UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                                    FORM 10-K

(X)  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE
     ACT OF 1934
For the fiscal year ended June 2, 2006
                                       OR
( )  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934

Commission File No. 0-4339

                            GOLDEN ENTERPRISES, INC.
             ------------------------------------------------------
             (Exact name of registrant as specified in its charter)

            Delaware                                         63-0250005
---------------------------------                      ---------------------
(State or other jurisdiction of                          (I.R.S. Employer
 incorporation or organization)                         Identification No.)

          One Golden Flake Drive
           Birmingham, Alabama                                35205
----------------------------------------                   ----------
(Address of Principal Executive Offices)                   (Zip Code)

        Registrant's Telephone Number including area code (205) 458-7316

           SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
                                      None
           SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
                   Common Capital Stock, Par Value $0.66(2)/3
                                (Title of Class)

Indicate by check mark if the Registrant is a well-known seasoned issuer, as
defined in Rule 405 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 Section 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 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. (X)

Indicate by check mark whether the Registrant is an accelerated filer (as
defined in Rule 12b-2 of the Act). Yes ( ) No (X)

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

State the aggregate market value of the voting common stock held by
non-affiliates of the registrant as of August 4, 2006.
Common Stock, Par Value $0.66(2)/3 --$17,470,091

Indicate the number of shares outstanding of each of the Registrant's Classes of
Common Stock, as of August 4, 2006.
         Class                                  Outstanding at August 4, 2006
         -----                                  -----------------------------
Common Stock, Par Value $0.66(2)/3                  11,835,330 shares

                       DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Annual Proxy Statement for the Annual Meeting of Stockholders to
be held on September 21, 2006 are incorporated by reference into Part III.


<PAGE>


                                TABLE OF CONTENTS

                          FORM 10-K ANNUAL REPORT -2006
                            GOLDEN ENTERPRISES, INC.


                                                                            Page
                                                                            ----

PART I.

Item 1.     Business ......................................................    3
Item 1A.    Risk Factors...................................................    5
Item 2.     Properties.....................................................    6
Item 3.     Legal Proceedings..............................................    7
Item 4.     Submission of Matters to a Vote of Security Holders............    8


PART II.

Item 5.     Market for Registrant's Common Equity, Related Stockholder
             Matters and Issuer Purchases of Equity Securities.............    8
Item 6.     Selected Financial Data........................................   10
Item 7.     Management's Discussion and Analysis of Financial Condition
                 and Results of Operations.................................   11
Item 7A.    Quantitative and Qualitative Disclosure About Market Risk......   18
Item 8.     Financial Statements and Supplementary Data....................   18
Item 9.     Changes in and Disagreements with Accountants
                 on Accounting and Financial Disclosure....................   41
Item 9A.    Controls and Procedures........................................   41
Item 9B.    Other Information..............................................   41

PART III.

Item 10.    Directors and Executive Officers of the Registrant.............   41
Item 11.    Executive Compensation.........................................   41
Item 12.    Security Ownership of Certain Beneficial
                 Owners and Management and Related Stockholder Matters.....   41
Item 13.    Certain Relationships and Related Transactions.................   42
Item 14.    Principal Accountant Fees and Services.........................   42

PART IV.

Item 15.    Exhibits and Financial Statement Schedules.....................   43


                                        2
<PAGE>

                                     PART I

                               ITEM 1. - BUSINESS

Golden Enterprises,  Inc. (the "Company") is a holding company which owns all of
the issued and  outstanding  capital stock of Golden Flake Snack Foods,  Inc., a
wholly-owned  operating subsidiary company ("Golden Flake").  Golden Enterprises
is paid a fee by Golden Flake for providing management services for it.

The Company was originally  organized  under the laws of the State of Alabama as
Magic City Food  Products,  Inc. on June 11, 1946. On March 11, 1958, it adopted
the name Golden Flake, Inc. On June 15, 1963, the Company purchased Don's Foods,
Inc. a Tennessee  corporation  which was merged into the Company on December 10,
1966. The Company was  reorganized  December 31, 1967 as a Delaware  corporation
without changing any of its assets, liabilities or business. On January 1, 1977,
the  Company,  which had been  engaged  in the  business  of  manufacturing  and
distributing potato chips, fried pork skins, cheese curls and other snack foods,
spun off its operating  division into a separate  Delaware  corporation known as
Golden  Flake  Snack  Foods,  Inc.  and  adopted  its  present  name  of  Golden
Enterprises, Inc.

The Company owns all of the issued and outstanding capital stock of Golden Flake
Snack Foods, Inc.


                         Golden Flake Snack Foods, Inc.

General

Golden Flake Snack Foods, Inc.  ("Golden Flake") is a Delaware  corporation with
its  principal  place of business  and home office  located at One Golden  Flake
Drive,  Birmingham,  Alabama.  Golden Flake  manufactures and distributes a full
line of salted snack items,  such as potato chips,  tortilla chips,  corn chips,
fried pork skins, baked and fried cheese curls, onion rings and puff corn. These
products are all packaged in flexible bags or other suitable wrapping  material.
Golden Flake also sells a line of cakes and cookie items, canned dips, pretzels,
peanut butter crackers,  cheese crackers,  dried meat products and nuts packaged
by other  manufacturers  using the  Golden  Flake  label.  No single  product or
product line accounts for more than 50% of Golden Flake's  sales,  which affords
some  protection  against  loss  of  volume  due  to a  crop  failure  of  major
agricultural raw materials.

Raw Materials

Golden Flake  purchases raw materials used in  manufacturing  and processing its
snack food products on the open market and under  contract  through  brokers and
directly  from growers.  A large part of the raw materials  used by Golden Flake
consists of farm commodities  which are subject to precipitous  change in supply
and price.  Weather  varies from season to season and directly  affects both the
quality and supply  available.  Golden Flake has no control of the  agricultural
aspects and its profits are affected accordingly.

Distribution

Golden  Flake  sells  its  products  through  its  own  sales  organization  and
independent  distributors to commercial  establishments which sell food products
in Alabama and in parts of Tennessee,  Kentucky, Georgia, Florida,  Mississippi,
Louisiana,  North Carolina,  South Carolina,  Arkansas,  Missouri and Texas. The
products are  distributed by  approximately  468 route salesmen and  independent
distributors who are supplied with selling  inventory by the Company's  trucking
fleet which  operates out of  Birmingham,  Alabama,  Nashville,  Tennessee,  and
Ocala,  Florida. All of the route salesmen are employees of Golden Flake and use
the direct store door delivery method. Golden Flake is not dependent upon any


                                       3
<PAGE>

single customer, or a few customers,  the loss of any one or more of which would
have a material adverse effect on its business.  No single customer accounts for
more than 10% of its total sales.  Golden Flake has a fleet of 869 company owned
vehicles to support  the route  sales  system,  including  47  tractors  and 123
trailers  for long haul  delivery  to the  various  company  warehouses  located
throughout its distribution  areas, 630 store delivery  vehicles and 69 cars and
miscellaneous vehicles.


Competition

The snack foods  business  is highly  competitive.  In the area in which  Golden
Flake operates, many companies engage in the production and distribution of food
products  similar to those produced and sold by Golden Flake.  Most, if not all,
of Golden Flake's  products are in direct  competition  with similar products of
several  local and regional  companies  and at least one national  company,  the
Frito Lay Division of Pepsi Co., Inc.,  which are larger in terms of capital and
sales volume than is Golden Flake.  Golden Flake is unable to state its relative
position in the industry.  Golden Flake's  marketing  thrust is aimed at selling
the highest quality  product  possible and giving good service to its customers,
while being  competitive  with its prices.  Golden  Flake  constantly  tests the
quality  of  its  products  for  comparison  with  other  similar   products  of
competitors and maintains tight quality controls over its products.

Employees

Golden Flake employs  approximately  991 employees.  Approximately 585 employees
are  involved in route  sales and sales  supervision,  approximately  293 are in
production and production supervision,  and approximately 113 are management and
administrative personnel.

Golden Flake believes that the  performance and loyalty of its employees are two
of the most important  factors in the growth and  profitability of its business.
Since labor costs  represent a significant  portion of Golden Flake's  expenses,
employee productivity is important to profitability.  Golden Flake considers its
relations with its employees to be excellent.

Golden Flake has a 401(k) Profit  Sharing Plan and an Employee  Stock  Ownership
Plan designed to reward the long term employee for his/her loyalty. In addition,
the employees are provided medical  insurance,  life insurance,  and an accident
and sickness salary  continuance  plan.  Golden Flake believes that its employee
wage rates are competitive  with those of its industry and with prevailing rates
in its area of operations.

Other Matters

The  Company's  Annual Report on Form 10-K,  Quarterly  Reports on Form 10-Q and
Current Reports on Form 8-K, and amendments to these reports,  are available via
the Company's website. The website address is www.goldenflake.com.  All required
reports  are made  available  on the website as soon as  reasonably  practicable
after they are electronically filed with the Securities and Exchange Commission.

Environmental Matters

There have been no material  effects of compliance  with  government  provisions
regulating discharge of materials into the environment.


Recent Developments

No significant changes have occurred in the kinds of products manufactured or in
the markets or methods of distribution,  and no material changes or developments
have occurred in the business done and intended to be done by Golden Flake.


                                       4
<PAGE>

                            ITEM 1A. - RISK FACTORS

Important  factors  that could  cause the  Company's  actual  business  results,
performance  or  achievements  to differ  materially  from any  forward  looking
statements  or other  projections  contained  in this  Annual  Form 10-K  Report
include,  but are not limited to the  principal  risk  factors set forth  below.
Additional risks and  uncertainties,  including risks not presently known to the
Company,  or that it currently deems  immaterial,  may also impair the Company's
business  and or  operations.  If the events,  discussed  in these risk  factors
occur, the Company's  business,  financial  condition,  results of operations or
cash flow could be adversely  affected in a material way and the market value of
the Company's common stock could decline.

Competition

Price  competition  and  consolidation  within  the Snack  Food  industry  could
adversely  impact the Company's  performance.  The Company's  business  requires
significant  marketing and sales effort to compete with larger companies.  These
larger  competitors  sell  a  significant  portion  of  their  products  through
discounting  and  other  price  cutting  techniques.  This  intense  competition
increases the  possibility  that the Company  could lose one or more  customers,
lose market share and/or be forced to,  increase  discounts and reduce  pricing,
any of which could have an adverse impact on the Company's  business,  financial
condition, results of operation and/or cash flow.

Commodity Fluctuations

Significant  commodity price fluctuations for certain  commodities  purchased by
the Company,  particularly potatoes,  could have a material impact on results of
operations.  In an attempt to manage  commodity price risk, the Company,  in the
normal  course of business,  enters into  contracts to purchase  pre-established
quantities of various  types of raw  materials,  at  contracted  prices based on
expected short term needs. The Company can also be adversely impacted by changes
in the cost of natural gas and other fuel costs. Long term increases in the cost
of natural gas and fuel costs could adversely impact the Company's cost of sales
and selling, marketing and delivery expenses.

There are other  risks and  factors  not  described  above that could also cause
actual results to differ  materially from those in any forward looking statement
made by the Company.


                                       5
<PAGE>


                        Executive Officers Of Registrant
                               And Its Subsidiary

     Name and Age              Position and Offices with Management
     ------------              ------------------------------------

John S. Stein, 69      Mr. Stein  is  Chairman  of the  Board.  He  was  elected
                           Chairman  on  June  1,  1996.   He  served  as  Chief
                           Executive  Officer from 1991 to April 4, 2001, and as
                           President  from 1985 to 1998 and from June 1, 2000 to
                           April 4, 2001.  Mr. Stein also served as President of
                           Golden Flake Snack Foods, Inc. from 1976 to 1991. Mr.
                           Stein  retired as an employee with the Company on May
                           31, 2002. Mr. Stein is elected Chairman annually, and
                           his present term will expire on June 1, 2007.

Mark W. McCutcheon, 51 Mr. McCutcheon is Chief  Executive  Officer and President
                           of the Company and  President  of Golden  Flake Snack
                           Foods,   Inc.,  a  wholly  owned  subsidiary  of  the
                           Company. He was elected President and Chief Executive
                           Officer of the Company on April 4, 2001 and President
                           of Golden  Flake on  November  1,  1998.  He has been
                           employed by Golden Flake since 1980.  Mr.  McCutcheon
                           is elected Chief  Executive  Officer and President of
                           the Company and  President of Golden Flake  annually,
                           and his present terms will expire on June 1, 2007.

Patty Townsend, 48     Ms. Townsend is Chief Financial  Officer,  Vice President
                           and  Secretary  of  Golden   Enterprises,   Inc.  and
                           Controller of Golden Flake Snack Foods, Inc. a wholly
                           owned  subsidiary  of the  Company.  She was  elected
                           Chief Financial Officer, Vice-President and Secretary
                           of the  Company  on March 1, 2004 and  Controller  of
                           Golden Flake on March 15, 1997. She has been employed
                           with the Company since 1988. Ms.  Townsend is elected
                           to her positions on an annual basis,  and her present
                           term of office will expire on June 1, 2007.

Randy Bates, 52        Mr. Bates  is   Executive,   Vice-President   of   Sales,
                           Marketing and Transportation for Golden Flake. He has
                           held these  positions  since  October 26,  1998.  Mr.
                           Bates was  Vice-President  of Sales  from  October 1,
                           1994 to 1998.  Mr. Bates has been  employed by Golden
                           Flake since March 1979.  Mr.  Bates is elected to his
                           positions on an annual basis, and his present term of
                           office will expire on June 1, 2007.

David Jones, 54        Mr. Jones  is  Executive  Vice-President  of  Operations,
                           Human Resources and Quality Control for Golden Flake.
                           He has held these  positions  since May 20, 2002. Mr.
                           Jones was  Vice-President of Manufacturing  from 1998
                           to 2002 and Vice-President of Operations from 2000 to
                           2002.  Mr.  Jones has been  employed by Golden  Flake
                           since 1984.  Mr. Jones is elected to his positions on
                           an annual basis,  and his present term of office will
                           expire on June 1, 2007.



                              ITEM 2. - PROPERTIES

The headquarters of the Company are located at One Golden Flake Drive,
Birmingham, Alabama 35205. The properties of the subsidiary are described below.



                                       6
<PAGE>

                                  Golden Flake

Manufacturing Plants and Office Headquarters

The main plant and office headquarters of Golden Flake are located at One Golden
Flake Drive, Birmingham,  Alabama, and are situated on approximately 40 acres of
land which is serviced by a railroad spur track. This facility consists of three
buildings which have a total of approximately 300,000 square feet of floor area.
The plant  manufactures  a full  line of Golden  Flake  products.  Golden  Flake
maintains  a  garage  and  vehicle  maintenance  service  center  from  which it
services,  maintains, repairs and rebuilds its fleet and delivery trucks. Golden
Flake has adequate employee and fleet parking.

Approximately 12 acres of the Birmingham property is undeveloped.  This property
is zoned for industrial use and is readily available for future use. The Company
has  executed a  Purchase  and Sale  Agreement  to sell this  property  for $1.5
million.  The purchaser has until December 23, 2006 to perform its due diligence
in regard to the property and may extend the due diligence inspection period for
two  additional 90 days periods which would extend the due diligence  inspection
period to June 21, 2007.  Purchaser may rescind the Purchase and Sale  Agreement
if it is not  satisfied  with its due diligence  investigation.  The property is
located in close proximity to the University of Alabama at Birmingham Campus and
purchaser  has  indicated  that it intends to develop the property  with student
housing.  At this time,  the Company  does not know whether the  purchaser  will
close on the Purchase and Sale Agreement and purchase the property.

Golden Flake also has a manufacturing  plant in Ocala,  Florida.  This plant was
placed in service in November 1984. The plant consists of approximately  100,000
square feet,  with allowance for future  expansion,  and is located on a 28-acre
site on Silver Springs Boulevard.  The Company manufactures corn chips, tortilla
chips and potato chips from this facility.


The manufacturing  plants, office headquarters and additional lands are owned by
Golden Flake free and clear of any debts.


Distribution Warehouses

Golden  Flake  owns  branch  warehouses  in  Birmingham,  Montgomery,  Midfield,
Demopolis,  Fort Payne,  Muscle  Shoals,  Huntsville,  Phenix City,  Tuscaloosa,
Mobile,  Dothan  and  Oxford,  Alabama;   Gulfport  and  Jackson,   Mississippi;
Chattanooga,  Knoxville, and Memphis,  Tennessee;  Decatur,  Marietta, and Macon
Georgia;  Jacksonville,  Panama City,  Tallahassee and Pensacola,  Florida;  New
Orleans,  Louisiana; and Little Rock, Arkansas. The warehouses vary in size from
2,400 to 8,000 square feet. All distribution warehouses are owned free and clear
of any debts.


Vehicles

Golden Flake owns a fleet of 869 vehicles  which  includes 630 route trucks,  47
tractors,  123 trailers  and 69 cars and  miscellaneous  vehicles.  There are no
liens or encumbrances on Golden Flake's vehicle fleet.  Golden Flake also owns a
1987 Cessna Citation II aircraft.



                           ITEM 3. - LEGAL PROCEEDINGS

There are no  material  pending  legal  proceedings  against  the Company or its
subsidiary other than ordinary routine litigation  incidental to the business of
the Company and its subsidiary.


                                       7
<PAGE>

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

     Not Applicable.


                                     PART II

                ITEM 5. - MARKET FOR REGISTRANT'S COMMON EQUITY,
                     RELATED STOCKHOLDER MATTERS AND ISSUER
                         PURCHASES OF EQUITY SECURITIES

GOLDEN ENTERPRISES, INC. AND SUBSIDIARY

MARKET AND DIVIDEND INFORMATION

The Company's  common stock is traded in the  over-the-counter  market under the
"NASDAQ"  symbol,  GLDC,  and  transactions  are  reported  through the National
Association of Securities  Dealers Automated  Quotation (NASDAQ) National Market
System. The following tabulation sets forth the high and low sale prices for the
common stock during each quarter of the fiscal years ended June 2, 2006 and June
3, 2005 and the amount of dividends paid per share in each quarter.  The Company
currently  expects that  comparable  regular cash  dividends will be paid in the
future.

                                                            Market Price
                                                       High     Low    Dividend
Quarter                                               Price    Price     Paid
Year Ended 2006                                                        Per share
---------------------------------------------------- -------- -------- ---------
First quarter    (13 weeks ended September 2, 2005)   $4.890   $3.430    $.0313
Second quarter   (13 weeks ended December 2, 2005)     4.850    3.070     .0313
Third quarter    (13 weeks ended March 3, 2006)        3.455    2.800     .0313
Fourth quarter   (13 weeks ended June 2, 2006)         3.600    2.320     .0313


                                                       High     Low    Dividend
Year Ended 2005                                       Price    Price     Paid
---------------------------------------------------- -------- -------- ---------
First quarter    (13 weeks ended August 27, 2004)     $3.110   $2.330    $.0313
Second quarter   (13 weeks ended November 27, 2004)    3.000    2.450     .0313
Third quarter    (14 weeks ended March 5, 2005)        4.109    2.010     .0313
Fourth quarter   (13 weeks ended June 3, 2005)         4.130    3.170     .0313

As of August 4, 2006, there were approximately 1,500 shareholders of record.



SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS.

The following table provides Equity  Compensation  Plan information  under which
equity securities of the Registrant are authorized for issuance:


                                       8
<PAGE>

<TABLE>
<CAPTION>
EQUITY COMPENSATION PLAN INFORMATION
<S>                             <C>                     <C>                            <C>
----------------------  ----------------------  ---------------------  ---------------------------------------
Plan category            Number of securities    Weighted-average        Number of securities remaining
                         to be issued upon       exercise price of       available for future issuance
                         exercise of out-        outstanding options,    under equity compensation plans
                         standing options,       warrants and rights     (excluding securities reflected in
                         warrants and rights                             column (a))
                         (a)                     (b)                     (c)
----------------------  ----------------------  ---------------------  ---------------------------------------
Equity compensation
plans approved by               369,000                 $3.776                         130,000
security holders
----------------------  ----------------------  ---------------------  ---------------------------------------
Equity compensation
plans not approved by              0                       0                              0
security holders
----------------------  ----------------------  ---------------------  ---------------------------------------
Total                           369,000                 $3.776                         130,000
----------------------  ----------------------  ---------------------  ---------------------------------------
</TABLE>



ISSUER PURCHASES OF EQUITY SECURITIES

The Company did not  repurchase any shares of its common stock during the fiscal
year ended June 2, 2006.


                                       9
<PAGE>

                        ITEM 6 - SELECTED FINANCIAL DATA

     GOLDEN ENTERPRISES, INC. AND SUBSIDIARY

     FINANCIAL REVIEW (Dollar amounts in thousands, except per share data)

<TABLE>
<CAPTION>

Operations                                               2006        2005        2004         2003         2002
                                                         ----        ----        ----         ----         ----
<S>                                               <C>         <C>         <C>         <C>          <C>
                                                   -------------------------------------------------------------
Net sales (b)...............................      $   106,547 $   103,144 $    97,583 $     96,604 $    104,335
Gain on sales of assets.....................              139         107          14          304          756
Other income................................              483         521         499          506          563
                                                   -------------------------------------------------------------
     Total revenues.........................          107,169     103,772      98,096       97,414      105,654
Cost of sales...............................           57,019      55,400      51,243       50,748       54,326
Selling, general and
  administrative expenses...................           49,168      48,022      46,595       47,686       47,653
Interest....................................              295         255         220          269          189
Income (Loss) before cumulative  effect of a
 change in accounting policy and income
 taxes......................................              687          95          38       (1,289)       3,486
Federal and state income taxes..............              398        (110)         84         (361)       1,367
Net income (loss) before cumulative
   effect of a change in accounting
   policy...................................              289         (15)        (46)        (928)       2,119
Cumulative effect of a change in accounting
 policy net of taxes........................            -----       -----       -----        -----          413
         Net income (loss)..................      $       289 $       (15)$       (46)$       (928)$      2,532
----------------------------------------------------------------------------------------------------------------
Financial data
Depreciation and amortization...............      $     2,285 $     2,268 $     2,347 $      2,490 $      2,594
Capital expenditures, net of disposals......            1,343       2,454         832          287        3,802
Working capital.............................            4,050       5,328       6,697         8337       10,989
Long-term debt..............................            1,915       2,426       2,327        3,862        5,083
Stockholders' equity........................           19,716      20,907      22,456       24,078       27,233
Total assets................................           33,728      34,402      33,623       36,492       40,840
----------------------------------------------------------------------------------------------------------------
Common stock data
Net income (loss) before cumulative
  effect of a change in accounting
  policy....................................      $       .02 $     (0.00)$     (0.00)$      (0.08)$       0.18
Cumulative effect of a change in
  accounting policy net of taxes............            -----       -----       -----        -----         0.03
Basic and diluted net income (loss).........              .02       (0.00)      (0.00)       (0.08)        0.21
Dividends...................................            .1250       .1250       .1250        .1875         0.25
Book value..................................             1.67        1.77        1.89         2.20         2.29
Price range.................................        4.89-2.32   4.15-2.01   3.50-2.15  5.530-1.640  4.550-2.950
----------------------------------------------------------------------------------------------------------------
Financial statistics
Current ratio...............................             1.36        1.54        1.84         2.09         2.37
Net income (loss) as percent of total
 revenues...................................              .27%       0.00%       0.00%       (1.0)%         2.4%
Net income (loss) as percent of
 stockholders' equity (a)...................              1.5%       0.00%       0.00%       (5.1)%        10.1%
----------------------------------------------------------------------------------------------------------------
Other data
Weighted average common shares
   outstanding..............................       11,835,330  11,846,419  11,879,891   11,883,305   11,898,097
Common shares outstanding at
   year end.................................       11,835,330  11,835,330  11,852,830   11,883,305   11,883,305
Approximate number of stockholders..........            1,500       1,500       1,500        1,500        1,500
</TABLE>

(a) Average amounts at beginning and end of fiscal year.
(b) Reflects on all periods presented, the effect on revenues of adopting the
provisions of the Emerging Issues Task Force of the Financial Accounting
Standards Board issue No. 01-9 Accounting for Consideration Given by a Vendor to
a Customer (Including a Reseller of the Vendor's Products) (EITF 01-9)


                                       10
<PAGE>

           ITEM 7. - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                       CONDITION AND RESULTS OF OPERATIONS

GOLDEN ENTERPRISES, INC. AND SUBSIDIARY

Management's Discussion and Analysis of
Financial Condition and Results of Operations


The following  discussion  provides an  assessment  of the  Company's  financial
condition, results of operations,  liquidity and capital resources and should be
read in conjunction with the accompanying  consolidated financial statements and
notes.

OVERVIEW

The Company  manufactures  and  distributes a full line of snack items,  such as
potato chips,  tortilla  chips,  corn chips,  fried pork skins,  baked and fried
cheese  curls,  onion  rings and puff corn.  The  products  are all  packaged in
flexible bags or other suitable wrapping material. The Company also sells a line
of cakes and  cookie  items,  canned  dips,  pretzels,  popcorn,  peanut  butter
crackers,  cheese  crackers,  dried meat  products  and nuts  packaged  by other
manufacturers using the Golden Flake label.

No single  product or product line  accounts for more than 50% of the  Company's
sales,  which  affords  some  protection  against  loss of volume  due to a crop
failure of major agricultural raw materials. Raw materials used in manufacturing
and  processing  the  Company's  snack food  products are  purchased on the open
market and under  contract  through  brokers and directly from growers.  A large
part of the raw materials used by the Company consists of farm commodities which
are  subject to  precipitous  changes in supply and price.  Weather  varies from
season to season and directly affects both the quality and supply available. The
Company has no control of the agricultural  aspects and its profits are affected
accordingly.

The  Company  sells  its  products  through  its  own  sales   organization  and
independent  distributors to commercial  establishments  that sell food products
primarily in the  Southeastern  United States.  The products are  distributed by
approximately  468 route  representatives  and independent  distributors who are
supplied with selling  inventory by the  Company's  trucking  fleet.  All of the
route  representatives  are  employees  of the  Company  and use  the  Company's
direct-store delivery system.



CRITICAL ACCOUNTING POLICIES AND ESTIMATES

The Company's  discussion and analysis of its financial condition and results of
operations are based upon the Company's consolidated  financial statements,  the
preparation of which in conformity with accounting principles generally accepted
in the United  States of  America  requires  management  to make  estimates  and
assumptions  that  in  certain  circumstances  affect  amounts  reported  in the
consolidated  financial  statements.  In preparing these  financial  statements,
management has made its best estimates and judgments of certain amounts included
in the financial  statements,  giving due  considerations  to  materiality.  The
Company does not believe there is a great  likelihood that materially  different
amounts  would  be  reported  under  different  conditions  or  using  different
assumptions  related  to  the  accounting  policies  described  below.  However,
application of these accounting  policies  involves the exercise of judgment and
use of assumptions as to future  uncertainties and, as a result,  actual results
could differ materially from these estimates.


                                       11
<PAGE>

Revenue Recognition

The  Company  recognizes  sales and related  costs upon  delivery or shipment of
products  to its  customers.  Sales are  reduced by returns  and  allowances  to
customers.

In November  2001,  the Emerging  Issues Task Force reached a consensus on Issue
No.  01-09  Accounting  for  Consideration  given  by a  Vendor  to  a  Customer
(Including a Reseller of the Vendor's Products)  effective for annual or interim
periods  beginning after December 15, 2001. The issue addresses the recognition,
measurement and income statement  classification  for certain sales  incentives.
The Company  implemented  this new  accounting  policy in the fourth  quarter of
fiscal 2002. The effect of this accounting  change is to adopt this policy as of
the  beginning  of the fiscal  2002 (June 1, 2001).  Certain of these  expenses,
including  slotting  fees,  previously  classified  as  selling,   general,  and
administrative  expenses,  are  now  characterized  as  offsets  to  net  sales.
Reclassifications have been made to prior period financial statements to conform
to current year presentation. Total vendor sales incentives now characterized as
reductions of net sales that  previously  would have been classified as selling,
general and  administrative  expenses were  approximately  $10.5 million,  $11.6
million and $11.6 million for the years ended 2006 2005 and 2004,  respectively.
There was no resulting impact on net operating results from adopting EITF 01-09.


Change in Accounting Policy

The Company is self-insured  for certain  casualty losses relating to automobile
liability, general liability, workers' compensation, property losses and medical
claims.  The Company also has stop loss  coverage to limit the exposure  arising
from  these  claims.   Automobile   liability,   general   liability,   workers'
compensation,  and  property  losses costs are covered by letters of credit with
the company's claim administrators.

The Company  changed its accounting  policy in the fourth quarter of fiscal 2005
with regard to the casualty insurance  obligations.  The Company adopted the use
of a third-party  actuary to estimate the casualty  insurance  obligations on an
annual  basis.  This  change in  accounting  policy  was made to  determine  the
ultimate loss and reserve requirements through actuarial  assumptions  including
compensation trends, health care cost trends and discount rates. The third-party
actuary also uses historical  information  for claims  frequency and severity in
order to establish  loss  development  factors.  The  cumulative  effect of this
change in  accounting  policy  did not have a material  effect on the  financial
statements.

Accounts Receivable

The Company  records  accounts  receivable  at the time  revenue is  recognized.
Amounts for bad debt expense are recorded in selling, general and administrative
expenses  on the  Consolidated  Statements  of  Operations.  The  amount  of the
allowance  for  doubtful  accounts  is based  on  management's  estimate  of the
accounts  receivable amount that is uncollectible.  Management records a general
reserve based on analysis of historical  data. In addition,  management  records
specific reserves for receivable  balances that are considered  high-risk due to
known facts  regarding  the  customer.  The  allowance for bad debts is reviewed
quarterly, and it is determined whether the amount should be changed. Failure of
a major customer to pay the Company amounts owed could have a material impact on
the financial  statements of the Company.  At June 2, 2006 and June 3, 2005, the
Company had accounts receivables in the amount of $8.4 million and $7.7 million,
net of an  allowance  for doubtful  accounts of $0.1  million and $0.2  million,
respectively.


                                       12
<PAGE>

The following  table  summarizes  the  Company's  customer  accounts  receivable
profile as of June 2, 2006:

                    Amount Range                         No. of Customers
                    ------------                         ----------------

  Less than $1,000.00..............................                      1,303
  $1,001.00-$10,000.00.............................                        607
  $10,001.00-$100,000.00...........................                        116
  $100,001.00-$500,000.00..........................                          9
  $500,001.00-$1,000,000.00........................                          0
  $1,000,001.00-$2,500,000.00......................                          1
                                                                         -----
  Total All Accounts...............................                      2,036
                                                                         =====


Inventories

Inventories  are stated at the lower of cost or market.  Cost is computed on the
first-in, first out method.

Accrued Expenses

Management  estimates  certain expenses in an effort to record those expenses in
the  period  incurred.  The  most  significant  estimates  relate  to  a  salary
continuation   plan  for  certain  key   executives  of  the  Company,   and  to
insurance-related  expenses,  including  self-insurance.  In 2005,  the  Company
adopted the use of a  third-party  actuary to estimate  the  casualty  insurance
obligations  on an annual basis.  In  determining  the ultimate loss and reserve
requirements,   the  third-party  actuary  uses  various  actuarial  assumptions
including  compensation trends,  health care cost trends and discount rates. The
third-party  actuary also uses historical  information for claims  frequency and
severity in order to establish loss development factors.

The actuarial  calculation  includes a margin of error to account for changes in
inflation, health care costs, compensation and litigation cost trends as well as
estimated  future incurred  claims.  The Company utilized a 75% confidence level
for estimating the ultimate outstanding casualty liability. Approximately 75% of
each claim should be equal to or less than the ultimate liability recorded based
on the historical trends experienced by the Company.  If the Company chose a 50%
factor,  the liability would have been reduced by approximate  $0.2 million.  If
the  Company  chose  a  90%  factor,  the  liability  would  have  increased  by
approximately $0.2 million.

The Company used 5% and 4%  investment  rates to discount the  estimated  claims
based on the historical payout pattern during 2006 and 2005, respectively. A one
percentage  point change in the discount  rate would have impacted the liability
by approximately $60,500.

Actual  ultimate  losses  could vary from  those  estimated  by the  third-party
actuary.  The Company believes the reserves established are reasonable estimates
of the ultimate liability based on historical trends.

As of June 2, 2006, the Company's  casualty reserve was $1.9 million and at June
3, 2005 the casualty reserve was $1.9 million.

Employee  medical  insurance  accruals  are  recorded  based on  medical  claims
processed as well as historical  medical claims  experienced for claims incurred
but not yet reported.  Differences in estimates and assumptions  could result in
an accrual requirement materially different from the calculated accrual.


                                       13
<PAGE>

OTHER MATTERS

Transactions  with  related  parties,  included  in  Note  13 of  the  Notes  to
Consolidated Financial Statements, are conducted on an arm's-length basis in the
ordinary course of business.

LIQUIDITY AND CAPITAL RESOURCES

Working  capital was $4.1  million at June 2, 2006  compared to $5.3  million at
June 3, 2005. Net cash provided by operations amounted to $2.6 million in fiscal
year 2006,  $2.4  million in fiscal  year 2005 and $2.9  million in fiscal  year
2004. During 2006, the principal source of liquidity for the Company's operating
needs was provided from  operating  activities,  credit  facilities  and cash on
hand.

Additions to property,  plant and equipment, net of disposals were $1.3 million,
$2.5 million and $0.8 million in fiscal years 2006, 2005 and 2004, respectively,
and are expected to be about $3.1 million in 2007.

Cash  dividends of $1.5 million,  $1.5 million and $1.5 million were paid during
fiscal years 2006, 2005, and 2004, respectively.

The amount of cash used to  purchase  treasury  shares in fiscal  2005 was $0.05
million and $0.09 million in fiscal 2004. No cash was used to purchase  treasury
shares in fiscal 2006.

During fiscal 2006,  the company's  debt proceeds net of re-paid debt was ($0.9)
million.

The following table  summarizes the significant  contractual  obligations of the
Company as of June 2, 2006:

<TABLE>
<CAPTION>
<S>                                 <C>          <C>          <C>          <C>          <C>
Contractual Obligations                 Total           2007    2008-2009    2010-2011   Thereafter
-----------------------                 -----           ----    ---------    ---------   ----------
Long-Term Debt                      $ 1,003,794  $   750,176  $   253,618  $         -  $         -
Salary Continuation Plan              1,773,899      112,536      253,870      297,760    1,109,733
                                     -----------  -----------  -----------  -----------  -----------
Total Contractual Obligations       $ 2,777,693  $   862,712  $   507,488  $   297,760  $ 1,109,733
                                     ===========  ===========  ===========  ===========  ===========
</TABLE>

Other Commitments

The  Company had letters of credit in the amount of  $3,084,365  outstanding  at
June 2, 2006 to support the Company's commercial self-insurance program.

The  Company  has a  line-of-credit  agreement  with a local  bank that  permits
borrowing  up to $2  million.  The  line-of-credit  is subject to the  Company's
continued credit  worthiness and compliance with the terms and conditions of the
advance  application.  The  Company's  line of  credit  debt at June 2, 2006 was
$313,923 with an interest rate of 8.00%.

The Company's current ratio at year end was 1.36 to l.00.

Available  cash,  cash from  operations  and available  credit under the line of
credit are expected to be sufficient to meet anticipated  cash  expenditures and
normal operating requirements for the foreseeable future.


                                       14
<PAGE>

OPERATING RESULTS

Net sales  increased  by 3% in fiscal year 2006,  increased by 6% in fiscal year
2005,  and  increased by 1% in fiscal year 2004.  Fiscal 2005  included an extra
week of sales.  If the extra week is  excluded,  the  increase  in net sales for
fiscal 2006 would have been 5%.

Cost of sales as a percentage of net sales  amounted to 53.5% in 2006,  53.7% in
2005, and 52.5% in 2004.

Selling,  general and  administrative  expenses were 46.1% of net sales in 2006,
46.5% in 2005 and 47.7% in 2004.

The Company's effective tax rates for 2006, 2005 and 2004 were 58.0%, 115.7% and
221.3%,  respectively.  Note 8 to the Consolidated Financial Statements provides
additional information about the provision for income taxes.

OFF-BALANCE SHEET ARRANGEMENT

The Company entered into a five-year term product purchase  agreement during the
year ending June 1, 2001 with a supplier.  Under the terms of the  agreement the
minimum  purchase  quantity  and the  purchase  price were fixed  resulting in a
minimum first year commitment of approximately $2,171,000. After the first year,
the  minimum  purchase  quantity  was  fixed  and the  purchase  unit  price was
negotiable  based on the current  market.  The  purchase  product  agreement  as
subsequently  amended  is  described  in more  detail in Note 13 of the Notes to
Consolidated Financial Statements.

MARKET RISK

The principal  market risks (i.e. the risk of loss arising from adverse  changes
in market rates and prices) to which the Company is exposed are  interest  rates
on its cash  equivalents,  investment  securities and bank loans,  and commodity
prices affecting the cost of its raw materials.

The Company's  cash  equivalents  consist of short-term  marketable  securities.
Presently these are variable rate money market funds.  Its bank loans also carry
variable rates.  Assuming year end 2006 variable rate investment levels and bank
loan balances, a one-point change in interest rates would impact interest income
by $80 and interest expense by $10,038.

The Company is subject to market risk with  respect to  commodities  because its
ability to recover  increased costs through higher pricing may be limited by the
competitive  environment  in which it operates.  The Company  purchases  its raw
materials on the open market,  under contract  through brokers and directly from
growers.  Futures  contracts  have been used  occasionally  to hedge  immaterial
amounts of commodity purchases, but none are presently being used.

INFLATION

Certain  costs and  expenses of the Company are affected by  inflation,  and the
Company's  prices for its  products  over the past several  years have  remained
relatively  flat. The Company will contend with the effect of further  inflation
through efficient purchasing,  improved manufacturing  methods,  pricing, and by
monitoring and controlling expenses.

Higher fuel and commodity costs continue to be a challenge.

ENVIRONMENTAL MATTERS

There have been no material  effects of compliance  with  government  provisions
regulating discharge of materials into the environment.

                                       15
<PAGE>

FORWARD-LOOKING STATEMENTS

This discussion contains certain  forward-looking  statements within the meaning
of the Private  Securities  Litigation  Reform Act of 1995. Actual results could
differ materially from those forward-looking statements.  Factors that may cause
actual  results  to  differ  materially  include  price  competition,   industry
consolidation,  raw  material  costs and  effectiveness  of sales and  marketing
activities,  as described in the Company's  filings with Securities and Exchange
Commission.

RECENT DEVELOPMENTS

The Company  continues to review and analyze its internal  audit program and has
directed  senior  management to dedicate  resources and take steps to strengthen
controls. The company engaged the services of a third party consultant to assist
in its review and analysis.  The Company is identifying and implementing actions
to improve the  effectiveness  of procedures  and internal  controls,  including
enhanced   training  with  respect  to  financial   reporting   and   disclosure
responsibilities.

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

In  December  2003,  the  FASB  issued  a  revised  SFAS  No.  132,  "Employers'
Disclosures about Pensions and Other Postretirement  Benefits." The revised SFAS
No.  132  revised   employers'   disclosures   about  pension  plans  and  other
postretirement  benefit plans.  It did not change the measurement or recognition
of those plans  required by SFAS No. 87,  "Employers'  Accounting for Pensions,"
SFAS No. 88, "Employers'  Accounting for Settlements and Curtailments of Defined
Benefit  Pension  Plans  and  for  Termination  Benefits,"  and  SFAS  No.  106,
"Employers'  Accounting for  Postretirement  Benefits Other Than  Pensions." The
revised  SFAS No. 132  retains  the  disclosure  requirements  contained  in the
original  SFAS No.  132.  It  requires  additional  disclosures  to those in the
original  SFAS No.  132 about  the  assets,  obligations,  cash  flows,  and net
periodic benefit cost of defined benefit pension plans and other defined benefit
postretirement  plans.  The adoption of this new standard did not have an impact
on the Company's financial position, results of operations or cash flows.

In October,  2004,  the American Jobs Creation Act of 2004 (The Act) was enacted
into  law.  The FASB had  issued  Staff  Position  109-1  and  109-2 to  provide
accounting  and disclosure  guidance  relating to the enactment of this Act. The
Act allows for a tax deduction of up to 9% (when fully  phased-in) of the lesser
of qualified  production  activities income" or taxable income as defined in the
Act beginning in 2005.  The tax benefits of this  deduction are to be recognized
in the year in which they are  reported on the tax  return.  The Act also allows
for a special  one-time tax deductions of 85 percent of certain foreign earnings
that are repatriated to a US taxpayer,  provided  certain  criteria are met. The
adoption of the Act did not have a material  impact on the  Company's  financial
position, results of operation or cash flows.

In November 2004, The FASB issued SFAS No. 151,  "Inventory Cost or Amendment of
ARB No. 43, Chapter 4." This Statement  amends AR 13 No. 43, to clarify abnormal
amounts of facility expense,  freight, handling costs and wasted material should
be recognized in current-period  charges.  In addition,  this Statement requires
that allocation of fixed production overhead to the costs on conversion be based
on the normal capacity of the production facilities. This provision is effective
for inventory  costs incurred during fiscal years beginning after June 15, 2005.
SAFS No.  151 is not  expected  to have an  impact  on the  Company's  financial
position, results of operations or cash flows.

In December 2004, the FASB revised its SFAS No. 123 (SFAS No. 123R), "Accounting
for Stock  Based  Compensation."  The  revision  established  standards  for the
accounting of transactions in which an entity  exchanges its equity  instruments
for  goods or  services  particularly  transaction  in which an  entity  obtains
employee  services in share based payment  transactions.  The revised  statement
requires a public  entity to measure the cost of employee  services  received in
exchange for an award of equity  instruments  based on the grant-date fair value
of the award.  That cost is to be  recognized  over the period  during which the
employee  is required to proved  service in exchange  for the award.  Changes in
fair  value  during  the  requisite  service  period  are  to be  recognized  as
compensation  cost over that period.  In addition the revised  statement  amends


                                       16
<PAGE>

SFAS No. 95,  "Statement  of Cash Flows," to require that excess tax benefits be
reported as a financing  cash flow rather than as a reduction of taxes paid. The
provisions of the revised  statement  are  effective  for  financial  statements
issued for the first annual reporting period beginning after June 15, 2005, with
early adoption encouraged. The adoption of this standard is not expected to have
a material impact on the company's financial position, results of operations, or
cash flows.

In December 2004, the FASB issued SFAS No. 153, "Exchanges of Nonmonetary Assets
- An  Amendment  of APB Opinion No.  29." APB  Opinion No. 29,  "Accounting  For
Nonmonetary Transactions," is based on the opinion that exchanges of nonmonetary
assets should be measured based on the fair value of the assets exchanged.  SFAS
No. 153  amends  Opinion  No. 29 to  eliminate  the  exception  for  nonmonetary
exchanges of similar  productive assets and replaces it with a general exception
for  exchanges  of  nonmonetary   assets  whose  results  are  not  expected  to
significantly change the future cash flows of the entity. The provisions of this
Statement  is  effective  for  nonmonetary  asset  exchanges  occurring  in  the
Company's fiscal year 2006. The adoption of SFAS No. 153 did not have a material
impact on the Company's financial position, results of operations or cash flows.

In May  2005,  the FASB  issued  SFAS No.  154,  "Accounting  Changes  and Error
Corrections, a replacement of APB Opinion No. 20 and FASB Statement No. 3." This
statement  carries forward without change the guidance  contained in APB Opinion
No. 20 for reporting the correction of an error in previously  issued  financial
statements and changes the  requirements for the accounting for and reporting of
a change in accounting  principle.  This  Statement is effective for  accounting
changes and  corrections of errors made in fiscal years beginning after December
15, 2005.  The  adoption of SFAS No. 154 is not  expected to have a  significant
impact on the Company's results of operations or financial position.

In September 2005, FASB issued its consensus on EITF Issue No. 04-13, Accounting
for Purchases and Sales of Inventory with the Same Counterparty.  This consensus
concludes  that an entity is required to treat sales and  purchases of inventory
between the entity and the same  counterparty as one transaction for purposes of
applying APB Opinion No. 29, Accounting for Nonmonetary  Transactions,  when the
transactions  are entered into in  contemplation  of each other.  The  consensus
should be applied to new arrangements entered into, or modifications or renewals
of  existing  arrangements,  in the first  interim  or annual  reporting  period
beginning  after  March 15,  2006.  This  consensus  is not  expected  to have a
material  effect on the Company's  financial  position,  results of operation or
cash flows.

In March 2005, the FASB issued FIN No. 47 (FIN47)  "Accounting  for  Conditional
Asset  Retirement  Obligations,   an  Interpretation  of  SFAS  No.  143."  This
Interpretation  clarifies that a conditional  retirement  obligation refers to a
legal obligation to perform an asset retirement activity in which the timing and
(or) method of settlement are  conditional on a future event that may or may not
be within the  control  of the  entity.  The  obligation  to  perform  the asset
retirement  activity is unconditional  even though  uncertainty exists about the
timing and (or)  method of  settlement.  Accordingly,  an entity is  required to
recognize  a  liability  for the fair value of a  conditional  asset  retirement
obligation if the fair value of the liability can be reasonably  estimated.  The
liability  should be  recognized  when  incurred,  generally  upon  acquisition,
construction or development of the asset.  FIN 47 is effective no later than the
end of the fiscal year ending after December 15, 2005.  The Company  adopted the
provisions  of FIN 47 during the fourth  quarter of 2005.  The  adoption  had no
impact on the financial condition, results of operations or cash flows.


                                       17
<PAGE>

ITEM 7 A.- QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

Included in Item 7, Management's  Discussion and Analysis of Financial Condition
and Results of Operations- Market Risk beginning on page 15.

ITEM 8.- FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The consolidated  financial  statements of the registrant and its subsidiary for
the year ended June 2, 2006, consisting of the following, are contained herein:

Consolidated Balance Sheets                - As of June 2, 2006 and June 3, 2005
Consolidated Statements of Operations      - Years ended 2006, 2005, and 2004
Consolidated Statements of Cash Flows      - Years ended 2006, 2005, and 2004
Consolidated Statements of Changes in
  Stockholders' Equity                     - Years ended 2006, 2005, and 2004
Notes to Consolidated Financial Statements - Years ended 2006, 2005, and 2004
Quarterly Results of Operations            - Years ended 2006, 2005, and 2004


                                       18
<PAGE>

               REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS



To the Stockholders and
Board of Directors of
Golden Enterprises, Inc.


We  have  audited  the  accompanying   consolidated  balance  sheets  of  Golden
Enterprises,  Inc. and  subsidiary as of June 2, 2006 and June 3, 2005,  and the
related consolidated  statements of operations,  changes in stockholders' equity
and cash flows for each of the three years in the three year  period  ended June
2, 2006.  Our audits also included the financial  statement  schedule  listed at
Item  15(a)  Schedule  II.  These  consolidated  financial  statements  are  the
responsibility of the Company's management.  Our responsibility is to express an
opinion on these consolidated 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
consolidated  financial statements are free of material  misstatement.  An audit
includes  examining,  on a test  basis,  evidence  supporting  the  amounts  and
disclosures in the  consolidated  financial  statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall consolidated  financial statement
presentation.  We believe  that our audits  provide a  reasonable  basis for our
opinion.

In our opinion, the consolidated  financial statements referred to above present
fairly, in all material respects,  the consolidated financial position of Golden
Enterprises,  Inc. and  subsidiary as of June 2, 2006 and June 3, 2005,  and the
consolidated  results of their  operations  and their cash flows for each of the
three  years in the three year period  ended June 2, 2006,  in  conformity  with
accounting  principles generally accepted in the United States of America.  Also
in our opinion, such financial statement schedule,  when considering in relation
to the  basic  consolidated  financial  statements,  taken as a whole,  presents
fairly, in all material respects, the information set forth therein.

As discussed in Note 2 to the financial  statements,  effective May 29, 2004 the
Company  changed its  accounting  policy with respect to the casualty  insurance
liability.





Birmingham, Alabama                    DUDLEY, HOPTON-JONES, SIMS & FREEMAN PLLP
July 24, 2006



                                       19
<PAGE>

                    GOLDEN ENTERPRISES, INC. AND SUBSIDIARY
                           CONSOLIDATED BALANCE SHEETS
                      As of June 2, 2006 and June 3, 2005
                                     ASSETS

                                                           2006            2005
                                                           ----            ----
CURRENT ASSETS
  Cash and cash equivalents.....................  $     321,627   $     371,204

  Receivables:
      Trade accounts............................      8,477,457       7,656,766
      Other.....................................         19,321         191,165
                                                   -------------   -------------
                                                      8,496,778       7,847,931
      Less: Allowance for doubtful accounts.....        133,422         156,467
                                                   -------------   -------------
                                                      8,363,356       7,691,464
      Notes receivable, current.................         53,672          49,558
                                                   -------------   -------------
                                                      8,417,028       7,741,022
                                                   -------------   -------------
  Inventories:
      Raw materials.............................      1,425,605       1,100,715
      Finished goods............................      2,850,466       2,869,352
                                                   -------------   -------------

                                                      4,276,071       3,970,067
                                                   -------------   -------------

  Prepaid expenses..............................      1,608,459       2,436,748
  Deferred income taxes.........................        669,976         589,946
                                                   -------------   -------------
         Total current assets...................     15,293,161      15,108,987
                                                   -------------   -------------

PROPERTY, PLANT AND EQUIPMENT
  Land..........................................      3,010,974       3,030,974
  Buildings.....................................     16,628,236      16,670,043
  Machinery and equipment.......................     36,561,024      35,170,539
  Transportation equipment......................     15,662,458      15,937,371
                                                   -------------   -------------
                                                     71,862,692      70,808,927
      Less: Accumulated depreciation............     58,279,641      56,561,891
                                                   -------------   -------------

                                                     13,583,051      14,247,036
                                                   -------------   -------------
OTHER ASSETS
  Notes receivable, long-term...................      1,716,756       1,770,428
  Cash surrender value of life insurance........      2,431,626       2,581,358
  Other.........................................        703,488         693,938
                                                   -------------   -------------

      Total other assets........................      4,851,870       5,045,724
                                                   -------------   -------------

      TOTAL.....................................  $  33,728,082   $  34,401,747
                                                   =============   =============

See Accompanying Notes to Consolidated Financial Statements


                                       20
<PAGE>

  LIABILITIES AND STOCKHOLDERS' EQUITY


                                                            2006           2005
                                                     ------------   ------------

CURRENT LIABILITIES
  Checks outstanding in excess of bank balances...  $  2,619,026   $  1,493,153
  Accounts payable................................     2,210,026      2,270,035
  Accrued income taxes............................       509,318              -
  Current portion of long-term debt...............       750,177        690,332
  Line of credit outstanding......................       313,923        522,008
  Other accrued expenses..........................     4,727,753      4,701,726
  Salary continuation plan........................       112,536        103,912
                                                     ------------   ------------

      Total current liabilities...................    11,242,759      9,781,166
                                                     ------------   ------------

LONG-TERM LIABILITIES.............................
  Note payable - bank, non-current................       253,618      1,013,846
  Salary continuation plan........................     1,661,363      1,735,885
  Deferred income taxes...........................       854,028        964,047
                                                     -------------- ------------

      Total long-term liabilities.................     2,769,009      3,713,778
                                                     ------------   ------------


STOCKHOLDERS' EQUITY..............................
  Common stock - $.66 2/3 par value:
  Authorized 35,000,000 shares;
      issued 13,828,793 shares....................     9,219,195      9,219,195
  Additional paid-in capital......................     6,497,954      6,497,954
  Retained earnings...............................    14,676,759     15,867,248
  Treasury shares - at cost (1,993,463 shares in
   2006 and 2005).................................   (10,677,594)   (10,677,594)
                                                     ------------   ------------


  Total stockholders' equity......................    19,716,314     20,906,803
                                                     ------------   ------------





      TOTAL.......................................  $ 33,728,082   $ 34,401,747
                                                     ============   ============


                                       21
<PAGE>

                    GOLDEN ENTERPRISES, INC. AND SUBSIDIARY
                     CONSOLIDATED STATEMENTS OF OPERATIONS
     For the Fiscal Years Ended June 2, 2006, June 3, 2005 and May 28, 2004

<TABLE>
<CAPTION>
<S>                                               <C>             <C>              <C>
                                                            2006             2005             2004
                                                            ----             ----             ----

  Net sales.....................................  $  106,546,696  $   103,143,979  $    97,583,493
  Cost of sales.................................      57,018,901       55,399,901       51,243,037
                                                   --------------  ---------------  ---------------
  Gross margin..................................      49,527,795       47,744,078       46,340,456

  Selling, general and administrative expenses..      49,168,289       48,022,149       46,595,519
                                                   --------------  ---------------  ---------------

  Operating income (loss).......................         359,506         (278,071)        (255,063)
                                                   --------------  ---------------  ---------------

  Other income (expenses):......................
  Gain on sale of assets........................         138,884          107,382           13,861
  Interest expense..............................        (294,549)        (255,132)        (219,608)
  Other income..................................         483,481          520,862          498,613
                                                   --------------  ---------------  ---------------

     Total other income (expenses)..............         327,816          373,112          292,866
                                                   --------------  ---------------  ---------------

     Income before income tax...................         687,322           95,041           37,803
                                                   --------------  ---------------  ---------------

         Provision for income taxes.............         398,386          109,965           83,649
                                                   --------------  ---------------  ---------------



     Net income (loss)..........................  $      288,936  $       (14,924) $       (45,846)
                                                   ==============  ===============  ===============

PER SHARE OF COMMON STOCK
  Net income....................................  $         0.02  $             -  $             -
  Basic earnings................................  $         0.02  $             -  $             -
                                                   ==============  ===============  ===============
  Diluted earnings..............................  $         0.02  $             -  $             -
                                                   ==============  ===============  ===============
</TABLE>


See Accompanying Notes to Consolidated Financial Statements


                                       22
<PAGE>

                     GOLDEN ENTERPRISES, INC. AND SUBSIDIARY
           CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
     For the Fiscal Years Ended June 2, 2006, June 3, 2005 and May 28, 2004


<TABLE>
<CAPTION>
<S>                                <C>          <C>         <C>           <C>            <C>
                                                 Additional                                   Total
                                      Common      Paid-in      Retained      Treasury     Stockholders'
                                       Stock       Capital     Earnings        Shares         Equity
                                    -----------  ----------  ------------  -------------  --------------

 Balance - May 30, 2003........... $ 9,219,195  $6,497,954  $ 18,893,553  $ (10,533,177) $   24,077,525

    Net loss - 2004...............           -           -       (45,846)             -         (45,846)

    Cash dividends paid...........                            (1,484,470)                    (1,484,470)
    Treasury shares purchased.....           -           -             -        (91,425)        (91,425)
                                    -----------  ----------  ------------  -------------  --------------

       Balance - May 28, 2004.....   9,219,195   6,497,954    17,363,237    (10,624,602)     22,455,784

    Net loss - 2005...............           -           -       (14,924)             -         (14,924)
                                                                                                      -
    Cash dividends paid...........           -           -    (1,481,065)             -      (1,481,065)
    Treasury shares purchased.....           -           -             -        (52,992)        (52,992)
                                    -----------  ----------  ------------  -------------  --------------

       Balance - June 3, 2005.....   9,219,195   6,497,954    15,867,248    (10,677,594)     20,906,803

    Net income - 2006.............           -           -       288,936              -         288,936
                                                                                                      -
    Cash dividends paid...........           -           -    (1,479,425)             -      (1,479,425)
                                    -----------  ----------  ------------  -------------  --------------

      Balance - June 2, 2006...... $ 9,219,195  $6,497,954  $ 14,676,759  $ (10,677,594) $   19,716,314
                                    ===========  ==========  ============  =============  ==============
</TABLE>


See Accompanying Notes to Consolidated Financial Statements


                                       23
<PAGE>

                     GOLDEN ENTERPRISES, INC. AND SUBSIDIARY
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
     For the Fiscal Years Ended June 2, 2006, June 3, 2005 and May 28, 2004

<TABLE>
<CAPTION>
<S>                                                                         <C>            <C>           <C>
                                                                                     2006          2005          2004
                                                                                     ----          ----          ----
CASH FLOWS FROM OPERATING ACTIVITIES
  Cash received from customers..............................................$ 105,874,804  $102,944,666  $ 97,937,596
  Interest income...........................................................      146,072       150,685       154,944
  Rental income.............................................................       36,469        32,471        31,948
  Other operating cash payments/receipts....................................      300,940       337,706       311,721
  Cash paid to suppliers & employees for cost of goods sold.................  (55,762,586)  (53,551,622)  (49,827,013)
  Cash paid for suppliers & employees for selling, general & administrative.  (47,888,447)  (47,233,583)  (45,894,592)
  Income taxes..............................................................      231,982         3,902       430,216
  Interest expense..........................................................     (294,549)     (255,132)     (219,608)
                                                                             -------------  ------------  ------------

      Net cash provided by operating activities.............................    2,644,685     2,429,093     2,925,212

CASH FLOWS FROM INVESTING ACTIVITIES........................................
  Purchase of property, plant and equipment.................................   (1,670,021)   (2,700,674)     (973,076)
  Proceeds from sale of property, plant and equipment.......................      188,221       139,644       155,288
  Collection of notes receivable............................................       49,558        45,760        42,254
                                                                             -------------  ------------  ------------

      Net cash used in investing activities.................................   (1,432,242)   (2,515,270)     (775,534)

CASH FLOWS FROM FINANCING ACTIVITIES........................................
  Debt proceeds.............................................................   21,525,001    16,952,546    10,304,286
  Debt repayments...........................................................  (22,433,469)  (15,725,922)  (11,727,633)
  Increase in checks outstanding in excess of bank
    balances................................................................    1,125,873       199,619       136,426
  Purchases of treasury shares..............................................            -       (52,992)      (91,425)
  Cash dividends paid.......................................................   (1,479,425)   (1,481,065)   (1,484,470)
                                                                             -------------  ------------  ------------

      Net cash used in financing activities.................................   (1,262,020)     (107,814)   (2,862,816)

NET (DECREASE) IN CASH AND
  CASH EQUIVALENTS..........................................................      (49,577)     (193,991)     (713,138)

CASH AND CASH EQUIVALENTS AT
  BEGINNING OF YEAR.........................................................      371,204       565,195     1,278,333
                                                                             -------------  ------------  ------------

CASH AND CASH EQUIVALENTS AT
  END OF YEAR...............................................................$     321,627  $    371,204  $    565,195
                                                                             =============  ============  ============
</TABLE>


See Accompanying Notes to Consolidated Financial Statements


                                       24
<PAGE>


                     GOLDEN ENTERPRISES, INC. AND SUBSIDIARY
                CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED
     For the Fiscal Years Ended June 2, 2006, June 3, 2005 and May 28, 2004

<TABLE>
<CAPTION>
<S>                                                                  <C>             <C>             <C>
                                                                               2006            2005           2004
                                                                               ----            ----           ----
CASH FLOWS FROM OPERATING ACTIVITIES
   Net income (loss)................................................ $      288,936  $      (14,924) $     (45,846)
   Adjustment to reconcile net income (loss) to net cash provided...
     by operating activities:
         Depreciation...............................................      2,284,669       2,267,718      2,346,880
         Deferred income taxes......................................       (190,049)        172,472        (30,251)
         Gain on sale of property and equipment.....................       (138,884)       (107,382)       (13,861)
     Change in receivables - net....................................       (671,892)       (199,313)       354,103
     Change in inventories..........................................       (306,004)       (267,018)      (397,854)
     Change in prepaid expenses.....................................        828,289        (143,805)       588,178
     Change in cash surrender value of insurance....................        149,732          67,209        114,172
     Change in other assets.........................................         (9,550)       (104,178)       (93,585)
     Change in accounts payable.....................................        (60,009)        453,156        115,945
     Change in accrued expenses.....................................         26,027         366,928         45,350
     Change in salary continuation plan.............................        (65,898)        (61,770)       (58,019)
     Change in accrued income taxes.................................        509,318               -              -
                                                                      --------------  --------------  -------------

         Net cash provided by operating activities.................. $    2,644,685  $    2,429,093  $   2,925,212
                                                                      ==============  ==============  =============
</TABLE>


See Accompanying Notes to Consolidated Financial Statements


                                       25
<PAGE>

                     GOLDEN ENTERPRISES, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
     For the Fiscal Years Ended June 2, 2006, June 3, 2005 and May 28, 2004


NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
---------------------------------------------------

The accounting and reporting policies of Golden Enterprises, Inc. and subsidiary
("Company")  conform to accounting  principles  generally accepted in the United
States of America and to general principles within the snack foods industry. The
following is a description of the more significant accounting policies:

Nature of the Business
----------------------
The Company  manufactures  and  distributes  a full line of snack items that are
sold  through  its  own  sales  organization  and  independent  distributors  to
commercial  establishments that sell food products primarily in the Southeastern
United States.

Consolidation
-------------
The   consolidated   financial   statements   include  the  accounts  of  Golden
Enterprises,  Inc. and its  wholly-owned  subsidiary,  Golden Flake Snack Foods,
Inc., (the "Company").  All significant inter-company  transactions and balances
have been eliminated.

Revenue Recognition
-------------------
The  Company  recognizes  sales and related  costs upon  delivery or shipment of
products  to its  customers.  Sales are  reduced by returns  and  allowances  to
customers.

Fiscal Year
-----------
The Company  ends its fiscal year on the Friday  closest to the last day in May.
The years ended June 2, 2006, June 3, 2005 and May 28, 2004 included 52, 53, and
52 weeks, respectively.

Fair Value of Financial Instruments
-----------------------------------
The carrying amount of cash and cash equivalents,  receivables, accounts payable
and short and long-term debt approximate fair value.

Cash and Cash Equivalents
-------------------------
The Company considers all highly liquid investments purchased with a maturity of
three months or less to be cash equivalents.

Inventories
-----------
Inventories  are stated at the lower of cost or market.  Cost is computed on the
first-in, first-out method.

Property, Plant and Equipment
-----------------------------
Property,  plant and  equipment  are  stated at cost.  For  financial  reporting
purposes,  depreciation and amortization  have been provided  principally on the
straight-line  method over the estimated useful lives of the respective  assets.
Accelerated methods are used for tax purposes.

Expenditures  for maintenance and repairs are charged to operations as incurred;
expenditures  for renewals and  betterments  are  capitalized and written off by
depreciation and amortization charges.  Property retired or sold is removed from
the asset and related accumulated  depreciation  accounts and any profit or loss
resulting therefrom is reflected in the statements of operations.


                                       26
<PAGE>

                     GOLDEN ENTERPRISES, INC. AND SUBSIDIARY
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
     For the Fiscal Years Ended June 2, 2006, June 3, 2005 and May 28, 2004

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
---------------------------------------------------------------


Self-Insurance
--------------
The Company is self-insured  for certain  casualty losses relating to automobile
liability, general liability, workers' compensation, property losses and medical
claims.  The Company also has stop loss  coverage to limit the exposure  arising
from  these  claims.   Automobile   liability,   general   liability,   workers'
compensation,  and property loss costs are covered by letters of credit with the
company's claim administrators.

As discussed in Note 2, the Company  changed its accounting  policy with respect
to these  casualty  insurance  liabilities in the fourth quarter of fiscal 2005.
The Company now uses a  third-party  actuary to estimate the casualty  insurance
obligations on an annual basis,  using the fully developed  actuarial  method of
accounting for the self-insurance  liability.  The third-party actuary also uses
historical  information for claims  frequency and severity in order to establish
loss development factors.


Advertising
-----------
The Company expenses advertising costs as incurred.  These costs are included in
selling,  general and administrative  expenses in the Consolidated  Statement of
Operations.   Advertising   expense  amounted  to  $5,970,393,   $5,503,641  and
$4,609,366 for the fiscal years 2006, 2005 and 2004, respectively.

Income Taxes
------------
Deferred  income taxes are provided  using the  liability  method to measure tax
consequences  resulting from differences between financial  accounting standards
and applicable  income tax laws.  Deferred tax assets are reduced by a valuation
allowance  when, in the opinion of  management,  it is more likely than not that
some portion or all of the  deferred  tax assets will not be realized.  Deferred
tax assets and  liabilities  are adjusted for the effects of changes in tax laws
and rates on the date of enactment.

Segment Information
-------------------
The  Company  does not  identify  separate  operating  segments  for  management
reporting purposes.  The results of operations are the basis on which management
evaluates  operations  and makes  business  decisions.  The Company's  sales are
generated primarily within the Southeastern United States.

Stock Options
-------------
The Company applies APB Opinion 25,  "Accounting for Stock Issued to Employees,"
and  related  interpretations  in  accounting  for all stock  option  plans.  No
stock-based  compensation  cost has been  recognized  in  operations  for  stock
options  granted because the option exercise price was equal to or more than the
market price of the underlying common stock on the date of grant.

SFAS No. 123, "Accounting for Stock-Based  Compensation," as amended by SFAS No.
148,  "Accounting  for  Stock-Based  Compensation - Transition and  Disclosure,"
requires  the  Company to provide  pro forma  information  regarding  net income
(loss) as if the compensation cost for the Company's stock option plans had been
determined in accordance with the fair value based method prescribed in SFAS No.
123. To provide the required pro forma  information,  the Company  estimates the
fair  value of each stock  option at the grant  date by using the  Black-Scholes
option-pricing model.



                                       27
<PAGE>

                     GOLDEN ENTERPRISES, INC. AND SUBSIDIARY
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
      For the Fiscal Year Ended June 2, 2006, June 3, 2005 and May 28, 2004

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
---------------------------------------------------------------

The  following  table  represents  the pro forma effect on net income (loss) and
earnings  (loss) per share as if the  Company  had  applied the fair value based
method   recognition   provisions  of  SFAS  No  123  to  stock-based   employee
compensation:

<TABLE>
<CAPTION>
                                                                            Year End
                                                               ----------------------------------
<S>                                                           <C>         <C>         <C>
                                                                    2006        2005        2004
                                                                    ----        ----        ----
 Net income (loss) as reported.............................   $  288,936  $  (14,924) $  (45,846)
 Deduct: total stock-based employee compensation expense...
   determined under fair value based method for all awards,
   net of related tax effects..............................      (10,458)    (10,458)    (12,291)
                                                               ----------  ----------  ----------
   Pro forma net income (loss).............................   $  278,478     (25,382)    (58,137)
                                                               ==========  ==========  ==========

 Earnings per share:.......................................
   Basic - as reported.....................................   $     0.02  $        -  $        -
                                                               ==========  ==========  ==========
   Basic - Pro forma.......................................   $     0.02  $        -  $        -
                                                               ==========  ==========  ==========

   Diluted - as reported...................................   $     0.02  $        -  $        -
                                                               ==========  ==========  ==========
   Diluted - Pro forma.....................................   $     0.02  $        -  $        -
                                                               ==========  ==========  ==========
</TABLE>

Shipping and Handling Costs
---------------------------
Shipping and  handling  costs,  which  include  salaries and vehicle  operations
expenses  relating to the  delivery of products to  customers by the Company are
classified as Selling, General and Administrative (SG&A) expenses.  Shipping and
handling  costs  classified as SG&A amounted to $2,991,430  million,  $2,788,746
million  and  $2,347,827  million  for the  fiscal  years  2006,  2005 and 2004,
respectively.

Use of Estimates
----------------
The preparation of financial  statements in conformity  with 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 revenues  and expenses  during the  reporting  period.
Actual results could differ from those estimates.

Recently Issued Accounting Pronouncements
-----------------------------------------
In  December  2003,  the  FASB  issued  a  revised  SFAS  No.  132,  "Employers'
Disclosures about Pensions and Other Postretirement  Benefits." The revised SFAS
No.  132  revised   employers'   disclosures   about  pension  plans  and  other
postretirement benefit plans.


                                       28
<PAGE>

                     GOLDEN ENTERPRISES, INC. AND SUBSIDIARY
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
     For the Fiscal Years Ended June 2, 2006, June 3, 2005 and May 28, 2004


NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
---------------------------------------------------------------

It did not change the measurement or recognition of those plans required by SFAS
No.  87,  "Employers'   Accounting  for  Pensions,"  SFAS  No.  88,  "Employers'
Accounting for Settlements and Curtailments of Defined Benefit Pension Plans and
for  Termination  Benefits,"  and  SFAS  No.  106,  "Employers'  Accounting  for
Postretirement  Benefits Other Than  Pensions." The revised SFAS No. 132 retains
the disclosure  requirements contained in the original SFAS No. 132. It requires
additional  disclosures  to those in the original SFAS No. 132 about the assets,
obligations,  cash  flows,  and net  periodic  benefit  cost of defined  benefit
pension plans and other defined benefit  postretirement  plans.  The adoption of
this new standard did not have an impact on the  Company's  financial  position,
results of operations or cash flows.

In October,  2004,  the American Jobs Creation Act of 2004 (The Act) was enacted
into  law.  The FASB had  issued  Staff  Position  109-1  and  109-2 to  provide
accounting  and disclosure  guidance  relating to the enactment of this Act. The
Act allows for a tax deduction of up to 9% (when fully  phased-in) of the lesser
of qualified  production  activities income" or taxable income as defined in the
Act beginning in 2005.  The tax benefits of this  deduction are to be recognized
in the year in which they are  reported on the tax  return.  The Act also allows
for a special  one-time tax deductions of 85 percent of certain foreign earnings
that are repatriated to a US taxpayer,  provided  certain  criteria are met. The
adoption of the Act did not have a material  impact on the  Company's  financial
position, results of operation or cash flows.

In November 2004, The FASB issued SFAS No. 151,  "Inventory Cost or Amendment of
ARB No. 43, Chapter 4." This Statement  amends AR 13 No. 43, to clarify abnormal
amounts of facility expense,  freight, handling costs and wasted material should
be recognized in current-period  charges.  In addition,  this Statement requires
that allocation of fixed production overhead to the costs on conversion be based
on the normal capacity of the production facilities. This provision is effective
for inventory  costs incurred during fiscal years beginning after June 15, 2005.
SAFS No.  151 is not  expected  to have an  impact  on the  Company's  financial
position, results of operations or cash flows.

In December 2004, the FASB revised its SFAS No. 123 (SFAS No. 123R), "Accounting
for Stock  Based  Compensation."  The  revision  established  standards  for the
accounting of transactions in which an entity  exchanges its equity  instruments
for  goods or  services  particularly  transaction  in which an  entity  obtains
employee  services in share based payment  transactions.  The revised  statement
requires a public  entity to measure the cost of employee  services  received in
exchange for an award of equity  instruments  based on the grant-date fair value
of the award.  That cost is to be  recognized  over the period  during which the
employee  is required to proved  service in exchange  for the award.  Changes in
fair  value  during  the  requisite  service  period  are  to be  recognized  as
compensation  cost over that period.  In addition the revised  statement  amends
SFAS No. 95,  "Statement  of Cash Flows," to require that excess tax benefits be
reported as a financing  cash flow rather than as a reduction of taxes paid. The
provisions of the revised  statement  are  effective  for  financial  statements
issued for the first annual reporting period beginning after June 15, 2005, with
early adoption encouraged. The adoption of this standard is not expected to have
a material impact on the company's financial position, results of operations, or
cash flows.

In December 2004, the FASB issued SFAS No. 153, "Exchanges of Nonmonetary Assets
- An  Amendment  of APB Opinion No.  29." APB  Opinion No. 29,  "Accounting  For
Nonmonetary Transactions," is based on the opinion that exchanges of nonmonetary
assets should be measured based on the fair value of the assets exchanged.  SFAS
No. 153  amends  Opinion  No. 29 to  eliminate  the  exception  for  nonmonetary
exchanges of similar  productive assets and replaces it with a general exception
for  exchanges  of  nonmonetary   assets  whose  results  are  not  expected  to
significantly change the future cash flows of the entity. The provisions of this
Statement is effective for nonmonetary asset exchanges


                                       29
<PAGE>


                     GOLDEN ENTERPRISES, INC. AND SUBSIDIARY
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
     For the Fiscal Years Ended June 2, 2006, June 3, 2005 and May 28, 2004



NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
---------------------------------------------------------------


occurring in the  Company's  fiscal year 2006.  The adoption of SFAS No. 153 did
not have a  material  impact on the  Company's  financial  position,  results of
operations or cash flows.

In May  2005,  the FASB  issued  SFAS No.  154,  "Accounting  Changes  and Error
Corrections, a replacement of APB Opinion No. 20 and FASB Statement No. 3." This
statement  carries forward without change the guidance  contained in APB Opinion
No. 20 for reporting the correction of an error in previously  issued  financial
statements and changes the  requirements for the accounting for and reporting of
a change in accounting  principle.  This  Statement is effective for  accounting
changes and  corrections of errors made in fiscal years beginning after December
15, 2005.  The  adoption of SFAS No. 154 is not  expected to have a  significant
impact on the Company's results of operations or financial position.

In September 2005, FASB issued its consensus on EITF Issue No. 04-13, Accounting
for Purchases and Sales of Inventory with the Same Counterparty.  This consensus
concludes  that an entity is required to treat sales and  purchases of inventory
between the entity and the same  counterparty as one transaction for purposes of
applying APB Opinion No. 29, Accounting for Nonmonetary  Transactions,  when the
transactions  are entered into in  contemplation  of each other.  The  consensus
should be applied to new arrangements entered into, or modifications or renewals
of  existing  arrangements,  in the first  interim  or annual  reporting  period
beginning  after  March 15,  2006.  This  consensus  is not  expected  to have a
material  effect on the Company's  financial  position,  results of operation or
cash flows.

In March 2005, the FASB issued FIN No. 47 (FIN47)  "Accounting  for  Conditional
Asset  Retirement  Obligations,   an  Interpretation  of  SFAS  No.  143."  This
Interpretation  clarifies that a conditional  retirement  obligation refers to a
legal obligation to perform an asset retirement activity in which the timing and
(or) method of settlement are  conditional on a future event that may or may not
be within the  control  of the  entity.  The  obligation  to  perform  the asset
retirement  activity is unconditional  even though  uncertainty exists about the
timing and (or)  method of  settlement.  Accordingly,  an entity is  required to
recognize  a  liability  for the fair value of a  conditional  asset  retirement
obligation if the fair value of the liability can be reasonably  estimated.  The
liability  should be  recognized  when  incurred,  generally  upon  acquisition,
construction or development of the asset.  FIN 47 is effective no later than the
end of the fiscal year ending after December 15, 2005.  The Company  adopted the
provisions  of FIN 47 during the fourth  quarter of 2005.  The  adoption  had no
impact on the financial condition, results of operations or cash flows.


                                       30
<PAGE>



                     GOLDEN ENTERPRISES, INC. AND SUBSIDIARY
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
     For the Fiscal Years Ended June 2, 2006, June 3, 2005 and May 28, 2004

NOTE 2 - CHANGE IN ACCOUNTING POLICY
------------------------------------

The Company  changed its accounting  policy in the fourth quarter of fiscal 2005
with regard to casualty insurance reserves. The effect of this accounting change
was to adopt this  policy as of the  beginning  of fiscal  2005 (May 29,  2004).
Previously,  casualty insurance reserves were calculated using the case reserves
method.  The  Company  changed  this  accounting  policy to the fully  developed
actuarial  method of estimating  insurance  reserves.  This change in accounting
policy was made to improve the  quality of the  accounting  estimate.  The fully
developed  method  reflects  future costs  inherent in the total  population  of
claims  including  claims  reported and IBNR  (incurred but not  reported).  The
estimate includes the recognition of inflation trends and the fact that injuries
may become  more  severe  over time.  The  cumulative  effect of this  change in
accounting  policy did not have a material  effect on the financial  statements.
The accounting  change also increased net income before the cumulative effect in
2005 by $240,028 ($.02) per share.


                                              First       Second       Third
                                           -----------  ----------  -----------
Basic earnings per share
     Net income (loss) - as reported      $      0.02  $        -  $     (0.04)
     Net income (loss) - pro forma               0.01           -        (0.01)

Diluted earnings per share
     Net income (loss) - as reported      $      0.02  $        -  $     (0.04)
     Net income (loss) - pro forma               0.01           -        (0.01)

NOTE 3- NOTES RECEIVABLE
------------------------

Notes receivable as of June 2, 2006 and June 3, 2005 consist of the following:
<TABLE>
<CAPTION>
<S>                  <C>                                                      <C>            <C>
                                                                                       2006           2005
                                                                                       ----           ----
   8% note, due in 120 monthly installments of $3,640
    through November 1, 2010, collateralized by property....................  $     164,608  $     193,836

   8% note, due in 360 monthly installments of $12,474
   through November 1, 2030, collateralized by property.....................      1,605,820      1,626,150
                                                                               -------------  -------------
                                                                                  1,770,428      1,819,986
        Less current portion................................................         53,672         49,558
                                                                               -------------  -------------
                                                                              $   1,716,756  $   1,770,428
                                                                               =============  =============
        Maturities at Year End
                                                   2008.....................         58,126
                                                   2009.....................         62,951
                                                   2010.....................         68,176
                                                   2011.....................         51,630
                                                   2012.....................         32,804
                                              Thereafter....................      1,443,069
</TABLE>


                                       31
<PAGE>

                     GOLDEN ENTERPRISES, INC. AND SUBSIDIARY
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
     For the Fiscal Years Ended June 2, 2006, June 3, 2005 and May 28, 2004


NOTE 4 - PREPAID EXPENSES
-------------------------

At June 2, 2006 and June 3, 2005, prepaid expenses consist of the following:

<TABLE>
<CAPTION>
<S>                                                  <C>              <C>
                                                               2006             2005
                                                       -------------    -------------

  Prepaid slotting fees...........................   $      177,479   $      421,198
  Other prepaid expenses..........................        1,430,980        2,015,550
                                                       -------------    -------------

                                                     $    1,608,459   $    2,436,748
                                                       =============    =============

NOTE 5 - OTHER ACCRUED EXPENSES

At June 2, 2006 and June 3, 2005, other accrued
 expenses consist of the following:

                                                               2006             2005
                                                       -------------    -------------

  Accrued payroll.................................   $      461,050   $      468,047
  Self insurance liability........................        1,885,500        1,931,800
  Accrued vacation................................        1,402,369        1,410,187
  Other accrued expenses..........................          978,834          891,692
                                                       -------------    -------------

                                                     $    4,727,753   $    4,701,726
                                                       =============    =============
</TABLE>

NOTE 6- LINE OF CREDIT
----------------------

The  Company  has a line of credit  agreement  with a local bank  which  permits
borrowing  up to $2  million.  The balance on the line of credit at June 2, 2006
was  $313,923 a rate of 8.00%.  The line of credit is  subject to the  Company's
continued credit  worthiness and compliance with the terms and conditions of the
advance application.

NOTE 7 - LONG-TERM LIABILITIES
------------------------------

  At June 2, 2006 and June 3, 2005, long-term debt consists of the
   following:

<TABLE>
<CAPTION>
<S>                                                                         <C>            <C>
                                                                               2006           2005
                                                                       -------------  -------------
  Note payable - bank - payable in equal monthly installments of
  $65,108 including interest at the LIBOR index rate plus 1.75%
  (6.77% at June 2, 2006) through November 30, 2007, secured
  by equipment......................................................  $   1,003,794  $   1,704,178

    Less: current portion...........................................        750,176        690,332
                                                                       -------------  -------------

                                                                      $     253,618  $   1,013,846
                                                                       =============  =============

                                                                                              2008
                                                                                      -------------

    Maturities at June 2, 2006......................................                 $     253,618
                                                                                      =============
</TABLE>


                                       32
<PAGE>

                     GOLDEN ENTERPRISES, INC. AND SUBSIDIARY
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
     For the Fiscal Years Ended June 2, 2006, June 3, 2005 and May 28, 2004


NOTE 7- LONG-TERM LIABILITIES - CONTINUED
-----------------------------------------

Other  long-term  obligations  at June 2, 2006 and June 3, 2005  consist  of the
following:
                                                       2006          2005
                                                ------------  ------------

      Salary continuation plan...............  $  1,773,899  $  1,839,797
      Less: current portion..................      (112,536)     (103,912)
                                                ------------  ------------

                                               $  1,661,363  $  1,735,885
                                                ============  ============

The Company is accruing the present  values of the estimated  future  retirement
payments  over the  period  from the date of the  agreements  to the  retirement
dates, for certain key executives.  The Company recognized  compensation expense
of  approximately  $38,058,  $34,178 and $30,576 for fiscal 2006, 2005 and 2004,
respectively.

NOTE 8 - INCOME TAXES
---------------------

At June 2, 2006,  June 3, 2005 and May 28, 2004 the  provision  for income taxes
consists of the following:

                                             2006        2005        2004
                                        ----------  ----------  ----------
Current:
  Federal............................. $  523,353  $  (55,620) $  101,350
  State...............................     65,082      (6,890)     12,550
                                        ----------  ----------  ----------

                                          588,435     (62,510)    113,900
Deferred:
  Federal.............................   (169,111)    155,191     (27,859)
  State...............................    (20,938)     17,284      (2,392)
                                        ----------  ----------  ----------

                                         (190,049)    172,475     (30,251)
                                        ----------  ----------  ----------

Total................................. $  398,386  $  109,965  $   83,649
                                        ==========  ==========  ==========


                                       33
<PAGE>

                     GOLDEN ENTERPRISES, INC. AND SUBSIDIARY
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
     For the Fiscal Years Ended June 2, 2006, June 3, 2005 and May 28, 2004


NOTE 8- INCOME TAXES - CONTINUED
--------------------------------

The effective tax rate for continuing  operations  differs from the expected tax
using statutory rates. A reconciliation  between the expected tax and actual tax
follows:

<TABLE>
<CAPTION>
<S>                                                              <C>            <C>            <C>
                                                                          2006           2005           2004
                                                                  -------------  -------------  -------------

 Tax on income at statutory rates..........................      $     233,689  $      32,327  $      12,853
 (Decrease) increase resulting from:.......................
   State income taxes, less Federal income tax effect......             42,954         (4,547)         8,741
   Tax exempt interest.....................................               (881)        (1,142)        (1,388)
   Change in valuation allowance...........................             36,040         57,559         55,000
   Other - net.............................................             86,584         25,768          8,443
                                                                  -------------  -------------  -------------

     Total.................................................      $     398,386  $     109,965  $      83,649
                                                                  =============  =============  =============

The tax effects of temporary differences that result in deferred tax assets and liabilities are as follows:


                                                                                         2006           2005
                                                                                 -------------  -------------
 Deferred tax assets................................................
   Salary continuation plan.........................................             $     650,489  $     674,654
   Accrued vacation.................................................                   514,248        517,116
   Contribution carryforward........................................                   423,569        383,657
   Inventory capitalization.........................................                    16,463         21,471
   Allowance for doubtful accounts..................................                    48,926         57,377
   Other accrued expenses...........................................                   155,421        164,241
                                                                                  -------------  -------------

     Gross defered tax assets before valuation allowance............                 1,809,116      1,818,516
     Less valuation allowance.......................................                  (268,599)      (232,559)
                                                                                  -------------  -------------

 Total deferred tax assets..........................................                 1,540,517      1,585,957
                                                                                  -------------  -------------

 Deferred tax liabilities...........................................
   Property and equipment...........................................                 1,659,487      1,805,605
   Prepaid expenses.................................................                    65,082        154,453
                                                                                  -------------  -------------
 Total deferred tax liabilities.....................................                 1,724,569      1,960,058
                                                                                  -------------  -------------

     Net deferred tax liability.....................................             $    (184,052) $    (374,101)
                                                                                  =============  =============
</TABLE>


                                       34
<PAGE>

                     GOLDEN ENTERPRISES, INC. AND SUBSIDIARY
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
     For the Fiscal Years Ended June 2, 2006, June 3, 2005 and May 28, 2004


NOTE 9- EMPLOYEE BENEFIT PLANS
------------------------------

The Company has trusteed "Qualified  Profit-Sharing Plans" that were amended and
restated  effective  June 1, 1996 to add a 401(k)  salary  reduction  provision.
Under this  provision,  employees  can  contribute  up to fifty percent of their
compensation to the plan on a pretax basis subject to regulatory limits; and the
Company,  at its  discretion,  can  match up to 4 percent  of the  participants'
compensation.  The annual contributions to the plans are determined by the Board
of  Directors.  Total plan  expenses  for the years ended June 2, 2006,  June 3,
2005, and May 28, 2004 were $122,641, $129,529 and $94,683 respectively.

The Company  has an  Employee  Stock  Ownership  Plan that covers all  full-time
employees.  The annual  contributions to the plan are amounts  determined by the
Board of  Directors  of the Company.  Annual  contributions  are made in cash or
common stock of the Company.  The Employee Stock Ownership Plan expenses for the
years  ended  June 2,  2006,  June 3,  2005 and May 28,  2004  were  $-0-.  Each
participant's account is credited with an allocation of shares acquired with the
Company's  annual   contributions,   dividends   received  on  ESOP  shares  and
forfeitures of terminated participants' nonvested accounts.

The  Company has a salary  continuation  plan with  certain of its key  officers
whereby  monthly  benefits will be paid for a period of fifteen years  following
retirement.  The  Company  is  accruing  the  present  value of such  retirement
benefits  until the key officers  reach normal  retirement age at which time the
principal  portion of the retirement  benefits paid are applied to the liability
previously accrued. The change in the liability for the Salary Continuation Plan
is as follows:

                                                              2006         2005
                                                        -----------  -----------
   Accrued Salary Continuation Plan - beginning of
    year.............................................. $ 1,839,797  $ 1,901,567

   Benefits Accrued...................................      38,058       34,178

   Benefits Paid......................................    (103,956)     (95,948)
                                                        -----------  -----------

   Accrued Salary Continuation Plan - end of year..... $ 1,773,899  $ 1,839,797
                                                        ===========  ===========


NOTE 10 - LONG-TERM INCENTIVE PLANS
-----------------------------------

The Company has a  long-term  incentive  plan  currently  in effect  under which
future  stock  option  grants  may be  issued.  This  Plan  (the  1996  Plan) is
administered by the Stock Option Committee of the Board of Directors,  which has
sole discretion, subject to the terms of the Plan, to determine those employees,
including executive officers, eligible to receive awards and the amount and type
of such awards.  The Stock Option  Committee also has the authority to interpret
the Plan,  formulate the terms and  conditions of award  agreements and make all
other  determinations  required  in  the  administration  thereof.  All  options
outstanding at the end of the 2006, 2005, and 2004 are exercisable.

The 1996 Plan  provides for the granting of Incentive  Stock  Options as defined
under the Internal Revenue Code. Under the Plan,  grants may be made to selected
officers and employees,  of incentive stock option with a term not exceeding ten
years from the issue date and at a price not less than the fair market  value of
the Company's stock at the date of grant.


                                       35
<PAGE>


                     GOLDEN ENTERPRISES, INC. AND SUBSIDIARY
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
         For the Years Ended June 2, 2006, June 3, 2005 and May 28, 2004


NOTE 10 - LONG-TERM INCENTIVE PLANS - CONTINUED
-----------------------------------------------

Five hundred thousand shares of the Company's stock have been reserved for
issuance under this Plan. The following is a summary of transactions:
<TABLE>
<CAPTION>
<S>                                <C>      <C>       <C>      <C>           <C>      <C>
Shares Under Option                      2006                2005                   2004
                                  ------------------- -------------------  ----------------------
                                             Weighted           Weighted               Weighted
                                              Average            Average               Average
                                             Exercise           Exercise               Exercise
                                   Shares     Price    Shares     Price      Shares     Price
                                  ---------  -------- --------  ---------  ----------  ----------
Outstanding - beginning of year    369,000  $   3.78  369,000  $    3.78     369,000  $     3.78
 Granted........................         -         -        -          -           -           -
 Exercised......................         -         -        -          -           -           -
 Forfeited......................         -         -        -          -           -           -
 Cancelled......................         -         -        -          -           -           -
                                  ---------  -------- --------  ---------  ----------  ----------

Outstanding - end of year.......   369,000  $   3.78  369,000  $    3.78     369,000  $     3.78
                                  =========  ======== ========  =========  ==========  ==========
</TABLE>

Pro forma information regarding net income and earnings per share is presented
as if the Company had accounted for its employees stock options under the fair
value method. The per share weighted average fair value of the stock options
granted during fiscal 2002 was $.25. The fair value of these options was
estimated at the date of grant using the Black-Scholes option pricing model with
the following weighted average assumptions: risk-free interest rate 5.05
percent; dividend yield 6.56 percent; expected option life of 5 years; and
expected volatility of 15 percent.

The Black-Scholes options pricing model was developed for use in estimating the
fair value of traded options which have no vesting restrictions and are fully
transferable. In addition, option valuation models require the input of highly
subjective assumptions including the expected stock price volatility. Because
the Company's employee stock options have characteristics significantly
different from those of traded options, and because changes in the subjective
input assumptions can materially affect an option's fair value estimate, in
management's opinion, the existing models do not necessarily provide a reliable
single measure of the fair value of it employee stock options.



                                       36
<PAGE>

                     GOLDEN ENTERPRISES, INC. AND SUBSIDIARY
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
     For the Fiscal Years Ended June 2, 2006, June 3, 2005 and May 28, 2004


NOTE 11 - NET INCOME PER SHARE
------------------------------

Basic earnings per common share are computed by dividing  earnings  available to
stockholders by the weighted average number of common shares  outstanding during
the period.  Diluted  earnings per share  reflects per share  amounts that would
have resulted if dilutive  potential common stock equivalents had been converted
to common stock,  as prescribed by Statement of Financial  Accounting  Standards
No.  128,  "Earnings  per  Share".  At June 2, 2006,  the effect of options  was
computed on the 40,000  shares of common stock that were  dilutive at that time.
Options on the remaining  329,000 shares were not included in the computation of
diluted earnings per share because the options' exercise price were greater than
the average market price of the common shares and,  therefore,  the effect would
be antidilutive.  At June 3, 2005 and May 28, 2004 options on all 329,000 common
shares were  antidilutive.  The following  reconciles  the  information  used to
compute basic and diluted earnings per share:
<TABLE>
<CAPTION>
<S>                                             <C>          <C>          <C>
                                                    Average Common Stock Shares
                                              ---------------------------------------
                                                   2006         2005         2004
                                                -----------  -----------  -----------

 Basic weighted average shares outstanding...   11,835,330   11,846,419   11,879,891
 Effect of options...........................          329            -            -
                                                -----------  -----------  -----------

 Diluted shares..............................   11,835,659   11,846,419   11,879,891
                                                ===========  ===========  ===========
</TABLE>


NOTE 12 - DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS
---------------------------------------------------------------

The Statement of Financial  Accounting Standards No. 107, Disclosures About Fair
Value of Financial  Instruments  requires  disclosure of fair value  information
about  financial  instruments,  whether  or not  recognized  on the  face of the
balance  sheet,  for which it is  practical  to estimate  that  value.  SFAS 107
defines fair value as the quoted  market prices for those  instruments  that are
actively  traded in financial  markets.  In cases where quoted market prices are
not available,  fair values are estimated using present value or other valuation
techniques. The fair value estimates are made at a specific point in time, based
on available  market  information and judgments about the financial  instrument,
such as  estimates  of timing and amount of expected  future  cash  flows.  Such
estimates do not reflect any premium or discount that could result from offering
for sale at one time the  Company's  entire  holdings of a particular  financial
instrument, nor do they consider the tax impact of the realization of unrealized
gains or losses. In many cases, the fair value estimates cannot be substantiated
by comparison to independent markets, nor can the disclosed value be realized in
immediate settlement of the instrument.

The carrying amounts for cash and cash equivalents approximate fair value
because of the short maturity, generally less than three months, of these
instruments.

The fair value of notes receivable is estimated by using a discount rate that
approximates the current rate for comparable notes. At June 2, 2006 and June 3,
2005 the aggregate fair value was approximately $2,090,955 and $2,364,641
compared to a carrying amount of $1,770 428 and $1,819,986, respectively.


                                       37
<PAGE>

                     GOLDEN ENTERPRISES, INC. AND SUBSIDIARY
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
     For the Fiscal Years Ended June 2, 2006, June 3, 2005 and May 28, 2004


NOTE 12 - DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS -CONTINUED
--------------------------------------------------------------------------

The interest  rate on the Company's  long-term  debt is reset monthly to reflect
the 30 day  LIBOR  rate.  Consequently,  the  carrying  value of the  bank  debt
approximates fair value.

The  carrying  value of the  Company's  salary  continuation  plan  and  accrued
liability approximates fair value because present value is used in accruing this
liability.

The Company does not hold or issue financial  instruments  for trading  purposes
and has no involvement with forward currency exchange contracts.


NOTE 13 - COMMITMENTS AND CONTINGENCIES
---------------------------------------

Rental  expense was $354,261 in 2006,  $316,724 in 2005 and $493,028 in 2004. At
June 2, 2006,  the Company was not  obligated  under any  significant  operating
leases.

The  Company  leases its  airplane  to a major  shareholder  of the  Company for
approximately  $20,000 per month.  The lease  provides for their personal use of
the  airplane  for up to 100 flight hours per year and is for a term of one year
with automatic renewal at the option of either party.

The  Company had letters of credit in the amount of  $3,084,365  outstanding  at
June 2, 2006 to support the Company's  commercial  self-insurance  program.  The
Company pays a commitment fee of 0.50% to maintain the letters of credit.

The Company entered into a five-year term product purchase commitment during the
year ending June 1, 2001 with a supplier.  Under the terms of the  agreement the
minimum purchase  quantity and the unit purchase price were fixed resulting in a
minimum first year commitment of approximately $2,171,000. After the first year,
the  minimum  purchase  quantity  was  fixed  and the  purchase  unit  price was
negotiable,  based on current  market.  Subsequently,  in  September  2002,  the
product  purchase  agreement  was  amended  to fix the  purchase  unit price and
establish  specific annual quantities.  The Company,  as of June 2, 2006, has no
outstanding long term product purchase commitments.

The Company has entered into various other short term purchase  commitments with
suppliers for raw materials in the normal course of business.

The  Company  is  subject to routine  litigation  and claims  incidental  to its
business.  In the opinion of  management,  such  routine  litigation  and claims
should  not have a  material  adverse  effect  upon the  Company's  consolidated
financial statements taken as a whole.



                                       38
<PAGE>

                     GOLDEN ENTERPRISES, INC. AND SUBSIDIARY
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
     For the Fiscal Years Ended June 2, 2006, June 3, 2005 and May 28, 2004


NOTE 14 - CONCENTRATIONS OF CREDIT RISK
---------------------------------------

The Company's financial instruments that are exposed to concentrations of credit
risk consist primarily of cash equivalents and trade receivables.

The Company maintains deposit  relationships  with high credit quality financial
institutions.  The Company's trade  receivables  result primarily from its snack
food operations and reflect a broad customer base, primarily large grocery store
chains located in the Southeastern United States. The Company routinely assesses
the financial  strength of its customers.  As a consequence,  concentrations  of
credit risk are limited.

The Company's notes receivable require  collateral and management  believes they
are well secured.

NOTE 15 - QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)
-----------------------------------------------------

The following is a summary of the unaudited  quarterly  results of operations of
the years ended June 2, 2006 and June 3, 2005.

<TABLE>
<CAPTION>
<S>                                                    <C>             <C>          <C>
                                                                                     Per Share
                                                                        Net (Loss)   Net (Loss)
                                                         Net Sales       Income        Income
                                                      --------------- ------------   ----------

 Quarter
 2006
 ----
      First........................................... $  26,031,836   $  (64,242)  $    (0.01)
      Second..........................................    25,430,115     (289,031)       (0.02)
      Third...........................................    26,819,759      490,297         0.04
      Fourth..........................................    28,264,986      151,912         0.01
                                                        -------------   ----------   ----------
           For the year............................... $ 106,546,696   $  288,936   $     0.02
                                                        =============   ==========   ==========

 2005
 ----
      First........................................... $  24,766,426   $   65,737   $     0.01
      Second..........................................    24,851,760       47,151            -
      Third...........................................    27,012,648     (136,754)       (0.01)
      Fourth..........................................    26,513,145        8,942            -
                                                        -------------   ----------   ----------
           For the year............................... $ 103,143,979   $  (14,924)  $        -
                                                        =============   ==========   ==========
</TABLE>


Quarterly net income  amounts for 2005 have been adjusted from amounts  reported
in the Company's 10-Q's to reflect the change in accounting discussed in Note 2.


                                       39
<PAGE>

                     GOLDEN ENTERPRISES, INC. AND SUBSIDIARY
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
     For the Fiscal Years Ended June 2, 2006, June 3, 2005 and May 28, 2004


NOTE 16 - SUPPLEMENTARY STATEMENT OF INCOME INFORMATION
-------------------------------------------------------

The  following  tabulation  gives  certain  supplementary  statement  of  income
information for continuing  operations for the years ended June 2, 2006, June 3,
2005 and May 28, 2004:

                                         2006          2005          2004
                                     -------------  ------------  ------------
 Maintenance and repairs..........  $   6,274,607  $  6,036,556  $  5,914,221
 Depreciation.....................      2,284,669     2,267,718     2,346,880
 Payroll taxes....................      2,341,678     2,379,888     2,241,443
 Advertising costs................      5,970,393     5,503,641     4,609,366


Amounts  for other  taxes,  rents and  research  and  development  costs are not
presented because each of such amounts is less than 1% of total revenues.


NOTE 17 - SUBSEQUENT EVENT
--------------------------

A purchase and sales  agreement  was executed by and between  Golden Flake Snack
Foods, Inc. as Seller,  and Educational  Development  Company of America,  LLC &
Waterbury Companies, LLC as Purchaser,  with an effective date of June 26, 2006,
for the sale of approximately 12 acres of land located adjacent to the Company's
office headquarters and manufacturing plant in Birmingham, Alabama. The purchase
price is $1,500,000.00.


                                       40
<PAGE>

ITEM 9. -  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
           ON ACCOUNTING AND FINANCIAL DISCLOSURE

Not Applicable.

ITEM 9A. - CONTROLS AND PROCEDURES

     The Company  performed an evaluation,  under the  supervision  and with the
participation  of  the  Company's  management,  including  the  Company's  Chief
Executive  Officer and Chief  Financial  Officer,  of the  effectiveness  of the
design and operation of the Company's  disclosure  controls and procedures as of
the end of the fiscal year ended June 2, 2006. Based upon that  evaluation,  the
Chief Executive Officer and Chief Financial Officer concluded that as of the end
of the fiscal year ended June 2, 2006,  the  Company's  disclosure  controls and
procedures were effective to ensure that information required to be disclosed in
reports that the Company files or submits under the  Securities and Exchange Act
of 1934 is recorded,  processed,  summarized  and reported  within the specified
time periods.


ITEM 9B. - OTHER INFORMATION

Not Applicable.

                                    PART III

ITEM 10. - DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

     With the  exception of  information  set forth under the caption  Executive
Officers of the Registrant  and Its  Subsidiary  which appears in Part I of this
Form 10-K on Page 6, the  information  required by this item is  incorporated by
reference  to  the  sections  entitled  "Election  of  Directors,"   "Additional
Information  Concerning the Board of  Directors,"  "Executive  Compensation  and
Other Information,"  "Section 16(a) Beneficial  Ownership Reporting  Compliance"
and "Code of Conduct and Ethics" of the Company's  Proxy  Statement for the 2006
Annual Meeting of Stockholders to be held September 21, 2006.


ITEM 11. - EXECUTIVE COMPENSATION

     The  information  required by this item is incorporated by reference to the
sections  entitled  "Executive   Compensation  and  Other  Information"  of  the
Company's Proxy Statement for the 2006 Annual Meeting of Stockholders to be held
September  21,  2006.  See  Item 5 of  this  Annual  Report  on  Form  10-K  for
information concerning the Company's equity compensation plans.

ITEM 12. - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
           MANAGEMENT AND RELATED STOCKHOLDER MATTERS

     The  information  required by this item is incorporated by reference to the
sections  entitled   "Security   Ownership  of  Certain  Beneficial  Owners  and
Management" and "Section 16(a) Beneficial  Ownership  Reporting  Compliance," of
the Company's  Proxy Statement for the 2006 Annual Meeting of Stockholders to be
held September 21, 2006.


                                       41
<PAGE>


ITEM 13. - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     The  information  required by this item is incorporated by reference to the
section entitled "Certain Transactions" of the Company's Proxy Statement for the
2006 Annual Meeting of Stockholders to be held September 21, 2006.

ITEM 14. - PRINCIPAL ACCOUNTANT FEES AND SERVICES


     The  information  required by this item is incorporated by reference to the
section entitled "Independent  Accountants" of the Company's Proxy Statement for
the 2006 Annual Meeting of Stockholders to be held September 21, 2006.


     Prior to  September  29, 2006,  the Company  will file a  definitive  Proxy
Statement with the Securities and Exchange Commission pursuant to Regulation 14A
which involves the election of directors.



                                       42
<PAGE>

                                     PART IV

                   ITEM 15.- EXHIBITS AND FINANCIAL STATEMENT
                                    SCHEDULES

  (a) 1. LIST OF FINANCIAL STATEMENTS

The following consolidated financial statements of Golden Enterprises, Inc., and
subsidiary required to be included in Item 8 are listed below:

Consolidated Balance Sheets - June 2, 2006 and June 3, 2005

Consolidated  Statements of Operations-  Years ended June 2, 2006,  June 3, 2005
and May 28, 2004

Consolidated  Statements of Changes in Stockholders' Equity- Years ended June 2,
2006, June 3, 2005, and May 28, 2004

Consolidated  Statements  of Cash Flows- Years ended June 2, 2006,  June 3, 2005
and May 28, 2004

Notes to Consolidated Financial Statements

  (a) 2. LIST OF FINANCIAL STATEMENT SCHEDULES

The following  consolidated financial statements schedule is included in Item 15
(c):

Schedule II- Valuation and Qualifying Accounts

All other schedules are omitted because the information  required therein is not
applicable,  or the  information is given in the financial  statements and notes
thereto.

  (a) 3. Exhibits

      (3)   Articles of Incorporation and By-laws of Golden Enterprises, Inc.

      3.1   Certificate of Incorporation of Golden Enterprises, Inc. (originally
            known as "Golden Flake, Inc.") dated December 11, 1967 (incorporated
            by reference to Exhibit 3.1 to Golden Enterprises, Inc. May 31, 2004
            Form 10-K filed with the Commission).

      3.2   Certificate of Amendment of Certificate of  Incorporation  of Golden
            Enterprises, Inc. dated December 22, 1976 (incorporated by reference
            to Exhibit 3.2 to Golden  Enterprises,  Inc.  May 31, 2004 Form 10-K
            filed with the Commission).

      3.3   Certificate of Amendment of Certificate of  Incorporation  of Golden
            Enterprises,  Inc. dated October 2, 1978  (incorporated by reference
            to  Exhibit 3 to Golden  Enterprises,  Inc.  May 31,  1979 Form 10-K
            filed with the Commission).

      3.4   Certificate of Amendment of Certificate of  Incorporation  of Golden
            Enterprises,  Inc. dated October 4, 1979  (incorporated by reference
            to  Exhibit 3 to Golden  Enterprises,  Inc.  May 31,  1980 Form 10-K
            filed with the Commission).


                                       43
<PAGE>

      3.5   Certificate of Amendment of Certificate of  Incorporation  of Golden
            Enterprises,   Inc.  dated  September  24,  1982   (incorporated  by
            reference  to Exhibit 3.1 to Golden  Enterprises,  Inc. May 31, 1983
            Form 10-K filed with the Commission).

      3.6   Certificate of Amendment of Certificate of  Incorporation  of Golden
            Enterprises,   Inc.  dated  September  22,  1983   (incorporated  by
            reference  to Exhibit  19.1 to Golden  Enterprises,  Inc.  Form 10-Q
            Report  for the  quarter  ended  November  30,  1983  filed with the
            Commission).

      3.7   Certificate of Amendment of Certificate of  Incorporation  of Golden
            Enterprises,  Inc. dated October 3, 1985  (incorporated by reference
            to Exhibit 19.1 to Golden Enterprises, Inc. Form 10-Q Report for the
            quarter ended November 30, 1985 filed with the Commission).

      3.8   Certificate of Amendment of Certificate of  Incorporation  of Golden
            Enterprises,   Inc.  dated  September  23,  1987   (incorporated  by
            reference  to Exhibit 3.1 to Golden  Enterprises,  Inc. May 31, 1988
            Form 10-K filed with the Commission).

      3.9   By-Laws of Golden  Enterprises,  Inc.  (incorporated by reference to
            Exhibit 3.4 to Golden Enterprises, Inc. May 31, 1988 Form 10-K filed
            with the Commission).

      (10)  Material Contracts.

      10.1  A  Form  of  Indemnity  Agreement  executed  by and  between  Golden
            Enterprises,  Inc.  and  Each  of  Its  Directors  (incorporated  by
            reference  as Exhibit  19.1 to Golden  Enterprises,  Inc.  Form 10-Q
            Report  for the  quarter  ended  November  30,  1987  filed with the
            Commission).

      10.2  Amended and  Restated  Salary  Continuation  Plans for John S. Stein
            (incorporated  by reference  to Exhibit 19.1 to Golden  Enterprises,
            Inc. May 31, 1990 Form 10-K filed with the Commission).

      10.3  Indemnity  Agreement  executed  by and  between  the  Company and J.
            Wallace  Nall,  Jr.  (incorporated  by  reference as Exhibit 19.4 to
            Golden  Enterprises,  Inc.  May 31,  1991 Form 10-K  filed  with the
            Commission).

      10.4  Salary  Continuation  Plans  -  Retirement,   Disability  and  Death
            Benefits  for F. Wayne Pate  (incorporated  by  reference to Exhibit
            19.1 to Golden  Enterprises,  Inc. May 31, 1992 Form 10-K filed with
            the Commission).

      10.5  Indemnity  Agreement  executed by and between the  Registrant and F.
            Wayne Pate  (incorporated  by  reference  as Exhibit  19.3 to Golden
            Enterprises, Inc. May 31, 1992 Form 10-K filed with the Commission).

      10.6  Golden Enterprises, Inc. 1996 Long-Term Incentive Plan (incorporated
            by  reference as Exhibit  10.1 to Golden  Enterprises,  Inc. May 31,
            1997 Form 10-K filed with the Commission).

      10.7  Equipment  Purchase and Sale  Agreement  dated  October 2000 whereby
            Golden Flake Snack Foods, Inc., a wholly-owned  subsidiary of Golden
            Enterprises,  Inc.,  sold the Nashville,  Tennessee  Plant Equipment
            (incorporated  by reference  as Exhibit 10.1 to Golden  Enterprises,
            Inc. May 31, 2001 Form 10-K filed with the Commission).


                                       44
<PAGE>

      10.8  Real  Property  Contract of Sale dated  October 2000 whereby  Golden
            Flake Snack Foods,  Inc. sold the  Nashville,  Tennessee  Plant Real
            Property  (incorporated  by  reference  as  Exhibit  10.2 to  Golden
            Enterprises, Inc. May 31, 2001 Form 10-K filed with the Commission).

      10.9  Amendment to Salary  Continuation  Plans,  Retirement and Disability
            for F. Wayne Pate dated April 9, 2002  (incorporated by reference to
            Exhibit  10.2 to Golden  Enterprises,  Inc.  May 31,  2002 Form 10-K
            filed with the Commission).

      10.10 Amendment to Salary  Continuation  Plans,  Retirement and Disability
            for John S. Stein dated April 9, 2002  (incorporated by reference to
            Exhibit  10.3 to Golden  Enterprises,  Inc.  May 31,  2002 Form 10-K
            filed with the Commission).

      10.11 Amendment to Salary  Continuation  Plan,  Death Benefits for John S.
            Stein dated April 9, 2002 (incorporated by reference to Exhibit 10.4
            to Golden  Enterprises,  Inc.  May 31, 2002 Form 10-K filed with the
            Commission).

      10.12 Retirement and Consulting Agreement for John S. Stein dated April 9,
            2002   (incorporated   by   reference  to  Exhibit  10.5  to  Golden
            Enterprises, Inc. May 31, 2002 Form 10-K filed with the Commission).

      10.13 Salary  Continuation  Plan for Mark W. McCutcheon dated May 15, 2002
            (incorporated  by reference  to Exhibit 10.6 to Golden  Enterprises,
            Inc. May 31, 2002 Form 10-K filed with the Commission).

      10.14 Trust Under Salary  Continuation  Plan for Mark W. McCutcheon  dated
            May 15, 2002  (incorporated  by  reference to Exhibit 10.7 to Golden
            Enterprises, Inc. May 31, 2002 Form 10-K filed with the Commission).

      10.15 Lease of aircraft  executed by and between Golden Flake Snack Foods,
            Inc., a  wholly-owned  subsidiary of Golden  Enterprises,  Inc., and
            Joann F. Bashinsky dated February 1, 2006.

      10.16 Purchase  and Sale  Agreement  executed by and between  Golden Flake
            Snack Foods, Inc., as Seller, and Educational Development Company of
            America,  LLC &  Waterbury  Companies,  LLC, as  Purchaser,  with an
            effective  date of June 26, 2006, for the sale of  approximately  12
            acres of land located adjacent to the Company's Office  Headquarters
            and Manufacturing Plant in Birmingham, Alabama.

      (14)  Code of Ethics

      14.1  Golden Enterprises, Inc.'s Code of Conduct and Ethics adopted by the
            Board of  Directors on April 8, 2004  (incorporated  by reference to
            Exhibit  14.1 to Golden  Enterprises,  Inc.  May 31,  2004 Form 10-K
            filed with the Commission).

      (18)  Letter Re: Change in Accounting Principles

      18.1  Letter from the Registrant's Independent Accountant dated August 12,
            2005  indicating  a change  in the  method  of  applying  accounting
            practices  followed by the Registrant for the fiscal year ended June
            3,  2005  (incorporated  by  reference  to  Exhibit  18.1 to  Golden
            Enterprises,   Inc.'s   June  3,  2005  Form  10-K  filed  with  the
            Commission)

                                       45
<PAGE>

      21    Subsidiaries of the Registrant (incorporated by reference to Exhibit
            21 to Golden Enterprises, Inc. May 31, 2004 Form 10-K filed with the
            Commission)

      (31)  Certifications

      31.1  Certification of Chief Executive  Officer pursuant to Section 302 of
            the Sarbanes-Oxley Act of 2002.

      31.2  Certification of Chief Financial  Officer pursuant to Section 302 of
            the Sarbanes-Oxley Act of 2002.

      32.1  Certification of Chief Executive  Officer pursuant to Section 906 of
            the Sarbanes-Oxley Act of 2002.

      32.2  Certification of Chief Financial  Officer pursuant to Section 906 of
            the Sarbanes-Oxley Act of 2002.



      (99)  Additional Exhibits

      99.1  A copy of  excerpts  of the Last  Will and  Testament  and  Codicils
            thereto of Sloan Y. Bashinsky, Sr. and of the SYB Common Stock Trust
            created by Sloan Y. Bashinsky,  Sr.  providing for the creation of a
            Voting  Committee  to vote the  shares  of  common  stock of  Golden
            Enterprises,  Inc.  held by SYB,  Inc.  and the  Estate/Testamentary
            Trust of Sloan Y.  Bashinsky,  Sr.  (incorporated  by  reference  to
            Exhibit  99.1 to Golden  Enterprises,  Inc.'s June 3, 2005 Form 10-K
            filed with the Commission).



                                       46
<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.

GOLDEN ENTERPRISES, INC.

By /s/Patty Townsend                                            August 25, 2006
--------------------                                            ---------------
Patty Townsend                                                       Date
Vice President, Secretary and Principal Financial
Officer


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

         Signature                  Title                            Date
         ---------                  -----                            ----

/s/John S. Stein              Chairman of Board                 August 25, 2006
---------------------------
John  S. Stein


/s/Mark W. McCutcheon         Chief Executive                   August 25, 2006
---------------------------   Officer, President and Director
Mark W. McCutcheon


/s/Patty Townsend             Vice President, Secretary and     August 25, 2006
---------------------------   Principal Financial Officer
Patty Townsend


/s/F. Wayne Pate              Director                          August 25, 2006
---------------------------
F. Wayne Pate


/s/Edward R. Pascoe           Director                          August 25, 2006
---------------------------
Edward R. Pascoe


/s/John P. McKleroy, Jr.      Director                          August 25, 2006
---------------------------
John P. McKleroy, Jr.


 /s/James I. Rotenstreich     Director                          August 25, 2006
---------------------------
James I. Rotenstreich


/s/John S.P. Samford          Director                          August 25, 2006
---------------------------
John S.P. Samford


/s/J. Wallace Nall, Jr.       Director                          August 25, 2006
---------------------------
J. Wallace Nall, Jr.


/s/Joann F. Bashinsky         Director                          August 25, 2006
---------------------------
Joann F. Bashinsky



                                       47
<PAGE>

                                   SCHEDULE II


                     GOLDEN ENTERPRISES, INC. AND SUBSIDIARY

                        VALUATION AND QUALIFYING ACCOUNTS

     For the Fiscal Years Ended June 2, 2006, June 3, 2005 and May 28, 2004

<TABLE>
<CAPTION>
<S>                                      <C>              <C>                <C>              <C>
                                                         Additions
                                        Balance at       Charged to                           Balance
                                         Beginning        Costs and                            at End
Allowance for Doubtful Accounts           of Year         Expenses          Deductions        of Year
-----------------------------------    --------------   --------------    ---------------   -------------

Year ended May 28, 2004                  $196,100         $131,771           $142,871         $185,000
                                       ==============   ==============    ===============   =============

Year ended June 3, 2005                  $185,000         $174,455           $202,988         $156,467
                                       ==============   ==============    ===============   =============

Year ended June 2, 2006                  $156,467          $23,676           $46,721          $133,422
                                       ==============   ==============    ===============   =============
</TABLE>



                                       48
<PAGE>

                                INDEX TO EXHIBITS
                                -----------------
                                                                            Page
                                                                            ----


3.1   Certificate  of   Incorporation   of  Golden   Enterprises,   Inc.
      (originally known as "Golden Flake, Inc.") dated December 11, 1967
      (incorporated  by reference to Exhibit 3.1 to Golden  Enterprises,
      Inc. May 31, 2004 Form 10-K filed with the Commission).

3.2   Certificate of Amendment of Certificate of Incorporation of Golden
      Enterprises,   Inc.  dated  December  22,  1976  (incorporated  by
      reference to Exhibit 3.2 to Golden Enterprises,  Inc. May 31, 2004
      Form 10-K filed with the Commission).

3.3   Certificate of Amendment of Certificate of Incorporation of Golden
      Enterprises, Inc. dated October 2, 1978 (incorporated by reference
      to Exhibit 3 to Golden  Enterprises,  Inc.  May 31, 1979 Form 10-K
      filed with the Commission).

3.4   Certificate of Amendment of Certificate of Incorporation of Golden
      Enterprises, Inc. dated October 4, 1979 (incorporated by reference
      to Exhibit 3 to Golden  Enterprises,  Inc.  May 31, 1980 Form 10-K
      filed with the Commission).

3.5   Certificate of Amendment of Certificate of Incorporation of Golden
      Enterprises,  Inc.  dated  September  24,  1982  (incorporated  by
      reference to Exhibit 3.1 to Golden Enterprises,  Inc. May 31, 1983
      Form 10-K filed with the Commission).

3.6   Certificate of Amendment of Certificate of Incorporation of Golden
      Enterprises,  Inc.  dated  September  22,  1983  (incorporated  by
      reference to Exhibit 19.1 to Golden  Enterprises,  Inc.  Form 10-Q
      Report for the  quarter  ended  November  30,  1983 filed with the
      Commission).

3.7   Certificate of Amendment of Certificate of Incorporation of Golden
      Enterprises, Inc. dated October 3, 1985 (incorporated by reference
      to Exhibit 19.1 to Golden  Enterprises,  Inc. Form 10-Q Report for
      the quarter ended November 30, 1985 filed with the Commission).

3.8   Certificate of Amendment of Certificate of Incorporation of Golden
      Enterprises,  Inc.  dated  September  23,  1987  (incorporated  by
      reference to Exhibit 3.1 to Golden Enterprises,  Inc. May 31, 1988
      Form 10-K filed with the Commission).

3.9   By-Laws of Golden Enterprises,  Inc. (incorporated by reference to
      Exhibit  3.4 to Golden  Enterprises,  Inc.  May 31, 1988 Form 10-K
      filed with the Commission).

10.1  A Form of  Indemnity  Agreement  executed  by and  between  Golden
      Enterprises,  Inc.  and  Each of Its  Directors  (incorporated  by
      reference as Exhibit 19.1 to Golden  Enterprises,  Inc.  Form 10-Q
      Report for the  quarter  ended  November  30,  1987 filed with the
      Commission).

10.2  Amended and Restated Salary  Continuation  Plans for John S. Stein
      (incorporated by reference to Exhibit 19.1 to Golden  Enterprises,
      Inc. May 31, 1990 Form 10-K filed with the Commission). Page

10.3  Indemnity  Agreement  executed  by and  between the Company and J.
      Wallace Nall,  Jr.  (incorporated  by reference as Exhibit 19.4 to
      Golden  Enterprises,  Inc.  May 31,  1991 Form 10-K filed with the
      Commission).


                                  49
<PAGE>
                                                                            Page
                                                                            ----

10.4  Salary  Continuation  Plans -  Retirement,  Disability  and  Death
      Benefits for F. Wayne Pate  (incorporated  by reference to Exhibit
      19.1 to Golden Enterprises, Inc. May 31, 1992 Form 10-K filed with
      the Commission).

10.5  Indemnity  Agreement executed by and between the Registrant and F.
      Wayne Pate  (incorporated  by  reference as Exhibit 19.3 to Golden
      Enterprises,   Inc.   May  31,  1992  Form  10-K  filed  with  the
      Commission).

10.6  Golden   Enterprises,   Inc.   1996   Long-Term   Incentive   Plan
      (incorporated by reference as Exhibit 10.1 to Golden  Enterprises,
      Inc. May 31, 1997 Form 10-K filed with the Commission).

10.7  Equipment  Purchase and Sale Agreement  dated October 2000 whereby
      Golden  Flake Snack  Foods,  Inc., a  wholly-owned  subsidiary  of
      Golden  Enterprises,  Inc.,  sold the Nashville,  Tennessee  Plant
      Equipment  (incorporated  by  reference  as Exhibit 10.1 to Golden
      Enterprises,   Inc.   May  31,  2001  Form  10-K  filed  with  the
      Commission).

10.8  Real Property  Contract of Sale dated October 2000 whereby  Golden
      Flake Snack Foods,  Inc. sold the Nashville,  Tennessee Plant Real
      Property  (incorporated  by  reference  as Exhibit  10.2 to Golden
      Enterprises,   Inc.   May  31,  2001  Form  10-K  filed  with  the
      Commission).

10.9  Amendment to Salary Continuation Plans,  Retirement and Disability
      for F. Wayne Pate dated April 9, 2002  (incorporated  by reference
      to Exhibit 10.2 to Golden Enterprises, Inc. May 31, 2002 Form 10-K
      filed with the Commission).

10.10 Amendment to Salary Continuation Plans,  Retirement and Disability
      for John S. Stein dated April 9, 2002  (incorporated  by reference
      to Exhibit 10.3 to Golden Enterprises, Inc. May 31, 2002 Form 10-K
      filed with the Commission).

10.11 Amendment to Salary  Continuation Plan, Death Benefits for John S.
      Stein dated April 9, 2002  (incorporated  by  reference to Exhibit
      10.4 to Golden Enterprises, Inc. May 31, 2002 Form 10-K filed with
      the Commission).

10.12 Retirement and Consulting  Agreement for John S. Stein dated April
      9, 2002  (incorporated  by  reference  to  Exhibit  10.5 to Golden
      Enterprises,   Inc.   May  31,  2002  Form  10-K  filed  with  the
      Commission).

10.13 Salary Continuation Plan for Mark W. McCutcheon dated May 15, 2002
      (incorporated by reference to Exhibit 10.6 to Golden  Enterprises,
      Inc. May 31, 2002 Form 10-K filed with the Commission).


                                   50
<PAGE>

                                                                            Page
                                                                            ----

10.14 Trust Under Salary  Continuation Plan for Mark W. McCutcheon dated
      May 15, 2002  (incorporated by reference to Exhibit 10.7 to Golden
      Enterprises,   Inc.   May  31,  2002  Form  10-K  filed  with  the
      Commission).

10.15 Lease of  aircraft  executed  by and  between  Golden  Flake Snack      52
      Foods,  Inc., a  wholly-owned  subsidiary  of Golden  Enterprises,
      Inc., and Joann F. Bashinsky dated February 1, 2006.

10.16 Purchase and Sale  Agreement  executed by and between Golden Flake      59
      Snack Foods, Inc., as Seller and Educational  Development  Company
      of America, LLC & Waterbury Companies,  LLC, as Purchaser, with an
      effective date of June 26, 2006, for the sale of  approximately 12
      acres  of  land   located   adjacent  to  the   Company's   Office
      Headquarters and Manufacturing Plant in Birmingham, Alabama.

14.1  Golden  Enterprises,  Inc.'s Code of Conduct and Ethics adopted by
      the Board of Directors on April 8, 2004 (incorporated by reference
      to Exhibit 14.1 to Golden Enterprises, Inc. May 31, 2004 Form 10-K
      filed with the Commission).

(18)  Letter Re: Change in Accounting Principles

18.1  Letter from the Registrant's  Independent  Accountant dated August
      12, 2005 indicating a change in the method of applying  accounting
      practices  followed  by the  Registrant  for the fiscal year ended
      June 3, 2005  (incorporated by reference to Exhibit 18.1 to Golden
      Enterprises,  Inc.'s  June  3,  2005  Form  10-K  filed  with  the
      Commission).

21    Subsidiaries  of the  Registrant  (incorporated  by  reference  to
      Exhibit  21 to Golden  Enterprises,  Inc.  May 31,  2004 Form 10-K
      filed with the Commission)

31.1  Certification  of Chief Executive  Officer pursuant to Section 302      69
      of the Sarbanes-Oxley Act of 2002.

31.2  Certification  of Chief Financial  Officer pursuant to Section 302      70
      of the Sarbanes-Oxley Act of 2002.

32.1  Certification  of Chief Executive  Officer pursuant to Section 906      71
      of the Sarbanes-Oxley Act of 2002.

32.2  Certification  of Chief Financial  Officer pursuant to Section 906      72
      of the Sarbanes-Oxley Act of 2002.

99.1  A copy of excerpts  of the Last Will and  Testament  and  Codicils
      thereto of Sloan Y.  Bashinsky,  Sr.  and of the SYB Common  Stock
      Trust  created  by  Sloan  Y.  Bashinsky,  Sr.  providing  for the
      creation of a Voting  Committee to vote the shares of common stock
      of  Golden   Enterprises,   Inc.   held  by  SYB,   Inc.  and  the
      Estate/Testamentary Trust of Sloan Y. Bashinsky, Sr. (incorporated
      by reference to Exhibit 99.1 to Golden Enterprises, Inc.'s June 3,
      2005 Form 10-K filed with the Commission).


                                   51