarding required disclosure.

The Company's management,  with the participation of the Chief Executive Officer
and  the  Chief  Financial  Officer,  has  evaluated  the  effectiveness  of the
Company's disclosure controls and procedures as of the end of the period covered
by this annual report (the "Evaluation  Date").  Management  determined that, at
the Evaluation Date, the Company had a material weakness because it did not have
a sufficient  number of personnel with an appropriate  level of knowledge of and
experience in generally accepted  accounting  principles in the United States of
America (U.S.  GAAP) that are appropriate to the Company's  financial  reporting
requirements.  Based on that evaluation,  the Company's Chief Executive  Officer
and Chief Financial Officer have concluded that, as of the Evaluation Date, such
controls and procedures were ineffective.

(b)      Changes in internal controls

The term  "internal  control  over  financial  reporting"  (defined  in SEC Rule
13a-15(f))  refers to the  process  of a company  that is  designed  to  provide
reasonable  assurance  regarding the reliability of financial  reporting and the
preparation  of financial  statements for external  purposes in accordance  with
generally accepted accounting  principles.  The Company's  management,  with the
participation of the Chief Executive  Officer and Chief Financial  Officer,  has
evaluated any changes in the Company's internal control over financial reporting
that  occurred  during the fourth  quarter  of the year  covered by this  annual
report,  and they have  concluded  that  there  was no  change to the  Company's
internal control over financial  reporting that has materially  affected,  or is
reasonably  likely to materially  affect,  the Company's  internal  control over
financial reporting.

(c)      Management's Report on Internal Control over Financial Reporting

Management  of the  Company is  responsible  for  establishing  and  maintaining
adequate internal control over financial  reporting as defined in Rule 13a-15(f)
under the Securities Exchange Act of 1934. We have assessed the effectiveness of
those  internal  controls  as of  December  31,  2008,  using the  Committee  of
Sponsoring  Organizations of the Treadway Commission ("COSO") Internal Control -
Integrated Framework as a basis for our assessment.

Because of inherent  limitations,  internal control over financial reporting may
not  prevent  or  detect   misstatements.   Projections  of  any  evaluation  of
effectiveness to future periods are subject to the risk that controls may become
inadequate  because of changes in  conditions,  or that the degree of compliance
with the policies and procedures may deteriorate.  All internal control systems,
no matter how well designed,  have inherent limitations.  Therefore,  even those
systems  determined to be effective can provide only  reasonable  assurance with
respect to financial statement preparation and presentation.

A material weakness in internal controls is a deficiency in internal control, or
combination  of control  deficiencies,  that  adversely  affects  the  Company's
ability to initiate,  authorize,  record,  process, or report external financial
data reliably in accordance with accounting principles generally accepted in the
United States of America such that there is more than a remote likelihood that a
material  misstatement of the Company's annual or interim  financial  statements

                                       28
<PAGE>

that is more than  inconsequential  will not be prevented  or  detected.  In the
course of making our assessment of the  effectiveness of internal  controls over
financial  reporting,  we  identified  one  material  weakness  related  to  the
Company's  control  environment,  in that the Company did not have a  sufficient
number  of  personnel  with an  appropriate  level of U.S.  GAAP  knowledge  and
experience  appropriate to its financial  reporting  requirements.  Accordingly,
management's  assessment is that the Company's  internal controls over financial
reporting were ineffective as of December 31, 2008.

This  annual  report  does not include an  attestation  report of the  Company's
registered  public  accounting  firm regarding  internal  control over financial
reporting.  Management's  report was not subject to attestation by the Company's
registered  public accounting firm pursuant to temporary rules of the Securities
and Exchange  Commission  that permit the Company to provide  only  management's
report in this annual report.

Subsequent  to filing the Annual  Report,  management  determined  to change its
policies  for  accounting  of the  derivative  securities  that the  Company has
issued.  While the Company has restated the financial statements in this amended
Report to conform with this new policy,  the use of the Company's  long-standing
prior policy for  accounting  of the  Company's  derivative  securities  was not
itself  due to  any  inadequacy  in  the  Company's  controls.  However,  and as
discussed in greater detail in this amended Report,  the Company's  controls and
procedures were ineffective as of December 31, 2008.

ITEM 9B  OTHER INFORMATION

None.













                                       29

<PAGE>



                                    PART III

ITEM 10             DIRECTORS AND EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

Name                        Age  Position
--------------------------
Kevin Kreisler               36  Chairman, Chief Executive Officer
Jacqueline Flynn             43  Chief Financial Officer

Kevin  Kreisler  is the  chairman  and  acting  chief  executive  officer of the
Company.  Mr. Kreisler is the founder,  chairman and chief executive  officer of
GreenShift Corporation.  Mr. Kreisler served as GreenShift's vice president from
1998 to 2000,  president from 2000 to 2002, chief executive officer from 2002 to
2005 and has  served as  GreenShift's  chairman  from 2005 to the  present.  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.

Jacqueline  Flynn has twenty years  experience in financial  accounting for both
public  and  private  companies.  Ms.  Flynn  has been  employed  since  2006 as
Controller of GreenShift  Corporation,  an affiliate of Carbonics Capital.  From
2002 to 2005,  Ms.  Flynn was  employed  as Chief  Financial  Officer  by Accent
Mortgage  Company of Alpharetta,  Georgia.  During the three years prior to 2002
Ms. Flynn was  employed by Lahaina  Acquisitions,  Inc.,  a public  company that
owned Accent  Mortgage  Company during that period.  She was employed by Lahaina
Acquisitions first as Controller and then as Chief Financial Officer.  Ms. Flynn
was awarded an M.B.A. in 1994 by Brenau University.

NOMINATING, COMPENSATION AND AUDIT COMMITTEE

The Board of  Directors  does not have an audit  committee  or a  nominating  or
compensation  committee  due to the fact  that  there is only one  member of the
Board of Directors.

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, 2008.


                                       30
<PAGE>



ITEM 11  EXECUTIVE COMPENSATION

The following table sets forth  compensation  information for Carbonics  Capital
Corporation's  executive officers during the years indicated as relevant.  As of
December 31,  2008,  no executive  officer  held options for  Carbonics  Capital
Corporation's Common Stock.
<TABLE>
<CAPTION>
                                                                                                             All Other
Name and Principal Position                 Annual Compensation              Long-term Compensation       Compensation

----------------------------------------------------------------------------------------------------------------------
                     Year Salary Bonus Other Shares Granted
----------------------------------------------------------------------------------------------------------------------
<S>                                    <C>   <C>        <C>               <C>                <C>        <C>
Kevin Kreisler                         2008  $      --  $      --         --                     --     $           --
Chairman and Chief Executive Officer   2007         --         --         --                     --                 --
                                       2006         --     10,914         --                 56,812                 --
</TABLE>

EMPLOYMENT AGREEMENTS

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

ITEM 12           SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth information regarding the voting stock
beneficially owned by any person who, to our knowledge, owned beneficially more
than 5% of any class of voting stock as well as by the members of our Board of
Directors and by all officers and directors as a group.
<TABLE>
<CAPTION>
                                          Amount and Nature of Beneficial Ownership
                      --------------------------------------------------------------------------------------------
Name and Address(1)                                 Series B                  Series C               Percentage of
Of Beneficial Owner       Common    % of Class     Preferred   % of Class    Preferred   % of Class   Voting Power
                      ----------   -----------  ------------  -----------  -----------  -----------  -------------

<S>                          <C>            <C>           <C>          <C>     <C>             <C>          <C>
Kevin Kreisler(2)             --            --            --           --      973,054         100%         77.84%
<FN>
(1)  The address of each  shareholder  is c/o GreenShift  Corporation,  One Penn
     Plaza, Suite 1612, New York, NY 10119.

(2)  All shares listed for Mr. Kreisler are owned of record by Viridis  Capital,
     LLC, of which Mr. Kreisler is the sole member.
</FN>
</TABLE>

ITEM 13    CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND
           DIRECTOR INDEPENDENCE

RELATED PARTY TRANSACTIONS

On November 9, 2007, the Company and GreenShift  Corporation  completed a series
of transactions, including the transfer to GreenShift of Carbonics' stakes in GS
AgriFuels  Corporation  and  EcoSystem  Corporation.  GreenShift  assumed all of
Carbonics'  intercompany,  affiliate related party notes payable and receivable,
all trade payables,  and all receivables,  but did not assume Carbonics' debt to
YA Global  Investments,  LP.  In  exchange  GreenShift  issued  to  Carbonics  a
promissory note in the aggregate  amount of $2,948,831  (the "Carbonics  Note").
The principal and interest on the Carbonics Note, which accrues at the per annum
rate of 8%, are due and payable in full on December 31, 2009. The Carbonics Note
was reduced by $2,000,000 in the first quarter 2008.  This reduction was in part
attributable  to the  fact  that the  appraised  value  of GS  AgriFuels,  which
appraisal  was completed  during the first  quarter of 2008,  was assessed to be
less than the total debt payable by GS AgriFuels,  and the fact that  GreenShift
realized  impairment  charges of  $11,153,816  relating to the  impairment of GS
AgriFuels'  NextGen Fuel,  Inc., and  Sustainable  Systems,  Inc.  subsidiaries.
During the year ended December 31, 2008, the note increased a net of $12,234 due
to expenses paid on behalf of GreenShift  and the note also  increased  $443,674
due to the reclassification of amounts that were owed by various subsidiaries to
Carbonics.  These amounts were reclassed so that the subsidiary  owed Greenshift
rather than  Carbonics  and  GreenShift  in turn owed the amounts to  Carbonics.
Additionally the company waived the interest  receivable from GreenShift as well
as other related party notes in the amount of $196,832.

On November 9, 2007, in connection with the transfer to GreenShift of Carbonics'
stakes in GS AgriFuels and EcoSystem,  GreenShift  assumed  liability for a term
note  issued  by  Carbonics  to  Viridis  Capital,  LLC  with a face  amount  of
$1,339,704  (the  "Viridis  Note"),  which  amount is due upon  demand and bears
interest  at the rate of 8%. As of  December  31,  2007,  the  balance  due from
Carbonics to Viridis was $0.

On December 12, 2007,  Carbonics  distributed  2,000,000  and  1,000,000  common
shares of EcoSystem Corporation and GS EnviroServices,  Inc.,  respectively,  to
all  shareholders of Carbonics  except for Viridis  Capital,  LLC, the Company's
majority  shareholder.  On December 12, 2007, Carbonics  distributed all of what

                                       31
<PAGE>

was then  Carbonics'  80% stake in  GreenShift  on a  pro-rated  basis to all of
Carbonics'  shareholders.  This was  accomplished  by  Carbonics'  conversion of
200,000 shares of GreenShift  Series D Preferred Stock into 20,800,000 shares of
GreenShift common stock, which were distributed to the minority  shareholders of
Carbonics,  and the  distribution  by Carbonics of 800,000  shares of GreenShift
Series D  Preferred  Stock to  Viridis  Capital,  LLC,  the  Company's  majority
shareholder. Kevin Kreisler, the sole member of Viridis Capital, is the Chairman
and Chief Executive Officer of the Company.

On January 25,  2008,  a financing  was  completed  that  resulted in  Carbonics
becoming  the  guarantor of the debts of several of its former  affiliates.  The
beneficiary  of the  guarantees was YA Global  Investments,  LP ("YAGI"),  which
committed to extend credit to those  affiliates.  As of September 30, 2008,  the
outstanding principal and accrued interest of the debt was $44,758,833.

DIRECTOR INDEPENDENCE

None of the members of our Board of Directors is independent,  as  "independent"
is defined in the rules of the NASDAQ Stock Market.






























                                       32
<PAGE>

                                     PART IV


ITEM 14  PRINCIPAL ACCOUNTANT FEES AND SERVICES

INDEPENDENT AUDITOR FEES

Audit Fees

Rosenberg  Rich Baker  Berman & Company,  P.A.  billed  $8,250 for  professional
services  rendered for the audit of our 2008 financial  statements and review of
the financial  statements included in our 2008 10-K filings.  For the year ended
2007, $35,875 was billed for services rendered.

Audit-Related Fees

Rosenberg Rich Baker Berman & Company,  P.A. billed $ to the Company in 2008 and
$34,620 in 2007 for services that are reasonably  related to the  performance of
the audit or review of the yearly financial statements.

Tax Fees

Rosenberg Rich Baker Berman & Company,  P.A. billed $ in 2008 and $10,000 to the
Company in 2007 for  professional  services  rendered  for tax  compliance,  tax
advice and tax planning.

All Other Fees

Rosenberg Rich Baker Berman & Company,  P.A. billed $ to the Company in 2008 and
$10,000 to the Company in 2007 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.

ITEM 15  EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

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-K 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 as an
     exhibit  to the  Current  Report  on Form 8-K  filed on May 19,  2005,  and
     incorporated herein by reference.

3-a(4) Certificate of Amendment of Certificate  of  Incorporation  - filed as an
     exhibit to the Current  Report on Form 8-K filed on February 13, 2008,  and
     incorporated herein by reference.

3-a(5) Certificate of Designation,  Preferences and Rights of Series C Preferred
     Stock of Carbonics Capital Corporation - filed as an exhibit to the Current
     Report on Form 8-K  dated  February  15,  2006 and  incorporated  herein by
     reference.

3-a(6) Certificate of Correction of Certificate of Designation,  Preferences and
     Rights of Series C Preferred Stock of Carbonics Capital Corporation - filed
     as an exhibit to the Current  Report on Form 8-K/A  (Amendment No. 1) dated
     February 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.

                                       33
<PAGE>

10-a Guaranty  Agreement  dated  October 25, 2006 among  Stillwater  Asset-Based
     Fund,  LP and  Carbonics  Capital  Corporation,  GS AgriFuels  Corporation,
     EcoSystem  Corporation 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-b Security  Agreement dated October 25, 2006 between  Stillwater  Asset-Based
     Fund,  LP and  Carbonics  Capital  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,
     Carbonics  Capital  Corporation,   EcoSystem   Corporation  and  GreenShift
     Corporation  and YA Global  Investments,  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 Carbonics Capital Corporation and YA Global Investments, 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 Credit  Agreement  dated January 11, 2008 between GS COES (Yorkville I) LLC
     and YA Global  Investments,  LP - filed as an exhibit to the Current Report
     on Form  8-K  filed  on  January  31,  2008,  and  incorporated  herein  by
     reference.

10-g Amended and  Restated  Forbearance  Agreement  dated as of January 11, 2008
     among  Carbonics  Capital  Corporation,   GreenShift  Corporation,  Viridis
     Capital,  LLC and YA Global  Investments,  LP - filed as an  exhibit to the
     Current  Report on Form 8-K filed on January  31,  2008,  and  incorporated
     herein by reference.

10-h Global Guaranty Agreement dated January 11, 2008 among Viridis Capital LLC,
     Kevin Kreisler,  Carbonics Capital Corporation,  GreenShift Corporation, GS
     AgriFuels   Corporation,   each  of  their  subsidiaries,   and  YA  Global
     Investments,  LP - filed as an  exhibit to the  Current  Report on Form 8-K
     filed on January 31, 2008, and incorporated herein by reference.

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

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

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










                                       34
<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.

CARBONICS CAPITAL CORPORATION

By:             /S/      KEVIN KREISLER
                -----------------------
                         KEVIN KREISLER
                         Chairman and Chief Executive Officer
Date:                    April 15, 2009

In accordance  with the Exchange Act, this Report has been signed below on March
31,  2008 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 15, 2009

                /S/      JACQUELINE FLYNN
                -------------------------
                         JACQUELINE FLYNN
                         Chief Financial Officer
Date:                    April 15, 2009


<PAGE>


<PAGE>