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

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

                                   FORM 10-QSB
                            -------------------------


                   QUARTERLY REPORT UNDER SECTION 13 OR 15 (d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934
                   FOR THE FISCAL QUARTER ENDED JUNE 30, 2007

                          COMMISSION FILE NO.: 0-52356


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


Delaware                                                           20-5996486
--------------------------------------------------------------------------------
(State of other jurisdiction of                                (IRS Employer
incorporation or organization                                Identification No.)


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


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



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

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


The number of  outstanding  shares of common  stock as of August  14,  2007 was:
448,243,730

Transitional Small Business Disclosure Format:  Yes         No  X .
                                                    -----      ---















<PAGE>


                         PART I - FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS (UNAUDITED)
























































                                        2

<PAGE>

<TABLE>


<CAPTION>
       GS CARBON CORPORATION AND SUBSIDIARIES, A DEVELOPMENT STAGE COMPANY
                      CONDENSED CONSOLIDATED BALANCE SHEET
                               AS OF JUNE 30, 2007
                                   (UNAUDITED)


ASSETS

Current assets:
<S>                                                                <C>
     Cash ......................................................   $      7,736

Property and equipment, net ....................................        140,205

Other Assets:
     Investments - at cost .....................................      1,685,333
     Investments - equity method ...............................        303,078
     Security deposits .........................................          7,548
     Due from related party (Note 6) ...........................        607,663
     Deferred financing costs (Note 5) .........................        104,167
     Technology licenses, net (Note 4) .........................        222,129
                                                                   ------------
         Total other assets ....................................      2,929,918
                                                                   ------------

TOTAL ASSETS ...................................................   $  3,077,859
                                                                   ============



LIABILITIES AND STOCKHOLDER'S DEFICIENCY

Current liabilities:
     Accounts payable ..........................................   $    317,850
     Accrued expenses ..........................................        243,567
Derivative liability - convertible debentures (Note 5) .........      6,725,733
                                                                   ------------

         Total current liabilities .............................      7,287,150

     Convertible debentures payable, net - long term (Note 5) ..      1,448,585
     Investments payable (Note 4) ..............................        191,427
     Due to related parties ....................................        934,406
                                                                   ------------


TOTAL LIABILITIES ..............................................      9,861,568

Commitments (Note 11) ..........................................           --



STOCKHOLDERS' DEFICIENCY

Series A voting preferred stock ($.0001 par value; 100,000
  shares authorized; no shares issued and outstanding) .........           --

Series B voting preferred stock ($.0001 par value; 100,000
  shares authorized; 59,500 shares issued and outstanding) .....              6

Common stock, $0.0001 par value, 2,500,000,000 authorized;
     448,243,730 issued and outstanding ........................         44,825
Additional paid-in capital .....................................      3,653,641
Deficit accumulated during the development stage ...............    (10,482,181)
                                                                   ------------
Total stockholders' deficiency .................................     (6,783,709)
                                                                   ------------

TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIENCY .................   $  3,077,859
                                                                   ============


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

                                       3
<PAGE>

<TABLE>


       GS CARBON CORPORATION AND SUBSIDIARIES, A DEVELOPMENT STAGECOMPANY
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                   FOR THE SIX MONTHS ENDED JUNE 30, 2007 AND
           THE PERIOD OF INCEPTION (JANUARY 14, 2006) TO JUNE 30, 2006
                                   (UNAUDITED)
<CAPTION>
                                                                                                   Period of         Period of
                                                                                                   Inception         Inception
                                                                                                (January 14, 2006)(January 14, 2006)
                                                  For the Three Months Ended    Six Months Ended       to                 to
                                                 June 30,2007    June 30,2006     June 30,2007   June 30,2006         June 30,2007
                                               ------------------------------------------------------------------------------------

<S>                                            <C>              <C>              <C>              <C>              <C>
 Revenue ...................................   $      18,900    $        --      $      18,900    $        --      $      18,900
 Cost of goods sold ........................          12,126             --             12,126             --             12,126
                                               -------------    -------------    -------------    -------------    -------------
 Gross profit ..............................           6,774             --              6,774             --              6,774

Selling, general and administrative expenses         394,234          173,576          751,163          211,723        1,640,004

Share based compensation ...................         226,050             --          2,036,704             --          2,036,704
                                               -------------    -------------    -------------    -------------    -------------


Operating Loss .............................        (613,510)        (173,576)      (2,781,093)        (211,723)      (3,669,934)

Other income (expense):
  Forgiveness of the registration
    rights penalty .........................            --               --               --               --            480,290
  Loss on disposal of technology license ...        (189,832)            --           (189,832)            --           (189,832)
  Gain on sale of investment ...............          76,487             --             76,487             --             76,487
  Unrealized (loss)/gain on
    derivative instruments .................      (3,745,664)            --         (6,135,369)            --         (5,334,149)
  Interest expense .........................        (263,607)          (7,623)        (443,680)         (11,713)        (614,774)
  Interest income ..........................          20,205             --             31,283             --             31,283
                                               -------------    -------------    -------------    -------------    -------------
Net loss ...................................   $  (4,715,921)   $    (181,199)   $  (9,442,204)   $    (223,436)   $  (9,220,629)
                                               =============    =============    =============    =============    =============


Basic and diluted loss per share ...........   $       (0.01)   $     (181.20)   $       (0.06)   $     (223.44)
                                               =============    =============    =============    =============
Weighted average shares of common stock
  outstanding, basic and diluted                 367,920,551            1,000      169,178,263            1,000
                                               =============    =============    =============    =============















       The notes to the consolidated condensed financial statements are an
                       integral part of these statements.
</TABLE>
                                       4

<PAGE>
<TABLE>


       GS CARBON CORPORATION AND SUBSIDIARIES, A DEVELOPMENT STATE COMPANY
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                   FOR THE SIX MONTHS ENDED JUNE 30, 2007 AND
           THE PERIOD OF INCEPTION (JANUARY 14, 2006) TO JUNE 30, 2006

                                   (UNAUDITED)
<CAPTION>
                                                                                        Period of Inception   Period of Inception
                                                                     Six Months Ended   (January 14, 2006) to (January 14, 2006) to
                                                                        June 30,2007     June 30, 2006          June 30, 2007
                                                                  ------------------------------------------------------------


<S>                                                                       <C>               <C>              <C>
Net cash used in operating activities ..............................      $  (680,872)      $  (195,867)     $(1,226,199)
                                                                          -----------       -----------      -----------
Cash flows from investing activities:
     Purchase of property and equipment ............................             --             (66,515)        (156,977)
     Proceeds from sale of investment ..............................          326,917              --            326,917
     Acquisition of technology license .............................             --             (50,000)        (261,328)
                                                                          -----------       -----------      -----------
       Cash provided by (used in) investing activities
                                                                              326,917          (116,515)         (91,388)
                                                                          -----------       -----------      -----------
Cash flows from financing activities:

   Proceeds from convertible debt ..................................        1,000,000              --          1,000,000
   Advances from/(payments to) related parties, net ................         (638,497)          461,228          325,323
                                                                          -----------       -----------      -----------
     Cash provided by financing activities
                                                                              361,503           461,228        1,325,323

Net increase in cash ...............................................            7,548           148,846            7,736
Cash at beginning of the period ....................................              188              --               --
                                                                          -----------       -----------      -----------
Cash at end of the period

                                                                          $     7,736       $   148,846      $     7,736
                                                                          ===========       ===========      ===========


Supplemental Schedule of Non-Cash Investing and Financing Activities

Issuance of GS Carbon Trading, Inc. shares
   in exchange for the transfer of holdings in

   cost and equity method investments ..............................      $      --         $      --        $   107,134
                                                                          ===========       ===========      ===========

DirectView, Inc. net liabilities assumed, October 9, 2006 ..........      $      --         $      --        $ 3,875,690
                                                                          ===========       ===========      ===========

Acquisition of technology license ..................................      $   191,427       $   211,328      $   191,427
                                                                          ===========       ===========      ===========

Discounts on convertible debt ......................................      $   712,125       $      --        $   712,125
                                                                          ===========       ===========      ===========

Beneficial conversion on convertible debt ..........................      $      --         $      --        $      --
                                                                          ===========       ===========      ===========

Conversion of convertible debt into common stock ...................      $    94,610       $      --        $    94,610
                                                                          ===========       ===========      ===========

Conversion of preferred stock in common stock ......................      $         2       $      --        $         2
                                                                          ===========       ===========      ===========

Acquisition of fixed assets ........................................      $     5,346       $      --        $     5,346
                                                                          ===========       ===========      ===========

Deferred financing fees ............................................      $   125,000       $      --        $   125,000
                                                                          ===========       ===========      ===========

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

</TABLE>

                                       5
<PAGE>



       GS CARBON CORPORATION AND SUBSIDIARIES, A DEVELOPMENT STATE COMPANY
                   NOTES TO CONDENSED CONSOLIDATED STATEMENTS
                   FOR THE SIX MONTHS ENDED JUNE 30, 2007 AND
           THE PERIOD OF INCEPTION (JANUARY 14, 2006) TO JUNE 30, 2006

                                   (UNAUDITED)

Note 1 - CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance  with  accounting  principles  generally  accepted in the
United States for interim  financial  information  and with the  instructions to
Form 10-QSB and Rule 310(b) of Regulation S-B. Accordingly,  they do not include
all of the information and footnotes required by accounting principles generally
accepted in the United States for complete financial statements.  In the opinion
of management,  all normal recurring adjustments considered necessary for a fair
statement  of the  results of  operations  have been  included.  The  results of
operations for the six months ended June 30, 2007 are not necessarily indicative
of the results of  operations  for the full year.  When  reading  the  financial
information contained in this Quarterly Report,  reference should be made to the
financial  statements,  schedule  and notes  contained in the  Company's  Annual
Report on Form 10-KSB for the year ended December 31, 2006.

Note 2 - BASIS OF PRESENTATION, ORGANIZATION AND OTHER MATTERS

On  October  9,  2006,  DirectView,  Inc.  ("Directview"),  acquired  all of the
outstanding capital stock of GS Carbon Trading,  Inc. GS Carbon Trading became a
wholly owned subsidiary of DirectView.  The business of GS Carbon Trading,  Inc.
is the only business of DirectView after the acquisition.

DirectView  completed  its  Subsidiary  Stock  Purchase  Agreement  between  the
DirectView and DirectView  Holdings,  Inc. ("DR Holdings") pursuant to the Share
Purchase Agreement with GS Energy Corporation ("GS Energy") immediately prior to
the  acquisition  of GS Carbon  Trading,  Inc. DR Holdings  agreed to accept and
assume  all the  outstanding  capital  stock  of the  DirectView's  subsidiaries
together  with  all of  the  liabilities  and  obligations  of the  DirectView's
subsidiaries  arising prior to the closing of the Share Purchase  Agreement with
GS Energy.

DirectView,  Inc. was originally incorporated under the laws of the Commonwealth
of  Massachusetts on June 12, 1989 with the name "Boston & Pacific Company Inc."
On May 5,  2003,  DirectView  changed  its  domicile  from the  Commonwealth  of
Massachusetts  to the State of Nevada and changed its name to  DirectView,  Inc.
DirectView  was  a  full-service   provider  of  teleconferencing   services  to
businesses and organizations.

GS Carbon  Trading,  Inc. was  incorporated  under the State of Delaware with on
August 30, 2006. GS Carbon  Trading,  Inc. was a development  stage company that
owned two cost method investments and one equity method investment.

The Company  accounted for the  acquisition  of GS Carbon  Trading,  Inc. by the
Company on October 9, 2006 as a recapitalization.  The  recapitalization was the
merger  of a  private  operating  company  (GS  Carbon  Trading,  Inc.)  into  a
non-operating public shell corporation  (DirectView) with nominal net assets and
as such is treated as a capital transaction, rather than a business combination.
As a result no Goodwill is recorded.  The  transaction  is the equivalent to the
issuance of stock by the  private  company  for the net  monetary  assets of the
shell  corporation.  The  pre  acquisition  financial  statements  of GS  Carbon
Trading,  Inc.  are  treated  as  the  historical  financial  statements  of the
consolidated companies.

On October  23,  2006 GS Carbon  acquired  General  Ultrasonics  from its parent
GreenShift  Corporation  for  the  assumption  of the  liabilities  and  General
Ultrasonics' ongoing cash needs. The acquisition was treated as a common control
acquisition  under  the  provisions  of  Appendix  D of SFAS No.  141,  Business
Combinations.

Effective  on  November  27,  2006,  DirectView,  Inc.,  a  Nevada  corporation,
reincorporated  in the  State of  Delaware  by  merging  with and into GS Carbon
Trading,  Inc.,  who  changed  there name to GS Carbon  Corporation,  a Delaware
corporation  which was a wholly owned  subsidiary of DirectView.  As a result of
the merger, GS Carbon Corporation is the surviving corporation;  the name of the
surviving  corporation  is  GS  Carbon  Corporation;   and  the  Certificate  of
Incorporation  and  Bylaws  of GS Carbon  Corporation  (the  "Company")  are the
Certificate of Incorporation and Bylaws of the surviving corporation.

                                       6
<PAGE>


The Merger  Agreement  provided  that each two hundred and fifty (250) shares of
common stock,  $.0001 par value, of DirectView  outstanding  prior to the merger
would be converted into one (1) share of common stock,  $.0001 par value,  of GS
Carbon  Corporation.  Each share of preferred  stock,  $.001 par value,  of each
series of  DirectView  outstanding  prior to the merger was  converted  into one
share of preferred stock of the comparable series of GS Carbon  Corporation.  No
other   changes  were   effected   with  respect  to  the   registrant   or  its
capitalization.

On February 26, 2007, the Company formed new subsidiary called General Carbonics
Corporation ("GCC").

Effective  July 1, 2007,  Seaway  Capital,  Inc.  acquired  GreenShift's  entire
controlling stake in return for the assumption  certain legacy liabilities of GS
Carbon. As part of that transaction, GS Carbon's historical operating businesses
were acquired by GreenShift Corporation affiliate, GS CleanTech Corporation.

Thomas W.  Scozzafava,  the founder and President of Seaway  Capital,  Inc., was
named the new President and CEO of the GS Carbon, and effective August 16, 2007,
the GS Carbon will be renamed "Seaway Valley Capital Corporation."

Seaway  Capital  Partners,  LLC (the  predecessor to Seaway  Capital,  Inc.) was
formed in 2002 as a money  management,  venture  capital,  and leveraged  buyout
company.  Seaway  Capital's  business plan is to invest in majority and minority
equity stakes and to enter into mezzanine debt agreements with various operating
companies.  Returns  are  intended  to be in  the  form  of the  eventual  share
appreciation and dispossession of those equity stakes and income from loans made
to businesses.

Seaway Capital makes equity,  equity-related,  and debt investments in companies
that require expansion capital and in companies pursuing acquisition strategies.
Seaway Capital also seeks investments in leveraged  buyouts and  restructurings.
Seaway Capital will consider  investment  opportunities in a number of different
industries,   including  retail,  restaurants,  media,  business  services,  and
manufacturing. Seaway Capital will also consider select technology investments.

Development Stage Company

Prior to it's sale to Seaway Capital,  Inc., the Company was a development stage
company  founded to  facilitate  decarbonization  in ways that  cost-effectively
capitalize on the evolving  carbon markets.  GS Carbon's  ambition was to affect
reductions in the carbon intensity of energy  consumption by investing in carbon
trading,   developing   and   commercializing   advanced   new   decarbonization
technologies,  and by developing and owning renewable energy production  assets.
Since its formation GS Carbon had not realized any significant revenues from its
planned  operations.  The Company's primary  activities since  incorporation had
been conducting research and development,  performing business and strategic and
financial planning. As stated previously,  these businesses and these activities
are now in and conducted at GS CleanTech Corporation, and Seaway Capital, Inc.'s
business  model  varies  significantly  from  that  of GS  Carbon  when  it  was
affiliated with GreenShift prior to July 1, 2007.

Going Concern

The  financial  statements  have  been  prepared  using  accounting   principles
generally  accepted  in the  United  States of  America  applicable  for a going
concern which assumes that the Company will realize its assets and discharge its
liabilities in the ordinary course of business. As of June 30, 2007, the Company
has no established  source of revenues and has accumulated  losses of $9,220,629
since its commencement.  Its ability to continue as a going concern is dependent
upon achieving production or sale of goods, the ability of the Company to obtain
the necessary  financing to meet its obligations and pay its liabilities arising
from  normal  business  operations  when  they  come  due  and  upon  profitable
operations.  The outcome of these matters cannot be predicted with any certainty
at this  time and  raise  substantial  doubt  that the  Company  will be able to
continue  as a going  concern.  These  financial  statements  do not include any
adjustments to the amounts and classification of assets and liabilities that may
be necessary should the Company be unable to continue as a going concern.

The Company  intends to overcome  the  circumstances  that impact its ability to
remain a going concern  through a combination of the  commencement  of revenues,
with interim cash flow deficiencies  being addressed  through  additional equity
and debt  financing.  The Company's  ability to obtain  additional  funding will
determine its ability to continue as a going concern. There can be no assurances
that these plans for additional financing will be successful.  Failure to secure

                                       7
<PAGE>

additional  financing  in a timely  manner  and on  favorable  terms if and when
needed in the  future  could  have a material  adverse  effect on the  Company's
financial  performance,  results of  operations  and stock price and require the
Company  to  implement  cost  reduction   initiatives  and  curtail  operations.
Furthermore,  additional  equity financing may be dilutive to the holders of the
Company's  common  stock,  and  debt  financing,   if  available,   may  involve
restrictive  covenants,  and may  require  the  Company to  relinquish  valuable
rights.

Note 3   - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Technology License

Costs  associated  with the Company's  technology  licenses are  capitalized and
amortized over their useful life of ten years using the straight-line method.

Principles of Consolidation

The  condensed  consolidated  financial  statements  include the accounts of the
Company  and its wholly  owned  subsidiaries,  General  Ultrasonics  and General
Carbonics Corporation.  All significant inter-company  transactions and balances
have been eliminated in consolidation.

Use of Estimates

The  preparation  of  financial  statements  in  conformity  with U.S  generally
accepted  accounting  principles  requires  management  to  make  estimates  and
assumptions  that  affect the  reported  amounts of assets and  liabilities  and
disclosure of  contingent  assets and  liabilities  at the date of the financial
statements and the reported amounts of revenue and expenses during the reporting
period. Actual results could differ from these estimates.

Derivative Financial Instruments

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

Net Loss per Common Share

In accordance  with SFAS No.  128,"Earnings  Per Share," Basic loss per share is
computed by dividing net loss by the weighted average number of shares of common
stock outstanding  during the period.  Diluted earnings per share is computed by
dividing net loss adjusted for income or loss that would result from the assumed
conversion  of potential  common  shares from  contracts  that may be settled in
stock or cash by the weighted  average number of shares of common stock,  common
stock equivalents and potentially  dilutive  securities  outstanding during each
period.  The Company had 51,652,000  warrants  outstanding at June 30, 2007. The
inclusion of the warrants  and any shares to be issued upon  conversion  have an
anti-dilutive  effect on diluted loss per share  because the Company  incurred a
loss from continuing  operations for the three and six months periods ended June
30,  2007,  the  three  months  period  ended  June 30,  2006 and the  period of
inception (January 14, 2006) to June 30, 2006.
<TABLE>

The following table sets forth the computation of basic and diluted loss per
share:
                                                                                                       Period of
                                                                                                       inception
                                                      Three Months Ended         Six Months Ended    (January 14, 2006)
                                                            June 30,                June 30,           to June 30,
---------------------------------------------------------------------------------------------------------------------
                                                    2007              2006            2007              2006
---------------------------------------------------------------------------------------------------------------------
                                                 (Unaudited)       (Unaudited)     (Unaudited)       (Unaudited)
Numerator:
<S>                                              <C>               <C>             <C>               <C>
Net loss - basic and diluted                     $ (4,715,921     )$ (181,199    ) $ (9,442,204    ) $(223,436    )
-------------------------------------------------=================-==============--================--=============---

Denominator:
Weighted average shares - basic                    367,920,551       1,000           169,178,263      1,000

Effect of dilutive stock options and warrants      --                 --               --                --
---------------------------------------------------------------------------------------------------------------------

Denominator for diluted earnings per share         367,920,551       1,000           169,178,263      1,000
---------------------------------------------------------------------------------------------------------------------

Loss per share
Basic                                            $ (0.01          )$ (181.20     ) $ (0.06         ) $(223.44     )
-------------------------------------------------=================-==============--================--=============---

Diluted                                          $ (0.01          )$ (181.20     ) $ (0..06        ) $(223.44     )
-------------------------------------------------=================-==============--================--=============---
</TABLE>
Recent Accounting Pronouncements

In  September  2006,  the FASB issued SFAS No.  157,  "Fair Value  Measurements"
("SFAS 157").  SFAS 157 clarifies the principal  that fair value should be based
on the  assumptions  market  participants  would  use when  pricing  an asset or
liability  and  establishes  a  fair  value   hierarchy  that   prioritizes  the
information used to develop those  assumptions.  Under the standard,  fair value
measurements  would be  separately  disclosed  by level  within  the fair  value
hierarchy. SFAS 157 if effective for the Company on January 1, 2008. The Company
is in the  process of  evaluating  SFAS 157 but does not  believe it will have a
significant effect on its financial position or results of operation.

                                       8
<PAGE>

In February 2007, the FASB issued SFAS 159, "The Fair Value Option for Financial
Assets and Financial  Liabilities  Including an Amendment of FASB  Statement No.
115 ("SFAS 159").  SFAS159 permits an entity to choose to measure many financial
instruments  and certain  other items at fair value.  Most of the  provisions of
SFAS 159 are  elective,  however,  the  amendment to SFAS 115,  "Accounting  for
Certain Investments in Debt and Equity Securities", applies to all entities with
available  for  sale or  trading  securities.  SFAS  159 is  elective  as of the
beginning of an entity's  first fiscal year that begins after November 15, 2007.
SFAS  159 was  recently  issued  and the  Company  is  currently  assessing  the
financial impact the statement will have on our financial statements.

Note 4 - TECHNOLOGY LICENSES

On January 14, 2006, General Ultrasonics  Corporation  acquired 70% of H2 Energy
Solutions,  Inc.  H2 Energy  owned the  rights to certain  patented  ultrasonics
technologies  used in the reformation of synthetic  fuels. The purchase price of
$261,328  was paid  $50,000 in cash and current  liabilities  of  $211,328  were
assumed.  H2 Energy  subsequently  ceased  operations.  The  technology is under
development by General Ultrasonics and the entire purchase price of $261,328 was
assigned to technology  license.  The technology use agreement between H2 energy
and the technology owner is for a term of ten years and requires certain minimum
royalties for the Company to maintain its exclusive use.

On February 26, 2007, GCC acquired patent-pending  technologies involving carbon
aerogel   composites   (United  States  Patent   Application  Nos.   10/327,300,
10/695,214, 10/800,993, 10/840,544, and 10/198,095) (the "GCC Technologies") and
several  executory  contracts  pertaining to the GCC  Technologies in return for
$191,427 in debt.  Among these contracts is a contract with United  Technologies
Corporation for work to be performed in cooperation with the U.S.  Department of
Energy.  On April 1, 2007, the Company  assessed that the $189,832 book value of
the technology license would not be recovered in the ordinary course of business
and  therefore  recorded a loss of $189,832 for the three and six months  period
ended June 30, 2007.

Technology licenses consist of the following at June 30, 2007:

Technology licenses                              $261,328

Less: Accumulated amortization                     39,199
                                                   ------

Technology licenses, net                         $222,129
                                                 ========

Amortization expense related to the technology license was $8,128 and $6,533 for
the three months periods ended June 30, 2007 and 2006, respectively.

Amortization  expense related to technology licenses was $14,661 and $13,066 for
the six months  ended June 30,  2007 and the period of  inception  (January  14,
2006) to June 30, 2006, respectively.

The  estimated  aggregate  amortization  expense  for the  next  five  years  is
estimated to be approximately $26,000 for each year.

Note 5   - CONVERTIBLE DEBENTURES PAYABLE - LONG TERM

On March 23, 2006,  DirectView entered into a Securities Purchase Agreement (the
"Agreement"),  with Cornell  Capital  Partners,  LP,  ("Cornell"),  and Highgate
(Cornell  and  Highgate  collectively,   "Buyers").   In  connection  with  this
Agreement, Highgate converted old debentures for conversion into new 10% Secured
Convertible  Debentures  amounting to $1,062,329  (including accrued interest of
$62,329)  and  Cornell  purchased  additional  secured  convertible   debentures
amounting to $150,000 for the total purchase price of $1,212,329  (the "Purchase
Price").  The  debentures  are due on March 23,  2009.  In  connection  with the
Agreement,  DirectView paid Yorkville  Advisors LLC a fee equal to $15,000 and a
structuring  fee to  Yorkville  Advisors  LLC of $5,000 from the proceeds of the
Closing. Accordingly, DirectView received net proceeds of $130,000.

                                       9
<PAGE>

Each of the 10% Secured  Convertible  Debentures  provides  for  interest in the
amount of 10% per annum and are  convertible  at the  lesser of $0.015 or 85% of
the lowest closing bid price of DirectView's  common stock during the 10 trading
days immediately preceding the conversion date.

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

In connection with this  Agreement,  the Company issued to the Buyer warrants to
purchase 1,636,000 shares of the Company's Common Stock (the "Warrants") in such
amounts as set forth on below.

                                             Exercise price
 Number of warrants                            per share
 -------------------------------------       --------------
   400,000                                          $2.50
   660,000                                          $0.875
   576,000                                          $1.00
-------------------
 1,636,000
===================

In order to secure its obligations under the secured  convertible  debenture and
related  documents,  the Company has  granted the  debenture  holders a security
interest  in all of its  assets  and  property,  and  the  Company  has  pledged
1,000,000  shares of its common stock.  A certificate  representing  the pledged
shares  together  with a stock power has been  deposited  in escrow with a third
party.  If the Company should default under the Securities  Purchase  Agreement,
10%  convertible  secured  debentures  or the related  transactional  documents,
Highgate is entitled to voting,  dividend  and other  rights over these  pledged
shares,  and may take  possession of and sell the pledged  shares to satisfy the
Company's obligations to the debenture holders. A foreclosure by Highgate of the
pledged  shares  could  result in a change of control of the  Company.  Upon the
satisfaction or conversion of the secured  convertible  debentures,  the pledged
shares  will be  returned  to the  Company  for  cancellation  and return to its
treasury.

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

                                       10
<PAGE>

The Company determined that the conversion feature of the convertible debentures
represents an embedded  derivative  since the debentures are convertible  into a
variable  number  of  shares  upon  conversion.   Accordingly,  the  convertible
debentures are not considered to be  conventional  debt under EITF 00-19 and the
embedded  conversion feature must be bifurcated from the debt host and accounted
for as a derivative  liability.  The Company  believes  that the  aforementioned
embedded derivative meets the criteria of SFAS 133 and EITF 00-19, and should be
accounted for as a derivative with a corresponding  value recorded as liability.
Accordingly, the fair value of these derivative instruments has been recorded as
a liability on the  consolidated  balance sheet. The change in the fair value of
the  liability  for  derivative  contracts  will be  credited  to other  income/
(expense) in the  consolidated  statements of operations.  The  $1,212,329  face
amount of the debentures  were stripped of their  conversion  feature due to the
accounting for the conversion feature as a derivative,  which was recorded using
the residual  proceeds method,  whereby any remaining  proceeds after allocating
the proceeds to the warrants and  conversion  option would be  attributed to the
debt. The beneficial  conversion  feature (an embedded  derivative)  included in
this debenture resulted in an initial debt discount of $1,192,329 and an initial
loss on the valuation of derivative  liabilities  of $262,219.  At June 30, 2007
the derivative liability on the Highgate debt calculated using the Black-Scholes
model was  $3,447,314.  For the three and six months periods ended June 30, 2007
the  unrealized  loss on the  conversion  derivative  on the  Highgate  debt was
$1,932,886 and $2,915,981, respectively.

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

The February 26, 2007 Cornell  debentures  provide for interest in the amount of
10% per annum and are  convertible  at the  lesser of $0.05 or 90% of the lowest
closing  bid price of the  Company's  common  stock  during the 30 trading  days
immediately  preceding the conversion date.  Cornell will be entitled to convert
the February 26, 2007  debenture on the basis of the  conversion  price into the
Company's  common stock,  provided that Cornell  cannot convert into shares that
would cause Cornell to own more 4.9% of the Company's outstanding common stock.

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

In connection with the February 2007 CCP Agreement, the Company paid Yorkville
Advisors, LLP a fee equal to $100,000 and a structuring fee of $25,000 from the
proceeds of the closing. Accordingly, the Company received net proceeds of
$1,000,000. These fees were treated as a deferred financing fees and beginning
on February 27, 2007 are being amortized over the term of the loan. The Company
used $900,000 of the proceeds from the Cornell Debenture to repay loans payable
to GreenShift Corporation and GS Ethanol Technologies.

In  addition  the  Company  issued to Cornell a warrant to  purchase  50,000,000
shares of the Company's  common stock at $0.03 a share. The value of the warrant
was  calculated  to be $712,125 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  using  the  effective  interest  method of
amortization.

The Company determined that the conversion feature of the convertible  debenture
represents  an embedded  derivative  since the debenture is  convertible  into a
variable  number  of  shares  upon  conversion.   Accordingly,  the  convertible
debenture is not  considered  to be  conventional  debt under EITF 00-19 and the
embedded  conversion feature must be bifurcated from the debt host and accounted
for as a derivative  liability.  The embedded  derivative feature created by the
variable conversion meets the criteria of SFAS 133 and EITF 00-19, and should be
accounted for as a separate  derivative.  At June 30, 2007 the fair value of the
conversion  derivative  liability created by this debenture calculated using the
Black-Scholes  model was $3,266,171.  For the three and six months periods ended
June 30, 2007 the unrealized loss on the derivative  instrument  created by this
debenture was $1,859,921and $3,266,171, respectively.

                                       11
<PAGE>

On  October 9, 2006,  Candent  Corporation  ("Candent")  purchased  $255,077  of
convertible  debt  previously  issued by the  Company to an  unaffiliated  third
party.  The  Convertible  Debenture  provides for no interest and is convertible
into the Company's  common stock at the lesser of (a) 0.001 per share or (b) the
amount of this  debenture to be converted  divided by 90% of the closing  market
price of the Maker's  common stock for the day prior to the date of the exercise
of such conversion  right.  Candent will be entitled to convert the debenture on
the basis of the conversion price into the Company's common stock, provided that
Candent  cannot convert into shares that would cause Candent to own more 4.9% of
the  Company's  outstanding  common  stock.  The  Candent  debenture  matured on
December  31,  2006.  As of June 30, 2007 the  Company has not been  notified by
Candent to demand payment of the convertible  debenture.  Subsequent to June 30,
2007,  Candent converted $25,508 into 25,507,700 of the Company's common stock.
The  former  president  of  Candent is the wife of the  Company's  former  Chief
Executive Officer.

On October 9, 2006,  Candent  purchased  $85,049 of convertible  debt previously
issued by the Company to a former officer of the Company,  the principal balance
of which debt was originally $242,997.  These convertible debentures provide for
no interest and  conversion  into the Company's  common stock at a rate equal to
90% of the closing market price of the Company's  common stock for the day prior
to the date of the  exercise  of such  conversion  right.  Each  holder  will be
entitled to convert their  debenture on the basis of the  conversion  price into
the Company's common stock, provided that each holder cannot convert into shares
that would cause that holder to own more than 4.9% of the Company's  outstanding
common stock. Each debenture matured on December 31, 2006. During February 2007,
Candent  purchased $25,000 of the former officer debenture and Cornell purchased
the  Candent  debenture  of $85,049  and the  $132,948  remaining  on the former
officer's debenture.  The terms of the purchased debentures were not changed. As
of June 30,  2007 the  Company  has not been  notified  by Cornell or Candent to
demand payment of the convertible debentures.

The Company  determined that the conversion  feature of the assumed  convertible
debentures represent an embedded derivative since the debentures are convertible
into a variable  number of shares  upon  conversion.  Accordingly,  the  assumed
convertible  debentures  are not considered to be  conventional  debt under EITF
00-19 and the embedded  conversion feature must be bifurcated from the debt host
and accounted for as a derivative  liability.  The embedded  derivative  feature
created  by the  variable  conversion  meets the  criteria  of SFAS 133 and EITF
00-19,  and should be accounted for as a separate  derivative.  At June 30, 2007
the fair value of the  conversion  derivative  liability  created by the assumed
debentures  calculated using the Black-Scholes model was $12,248.  For the three
and six months  periods  ended June 30, 2007 the  unrealized  gain (loss) on the
derivative  instrument  created  by this  debenture  was  $47,143  and  $46,783,
respectively.

The following assumptions were applied to all convertible debt:

                                                        June 30,
                                                          2007
                                                    --------------
Market price                                             $0.0107
Exercise prices                                     $0.0006- $0.0096
Expected volatility                                  254.33%-276.83%
Expected dividends                                        None
Expected term (in days)                                   10-30
Risk-free interest rate                                4.89%-4.90%


The convertible debentures liability is as follows at June 30, 2007:

Convertible debentures payable                              $ 2,740,793

Less: unamortized discount on debentures                      1,292,208
                                                            -----------
Convertible debentures, net - Long term                     $ 1,448,585
                                                            ===========

                                       12
<PAGE>


Note 6   - DUE TO/FROM RELATED PARTIES

At June 30, 2007 the Company owed GreenShift Corporation $559,343 and GreenShift
Corporation owed the Company $1,167,006, for a net amount of $607,663.

Due to related parties consists of the following at June 30, 2007:

Candent Corporation                                         $    616,000

GS Ethanol Technologies, Inc.                                    238,306
GS Advanced Application                                            5,100
GS CleanTech Ventures                                             25,000
Due to officer                                                    50,000
                                                            ------------
                                                            $    934,406
                                                            ============


During  the three and six months  ended  June 30,  2007,  the  Company  recorded
$11,377  and  $18,179 of  interest  expense,  respectively,  for  amounts due to
GreenShift Corporation and $20,205 and $31,283 of interest income, respectively,
for amounts due from GreenShift Corporation.

GreenShift  Corporation was the Company's parent. GS Ethanol Technologies,  Inc.
is a subsidiary of GreenShift,  and the former  president of Candent is the wife
of the Company's former Chief Executive  Officer.  GS Advanced  Application is a
subsidiary  of GS  CleanTech  Corporation  and GS  Cleantech  is  subsidiary  of
GreenShift.  Amounts due to officer  represent  amount  loaned by the  Company's
Chairmen and Chief Executive officer. All amounts are non-interest bearing.

Note 7 - INCOME TAXES

The  Company   currently  files  an  income  tax  return  in  the  U.S.  federal
jurisdiction  as well as in New York.  Tax returns for the year 2006 remain open
for  examination  in various  tax  jurisdictions  in which the  Company  and its
subsidiaries operates or operated.

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 June 30, 2007, there were no unrecognized tax benefits. Interest
and penalties  related to uncertain  tax positions  will be recognized in income
tax expense. As of June 30, 2007, no interest related to uncertain tax positions
had been accrued.

Note 8 - STOCKHOLDER'S EQUITY

The Company  accounts for its  share-based  employee  compensation  arrangements
under SFAS No. 123 (revised 2004),  "Share Based Payment"  ("SFAS 123R"),  which
requires  companies  to  recognize  the cost of  employee  services  received in
exchange for awards of equity instruments, based on the grant date fair value of
those awards, in the financial statements.

On January 4, 2007 the Company issued 130 shares of common stock to an employee
for services provided. The fair value of the award was determined by the closing
price of its stock on the issuance date. For the three and six months periods
ended June 30, 2007 the Company incurred $0 and $16 of share based compensation,
respectively, related to these issuance.

                                       13
<PAGE>

On January 16,  2007 the  Company  issued  6,914,892  shares of common  stock to
employees for services provided.  The fair value of the awards was determined by
the  closing  price of its  stock on the  issuance  date.  For the three and six
months periods ended June 30, 2007 the Company incurred $0 and $760,638 of share
based compensation, respectively, related to these issuance.

On February 26, 2007  GreenShift  Corporation  converted its 6,250 shares of its
Series B Voting Preferred Stock into its Common Stock for $1.

On  February  26,  2007,  the  Company's  additional  Paid in Capital  increased
$712,125  due to the discount  taken on the Cornell  Convertible  Debenture  for
detachable warrants granted in conjunction with the financing. (See Note 5)

On March 2, 2007 Cornell Capital converted $52,850 of its convertible debentures
into 5,285,000 shares of its Common Stock

On  March  21,  2007  Cornell  Capital  converted  $13,760  of  its  convertible
debentures into 1,376,000 shares of its Common Stock

On March 29,  2007 the  Company  issued  35,000,000  shares  of common  stock to
employees for services provided.  The fair value of the awards was determined by
the  closing  price of its  stock on the  issuance  date.  For the three and six
months  period  ended June 30, 2007 the Company  incurred $0 and  $1,050,000  of
share based compensation, respectively, related to these issuance.

On April 18, 2007  GreenShift  Corporation  converted  its 12,500  shares of its
Series B Voting Preferred Stock into its Common Stock for $20,083.

On May 8, 2007 the  Company  issued  40,500,000  shares  of  common  stock to an
employee for services  provided.  The fair value of the award was  determined by
the  closing  price of its  stock on the  issuance  date.  For the three and six
months periods ended June 30, 2007 the Company incurred  $226,800 of share based
compensation related to these issuance.

On May 14, 2007 the Company issued 2,500,000 shares of common stock to employees
for  services  provided.  The fair  value of the awards  was  determined  by the
closing  price of its stock on the issuance  date.  For the three and six months
periods  ended  June 30,  2007  the  Company  incurred  $14,250  of share  based
compensation related to these issuance.

On May 14, 2007 an employee returned 500,000 shares of common stock, which were
canceled by the Company. The common stock was issued for services provided on
March 29, 2007. The Company reversed compensation expenses of $15,000 on May 14,
2007.

On June 14, 2007 Highgate  converted $16,000 of its convertible  debentures into
6,666,667 of its common stock.

On June 27, 2007 Highgate  converted $12,000 of its convertible  debentures into
20,000,000 of its common stock.

Note 9 - SUBSEQUENT EVENTS

Purchase Agreement

On July 1, 2007 the Company's majority shareholder, GreenShift Corporation, sold
its entire  interest in the  Company,  specifically  78,250  shares of preferred
stock and 320,534,884  shares of Common Stock, to Seaway Capital Inc.,  which is
owned by the Company's  current Chief Executive  Officer.  Seaway Capital,  Inc.
agreed to assume  responsibility  for the  management  and  certain  convertible
debentures of GS Carbon  Corporation,  but gave no additional  consideration  to
GreenShift Corporation.

                                       14
<PAGE>

On July 1, 2007 the Company sold 100% of the capital stock of GS Carbon Trading,
Inc.,  which owns certain cost and equity  method  investments,  to GS CleanTech
Corporation  in  return  for the  assumption  by GS  CleanTech  of a  $1,125,000
convertible debenture.

Conversion of Series B Preferred Stock

On July 1, 2007, Seaway Capital,  Inc.  converted  308,234,884 shares of Company
common stock into 21,750 shares of Company Series B preferred stock. Taking this
conversion  into account,  Seaway now  beneficially  owns 100,000  shares of the
Company's  Series B preferred  stock.  After this  conversion  is effected,  the
Company had  approximately  186,099,879  shares of common stock  outstanding and
100,000 shares of Series B preferred stock.

Restatement of Prior Periods

     In its Annual Report on Form 10-KSB for the year ended December 31, 2006 GS
     Carbon disclosed in Note 13 to the Financial Statements the following:

     A subsidiary  of GS Carbon that was spun-off  from GS Carbon in 2006 issued
     debt  instruments in the principal amount of $498,074 several years ago. We
     recently  were  presented  with  evidence  that GS Carbon may be liable for
     payment of the debts.  Management is actively  investigating  the facts and
     circumstances  with  respect to the debts,  and is not able to determine at
     this time if GS Carbon has liability for the debts.

On July 26,  2007,  the  Company  determined  it was  liable  for  approximately
$498,000  of  convertible  debt  along  with  approximately  $59,000  of related
derivative  liabilities at the acquisition  date and that it existed at December
31, 2006 and March 31, 2007.  The Company will restate its December 31, 2006 and
March 31, 2007 financial statement as a result of these omissions.

Convertible Debt Common Stock Conversions

Between  July 2,  2007  and July  18,  2007,  Highgate  converted  aggregate  of
approximately  $527,850  of the 10%  secured  convertible  debentures  that have
converted  or in the process of  converting  into an  aggregate  of  182,526,132
shares of our common stock at an average price of $.00276 per share.

Subsequent to June 30, 2007,  Candent  converted  $25,508 into 25,507,700 of the
Company's  common  stock.  The  former  president  of Candent is the wife of the
Company's former Chief Executive Officer.





                                       15
<PAGE>


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

BUSINESS RISK FACTORS

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

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

GS Carbon  had  approximately  $7,736 in cash at June 30,  2007 and had  current
liabilities totaling $7,287,150.  These matters raise substantial doubt about GS
Carbon's  ability to continue as a going  concern.  Management's  plans  include
raising  additional  proceeds from debt and equity  transactions  and completing
strategic acquisitions.

The issuance of shares under our  agreements  with Candent and  Cornell/Highgate
could increase their holding to over 80% of the total common shares outstanding.

While Candent and  Cornell/Highgate are subject to restrictions on conversion of
their respective debentures limiting their ownership to 4.9% of our common stock
at any given time, upon default the Cornell and Highgate Debentures,  along with
the  outstanding  options and warrants,  could be converted  into  approximately
3,716,116,322 shares at the market price on June 30, 2007. The issuance of these
shares  would  dilute the  interest  of our  current  shareholders  and  provide
Cornell/Highgate with over 80% of the common shares outstanding.  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 may be unable to satisfy our current debts.

Our total  liabilities as of June 30, 2007 were $9,861,568.  We cannot afford to
pay these  amounts  out of our  operating  cash flows and our ability to operate
will be significantly impaired if we cannot reduce the Cornell and Highgate debt
with registered stock.

We are liable for approximately $498,000 in previously unreported debt.

In its Annual Report on Form 10-KSB for the year ended December 31, 2006 GS
Carbon disclosed in Note 13 to the Financial Statements the following:

     A subsidiary  of GS Carbon that was spun-off  from GS Carbon in 2006 issued
     debt  instruments in the principal amount of $498,074 several years ago. We
     recently  were  presented  with  evidence  that GS Carbon may be liable for
     payment of the debts.  Management is actively  investigating  the facts and
     circumstances  with  respect to the debts,  and is not able to determine at
     this time if GS Carbon has liability for the debts.

On July 26,  2007,  the  Company  determined  it was  liable  for  approximately
$498,000  of  convertible  debt  along  with  approximately  $59,000  of related
derivative  liabilities at the acquisition  date and that it existed at December
31, 2006 and March 31, 2007.  The Company will restate its December 31, 2006 and
March 31, 2007 financial statement as a result of these omissions.


                                       16
<PAGE>


ITEM 1.  DESCRIPTION OF BUSINESS (continued)

BUSINESS RISK FACTORS (continued)

As of July 1, 2007 Seaway  Capital,  Inc. can exert  control over us and may not
make decisions that further the best interests of all stockholders.

As of July 1, 2007 Seaway Capital,  Inc. controls 100% of our outstanding Series
B preferred stock after  completing the purchase from  GreenShift  Corporation..
The preferred  shares are convertible into 85% of our Common Stock. As a result,
Seaway  Capital,  Inc.  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.

GS Carbon is not  likely to hold  annual  shareholder  meetings  in the next few
years.

Delaware  corporation law provides that members of the board of directors retain
authority  to act  until  they are  removed  or  replaced  at a  meeting  of the
shareholders.  A  shareholder  may petition  the  Delaware  Court of Chancery to
direct that a shareholders  meeting be held. But absent such a legal action, the
board has no obligation to call a  shareholders  meeting.  Unless a shareholders
meeting is held, the existing directors elect directors to fill any vacancy that
occurs on the board of directors. The shareholders,  therefore,  have no control
over the constitution of the board










                                       17
<PAGE>


ITEM 1.  DESCRIPTION OF BUSINESS (continued)

BUSINESS RISK FACTORS (continued)

of directors,  unless a shareholders meeting is held. Management does not expect
to hold  annual  meetings  of  shareholders  in the next few  years,  due to the
expense involved.  Thomas  Scozzafava,  who is currently the sole director of GS
Carbon,  was  appointed  to that  position by the previous  directors.  If other
directors are added to the Board in the future, it is likely that Mr. Scozzafava
will  appoint  them.  As a result,  the  shareholders  of GS Carbon will have no
effective means of exercising control over the operations of GS Carbon.

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 GS  Carbon  common  stock  may  prevent  a
shareholder from obtaining a fair price for his shares.

The  common  stock of GS  Carbon  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 GS  Carbon,  since the price  sometimes  moves up or down by 50% or more in a
week's time. A shareholder in GS Carbon 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 National  Market or the NASDAQ  Small-Cap
Market.  Because our common  stock does not trade on a stock  exchange or on the
NASDAQ National Market or the NASDAQ Small-Cap  Market,  and the market price of
the common stock is less than $5.00 per share,  the common stock  qualifies as a
"penny stock." SEC Rule 15g-9 under the Securities  Exchange Act of 1934 imposes
additional  sales practice  requirements  on  broker-dealers  that recommend the
purchase or sale of penny  stocks to persons  other than those who qualify as an
"established   customer"  or  an  "accredited   investor."   This  includes  the
requirement   that  a   broker-dealer   must   make  a   determination   on  the
appropriateness  of  investments  in penny stocks for the customer and must make
special  disclosures  to the  customer  concerning  the  risks of penny  stocks.
Application  of the penny  stock  rules to our common  stock  affects the market
liquidity of the shares,  which in turn may affect the ability of holders of our
common stock to resell the stock.

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

GS Carbon  common  stock is  defined  by the SEC as a "penny  stock"  because it
trades at a price less than $5.00 per share.  GS Carbon  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 GS Carbon  common  stock as long as it  remains a
"penny stock." This situation may limit the liquidity of your shares.

                                       18

<PAGE>

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

FORWARD LOOKING STATEMENTS

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

OVERVIEW

GS Carbon  Corporation  ("we," "our," "us," "GS Carbon," or the  "Company") is a
development  stage company that is controlled  by Seaway  Capital,  Inc.,a money
management,  venture  capital and  leveraged  buyout  company  formed in 2002 as
"Seaway  Capital   Partners,   LLC."  As  a  result  of  the  controlling  stake
acquisition,  the  Company's  new  business  model is to invest in majority  and
minority  equity stakes and to enter into mezzanine debt agreements with various
operating  companies.  Returns are  intended  to be in the form of the  eventual
share  appreciation  and  dispossession  of those equity  stakes and income from
loans made to businesses.

The Company  intends to make equity,  equity-related,  and debt  investments  in
companies that require expansion capital and in companies  pursuing  acquisition
strategies.  The  Company  also  seeks  investments  in  leveraged  buyouts  and
restructurings.  The Company will consider investment  opportunities in a number
of  different  industries,   including  retail,  restaurants,   media,  business
services,  and  manufacturing,   and  the  Company  will  also  consider  select
technology investments.

Effective  August 16, 2007, the Company shall be renamed  "Seaway Valley Capital
Corporation."

                                       19
<PAGE>


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

RESULTS OF OPERATIONS FOR SIX MONTHS ENDED JUNE 30, 2007

Revenues

Total revenues were $18,900 for the six months ended June 30, 2007, and $18,900
for the three months ended June 30, 2007.

Selling, General and Administrative Expenses

Selling, general and administrative expenses for the six months ended ended June
30,  2007  were  $751,163  and for the three  months  ended  June 30,  2007 were
$394,234 which amount was primarily  attributable to the operating activities of
our research and development unit, General Ultransonics Corporation.

Interest Expense and Financing Costs

Interest  expenses  and  financing  costs for the six months ended June 30, 2007
were  $443,680  and  was  primarily   attributable  to  our  existing  financing
agreements with Cornell  Capital  Partners,  LLP and Highgate House Funds,  Ltd.
Interest  expense and  financing  costs for the three months ended June 30, 2007
were $263,607.

Unrealized Loss on Derivative Instruments

For the six and three months  ended June 30, 2007 we incurred a  $6,135,369  and
$3,745,664  unrealized loss on derivative  instruments.  We have determined that
the  conversion  feature of our  convertible  debentures  represents an embedded
derivative since the debentures are convertible into a variable number of shares
upon conversion.  The unrealized loss on derivative  instruments  represents the
change in the fair value of our derivative liability from December 31, 2006. The
unrealized  loss  increased  during the period due to the decrease in our market
price  of our  stock  that  results  in more  potential  issuable  shares  to be
converted.

Net Loss

Our net loss for the six and  three  month  periods  ended  June 30,  2007  were
$9,442,204  and  $4,715,921  respectively.  The net loss incurred was due to the
expenses and other factors described above.

Liquidity and Capital Resources

The Company had  $561,417 in accounts  payable and accrued  expenses at June 30,
2007. GS Carbon intends to satisfy these amounts predominantly out of cash flows
from its operations and financing  activities.  The Company had negative working
capital  of  $7,279,414  at June  30,  2007,  of  which  $6,725,733  related  to
convertible debentures due to Highgate and Cornell.





                                       20
<PAGE>

ITEM 3. CONTROLS AND PROCEDURES

EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

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

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

                                       21
<PAGE>

                           PART II - OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

None.

ITEM 2.  UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None during the six months ended June 30, 2007

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

None.

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

None.

ITEM 5.  OTHER INFORMATION

None.

ITEM 6.  EXHIBITS

The  following are exhibits  filed as part of the Company's  Form 10-QSB for the
period ended June 30, 2007:

Exhibit Number             Description

     31.1 Certification of Chief Executive  Officer and 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.


                                       22


<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.


GS CARBON CORPORATION

By:             /S/      THOMAS SCOZZAFAVA
                --------------------------
                         THOMAS SCOZZAFAVA
                         Chairman and Chief Executive Officer
                         Chief Financial Officer

Date:                    August 14, 2007




























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