U.S. SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



FORM 10-QSB



QUARTERLY REPORT UNDER SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF

1934 FOR THE QUARTERLY PERIOD ENDED



March 31, 2007



TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934



For the transition period from ___________ to ___________



Commission File Number: 0-26101



GOLDEN SPIRIT ENTERPRISES LTD.

(Exact name of registrant as specified in its charter)



DELAWARE                        52-2132622

(State or other jurisdiction of        (I.R.S. Employer

incorporation or organization)       Identification No.)



1288 Alberni  Street, Suite 806, Vancouver,     V6E 4N5

British Columbia, Canada

(Address of registrant's principal executive offices)    (Zip Code)



604.664.0499

(Registrant's Telephone Number, Including Area Code)



Check whether the issuer (1) filed all reports required to be filed by Section

13 or 15(d) of the Exchange Act during the past 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 whether the registrant is a shell company (as defined

in Rule 12b-2 of the Exchange Act)   Yes [ ]   No  [X]



APPLICABLE ONLY TO CORPORATE ISSUERS



State the number of shares outstanding of each of the issuer's classes of

common equity, as of the latest practical date.  As of March 31, 2007 there

were 15,698,624 shares of the issuer's $.0001 par value common stock issued

and outstanding.



Transitional Small Business disclosure format:  Yes [ ]   No  [X]



INDEX





Page

Part I. FINANCIAL INFORMATION



Item 1.   Financial Statements........................................................................

1 - 12



Item 2.   Management's Discussion and Analysis or Plan of Operation...........

13



Item 3.   Controls and Procedures....................................................................

24



Part II. OTHER INFORMATION



Item 1.   Legal Proceedings..........................................................................

24



Item 2.   Changes in Securities and Use of Proceeds......................................

25



Item 3.   Defaults Upon Senior Securities.......................................................

27



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

27



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

27



Item 6.   Exhibits and Reports on Form 8-K....................................................

30



SIGNATURES.................................................................................................

30

=========================================================================================================================================

Item 1. Financial Statements

GOLDEN SPIRIT ENTERPRISES LTD.

(Formerly Golden Spirit Gaming Ltd.)

(A development stage company)

CONSOLIDATED FINANCIAL STATEMENTS



March 31, 2007

(UNAUDITED)

CONSOLIDATED BALANCE SHEETS............................................................ 2



CONSOLIDATED STATEMENTS OF OPERATIONS.................................. 3



CONSOLIDATED STATEMENT OF STOCKHOLDERS DEFICIT........... 4



CONSOLIDATED STATEMENTS OF CASH FLOWS................................. 5



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS....................... 6-12



1



GOLDEN SPIRIT ENTERPRISES LTD.

(Formerly Golden Spirit Gaming Ltd.)

(A development stage company)



CONSOLIDATED BALANCE SHEETS



|                                                                     |                     |                       
|-------------------------------------------------------------------- | ------------------- | ----------------------
|                                                                     | March 31,           | December 31,          
|                                                                     | 2007
(unaudited)    | 2006                  
|                                                                    
|ASSETS                                                              
|CURRENT ASSETS                                                       |                     |                       
|Cash                                                                 | $           22,822  | $                7,547
|Sales tax receivable                                                 | 3,683               | 2,966                 
|Available-for-sale securities                                        | 776                 | 1,087                 
|Prepaids & Deposits                                                  | 31,663              | 20,464                
|                                                                     |                     |                       
|                                                                     | 58,944              | 32,064                
|                                                                     |                     |                       
|DUE FROM LEGACY MINING LTD.                                          | 20,082              | 20,082                
|FURNITURE AND EQUIPMENT, net of depreciation of $7,118 (2006-$7,038) | 347                 | 427                   
|                                                                     |                     |                       
|                                                                     | 79,373              | 52,573                
|                                                                     |                     |                       
|LIABILITIES                                                         
|CURRENT                                                              |                     |                       
|Accounts payable and accrued liabilities                             | $            47,129 | $              57,020 
|Due to Avalon Energy Corporation                                     | 238,483             | 215,054               
|Due to related parties                                               | 149,578             | 109,875               
|                                                                     |                     |                       
|                                                                     | 435,190             | 381,949               
|                                                                     |                     |                       
|CONTINGENCIES(Notes 1 and 9)                                        
|                                                                    
|                                                                    
|STOCKHOLDERS DEFICIT                                               
|                                                                     |                     |                       
|Common stock, $0.0001 par value, 500,000,000 shares authorized       |                     |                       
|Issued and outstanding:                                              |                     |                       
|15,698,624 (2006  15,528,624) common shares                         | 1,571               | 1,553                 
|Additional paid-in capital                                           | 16,969,526          | 16,726,244            
|Deferred compensation                                                | (127,573)           | (150,490)             
|Deficit accumulated during the development stage                     | (17,198,346)        | (16,905,999)          
|Accumulated other comprehensive loss                                 | (995)               | (684)                 
|                                                                     |                     |                       
|                                                                     | (355,817)           | (329,376)             
|                                                                     |                     |                       
|                                                                     | $           79,373  | $              52,573 



The accompanying notes are an integral part of these consolidated financial statements.



2





GOLDEN SPIRIT ENTERPRISES LTD.

(Formerly Golden Spirit Gaming Ltd.)

(A development stage company)



CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)

|                                                             |                                   |                                   |                                  
|------------------------------------------------------------ | --------------------------------- | --------------------------------- | ---------------------------------
|                                                             |                                   |                                   | Results of operations from       
|                                                             |                                   |                                  
|                                                             |                                   |                                   | September 13,                    
|                                                             |                                   |                                   | 1993 (inception)                 
|                                                             | Year Ended                        | Year Ended                        | to March 31,                     
|March 31, 2007                                               | March 31, 2006                    | 2007                             
|                                                             |                                   |                                   |                                  
|REVENUES                                                     |                                   |                                   |                                  
|Processing fees                                              | $                 -               | $                 -               | $                          98,425
|GamingRevenue                                                | 43                                | 7,880                             | 18,596                           
|Sale of oil and gas interest                                 | -                                 | -                                 | 47,501                           
|Interest income                                              | -                                 | -                                 | 2,927                            
|                                                             | 43                                | 7,880                             | 167,449                          
|COST OF SALES                                                |                                   |                                   |                                  
|Poker royalties and processing fees                          | 2,941                             | 2,036                             | 30,517                           
|                                                             |                                   |                                   |                                  
|GROSS PROFIT (LOSS)                                          | (2,898)                           | 5,844                             | 136,932                          
|GENERAL AND ADMINISTRATIVE EXPENSES                          |                                   |                                   |                                  
|Advertising and marketing                                    | 3,498                             | 600                               | 92,165                           
|Consulting fees                                              | 251,344                           | 174,167                           | 7,236,992                        
|Depreciation and amortization                                | 80                                | 80                                | 132,222                          
|Exploration costs                                            | -                                 | -                                 | 241,754                          
|Investor relations                                           | -                                 | 35,213                            | 694,503                          
|Loss on settlement of debt                                   | -                                 | -                                 | 302,500                          
|Management fees                                              | 2,133                             | 1,948                             | 378,447                          
|Office and general                                           | 13,894                            | 13,830                            | 481,707                          
|Poker Sponsorships                                           | -                                 | 9,000                             | 52,500                           
|Professional fees                                            | 10,378                            | 11,793                            | 559,077                          
|Travel and accommodation                                     | 6,945                             | 4,447                             | 221,724                          
|Wages and salaries                                           | 1,177                             | 476                               | 240,884                          
|Write-off of website development costs                       | -                                 | 80,000                            | 425,682                          
|Write-down (recovery) of URL costs                           | -                                 | -                                 | 1,571,657                        
|Write-down of technology license                             | -                                 | -                                 | 2,055,938                        
|Write-off of other assets                                    | -                                 | -                                 | 265,886                          
|                                                             | 289,449                           | 331,554                           | 14,953,638                       
|LOSS BEFORE THE FOLLOWING:                                   | (292,347)                         | (325,710)                         | (14,816,706)                     
|EQUITY LOSS FROM AVALON                                      | -                                 | -                                 | (1,394,280)                      
|WRITE-DOWN OF INVESTMENT IN AVALON                           | -                                 | -                                 | (313,301)                        
|LOSS ON SALE OF SECURITIES                                   | -                                 | -                                 | (26,178)                         
|DILUTION GAIN  LEGACY                                       | -                                 | -                                 | 334,087                          
|PROPERTY OPTION LOSS                                         | -                                 | (600,000)                         | (600,000)                        
|MINORITY INTEREST IN LEGACYS LOSS                           | -                                 | -                                 | 479,978                          
|NET LOSS                                                     | $                       (292,347) | $                       (925,710) | $                 (16,336,400)   
|                                                             |                                   |                                   |                                  
|BASIC AND DILUTED LOSS PER COMMON SHARE                      | (0.02)                            | (0.07)                            |                                  
|BASIC AND DILUTED WEIGHTED AVERAGE COMMON SHARES OUTSTANDING | 15,637,500                        | 12,774,379                        |                                  



The accompanying notes are an integral part of these consolidated financial statements.



3







GOLDEN SPIRIT ENTERPRISES LTD.

(Formerly Golden Spirit Gaming Ltd.)

(A development stage company)



CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

|                                                                             |                          |                              |                           
|---------------------------------------------------------------------------- | ------------------------ | ---------------------------- | --------------------------
|                                                                             |                          |                              | September 13,             
|                                                                             | Year ended               | Year ended                   | 1993 (inception)          
|                                                                             | March 31,                | March 31,                    | to March 31,              
|                                                                             | 2007                     | 2006                         | 2007                      
|OPERATING ACTIVITIES                                                         |                          |                              |                           
|Net loss                                                                     | $             (292,347)  | $            (925,710)       | $          (16,336,400)   
|Adjustments to reconcile net loss to net cash used in  operating activities: |                          |                              |                           
|Depreciation                                                                 | 80                       | 80                           | 132,222                   
|Fees and services paid for with shares                                       | 22,917                   | 208,688                      | 4,919,595                 
|Loss on settlement of debt                                                   | -                        | -                            | 302,500                   
|Stock-based compensation                                                     | 228,000                  | -                            | 2,208,169                 
|Non-cash component of URL write-down                                         | -                        | -                            | 1,214,193                 
|Resource property acquisition and exploration costs                          | -                        | 600,000                      | 763,000                   
|Write-down of technology license                                             | -                        | -                            | 2,055,938                 
|Write-off of website development costs                                       | -                        | 80,000                       | 206,876                   
|Equity loss from Avalon Energy Corporation                                   | -                        | -                            | 1,394,280                 
|Write-down of investment in Avalon Energy Corporation                        | -                        | -                            | 313,301                   
|Loss on sale of marketable securities                                        | -                        | -                            | 26,178                    
|Dilution gain  Legacy Mining Ltd.                                           | -                        | -                            | (334,087)                 
|Minority interest in Legacy Mining Ltd.s loss                               | -                        | -                            | (479,978)                 
|Net changes in operating assets and liabilities                              | (21,807)                 | (27,329)                     | 296,151                   
|                                                                             |                          |                              |                           
|CASH FLOWS USED IN OPERATING ACTIVITIES                                      | (63,157)                 | (64,271)                     | (3,318,062)               
|                                                                             |                          |                              |                           
|INVESTING ACTIVITIES                                                         |                          |                              |                           
|Deposit                                                                      | -                        | -                            | (75,000)                  
|Technology license                                                           | -                        | -                            | (135,938)                 
|Acquisition of furniture and equipment                                       | -                        | -                            | (32,696)                  
|Website development costs                                                    | -                        | (100,000)                    | (306,876)                 
|Other intangible assets                                                      | -                        | -                            | (5,189)                   
|Net proceeds from sale of shares of Avalon Energy Corporation                | -                        | -                            | 99,470                    
|Net cash on disposition of Legacy Mining Ltd.                                | -                        | -                            | 209,955                   
|CASH FLOWS (USED IN) PROVIDED BY INVESTING ACTIVITIES                        | -                        | (100,000)                    | (246,274)                 
|                                                                             |                          |                              |                           
|FINANCING ACTIVITIES                                                         |                          |                              |                           
|Increase in bank overdraft (repayment)                                       | -                        | (11)                         | -                         
|Net advances from related parties                                            | 63,132                   | 110,282                      | 770,208                   
|Net proceeds on sale of common stock                                         | 15,300                   | 54,000                       | 2,816,950                 
|CASH FLOWS PROVIDED BY FINANCING ACTIVITIES                                  | 78,432                   | 164,271                      | 3,587,158                 
|                                                                             |                          |                              |                           
|NET INCREASE IN CASH                                                         | 15,275                   | -                            | 22,822                    
|CASH, BEGINNING OF YEAR                                                      | 7,547                    | -                            | -                         
|CASH , END OFYEAR                                                            | $                 22,822 | $                          - | $                   22,822
|                                                                             |                          |                              |                           
|SUPPLEMENTAL CASH FLOW INFORMATION AND NONCASH INVESTING AND                 |                          |                             
|FINANCING ACTIVITIES (See Note 10)                                           |                          |                              |                           



The accompanying notes are an integral part of these consolidated financial statements.



4



GOLDEN SPIRIT ENTERPRISES LTD.

(Formerly Golden Spirit Gaming Ltd.)

(A development stage company)



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2007 (unaudited)

NOTE 1  NATURE OF OPERATIONS



The Company was incorporated on September 13, 1993 in the State of Delaware as Power Direct, Inc.  On January 31, 2000 the Company changed its name to 2U Online.com Inc. to reflect managements decision to shift the Companys focus from oil and gas exploration and development to internet-based business development.  On October 8, 2003, the Company changed its name to Golden Spirit Minerals Ltd. to reflect managements decision to shift the Companys focus from internet-based business development to mineral exploration. On October 19, 2004, the Company changed its name to Golden Spirit Mining Ltd. On July 18, 2005, the Company changed its name to Golden Spirit Gaming Ltd. to reflect managements decision to develop an online gaming business.  The launch of the updated goldenspiritpoker.com website featuring real cash games, in addition to play money games, occurred in January 2006.  By agreement dated July 18, 2005 as amended September 20, 2005 (the Amended Agreement), the Company agreed to acquire 100% of the issued and outstanding common shares of 4 Of A Kind Enterprises (4KE) doing business as EverythingAboutPoker.com for consideration of 25,000,000 restricted shares of the Companys common stock which were placed in trust pending finalization of the agreement.  The parties have agreed to complete this acquisition, subject to satisfactory completion of due diligence (See Note 5), effective March 31, 2006. Effective June 30, 2006, the Company completed a 1 for 18 reverse stock split and changed its name to Golden Spirit Enterprises Ltd. to reflect the Companys plan to expand its operations to include the marketing of other products and venues not related to gaming. The Company will be involved in the development, production, financing and packaging of innovative film and television programming.



The consolidated financial statements have been prepared on the basis of a going concern which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.  The Company has incurred losses since inception of $16,336,400 and at March 31, 2007 had a working capital deficiency of $376,246.  The Company and its subsidiaries are in the development stage and further significant losses are expected to be incurred in developing its business.  The recoverability of the carrying value of assets and the ability of the Company to continue as a going concern is dependent on raising additional capital and ultimately on generating future profitable operations.  There can be no assurance that the Company will be able to raise the necessary funds when needed to finance its ongoing costs. Given the Companys limited operating history, lack of sales, and its operating losses, there can be no assurance that it will be able to achieve or maintain profitability. The Company intends to fund the marketing of its business with both equity financing and joint venture opportunities, although there are no assurances these opportunities will be successful. Accordingly, these factors raise substantial doubt regarding the ability of the Company to continue as a going concern.



NOTE 2- BASIS OF PRESENTATION



The financial statements include the accounts of the Company and its subsidiaries, a 100% interest in PD Oil & Gas, Inc. (inactive), and a 100% interest in Cardstakes.com Enterprises Ltd. (inactive).



The foregoing unaudited interim consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-QSB and Regulation S-B as promulgated by the Securities and Exchange Commission ("SEC").  Accordingly, these financial statements do not include all of the disclosures required by generally accepted accounting principles for complete financial statements.  These unaudited interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements for the period ended December 31, 2006 referenced in the 10-KSB.  In the opinion of management, the unaudited interim consolidated financial statements furnished herein include all adjustments, all of which are of a normal recurring nature, necessary for a fair statement of the results for the interim period presented.



The preparation of financial statements in accordance with generally accepted accounting principles requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities known to exist as of the date the financial statements are published, and the reported amounts of revenues and expenses during the reporting period.  Uncertainties with respect to such estimates and assumptions are inherent in the



The accompanying notes are an integral part of these consolidated financial statements.



5



GOLDEN SPIRIT ENTERPRISES LTD.

(Formerly Golden Spirit Gaming Ltd.)

(A development stage company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

|              
|--------------
|March 31, 2007





NOTE 2- BASIS OF PRESENTATION  (continued)



preparation of the Company's financial statements; accordingly, it is possible that the actual results could differ from these estimates and assumptions that could have a material effect on the reported amounts of the Company's financial position and results of operations.



Operating results for the three months ended March 31, 2007 are not necessarily indicative of the results that may be expected for the year ending December 31, 2007.



NOTE 3 AVAILABLEFOR-SALE SECURITIES



The Company owns common shares of Avalon Energy Corporation (Avalon), a public company with directors and significant shareholders in common, that does not represent a position of control of or significant influence over Avalon.  During 2006 the Company recorded an unrealized loss in the carrying value of its available-for-sale securities totalling $569  (2005  unrealized gain of $1,112), which was recorded as other comprehensive income (loss).  As at March 31, 2007, the Company owns 10,351 shares of Avalons common stock with a market value of $776 (December 31, 2006 - $1,087).



NOTE 4  RESOURCE PROPERTIES



Second Chance Claims

On October 10, 2004, the Company entered into an agreement with Lee Holland (Holland), to acquire from Holland a 90% ownership of the Second Chance claims (the Claims) located in the Ester Creek area of Alaska for: (i) $2,000 plus 100,000 restricted Rule 144 shares of common stock valued at $6,000; (ii) $2,000 per month between November 10, 2004 and February 10, 2005 for a total of $8,000. Under the terms of the agreement, Holland retained a 10% non-assessable interest in the Claims.



On October 11, 2005, the Company entered into an agreement with Legacy Mining Ltd. (Legacy), a company with directors in common, whereby the Company sold its full 90% ownership interest of Ester Creek area claims including the Second Chance claims in exchange for 750,000 restricted shares of Legacys common stock valued at $1.



Niger Property

On April 4, 2005, the Company signed a memorandum of understanding with a private corporation to acquire a Uranium Concession on the African Continent.  The Company paid a Cdn $5,000 fee to a third party to commence the process of acquiring a thirty (30) year prospecting permit from the Niger Ministry of Mines.  The Company also agreed to issue 1,666,667 post reverse-split non-refundable restricted Rule 144 common shares upon signing the memorandum, and issue a further 3,888,889 post reverse-split restricted Rule 144 common shares and pay an additional Cdn $5,000 once the Ministry of Mines issues the Prospecting Permit.  During 2006, the Company issued the 1,666,667 non-refundable post reverse-split shares with a value of $600,000.  As at March 31, 2007, the prospecting permit has not been issued.



NOTE 5  ONLINE GAMING BUSINESS DEVELOPMENT



Arc2 Entertainment

On July 12, 2005, the Company entered into a Software Sub License Agreement (SSL Agreement) with Arc2 Entertainment (Arc2), a British Virgin Islands Corporation   whereby Arc2 agreed to build, operate and manage the Companys online gaming website, GoldenSpiritPoker.com.  Arc2 is an online gaming software development and marketing company that has licensed the Company the rights to route users to such software utilized for the operation of online gaming.



The total consideration to be paid to Arc2 by the Company was as follows:



(a)

Initial fee: The Company agreed to pay Arc2 , under the original SSL Agreement, a one-time, non-refundable license acquisition website and development fee in the amount of $100,000, $80,000 due upon execution (paid) and $20,000 would be due upon launch of the live website where players are able to play on the site for real money.  The Company negotiated with Arc2 who agreed to accept the $80,000 as payment in full payment (see below).



6



GOLDEN SPIRIT ENTERPRISES LTD.

(Formerly Golden Spirit Gaming Ltd.)

(A development stage company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

|              
|--------------
|March 31, 2007





NOTE 5  ONLINE GAMING BUSINESS DEVELOPMENT (continued)



(b)

Monthly license fee: The Company agreed to pay Arc2 an ongoing monthly fee based on a monthly amount equivalent to 28% of the net monthly revenue generated by the website.



(c)

Payment for consulting fees: Upon the signing of this agreement, the Company issued 5,555,556 post reverse-split Rule 144 restricted shares of its common stock with a fair value of $2,000,000 to Arc2 and its designees.  This amount has been recorded as deferred compensation as a separate component of stockholders deficit and is amortized using the straight-line method as consulting expenses over the three-year term of the SSL Agreement.  As a result of the Companys change of business, these services are no longer required and have no future benefit.  Accordingly, during 2006, the Company recorded consulting fees of $1,666,667 being the full balance of the amounts previously deferred as at December 31, 2005.



(d)

Payment for development costs: The Company would be responsible for all of the remaining costs in connection with the development of the online gaming website.



The website, where people are able to play with and for play money or play for free, was launched in September 2005.  This first play for free phase is intended to draw players while the live version, where players are able to play on the site for cash, is being developed.  The live version was launched in January 2006. The Company receives revenues for hosting games between players by collecting a percentage (rake) from each real money pot.



On January 12, 2006, the Company entered into an amended Licensing Agreement with Arc2 titled Internet Poker Room, Casino and Sportsbook Software Licensing Agreement (Amended SSL Agreement).  The Amended SSL Agreement will provide the Company access to a broader base network of players online for poker games in addition to new software for casino table games such as Blackjack, Roulette, Baccarat, Craps, Slot Machines and Video Poker.  The casino software is available in several different languages such as French, Italian, Japanese, Korean, German, Chinese, Turkish and Spanish.  Although the sportsbook software is included, it will not be utilized at this time.  The original term of the Amended SSL Agreement is for 36 months followed by automatic 2 year renewals which may be terminated by either party.  The Company originally intended to amortize the software license acquisition fee over the 36 month initial term.  However, as a result of the change in business, these costs were fully amortized during 2006 as they are estimated to have no useful life beyond December 31, 2006.



Under the Amended SSL Agreement, consideration paid to Arc2 by the Company was modified as follows:



a)

Initial fee: The Company shall pay Arc2 a one-time, non-refundable software license acquisition fee in the amount of $100,000 in addition to the $80,000 previously paid in connection with the original software. Arc2 and its designees are still entitled to retain the 5,555,556 post reverse-split rule 144 restricted shares of its common stock with an original fair value of $2,000,000 as under the original agreement (See above).



b)

Monthly license fee: The Company shall pay to Arc2 an ongoing monthly fee based on a monthly amount equivalent to 30% of the net monthly revenue.



c)

The Company shall pay a monthly support fee to licensor or its designee in the amount of $1,000 commencing upon the launch of the site.  This fee may be reasonably adjusted on a semi-annual basis to reflect the growth of licensee's web site traffic and customer service requirements.  This fee was waived for the first 3 months after launch.



As a result of the Amended SSL Agreement, the Company wrote-off the initial $80,000 of capitalized web site development costs due to the initial software acquired being replaced with new software.



On September 30, 2006, Congress passed the Unlawful Internet Gambling Enforcement Act of 2006 (included in H.R. 4954, the Port Security Improvement Act of 2006) (The Act).  The President is expected to sign it in the near future. The new



7



GOLDEN SPIRIT ENTERPRISES LTD.

(Formerly Golden Spirit Gaming Ltd.)

(A development stage company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

|              
|--------------
|March 31, 2007





NOTE 5  ONLINE GAMING BUSINESS DEVELOPMENT (continued)



legislation prohibits banks, credit card companies, money transmitting businesses, and other third-party payment providers from knowingly processing online gaming transactions.



After the bill is signed, the U.S. Attorney General will have 270 days (9 months) to determine how the law will be enforced.



A notice has been posted on our website, www.goldenspiritpoker.com, informing players of the new legislation. Currently our site no longer accepts registrations or monetary deposits from U.S. players.  They may, however, continue playing on our for fun site.



Due to this ruling and the negative impact it would have on the Golden Spirit poker website, management has decided to discontinue its online gaming operations.



Poker Sponsorships



On January 27, 2006, the Company entered into an agreement with Anna Benson Enterprises (Benson) for the purposes of sharing cross-site access between the Companys website and the Benson website and for the performance of the services by the Company and Benson.  Total consideration to be paid to Benson will be as follows:



i)

Take fee: Benson will receive payment on a quarterly basis commencing on March 31, 2006 (the Effective Date), 10% of the rake that is earned by, and paid to, the Company from all poker tables on www.goldenspiritpoker.com and any affiliated sites established after the Effective Date.  An advance of $30,000 was paid to Benson in the amount of $5,000 per month for the first 6 months, commencing on the Effective Date.



ii)

Traffic fee: Benson will receive 20% of revenue from all traffic that is originating and transferred directly from www.annabenson.net to www.goldenspiritpoker.com.



iii)

Affiliate fee: Benson will receive 2.5% of the amount earned from online games (excluding poker) on the Companys website paid to the Company and any added affiliated websites after the Effective Date less any amounts paid as traffic fees for Benson Services.



On January 24, 2006, the Company entered into an Agreement with Abdul R. Aref (ARA) with compensation for his services in marketing, as follows:



a)

5% override on all affiliate programs set up by ARAs network.



b)

10% override on all signup and referral bonuses from leads within ARAs network.



c)

30% payment of fees generated by ARA on GSP affiliate programs set up directly by ARA.



On March 30 2006, the Company issued 16,667 post reverse-split restricted common shares valued at $9,000 to Ron Rose, a professional poker player, in exchange for joining the Advisory Board and being a featured player in the VIP room of our website.



On June 26, 2006, the Company sponsored Mr. Rose in the amounts of $1,500 and $2,000 for two tournaments at the 2006 World Series of Poker.  It has been agreed that any monetary winnings from the above mentioned tournaments will firstly be used to repay Golden Spirit Poker for the buy-in fees used to enter Mr. Rose into the tournaments and secondly, will be split 50:50 between Mr. Rose and the Company.  Mr. Rose also agrees to help promote the Company by wearing clothing with the Companys logo during the WSOP events.





8



GOLDEN SPIRIT ENTERPRISES LTD.

(Formerly Golden Spirit Gaming Ltd.)

(A development stage company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

|              
|--------------
|March 31, 2007



NOTE 5  ONLINE GAMING BUSINESS DEVELOPMENT (continued)



On July 12, 2006, the Company entered into an Affiliate Program Agreement with Massey Resources, LLC, a Nevada Corporation, doing business as Your Mental Edge (YME).  YME is in the business of developing programs for golfers and gamblers to instil the confidence and focus necessary for them to succeed.  The Company will provide the YME logo link on



its website, as well as assisting YME to get their logo link on other partnered websites.  In exchange, the Company will receive a 25% commission from YME for any person that visits their site from the logo link on the Companys website and purchases either a Casino Series or Golf Series program.  An additional 5% net commission will be paid to the Company for those who purchase programs coming from the Companys partnered sites.



NOTE 6  DEFERRED COMPENSATION



The Company has recorded the prepaid amounts for consulting and management services contracts paid for by issuance of shares of common stock as deferred compensation as follows:



a)

On June 15, 2005, the Company entered into an agreement with Palisades Financial Ltd. (Palisades), a private company controlled by a significant shareholder, with a two-year term, whereby Palisades will provide investment-banking services to the Company (valued at $60,000) in exchange for 166,666 post reverse-split restricted shares of the Companys common stock.  To March 31, 2007, a total of $53,125 (December 31, 2006 - $46,250) has been expensed.



b)

On July 12, 2005, the Company entered into the SSL Agreement with Arc2.  Under the terms of the SSL Agreement, Arc2 will build and operate the Companys online gaming website in connection with which Arc2 will license to the Company Arc2s software utilized for the operation of online gaming.  Upon the signing of the SSL Agreement, the Company issued 5,555,556 post reverse-split (valued at $2,000,000) Rule 144 restricted shares of its common stock to Arc2 and its designees as payment for the marketing and management services to be provided over the 3-year term of the Agreement (See Note 5).  To March 31, 2007, a total of $2,000,000 (December 31, 2006 - $2,000,000) has been expensed.



c)

On October 1, 2004, the Company entered into agreements with Holm Investments Ltd. (Holm) a private company controlled by a shareholder, for a three-year term, whereby Holm will provide investor relations services to the Company (valued at $175,000) in exchange for 97,222 post reverse-split restricted shares of the Companys common stock. The investor relations services include researching, editing and generating a company profile, technical chart analysis, relaying the Companys business perspectives and distribution of corporate updates, including press releases.  To March 31, 2007, a total of  $175,000 (December 31, 2006 - $175,000) has been expensed.



d)

On June 2, 2006, the Company entered into an agreement with a consultant, for a three-year term, whereby the consultant will provide consulting services to the Company (valued at $110,000) in exchange for 555,556 post reverse-split shares of the Companys common stock.  To March 31, 2007, a total of $30,557 (December 31, 2006 - $21,390) has been expensed.



e)

On June 2, 2006, the Company signed an agreement with an effective date of October 1, 2005 with a consultant, for a three-year term, whereby the consultant will provide services to the Company (valued at $82,500) in exchange for 416,667 post reverse-split shares of the Companys common stock.  To March 31, 2007, a total of $ 41,250 (December 31, 2006 - $34,370) has been expensed.





9



GOLDEN SPIRIT ENTERPRISES LTD.

(Formerly Golden Spirit Gaming Ltd.)

(A development stage company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

|              
|--------------
|March 31, 2007





NOTE 7  CAPITAL STOCK



The Companys capitalization is 500,000,000 common shares with a par value of $0.0001 per share.  No preferred shares have been authorized.



On June 1, 2006, the Company announced a one for eighteen (1:18) reverse stock split of all of the Companys outstanding common stock without any change in par value for the shares of common stock.  The capitalization of 500,000,000 shares with a par value of $0.0001 per share remains the same after the reverse stock split.  Shareholder approval was obtained to affect the reverse stock split and on June 6, 2006 the Company filed a certificate with the Secretary of State of Delaware authorizing the 1:18 reverse stock split.  The reverse stock split became effective June 30, 2006.  All previous references to shares of common stock and weighted average common shares outstanding have been restated to give affect to the 1:18 reverse stock split unless otherwise stated.



(1)

2007 Stock Transactions



During the three months ending March 31, 2007, the Company issued:



(a) 170,000 post reverse-split options, granted pursuant to the Companys 2006 Stock Incentive and Option Plan, were exercised at $0.09 per share for cash proceeds of $15,300.



(2)

2007 Stock Options



(a)

The fair value of the common stock options granted during the year was measured at the grant date using the Black-Scholes option pricing model with the following weighted average assumptions:



Expected dividend yield0%Risk-free interest rate4.95%Expected volatility136%Expected option life1 year




Pursuant to the Companys 2006 Stock Option Plans, 3,800,000 post reverse-split options were granted on March 1, 2007 at $0.10 per share.  The options were granted to employees, directors and consultants.  During the three months ended March 31, 2007, the Company expensed the fair value of $228,000 for these options which was estimated using the Black-Scholes option pricing model with the following weighted average assumptions: expected option life of 1 year; risk-free interest rate of 4.95%; expected dividend yield of 0% and expected volatility of 136%.



NOTE 8  RELATED PARTY TRANSACTIONS



During the three months ended March 31, 2007, companies controlled by significant shareholders earned $6,875 (2006 - $7,500) pursuant to investment banking services contracts (refer to Note 6).



During the three months ended March 31, 2007, private companies controlled by significant shareholders earned $Nil (2006 - $25,521) pursuant to investor relations services contracts (refer to Note 6).



During the three months ended March 31, 2007, the Company paid $2,133 (2006 - $1,948) to two directors for management fees.



During the three months ended March 31, 2007, the Company incurred expenses for office rent of $5,332 (2006 - $5,355) to a private company controlled by a significant shareholder.



10



GOLDEN SPIRIT ENTERPRISES LTD.

(Formerly Golden Spirit Gaming Ltd.)

(A development stage company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

|              
|--------------
|March 31, 2007





NOTE 8  RELATED PARTY TRANSACTIONS (continued)



At March 31, 2007, a total of $237,928 (December 31, 2006 - $212,054) was owing to Avalon Energy Corporation, a public company with common directors and officers, for cash advances. This amount is unsecured, non-interest bearing and has no specified terms of repayment.



At March 31, 2007, a total of $20,082 (December 31, 2006 - $20,082) was due from Legacy Mining Ltd. (Legacy), a company with common directors and officers, for cash advances. This amount is unsecured, non-interest bearing and has no specified terms of repayment.



The following amounts are due to related parties at:

|                         |                      |                  
|------------------------ | -------------------- | -----------------
|                         | March 31, 2007       | December 31, 2006
|                         | (unaudited)          |                  
|Significant shareholders | $            149,578 | $         109,875



All related party transactions are in the normal course of business and are measured at the exchange amount, which is the amount of consideration established and agreed to by the related parties.



NOTE 9  CONTINGENCIES



On May 2, 2003, the Company issued 25,000 post reverse-split common shares valued at $9,000 to a consultant pursuant to a stock option incentive plan.  The consultant failed to meet the terms of the stock option agreement by not paying the exercise price and as a result, the Company requested the return of the 25,000 post reverse-split shares.  The consultant refused to return the shares; therefore, the Company issued a stop transfer and commenced legal proceedings to recover the shares.  The consultant subsequently filed a Statement of Claim against the Company for damages of $53,000 Cdn.  On April 29, 2005, the Supreme Court of British Columbia issued a judgment awarding the plaintiff $15,000 Cdn in damages and $7,180 Cdn in costs; however, the 25,000 post reverse-split shares were to be returned to the Company (not yet received).In September 2005, the Company and the plaintiff agreed to payment terms to settle this damage award by a payment of $6,080 Cdn (paid) and a payment schedule of $1,000 Cdn per month for the remaining balance of the judgment commencing December 1, 2005.  The $6,080 Cdn payment was made as the result of a bailiffs executed court order on September 28, 2005, which seized the Companys bank account.  No further payments have been made towards the settlement agreement due to the Plaintiffs refusal to sign the order.



On September 28,2005, the Company received notice of a lawsuit from Thomas L. Franklin, a professional poker player formerly under contract with 4KE, for an alleged breach of contract for services rendered based on the original contract between the Company and 4KE dated July 18, 2005.  The Company, 4KE, and certain individuals, are being sued for $967,500, plus interest at the rate of 8% per annum from August 22, 2005, and all costs pertaining to this legal matter.  An attorney in Mississippi has been retained to defend this action and to apply for a dismissal of the case, based on Mississippi being the wrong jurisdiction for this suit and to defend the Company from the claims made by the plaintiff.  The outcome of this litigation and an estimate of loss are presently not determinable and no provision for loss relating to this lawsuit has been recorded.



NOTE 10  SUPPLEMENTAL CASH FLOW INFORMATION AND NON-CASH INVESTING AND FINANCING ACTIVITIES



|                                                                     |  |                     |  |                    
|-------------------------------------------------------------------- |  | ------------------- |  | -------------------
|Cash paid during the three months ended March 31, 2007 and 2006 for: |  | 2007                |  | 2006               
|                                                                     |  |                     |  |                    
|Interest                                                             |  | $                 - |  | $                 -
|                                                                     |  |                     |  |                    
|Income taxes                                                         |  | $                 - |  | $                 -





11



GOLDEN SPIRIT ENTERPRISES LTD.

(Formerly Golden Spirit Gaming Ltd.)

(A development stage company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

|              
|--------------
|March 31, 2007





NOTE 10  SUPPLEMENTAL CASH FLOW INFORMATION AND NON-CASH INVESTING AND FINANCING ACTIVITIES (continued)



During the three months ended March 31, 2007:



The Company received proceeds of $15,300 for the exercise of 170,000 post reverse-split restricted common shares.



NOTE 11  SUBSEQUENT EVENTS



During April 2007, a total of 820,000 post reverse-split options, pursuant to the 2006 and 2005 Stock Option Plan, were exercised at prices of $0.09 and $0.10 per share for total consideration of $76,300.



Effective April 15, 2007, the Companys online gaming operations will be discontinued.  Notice has been given to Arc 2 Entertainment for the termination of the Amended SSL Agreement (See Note 5.)



12



ITEM 2.

Plan of Operation



THIS FOLLOWING INFORMATION SPECIFIES CERTAIN FORWARD-LOOKING STATEMENTS OF MANAGEMENT OF THE COMPANY. FORWARD-LOOKING STATEMENTS ARE STATEMENTS THAT ESTIMATE THE HAPPENING OF FUTURE EVENTS AND ARE NOT BASED ON HISTORICAL FACT. FORWARD-LOOKING STATEMENTS MAY BE IDENTIFIED BY THE USE OF FORWARD-LOOKING TERMINOLOGY, SUCH AS "MAY", "SHALL", "WILL", "COULD", "EXPECT", "ESTIMATE", "ANTICIPATE", "PREDICT", "PROBABLE", "POSSIBLE", "SHOULD", "CONTINUE", OR SIMILAR TERMS, VARIATIONS OF THOSE TERMS OR THE NEGATIVE OF THOSE TERMS.  THE FORWARD-LOOKING STATEMENTS SPECIFIED IN THE FOLLOWING INFORMATION HAVE BEEN COMPILED BY OUR MANAGEMENT ON THE BASIS OF ASSUMPTIONS MADE BY MANAGEMENT AND CONSIDERED BY MANAGEMENT TO BE REASONABLE. OUR FUTURE OPERATING RESULTS, HOWEVER, ARE IMPOSSIBLE TO PREDICT AND NO REPRESENTATION, GUARANTY, OR WARRANTY IS TO BE INFERRED FROM THOSE FORWARD-LOOKING STATEMENTS.



THE ASSUMPTIONS USED FOR PURPOSES OF THE FORWARD-LOOKING STATEMENTS SPECIFIED IN THE FOLLOWING INFORMATION REPRESENT ESTIMATES OF FUTURE EVENTS AND ARE SUBJECT TO UNCERTAINTY AS TO POSSIBLE CHANGES IN ECONOMIC, LEGISLATIVE, INDUSTRY, AND OTHER CIRCUMSTANCES. AS A RESULT, THE IDENTIFICATION AND INTERPRETATION OF DATA AND OTHER INFORMATION AND THEIR USE IN DEVELOPING AND SELECTING ASSUMPTIONS FROM AND AMONG REASONABLE ALTERNATIVES REQUIRE THE EXERCISE OF JUDGMENT. TO THE EXTENT THAT THE ASSUMED EVENTS DO NOT OCCUR, THE OUTCOME MAY VARY SUBSTANTIALLY FROM ANTICIPATED OR PROJECTED RESULTS, AND, ACCORDINGLY, NO OPINION IS EXPRESSED ON THE ACHIEVABILITY OF THOSE FORWARD-LOOKING STATEMENTS. NO ASSURANCE CAN BE GIVEN THAT ANY OF THE ASSUMPTIONS RELATING TO THE FORWARD-LOOKING STATEMENTS SPECIFIED IN THE FOLLOWING INFORMATION ARE ACCURATE, AND WE ASSUME NO OBLIGATION TO UPDATE ANY SUCH FORWARD-LOOKING STATEMENTS.



Item 1. Description of Business.



Our Background. Golden Spirit Enterprises Ltd., formerly Golden Spirit Gaming Ltd., formerly Golden Spirit Mining Ltd., formerly Golden Spirit Minerals Ltd., formerly 2UOnline.com, Inc., formerly Power Direct, Inc., was incorporated in the State of Delaware on September 13, 1993, and we maintain our principal executive offices at 1288 Alberni Street, Suite 806, Vancouver, British Columbia, Canada V6E 4N5. Our offices in the United States are located at 702 Kentucky Street, Suite 541, Bellingham, Washington 98225.



We changed our name from Power Direct, Inc., to 2UOnline.com, Inc. by filing a Certificate of Amendment to our Certificate of Incorporation on January 31, 2000. We also changed our trading symbol from "PWDR" to "TWOU" in order to reflect our decision to shift our focus from oil and gas production to Internet- related activities. Our symbol was then changed to "TWOUE".  On or about April 18, 2000, we were removed from the Over-the-Counter Bulletin Board ("OTCBB") for failure to comply with NASD Rule 6530, which requires any company listed on the OTCBB to be current in its public reporting obligations pursuant to the Securities and Exchange Act of 1934. The Company was re-instated on the OTCBB on October 7, 2002 under the symbol "TWOU". The Company filed a certificate of amendment to its Articles of Incorporation with the State of Delaware on October 1, 2003 to change its name to Golden Spirit Minerals Ltd. The name change reflects management's decision to shift the Company's focus from internet-based business development to mineral exploration. On October 8, 2003, the trading symbol for the Company became "GSPM". On October 19, 2004, the Company changed its name to Golden Spirit Mining Ltd. and the trading symbol was "GSML". On July 18, 2005 the Company changed its name to Golden Spirit Gaming Ltd. and the trading symbol was GSGL. On June 30, 2006, the Company changed its name to Golden Spirit Enterprises Ltd. and the trading symbol is currently GSPT.



13



On August 17, 2005, the Company incorporated Golden Spirit Poker Company Limited, a British Virgin Islands Corporation.  Golden Spirit Gaming Ltd. was issued 10 shares of this Company for consideration of $10.00, representing 100% of the issued capital of Golden Spirit Poker Company Limited.



We were originally incorporated to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of Delaware. We were inactive from September 13, 1993, through November 1998, when we began the process of identifying potential business interests, including, but not necessarily limited to, interests in oil and natural gas producing properties.



Our Business.  On June 30, 2006, the Company changed its name and focus from gaming to reflect the Companys plan to expand its operations to include the marketing of other products and venues. The Company will be involved in the development, production, financing and packaging of innovative film and television programming.

During the three months ended March 31, 2007, management has decided to cease its online gaming operations.  Since then, the following events have occurred:



PROJECTS IN POST-PRODUCTION



TALES OF RAIN AND MAGIC  is currently in post-production



Synopsis:

Misty lives with her opera singer grandmother and her orphaned cousin Rain in a charming small town along the banks of a river. Sent by her parents at an early age to study Sichuanese opera with her grandmother, Misty enjoys an idyllic and carefree childhood. At the age of four, she learns that her mother died while taking photographs of a mountain known as Goddess Peak, which begins Mistys fascination with the legend of the same name. She and her cousin Rain spend many happy hours exploring a nearby cave and hoping for a glimpse of the goddess said to inhabit it. Several years later, Misty is distraught to learn of her fathers remarriage. She returns to the cave but instead of finding the goddess, she runs into her great-uncle, who happens to be in the cave taking photographs.  Great-uncle begins teaching Misty the art of photography, just as he taught her mother many years before. Photography brings Misty closer to the memory of her mother, and she soon develops a passion for taking photos.



Grandmothers favorite student is a lovely young girl named Spring. Spring is an aspiring opera singer and an admirer of Mistys older cousin Rain. As Misty reaches adolescence and begins experiencing physical and emotional changes, she also becomes aware of the blossoming romance between Rain and Spring. This presents a problem, for Misty is also secretly in love with her cousin Rain. Her jealously leads her to snap a photo of Spring and Rain in a very compromising position and post it for everyone in the village to see. This act leads to a series of unforeseen consequences that will change Mistys life forever...With its stories of wind and water, rain and magic, love and loss, the film unfolds like a charming fairytale.



14

PROJECTS IN PROGRESS



THE CABIN  is currently in pre-production.



The Company will act as Distributor for this high energy horror film about five beautiful university students who decide to spend a girls only weekend at a remote picturesque rustic cabin only to learn that there is an evil entity lurking in the Cabin that wants them to stay forever and does not intend for them to leave alive.



Synopsis:

The ad simply read; The perfect place. Rustic 19th century log cabin with luxurious 21st century amenities. Historic location. Details upon request. Josie knew right away that this was, as the ad read, the perfect place for the Delta Phi Sister annual study week retreat. A bit unsettling that the ad had mysteriously popped up in the Craigs List Vacation wanted section at the very moment Josie was ready to close the already thoroughly perused daily listings.



The friends decide to make it a girls only getaway, and after some not so gentle persuading of their somewhat promiscuous friend Heather, they all agree and catch a ferry to New Haven Island off the coast of Maine. Unbeknownst to the group, Heather secretly informs her boyfriend and his Omega friends of the location of the remote cabin.



On the ferry ride over, the girls meet a mysterious and slightly creepy old man who gives them a token of protection against what he eerily refers to as The Haunting. He informs the girls that nearly two hundred years ago, an evil coven of witches were burned at the stake by the priests of the Christian church. Their bones were ferried over to New Haven Island and entrusted to a Keeper who built a sanctified burial ground for the bones of the burnt witches and swore an oath of eternal secrecy and protection of the bones to the church. The cabin has, over the centuries, been believed to be the eternal battleground for a mutual and unholy vendetta between the witches and the Christian priests. Undaunted and skeptical, the girls decide to press on, determined that the old guy was more than just a little insane and that the idea of some clash of the spirits is just a little too far fetched. The girls only weekend is shortly crashed by the arrival of the Alpha Omega boys.  Amidst the steam of the hot tub truth or dare sessions, strip shooter games and secret midnight girl swapping, the group discovers a Ouija board amongst the board games left in the cabin and enter themselves into a dangerous game of black magic, revenge and blood sacrifice.



THE BROTHERHOOD OF THE PHOENIX  is currently in pre-production.



The Company will act as distributor for this high concept action drama that deals with a CIA operative who is called upon to work with an infamous international arms dealer that he has been tracking for years, in an effort to rescue this daughter from an ultra-radical terrorist group who are demanding to be given the secret plans for a biological weapon of mass distribution in exchange for her freedom.



Synopsis:

When Sabella Phoenix Zahra, the only daughter of infamous, international arms dealer Asim-Abdul Zahra is kidnapped by an ultra-radical terrorist group known as Black Fist, he realizes he has only two choices; give the terrorists the secret plans for a biological weapon of mass destruction that they plan to unleash on the United States and Britain or try and enlist the help of CIA agent Arlen Atkinson, the very man whos been trying to bring him to justice for a decade.



Arlen is woken in the middle of the night by a phone call from Asim, who informs him of the situation, suggesting the two work together in an effort to rescue his daughter while at the same time, eliminating a very real threat to the safety of the United States. Arlen is torn between his desire to bring down this dangerous arms dealer and his sworn duty to faithfully protect the sovereignty of his country from a potentially catastrophic biological attack.  Choosing the lesser of two evils, Arlen contacts longtime friend, Captain Cole Herrick, commander of the ultra-secret anti-terrorism group known as The Nine.



Captain Herrick begins assembling his group of nine operatives from their various assignments around the world and begins the planning and training operations for a covert mission into the heavily fortified Indonesian jungle where Black Fist makes its headquarters. Having mixed feelings about his team being used to help an arms dealer whos long been supplying the very weapons responsible for killing thousands world wide, including some of his own operatives, he informs his team that after the rescue of the girl and the disposal of Black Fist, they will bring Asim to justice.

15



The team penetrates the heavily guarded jungle fortress with very little resistance and is able to successfully retrieve Sabella quite easily maybe a little too easily. On the way out, however, the team seems to be getting ambushed at every turn and it begins to become more and more apparent that there is a mole among The Nine working for Black Fist.  While deep inside enemy territory and Black Fist aware of their every move, Captain Herrick and The Nine must use every ounce of their training and instinct to get themselves and Sabella out alive. Rick and The Nine must use every ounce of their training and instinct to get themselves and Sabella out alive.



AMAZING SUPER BUDDIES  is currently in production.



The Company will act as the Producer and Distributor for a 3D Television Series for children known as ASB: Power Force. The entire first series will consist of one pilot and twenty-five episodes, each having a length of twenty-two minutes. The ASB: Power Force Series is intended for distribution in Video/DVD/Television markets worldwide.



Synopsis:

After saving their world from the crystal hunting space villain Gor Vandall and his ravaging robot army, the Power Force are granted permission to explore the Universe on a mission of Knowledge, Peace and Good Times, First stop on their incredible inter-galactic tour is Earth, where the Power Force learn all about the wonders of the World, one country per episode. But all is not what it seems... Little do the Power Force realize that their old nemesis and co-founder, Gor Vandall is still alive and on the hunt! Determined to destroy the order of the Power Force and reunite the lost piece of the Crystal of the Ages, Gor will stop at nothing to attain his objectives. Only their superior skills and teamwork can save the daring buddies for Gor and his all powerful knowledge vacuum as they explore the countries of Earth on their quest for knowledge, peace and good times. More information on the Series and its characters can be seen at www.amazingsuperbuddies.com.



THE MISTS OF TIME  is currently in pre-production.



The Company will be co-producing this love story to be filmed mainly in Shanghai, China in late 2007 or early 2008. This dramatic film is set during the Japanese occupation of Shanghai.



Synopsis:

Set in the 1930s Shanghai, a train from Harbin steams in, with crowds of Russians and Chinese disembarking.  Amongst them a young ballet dancer named Ninushka.  At the same time a small boat from Hong Kong docks in the harbour.  Mathias, a Chinese-European, visibly unkept crosses the gangway and disappears into the crowd.



Ninushka, the dancer, and Mathias, the illusionist, begin working at La Laterne, a very large, notorious casino and dance club in Shanghai. The elegant Europeans and Chinese are a part of their prestigious clientele.  This is where Ninushka and Mathias meet and fall deeply in love.



The bombing of Shanghai and the Japanese invasion destroy everything that Mathias and Ninushka have, arresting Mathias in the process.  This is the last time that Mathias and Ninushka see each other for a very long time. She continues to appear at La Laterne, refusing to accept his death as long as she hasnt seen his body.

To escape from the occupation, Ninushka decides to accept the offer from the Russian Consulate to return to the motherland.



Sixty years pass and a train arrives in present day Shanghai Station from Moscow, a beautiful, older woman steps off the train. At the same time a boat from Hong Kong arrives in the harbour with Mathias, sixty years older, still dressed in white with his dark rimmed glasses. But this time someone is waiting for him, Ninushka.



History is repeating itself.



16

Prior Business. Our initial focus was on the development of oil and natural gas properties. In this regard, we purchased interests in two properties; one in the United States and one in Canada. In or around December 1999, we decided to review the focus of our business, primarily the direction we would take with our various oil and gas projects. We decided that maintaining interests in oil and gas producing properties should no longer be our focus. Due to the growth of the Internet, we decided to pursue Internet-related activities. We determined that Internet-related activities would provide a positive revenue stream sooner than oil and gas producing activities. Due to the lack of success with our internet activities we decided to abandon this business and commencing in 2003 instead pursue opportunities in mineral exploration and development



We had limited success with both our internet activities and our mineral exploration and development activities. In mid 2005, management of the Company decided to focus on online gaming and in June 2006, the Company decided to diversify its business by adding film production and distribution.  Since then, management of the Company has decided to cease its online gaming operations due to the passing of the Unlawful Internet Gambling Enforcement Act of 2006, by the US Congress in September 2006.  The Companys focus will now be in the development, production, financing and packaging of innovative film and television programming



Our Investment in Avalon Energy Corporation



During 2002 the Company sold 360,961 shares of Avalon Energy Corporation ("Avalon"), a public company with directors and significant shareholders in common, for proceeds of $50,663 resulting in a gain of $7,452.  Effective September 30, 2002 the Company determined that the value of its investment in Avalon had become permanently impaired and as a result, wrote down its investment by $313,301.  For the period from January 1, 2002 to September 30, 2002 the Company recorded a net equity loss in Avalon totaling $346,053.  During the fourth quarter of 2002, Avalon issued shares of its common stock from treasury resulting in a significant reduction of the Company's equity interest in Avalon to approximately 4%.  As a result, the Company reclassified its investment in Avalon from an equity investment to available-for-sale securities whereby its value is carried at market.



During 2003, the Company bought 303,750 shares of Avalon for $55,786 and sold 355,750 shares for net proceeds of $74,710 and realized a loss of $38,764.  Effective December 31, 2003, the Company recorded an unrealized loss in the carrying value of its available-for-sale securities totaling $115 which was recorded as other comprehensive income for the year.  Effective December 31, 2004, the Company recorded an unrealized loss in the carrying value of its available-for-sale securities totaling $1,126 which was recorded as comprehensive loss for the year.



Effective December 31, 2005, the Company recorded an unrealized gain in the carrying value of its available-for-sale securities totaling $1,112 which was recorded as other comprehensive income for the year.  As at December 31, 2005, the Company owns 10,351 shares of Avalon's common stock with a fair value of $1,656. Effective December 31, 2006, the Company recorded an unrealized loss in the carrying value of its available-for-sale securities which was recorded as comprehensive loss for the year, the carrying value at December 31, 2006 was $1,087. As at March 31, 2007, the Company recorded an unrealized loss in the carrying value of its available-for-sale securities which was recorded as comprehensive loss for the period.  The carrying value at March 31, 2007 is $776 (December 31, 2006 - $1,087).



Our Mineral Properties:



(i) Niger Property



On April 4, 2005, the Company signed a memorandum of understanding with a private corporation to acquire a Uranium Concession on the African Continent. The Company paid a Cdn $5,000 consultant fee to a third party to commence the process of acquiring a prospecting permit from the Niger Ministry of Mines, which will be valid for thirty (30) years. The Company also agreed to issue 1,666,667 post reverse-split non-refundable restricted Rule 144 common shares upon signing the memorandum, and issue a further 3,888,889 post reverse-split restricted Rule 144 common shares and pay an additional Cdn $5,000 once the Ministry of Mines issues the Prospecting Permit.  As at December 31, 2006, the prospecting permit has not been issued.  To March 31, 2007, the Company has issued 1,666,667 of the non-refundable post reverse-split shares with a fair value of $600,000.  In accordance with the memorandum of understanding, the Company was to attain a Prospecting Permit from the African Government. The Company has been unable to attain the permit and management has decided to abandon the project, resulting in a charge to operations of $600,000 in 2006.



17



Investment in Legacy Mining Ltd. (formerly Cardstakes.com)



On February 19, 1999, we caused PDTech.com, a Nevada corporation, to be formed as our subsidiary.  On June 8, 1999, PDTech.com changed its name to CardStakes.com, Inc., and on January 13, 2004, Cardstakes.com changed its name to Legacy Mining Ltd. At the time, Legacy Mining Ltd. was incorporated, it was contemplated that founders would be issued founders shares in Legacy Mining Ltd. in consideration for incorporating and initially financing Legacy Mining Ltd.



Between June 15, 1999, and July 7, 1999, Legacy Mining Ltd. issued 7,126,531 shares of its common stock to us pursuant to the sub-licensing agreement between the Company and Legacy Mining Ltd. Under the licensing agreement, Legacy Mining Ltd. purchased the right to utilize and exploit the technology necessary to sell greeting cards over the Internet (more particularly described in the Compte Agreement previously filed). On August 16, 1999, we issued to each of our shareholders entitled to receive dividends, one (1) share of Legacy Mining Ltd.'s common stock for every eight (8) shares of our common stock.  We issued a total of 2,199,779 shares of Legacy Mining Ltd.'s common stock to our shareholders. The purpose for issuing these shares in Cardstakes.com to Golden Spirit Mining Ltd. shareholders was in consideration for delays encountered in Cardstakes.com  implementation of its business. On September 10, 1999, and in consideration for the removal of the anti-dilution provision from Legacy Mining Ltd.'s Articles of Incorporation (more particularly described in Item 12.5.), CardStakes.com issued an additional 2,000,000 shares of its common stock to us. On December 31, 2003 the Company and Legacy, undertook a series of capital reorganization transactions, as follows:



1. By agreements dated December 31, 2003 with ten individuals, the Company transferred ownership of 5,900,000 of the Legacy shares to these individuals for nominal consideration and their agreement to fund Legacy in the future.    Of the 5,900,000 shares transferred, 150,000 were transferred to two directors of the Company, 1,000,000 were transferred to a significant shareholder of the Company and 1,020,000 were transferred to an employee of the Company.  This transaction resulted in a decrease of the Company's ownership of Legacy from 59% to 9%.



2. On December 31, 2003, Legacy issued shares of its capital stock in order to settle $122,988 owing to Avalon and $106,000 of the Company's debt, and to acquire a mineral property interest with a fair value of $2,000.  These transactions resulted in a further decrease of the Company's ownership of Legacy from 9% to 4%.



On December 31, 2003, the Companys interest in Legacy was reduced from 59% to 4%.  As Legacy had a negative carrying value on consolidation, and the Company disposed of the majority of its interest for nominal consideration, the Company has recorded a dilution gain of $762,805. At the same time, management has determined that its receivable from Legacy of $428,718 is impaired and therefore has written off the receivable against the dilution gain.  The net dilution gain on the reduction in interest ownership of Legacy was $334,087.  Commencing January 1, 2004, the Company will account for its investment in Legacy using the cost method.  In October 2005, the Company entered into an agreement to sell its interest in Ester Creek to Legacy for 750,000 shares of Legacys common stock; which increased the Companys ownership in Legacy back up to 7.39%.  As at March 31, 2007, the carrying value of the Company's investment in Legacy is $nil.



18



Online Business Development:



Arc2 Entertainment



On July 12, 2005, the Company entered into a Software Sub License Agreement (SSL Agreement) with Arc2 Entertainment (Arc2), a British Virgin Islands Corporation   whereby Arc2 agreed to build, operate and manage the Companys online gaming website, GoldenSpiritPoker.com.  Arc2 is an online gaming software development and marketing company that has licensed the Company the rights to route users to such software utilized for the operation of online gaming.

The total consideration to be paid to Arc2 by the Company was as follows:



(a)

Initial fee: The Company agreed to pay Arc2 , under the original SSL Agreement, a one-time, non-refundable license acquisition website and development fee in the amount of $100,000, $80,000 due upon execution (paid) and $20,000 would be due upon launch of the live website where players are able to play on the site for real money.  The Company negotiated with Arc2 who agreed to accept the $80,000 as payment in full payment (see below).

(b)

Monthly license fee: The Company agreed to pay Arc2 an ongoing monthly fee based on a monthly amount equivalent to 28% of the net monthly revenue generated by the website.



(c)

Payment for consulting fees: Upon the signing of this agreement, the Company issued 5,555,556 post reverse-split Rule 144 restricted shares of its common stock with a fair value of $2,000,000 to Arc2 and its designees.  This amount has been recorded as deferred compensation as a separate component of stockholders deficit and is amortized using the straight-line method as consulting expenses over the three-year term of the SSL Agreement.  As a result of the Companys change of business, these services are no longer required and have no future benefit.  Accordingly, during 2006, the Company recorded consulting fees of $1,666,667 being the full balance of the amounts previously deferred as at December 31, 2005.



(d)

Payment for development costs: The Company would be responsible for all of the remaining costs in connection with the development of the online gaming website.



The website, where people are able to play with and for play money or play for free, was launched in September 2005.  This first play for free phase is intended to draw players while the live version, where players are able to play on the site for cash, is being developed.  The live version was launched in January 2006. The Company receives revenues for hosting games between players by collecting a percentage (rake) from each real money pot.

On January 12, 2006, the Company entered into an amended Licensing Agreement with Arc2 titled Internet Poker Room, Casino and Sportsbook Software Licensing Agreement (Amended SSL Agreement).  The Amended SSL Agreement will provide the Company access to a broader base network of players online for poker games in addition to new software for casino table games such as Blackjack, Roulette, Baccarat, Craps, Slot Machines and Video Poker.  The casino software is available in several different languages such as French, Italian, Japanese, Korean, German, Chinese, Turkish and Spanish.  Although the sportsbook software is included, it will not be utilized at this time.  The original term of the Amended SSL Agreement is for 36 months followed by automatic 2 year renewals which may be terminated by either party.  The Company originally intended to amortize the software license acquisition fee over the 36 month initial term.  However, as a result of the change in business, these costs were fully amortized during 2006 as they are estimated to have no useful life beyond December 31, 2006.

19

Under the Amended SSL Agreement, consideration paid to Arc2 by the Company was modified as follows:



a)

Initial fee: The Company shall pay Arc2 a one-time, non-refundable software license acquisition fee in the amount of $100,000 in addition to the $80,000 previously paid in connection with the original software. Arc2 and its designees are still entitled to retain the 5,555,556 post reverse-split rule 144 restricted shares of its common stock with an original fair value of $2,000,000 as under the original agreement (See above).



b)

Monthly license fee: The Company shall pay to Arc2 an ongoing monthly fee based on a monthly amount equivalent to 30% of the net monthly revenue.



c)

The Company shall pay a monthly support fee to licensor or its designee in the amount of $1,000 commencing upon the launch of the site.  This fee may be reasonably adjusted on a semi-annual basis to reflect the growth of licensee's web site traffic and customer service requirements.  This fee was waived for the first 3 months after launch.



As a result of the Amended SSL Agreement, the Company wrote-off the initial $80,000 of capitalized web site development costs due to the initial software acquired being replaced with new software.



On September 30, 2006, Congress passed the Unlawful Internet Gambling Enforcement Act of 2006 (included in H.R. 4954, the Port Security Improvement Act of 2006) (The Act).  The President is expected to sign it in the near future. The new legislation prohibits banks, credit card companies, money transmitting businesses, and other third-party payment providers from knowingly processing online gaming transactions.



After the bill is signed, the U.S. Attorney General will have 270 days (9 months) to determine how the law will be enforced.



A notice has been posted on our website, www.goldenspiritpoker.com, informing players of the new legislation. Currently our site no longer accepts registrations or monetary deposits from U.S. players.  They may, however, continue playing on our for fun site.



Due to this ruling and the negative impact it would have on the Golden Spirit poker website, management has decided to discontinue its online gaming operations.



20

Poker Sponsorships

On January 27, 2006, the Company entered into an agreement with Anna Benson Enterprises (Benson) for the purposes of sharing cross-site access between the Companys website and the Benson website and for the performance of the services by the Company and Benson.  Total consideration to be paid to Benson will be as follows:



i)

Take fee: Benson will receive payment on a quarterly basis commencing on March 31, 2006 (the Effective Date), 10% of the rake that is earned by, and paid to, the Company from all poker tables on www.goldenspiritpoker.com and any affiliated sites established after the Effective Date.  An advance of $30,000 was paid to Benson in the amount of $5,000 per month for the first 6 months, commencing on the Effective Date.



ii)

Traffic fee: Benson will receive 20% of revenue from all traffic that is originating and transferred directly from www.annabenson.net to www.goldenspiritpoker.com.



iii)

Affiliate fee: Benson will receive 2.5% of the amount earned from online games (excluding poker) on the Companys website paid to the Company and any added affiliated websites after the Effective Date less any amounts paid as traffic fees for Benson Services.



On January 24, 2006, the Company entered into an Agreement with Abdul R. Aref (ARA) with compensation for his services in marketing, as follows:



a)

5% override on all affiliate programs set up by ARAs network.

b)

10% override on all signup and referral bonuses from leads within ARAs network.

c)

30% payment of fees generated by ARA on GSP affiliate programs set up directly by ARA.



On March 30 2006, the Company issued 16,667 post reverse-split restricted common shares valued at $9,000 to Ron Rose, a professional poker player, in exchange for joining the Advisory Board and being a featured player in the VIP room of our website.



On June 26, 2006, the Company sponsored Mr. Rose in the amounts of $1,500 and $2,000 for two tournaments at the 2006 World Series of Poker.  It has been agreed that any monetary winnings from the above mentioned tournaments will firstly be used to repay Golden Spirit Poker for the buy-in fees used to enter Mr. Rose into the tournaments and secondly, will be split 50:50 between Mr. Rose and the Company.  Mr. Rose also agrees to help promote the Company by wearing clothing with the Companys logo during the WSOP events.



21

On July 12, 2006, the Company entered into an Affiliate Program Agreement with Massey Resources, LLC, a Nevada Corporation, doing business as Your Mental Edge (YME).  YME is in the business of developing programs for golfers and gamblers to instil the confidence and focus necessary for them to succeed.  The Company will provide the YME logo link on its website, as well as assisting YME to get their logo link on other partnered websites.  In exchange, the Company will receive a 25% commission from YME for any person that visits their site from the logo link on the Companys website and purchases either a Casino Series or Golf Series program.  An additional 5% net commission will be paid to the Company for those who purchase programs coming from the Companys partnered sites.



The Following are Material Subsequent Events (Occurring after March 31, 2007).



During April 2007, a total of 820,000 post reverse-split options, pursuant to the 2006 and 2005 Stock Option Plan, were exercised at prices of $0.09 and $0.10 per share for total consideration of $76,300.



Effective April 15, 2007, the Companys online gaming operations will be discontinued. Notice has been given to Arc 2 Entertainment for the termination of the Amended SSL Agreement(see Online Business Development).



Liquidity and Capital Resources



For the three months ended March 31, 2007, we had total assets of $79,373 including $3,683 in accounts receivable, $20,082 due from Legacy Mining Ltd., $31,663 in pre-paids and deposits, and $776 in available for sale securities. We also held $347 in depreciated furniture and equipment. At March 31, 2007, we had total current liabilities of $435,191 of which $47,129 was represented by accounts payable and accrued liabilities, $238,483 due to Avalon Energy Corporation and $149,578 was due to related parties. At March 31, 2007, we had $58,944 in current assets and $435,191 in total current liabilities. At March 31, 2007, current liabilities exceeded current assets by $376,246.



We are not aware of any trends, demands, commitments or uncertainties that will result in our liquidity decreasing or increasing in any material way. We do not believe that our available cash is sufficient to pay our day-to-day expenditures; therefore, we rely on management to provide the necessary funds to pay these day-to-day expenditures. We have one other external source of liquidity, that being the sale of our common stock.



No assurance can be given, however, that we will have access to additional cash in the future, or that funds will be available on acceptable terms to satisfy our case requirements.

22



Results of Operations



We have not yet realized any significant revenue from operations. For the three months ended March 31, 2006, we had $289,450 in general and administrative expenses including, but not limited to, expenses for consulting fees, management fees, and office and general expenses.  We also incurred poker royalties and processing fees in the amount of $2,941.  Our general and administrative expenses for the corresponding period in 2006 were $331,554. The decrease in operating expenses was primarily due to a decrease in investor relations fees, poker sponsorships, the write-off of website development costs and stock based compensation.  Net losses from operations for the three months ending March 31, 2007, were $292,347. Our net loss for the corresponding period in 2006 was $925,710, with a significatant portion of the difference due to $600,000 in property option loss.  We have incurred net losses of $16,336,400 since our inception on September 13, 1993.



Our Plan of Operation for the Next 12 Months.



We anticipate that we will need to raise additional capital within the next 12 months in order to continue as a going concern.  Such additional capital may be raised through additional public or private financings, as well as borrowings and other resources.  To the extent that additional capital is raised through the sale of equity or equity-related securities, the issuance of such securities could result in dilution of our stockholders.  There can be no assurance that additional funding will be available on favorable terms, if at all.  If adequate funds are not available within the next 12 months, we may be required to curtail our operations significantly or to obtain funds through entering into arrangements with collaborative partners or others that may require us to relinquish rights to certain of our assets that we would not otherwise relinquish.



We do anticipate certain expenditures within the next 12 months for the development, production and packaging of innovative film and television programming We do not anticipate any significant research and development within the next 12 months, nor do we anticipate that we will lease or purchase any significant equipment within the next 12 months. We do not anticipate a significant change in the number of our employees within the next 12 months. We are not aware of any material commitment or condition that may affect our liquidity within the next 12 months.



Recent Accounting Pronouncements



In February 2006, the FASB issued SFAS No. 155, Accounting for Certain Hybrid Financial Instruments-an amendment of FASB Statements No. 133 and 140, to simplify and make more consistent the accounting for certain financial instruments. SFAS No. 155 amends SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities, to permit fair value remeasurement for any hybrid financial instrument with an embedded derivative that otherwise would require bifurcation, provided that the whole instrument is accounted for on a fair value basis. SFAS No. 155 amends SFAS No. 140, Accounting for the Impairment or Disposal of Long-Lived Assets, to allow a qualifying special-purpose entity to hold a derivative financial instrument that pertains to a beneficial interest other than another derivative financial instrument. SFAS No. 155 applies to all financial instruments acquired or issued after the beginning of an entity's first fiscal year that begins after September 15, 2006, with earlier application allowed. This standard is not expected to have a significant effect on our future reported financial position or results of operations.



In March 2006, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 156 ("SFAS No. 156"), Accounting for Servicing of Financial Assets, an amendment of FASB Statement No. 140, Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities. SFAS No. 156 requires all separately recognized servicing assets and servicing liabilities be initially measured at fair value, if practicable, and permits for subsequent measurement using either fair value measurement with changes in fair value reflected in earnings or the amortization and impairment requirements of Statement No. 140. The subsequent measurement of separately recognized servicing assets and servicing liabilities at fair value eliminates the necessity for entities that manage the risks inherent in servicing assets and servicing liabilities with derivatives to qualify for hedge accounting treatment and eliminates the characterization of declines in fair value as impairments or direct write-downs. SFAS 156 is effective for an entity's first fiscal year beginning after September 15, 2006.



23

ITEM 3. Controls and Procedures



a) Evaluation of Disclosure Controls and Procedures.  Our Chief Executive Officer, and Chief Financial Officer, have performed an evaluation of the Company's   disclosure   controls and procedures, as that term is defined in Rule 13a-15(e) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), as of March 31, 2007 and each has concluded that such disclosure controls and procedures are effective to ensure that information required to be disclosed in our periodic reports filed under the Exchange Act is recorded, processed, summarized and reported within the time periods specified by the Securities and Exchange Commission's rules and forms.



(b) Changes in Internal Controls. There were no changes in the Company's internal controls or in other factors that could significantly affect these controls subsequent to the date of the evaluation.



Code of Ethics:



We intend to adopt a code of ethics in 2007 that applies to our principle executive officer, principal financial officer, principle accounting officer or controller, other persons performing similar functions.  We intend to post the text of our code of ethics on our website in connection with our "Investor Relations" materials.  In addition, we intend to promptly disclose (1) the nature of any amendment to our code of ethics that applies to our principle executive officer principal  financial officer, principle accounting officer or controller, other persons  performing similar functions (2) the nature of any wavier, including an implicit wavier, from a provision of our code of ethics that is granted to one of these specific officers, the name of such person who is granted the waiver and the date of the waiver on our web site in the future.



We do not currently have a code of ethics as this is a new regulatory requirement and we are examining the various form and contents of other companies written code of ethics, discussing the merits and meaning of a code of ethics to determine the best form for our Company.



PART II - OTHER INFORMATION



Item 1. Legal Proceedings.



On May 2, 2003, the Company issued 450,000 shares valued at $9,000 to a consultant pursuant to a stock option incentive plan. The consultant failed to meet the terms of the stock option agreement by not paying the exercise price and as a result, the Company requested the return of the 450,000 shares. The consultant refused to return the shares; therefore the Company issued a stop transfer and commenced legal proceedings to recover the shares. The consultant subsequently filed a Statement of Claim against the Company for damages of $53,000 Cdn. On April 29, 2005, the Supreme Court of British Columbia issued a judgment awarding the plaintiff $15,000 Cdn in damages and $7,180 Cdn in costs, however, the 450,000 shares were to be returned to the Company (not yet received).In September 2005, the Company and the plaintiff agreed to payment terms to settle this damage award by a payment of $6,080 Cdn (paid) and a payment schedule of $1,000 Cdn per month for the remaining balance of the judgment commencing December 1, 2005. The $6,080 Cdn payment was made as the result of a bailiffs executed court order on September 28, 2005, seizing the Companys bank account. No further payments have been made towards the settlement agreement due to the Plaintiffs refusal to sign the order.



24

On September 28,2005, the Company received notice of a lawsuit from Thomas L. Franklin, a professional poker player formerly under contract with 4KE, for an alleged breach of contract for services rendered based on the original contract between the Company and 4KE dated July 18, 2005. The Company, 4KE, and certain individuals, are being sued for $967,500, plus interest at the rate of 8% per annum from August 22, 2005, and all costs pertaining to this legal matter.  An attorney in Mississippi has been retained to defend this action and to apply for a dismissal of the case, based on Mississippi being the wrong jurisdiction for this suit and to defend the claims made by the plaintiff.  The outcome of this litigation and an estimate of loss and the impact, if any, on the Acquisition Agreement dated September 20, 2005 between the Company and 4KE is presently not determinable and no provision for loss relating to this lawsuit has been recorded at March 31, 2007.



On November 2, 2005, the Company filed a lien with the State of Alaska against the Ester Creek property.  The lien was filed as the Companys attempt to register title to the property in its name was blocked by Ester Creek.  The process for filing the Lien on the property was initiated in September 2005, prior to the Company's decision to sell the interest in the property to Legacy.The Company intends to resolve this issue with Ester Creek.  In the meantime, the Company has sold its interest in its Ester Creek claims to Legacy.



Item 2. Changes in Securities.



2007 Stock Option Transactions



During the three months ending March 31, 2007, the Company issued:



(a) 170,000 post reverse-split options, granted pursuant to the Companys 2006 Stock Incentive and Option Plan, were exercised at $0.09 per share for cash proceeds of $15,300.



Pursuant to the Companys 2006 Stock Option Plans, 3,800,000 post reverse-split options were granted on March 1, 2007 at $0.10 per share.  The options were granted to employees, directors and consultants.  During the three months ended March 31, 2007, the Company expensed the fair value of $228,000 for these options which was estimated using the Black-Scholes option pricing model with the following weighted average assumptions: expected option life of 1 year; risk-free interest rate of 4.95%; expected dividend yield of 0% and expected volatility of 136%.



25

2006 Transactions



On January 27, 2006, the Company filed a Registration Statement on Form S-8 to cover 18,000,000 shares of common stock to be issued pursuant to the Companys 2006 Stock Incentive and Option Plan. To date no options have been granted.



In March 2006, the Company issued 20,000,000 restricted Rule 144 shares of the Companys common stock. 10,000,000 shares each to Island Star Holdings Ltd. and Arcade Investments Ltd., pursuant to the Memorandum of Understanding dated April 4, 2005 with a private corporation to acquire a Uranium Concession on the African Continent. The shares are non-refundable. An additional 10,000,000 non-refundable restricted shares will be issued in April 2006 to complete the initial stage of the Niger Property transaction.



On March 30 2006, the Company issued 300,000 restricted common shares valued at $9,000 to Ron Rose, a professional poker player, in exchange for joining the Advisory Board and being a featured player in the VIP room of our website.



2006 Stock Option Transactions



On January 27, 2006, the Company filed a Registration Statement on Form S-8 to cover 18,000,000 shares of common stock to be issued pursuant to the Companys 2006 Stock Incentive and Option Plan. To date no options have been granted.



During the three months ended March 31, 2006, a total of 8,884,683 options, pursuant to the 2005 Stock Option Plans, were exercised at prices ranging from $0.02 to $0.03 per share. A total of 2,900,000 options were exercised for cash proceeds of $54,000 and the remaining 5,684,683 options were exercised for the settlement of debt in the amount of $146,290 for outstanding consulting fees.



26

Item 3.  Defaults Upon Senior Securities

None.



Item 4.  Submission of Matters to Vote of Security Holders

None.



Item 5.  Other Information



A. Security Ownership of Management



Title of Class     Name of Beneficial Owner

Amount and Nature of

Percent of



Beneficial Owner

Class

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

Common Stock      Robert Klein

278

0.002 %



4540 Woodgreen Place

West Vancouver, BC V7S 2S6



Common Stock

Carlton Parfitt

5,556

0.035 %



Suite 801 - 1875 Robson Street



Vancouver, BC V6G 1E5









27

Directors' Compensation



During the three months ended March 31, 2007, the Company paid $2,133 (2006 - $1,948) to two directors for management fees.



Stock Based Compensation.



During the three months ended March 31, 2007, $228,000 (March 2006-$Nil) in stock based compensation was recorded in our financial statements.  Stock based compensation is an estimate of the intrinsic value placed in respect to stock options granted to officers, directors, employees and an estimate of the fair value of stock options granted to consultants using the Black-Scholes option pricing model. We do expect further stock based compensation in 2007.



B. Security Ownership of Certain Beneficial Holders of ten percent or more



Title of Class   Name of Beneficial Owner

Amount and Nature of



Beneficial Owner

Percent of Class



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

Common Stock

CEDE & Co. (1)



The Depository Trust Co.



P.O. Box 222 Bowling Green Station



New York, New York 10274

6,862,072

43.91 %





(1) According to the NOBO List, there are no holders of more than 10% of our issued and outstanding shares.



28

C. Certain Relationships and Related Party Transactions



During the three months ended March 31, 2007, companies controlled by significant shareholders earned $6,875 (2006 - $7,500) pursuant to investment banking services contracts.



During the three months ended March 31, 2007, private companies controlled by significant shareholders earned $Nil (2006 - $25,521) pursuant to investor relations services contracts.



During the three months ended March 31, 2007, the Company paid $2,133 (2006 - $1,948) to two directors for management fees.



During the three months ended March 31, 2007, the Company incurred expenses for office rent of $5,332 (2006 - $5,355) to a private company controlled by a significant shareholder.



At March 31, 2007, a total of $237,928 (December 31, 2006 - $212,054) was owing to Avalon Energy Corporation, a public company with common directors and officers, for cash advances. This amount is unsecured, non-interest bearing and has no specified terms of repayment.



At March 31, 2007, a total of $20,082 (December 31, 2006 - $20,082) was due from Legacy Mining Ltd. (Legacy), a company with common directors and officers, for cash advances. This amount is unsecured, non-interest bearing and has no specified terms of repayment.



The following amounts are due to related parties at:



|                         |                              |                  
|------------------------ | ---------------------------- | -----------------
|                         | March 31, 2007
  (unaudited) | December 31, 2006
|                         |                              |                  
|Significant shareholders | $    149,578                 | $     109,875    



All related party transactions are in the normal course of business and are measured at the exchange amount, which is the amount of consideration established and agreed to by the related parties.



29

D. Description of Property.



Property held by the Company.  As of the dates specified in the following table, we held the following property in the following amounts:





March 31,

December 31,

December 31,



2007



2006



2005

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

Property and

Cash Equivalents

$22,822



$7,547

$Nil



We define cash equivalents as all highly liquid investments with maturity of 3 months or less when purchased. We do not presently own any interests in real estate or own any inventory or equipment.



Item 6.  Exhibits and Reports on Form 8-K



Index to Exhibits



(i)

Exhibits



Exhibit 31.1 - Section 906 Certification of Periodic Report

of the Chief Executive Officer.



Exhibit 31.2 - Section 906 Certification of Periodic Report

of the Chief Financial Officer.



Exhibit 32.1 - Section 302 Certification of Periodic Report

of the Chief Executive Officer.



Exhibit 32.2 - Section 302 Certification of Periodic Report

of the Chief Financial Officer.



SIGNATURES



In accordance with the requirements of the Securities Exchange Act of 1934, we have duly caused this Registration Statement on Form 10-QSB to be signed on our behalf by the undersigned; thereunto duly authorized, in the City of Vancouver, British Columbia, Canada, on May 15, 2007.



Golden Spirit Enterprises Ltd.,

a Delaware corporation



/s/ Robert Klein

By:      ______________

Robert Klein

Its:       President



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