UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                             ______________________

                                   FORM 10-KSB
                             ______________________

|X|      ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
         OF 1934 For the fiscal year ended December 31, 2006

|_|      TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
         ACT OF 1934
         For the transition period from ______ to ______


                        Commission file number: 000-30104

                              GPS INDUSTRIES, INC.
                 (Name of small business issuer in its charter)


                    Nevada                                      88-0350120
        (State or other jurisdiction of                      (I.R.S. Employer
        incorporation or organization)                    Identification Number)

         5500 152nd Street, Suite 214
              Surrey, B.C. Canada                                 V3S 5J9
   (Address of principal executive offices)                     (Zip Code)

                    Issuer's telephone number: (604) 576-7442

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

Securities registered under Section 12(g) of the Act:  None.

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

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 issuer was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes [X] No [ ]

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

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

Issuer's revenues for its fiscal year ended December 31, 2006:  $6,575,567

Aggregate market value of the common stock held by non-affiliates of the Issuer
as of March 29, 2007 was approximately $25.5 million.

There were 376,533,966 shares of the Company's common stock outstanding on March
29, 2007.

Transitional Small Business Disclosure Format:  Yes [  ]  No [X]

<PAGE>

<TABLE>
<CAPTION>

                                TABLE OF CONTENTS


                                     PART I

<S>  <C>                                                                                                       <C>
ITEM 1.       DESCRIPTION OF BUSINESS...........................................................................1
ITEM 2.       DESCRIPTION OF PROPERTY..........................................................................12
ITEM 3.       LEGAL PROCEEDINGS................................................................................12
ITEM 4.       SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS..............................................12

                                     PART II

ITEM 5.       MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.........................................12
ITEM 6.       MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION........................................14
ITEM 7.       FINANCIAL STATEMENTS.....................................................         F-1i..F-1 to F-22
ITEM 8.       CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.............19
ITEM 8A.      CONTROLS AND PROCEDURES..........................................................................19
ITEM 8B.      OTHER INFORMATION................................................................................19

                                    PART III

ITEM 9.       DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE WITH SECTION 16(a) OF THE
              EXCHANGE ACT.....................................................................................19
ITEM 10.      EXECUTIVE COMPENSATION...........................................................................21
ITEM 11.      SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS...24
ITEM 12.      CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS...................................................26
ITEM 13.      EXHIBITS.........................................................................................27
ITEM 14.      PRINCIPAL ACCOUNTANT FEES AND SERVICES...........................................................29
</TABLE>





<PAGE>

                              Introductory Comment

         Throughout this Annual Report on Form 10-KSB, the terms "we," "us,"
"our," "our company," "Company" and "GPSI" refer to GPS Industries, Inc., a
Nevada corporation formerly known as Inforetech Wireless Technology, Inc. and
Diversified Marketing Services, Inc., and, unless the context indicates
otherwise, also include our subsidiaries.

                             "SAFE HARBOR" STATEMENT

         From time to time, we make oral and written statements that may
constitute "forward-looking statements" (rather than historical facts) as
defined in the Private Securities Litigation Reform Act of 1995 or by the
Securities and Exchange Commission, or SEC, in its rules, regulations and
releases, including Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended. We desire to
take advantage of the "safe harbor" provisions in the Private Securities
Litigation Reform Act of 1995 for forward-looking statements made from time to
time, including the forward-looking statements made in this Annual Report, as
well as those made in our other filings with the SEC.

         All statements in this Annual Report, including under the captions
"Business," "Risk Factors," and "Management's Discussion and Analysis or Plan of
Operation," other than statements of historical fact are forward-looking
statements for purposes of these provisions, including statements of our current
views with respect to our business strategy, business plan and research and
development activities, our future financial results, and other future events.
These statements include forward-looking statements both with respect to us,
specifically, and the biotechnology industry, in general. In some cases,
forward-looking statements can be identified by the use of terminology such as
"may," "will," "expects," "plans," "anticipates," "estimates," "potential" or
"could" or the negative thereof or other comparable terminology. Although we
believe that the expectations reflected in the forward-looking statements
contained herein are reasonable, there can be no assurance that such
expectations or any of the forward-looking statements will prove to be correct,
and actual results could differ materially from those projected or assumed in
the forward-looking statements.

         All forward-looking statements involve inherent risks and
uncertainties, and there are or will be important factors that could cause
actual results to differ materially from those indicated in these statements. We
believe that these factors include, but are not limited to, those factors set
forth in this Annual Report under the captions "Business," "Risk Factors," and
"Management's Discussion and Analysis or Plan of Operation," all of which you
should review carefully. If one or more of these or other risks or uncertainties
materialize, or if our underlying assumptions prove to be incorrect, actual
results may vary materially from what we anticipate. Please consider our
forward-looking statements in light of those risks as you read this Annual
Report. We undertake no obligation to publicly update or review any
forward-looking statement, whether as a result of new information, future
developments or otherwise.



                                     PART I

ITEM 1.  DESCRIPTION OF BUSINESS

Overview

         GPS Industries, Inc. develops and markets global positioning satellite
("GPS") and Wi-Fi wireless multimedia solutions to golf facilities worldwide.
Our Inforemer(TM) product line combines a backend management information system
and revenue generating modules with mobile color handheld and cart-mounted
Differential GPS units, seamlessly connected via a wireless, high-speed Wi-Fi
network.

         Our current target market is the golf industry with the goal to expand
into other markets for GPS and Wi-Fi business solutions. However, we believe
that GPSI's technology is well suited to recreational activities outside of golf
and, subject to available working capital, we plan to expand our company's
offering to other recreational industries in the future.

         Our Inforemer suite of products provides golf facility managers with a
business solution, helping the facilities drive profit and become more
competitive. Inforemer enables managers to run their businesses more efficiently
with wireless Virtual Private Network (VPN), wireless security camera
applications and data management and reporting capabilities. Facilities can
generate more revenue with advertising, wireless internet access, tournament and
point-of-purchase applications. The mobile handheld or cart-mounted GPS units
help attract and retain customers by delivering a better golf experience on the
course or at the learning center with precise distance measurements, detailed
color course maps, media streaming of real-time sports scores and news
headlines, food and beverage ordering, electronic scoring, tournament play and
emergency communication to the clubhouse.

                                       1

<PAGE>

         On November 26, 2004, GPSI entered into a strategic technology and
marketing partnership arrangement with back-office software developer, Jencess
Software & Technologies, Inc. to integrate their back office and facility
management software with GPSI's Inforemer product. Jencess' customer base
consists of more than 900 golf facilities.

         We believe that GPSI currently is the only GPS golf solutions provider
to utilize an integrated Wi-Fi wireless infrastructure. This wireless
infrastructure provides golf facilities with benefits completely outside of
golf. Facilities can attract more conferences and events with wireless internet
access in meeting rooms and resorts and residential communities can extend
wireless internet access to resort guest rooms and residences.

         On July 2, 2004, GPSI purchased the patents to Differential GPS in
Australia, Japan and 11 European Nations from Pinranger (Australia) Pty Ltd. On
November 19, 2004, we purchased the patents for GPS for golf in the United
States and in Canada from Optimal Golf Solutions, Inc.

         GPSI has appointed distributors in key golf markets worldwide,
including Canada, United States, Europe, Australia/New Zealand, Asia and South
Africa, thus transferring some of its sales and marketing costs to these
independent firms. North America continues to be a key focus area with coverage
by both distributors and direct sales representatives. Currently, GPSI has
installations in the United States, Canada, Australia, France, Spain, United
Kingdom and South Africa.

         Our goal is to become the industry leader for wireless GPS golf
technology, and to leverage our core technology into related markets, such as
gated communities and large scale golf residential developments as well as other
recreational industries. Within the golf market, we intend to grow our current
position by (i) offering reliable, advanced Wi-Fi and GPS based business
solutions; (ii) competitively pricing our wireless solutions by offering
economic and tax friendly customized leasing solutions through specialized
financial institutions; (iii) leveraging our strategic and technological
relationships; (iv) selectively acquiring providers of GPS-based products and
services to expand our installation base and product offering; and (v) building
brand awareness.

         We were incorporated on December 12, 1995 as Diversified Marketing
Services, Inc. In December 1999 we changed our name to Inforetech Wireless
Technology, Inc. and in September 2003 we changed our name to GPS Industries,
Inc. Our common stock was first publicly traded on the OTC Bulletin Board
trading system in January 2000 and is currently trading on the OTC Bulletin
Board under the symbol "GPSN."

Business

         GPS Industries, Inc. is a global technology solutions provider with
customizable, patent-protected applications in GPS and Wi-Fi software and
hardware for use with golf course operations and residential community
developments.

         In the golf industry vertical, our Inforemer(TM) Management System
features an integrated Wi-Fi communications network, cart-mounted LCD panels
delivering an enriched on-course playing experience to golfers, plus a
comprehensive suite of management software applications for club operators.
Inforemer system sales range between $150,000 and $270,000, due primarily to
varying numbers of units sold, geographic location and topographical anomalies.
As of March 31, 2007, we had completed installation of approximately 80
Inforemer(TM) Management Systems on five continents.

         We recently launched a new media division, InforeMedia(TM), to
capitalize on potentially lucrative, recurring revenues from the sale of
advertising space on the cart-mounted LCD panels that are integral to the
Inforemer(TM) Management System. Based on current and projected installations
and utilization rates, we anticipate that by the end of 2007 the InforeMedia(TM)
network will reach a targeted audience of approximately six million golfers.
Golfers represent a highly sought-after demographic group that is prized by
regional and national advertisers. As a consequence, we believe the potential
advertising sales revenue will be substantial and could eventually exceed
revenues generated by Inforemer system sales. In addition, unlike the one-time
sales revenues derived from the sale and installation of Inforemer systems,
revenues generated from the sale of advertising space on the Inforemer units are
expected to be a recurring revenue stream. Since we only recently launched this
new division, no revenues were generated from this division in 2006.

         We also have a division referred to as the Fire At The Flag(TM)
division that is instituting a unique international hole-in-one program that
culminates with an annual grand prize shoot out for $1 million cash. Fire At The
Flag(TM) is a turnkey program that provides golf courses with a marketable
promotion throughout the year. Golfers opt-in to the program with payment of a
regionally determined entry fee and, on a selected par-3 hole, take a shot at a
$10,000 cash prize. The Fire At The Flag(TM) shootout will be covered on the
Golf Channel, thereby providing additional visibility to our company. During
2006, we market tested this program and intend to institute this program in 2007
in as many as 100 events.

                                       2
<PAGE>

         We also intend to target the residential development market through our
recently established WiStream(TM) division. The goal of this division is to
implement WiFi technology throughout an entire residential development, creating
a community-wide wireless `hot-spot', which supports our array of WiFi
amenities: wireless internet connectivity, location tracking devices, wireless
security protection, VOIP phones, mobile point-of-sale systems, and a
proprietary dash-mount real estate sales product.

Recent Events:  Series B Convertible Preferred Stock Financing

         On November 13, 2006, we entered into a Securities Purchase Agreement
with Great White Shark Enterprises, Inc. ("GWSE") and Leisurecorp LLC, pursuant
to which GPSI agreed, subject to certain closing conditions, to sell for an
aggregate purchase price of $15,740,890 a total of 1,574,089 shares of newly
authorized Series B Convertible Preferred Stock (the "Series B Shares") and
warrants to purchase up to 59,885,186 shares of common stock. The warrants are
exercisable for five years, from the closing under the Securities Purchase
Agreement, at an initial exercise price of $0.122 per share. The purchase price
of the Series B Shares was payable in cash and by the cancellation of loans
previously made to GPSI by GWSE and Leisurecorp LLC. The closing of the sale of
the Series B Shares and warrants occurred on December 29, 2006.

         Concurrently with the closing of the sale of the Series B Shares to
GWSE and Leisurecorp LLC, Douglas Wood, one of GPSI's directors, converted
$3,000,000 of cash loans he had previously made to the company for 300,000
Series B Shares and warrants to purchase 49,180,328 shares of common stock, and
Robert C. Silzer, our Chief Executive Officer and a member of our Board of
Directors, cancelled $750,000 of obligations owed to him by GPSI in exchange for
12,295,082 shares of our common stock and warrants to purchase 3,073,770 shares
of common stock. The warrants issued to Mr. Wood and Mr. Silzer are identical to
those issued to GWSE and Leisurecorp LLC (i.e., are exercisable for five years
at an initial exercise price of $0.122 per share).

         The Series B Shares provide the holders thereof with significant
rights, including the right to elect three of GPSI's five members of the Board
of Directors and the right to approve various corporate and business actions of
GPSI. At the closing, we also entered into a Registration Rights Agreement and a
Shareholder Agreement with GWSE, Leisurecorp LLC, Robert C. Silzer, Sr. and
Douglas Wood.

         In connection with the sale of the Series B Shares, in November 2006 we
repaid the remaining outstanding balance of the $3,720,000 Callable Secured
Convertible Notes (the "Callable Notes") that we sold in September 2005 to four
investors. The Callable Notes were convertible into shares of our common stock
at the option of the holders at a variable conversion price based on the trading
price of the common stock. The Callable Notes had a term of three years but
could be repaid under certain circumstances for an amount based on 124% of the
subscription amount. On November 8, 2006, the total outstanding balance of all
of the Callable Notes, including accrued and unpaid interest, was $2,527,603.
Pursuant to a negotiated redemption of the Callable Notes we entered into with
the holders of the Callable Notes on November 8, 2006, on November 15, 2006 we
redeemed all of the outstanding Callable Notes, including outstanding principal
amount and accrued and unpaid interest thereon, by paying the holders of the
Callable Notes $2,800,000 in cash and by issuing to the holders (pro rata in
accordance with the amount paid to the applicable holder) five year warrants to
purchase an aggregate of 3,000,000 shares of our common stock at an exercise
price of $0.122 per share. The Callable Notes were secured by a lien on all of
the assets of GPSI and by a pledge of 6,371,306 shares of our President's own
shares of our common stock. As a result of the redemption of all of the Callable
Notes, the foregoing liens were released on all collateral.

Products

         Our principal product is the Inforemer Golf Management System, a suite
of products and software to enhance the playing experience of golfers and the
operational efficiencies of course operators. The range of Inforemer products
includes: a handheld Differential GPS display unit, a golf cart-mounted
Differential GPS display unit, management software (Tournaments, advertising,
CRM). Management believes the Inforemer system is unique in that it also
incorporates a Wi-Fi communications network, which effectively turns the entire
golf course into a wireless `hot spot'.

         Inforemer display units deliver a detailed graphic depiction of each
hole on the golf course and provide precise distance measurements to flagsticks,
hazards, bunkers and other landmarks. Golfers use this information to modify or
refine their game strategy. The displays also assist in maintaining scores and,
during tournaments, allow players to view a leaderboard. Inforemer's wi-fi
network delivers real-time sports updates to the display units anywhere on the
course. The media content is provided to the golfers through our partnership
with CBS Sportsline and agreements with other leading news and media outlets.

         The Inforemer system enables the course operator to communicate with
the golfers on the course and also manage the back office operations of the
facility. The combination of Inforemer displays, GPS technology, wi-fi
infrastructure and management software allows the golf course staff to monitor,
control and enhance many important operational components. Staff can track the
location of golfers anywhere on the course, in real-time, to manage the flow of
play, and send messages, including advisories and storm warnings, to both
golfers and staff to ensure their safety. Golfers can also send messages to
course management to summon assistance in case of emergency. This two-way

                                       3
<PAGE>

communication also allows golfers to order food and beverages or pro shop
merchandise remotely and even have the items delivered as they play; again
enhancing the golf experience and enhancing the flow of existing revenue
streams. Beyond that however the Inforemer system also integrates an advertising
management function that allows the course operator to display ad messages on
the display units, thereby creating a new source of revenue. In many cases the
ad revenue generated for the course largely, or completely, offsets the
investment in the Inforemer system.

         Inforemer's Multiple Course Manager is a suite of software applications
for companies managing a portfolio of golf facilities and includes centralized
administration/monitoring of multiple Inforemer systems, and real-time access to
all data from every course in the portfolio. This component also includes a
centralized advertising management function that controls the distribution of
advertising content for the entire portfolio of properties, the integration of
customer loyalty programs and even simultaneous tournament play at multiple
locations with scores on a single `live' Leaderboard.

         These tools are continually refined, upgraded and enhanced by our
in-house team of software engineers. For ongoing maintenance and system upgrades
Inforemer customers are billed a monthly service and support fee once the
initial equipment warranty period has expired.

         Inforemer hardware components are assembled by our manufacturing staff
and repairs are also performed by this same department at our facilities in
Vancouver, Canada.

         The Inforemer system is either sold in a cash sale to a customer or
leased under a five-year lease. The sales price of an Inforemer system ranges
between $150,000 and $270,000 depending on the number of units sold, geographic
location of the course and its topographical anomalies. In the case of a cash
sale we are usually paid an initial down payment on order, a further partial
payment on delivery of equipment and the final portion of the sales price on
completion of the installation. In the case of a lease sale, we are usually paid
in full for the Inforemer system by the leasing company on completion of the
installation. Such leases are on a non-recourse basis to us. We have recently
initiated new programs where we will participate with our customers in
generating ongoing recurring revenues from sources such as advertising and our
"Fire At The Flag" program. Such programs are in addition to our usual service
and support revenue from out of warranty installations.

The Market

Inforemer(TM)

         The market for the Inforemer-HD(TM) System is most broadly defined as
golf facilities worldwide: approximately 33,000 golf courses (with a 2% annual
growth rate). Approximately 20,000 of these golf courses are currently located
in North America (16,700 in the United States and 3,200 in Canada). Almost 50%
(5,900) of the remaining golf courses are located in Europe, with 3,100
concentrated in Great Britain and Ireland. Other territories containing more
than 250 courses include Japan, Australia and South Africa. The fastest growing
golf territories, reporting double-digit growth, include China, Spain, Mexico
and the rest of Latin America.

         The most readily penetrable, primary market for the Wi-Fi powered `full
management' Inforemer(TM) system includes resort courses, high-end daily fee
facilities, and residential golf communities. These facilities constitute
approximately 37% of the total golf course market and include large-scale
golf-centric resorts and developments. A secondary market includes the mid-range
facilities, lower-end daily-fee facilities and municipal courses that represent
approximately 40% of the global market.

         Because our Inforemer system is marketed to both our primary and
secondary target markets, our market effectively includes 75% of all golf
courses worldwide. The balance, approximately 25%, consists of smaller executive
facilities, par 3 courses and pitch-and-putt facilities for which current
product offerings are not appropriate.

         Current market penetration of GPS Management systems is less than 5% of
the global market, with adoption increasing steadily. Based on the technological
capabilities of our Inforemer(TM) system compared to those of other competing
systems, our growing market reputation, our improved financial condition, and on
recent sales and sales order inquiries, we believe that we will be able to
achieve substantial growth in our target market and penetrate a significant
portion of our world-wide target market.

InforeMedia(TM)

         The appetite among national and regional advertisers for narrowly
targeted media (`narrowcasting) is growing rapidly. Advertisers have been
increasingly driven to reach more precisely, or narrowly, defined audiences in
an effort to deliver more accurately targeted ad messages, thus generating more
consistent campaign results and a more efficient use of their media budgets. By
virtue of its Wi-Fi infrastructure and vivid LCD panels, our current and
projected base of installed Inforemer(TM) systems represents a new,
state-of-the-art narrowcast advertising opportunity, reaching an audience of up
to six million golfers by the end of 2007 and possibly more than ten million by
the end of 2008. This audience represents a highly sought after demographic.
InforeMedia has been developed to fully exploit the revenue opportunity of this
unique narrowcast network. As the number of Inforemer(TM) system installs grows,
so too does the reach of our InforeMedia network, which in turn will grow the
value of our audience to large advertisers.

                                       4
<PAGE>

Fire At The Flag(TM)

         After a full year of successful market testing for this unique
hole-in-one program, GPSI is rolling out Fire At The Flag around the world in
2007. As the program can be integrated at virtually any type or size of golf
facility, the market for this division is essentially 100% of all golf courses
worldwide.

WiStream

         We recently launched the WiStream(TM) division as a natural extension
of the expertise we have gained through implementation of Wi-Fi technology in
the Inforemer division. WiStream applies that experience to deliver wireless
networks and complementary wireless products/services to residential communities
independent of a golf component. The present menu of supported WiStream options
include: wireless internet connectivity, location tracking devices, wireless
security protection, VOIP phones, mobile point-of-sale systems, and a
proprietary dash-mount real estate sales product. The potential market for this
division consists of the residential community market. We have identified a
number of specific communities in which we will be introducing our new WiStream
system during 2007 that will generate our first revenues for the WiStream
division.

Patents and Trademarks

         On July 2, 2004, we purchased the patents to Differential GPS in
Australia, Japan and eleven European Nations from Pinranger (Australia) Pty Ltd.
On November 19, 2004, we purchased the patents to GPS for golf in the United
States and in Canada from Optimal Golf Solutions, Inc. In addition to providing
us with broad patent protection for a number of our products in the GPS market,
these patents also generate recurring revenue through licensing fees paid to us
by competitors in the golf industry. Our patents have been licensed to six
companies, and we currently generate revenue from two of them (UpLink
Corporation and ProLink/ParView, LLC) for approximately $584,000 per annum. We
intend to license these patents on a non-exclusive basis to other GPS-based golf
system providers and believe we are in a strong position to enforce these
patents against infringers. In November 2006 we entered into a US$1.2 million
dollar settlement in a patent-infringement lawsuit we initiated in London County
Court, UK. In 2006, we received a $212,500 as part of this settlement as the
first license payment; we are scheduled to receive additional license payments
under that settlement/license agreement of $210,000 per year, paid quarterly,
until 2011, with the last payment due in August 2011.

         We funded the purchase of the foregoing patents through loans that we
obtained from Great White Shark Enterprises, Inc. As compensation for the loans
that enabled the acquisition of these patents, Great White Shark Enterprises now
receives 20% of all patent license payments we receive through December 31,
2008, at which time their share of these fees will be increased to 40% for the
remaining life of the patents.

         In addition to those referenced above, we have filed for and/or
obtained certain other patents, including the following:

1.       Hand Held communicator patents issued in the U.S. on February 1, 2000,
         in Canada on September 29, 2000; and in the United Kingdom on November
         30, 1999.
2.       Charging base for Electronic Apparatus patent issued in the US on
         February 1, 2000. 3. Golf course communication system and method patent
         was applied for in the US on January 29, 2004 and is
         awaiting office action by the USPTO. We also filed a PCT application in
         the European Community on January 20, 2005 and it is awaiting a serial
         number and filing receipt.
4.       Endurable Sports PDA with communications capabilities and accessories.
         This patent was applied for in the US on January 22, 2003 and is
         pending, awaiting office action of the USPTO.
5.       Portable GPS Unit patent was applied for in the US on April 1, 2004 and
         is pending, awaiting office action. 6. Cart mounted GPS Unit patent was
         applied for in the US on April 1, 2004 and is pending, awaiting office
         action. 7. Mounting bracket patent was applied for in the US on April
         1, 2004 and is pending, awaiting office action. 8. Method for
         conducting a multi-golf course performance contest patent was applied
         for in the US on May 4, 2004
         and is pending, awaiting office action.

         We have also registered our trademarks as follows:

1. Inforemer 2000 Handset Software trademark in the US. 2. Inforetech Clubhouse
Computer Software in the US. 3. Inforemer in the European Community. 4.
Inforemer in the US.
5. Inforetech in Canada. 6. Inforetech in the European Community. 7. Inforetech
in the US.


Competition

Inforemer

         Competition in the GPS golf market can be segmented into two main
categories; low-priced consumer products and high-value GPS-based management
business solutions.

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<PAGE>

         While there are an increasing number of GPS golf products on the
market, many of these are consumer oriented, utilizing devices such as laser
finders, binoculars or personal digital assistants (PDA's). These commodity
products are basic in functionality, and do not provide the same level of
accuracy or reliability as our products and business solutions.

         Our direct competition in the GPS golf management market consists of:
UpLink Corporation, based in Austin, Texas; and the merged ProLink/Parview, LLC
of Tempe, Arizona, now named Prolink Holdings Corp. Both companies have
developed GPS-based golf management solutions which provide courses with various
applications for improving operations, increasing revenue and as a tool for
golfers to utilize while playing. Uplink has approximately 160 installations and
ProLink has approximately 500 installations. Both companies are focused
primarily in the North American market, though ProLink has recently expanded
sales efforts to Europe. Both have also taken a non-exclusive license from GPSI
and make license payments to us for use of the `Optimal' GPS patents in the
United States. In November 2006, we obtained a US$1.2 million dollar settlement
in a patent-infringement lawsuit we brought against Prolink in London County
Court, UK, under the `PinRanger' patents. Accordingly, Prolink now licenses our
technology.

InforeMedia(TM)

         We believe that our only competition in the on-course narrowcast market
consists of products offered by UpLink Corporation and ProLink Holdings Corp.
These competing systems possess the ability to distribute and sell advertising
through their network of installed courses. UpLink however has not endeavored to
sell the available ad space on a national or regional basis, opting instead to
pursue local ad sales exclusively with all revenue accrued solely to the
host-course. ProLink on the other hand has, with some success, endeavored to
generate advertising contracts on something akin to a network-wide basis.
Nevertheless, we do not believe that either of these products meaningfully
hampers our ability to compete for advertising contracts in the general sense as
the size of the potential market is both vast and heretofore untapped. The only
implication of ProLink's activities in this sector is the relative
cost-per-thousand or cost-per-golfer fee they communicate to the market.

WiStream

         Numerous entities already provide, or have announced their intention to
provide Wi-Fi wireless services to individual residences, governmental
jurisdictions (cities and municipalities), or individual business entities (eg.
Starbucks). These other businesses or governmental jurisdictions all have
substantially greater financial and other resources than we do. However, to our
knowledge, our WiStream division is the only participant in this market that at
this time uniquely targets defined residential communities.


Acquisition of Optimal Golf Solutions, Inc.

         On November 19, 2004 we acquired 100% of the common shares of Optimal
Golf Solutions, Inc. ("Optimal"), a Texas corporation owned by Darryl Cornish
and Charles Huston ("Optimal Shareholders"), for a total of $5,250,000 plus
interest of 4.75% on the principal balance outstanding payable as follows:
$100,000 on signing a Letter Of Intent on November 8, 2004, $1,000,000 on
closing, a first stock payment of 9,000,000 restricted common shares of GPSI
valued at $2,250,000 using a minimum price of $.25 per share and a final stock
payment of $1,900,000 representing 7,600,000 common shares of GPSI using a
minimum price of $.25 per share. These shares can be sold after the
effectiveness of a registration statement and in accordance with a Leakage
Agreement. The final purchase price may vary, however, depending on the price
that the Optimal Shareholders receive for the shares they sell. The obligation
to pay the deferred purchase price was secured by a first security interest in
the Optimal patents as described below.

         The first stock payment of 9,000,000 shares was to be sold (in
accordance with the Leakage Agreement) over 180 trading days. If the Optimal
Shareholders sold their shares and received less than the target price of $.25
per share, then we were required to issue additional shares to make up the
difference (or cash under certain conditions).

         The second stock payment was to be issued at a 15% discount to market
price at the time of issuance and sold into the market by the Optimal
Shareholders over a further 180 trading days. On May 28, 2005 we entered into a
First Amendment to Stock Purchase Agreement whereby we were granted up to six
months of additional time to have a Registration Statement declared effective.
As consideration for this extension, we agreed to pay $100,000 per month until
the Registration Statement was declared effective, which would be applied to the
balance owing which was to be settled with the second stock payment. We paid a
total of $600,000 to the Optimal Shareholders under this amendment.

         Pursuant to the First Amendment, we agreed to use our best efforts to
file and cause to have effective a Registration Statement covering the resale of
the shares issued. Because we did not have the Registration Statement filed by
September 30, 2005 as required, we agreed to register the resale of the
9,000,000 shares issued for the first stock payment and an additional 31,000,000
shares to cover the shares issuable for the second stock payment and the
additional shares that must be issued to cover decrease in the market price of
its common stock which had a closing bid price of $0.065 on December 31, 2005.
We filed the Registration Statement covering these shares on October 20, 2005
and it was declared effective by the SEC on December 7, 2005.

                                       6
<PAGE>

         The trading period for the first stock payment expired on August 22,
2006. Based upon the receipts from the sale of the first stock payment during
the trading period, we had a liability to the Optimal Shareholders for the
balance of the first stock payment of approximately $1.65 million at that date.
We also had a liability to issue approximately 30,400,000 shares to the Optimal
Shareholders to fund the second stock payment liability of approximately $1.65
million. Subsequent to August 22, 2006 we paid the Optimal Shareholders $300,000
of the liability under the first stock payment and they in turn agreed to sell
the remaining balance of the unsold shares they still held from the first stock
payment and to apply the proceeds against the liability for the balance due. On
December 8, 2006, we entered into a second amendment to our agreement with the
Optimal Shareholders to confirm our agreement regarding the payment we are
required to make. Pursuant to the second amendment, among other things, we
agreed that we still owed the Optimal Shareholders $806,852 and a second stock
payment of 30,392,002 shares. In January 2007, we paid the Optimal Shareholders
the $806,852 cash payment and issued to them the 30,392,082 shares to fully
satisfy the liability for the second stock payment. In the December 8, 2006
amendment, we also agreed that if before June 15, 2007 our common stock is
listed on the American Stock Exchange or the NASDAQ Stock Market, we would pay
the Optimal Shareholders $400,000 or, at our option, issue to the Optimal
Shareholders three-year warrants to purchase 4,000,000 shares of common stock at
an exercise price per share of $0.12 (subject to customary adjustments for stock
splits, recapitalizations, reorganizations, etc.).

         Optimal was primarily engaged in the business of holding patents
relating to GPS technology for the golf industry. Optimal held an important U.S.
patent, no. 5,364,093, which was issued on November 15, 1994 for a Golf Distance
Measuring System and Method. They also owned U.S. Patent No. 5,751,244 which was
for the Method and Apparatus for Calibration of a GPS Receiver. Optimal had also
made a Canadian patent application, no 2,134,737, entitled Method and Apparatus
for Message Display on a Golf Course. The 093 Patent has been licensed to six
companies, of which two currently pay us annual licensing fees. All license
payments that we receive were required to be forwarded to Great White Shark
Enterprises until their loan in the amount of $3,000,000, plus interest owing of
10% per annum, was fully repaid (see "Loan From Great White Shark Enterprises,
Inc."). This loan was converted to Series B Convertible Preferred Shares on
December 29, 2006. Great White Shark is entitled to 20% of all patent license
payments we receive through December 31, 2008, at which time their share of
these fees will be increased to 40% for the remaining life of the patents. We
expect to license the 093 Patent on a non-exclusive basis to other GPS based
golf system providers.

                                  RISK FACTORS

         You should carefully consider the risks described below before deciding
to invest in or maintain your investment in our company. The risks described
below are not intended to be an all-inclusive list of all of the potential risks
relating to an investment in our securities. If any of the following or other
risks actually occur, our business, financial condition or operating results and
the trading price or value of our securities could be materially adversely
affected.

         We have a history of losses, and our auditors have issued a going
concern opinion.

         We have incurred operating losses since our inception and no assurance
can be given that we will ever become profitable. Our auditors have included a
going concern opinion on our financial statements because we have not generated
sufficient cash flows to meet our obligations and sustain our operations. Our
operating losses are attributable to the developing nature of our business and
have resulted primarily from:

o        significant costs associated with the development of our products;

o        marketing and distribution of our products; and

o        limited sales history of our recently developed products.

         Although we currently believe that our operations will significantly
improve by the end of the fiscal year ended December 31, 2007 and that we will
have sufficient capital to operate for the next twelve months, no assurance can
be given that the financing that we anticipate will actually be obtained or that
our operations will improve as anticipated. Our belief that our operations will
significantly improve is based on a number of factors, including our ability to
obtain both additional equity and debt funding to finance our anticipated
increased operating expenses and higher inventory purchase requirements, on our
ability to reach our internally projected level of product sales, and the
overall development of our business in accordance with our internal plans. If
any of the projected events do not occur as we currently anticipate, our
operations will continue to operate at a loss and with a negative cash flow. If
we are unable to continue as a going concern, you could lose your entire
investment in us.

         We need additional financial support in order to continue to operate
and grow, and cannot be certain that additional funds will be available when
needed on satisfactory terms, if at all. Without additional funds we have to
reduce our planned operations and restructure our existing operations, all of
which will negatively affect our business and future prospects.

                                       7
<PAGE>

         Our internal business plan assumes that we will obtain financial
assistance from our principal stockholders or that we will obtain alternative
financing. While we have been in discussions with our principal stockholders
regarding obtaining addition equity or debt financing (Leisurecorp LLC and Great
White Shark Enterprises have the right to purchase additional shares of our
Series A Shares until the end of April 2007), neither of these stockholders has
any obligation to provide us with any additional funding, and neither has agreed
to do so. We will need funding in order to support our operations during this
year. If we cannot obtain the amount of additional financing that we have
projected that we will need to support our operations or to fully implement our
business plan, our future operations will be severely hindered, and our ability
to sustain our operations and growth will be jeapordized.

         We depend on GPS technology owned and controlled by others. If we do
not have continued access to GPS technology and satellites, we will be unable to
deliver our services and our revenues will decrease.

         Our services rely on signals from GPS satellites built and maintained
by the U.S. Department of Defense. GPS satellites and their ground support
systems are subject to electronic and mechanical failures and sabotage. If one
or more satellites malfunction, there could be a substantial delay before they
are repaired or replaced, if at all, and our services may cease and customer
satisfaction would suffer.

         In addition, the U.S. government could decide not to continue to
operate and maintain GPS satellites over a long period of time or to charge for
the use of GPS. Furthermore, because of ever-increasing commercial applications
of GPS, other U.S. government agencies may become involved in the administration
or the regulation of the use of GPS signals in the future. If the foregoing
factors affect GPS, such as by affecting the availability and pricing of GPS
technology, our business will suffer.

         Our GPS technology depends on the use of radio frequency spectrum
controlled by others.

         Our GPS technology is dependent on the use of radio frequency spectrum.
The assignment of spectrum is controlled by an international organization known
as the International Telecommunications Union or ITU. The Federal Communications
Commission or FCC is responsible for the assignment of spectrum for
non-government use in the United States in accordance with ITU regulations. Any
ITU or FCC reallocation of radio frequency spectrum, including frequency band
segmentation or sharing of spectrum, could cause interference with the reception
of GPS signals and may materially and adversely affect the utility and
reliability of our products, which would, in turn, cause a material adverse
effect on our operating results. In addition, emissions from mobile satellite
service and other equipment operating in adjacent frequency bands or inband may
materially and adversely affect the utility and reliability of our products,
which could result in a material adverse effect on our operating results.

         On May 11, 2000, the FCC issued a Notice of Proposed Rulemaking that
proposes rules for the operation of Ultra-Wideband or UWB radio devices on an
unlicensed basis in the frequency bands allocated to GPS. If the FCC issues
final rules authorizing such operation, UWB devices might cause interference
with the reception of GPS signals. Such interference could reduce demand for GPS
products in the future. Any resulting change in market demand for GPS products
could have an adverse effect on our financial results.

         Speculative Nature of Business.

         The profits of an enterprise involved in the golf industry are
generally dependent upon many variables. Our customer appeal depends upon
factors which cannot be reliably ascertained in advance and over which we have
no control, such as unpredictable critic reviews and appeal to the public.

         In order for our products to be successful, we need to establish market
recognition quickly, following the introduction of our products

         We believe it is imperative to our success that we obtain significant
market share for our products quickly, before other competitors establish a
significant market share. We believe that, if a market for products like ours
develops, an early entrant that gains significant market share will dominate the
market, significantly reducing opportunities for competitors. We have limited
experience conducting marketing campaigns, and we may fail to generate
significant interest. We cannot be certain that we will be able to expand our
brand and capitalize on the commercial acceptance of our products.

         Government regulations and standards may harm our business and could
increase our costs or reduce our opportunities to earn revenues.

         In addition to regulations applicable to businesses in general, we may
also be subject to direct regulation by governmental agencies, including the FCC
and Department of Defense. A number of legislative and regulatory proposals
under consideration by federal, state, provincial, local and foreign
governmental organizations may lead to laws or regulations concerning various
aspects of wireless communications and GPS technology. Additionally, it is
uncertain how existing laws governing issues such as taxation, intellectual
property, libel, user privacy and property ownership, will be applied to our
services. The adoption of new laws or the application of existing laws may
expose us to significant liabilities and additional operational requirements,
which could decrease the demand for our services and increase our cost of doing
business.

                                       8
<PAGE>

         We depend on intellectual property rights and development of new
products and the inability to obtain patents or develop new products may have an
adverse effect on our ability to be profitable.

         Our success is partly dependent upon our intellectual property rights.
Effective protection may not be available for these rights. There can be no
assurance that a patent will provide adequate protection for the underlying
technology. While we have patents covering our technology, there is no assurance
that such patents will be able to prevent other companies from developing
substantially similar products. In addition, litigation may be necessary in the
future to enforce the intellectual property rights. Such litigation, whether
successful or unsuccessful, could result in substantial costs and diversions of
resources, either of which could negatively affect our business.

         Our future success is dependent upon our ability to retain key
management.

         Our success is dependent upon the continued services of Robert C.
Silzer, Sr., our chief Executive Officer and Chairman of the Board of Directors
and upon the skills, experience and efforts of our key marketing and other
management personnel. The loss of the continued services of any of these
individuals could have a negative effect on our business.

         Conflicts of Interest.

         We have engaged in transactions with our management in the past, and we
can be expected to engage in such transactions in the future. In each case, the
transactions are approved by our Board of Directors and are considered to be
fair to and in the best interests of the company.

         Competition.

         We face competition in all aspects of our business. We compete for
customers with other electronics and recreation companies, many of which have
substantially greater assets and resources. Our primary competitors are
companies such as Prolink/Parview LLC and UpLink Corp. Our ability to compete
successfully in the future will depend on several factors, including:

o    the cost effectiveness, quality, price, service and market acceptance of
     our products;

o    response to the entry of new competitors or the introduction of new
     products by competitors;

o    ability to keep pace with changing technology and customer requirements;

o    timely development or acquisition of new or enhanced products; and

o    timing of new product introductions by GPSI or our competitors.

         Acquisitions of companies may disrupt our business and distract
management due to difficulties in assimilating personnel and operations.

         Provided that we have sufficient financing, we may consider purchasing
other businesses that could complement or supplement our current product
offerings. If we acquire any other company, we could face difficulties in
assimilating that company's personnel and operations. Acquisitions also involve
the need for integration into existing administration, services marketing, and
support efforts. These acquisitions and investments could disrupt our ongoing
business, distract management and employees and increase our expenses. In
addition, key personnel of the acquired company may decide not to work for us.

         We may not be able to implement Section 404 of the Sarbanes-Oxley Act
on a timely basis.

         The SEC, as directed by Section 404 of the Sarbanes-Oxley Act, adopted
rules generally requiring each public company to include a report of management
on the company's internal controls over financial reporting in its annual report
on Form 10-KSB that contains an assessment by management of the effectiveness of
the company's internal controls over financial reporting. This requirement will
first apply to our annual report on Form 10-KSB for the fiscal year ending
December 31, 2007.

         We have not yet developed a complete Section 404 implementation plan.
We have in the past discovered, and may in the future discover, areas of our
internal controls that need improvement. We expect that we will need to hire
and/or engage additional personnel and incur incremental costs in order to
complete the work required by Section 404. We can not assure you that we will be
able to complete a Section 404 plan on a timely basis. Additionally, upon
completion of a Section 404 plan, we may not be able to conclude that our
internal controls are effective, or in the event that we conclude that our
internal controls are effective, our independent accountants may disagree with
our assessment. Any failure to implement required new or improved controls, or
difficulties encountered in their implementation, could negatively affect our
operating results or cause us to fail to meet our reporting obligations.

                                       9
<PAGE>

RISKS RELATED TO OUR COMMON STOCK

         Our common stock is traded on the OTC Bulletin Board, and a shareholder
may be unable to sell at or near ask prices or at all if the shareholder needs
to sell his shares to raise money or otherwise desire to liquidate his shares.

         Our Common Stock is currently listed for trading on the OTC Bulletin
Board. Shares listed for trading on the OTC Bulletin Board often are thinly
traded, meaning the number of persons interested in purchasing the shares at or
near ask prices at any given time may be relatively small or non-existent. This
situation may apply to our shares and is attributable to a number of factors,
including the fact that we are a small public company which is relatively
unknown to stock analysts, stock brokers, institutional investors and others in
the investment community that generate or influence sales volume. In addition,
even if we came to the attention of such persons, they tend to be risk-averse
and would be reluctant to follow a company of our size and expanding into a
relatively new line of business as we are in, or purchase or recommend the
purchase of our shares until such time as we became more seasoned and proven. As
a consequence, there may be periods of several days or more when trading
activity in our shares is minimal or non-existent, as compared to a seasoned
issuer which has a large and steady volume of trading activity that will
generally support continuous sales without an adverse effect on share price. We
cannot give you any assurance that a broader or more active public trading
market for our Common Stock will develop or be sustained, or that current
trading levels will be sustained. Due to these conditions, we can give you no
assurance that you will be able to sell your shares at or near ask prices or at
all if you need money or otherwise desire to liquidate your shares.

         The holders of our outstanding Series B Shares have the right to
approve or disapprove certain corporate action, which could materially affect
the holders of our common stock. Currently, the rights of the Series B Shares
are controlled by Leisurecorp LLC.

         In December 2006 we issued the Series B Shares to three investors.
Under the terms of the Series B Shares, we may not, without first obtaining the
prior approval of the holders of a majority of the then outstanding Series B
Shares, voting separately as a class, take any of the following actions: (i)
amend our Articles of Incorporation or Bylaws if such action would adversely
affect the rights, preferences, privileges, or restrictions of the Series B
Shares; (ii) authorize or issue any class or series of our capital stock or any
rights, options, warrants or other securities that are convertible into or
exchangeable for any of our capital stock, having any right, preference or
privilege superior to or on parity with the Series B Shares in any respect
whether by reclassification or otherwise; (iii) pay any dividends or
distributions on any shares of our capital stock; (iv) amend any of the
provisions of the Certificate of Designation of the Series B Shares; (v) redeem
or declare a dividend with respect to any security; (vi) increase or decrease
the authorized number of shares of Series B Shares; (vii) effect a merger,
consolidation, or business combination or other acquisition involving GPSI
(other than solely for the purposes of reincorporation); or (viii) increase or
decrease the authorized number of directors on our Board of Directors. The
foregoing voting provisions shall remain in effect so long as one holder of our
Series B Shares, Leisurecorp LLC, is the owner of record of 25% or more of the
number of Series B Shares that it purchased on December 2006 or that it
subsequently may still purchase under the additional purchase right that we have
extended to Leisurecorp. As a result of its investment in the Series B Shares
and the voting agreements contained in a shareholders agreement Leisurecorp has
entered into with the other holders of the Series B Shares, Leisurecorp LLC owns
or controls the vote of approximately 84% of the currently issued and
outstanding Series B Shares.

         The holders of the Series B Shares have the ability to elect a majority
of our Board of Directors, and we are prohibited from taking certain corporate
actions without the approval of the directors elected by Series B Share holders.

         The holders of a majority of the outstanding Series B Shares have the
right, voting as a separate class, to elect three of our five members of our
board of directors, of which two shall be designated by the holders of a
majority of the outstanding Series B Shares as the "Reviewing Preferred
Directors." Our Board of Directors may not take certain actions, and none of
such actions shall be valid and constitute an action of the Board of Directors
unless such action is approved by a majority of the Board of Directors, which
majority shall include at least one of the Reviewing Preferred Directors. The
actions that must be approved by at least one Reviewing Preferred Director are
as follows: (i) reorganize GPSI or voluntarily liquidate, dissolve or wind up
GPSI, (ii) incur any new indebtedness or refinance any existing indebtedness for
borrowed money other than trade payables and accrued expenses incurred in the
ordinary course of business and indebtedness not to exceed at any time $500,000
in the aggregate, (iii) approve, adopt or amend our annual budget, (iv) incur
any capital or operating expenditures (other than purchases of inventory
purchased solely for, and specifically to fill signed purchase orders) in excess
of $50,000 in one or a series of related expenditures, or in excess of $250,000
in the aggregate unless included in our annual budget approved by the Board of
Directors (including one of the Reviewing Preferred Directors), (v) hire or fire
our Chief Executive Officer, the Chief Financial Officer, or any of our other
officer or employee who, at the time, earns or is expected to earn a salary
(excluding bonuses) of $100,000 or more per year, (vi) acquire any assets or
equity securities of any other business or entity, or sell any of our assets
(other than in the ordinary course of business), in each case if the transaction
value of such acquisition or disposition is greater than $2,000,000, (vii) issue

                                       10
<PAGE>

options or securities except under our stock compensation, bonus or other
compensation plan, (viii) amend our stock compensation, bonus or other
compensation plan, or (ix) enter into a transaction with a stockholder or an
affiliate of ours or of a stockholder of ours. The foregoing restrictions will
remain in effect until the earlier of (a) the date on which Leisurecorp is the
owner of record of less than 25% of the number of Series B Shares that it
purchased on December 29, 2006 pursuant to the Securities Purchase Agreement, or
(b) we meet or exceed the approved annual budget for two consecutive fiscal
years. Under a shareholder agreement entered into by, among others, the holders
of approximately 84% of our currently outstanding Series B Shares, Leisurecorp
LLC has the right to designate both Reviewing Preferred Directors.

         Our Board of Directors has the right to issue additional series of
preferred stock, the terms of which could adversely affect the value of our
common stock.

         Under our articles of incorporation, our board of directors has the
power, without further action by the holders of our common stock, to designate
the relative rights and preferences of the preferred stock, and to issue the
preferred stock in one or more series as designated by our board of directors.
The designation of rights and preferences could include preferences as to
liquidation, redemption and conversion rights, voting rights, dividends or other
preferences, any of which may be dilutive of the interest of the holders of our
common stock or the preferred stock of any other series. The issuance of
preferred stock may have the effect of delaying or preventing a change in
control of our company without further stockholder action and may adversely
affect the rights and powers, including voting rights, of the holders of our
common stock.

         If securities or industry analysts do not publish research reports
about our business, our stock price and trading volume could decline.

         Small, relatively unknown public companies can achieve visibility in
the trading market through research and reports that industry or securities
analysts publish. However, to our knowledge, no analysts cover our company. The
lack of published reports by independent securities analysts could limit the
interest in our stock and negatively affect our stock price. We do not have any
control over research and reports these analysts publish or whether they will be
published at all. If any analyst who does cover us downgrades our stock, our
stock price would likely decline. If any analyst initiates and then ceases
coverage of our company or fails to regularly publish reports on us, we could
lose visibility in the financial markets or never achieve such visibility, which
in turn could cause our stock price or trading volume to stagnate or decline.

         You may have difficulty selling our shares because they are deemed
"penny stocks."

         Since our Common Stock is not listed on the Nasdaq Stock Market or any
national securities exchange, if the trading price of our Common Stock is below
$5.00 per share, trading in our Common Stock will be subject to the requirements
of certain rules promulgated under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"). These rules require additional disclosures by
broker-dealers in connection with any trades involving a stock defined as a
penny stock. Such rules require the delivery, prior to any penny stock
transaction, of a disclosure schedule explaining the penny stock market and the
risks associated therewith and impose various sales practice requirements on
broker-dealers who sell penny stocks to persons other than established customers
and accredited investors (generally defined as an investor with a net worth in
excess of $1,000,000 or annual income exceeding $200,000 individually or
$300,000 together with a spouse). For these types of transactions, the
broker-dealer must make a special suitability determination for the purchaser
and have received the purchaser's written consent to the transaction prior to
the sale. The broker-dealer also must disclose the commissions payable to the
broker-dealer, current bid and offer quotations for the penny stock and, if the
broker-dealer is the sole market maker, the broker-dealer must disclose this
fact and the broker-dealer's presumed control over the market. Such information
must be provided to the customer orally or in writing before or with the written
confirmation of trade sent to the customer. Monthly statements must be sent
disclosing recent price information for the penny stock held in the account and
information on the limited market in penny stocks. The additional burdens
imposed upon broker-dealers by such requirements could discourage broker-dealers
from effecting transactions in our common stock, which could severely limit the
market liquidity of the common stock and the ability of holders of the common
stock to sell their shares.

         The market price of our Common Stock may be adversely affected by
market volatility.

         The market price of our Common Stock is likely to be volatile and could
fluctuate widely in response to many factors, including:

o    announcements of the results of our operations or the operations of our
     competitors,

o    developments with respect to intellectual property rights,

o    announcements of technological innovations by us or our competitors,

o    announcements of new services, products or new contracts by us or our
     competitors,

o    actual or anticipated variations in our operating results due to the level
     of development expenses and other factors,

                                       11
<PAGE>

o    changes in financial estimates by securities analysts, if any, and whether
     our earnings meet or exceed such estimates,

o    new accounting standards,

o    general economic, political and market conditions and other factors, and

o    the occurrence of any of the risks described in this registration
     statement.

ITEM 2.  DESCRIPTION OF PROPERTY

         Our principal executive offices are located in Surrey, a suburb of
Vancouver, British Columbia, Canada in a 6,158 square foot facility. The lease
expires on January 31, 2008. In March 2004 we leased an additional 2,520 square
foot facility in an adjacent building as part of the plan to bring final
assembly of the Company's product in-house. The additional lease expires January
31, 2007 with a one year renewal option.

ITEM 3.  LEGAL PROCEEDINGS

         On February 5, 2007 David Stratton filed a lawsuit against us in the
Supreme Court of British Columbia, Vancouver, Canada. Mr. Stratton entered into
a written employment agreement with us on June 12, 2006 pursuant to which we
employed Mr. Stratton as our Vice President, Sales. The employment agreement had
a three-year term, renewable each year. Under the employment, Mr. Stratton was
entitled to an annual base salary of CDN $150,000, options to purchase up to
1,500,000 shares of our common stock at an exercise price of $0.05 per share, a
signing bonus of 300,000 shares of our common stock, certain bonuses (including
bonuses based on gross sales), and sales commissions. On November 8, 2006, Mr.
Stratton's employment was terminated. Mr. Stratton has set forth his claims in
the Statement of Claims, which claims principally consist of the following: (i)
a judgment equal to the amount of his base salary that he would have earned,
(ii) the signing bonus stock options referred to in the employment agreement,
(iii) the 300,000 signing bonus shares, (iv) special damages and punitive
damages, and (v) legal fees. We have filed a statement of defense denying the
claims and we intend to vigorously defend this lawsuit.

         We may occasionally become subject to legal proceedings and claims that
arise in the ordinary course of our business. It is impossible for us to predict
with any certainty the outcome of any disputes that may arise, and we cannot
predict whether any liability arising from claims and litigation will be
material in relation to our consolidated financial position or results of
operations.

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

         On Thursday, December 28, 2006 we held a Special Meeting of
Shareholders to amend our Articles of Incorporation to increase the number of
shares of capital stock authorized from 550,000,000 shares (500,000,000 shares
of common stock and 50,000,000 shares of preferred stock) to 1,650,000,000
shares (1,600,000,000 shares of common stock and 50,000,000 shares of preferred
stock). A total of 174,734,088 shares were represented at the special meeting
(in person or by proxy). At the meeting, a total of 167,567,325 votes were cast
in favor for the amendment of the Articles of Incorporation, 7,073,013 votes
were cast against the amendment, 93,750 shares abstained, and no shares were not
voted because of the broker non-vote rules.

                                     PART II

ITEM 5.           MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

Market Information

         Our common stock is listed for trading on the OTC Bulletin Board
over-the-counter market under the symbol "GPSN." The following table sets forth
the high and low closing prices per share of our common stock. The prices
represent prices between dealers, exclusive of retail markup, markdown or
commission and do not necessarily represent actual transactions. There is no
trading market for our outstanding preferred stock.

<TABLE>
<CAPTION>

                 Year ended December 31, 2006                   High               Low
<S>                                                             <C>               <C>
     First Quarter                                              $0.09             $0.04
     Second Quarter                                             $0.06             $0.04
     Third Quarter                                              $0.09             $0.04
     Fourth Quarter                                             $0.10             $0.06

                 Year ended December 31, 2005                   High               Low
     First Quarter                                              $0.15             $0.09
     Second Quarter                                             $0.16             $0.10
     Third Quarter                                              $0.15             $0.08
     Fourth Quarter                                             $0.13             $0.06
</TABLE>


         As of December 31, 2006, there were 343,441,884 common shares
outstanding and approximately 340 shareholders of record, not including holders
who hold their stock in "street name".

                                       12
<PAGE>

Dividends

         We have never paid any cash dividends on our common stock. We currently
anticipate that we will retain all future earnings for use in our business.
Consequently, we do not anticipate paying any cash dividends in the foreseeable
future. The payment of dividends in the future will depend upon our results of
operations, as well as our short-term and long-term cash availability, working
capital, working capital needs and other factors, as determined by our Board of
Directors.

         Under the terms of the Series B Shares, we may not, without first
obtaining the prior approval of the holders of a majority of the then
outstanding Series B Shares, voting separately as a class, pay any dividends or
distributions on any shares of our capital stock.

Repurchase of Securities

         We did not repurchase any shares of our common stock during the fourth
quarter of the year ended December 31, 2006.

Recent Sales of Unregistered Securities

         During the fourth quarter of 2006 we issued the following unregistered
securities:

         Preferred Stock and Warrants: On December 29, 2006, for an aggregate
purchase price of $15,740,890 we sold a total of 1,574,089 shares of newly
authorized Series B Shares and warrants to purchase up to 59,885,186 shares of
our common stock to Great White Shark Enterprises, Inc., Leisurecorp LLC, Robert
C. Silzer, Sr. and Douglas Wood.

         Common Stock:  We also issued the following shares of common stock:

o    2,523,810 shares valued at $188,536 for services rendered;

o    416,666 shares valued at $29,167 in payment of outstanding commissions;

o    24,627,349 shares valued at $1,674,920 in settlement of outstanding
     indebtedness;

o    611,127 shares valued at $45,834 in payment of interest;

o    5,893,038 shares upon the automatic conversion of all of outstanding shares
     Series A Convertible Preferred Shares; and

o    600,000 shares for $30,000 cash upon the exercise of an employee stock
     option.

         All of the foregoing shares were sold pursuant to an exemption
available under Section 4(2) of the Securities Act of 1933 (the "Securities
Act") because the issuance did not involve any public offering.

Equity Compensation Plan Information

         The following table summarizes as of December 31, 2006, the number of
securities to be issued upon the exercise of outstanding derivative securities
(options and rights); the weighted-average exercise price of the outstanding
derivative securities; and the number of securities remaining available for
future issuance under our equity compensation plans.
<TABLE>
<CAPTION>

  -------------------------------- ------------------------ ------------------------ ----------------------------
                                    Number of securities                                Number of securities
                                      to be issued upon        Weighted-average        remaining available for
                                         exercise of           exercise price of        future issuance under
                                    outstanding options,     outstanding options,     equity compensation plans
           Plan Category                 and rights               and rights           (excluding column (a))
  -------------------------------- ------------------------ ------------------------ ----------------------------
                                             (a) (b) (c)
  -------------------------------- ------------------------ ------------------------ ----------------------------
  Equity compensation plans
<S>                                       <C>                       <C>                        <C>
  approved by security holders            9,290,000                 $0.062                     110,000
  -------------------------------- ------------------------ ------------------------ ----------------------------
  Equity compensation plans not
  approved by security holders           15,000,000                 $0.074

  -------------------------------- ------------------------ ------------------------ ----------------------------
  Total                                  24,290,000                 $0.069                     110,000
  -------------------------------- ------------------------ ------------------------ ----------------------------
</TABLE>

         The equity compensation plans approved by the security holders consist
of our 2000 Stock Option Plan, as amended.

                                       13
<PAGE>

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

         You should read the information in this Item 6 together with our
consolidated financial statements and notes thereto that appear elsewhere in
this Annual Report. This Annual Report contains forward-looking statements that
involve risks, uncertainties, and assumptions. Actual results may differ
materially from those anticipated in these forward-looking statements as a
result of various factors, including, but not limited to, those presented under
"Risk Factors " included in Item 1 and elsewhere in this Annual Report.

Recently Issued Accounting Pronouncements

         For recently issued accounting pronouncements that may affect us, see
Note 1 of Notes to Financial Statements.

Overview

         We are a golf course management technology company. We have developed
both a hand-held and cart mounted product using Global Positioning Systems
("GPS") technology. At December 31, 2006 and December 31, 2005, substantially
all of our assets and operations were located in Canada. However, we maintain
sales offices in the USA, and have sales distributors in the USA, UK and Europe,
Australia, South Africa and Asia.

         We utilize GPS, radio frequency and a sophisticated integrated network
of wireless technology to information systems for the golf and recreational
industries. Our portable product, the "Inforemer", is the first patented
communications network that utilizes advanced internet protocols to provide a
wireless information system to enhance recreational value, increase golf course
profits and improve player safety. We generated revenue from the sales of our
products for the first time in the year ended December 31, 2004. Our objective
is to obtain a leadership position as an international supplier of GPS golf
wireless products and become the leader in hand-held portable recreational
devices ("PRDs") for applications worldwide.

         We recognize revenue from the sale of our products only when delivery
has occurred, the sales price is fixed or determinable, and collectibility is
probable. When other significant obligations remain after products are
delivered, we recognize revenue only after such obligations are fulfilled.

Twelve-months ended December 31, 2006 compared to December 31, 2005

         Revenue - Revenue during the past two years has been comprised of (i)
sales generated from our Inforemer product,(ii) service contract fees we
received in connection with the sale of the Inforemer, (iii) fees we received
from certain of our distributors, and (iv) patent license fees received by us
and Optimal Golf Solutions, Inc., one of our subsidiaries, for the right to use
certain of our patented technologies. For the fiscal year ended December 31,
2006 ("fiscal 2006"), we recorded total revenue of $6,575,567, compared to
$5,818,020 during in the twelve months ended December 31, 2005 ("fiscal 2005").
This 13% increase in revenue is primarily attributable to a 16% increase in the
number of sales and installations of our Inforemer system. Revenues derived from
Inforemer sales in fiscal 2006 exceeded Inforemer sales in fiscal 2005 by
approximately $600,000. Fiscal 2004 was the first full year in which we offered
the Inforemer system, and fiscal 2006 sales improvement over fiscal 2005
reflects our increased marketing and sales efforts and the growing reputation of
our system. During fiscal 2006, we also realized $212,500 of revenue from the
first license payment we received following the settlement of a patent
infringement lawsuit we initiated against a competitor. We are scheduled to
receive additional licence payments under that settlement/license agreement of
$210,000 per year, paid quarterly, until 2011, the last payment due August 2011.
During fiscal 2005, we received distributorship fees of $154,000 in connection
with establishing an international distributor relationship; no such fees were
received in fiscal 2006. Total patent licence revenue earned by Optimal Golf
Solutions in fiscal 2006 was $584,326 compared to $536,538 in fiscal 2005. We
currently anticipate that revenues will increase in the fiscal year ending
December 31, 2007 as a result of our prior marketing efforts that are generating
an increase in Inforemer orders and as our product line-up expands and improves.

         Cost of Goods Sold - Cost of goods sold represents the cost we pay for
our Inforemer products. Cost of goods sold remained substantially the same in
fiscal 2006 as in fiscal 2005. However, as a percentage of revenues, cost of
goods sold decreased from 59% to 52% due to improved pricing we received from
our manufacturer and due to improvements we made in our delivery and
installation procedures. In addition, we currently anticipate that our cost of
goods will continue to improve in the current fiscal year due to our anticipated
increase in sales and our improved financial condition, which will allow us to
obtain better terms from our vendors.

         Installation Costs - These costs represent our cost of delivering and
installing our equipment at our customers' sites and costs of third party
services we incur in the installation of systems that we sell to our customers.
Since we install our system in various countries, we often need the assistance
of local licensed trades to install those systems. These costs vary to a certain
extent based on the location of our customers and the amount of installation
services we employ from local service providers. In general, however, we believe
that we are improving our installation procedures and, therefore, are lowering
our third party installation costs. This improvement is reflected in the 6%
decrease in installation costs in fiscal 2006.

                                       14
<PAGE>

         General and Administrative Expenses - General and administrative
expenses decreased by $396,300 in fiscal 2006 compared to fiscal 2005 primarily
due to a $1,353,159 reduction in non-cash compensation expenses attributable to
the grant of stock options. During fiscal 2005, we recognized non-cash
compensation expenses of $1,770,392 as a result of the grant of equity
incentives to our executives, employees and consultants. During fiscal 2006, the
amount of such non-cash equity compensation decreased to $417,233. Excluding the
non-cash compensation, general and administrative expenses increased as a result
of an increase in personnel, professional fees and consulting fees, which
increase reflects an increase in our employees and sales and also the costs of
the financing initiatives we undertook in 2006.

         Depreciation and Amortization - Depreciation and amortization increased
by $24,768 or 8% in fiscal 2006 compared to fiscal 2005. The increase was the
result of an increase in the equipment being depreciated. Our patents are being
amortized over the remaining life of the patents.

         Selling and Marketing Expenses - Selling and marketing expenses were
$2,924,234 in fiscal 2006 compared $2,137,404 in fiscal 2005. The increase was
attributable to a general increase in sales activities, including increases in
our attendance at trade shows and increases in advertising. In addition, in
fiscal 2006 we incurred additional marketing costs in connection with a
marketing promotion we undertook at the annual Greg Norman Shark Shoot-Out. Our
sales commissions also increased in fiscal 2006 as sales increased over the
prior year.

         Operations, Engineering, Research & Development Expenses - Operations,
engineering, research and development expenses in fiscal increased by $1,229,562
(or 64%) over fiscal 2005. This increase was attributable to the engineering and
continuing development cost of the Inforemer product. These costs comprised
personnel costs, consultants, computer software development costs and service
costs of the increased number of Inforemer systems installed. We are currently
completing major improvements in the functionality of our Inforemer, including
upgrading the computing power of our Inforemer units, the visual appearance of
the units, the ability of the units to stream video and play sound, and the
ability to remotely accept charge card payments.

         Loss from Operations - Despite a $821,460 increase in gross profits in
fiscal 2006 to $2,287,133, our loss from operations increased by $823,400 in
fiscal 2006 over the loss from operations in fiscal 2005. The increase in loss
from operations in fiscal 2006 was due primarily to the $786,830 increase in
sales and marketing and the $1,229,562 increase in Operations, Engineering and
Research & Development. We currently anticipate that our revenues will increase
in the fiscal year ended December 31, 2007 and that our engineering and research
and development costs will, by the end of the year, decrease, thereby improving
our results of operations.

         Finance Costs - Finance costs represent expenses recognized related to
warrants we have issued. The value of the warrants is recorded as a discount on
the debt financing raised or as a deferred financing cost and is amortized over
the term of the respective debt or term of service. Financing costs also include
fees paid to a provider of a Line of Credit to the company. Finance costs
decreased to $464,847 in fiscal 2006 compared to $765,271 in fiscal 2005 as a
result of a reduction in warrants issued in the year and the equity financing we
secured during the year.

         Interest Expense - Interest expense increased by $2,042,916 to
$4,324,801 in fiscal 2006, as compared to $2,281,885 in fiscal 2005, as a result
of an increase of interest-bearing debt. In September 2005, we issued $3,720,000
of Callable Secured Convertible Notes (the "Callable Notes") that bore interest
at a rate of 8% per annum. The Callable Notes created a derivative liability,
which in turn created a debt discount of $3,720,000, or 100% against the
Callable Notes. This debt discount was amortized over the term of the loan and
also against any interim conversions of the Callable Notes. This amortization
amounted to $1,675,449 in the year, which was included in interest expense. We
repaid the Callable Notes in November 2006, including a penalty interest payment
of $272,397. In addition, we have received financing from GWSE to enable us to
purchase our patents and acquire inventory, have several outstanding bank
operating lines of credit and short term financing loans, all of which bore
interest. Of the foregoing interest expense, a total of $225,884 was paid in
stock issuances rather than cash payments.

         Derivative Liabilities - Our derivative financial instruments consist
of embedded derivatives related to the issuance of the Callable Notes. The
accounting treatment of derivative financial instruments requires that we record
the derivatives at their fair values and record them at fair value as of each
subsequent balance sheet date. Any change in fair value is recorded as
non-operating, non-cash income or expense at each reporting date. During the
first three fiscal quarters of fiscal 2006 we recorded an aggregate of
$2,768,683 of non-operating, non-cash charges. Because we repaid the Callable
Notes in November 2006, we reversed the derivative charges, which resulted in a
recorded non-operating, non-cash income of $7,831,868 for fiscal 2006. The
valuation and basis for this expense is more fully discussed in the "Derivative
Liabilities" note to the financial statements.

                                       15
<PAGE>

         Gain on Extinguishment of Debt - Gain on extinguishment of debt
increased to $448,459 in fiscal 2006 from $418,365 in fiscal 2005. This gain
represents a gain relating to the write-off of debt guarantees of discontinued
operations, offset by certain losses arising from the issuance of stock in
settlement of debt.

         Deemed Preferred Stock Dividend - At December 31, 2006 we recorded a
Deemed Preferred Stock Dividend of $11.5 million. This deemed dividend does not
represent an actual dividend paid on shares but arose from applying GAAP
accounting rules to the issuance of the Series B Shares for the cash equity and
debt conversion investment that occurred on December 29, 2006. Under GAAP a
portion of the cash received and debt converted is assigned to the fair market
valuation of the warrants issued with the Series B Shares. The remaining portion
is compared to the fair market value of the shares acquired. Any difference
arising from this comparison, together with the fair market value of the
warrants, is treated as a deemed dividend issued on the Series B Shares. We did
not issue any shares of preferred stock in fiscal 2005 that would have given
rise to a deemed dividend in that fiscal year.

         Net Loss - Net loss was $16,950,891 for fiscal 2006, which was a slight
decrease from the net loss of $17,191,037 in fiscal 2005. The non-cash
accounting adjustments related to derivative liabilities and deemed preferred
stock dividends increased the amount of net losses during fiscal 2005 and fiscal
2006 respectively. Nevertheless, excluding these expense non-cash accounting
adjustments we still incurred net losses of $13,273,632 in fiscal 2006 and
$10,730,671 in fiscal 2005. These net losses are the result of our large general
and administrative expenses, large selling and marketing expenses, and large
operations, engineering, research and development expenses, each of which
individually exceeded our gross profits in fiscal 2005 and 2006. Until we
increase our revenues and gross profits compared to the foregoing operating
expenses, we will continue to incur significant net losses.

Liquidity And Capital Resources

         To date, we have incurred significant losses from operations. As of
December 31, 2006, we had a working capital deficit of $ $7,337,819. Our
operations have not generated sufficient funds from operations, and we currently
still do not generate sufficient funds to internally fund our working capital
needs. Accordingly, to date, our operating deficits have had to be supplemented
by outside sources of funding, including funds raised from (i) the sale of
shares of our common stock and preferred stock, (ii) the issuance of debentures,
(iii) the issuance of shares as payment for services and in satisfaction of
indebtedness, (iv) bank lines of credit, and (v) short-term loans made to us by
our affiliates and by third parties. Our working capital needs during fiscal
2006 were partially funded from $3,720,000 of the Callable Notes that we issued
in September 2005 (which Callable Notes were repaid in November 2006), and, as
further described below, by a bank line of credit for $1,485,000 made available
to us by HSBC Bank Canada, approximately $3,029,000 of unsecured short-time
loans extended to us by Douglas Wood, one of our directors, and by approximately
$1,143,000 of purchase money loans made to us by Great White Shark Enterprises,
Inc. The line of credit that Mr. Wood extended to us expired in February 2007
and is no longer available.

         Our liquidity and capital resources were substantially improved on
December 29, 2006 by the sale of $15,740,890 of newly authorized Series B Shares
and warrants to GWSE and Leisurecorp LLC and by the concurrent sale of the
Series B Shares to Douglas Wood, one of our directors, in exchange for, and as
payment for $3,000,000 of cash loans he had previously made to us. The
$3,000,000 of loans were repaid through the issuance of 300,000 Series B Shares
and warrants to purchase 49,180,328 shares of common stock to Mr. Wood. Also, on
December 29, 2006 Robert C. Silzer, our Chief Executive Officer, cancelled
$750,000 of obligations we owed to him in exchange for 12,295,082 shares of our
common stock and warrants to purchase 3,073,770 shares of common stock. In
connection with the foregoing purchase of Series B Shares by GWSE and
Leisurecorp, we agreed to give GWSE and Leisurecorp each an assignable right,
exercisable until the end of April 2007, to increase their investment, or make
an additional investment in our shares of Series B Shares and warrants for cash
on the same terms as the securities sold to them on December 29, 2006. GWSE has
the right to increase its aggregate investment in the Series B Shares and
warrants by $3,000,000, and Leisurecorp has the right to increase its aggregate
investment in the Series B Shares and warrants by $10,000,000. We are currently
in discussions with these parties regarding the exercise by GWSE and Leisurecorp
of this additional investment right. However, neither GWSE nor Leisurecorp has
agreed to purchase some or all of the additional Series B Shares that they have
a right to purchase, and no assurance can be given that they will do so. In the
event that GWSE and Leisurecorp do exercise their full additional investment
right, combined with our projected level of revenues and the availability of
certain of our existing lines of credit, we project that we will have sufficient
working capital to fund our projected operations for 2007. In the event that
GWSE and/or Leisurecorp do not exercise their additional investment right, we
will have to attempt to raise additional capital through the sale of additional
shares of our stock or through the placement of new debt securities.

         Operating Activities - During fiscal 2006, our operations utilized cash
of $9,548,854, as compared to $5,588,525 during the twelve months ended December
31, 2005. The increase in cash utilized in operations in 2006 as compared to
2005 was primarily a result of increases in accounts receivable, inventory,
prepaid expenses and long-term receivables combined with an increase in the net
loss adjusted for non-cash items; partially offset by increases in accounts
payable and deferred revenue.

                                       16
<PAGE>

         At December 31, 2006, as a result of the issuance of the Series B
Shares on December 31, 2006, cash increased by $2,065,046 to $2,196,220, as
compared to $131,174 at December 31, 2005. In addition, at December 31, 2006, we
also had a $5,000,000 subscription receivable (reflecting a portion of the
Series B Share purchase price that had not been received by the December 31,
2006). This subscription receivable was fully funded in January 2007.

         We had a working capital deficit of $7,337,819 at December 31, 2006, as
compared to a working capital deficit of $23,771,591 at December 31, 2005. Major
reasons for this improvement were (i) the sale of the Series B Shares and the
concurrent cancellation of indebtedness in exchange for shares of Series B
Shares and common stock, and (ii) the elimination in the fair value of
derivative liabilities of $9,460,366 from December 31, 2005. At December 31,
2006 and December 31, 2005, $2,308,715 and $2,968,582 respectively of our
current liabilities consisted of liabilities with respect to discontinued
operations, on which no cash payment is anticipated.

         Investing Activities - Net cash used in investing activities was
$745,091 and $628,932 for the twelve months ended December 31, 2006 and 2005,
respectively, consisting of the purchase of equipment and patents and payments
relating to the purchase of Optimal Golf Solutions, Inc.

         Financing Activities - Net cash provided by financing activities was
$12,358,991 for fiscal 2006, as compared to $6,175,538 for fiscal 2005. During
the twelve months ended December 31, 2006, we made payments on loans of
$3,018,147. During the twelve months ended December 31, 2006, we issued Series B
Shares for cash consideration of $8,000,000, a subscription receivable for
$5,000,000 that was paid in January 2007, and for the settlement of debt of
$5,740,890. During fiscal 2006, proceeds from bank borrowings and short term
loans were $1,606,248.

Contractual Obligations

         The following table sets forth certain information regarding our
contractual obligations as of December 31, 2006:
<TABLE>
<CAPTION>

                                                                                                 2011
Contractual Obligations         Total         2007          2008         2009          2010      and thereafter
---------------------------- ------------- ------------ ------------- ------------ ------------- ------------------
<S>                            <C>           <C>           <C>          <C>
Long-Term Office Lease and     $78,199       $66,678       $9,234       $2,287          -                -
Office Equipment
---------------------------- ------------- ------------ ------------- ------------ ------------- ------------------
Employee agreements           $1,163,000    $449,000      $449,000     $265,000
---------------------------- ------------- ------------ ------------- ------------ ------------- ------------------
</TABLE>


         We do not believe that inflation has had a material impact on our
business or operations.

         We are not a party to any off-balance sheet arrangements and do not
engage in trading activities involving non-exchange traded contracts. In
addition, we have no financial guarantees, debt or lease agreements or other
arrangements that could trigger a requirement for an early payment or that could
change the value of our assets.


Lines of Credit


         Effective June 27, 2003, we obtained a bank line of credit for
$1,425,000 to fund our operations. As of December 31, 2006, we had borrowed
$950,455 under this line of credit. The line of credit bears interest at prime
plus 0.5%, is repayable in full on demand and is secured by a one year standby
bank letter of credit for $1,500,000 that was provided by a third party, Hansen
Inc. This standby letter of credit from Hansen Inc. has been renewed a number of
times and is currently renewed to April 30, 2007. As consideration for renewing
the standby bank letter of credit, we issued to Hansen Inc. common stock
purchase warrants to purchase 1,500,000 shares of common stock, exercisable at
$0.10 per share (a 15% discount to the then market price) for a period of three
years. In addition, we extended 2,000,000 previously issued warrants which
expired in 2006 to expire in 2008 at a price of $0.05. We incurred a finance
cost of $75,416 as a result of the issuance of these common stock purchase
warrants in the twelve months ended December 31, 2006. We also pay a standby
letter of credit fee to Hansen Inc. equal to 2% per annum on a quarterly basis,
amounting to approximately $7,500 per quarter.


         In March 2004 we entered into an agreement with Douglas J. Wood, Daniel
S. Wood and James Liken pursuant to which they provided the security we needed
to obtain a $1,000,000 line of credit from HSBC Bank Canada to be used for
manufacturing purposes. On June 22, 2006 this line of credit was increased to
$1,400,000. As of December 31, 2006 this line was drawn down in the amount of
$1,433,864. As consideration for the security provided, the Company agreed to
pay the Secured Party 15% per annum of the maximum amount outstanding in the
month, payable 50% in US$ and 50% in common shares of the Company, issued at a
10% discount to market based on the seven day average price prior to each
quarter end. The Company has accrued this consideration to December 31, 2006.
Additionally the Company agreed to issue 666,667 warrants to purchase common
stock of the Company at $0.15 per common share. The Company also granted the
Secured Party a security interest in all the Company's inventory. This letter of
credit, along with its related Reimbursement Agreement, was subsequently renewed
until April 2006, October 2006, December 2006 and expired February 28, 2007, at
which point the line of credit was removed.

                                       17
<PAGE>

Loan From Great White Shark Enterprises

         On December 3, 2004, we entered into a Credit Agreement with Great
White Shark Enterprises, Inc. ("GWSE") for GWSE to provide a Term Loan of
$3,000,000 to us. These funds were received by us as follows: $1,000,000 on
November 22, 2004 and the balance of $2,000,000 on December 3, 2004 (less
outstanding service fees owed by us to GWSE to December 31, 2004 of $548,750
pursuant to a Merchandising Agreement dated April, 2003). Collateral for the
loan was (a) a first priority security interest in (a) all of the shares of the
capital stock of Optimal, (b) a second security interest in the Optimal Patents
and (c) a first security interest in the Pinranger Patents acquired by us
pursuant to an Agreement dated July 2, 2004 between us and Pinranger (Australia)
Pty. Ltd. and PagiSat, LLC. The Pinranger Patents are registered in 13 countries
in Europe, Japan, and Australia. In connection with the Term Loan, GWSE also
received an equity bonus of 3,000,000 shares of restricted common stock and a
three year warrant dated, December 3, 2004, to purchase 2,000,000 shares of
common stock at an exercise price of $0.15.

         On December 29, 2006, at the closing of our sale of the Series B
Shares, GWSE purchased $3,000,000 of our Series B Shares and warrants and also
simultaneously converted the remaining outstanding principal amount of the Term
Loan, and another outstanding short term loan, into 274,089 Series B Shares in
full settlement of the principal balance due. For a period of two years from the
conversion date GWSE will continue to receive 20% of the license payments we
receive as a result of the licenses we have granted under the Optimal patents,
which interest in the license payment that we receive will increase thereafter
to 40% of the license payments for the remaining life of the patents.

                                       18
<PAGE>


ITEM 7.           FINANCIAL STATEMENTS

         Our consolidated financial statements and notes thereto and the related
report of Sherb & Co., LLP are attached to this Annual Report beginning at page
F-1 and are incorporated herein by reference.

             Filed herewith are the following financial statements:

                              GPS INDUSTRIES, INC.
                              FINANCIAL STATEMENTS

                                      INDEX

                                                            Page Number
                                                         -------------------
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM       F - 1

CONSOLIDATED FINANCIAL STATEMENTS:

Balance Sheet                                                 F - 2

Statements of Operations                                      F - 3

Statements of Stockholders' Deficit                           F - 4-5

Statements of Cash Flows                                      F - 6

Notes to Financial Statements                            F - 7 to F - 23

                                       F-i

<PAGE>

            REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Stockholders
GPS Industries Inc. and Subsidiaries

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

We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. The Company has determined that it
is not required to have, nor were we engaged to perform, an audit of its
internal control over financial reporting. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of GPS Industries Inc.
at December 31, 2006 and the results of its operations and its cash flows for
the years ended December 31, 2006 and 2005 in conformity with accounting
principles generally accepted in the United States.

The accompanying consolidated financial statements have been prepared assuming
that the Company will continue as a going concern. The Company has incurred
significant losses and has a working capital deficiency as more fully described
in Note 3. The Company anticipates that additional funding will be necessary to
sustain the Company's operations through the fiscal year ending December 31,
2006. These conditions raise substantial doubt about the Company's ability to
continue as a going concern. Management's plans in regard to these matters are
also described in Note 3. The consolidated financial statements do not include
any adjustments that might result from the outcome of this uncertainty.

                                        /s/ Sherb & Co., LLP
                                            ----------------
                                            Sherb & Co., LLP
                                            Certified Public Accountants
 April 16, 2007
 New York, NY

                                       F-1

<PAGE>

                      GPS INDUSTRIES INC. AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEET


                                December 31, 2006
<TABLE>
<CAPTION>


Assets

Current

<S>                                                                             <C>
     Cash                                                                       $  2,196,220
     Accounts receivable, net                                                      1,113,452
     Subscription receivable                                                       5,000,000
     Inventories                                                                   1,473,545
     Prepaid expenses and other current assets                                       388,156
                                                                                ------------
          Total current assets                                                    10,171,373

Long-term accounts receivable                                                        273,743

Property and equipment, net                                                          108,894

Patents                                                                            1,265,993

Deferred implementation costs                                                        116,347

                                                                                -------------
                                                                                $ 11,936,350
                                                                                =============


Liabilities and Stockholders' Deficit

Current liabilities

     Bank indebtedness                                                          $  2,384,319
     Bank loan                                                                         1,450
     Deferred Revenue                                                                427,374
     Short term loans                                                              2,636,634
     Short term loan from related party                                            1,572,165
     Accounts payable and accrued liabilities                                      5,690,831
     Liability associated with Optimal Golf acquisition                            2,459,981
     Promissory notes - related parties                                               27,723
                                                                                ------------
                                                                                  15,200,477

     Liabilities related to discontinued operations
     (Chapter 7 proceedings filed in 2002)
     Promissory note payable                                                       1,274,757
     Accounts payable and accrued liabilities                                        746,491
     Loans payable to related parties                                                258,000
     Capital lease obligations ( in default)                                          29,467
                                                                                ------------
                                                                                   2,308,715
                                                                                ------------
          Total current liabilities                                               17,509,192
                                                                                ------------


Stockholders' deficit
     5% Convertible Series A Preferred Shares, $.001 par value,
        15,000,000 authorized, Issued and outstanding - None                               -
     Series B Convertible Preferred Shares, $10 par value, 4,000,000
        authorized, 1,874,089 issued and outstanding                              18,740,890
     Class A common stock, $.001 par value, 1,600,000,000 authorized
        343,441,884 issued and outstanding                                           343,442
     Accumulated other comprehensive income                                          722,295
     Additional paid-in capital                                                   53,455,575
     Accumulated deficit                                                        ( 78,835,044)
                                                                                -------------
          Total Stockholder's Deficit                                            ( 5,572,842)
                                                                                -------------
                                                                                $ 11,936,350
                                                                                =============
</TABLE>

          See accompanying notes to consolidated financial statements

                                       F-2

<PAGE>

                      GPS INDUSTRIES INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>

                                                                        For the Year Ended December 31,
                                                                      ----------------------------------
                                                                                2006             2005
                                                                      ------------------  --------------


<S>                                                                         <C>             <C>
Revenue                                                                     $ 6,575,567     $ 5,818,020

Cost of Goods Sold                                                            3,405,972       3,414,849

Installation Costs                                                              882,462         937,498

                                                                      ------------------  --------------
Gross Profit                                                                  2,287,133       1,465,673
                                                                      ------------------  --------------


Operating Expenses

      General and Administrative Expenses                                     4,728,401       5,124,701
      Depreciation and amortization                                             331,798         307,030
      Sales and marketing                                                     2,924,234       2,137,404
      Operations, Engineering and Research & Development                      3,159,546       1,929,984
                                                                      ------------------  --------------
                                                                             11,143,979       9,499,119
                                                                      ------------------  --------------

Loss Before Other Income (Expense)                                          ( 8,856,846)    ( 8,033,446)
                                                                      ------------------  --------------

Other Income (Expense)

      Finance costs                                                           ( 464,847)      ( 765,271)
      Interest expense                                                      ( 4,324,801)    ( 2,281,885)
      Derivative liabilities - Decrease/(Increase) in fair value              7,831,868     ( 6,460,366)
      (Loss) on foreign exchange                                               ( 75,597)       ( 68,434)
      Gain on extinguishment of debt                                            448,459         418,365
                                                                      ------------------  --------------
                                                                              3,415,082     ( 9,157,591)
                                                                      ------------------  --------------

Net Loss Before Deemed Preferred Stock Dividend                           $ ( 5,441,764) $ ( 17,191,037)

      Deemed Preferred Stock Dividend                                      ( 11,509,127)             -
                                                                      ------------------  --------------
Net Loss                                                                 $ ( 16,950,891) $ ( 17,191,037)
                                                                      ==================  ==============

Loss per common share - basic and diluted
                                                                               $ ( 0.02)       $ ( 0.07)
                                                                      ==================  ==============


Weighted average number of common shares outstanding -
      basic and diluted                                                     303,319,213     236,586,213
                                                                      ==================  ==============

</TABLE>

          See accompanying notes to consolidated financial statements

                                       F-3

<PAGE>

                      GPS INDUSTRIES INC. AND SUBSIDIARIES

                 CONSOLIDATED STATEMENT OF STOCKHOLDERS' DEFICIT
<TABLE>
<CAPTION>


                                                  Series A                 Series B
                                             Preferred Shares            Preferred Shares    Class A Common Stock
                                            -----------------         --------------------   --------------------
                                             Number                    Number                  Number
                                            of Shares  Amount         of Shares     Amount   of Shares     Amount
                                            ---------  ------         ---------     ------   ---------     ------


<S>             <C>                          <C>       <C>                               <C> <C>           <C>
Balance January 1, 2005                      375,000   $375,000              -           $-  205,021,853   $205,022

Common stock issued for compensation expense       -          -              -            -   15,975,850     15,976
Common stock issued for settlement of debt         -          -              -            -    6,236,440      6,236
Common stock issued on conversion of debt          -          -              -            -   13,487,849     13,488
Common stock issued for cash                       -          -              -            -   19,022,144     19,022
Common stock issued for investment in subsidiary   -          -              -            -            -          -
Common stock issued for interest                   -          -              -            -    4,411,000      4,411
Common stock issued for finance costs              -          -              -            -    1,250,000      1,250
Common stock Class B write-off                     -          -              -            -            -          -
Warrants issued for debt financing                 -          -              -            -            -          -
Stock options issued                               -          -              -            -            -          -

Preferred Shares issued for cash                   -          -              -            -            -          -

Comprehensive Loss
Net loss                                           -          -              -            -            -          -
Deferred compensation expense                      -          -              -            -            -          -
Subscriptions receivable                           -          -              -            -            -          -
Deferred financing costs                           -          -              -            -            -          -
Deemed dividend on preferred shares                -          -              -            -            -          -

Total Comprehensive Loss                           -          -              -            -            -          -
                                             ---------  ----------  -----------  -----------  -----------  ----------


Balance December 31, 2005                    375,000    375,000              -            -  265,405,136    265,405


Common stock issued for compensation expense       -          -              -            -    5,916,071      5,916
Common stock issued for settlement of debt         -          -              -            -   41,545,508     41,546
Common stock issued on conversion of debt          -          -              -            -   15,500,000     15,500
Common stock issued for cash                       -          -              -            -    5,155,595      5,156
Common stock issued for investment in subsidiary   -          -              -            -            -          -
Common stock issued for interest                   -          -              -            -    4,026,537      4,027
Common stock issued for finance costs              -          -              -            -            -          -
Series A Preferred Shares converted to
     common stock                          ( 375,000) ( 375,000)             -            -    5,893,038      5,893
Warrants issued for debt financing                 -          -              -            -            -          -
Stock options issued                               -          -              -            -            -          -

Preferred shares issued for cash                   -          -      1,300,000   13,000,000            -          -
Preferred shares issued for debt                   -          -        574,089    5,740,890            -          -


Comprehensive Loss

Net loss                                           -          -              -            -            -          -
Deferred compensation expense                      -          -              -            -            -          -
Subscriptions receivable                           -          -              -            -            -          -
Deferred financing costs                           -          -              -            -            -          -
Deemed dividend on preferred shares                -          -              -            -            -          -

Total Comprehensive Loss                           -          -              -            -            -          -

                                             ---------  ----------  -----------  -----------  -----------  ----------
Balance December 31, 2006                          -          -       1,874,089 $18,740,893  343,441,885   $343,442
                                             =========  ==========  ===========  ===========  ===========  ==========
</TABLE>

          See accompanying notes to consolidated financial statements

                                       F-4

<PAGE>


                      GPS INDUSTRIES INC. AND SUBSIDIARIES

                 CONSOLIDATED STATEMENT OF STOCKHOLDERS' DEFICIT
<TABLE>
<CAPTION>

                                                 Additional       Other                        Total
                                                   Paid-In    Comprehensive    Accumulated Stockholders'
                                                   Capital       Income          Deficit      Deficit
                                                ------------  ------------  --------------  -------------


<S>             <C>                              <C>              <C>       <C>            <C>
Balance January 1, 2005                          $30,627,707      $722,295  $( 44,693,115) $( 12,763,091)

Common stock issued for compensation expense       1,754,416             -              -      1,770,392
Common stock issued for settlement of debt           737,764             -              -        744,000
Common stock issued on conversion of debt            886,071             -              -        899,559
Common stock issued for cash                       1,465,938             -              -      1,484,960
Common stock issued for investment in subsidiary   ( 585,000)            -              -      ( 585,000)
Common stock issued for interest                     501,630             -              -        506,041
Common stock issued for finance costs                 86,300             -              -         87,550
Common stock Class B write-off                             -             -              -              -
Warrants issued for debt financing                   404,053             -              -        404,053
Stock options issued                                  33,100             -              -         33,100

Preferred Shares issued for cash                           -             -              -              -

Comprehensive Loss
Net loss                                                   -             -   ( 17,191,037)  ( 17,191,037)
Deferred compensation expense                        225,263             -              -        225,263
Subscriptions receivable                                   -             -              -              -
Deferred financing costs                            ( 58,058)            -              -       ( 58,058)
Deemed dividend on preferred shares                        -             -              -              -
                                                                                            -------------
Total Comprehensive Loss                                   -             -              -   ( 17,023,832)

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

Balance December 31, 2005                         36,079,184       722,295   ( 61,884,152)  ( 24,442,268)


Common stock issued for compensation expense         411,317             -              -        417,233
Common stock issued for settlement of debt         2,742,726             -              -      2,784,271
Common stock issued on conversion of debt            452,363             -              -        467,863
Common stock issued for cash                          24,844             -              -         30,000
Common stock issued for investment in subsidiary   ( 128,981)            -              -      ( 128,981)
Common stock issued for interest                     297,546             -              -        301,573
Common stock issued for finance costs                      -             -              -              -
Series A Preferred Shares converted to
     common stock                                    369,107             -              -              -
Warrants issued for debt financing                   108,315             -              -        108,315
Stock options issued                                 968,425             -              -        968,425

Preferred shares issued for cash                           -             -              -     13,000,000
Preferred shares issued for debt                           -             -              -      5,740,890


Comprehensive Loss

Net loss                                                   -             -   ( 16,950,891)  ( 16,950,891)
Deferred compensation expense                        225,263             -              -        225,263
Subscriptions receivable                                   -             -              -              -
Deferred financing costs                             396,340             -              -        396,340
Deemed dividend on preferred shares               11,509,127             -              -     11,509,127
                                                                                            -------------
Total Comprehensive Loss                                   -             -              -    ( 4,820,161)
                                             ---------------  ------------  --------------  ---------------
Balance December 31, 2006                        $53,455,574      $722,295  $( 78,835,043) $ ( 5,572,842)
                                             ===============  ============  ==============  ===============
</TABLE>

          See accompanying notes to consolidated financial statements

                                       F-5

<PAGE>

                      GPS INDUSTRIES INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>


                                                                                 For the Year Ended December 31,
                                                                                --------------------------------
                                                                                         2006             2005
                                                                                ----------------  --------------


Cash Flow From Operating Activities

<S>                                                                               <C> <C>        <C> <C>
      Net loss from operations                                                    $ ( 5,441,764) $ ( 17,191,037)

      Adjustments to reconcile net loss to net cash used in operating
        activities:
          Depreciation and amortization                                                 331,798         307,030
          Amortization of deferred compensation                                         225,263         225,263
          Warrants issued for debt financing                                            108,315               -
          Loss on extinguishment of debt                                                      -          36,575
          Expenses paid by issuance of stock                                            417,233       1,770,392
          Expenses paid by issuance of stock options                                    968,425          33,100
          Interest converted to stock                                                   301,573         506,042
          Finance charges converted to stock                                                  -         168,550
          Finance charges charged to equity                                                   -          15,100
          (Decrease)/Increase in fair value of derivative liabilities               ( 9,460,366)      6,460,366
          Common stock issued for debt                                                3,252,134               -
          Amortization of finance costs                                                 396,340         263,894

      Changes in operating assets and liabilities:
          Inventories                                                                 ( 372,838)        292,491
          Accounts receivable                                                         ( 409,354)      ( 464,400)
          Long-term accounts receivable                                               ( 155,934)      ( 117,809)
          Prepaid expenses and deposits                                               ( 187,017)       ( 30,606)
          Deferred implementation costs                                                  11,567       ( 122,617)
          Accounts payable and accrued liabilities                                      922,250       2,608,943
          Discontinued operations - accounts payable and accrued liabilities          ( 659,867)      ( 454,940)
          Deferred Revenue                                                              203,388         105,138
                                                                             -------------------  --------------
Net Cash Used In Operating Activities                                               ( 9,548,854)    ( 5,588,525)
                                                                             -------------------  --------------
Cash Flow From Investing Activities
          Purchase of property and equipment                                          ( 111,091)       ( 20,032)
          Purchase of patents                                                                 -         ( 8,900)
          Investment in Optimal Golf Solutions Inc.                                   ( 634,000)      ( 600,000)
                                                                             -------------------  --------------
Net Cash Flow Used In Investing Activities                                            ( 745,091)      ( 628,932)

Cash Flow From Financing Activities
          Common stock issued for cash                                                   30,000       1,484,960
          Preferred Stock issued for cash                                            13,000,000               -
          Preferred Stock issued for debt                                             5,740,890               -
          Subscription receivable                                                   ( 5,000,000)              -
          Proceeds from loans and bank indebtedness                                   1,606,248       5,034,290
          Repayments of loans                                                       ( 3,018,147)      ( 343,712)
                                                                             -------------------  --------------
Net Cash Flow Provided By Financing Activities                                       12,358,991       6,175,538
                                                                             -------------------  --------------

Net Increase/ (Decrease) In Cash                                                      2,065,046        ( 41,918)

Cash, Beginning Of Year                                                                 131,174         173,092
                                                                             -------------------  --------------
Cash, End Of Year                                                                 $   2,196,220  $      131,174
                                                                             ===================  ==============

Supplemental disclosure of cash flow information:
      Cash paid for interest                                                      $     771,094  $      471,351
                                                                             ===================  ==============
      Cash paid for taxes                                                         $           -  $            -
                                                                             ===================  ==============

Non-Cash Investing And Financing Activities

      Common stock issued on conversion of convertible notes                      $     467,863  $      726,000
                                                                             ===================  ==============
      Common stock issued to settle debt                                          $     621,231  $      400,000
                                                                             ===================  ==============
      Common stock issued in settlement of accounts payable                       $   2,022,602  $      143,425
                                                                             ===================  ==============
      Common stock issued for investment in subsidiary                            $     128,981  $      585,000
                                                                             ===================  ==============
      Deemed dividends on issuance of preferred stock                             $  11,509,127  $            -
                                                                             ===================  ==============
</TABLE>

          See accompanying notes to consolidated financial statements

                                       F-6

<PAGE>

GPS industries Inc. and Subsidiaries Notes to Consolidated Financial Statements

For the years ended December 31, 2006 and 2005

1. NATURE OF OPERATIONS

GPS Industries Inc., (the "Company" or "GPSI") a Nevada corporation, is involved
in the development of golf course management technology. The Company has
developed hand-held and cart mounted Global Positioning System ("GPS") units. At
December 31, 2006, the Company had substantially all of its assets and
operations in Canada.

Infotech Golf Technology 2000 Inc,

The Company's wholly owned subsidiary, Inforetech Golf Technology 2000 Inc.
(IGT), which had participated with the Company in the development of its
technology, filed petition for relief under Chapter 7 of the federal bankruptcy
laws of the United States Bankruptcy Court on December 19, 2002 and ceased
operations. These financial statements reflect the operations of the Company and
of IGT up until the time it ceased operations and its assets and liabilities at
that time and have not been adjusted to reflect the bankruptcy filing.

All remaining unresolved liabilities of IGT are reflected as liabilities related
to discontinued operations. All resolution of liabilities related to IGT are
reflected as either a gain (loss) on extinguishment of debt - discontinued
operations.

ProShot Golf, Inc.

The Company acquired ProShot Golf Inc., ("ProShot") on January 12, 2001. ProShot
is a California based Company that manufactures, markets, leases and installs an
integrated GPS system that provides golfers with yardage readings and potential
shot options from any location on a golf course. The ProShot GPS system is
installed directly on golf carts.

On September 21, 2001, the Company received notices of defaults from a group of
Inforetech shareholders (the "Guarantors") in regard to a finance agreement
dated April 24, 2001. The Company, being unable to cure those defaults, along
with one of its directors signed an agreement with the Guarantors stating that
the Company would use its best efforts to assist in the foreclosure of ProShot's
assets by its bank, so that the Bank debt and ultimately the obligation of the
Guarantors, to the Bank, in respect of their guarantee of ProShot's Bank debt,
might be reduced.

During the fourth quarter of 2001, the Company discontinued all operations of
ProShot, accordingly all revenues, expenses and liabilities associated with
ProShot in 2001 has been classified as discontinued operations.

On May 31, 2002 ProShot filed a petition for relief under Chapter 7 of the
federal bankruptcy laws of the United States Bankruptcy Court.

All remaining unresolved liabilities of ProShot are reflected as liabilities
related to discontinued operations. All resolution of liabilities related to IGT
are reflected as either a gain (loss) on extinguishment of debt - discontinued
operations.

2. ACQUISITIONS

On November 19, 2004 the Company entered into a Stock Purchase Agreement with
the shareholders of Optimal Golf Solutions, Inc. ("Optimal") to acquire 100% of
the common shares of Optimal (the "Share Acquisition") for $5,250,000. Optimal's
assets at the date of acquisition were concentrated in a single indentifiable
intangible patent asset, therefore the acquisition was treated as an asset
purchase for accounting purposes. The Company gave $2,270,000 of cash and stock
pursuant to the terms of the agreement as shown below. The remaining amount due
from the Company in the amount of $2,980,000 was recorded as a liability on the
Company's balance sheet.

(i) Upon signing the purchase agreement the Company was required to pay $100,000
and an additional $1,000,000 at closing.

(ii) The balance of $4,150,000 is to be paid in two tranches of shares of common
stock of the Company. Shares issued under these tranches, can be liquidated by
the shareholders of Optimal over 360 trading days (after the effectiveness of a
registration statement referred to below) in accordance with the terms of a
Leakage Agreement; and an additional cash payment, if required, depending on
what amount Optimal receives from the shares it sells into the market.


The first stock tranche (payment) is for 9,000,000 shares. These shares were
trading at $.13 on the date the agreement was signed and valued at $1,170,000,
accordingly. Under the terms of the agreement the shares can be sold in
accordance with the Leakage Agreement over 180 trading days. Any funds received
from the sale of those shares in excess of $3,250,000 (i.e. $1,000,000 over the
$2,250,000 target price for the first share payment) will be deducted from the
amount to be paid with the second stock payment, targeted for the remaining
amount due of $1,900,000 (plus interest). The stock price has not reached the
target price of $.25 at any point from the date of the acquisition and is
trading at $.10 on at April 8, 2005, therefore the Company will have to issue
additional shares to cover the difference between the market price and $.25

                                      F-7

<PAGE>

target price or cash. The second stock tranche (payment) will be issued at a 15%
discount to market price at the time of issuance and can be sold into the market
by Optimal over a further 180 trading days. The Company has the right to pay out
any remaining balance plus interest owing at any time.

The Company will use its best efforts to file a Registration Statement as
required under the Stock Purchase Agreement to make the stock payments required
to the shareholders under this Agreement. If the Registration Statement has not
become effective by June 30, 2005, GPSI must pay cash of $2,250,000 plus
interest over eight monthly installments of $250,000 each starting June 1, 2005.
In that case, the first stock payment of shares would be returned to the
Company. If the Registration Statement has not become effective by September 30,
2005, then the Company must also pay cash to the shareholders (in lieu of a
second stock payment) of $1,900,000 plus interest in eight monthly payments of
$237,500 commencing on October 1, 2005.

Upon receipt of the first $727,000 of net proceeds from the sale of shares
issued to the shareholders for the second stock payment, this amount will be
forwarded to the Company's attorney to be held in escrow for a period of 18
months from closing to partially secure the shareholders indemnification
obligations to the Company under the Agreement The following table summarizes
the estimated fair values of the assets acquired and liabilities assumed at the
date of acquisition.

     Aggregated purchase price          $   5,250,000
                                          ===========
     Day One Impairment                 $   2,250,000
                                          -----------
     Fair value of assets acquired      $   3,000,000
     SFAS 144 Impairment                $  (1,500,000)
                                          -----------
     Net  assets acquired               $   1,500,000
                                           ==========

These patents acquired have a remaining useful life of seven years and expire on
November 11, 2011. The value attributed to these patents is based on discounted
future earnings that the Company expects to receive from ownership of the
patents and license agreement royalties with various customers over the life of
the patents.


A day one measurement of the impairment loss was calculated on the present value
of the third party cash flows being generated by the patent on the date of
valuation plus the amount added for a "relief of royalty" full term license. A
"relief from royalty" amount of $1.68 million, comparable to an existing third
party full term license payment, was added to the third party royalty license
revenues already being generated by the 093 patent to calculate the undiscounted
cash flow service potential of the asset at the date of acquisition. The
carrying amount of the asset at the date of acquisition exceeded and was not
recoverable from the total of the undiscounted cash flow of both the third party
revenue and "relief from royalty" revenue. Therefore the recognition and
measurement of an impairment loss was required. This calculation resulted in a
fair value impairment at the date of acquisition of $2.25 million.




The Company determined that a cash flow recoverability test as of December 31,
2004 was necessary under the guidance of SFAS 144 since the Company had a
significant current period loss and a history of operating and cash flow losses.
SFAS 144 does not provide for the inclusion of the cash flow of a "relief from
royalty" method as was the case for the day one measurement and resulting day
one impairment loss, therefore the "relief of royalty" amount was excluded from
the test at December 31, 2004. Pursuant to SFAS 144 the Company used the lowest
level of identifiable cash flows for the patent which were considered to be the
cash flows for the underlying business of the Company, as the underlying
business requires either ownership of or a license under the patent to operate.
The cash flow recoverability test was performed based on the undiscounted cash
flows of the underlying business over the future life of the patent compared to
the carrying value of the patent. This test included the effects of the current
and projected cash flows of the business beginning with historical numbers and
projecting future cash flows using various assumptions over the life of the
patent. The sum total of these future undiscounted cash flows did not exceed the
carrying value of the asset. Therefore a second impairment test was calculated
based on the present value of the future cash flows of the business. As a result
of this test pursuant to SFAS 144, the Company determined that there was a
second impairment of $1.5 million to reduce the value of the asset to the $1.5
million on December 31, 2004.

The Company performed a further cash flow recoverability test as of December 31,
2006 under the guidance of SFAS 144. As a result of this test the Company
determined that there was no further impairment of the value of the asset at
December 31, 2006.

                                      F-8

<PAGE>

3. GOING CONCERN


The consolidated financial statements have been prepared assuming that the
Company will continue as a going concern, which contemplates the realization of
assets and the satisfaction of liabilities in the normal course of business. The
carrying amounts of assets and liabilities presented in the consolidated
financial statements do not purport to represent the realizable or settlement
values. The Company has incurred significant losses and had a working capital
deficit at December 31, 2006. The successful commercialization of the Company's
technology is dependent on the Company's ability to successfully finance its
cash requirements through a combination of equity financings and payments from
potential strategic partners. The Company's independent registered public
accounting firm, in their report on the consolidated financial statements as of
and for the year ended December 31, 2006, have expressed substantial doubt about
the Company's ability to continue as a going concern.


The Company is attempting to restructure its debt obligations and raise new
capital. To the extent that the Company is unable to successfully restructure
its debt obligations and/or obtain the capital necessary to fund its future cash
requirements on a timely basis and under acceptable terms and conditions, the
Company will not have sufficient cash resources to maintain operations, and may
consider a formal or informal restructuring or reorganization.

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

These consolidated financial statements have been prepared in accordance with
generally accepted accounting principles in the United States. The significant
accounting policies used in the preparation of these financial statements are
summarized below.

The Company prepared the consolidated financial statements in accordance with
accounting principles generally accepted in the United States of America. The
preparation of these financial statements requires the use of estimates and
assumptions that affect the reported amounts of assets and liabilities and the
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amount of revenues and expenses during the reporting
period. Management periodically evaluates the estimates and judgments made.
Management bases its estimates and judgments on historical experience and on
various factors that are believed to be reasonable under the circumstances.
Actual results may differ from these estimates as a result of different
assumptions or conditions.

The following critical accounting policies affect the more significant judgments
and estimates used in the preparation of the Company's consolidated financial
statements.

Revenue recognition

The Company recognizes revenue only when persuasive evidence of an arrangement
exists, delivery has occurred, the sales price is fixed or determinable, and
collectibility is probable. When other significant obligations remain after
products are delivered, revenue is recognized only after such obligations are
fulfilled. Cost of Goods Sold represents the cost of physical equipment products
delivered to the customer and installed on the customer's site. The costs of
installing the equipment on the customer's site, such as labor and travel and
accommodation expenses, are recorded as Installation Costs. The cost of
developing the equipment and the software installed in the equipment on the
customer's site is recorded as an operating expense in the category
"Engineering, Research and Development", all such costs are expensed as they are
incurred.

Impairment of Long-Lived Assets

The Company's long-lived assets consist of patents, property and equipment. In
assessing the impairment of patents, property and equipment, the Company makes
assumptions regarding the estimated future cash flows and other factors to
determine the fair value of the respective assets. The Company did not record
any impairment charges for property and equipment at December 31, 2006. However,
if these estimates or the related assumptions change in the future, the Company
may be required to record impairment charges for these assets at such time. The
Company did record impairment charges for certain of its patent assets at
December 31, 2004. These impairment charges are more fully discussed in Note 2
to the Financial Statements.

Consolidation

The consolidated  financial  statements include the operations of GPS Industries
Inc.  (formerly  Inforetech  Wireless  Technology,  Inc.)  and its  wholly-owned
subsidiaries (the "Company"),  including  Optimal Golf Solutions,  Inc. which it
acquired on November 19, 2004. All  significant  intercompany  transactions  and
balances have been eliminated in consolidation.

Loss Per Share

Basic loss per share is based on net loss divided by the weighted average common
shares outstanding or deemed to be outstanding during the period. Diluted loss
per share assumes exercise of in-the-money stock options and warrants
outstanding into common stock at the beginning of the year or date of issuance,
unless they are anti-dilutive. A total of 42,199,540 potential shares were
excluded from the fully diluted calculation as they are anti-dilutive.

                                      F-9

<PAGE>

Net Loss Per Common Share - Basic loss per common share is calculated by
dividing net loss by the weighted average number of common shares outstanding
during the period. Diluted loss per common share reflects the potential dilution
that would occur if dilutive stock options and warrants were exercised. These
potentially dilutive securities were not included in the calculation of loss per
share for the periods presented because the Company incurred a loss during such
periods and thus their effect would have been anti-dilutive. Accordingly, basic
and diluted loss per common share is the same for all periods presented.

Use of Estimates

The preparation of financial statements in conformity with accounting principals
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.

Financial Instruments

The fair value of financial instruments approximates their carrying value except
as otherwise disclosed in the financial statements.


Derivative Liabilities

The Company accounts for its liquidated damages pursuant to Emerging Issue Task
Force ("EITF") 05-04, View C, "The Effect of a Liquidated Damages Clause on a
Freestanding Financial Instrument", subject to EITF Issue No. 00-19, "Accounting
for Derivative Financial Instruments Indexed to, and Potentially Settled in, a
Company's Own Stock". Pursuant to EITF 05-04, View C, liquidated damages payable
in cash or stock are accounted for as a separate derivative, which requires a
periodical valuation of its fair value and a corresponding recognition of
liabilities associated with such derivative. The Company accounts for its
embedded conversion features and freestanding warrants pursuant to SFAS No. 133,
"Accounting for Derivative Instruments and Hedging Activities", which requires a
periodic valuation of their fair value and a corresponding recognition of
liabilities associated with such derivatives. The recognition of derivative
liabilities related to the issuance of shares of common stock is applied first
to the proceeds of such issuance, at the date of issuance, and the excess of
derivative liabilities over the proceeds is recognized as other expense in the
accompanying consolidated financial statements. The recognition of derivative
liabilities related to the issuance of convertible debt is applied first to the
proceeds of such issuance as a debt discount, at the date of issuance, and the
excess of derivative liabilities over the proceeds is recognized as other
expense in the accompanying consolidated financial statements. Any subsequent
increase or decrease in the fair value of the derivative liabilities is
recognized as other expense or other income, respectively.

Foreign Currency Translation

Assets and liabilities of subsidiaries operating in foreign countries are
translated into U.S. dollars using both the exchange rate in effect at the
balance sheet date of historical rate, as applicable. Results of operations are
translated using the average exchange rates prevailing throughout the year. The
effects of exchange rate fluctuations on translating foreign currency assets and
liabilities into U.S. dollars are included in stockholders equity (Accumulated
other comprehensive loss), while gains and losses resulting from foreign
currency transactions are included in operations.

Allowance for Doubtful Accounts

The allowance for doubtful accounts is based on our assessment of the
collectibility of specific customer accounts and the aging of the accounts
receivable. If there is a deterioration of a major customer's credit worthiness
or actual defaults are higher than our historical experience, our estimates of
the recoverability of amounts due us could be adversely affected. As of December
31, 2006 the allowance for doubtful accounts was $69,760.

Property and Equipment

Property and equipment are recorded at cost. Depreciation is provided using the
straight-line method over the following estimated useful lives:

                   Office equipment and furnishings 3-5 years
                   Computer Software 3 years
                   Leasehold improvements Lease term
                   Tooling 3 years
                   Patents Patent life


The Company leases certain of its office equipment under capital lease
agreements. The assets and liabilities under capital leases are recorded at the
lesser of the present value of aggregate future minimum lease payments or the
fair value of the assets under the lease. Assets under capital lease are
depreciated over the shorter of their estimated useful lives or the lease term.

Depreciation expense for the years ended December 31, 2006 and 2005 was $80,807
and $92,746 respectively.

                                      F-10

<PAGE>

Cash and Cash Equivalents

Cash and cash equivalents include all highly liquid investments with maturities
of three months or less when purchased.

Inventories

Inventories are stated at the lower of cost or market, determined on an average
cost basis, and consist of raw material parts, work in process and finished
products ready to ship to customers.

Shipping and handling costs

The Company accounts for shipping and handling costs as a component of "Cost of
Sales".


Stock Based Compensation

Stock-Based Compensation - The Company periodically issues shares of common
stock for services rendered or for financing costs. Such shares are valued based
on the market price on the transaction date.

The Company periodically issues stock options and warrants to employees and
non-employees in non-capital raising transactions for services and for financing
costs.

Effective January 1, 2006, the company adopted the provisions of Statement of
Financial Accounting Standards ("SFAS") No. 123(R), "Share-Based Payment" (SFAS
123(R)). The company previously applied Accounting Principles Board (APB)
Opinion No. 25, "Accounting for Stock Issued to Employees," and related
Interpretations and provided the required pro forma disclosures of SFAS No. 123,
"Accounting for Stock-Based Compensation" (SFAS 123). Stock-based compensation
represents the cost related to stock-based awards granted to employees and
others. The company measures stock-based compensation cost at grant date, based
on the estimated fair value of the award, and recognizes the cost as expense on
a straight-line basis (net of estimated forfeitures) over the requisite service
period. The company estimates the fair value of stock options using a
Black-Scholes valuation model. The expense is recorded in the Consolidated
Statement of Operations.

The fair value for options issued in the year ended December 31, 2006 was
estimated at the date of grant using the Black-Scholes option pricing model with
the following weighted-average assumptions: risk-free interest rate of 4.58%; no
dividend yield; volatility factor of the expected market price of the Company's
common stock of 119.11%, and the expected lives of the options. The weighted
average fair value of stock options granted for the years ended December 31,
2006 and 2005 was $1,028,825, and $326,580, respectively.

The Black-Scholes option valuation model was developed for use in estimating the
fair value of traded options that have no vesting restrictions and are fully
transferable. In addition, option valuation models require the input of highly
subjective assumptions including the expected stock price volatility.

Because the Company's stock options have characteristics significantly different
from those of traded options, and because changes in the subjective input
assumptions can materially affect the fair value estimate, in management's
opinion, the existing models may not provide a reliable single measure of the
fair value of its stock options.

Income Taxes

The Company follows the liability method of accounting for income taxes. Under
this method, deferred tax assets and liabilities are determined based on the
difference between the financial reporting and tax bases of assets and
liabilities using enacted tax rates that will be in effect for the year in which
the differences are expected to reverse.

The Company records a valuation allowance to reduce its deferred tax assets
arising from net operating loss carryforwards to the amount that is more likely
than not to be realized. In the event the Company was to determine that it would
be able to realize its deferred tax assets in the future in excess of its
recorded amount, an adjustment to the deferred tax assets would be credited to
operations in the period such determination was made. Likewise, should the
Company determine that it would not be able to realize all or part of its
deferred tax assets in the future, an adjustment to the deferred tax assets
would be charged to operations in the period such determination was made.

Warranty Obligations

The Company generally provides the ultimate consumer a warranty with each
product and accrues warranty expense at the time of the sale based on the
Company's prior claims history. This history is limited with regard to the
Company at the current year end of December 2006, as the Company only commenced
sale and distribution of their GPS product in the year ended December 31, 2004.
The Company does not believe that it is exposed to any significant risk in its
cash investment.

                                      F-11

<PAGE>

Recent Accounting Pronouncements

In June 2006, the FASB issued FASB Interpretation No. 48, "Accounting for
Uncertainty in Income Taxes, an Interpretation of FASB Statement No. 109" (FIN
48). FIN 48 clarifies the accounting for uncertainty in income taxes recognized
in an enterprise's financial statements in accordance with FAS No. 109,
"Accounting for Income Taxes." FIN 48 prescribes a two-step process to determine
the amount of tax benefit to be recognized. First, the tax position must be
evaluated to determine the likelihood that it will be sustained upon external
examination. If the tax position is deemed "more-likely-than-not" to be
sustained, the tax position is then assessed to determine the amount of benefit
to recognize in the financial statements. The amount of the benefit that may be
recognized is the largest amount that has a greater than 50% likelihood of being
realized upon ultimate settlement. We were required to adopt FIN 48 effective as
of January 1, 2007. We are currently evaluating the effect FIN 48 will have on
our financial statements. We do not expect the impact will be material.

On July 13, 2006, the Financial Accounting Standards Board (FASB) issued FASB
Interpretation No. 48, ("FIN 48"), entitled, "Accounting for Uncertainty in
Income Taxes - an Interpretation of FASB Statement No. 109". Concurrently, FASB
issued a FASB staff position (FSP) relating to income taxes, (FSP) No. FAS 13-2,
"Accounting for a Change or Projected Change in the Timing of Cash Flows
Relating to Income Taxes Generated by a Leveraged Lease Transaction." FASB's
summary of FIN 48 notes that differences between tax positions recognized in the
financial statements and tax positions taken in the tax return (referred to
commonly as "book" vs. "tax") will generally result in: (a) an increase in a
liability for income taxes payable or a reduction of an income tax refund
receivable, (b) a reduction in a deferred tax asset or an increase in a deferred
tax liability, or (c) both of the above. FIN 48 requires the affirmative
evaluation that it is more likely than not, based on the technical merits of a
tax position, that an enterprise is entitled to economic benefits resulting from
positions taken in income tax returns. Further, if a tax position does not meet
the more-likely-than-not recognition threshold, the benefit of that position is
not recognized in the financial statements. Additionally, FIN 48 establishes
guidance for "derecognition" of previously recognized deferred tax items, and
sets forth disclosure requirements. The effective date of FIN 48 is for fiscal
years beginning after December 15, 2006. The Company does not believe that FIN
48, once adopted, will have a significant impact on its financial position,
operating results, or cash flows.

In September 2006, the FASB issued SFAS No. 157, "Fair Value Measurements"
(Statement 157), which addresses how companies should measure fair value when
they are required to use a fair value measure for recognition or disclosure
purposes under generally accepted accounting principles. Statement 157 defines
fair value, establishes a framework for measuring fair value in generally
accepted accounting principles and expands disclosures about fair value
measurements. Statement 157 is effective for financial statements issued for
fiscal years beginning after November 15, 2007 and should be applied
prospectively, except in the case of a limited number of financial instruments
that require retrospective application. We are currently evaluating the
potential impact of Statement 157 on our financial statements. We do not expect
the impact will be material.

In December 2006, the FASB approved FASB Staff Position (FSP) No. EITF 00-19-2,
"Accounting for Registration Payment Arrangements" ("FSP EITF 00-19-2"), which
specifies that the contingent obligation to make future payments or otherwise
transfer consideration under a registration payment arrangement, whether issued
as a separate agreement or included as a provision of a financial instrument or
other agreement, should be separately recognized and measured in accordance with
SFAS No. 5, "Accounting for Contingencies". FSP EITF 00-19-2 also requires
additional disclosure regarding the nature of any registration payment
arrangements, alternative settlement methods, the maximum potential amount of
consideration and the current carrying amount of the liability, if any. The
guidance in FSP EITF 00-19-2 amends FASB Statements No. 133, "Accounting for
Derivative Instruments and Hedging Activities", and No. 150, "Accounting for
Certain Financial Instruments with Characteristics of both Liabilities and
Equity", and FASB Interpretation No. 45, "Guarantor's Accounting and Disclosure
requirement for Guarantees, Including Indirect Guarantees of Indebtedness of
Others", to include scope exceptions for registration payment arrangements. FSP
EITF 00-19-2 is effective immediately for registration payment arrangements and
the financial instruments subject to those arrangements that are entered into or
modified subsequent to the issuance date of this FSP, or for financial
statements issued for fiscal years beginning after December 15, 2006, and
interim periods within those fiscal years, for registration payment arrangements
entered into prior to the issuance date of this FSP. The Company is currently
evaluating the impact, if any, on the Company's financial position, results of
operations or cash flows.

In February 2007, the FASB issued SFAS No. 159, "The Fair Value Option for
Financial Assets and Financial Liabilities-including an amendment of FAS 115"
(Statement 159). Statement 159 allows entities to choose, at specified election
dates, to measure eligible financial assets and liabilities at fair value that
are not otherwise required to be measured at fair value. If a company elects the
fair value option for an eligible item, changes in that item's fair value in
subsequent reporting periods must be recognized in current earnings. Statement
159 is effective for fiscal years beginning after November 15, 2007. We are
currently evaluating the potential impact of Statement 159 on our financial
statements. We do not expect the impact will be material.

                                      F-12

<PAGE>

5. PROPERTY AND EQUIPMENT

At December 31, 2006 property and equipment consisted of the following:

            Office equipment                                        $   409,293
            Computer software                                            77,708
            Leasehold improvements                                      127,333
            Tooling                                                      30,958
                                                                         ------
                                                                        645,292
            Less:  accumulated depreciation                            (536,398)
                                                                       ---------
                                                                    $   108,894
                                                                       =========


6. PATENTS

In June 2004, in addition to patents acquired with the Optimal purchase, the
Company acquired the patent for installation of GPS golf systems in eleven
European countries as well as Japan and Australia, referred to as the
"Pinranger" patent. The purchase price for these patents was $20,000 in cash and
the issuance of 3,500,000 shares of common stock valued at $0.08 per share or
$280,000, for a total cost of $300,000. These patents are being amortized over
approximately 8.5 years, the expected future life of these patents. In addition
to the above acquisition costs, the Company has capitalized related legal and
acquisition fees of $12,400.

In addition to the above Pinranger patents, the Company has possession of all of
Optimal's patents, since the acquisition of Optimal in November 2004.

The following is a reconciliation of all patents owned as of December 31, 2006:

                             Patents                               $  1,812,400
                             Less: accumulated depreciation            (546,407)
                                                                     -----------
                                                                   $  1,265,993
                                                                     ===========

Future amortization of patents is expected to be as follows:

                                   Year Ended December 31,

                                   2007                              $  250,988
                                   2008                                 250,988
                                   2009                                 250,988
                                   2010                                 250,988
                                   Thereafter                           262,041
                                                                     -----------
                                                                     $1,265,993
                                                                     ===========


7. CAPITAL LEASES

The Company's subsidiary IGT leased certain equipment under capital lease
agreements that expire at various dates through January 2006. During 2002 IGT
defaulted on those leases and surrendered the equipment to the leasing Company.
The leasing Company took action in the Supreme Court of British Columbia for the
balances outstanding on the leases. No liability is expected to accrue to the
Company as a result of these actions, but the balance of the leases have been
shown as a current liability at December 31, 2006.

8. DEBT

The Company and its subsidiaries have significant debt liabilities. The
following table is a summary of debt at December 31, 2006.

            Bank Indebtedness  (a)                             $      2,384,319
            Bank Loan (b)                                                 1,450
            Short term loans  (c)                                     4,208,799
            Liability for Optimal Golf acquisition (d)                2,459,981


            Note payable - related parties (e)                           27,723
            Promissory notes (f)                                      1,274,757
            Loan to related party  (g)                                  258,000
                                                                     -----------
            Total Debt                                               10,615,029
                                                                     -----------


                                      F-13

<PAGE>

a) Bank Indebtedness

Effective June 27, 2003, the Company obtained a bank line of credit for
$1,425,000 to fund its operations. As of December 31, 2006, the Company had
borrowed $950,455 under this line of credit. The line of credit bears interest
at prime plus 0.5%, is repayable in full on demand and is secured by a one year
standby bank letter of credit for $1,500,000 that was provided by a third party,
Hansen Inc. This standby letter of credit from Hansen Inc. has been renewed a
number of times and is currently renewed to April 30, 2007. As consideration for
renewing the standby bank letter of credit, the Company has issued to Hansen
Inc. common stock purchase warrants to purchase 1,500,000 shares of the
Company's common stock, exercisable at $0.10 per share (a 15% discount to the
then market price) for a period of three years. In addition the Company extended
2,000,000 previously issued warrants which expired in 2006 to expire in 2008 at
a price of $0.05. $75,416, the fair value of these common stock purchase
warrants, calculated pursuant to the Black-Scholes option pricing model, was
charged to operations as finance costs for the twelve months ended December 31,
2006..The Company also pays a standby LOC fee to Hansen Inc. of 2% per annum on
a quarterly basis, amounting to approximately $7,500 per quarter.


Effective March 23, 2004, the Company entered into a Reimbursement Agreement
with Douglas J. Wood, Daniel S. Wood and James Liken (the Secured Party) to have
them secure a new $1,000,000 line of credit to be used for manufacturing
purposes. The security provided was a Letter of Credit from Citicorp North
America Inc. The Company's bankers, HSBC Bank Canada, provided the Company this
new line of credit on April 29, 2004 based on the security provided, on which
interest at prime plus 0.5% interest is payable. On June 22, 2006 this Letter of
Credit was increased to $1,400,000. As of December 31, 2006 this line was drawn
down in the amount of $1,433,864. The excess represents the cash float arising
from timing differences between when payments are issued from this account and
when they are presented for payment. As consideration for the security provided,
the Company agreed to pay the Secured Party 15% per annum of the maximum amount
outstanding in the month, payable 50% in US$ and 50% in common shares of the
Company, issued at a 10% discount to market based on the seven day average price
prior to each quarter end. Beginning July 2006 the consideration was 100% paid
in cash. The Company has accrued this consideration to December 31, 2006.
Additionally the Company agreed to issue 666,667 warrants to purchase common
stock of the Company at $0.15 per common share. The Company also granted the
Secured Party a security interest in all the Company's inventory. This letter of
credit, along with its related Reimbursement Agreement, was subsequently renewed
until April 2006, October 2006, December 2006 and expired February 28, 2007, at
which point the line of credit was removed.

(b) The Company has $1,450 remaining on a loan from a commercial bank. As part
of a settlement agreement the bank agreed that no further interest will accrue
on this loan.

(c) Short-Term Loans

As of December 31, 2006 the Company has $4,208,799 owing on short term notes.
These amounts are repayable on demand and bear interest at rates varying from 8%
to 60%. The largest of these, amounting to $1,572,165, is from a director and
shareholder.


(d) Liability Associated with Acquisition of Optimal Golf Solutions, Inc.


On November 19, 2004 we acquired 100% of the common shares of Optimal Golf
Solutions, Inc. ("Optimal"), a Texas corporation owned by Darryl Cornish and
Charles Huston ("Optimal Shareholders"), for a total of $5,250,000 plus interest
of 4.75% on the principal balance outstanding payable as follows: $100,000 on
signing a Letter Of Intent on November 8, 2004, $1,000,000 on closing, a stock
payment of 9,000,000 restricted common shares of GPSI valued at $2,250,000 using
a minimum price of $.25 per share and a final stock payment of $1,900,000
representing 7,600,000 common shares of GPSI using a minimum price of $.25 per
share. These shares can be sold after the effectiveness of a registration
statement and in accordance with a Leakage Agreement. The final purchase price
may vary, however, depending on the price that the Optimal Shareholders receive
for the shares they sell. The obligation to pay the deferred purchase price was
secured by a first security interest in the Optimal patents as described below.

The first stock payment of 9,000,000 shares can be sold (in accordance with the
Leakage Agreement) over 180 trading days. Any funds received from the sale of
those shares over $3,250,000 (i.e. $1,000,000 over the $2,250,000 target price
for the first share payment) will be deducted from the amount to be paid with
the second stock payment, for the remaining amount due of $1,900,000 (plus
interest). If the former Optimal shareholders sold their shares and received
less than the target price of $.25 per share, then we were required to issue
additional shares to make up the difference (or cash under certain conditions).

The second stock payment is to be issued at a 15% discount to market price at
the time of issuance and can be sold into the market by the Optimal Shareholders
over a further 180 trading days. On May 28, 2005 we entered into a First
Amendment to Stock Purchase Agreement whereby we were granted up to six months
of additional time to have a Registration Statement declared effective. As
consideration for this extension, we agreed to pay $100,000 per month until the
Registration Statement was declared effective, which would be applied to the
balance owing which was to be settled with the second stock payment. We paid a

                                      F-14

<PAGE>

total of $600,000 to the Optimal Shareholders under this amendment. However,
because the Registration Statement was not filed by September 30, 2005, we lost
the benefit of the reduction in the balance of the second stock payment and of
any amounts realized from the sales of the first stock payment over $3,250,000
(the "cap"), which was to reduce the amount to be paid in the second stock
payment.

We agreed to use our best efforts to file and cause to have effective a
Registration Statement covering the resale of the shares issued. If the
Registration Statement was not effective by June 30, 2005, we were obliged to
pay cash of $2,250,000 plus interest over eight monthly installments of $250,000
each starting June 1, 2005. In that case, the first stock payment of shares
would be returned to us. If the Registration Statement was not effective by
September 30, 2005, then we would also pay cash to the Optimal Shareholders (in
lieu of a second stock payment) of $1,900,000 plus interest in eight monthly
payments of $237,500 commencing on October 1, 2005.

Because we did not have the Registration Statement filed by September 30, 2005,
it agreed to register the resale of the 9,000,000 shares issued for the first
stock payment and an additional 31,000,000 shares to cover the shares issuable
for the second stock payment and the additional shares that must be issued to
cover decrease in the market price of its common stock which had a closing bid
price of $0.065 on December 31, 2005. We filed the SB2 Registration Statement
covering these shares on October 20, 2005 and it was declared effective by the
SEC on December 7, 2005.

Upon receipt of the first $727,000 of net proceeds from the sale of shares
issued to the Optimal Shareholders for the second stock payment, this amount
will be forwarded to our attorney to be held in escrow for a period of 18 months
from closing to partially secure the shareholders indemnification obligations to
GPSI under the Agreement.

The trading period for the first stock payment expired on August 22, 2006. Based
upon the receipts from the sale of the first stock payment during the trading
period the Company had a liability to the Optimal Shareholders for the balance
of the first stock payment of approximately $1.65 million at that date. The
Company also has a liability to issue approximately 30,400,000 shares to the
Optimal Shareholders to fund the second stock payment liability of approximately
$1.65 million. Subsequent to August 22, 2006 we paid the Optimal Shareholders
$300,000 of the liability under the first stock payment and they in turn agreed
to sell the remaining balance of the unsold shares they still held from the
first stock payment and to apply the proceeds against the liability for the
balance due. These subsequent sales reduced the remaining liability under the
first stock payment to $806,852 which was paid in January 2007. On January 16,
2007 we issued 30,392,082 shares to satisfy the liability to issue shares for
the second stock payment.

 (e) Promissory notes payable to the president of the Company are unsecured,
repayable on demand and bear interest at 8% per annum. As of December 31, 2006
the balance of the note is $27,723.

(f) This is a promissory note for $1,274,757, which was entered into by the
Company's discontinued, ProShot subsidiary in January 2001. The note matured in
January 2004, with accrued interest at 6% per annum, accruing form October 1998.
The Company has not accrued any interest on this note since December 2001.

(g) The Company has a promissory note dated December 11, 1998 in the amount of
$258,000 due to a party related to ProShot. As these are part of discontinued
operations, the Company has not accrued any interest related to these notes in
the years ended December 31, 2006 and 2005, respectively.

9. RELATED PARTY TRANSACTIONS

The Company has engaged in transactions with persons who were directors,
officers or affiliates at the time of the transaction, and persons known by us
to be the beneficial owners of 5% or more of our common stock since January 1,
2006. These transactions involve the provision of loans and promissory notes,
debt financing and services provided to the Company by such related parties.

On November 13, 2006, we obtained a $1,500,000 unsecured, short-term loan (the
"$1,500,000 Loan") from Great White Shark Enterprises, Inc. ("GWSE"). During
2006, GWSE was, and currently still is, a lender to GPSI under an existing
purchase order credit facility. Bart Collins, one of our directors, is the
President of GWSE. The $1,500,000 Loan bore interest on the outstanding unpaid
principal balance at a rate 4.83% per annum (11% per annum in the event of
default), and was due and payable on the earliest to occur of (i) March 31,
2007, and (ii) the closing of the purchase by GWSE and Leisurecorp LLC of Series
B Shares and warrants pursuant to that certain Securities Purchase Agreement we
entered into on November 13, 2006 with GWSE and Leisurecorp. As permitted by the
$1,500,000 promissory note that evidenced the $1,500,000 Loan, the entire
outstanding balance of the $1,500,000 Loan was applied to the purchase price of
the Series B Shares and warrants that GWSE purchased at the closing of the sale
of the Series B Shares and warrants on December 29, 2006.

                                      F-15

<PAGE>

On December 29, 2006, we sold a total of 1,574,089 shares of newly authorized
Series B Shares and warrants to purchase up to 59,885,186 shares of common stock
to GWSE and Leisurecorp LLC. The purchase price of the foregoing shares and
warrants was $15,740,890. GWSE purchased 574,089 shares in consideration for
$3,000,000 in cash and the cancellation of the $1,500,000 Loan. Leisurecorp paid
$10,000,000 for its 1,000,000 Series B Shares and warrants by paying $5,000,000
in cash and canceling a $5,000,000 loan it had extended to us on November 13,
2006.

In connection with the sale of the 1,574,089 shares of newly authorized Series B
Shares and warrants to purchase up to 59,885,186 shares of common stock to GWSE
and Leisurecorp LLC, and as a condition to the closing of that sale on December
26, 2006 (the "Closing"), Robert C. Silzer and Douglas Wood converted
obligations owed to them by GPSI into our securities as follows:

At the Closing, Mr. Silzer, our Chief Executive Officer and our Chairman of the
Board, exchanged $750,000 of obligations owed to him by the company for
12,295,082 shares of Common Stock and warrants to purchase 3,073,770 shares of
Common Stock. The shares of common stock were sold at the same price as the
conversion price of Series B Shares ($0.061 per share). The warrants that he
received with his shares of common stock were identical to the warrants issued
to GWSE and Leisurecorp at the Closing. The $750,000 obligation owed to Mr.
Silzer consisted of the forgiveness of a $471,560 promissory note, a $12,869
short term loan Mr. Silzer had extended to us, accrued and unpaid vacation pay
of $106,643 we owed him, and accrued interest of $158,928 on the foregoing
promissory note and short term loan.

At the Closing, Douglas Wood, one of our directors, exchanged $3,000,000 of cash
loans made by him during 2006 to us for (i) 300,000 Series B Shares and (ii)
warrants to purchase 12,295,082 shares of Common Stock. The Series B Shares and
warrants were sold for the same price as the Series B Shares and warrants sold
to GWSE and Leisurecorp LLC at the Closing.

On December 3, 2004, we entered into a Credit Agreement with Great White Shark
Enterprises, Inc. ("GWSE") for GWSE to provide a Term Loan of $3,000,000 to
GPSI. These funds were received by GPSI as follows: $1,000,000 on November 22,
2004 and the balance of $2,000,000 on December 3, 2004 (less outstanding service
fees owed by us to GWSE to December 31, 2004 of $548,750 pursuant to a
Merchandising Agreement dated April, 2003). Collateral for the loan was (a) a
first priority security interest in (a) all of the shares of the capital stock
of Optimal, (b) a second security interest in the Optimal Patents and (c) a
first security interest in the Pinranger Patents acquired by us pursuant to an
Agreement dated July 2, 2004 between GPSI and Pinranger (Australia) Pty. Ltd.
and PagiSat, LLC. The Pinranger Patents are registered in 13 countries in
Europe, Japan, and Australia.

The Term Loan could be repaid at any time prior to maturity without premium or
penalty, except that the total minimum interest to be paid had to be $300,000
irrespective of when the loan was repaid. During the term of the loan, we were
to pay interest of 10% per annum on a monthly basis in cash or shares. If GWSE
chose to receive shares, the interest rate will be adjusted to 15% for the
period selected and the shares would be priced at a 15% discount to market,
using the average daily close for the three trading days prior to the end of the
monthly period for which interest is due.

Repayment of the principal and interest due under the Credit Agreement was
provided for by GPSI giving to GWSE (commencing December 4, 2004) all license
payments we received under all license agreements between Optimal as licensor
and its licensees. Once the Term Loan and accrued interest was paid in full, for
a period of two years from the repayment date, GWSE will receive 20% of the
license payments and thereafter 40% of the license payments for the remaining
life of the Patents. Any fees received in connection with enforcement of the
Optimal Patents would also be paid to GWSE in accordance with the
above-mentioned formula, except that we must pay all legal costs to enforce the
Optimal Patents. Any fees received from infringement payments relating to the
Pinranger Patents will be shared on a 50/50 basis (net of legal costs) until the
Term Loan and accrued interest are fully repaid, after which we will have no
further obligation to GWSE regarding the Pinranger Patents for any revenue they
generate, and GWSE will agree to have its security interest in the Pinranger
Patents removed by us.

To the extent that, during any calendar year commencing January 1, 2005, the
total annual license payments received by GWSE do not total $500,000, then the
shortfall would be paid to GWSE in equal monthly payments over the next calendar
year, above and beyond the following year's minimum license payment. The
maturity date of the Term Loan is November 15, 2011, the termination of the life
of one of the key Optimal Patents. This loan was converted to Series B
Convertible Preferred Shares on December 29th, 2006. For a period of two years
from the conversion date Great White Shark will receive 20% of the license
payments, and thereafter 40% of the license payments for the remaining life of
the Patents.

In addition to the above-mentioned interest and security provided for the Term
Loan, GWSE also received an equity bonus of 3,000,000 of our restricted Common
Shares and a three year Warrant dated December 3, 2004 to purchase 2,000,000 of
our Common Shares at an exercise price of $.15.

As of December 31, 2006, we owed approximately $1,923,646 to Doug Wood and the
Wood Family Trust. This amount includes interest, payable at 8% per annum.

                                      F-16

<PAGE>

As of December 31, 2006 we owed approximately $27,723 to Robert C. Silzer, Sr.
This amount includes accrued interest, payable at 8% per annum.

Promissory notes payable to our officers and directors or companies controlled
by our officers and directors are unsecured and repayable on demand



10. GAIN ON EXTINGUISHMENT OF DEBT

- During the year ended December 31, 2006 the Company wrote off trade debts
arising from discontinued operations amounting to $659,867. This was based upon
management's belief that these debt holders rights have expired under the
statutes of limitations in the various states in which the debt holders reside.

- The Company also settled various other trade debts and loans payable in the
year by issue of common stock. These transactions resulted in a net loss on
extinguishment of debt amounting to $211,408

11. DERIVATIVE LIABILITIES


During the year ended December 31, 2005, the Company recognized derivative
liabilities of approximately $9.5 million pursuant to the issuance of $3,720,000
Secured Convertible Notes and the granting of certain registration rights which
provided for liquidated damages and a default premium in the event of failure to
timely register or deliver the shares in connection with the issuance of the
Notes and the related Warrants. This resulted in an expense in the Consolidated
Statement of Operations in 2005 of $6,460,366. Any increase or decrease in the
fair market value of the derivative liability on each subsequent balance sheet
date was recorded as an expense or income item.

We repaid the Secured Convertible Notes in November 2006, including a penalty
interest payment of $272,397. The repayment of the Notes removed the need to
recognize derivative liabilities and the balance of the liability at that point
was recorded as other income.


12. STOCKHOLDERS' DEFICIT

Effective September 30, 2003, pursuant to a written consent of a majority of the
Company's stockholders, the Company amended its Articles of Incorporation to
change its name to GPS Industries Inc., to increase the authorized shares of
common stock from 100,000,000 shares to 250,000,000 shares, to authorize
25,000,000 shares of preferred stock, and to eliminate the dual classes of
common stock. The elimination of the dual classes of common stock has been
reflected in the Company's consolidated financial statements at December 31,
2003, and did not have any effect on the Company's consolidated results of
operations, financial position or cash flows.

Effective April 27, 2005 the Company increased the total number of authorized
shares to 550,000,000 of which 500,000,000 were common shares and 50,000,000
were preferred shares with the series, rights, preferences privileges and
restrictions to be determined by the Board of Directors of the Company.

On December 28, 2006 the Company held a Special Meeting of Shareholders to amend
the Articles of Incorporation to increase the number of shares of capital stock
authorized from 550,000,000 shares (500,000,000 shares of common stock and
50,000,000 shares of preferred stock) to 1,650,000,000 shares (1,600,000,000
shares of common stock and 50,000,000 shares of preferred stock).


Series B Convertible Preferred Stock Financing


On November 13, 2006, we entered into a Securities Purchase Agreement with Great
White Shark Enterprises, Inc. ("GWSE") and Leisurecorp LLC, pursuant to which
GPSI agreed, subject to certain closing conditions, to sell for an aggregate
purchase price of $15,740,890 a total of 1,574,089 shares of newly authorized
Series B Convertible Preferred Stock (the "Series B Shares") and warrants to
purchase up to 59,885,186 shares of common stock. The warrants will be
exercisable for five years, beginning after the closing under the Securities
Purchase Agreement, at an initial exercise price of $0.122 per share. The
1,574,089 Series B Preferred shares are convertible into 258,047,377 shares of
common stock. The purchase price of the foregoing Series B Shares was payable in
cash and by the cancellation of loans previously made to GPSI by GWSE and
Leisurecorp LLC. The closing of the sale of the foregoing Series B Shares and
warrants occurred on December 29, 2006.

Concurrently with the closing of the sale of the Series B Shares to GWSE and
Leisurecorp LLC, Douglas Wood, one of GPSI's directors, converted $3,000,000 of
cash loans he had previously made to the company for 300,000 Series B Shares and
warrants to purchase 49,180,328 shares of common stock, and Robert C. Silzer,
our Chief Executive Officer and a member of our Board of Directors, cancelled
$750,000 of obligations owed to him by GPSI in exchange for 12,295,082 shares of
our common stock and warrants to purchase 3,073,770 shares of common stock. The
warrants issued to Mr. Wood and Mr. Silzer are identical to those issued GWSE
and Leisurecorp LLC (i.e., are exercisable for five years at an initial exercise
price of $0.122 per share).

                                      F-17

<PAGE>

The Series B Shares provide the holders thereof with significant rights,
including the right to elect three of GPSI's five members of the Board of
Directors and the right to approve various corporate and business actions of
GPSI. At the closing, we also entered into a Registration Rights Agreement and a
Shareholder Agreement with GWSE, Leisurecorp LLC, Robert C. Silzer, Sr. and
Douglas Wood.

Details Of Shares Issued:



In 2005 we issued the following unregistered securities.

We issued 15,975,850 shares of common stock valued at $1,770,392 for services
rendered. We issued 6,236,440 shares of common stock valued at $730,000 in
settlement of debt. We issued 4,411,000 shares of common stock valued at
$506,040 in payment of interest. We issued 1,250,000 shares of common stock to
pay $168,550 of financing expense. We issued 9,487,849 shares of common stock
valued at $864,279 to the Shaar Fund for principal with respect to final
conversion of the $1,000,000 8% convertible debenture due November 2, 2007. We
issued 4,000,000 shares of common stock for $173,560 cash with respect to a
$1,860,000 8% convertible note due September 20, 2008. The resale of these
securities was covered by an SB2 Registration Statement declared effective
December 7, 2005. We issued 5,155,595 shares of common stock for $30,000 cash on
the exercise of an employee stock option.

In 2006 we issued the following unregistered securities.

We issued 5,499,405 shares of common stock valued at $374,866 for services
rendered. We issued 416,666 shares of common stock valued at $29,167 in payment
of commission. We issued 41,545,508 shares of common stock valued at $2,784,271
in settlement of debt. We issued 4,026,537 shares of common stock valued at
$301,573 in payment of interest. We issued 5,893,038 shares of common stock to
convert $375,000 of Series A Convertible Preferred Shares. We issued 15,500,000
shares of common stock valued at $467,863 with respect to a $1,860,000 8%
convertible note due September 20, 2008. The resale of these securities was
covered by an SB2 Registration Statement declared effective December 7, 2005. We
issued 600,000 shares of common stock for $30,000 cash on the exercise of an
employee stock option and 4,555,595 shares of common stock on the exercise of
cashless employee options.All of the above securities were issued pursuant to an
exemption from the registration requirements of the Securities Act 1933, as
amended, pursuant to Section 4(2) thereof.

On April 27, 2005 the Company's stockholders approved an increase in the
authorized share capital of the Company from 275,000,000 authorized shares
(250,000,000 common stock and 25,000,000 preferred stock) to 550,000,000 shares,
500,000,000 shares of common stock par value $.001 and 50,000,000 shares of
preferred stock with the series, rights, preferences privileges and restrictions
to be determined by the Board of Directors of the Company.

On December 28, 2006 the Company's stockholders approved an increase in the
authorized share capital of the Company from 550,000,000 shares (500,000,000
shares of common stock and 50,000,000 shares of preferred stock) to
1,650,000,000 shares (1,600,000,000 shares of common stock and 50,000,000 shares
of preferred stock).



13. STOCK PURCHASE WARRANTS


During the year ended December 31, 2006, the Company issued 310,227,705 warrants
at $0.122 associated with the sale of 1,300,000 Series B Preferred Shares and
various debt conversions. (see Note 12) These warrants have been included in the
calculation of the deemed preferred stock dividend arising on the issuance of
these shares and are accounted for in the deemed preferred stock dividend.. The
valuation was based upon a Black-Scholes calculation, assuming a five year life,
a risk free rate of return of 4.58% and a volatility of 119.11%.

During the year ended December 31, 2006, the Company extended for two years and
repriced to $0.05 warrants to purchase 2,000,000 shares of common stock which
had previously been issued for financing services. The Company valued these
warrants at $75,416, and accounted for this as an operating expense. The
valuation was based upon a Black-Scholes calculation, assuming a life of two
years, a risk free rate of return of 4.58% and a volatility of 119.11%

During the year ended December 31, 2005, the Company issued 6,540,000 warrants
at $0.25 associated with various debt issuances. 6,000,000 of these warrants
were included in the calculation of the derivative liability arising on the
issuance of this debt and were accounted for in the derivative liability. The
Company valued the remaining 540,000 warrants at $20,088, and accounted for
$1,674 of this as an operating expense. The remainder of the valuation was
classified as deferred financing costs to be amortized over the term of the
debt. The valuation was based upon a Black-Scholes calculation, assuming a three
year life, a risk free rate of return of 4% and a volatility of 102.8%.
During the year ended December 31, 2005, the Company issued warrants to purchase
4,756,696 shares at prices from $0.12 to $0.25 in connections with the sale of
common stock. The Company valued these warrants at $361,090, and accounted for
this as additional paid in capital. The valuation was based upon a Black-Scholes
calculation, assuming a three year life, a risk free rate of return of 4% and a
volatility of 102.8%.

                                      F-18

<PAGE>

During the year ended December 31, 2005, the Company issued for financing
services warrants to purchase 6,600,000 shares of common stock at prices ranging
from $0.10 to $0.30 per share. The Company valued these warrants at $383,965,
and accounted for $234,321 of this as an operating expense. The remainder of the
valuation was classified as deferred financing costs to be amortized over the
term of the services contracted. The valuation was based upon a Black-Scholes
calculation, assuming a life ranging from 6 months to one year, a risk free rate
of return of 4% and a volatility of 102.8%

A reconciliation of warrant activity is as follows:
<TABLE>
<CAPTION>

                                                                         Number of          Weighted
                                                                          shares            average
                                                                         issuable        exercise Price
                                                                       --------------    ---------------
<S>                                         <C>                           <C>                  <C>
                         Balance at January 1, 2005                       12,154,211           $  2.059
                              Granted                                     17,896,696              0.222

                              Exercised                                            -                 -

                              Expired                                       (100,000)            (6.250)
                                                                       --------------    ---------------
                         Balance at December 31, 2005                     29,950,907               .947
                              Granted                                     80,254,038              0.120

                              Exercised                                           -                  -

                              Expired                                     (5,750,000)            (4.085)
                                                                       --------------    ---------------
                         Balance at December 31, 2006                    104,454,945           $  0.139
                                                                       ==============    ================
</TABLE>


The following table summarized warrants outstanding and exercisable as of
December 31, 2006:
<TABLE>
<CAPTION>

                                                     Number of       Weighted-average
                                                       shares           remaining         Number of
                                                     underlying        contractual         shares
                               Exercise Price         warrants            life           exercisable
                            --------------------    --------------    --------------    --------------
                                                                       (in Years)

<S>                            <C>     <C>             <C>                 <C>             <C>
                               $0.32 - $0.15           19,965,073          1.36            19,965,073

                              $0.124 - $0.055          84,489,872          4.75            84,489,872
                                                    --------------    --------------    --------------
                                                      104,454,945          3.941          104,454,945
</TABLE>


14. STOCK OPTIONS

         We have adopted the 2000 Stock Option Plan (the "Option Plan"). Under
the 2000 Stock Option Plan we are authorized to issue a total of 10,000,000
shares as either incentive stock options within the meaning of Section 422 of
the Internal Revenue Code of 1986, as amended (the "Code"), or nonqualified
stock options to our officers, directors, employees, consultants and others
performing services for us. The Option Plan is administered by our Board of
Directors (or by our Compensation Committee, if the Board elects to delegate
these responsibilities). The Compensation Committee/Board of Directors
designates the optionees, number of options, exercise prices, dates of grant,
exercise period and other terms and conditions.

         The purchase price to be paid upon exercise of each incentive stock
option granted pursuant to the Option Plan shall be no less than the fair market
value of the Common Stock on the date the option is granted, or 110% of such
fair market value in the case of any optionee holding in excess of 10% of the
combined voting power of all classes of our capital stock as of the date of
grant. Provided that our Common Stock is publicly traded on an exchange or on an
over the counter market, the fair market value will equal to the closing price
of our Common Stock on such exchange or market on the date of grant (or on the
last date preceding such date on which a sale was reported). The purchase price
and method of exercise of each nonqualified option granted to officers and other
key employees shall be determined by the Compensation Committee/Board of
Directors. The purchase price is payable in full by cash, check, and if approved
by the Compensation Committee/Board of Directors, by the surrender of shares of
our Common Stock having a market value equal to the option price of the shares
to be purchased, or by any other manner of cashless exercises permitted by law.

         Options granted under the Option Plan become exercisable and shall
expire on such dates as determined by the Compensation Committee/Board of
Directors, provided, however, that no term may exceed ten years from the date of
grant, or five years from the date of grant in the case of any optionee holding
more than 10 percent of the combined voting power of all classes of our capital
stock as of the date of grant. After options become exercisable they may be
exercised at any time or from time to time as to any part thereof. The
Compensation Committee/Board of Directors may, at any time after grant of the
option and from time to time increase the number of shares purchasable in any
installment, subject to certain limitations.

         Options granted under the Option Plan expire on such date as the
Compensation Committee/Board of Directors has determined. Options are not
transferable except by will or by the laws of descent and distribution; during
the life of the person to whom the option is granted, that person alone may
exercise them. All rights to exercise options terminate 90 days from the date a
grantee ceases to be an employee for any reason other than termination for
cause, death or disability.

         If an option grantee is terminated for cause, the option terminates on
the date of such termination of employment. If a grantee dies while in our
employ, his or her option may be exercised at any time within one year following
the grantee's death by his or her estate or by the person or persons to whom the
grantee's rights under the option passed by will or operation of law, but only
to the extent such option was exercisable by the grantee at the time of his or
her death. Except for certain stated provisions covering termination, disability
or death, no option may be exercised after the expiration of its original term.

To date, since we had not established a Compensation Committee, the Option Plan
has been administered by the entire Board. As of December 31, 2006, there were
outstanding options under the Option Plan to purchase approximately 9,290,000
shares of our common stock at a weighted- average exercise price of
approximately $0.062 per share.

                                      F-19

<PAGE>

A total of  17,700,000  options  were  issued  to  employees  in the year  ended
December 31, 2006 of which  2,700,000  were issued under the Option Plan.  These
options were issued at exercise prices ranging from $0.05 to $0.074.  15,000,000
of these options vested  immediately,  the remainder  vest over periods  ranging
from one to four years.  These option issues resulted in an administrative  cost
of $968,425. 5,155,595 options were exercised during the year ended December 31,
2006 at an  average  exercise  price of  $0.0124,  and  1,150,000  options  were
cancelled in the year upon termination of various employees.

A total of 7,560,000 options were issued to employees in the year ended December
31, 2006. These options were issued at exercise prices ranging from $0.05 to
$0.08 and were fully vested on issue. These option issues resulted in an
administrative cost of $33,100. Additionally 100,000 options issued to employees
in 2003 which would have vested in June 2006 were accelerated to fully vest in
December 2005 to put them on the same basis as the options issued in 2005.

Stock  option  activity  for the years ended  December 31, 2006 and December 31,
2005 is as follows:
<TABLE>
<CAPTION>

                                                                  Weighted-
                                                             Number of  Shares            Average
                                                                  Issuable                Exercise
                                                                     #                    Price $
                              ---------------------------  --------------------------- --------------
<S>                                            <C> <C>             <C>                    <C>
                              Balance December 31, 2004            6,675,595              $0.021
                              Granted                              7,560,000               0.0617
                              Exercised                             (700,000)              0.001
                              Expired                               (640,000)              0.1625
                              ---------------------------  ----------------------------  -----------
                              Balance December 31, 2005           12,895,595               0.0448
                              Granted                             17,700,000               0.0711
                              Exercised                           (5,155,595)              0.0124
                              Expired                             (1,150,000)              0.0765
                              --------------------------  -----------------------------  -----------
                              Balance December 31, 2006           24,290,000              $0.06937
                                                          =============================  ===========
</TABLE>

The following table  summarizes the  outstanding  and exercisable  options as at
December 31, 2006
<TABLE>
<CAPTION>

                                 Exercise            Number          Weighted-average      Number
                                  prices           outstanding          remaining        exercisable
                                     $                  #            contractual life         #
                              ---------------  ------------------  -------------------- -------------
<S>                               <C>                 <C>                 <C>               <C>
                                  0.10                580,000             0.75              580,000
                                0.05 - 0.08         6,010,000             3.00            6,010,000
                                0.05 - 0.074       17,700,000             4.81           15,000,000
                              ---------------  ------------------  --------------------  -----------
                                                   24,290,000                            21,590,000
</TABLE>


15. COMMITMENTS AND CONTINGENCIES

Lease Commitments

The Company leases office premises and certain of its office equipment under
operating leases with various expiration dates to 2009. Rent expense for the
years ended December 31, 2006 and December 31, 2005 was $154,638 and $135,155
respectively. This table shows future minimum lease commitments under the leases
at December 31, 2006

                                         2007                     $      66,678
                                         2008                             9,234
                                         2009                             2,287
                                                                        -------
                                                                  $      78,199
                                                                        =======

Employment Agreements

The Company has entered into employment agreements with Mr Robert C Silzer,
Chief Executive Officer, and Mr Alex Doaga, Vice President of Operations.

The agreement with Mr Silzer commences on 1 January 2007 for a period of three
years and stipulates a minimum salary of US$ 250,000 per annum and other
guaranteed payments of Cdn$ 14,400 per annum in addition to other discretionary
payments and compensation.

The agreement with Mr Doaga provides for a salary of Cdn$ 160,000 and expires in
2008. Discretionary payments and other compensation may also be made.

Under the terms of these employment agreements, the Company is committed to the
following payments:

                           2007             $        449,000
                           2008                      449,000
                           2009                      265,000
                                            ----------------
                           Total            $     1, 163,000
                                            ----------------

                                      F-20

<PAGE>

Legal Proceedings


On February 5, 2007 David Stratton filed a lawsuit against us in the Supreme
Court of British Columbia, Vancouver, Canada. Mr. Stratton entered into a
written employment agreement with us on June 12, 2006 pursuant to which we
employed Mr. Stratton as our Vice President, Sales. The employment agreement had
a three-year term, renewable each year. Under the employment, Mr. Stratton was
entitled to an annual base salary of CDN $150,000, options to purchase up to
1,500,000 shares of our common stock at an exercise price of $0.05 per share, a
signing bonus of 300,000 shares of our common stock, certain bonuses (including
bonuses based on gross sales), and sales commissions. On November 8, 2006, Mr.
Stratton's employment was terminated. Mr. Stratton has set forth his claims in
the Statement of Claims, which claims principally consist of the following: (i)
a judgment equal to the amount of his base salary that he would have earned,
(ii) the signing bonus stock options referred to in the employment agreement,
(iii) the 300,000 signing bonus shares, (iv) special damages and punitive
damages, and (v) legal fees. We have filed a statement of defense denying the
claims and we intend to vigorously defend this lawsuit.

Our wholly owned subsidiary, Inforetech Golf Technology 2000 Inc. (IGT) is a
defendant in a number of lawsuits principally arising from vendor debt, which in
the aggregate are not material to us. IGT ceased operations in the fourth
quarter of 2002 and filed a petition for relief under Chapter 7 of the United
States Bankruptcy Code on December 19, 2002.

We acquired ProShot Golf Inc. on January 12, 2001. ProShot ceased operations and
filed a petition for relief under Chapter 7 of the United States Bankruptcy Code
on May 31, 2002, which was subsequently granted.

Liabilities relating to these two companies, however, continue to exist in our
consolidated balance sheet as debt from discontinued operations and are being
written off in accordance with the statute of limitations in each state in which
the debt was incurred.

We have been threatened with potential litigation for an amount of approximately
$155,000, which is included in accounts payable. The agreement is that further
negotiations will take place before any action is taken on this balance.

We may occasionally become subject to legal proceedings and claims that arise in
the ordinary course of our business. It is impossible for us to predict with any
certainty the outcome of any disputes that may arise, and we cannot predict
whether any liability arising from claims and litigation will be material in
relation to our consolidated financial position or results of operations.


16. INCOME TAXES

The Company is subject to United States Federal income taxes at an approximate
rate of 35% and is subject to Canadian federal and provincial combined tax rates
of approximately 36%. It is eligible for a credit against its US taxes of
amounts approximating its Canadian taxes.


The reconciliation of the provision (recovery) for income taxes before the
extraordinary loss, at the United States federal statutory rate compared to the
Company's income tax expense as reported is as follows:


<TABLE>
<CAPTION>

                                                                                 2006         2005
                                                                              ----------  -----------
                                                                               $ 000's       $ 000's
                                                                              ----------  -----------
<S>                                                                              <C>          <C>
                             Expected (benefit) at U.S. statutory rates          (1,905)      (6,017)
                             Change in valuation allowance                        4,159        3,495
                             Non-deductible expenses                             (2,444)       2,522
                             Other                                                  190            -
                                                                               ----------   ----------
                             Income tax provision (benefit)                           -            -
                                                                               ==========   ==========
</TABLE>

                                      F-21

<PAGE>

Deferred income taxes reflect the net tax effects of temporary differences
between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes. The Company has
recognized, a valuation allowance for those deferred tax assets for which it is
more likely than not that realization will not occur. Significant components of
the Company's deferred tax assets as of December 31, 2006 are as follows:

                                                     2006
                                                  ----------
                                                    $ 000's
                                                  ----------
 Net operating loss carryforwards                   16,309
 Research expenditures for Canadian tax purposes     1,170
 Stock option expense                                  350
 Allowance for bad debt                                 25
 Valuation allowance                               (17,854)
                                                  ----------
                                                         -
                                                  ==========


The Company has scientific research expenditures for Canadian income tax
purposes in the amount of $3,655,000 that may be applied to reduce taxable
income of future years for Canadian income tax purposes.

The Company has net operating losses for United States and Canadian income tax
purposes of approximately $46,600,000, which will expire in the year 2025.
Pursuant to Section 382 of the Internal Revenue Code, use of the Company's net
operating loss carryforwards may be limited if the Company experiences a
cumulative change in ownership of greater than 50% in a moving three-year
period. Ownership changes could impact the Company's ability to utilize net
operating losses and credit carryforwards remaining at the ownership change
date. The limitation will be determined by the fair market value of common stock
outstanding prior to the ownership change, multiplied by the applicable federal
rate.

                                      F-23

<PAGE>

ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
         FINANCIAL DISCLOSURE

         Not applicable.

ITEM 8A. CONTROLS AND PROCEDURES

         We maintain disclosure controls and procedures that are designed to
ensure that information required to be disclosed in the reports that we file
with the SEC under the Exchange Act is recorded, processed, summarized and
reported within the time periods specified in the SEC's rules and forms and that
such information is accumulated and communicated to our management, including
our principal executive and financial officers, as appropriate, to allow for
timely decisions regarding required disclosure. As required by SEC Rule
15d-15(b), we carried out an evaluation, under the supervision and with the
participation of our management, including our principal executive and financial
officers, of the effectiveness of the design and operation of our disclosure
controls and procedures as of the end of the period covered by this report.
Based on the foregoing, our principal executive and financial officers concluded
that our disclosure controls and procedures are effective.

         There has been no change in our internal control over financial
reporting during our most recent fiscal quarter that has materially affected, or
is reasonably likely to materially affect, our internal control over financial
reporting.

ITEM 8B. OTHER INFORMATION

         None.


                                    PART III

ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE
        WITH SECTION 16(a) OF THE EXCHANGE ACT

Executive Officers and Directors

         The following table sets forth the name, age and position held by each
of our executive officers and directors. Directors are elected for a period of
one year and thereafter serve until the next annual meeting at which their
successors are duly elected by the stockholders.

<TABLE>
<CAPTION>

               Name                      Age                                  Position

                                                   Chairman of the Board of Directors, Chief Executive Officer,
<S>                                       <C>
Robert C. Silzer, Sr.                     59       President and acting Chief Financial Officer

Alex Doaga                                40       Senior Vice President, Chief Technical Officer

Michael Martin                            57       Controller

Bart Collins(1)                           45       Director, Executive Vice President

Douglas J. Wood(1)                        53       Director

Robert Linn                                        Director

Marc Potter                                        Director

(1)  Member of our Audit Committee
</TABLE>


         Robert C. Silzer, Sr. - Chairman, President, Chief Executive Officer
and Director. Mr. Silzer has served as our Chief Executive Officer, President,
Chairman and Director since this company was formed in 1995. He currently also
is our acting Chief Financial Officer. Prior to founding GPSI, Mr. Silzer
founded XGA, an online golf store and website company in 1993. He also founded
Advanced Gaming Technology, Inc. in 1992, an electronic gaming company, where he
served as Chief Executive Officer until 1998. From 1986 to 1992, Mr. Silzer
founded and operated the private company Supercart International. With over 30
years as an entrepreneur in the technology and other markets, Mr. Silzer has
developed expertise in taking companies to market, growing start-up business,
initial public offerings, raising funds, operations, marketing and international
licensing.

         Alex Doaga, Senior Vice President, Chief Technical Officer. Mr. Doaga
joined the Company in 1999 and has served as Vice President since 2003. From
2001-2002, Mr. Doaga was Vice President, Engineering for Synapse Global
Development, a GPS wireless asset management company. From 1996-1999, Mr. Doaga
was President and Chief Executive Officer of Westgate Digital Corporation, a
telecommunication voice, video and data services company. From 1991 to 1996, Mr.
Doaga was President and Chief Executive Officer of the Net Group of Companies, a
cable TV and data communication systems group in Romania. Mr. Doaga received his
MSc. Degree in Automotive Engineering from the Bucharest Polytechnic University
in Romania.

                                       19
<PAGE>

         Michael Martin, Corporate Controller. Mr. Martin has served as the
Corporate Controller of GPSI since April, 2004. Prior to joining GPSI he was VP
Finance of Axton Manufacturing Ltd in Vancouver, BC from 2002 to 2003. From 1985
to 1987, from 1991 to 1993, and from 1996 to 2001 he provided contract
consulting services to various companies in London, England and in Vancouver,
British Columbia. He was also CFO for Johnson Enterprises Ltd. In Langley, B.C.
from 1989 to 1991, Manager of Business Investigations of Coopers & Lybrand in
Langley, B.C. from 1987 to 1989 and Controller for Galactic Resources Ltd. in
Vancouver from 1983 to 1985. Before moving into industry he was a Manager with
Peat Marwick Mitchell in Vancouver and Jamaica from 1977 to 1982 and articled
with Viney Merretts, Chartered Accountants in London, England from 1972 to 1977.
Mr. Martin is a Chartered Accountant and graduated with a B.A (Hons) from
University College, London University.

         Bart Collins, Director. Bart Collins has served as a Director of GPSI
since January 26, 2005 and as Executive Vice President since November 2006. Mr.
Collins is President of Great White Shark Enterprises, Inc. ("GWSE"), a
multi-national corporation founded by Greg Norman in 1993. GWSI is involved in
the areas of golf course design, residential development, turfgrass development,
golf events, golf equipment, merchandising and licensing. Having worked in some
capacity with Greg Norman since 1987, Mr. Collins was retained on a full time
basis by GWSE in 1995 as an International Vice President based in Sydney,
Australia, overseeing GWSE's interests in the Asia-Pacific region. In 1997 Mr.
Collins moved into his current position in Jupiter, Florida. Prior to joining
GWSE, he spent 12 years with the sports conglomerate International Management
Group ("IMG") that he joined in 1983 and became a Vice President. At the age of
31 he established and managed IMG's operation in Southeast Asia from their
offices in Singapore. Mr. Collins graduated from Wittenberg University in 1983.

         Douglas J. Wood, Director. Mr. Wood has been a Director of the Company
since February 26, 2003. He began his career as a financial analyst, and later,
senior financial analyst for Rockwell as part of the Defense Electronic
Operations department, based out of Anaheim, California. He then moved on to
Kennemetal, Inc., where he served as Project Manager for International
Operations, Manager of Defense Products Operations, and Marketing Manager for
Metallurgical Products. He went on to become co-owner and president of Carrera
Corporation, a provider of custom injection moulding manufacturing services that
he owned and operated for 13 years. After the successful sale of Carrera, Mr.
Wood contributed to the formation and establishment of Astro Instrumentation
LLC, a leading provider of cost-effective and complete manufacturing solutions
for technology and high-end corporate clients. Mr. Wood also sits on the Board
of the Latrobe Foundation, the Westmoreland Trust and the Board of Trustees of
Seton Hall University. Mr. Wood holds a B.A. in economics from Brown University
and an M.B.A. in corporate finance and accounting from Cornell.

         Robert Linn, Director. Mr. Linn was elected as a Director of GPSI in
December 2006. Mr. Linn has been the Senior Manager-Commercial of Leisurecorp
LLC since May 2005. Prior thereto, from 1988 to May 2005, Mr. Linn was a project
director/project manager of Associated Consulting Engineers/Sir Frederick Snow &
Partners Ltd. Mr. Linn holds a B.Sc. in Civil Engineering from University of
Strathclyde in his native city of Glasgow, and is a chartered member of the
Institution of Civil Engineers and the Institution of Highways and
Transportation.

         Marc Potter, Director. Mr. Potter was elected as a Director of GPSI in
December 2006. Since January 2005, Mr. Potter has been a Senior
Manager--Development and Operations of Leisurecorp LLC, a wholly owned
subsidiary of Istithmar Real Estate, a Dubai World Company. Prior to joining
Leisurecorp LLC, Mr. Potter assisted in the establishment of Nakheel Golf for
Dubai World Company. At Nakheel Golf, Mr. Potter developed and operated
Nakheel's four golf courses at Jumeirah Golf Estates. Mr. Potter has also was
employed at Troon Golf where he managed golf facilities in the Middle East and
U.K. Mr. Potter graduated from La Trobe University in 1996 with a Bachelor of
Business degree in hospitality management.

Audit Committee

     In January, 2005 our Board of Directors established an Audit Committee. Our
Board of Directors has instructed the Audit Committee to meet periodically with
our management and independent accountants to, among other things, review the
results of the annual audit and quarterly reviews and discuss the financial
statements, select the independent accountants to be retained, and receive and
consider the accountants' comments as to controls, adequacy of staff and
management performance and procedures in connection with audit and financial
controls. The Audit Committee is also authorized to review related party
transactions for potential conflicts of interest. The Audit Committee is
composed of Mr. Doug Wood and Mr. Bart Collins. Messrs. Wood and Collins are
non-employee directors. Although Mr. Collins was, in December 2006, appointed as
a part-time Executive Vice President, Mr. Collins is not an employee and is not
compensated by us. However, because both Mr. Wood and Mr. Collins, directly or
indirectly, have made loans to, and are otherwise parties to financial
transactions with GPSI, neither of them is an "independent" member of the Audit
Committee.

         Mr. Wood has been designated as the "audit committee financial expert,"
as defined under Item 401(h)(2) of Regulation S-K of the Securities Act of 1933,
of the Audit Committee.

                                       20
<PAGE>

Special Management Provisions

         On December 29, 2006, we sold to Great White Shark Enterprises, Inc.
and Leisurecorp LLC 1,574,089 Series B Shares and warrants to purchase up to
59,885,186 shares of common stock. Under the Securities Purchase Agreement we
entered into with Great White Shark Enterprises, Inc. and Leisurecorp LLC, we
agreed to elect two persons designated by Leisurecorp LLC to our Board of
Directors, which persons shall serve as "Preferred Directors" under the Series B
Shares Certificate of Designation. Leisurecorp LLC designated Mr. Marc Potter
and Mr. Robert Linn as the new additional directors. Accordingly, in
anticipation of the sale of the Series B Shares and warrants, on December 28,
2006 our Board of Directors increased the size of the Board of Directors to five
and conditionally elected Mr. Potter and Mr. Linn as additional directors. The
election of Mr. Potter and Mr. Linn became effective on December 29, 2006
immediately after the closing of the sale of the Series B Shares and warrants to
Great White Shark Enterprises, Inc. and Leisurecorp LLC.

         Under the Securities Purchase Agreement we entered into with Great
White Shark Enterprises, Inc. and Leisurecorp LLC, we agreed to create the
office of "Executive Vice President," and agreed to elect Mr. Collins to that
office. Accordingly, pursuant to the Securities Purchase Agreement, in November
2006, our Board of Directors amended our bylaws to create a new part-time office
(designated as the office of the "Executive Vice President") and elected Bart
Collins, one of Directors, to that office. The new office was established for
the purposes of monitoring and controlling specific operations or functions. In
establishing the new executive office, the Board of Directors decided that GPSI
may not make any payment (or series of related payments) or agree to make any
payment (or series of related payments) or issue or agree to issue any of our
securities in lieu of any payment to be made by us or on our behalf (a
"Securities Issuance") (a) in excess of $25,000, without the express written
approval of the new Executive Vice President and (b) in excess of $100,000,
without having the signature of the Executive Vice President on (x) the check or
other financial instrument pursuant to which such payment will be made, on (y)
the wire transfer instructions authorizing the wire transfer pursuant to which
such payment will be made or (z) in the case of a Securities Issuance, specific
authorization for such Securities Issuance including the number of shares or
securities to be issued and the terms thereof. Pursuant to the Securities
Purchase Agreement, Mr. Collins must remain the Executive Vice President until
such time as our Common Stock is listed on either the Nasdaq Global Market or
the Nasdaq Capital Market. Mr. Collins' obligations as the Executive Vice
President are limited to providing the foregoing services on a part-time basis.
Mr. Collins currently is not paid for his services as the Executive Vice
President.



Code of Ethics

         Our Board of Directors has adopted a business code of ethics for
directors and officers and has also adopted an Insider Trading Policy. A copy of
our code of ethics will be furnished without charge to any person upon written
request. Requests should be sent to: Secretary, 5500 152nd Street, Suite 214
Surrey, B.C. V3S 5J9 Canada.

         There are no family relationships between any of our officers and
directors.

Section 16(a) Beneficial Ownership Reporting Compliance

         Section 16(a) of the Exchange Act requires our directors and executive
officers, and persons who own more than 10% of the outstanding shares of our
common stock (collectively, "Reporting Persons") to file reports of ownership
and changes in ownership with the SEC. Reporting Persons are required by SEC
regulations to furnish us with copies of all Section 16(a) forms that they file.

         Based solely on our review of the copies of such forms received or
written representations from the Reporting Persons, we believe that, with
respect to the fiscal year ended December 31, 2006, all of the Reporting Persons
complied with all applicable Section 16 filing requirements on a timely basis
except that Mr. Robert Silzer, Sr. failed to timely file a Form 4 in connection
with the December 2006 grant of options to purchase 15,000,000 shares.

ITEM 10. EXECUTIVE COMPENSATION

Compensation of Executive Officers

         The following table summarizes compensation paid or, or earned by our
Chief Executive Officer and the other two most highly compensated executive
officers (the "Named Executive Officers") whose annual compensation exceeded
$100,000 as of December 31, 2006. All amounts were paid in Canadian dollars as
these officers live in British Columbia, Canada and are converted in U.S.
dollars based on the conversion rate in effect on December 31, 2006.

                                       21
<PAGE>


<TABLE>
<CAPTION>

                                                    SUMMARY COMPENSATION TABLE
---------------------------------------------------------------------------------------------
                                                    Option        All Other
                                       Salary       Awards      Compensation       Total
 Name and Principal Position   Year     ($)         ($)(2)         ($)(1)           ($)
---------------------------------------------------------------------------------------------
<S>                            <C>    <C>        <C>               <C>           <C>
Robert C. Silzer, Sr., Chief   2006   208,419    $929,796(3)       15,841        1,154,056
Executive Officer, President                          -
and Chief Financial Officer    2005   207,759                      15,820         223,579

---------------------------------------------------------------------------------------------
Alex Doaga, Senior Vice        2006   137,316       41,137          6,364         184,817
President Operations & CTO
                               2005   128,733       61,650          6,008         196,391
---------------------------------------------------------------------------------------------
</TABLE>

(1)  Amounts primarily represent medical insurance premiums and payments for
     automobile and electronic communication device expenses.

(2)  This column represents the dollar amount recognized for financial statement
     reporting purposes with respect to the 2006 fiscal year for the fair value
     of stock options granted to the named executive, in 2006 as well as prior
     fiscal years, in accordance with SFAS 123R. Pursuant to SEC rules, the
     amounts shown exclude the impact of estimated forfeitures related to
     service-based vesting conditions. For additional information on the
     valuation assumptions with respect to the 2006 grants, refer to Note 4 of
     our financial statements in this Annual Report. These amounts reflect our
     accounting expense for these awards, and do not correspond to the actual
     value that will be recognized by the named executive from these awards.

(3)  Represents a five-year option to purchase 15,000,000 shares of our common
     stock granted on December 19, 2006 at an exercise price of $0.074 per share
     (the closing price of our stock on December 19, 2006), vesting.

Stock Option Grants

         The following table sets forth information as of December 31, 2006
concerning unexercised options, unvested stock and equity incentive plan awards
for the executive officer named in the Summary Compensation Table.
<TABLE>
<CAPTION>

            OUTSTANDING EQUITY AWARDS AT YEAR ENDED DECEMBER 31, 2006
------------------------------------------------------------------------------------
                                              Option Awards
------------------------------------------------------------------------------------

                                                   Equity
                                                  Incentive
                                                    Plan
                                                   Awards:
                        Number of    Number of    Number of
                       Securities    Securities  Securities
                       Underlying    Underlying  Underlying
                       Unexercised  Unexercised  Unexercised   Option
                         Options      Options     Unearned    Exercise   Option
                           (#)           (#)       Options      Price    Expiration
        Name           Exercisable  Unexercisable    (#)         ($)        Date
------------------------------------------------------------------------------------

------------------------------------------------------------------------------------
<S>                   <C>                                       <C>       <C>   <C>
Robert C. Silzer,     15,000,000(1)      -                      $0.074    12-18-11
Sr., Chief Executive
Officer, President
and Chief Financial
Officer

Alex Doaga, Vice       1,250,000                                 $0.05    12-25-09
President Operations
                       1,000,000                                 $0.06     5-31-11

         ___________________________
(1) Vested upon grant, December 19, 2006.
</TABLE>

Compensation of Directors

         During the fiscal year ended December 31, 2006, we did not pay any of
our directors any compensation (neither cash nor stock options) for serving on
the Board of Directors.

                                       22
<PAGE>

Employment Agreements and Severance Agreements

         Robert C. Silzer, Sr. On December 19, 2006, we entered into an
employment agreement with Robert C. Silzer, Sr. Mr. Silzer has been our Chief
Executive Officer since 1996. Under the employment agreement, Mr. Silzer agreed
to continue to act as our Chief Executive Officer during the three-year period
commencing January 1, 2007. In connection with the execution of the employment
agreement, we granted stock options to Mr. Silzer for the purchase of 15,000,000
shares. The options have a five-year term and an exercise price of $0.074 per
share (the closing price of our stock on December 19, 2006). Under the
employment agreement, Mr. Silzer will initially receive a base salary of
US$250,000 per annum through September 30, 2007. Thereafter, Mr. Silzer's annual
base salary will be as determined by the Compensation Committee of our Board of
Directors, provided that the annual salary shall not be less than $250,000. The
employment agreement provides that GPSI will review with Mr. Silzer, at least
once a year and prior to September 30, his annual salary, bonus payments and
benefits provided by us to him to determine the basis for any increases thereto
with the objective of ensuring that the remuneration is at least at market
level. Mr. Silzer will also be entitled to our company's medical and other
insurance benefits, which benefits will be provided to Mr. Silzer and his family
even if the employment agreement is terminated for any reason other than for
"just cause" (as determined under the common law of British Columbia). Mr.
Silzer will also be entitled to a car allowance of CDN$1,200 per month, an
annual bonus grant, benefits, and stock options, as determined and awarded by
the Board from time to time in its sole discretion. Mr. Silzer's employment
agreement may be terminated by us at any time during the three-year term by
paying to Mr. Silzer a lump sum amount equal to the present value (calculated
using an 8% discount factor) of his salary for the unexpired period of the term,
and by providing to him the amount of any performance bonus and common stock
grants and options to which he is or becomes entitled. Notwithstanding the
foregoing, Mr. Silzer will be entitled to a minimum payment of $1,000,000 if
GPSI terminates Mr. Silzer's employment under the employment agreement without
just cause. Mr. Silzer may terminate the employment agreement if a "change of
control" event occurs (defined to exclude the effects of the sale of the Series
B Shares on December 29, 2006) or if there is a material alteration of his
duties and responsibilities without his prior written consent. A change in the
location of GPSI's headquarters outside of the Vancouver, B.C. is deemed to be a
material alteration unless the company provides at its expense reasonable
accommodation to allow Mr. Silzer to retain his personal residence in the
Vancouver, B.C. area. If Mr. Silzer is permitted to terminate the employment
agreement for the foregoing reasons, Mr. Silzer shall be entitled to receive a
lump sum amount equal to the present value (calculated using an 8% discount
factor) of his salary for the unexpired period of the three-year term and (as
well has any performance bonus and common stock grants and options to which he
is or becomes entitled under the agreement); provided, however, that such
payment shall be no less than $1,000,000, or $1,500,000 in the case of a change
of control.

         Alex Doaga We entered into an employment agreement with Alex Doaga, our
current Vice President of Operations, on September 1, 2002 for a five-year term,
which was renegotiated after December 31, 2003. The agreement called for an
annual salary of $80,000. This agreement was subsequently renegotiated and in
2004 Dr. Doaga earned a base salary of Cdn$140,000 per year. In January, 2005 a
commitment was made to Doaga to increase this base salary to Cdn$151,000 per
year effective January 1, 2005, plus to provide an annual bonus of up to 25% of
his base salary, and stock options. In December 2005 Mr. Doaga was granted
options to purchase 1,250,000 shares of common stock at a price of $0.05 per
share. On January 1, 2006 Mr. Doaga's salary was increased to Cdn$160,000. In
June, 2006 Mr. Doaga was granted options to purchase 1,000,000 shares of common
stock at a price of $0.06 per share.

Stock Option Plan

         We have adopted the 2000 Stock Option Plan (the "Option Plan"). Under
the 2000 Stock Option Plan we are authorized to issue a total of 10,000,000
shares as either incentive stock options within the meaning of Section 422 of
the Internal Revenue Code of 1986, as amended (the "Code"), or nonqualified
stock options to our officers, directors, employees, consultants and others
performing services for us. The Option Plan is administered by our Board of
Directors (or by our Compensation Committee, if the Board elects to delegate
these responsibilities). The Compensation Committee/Board of Directors
designates the optionees, number of options, exercise prices, dates of grant,
exercise period and other terms and conditions.

         The purchase price to be paid upon exercise of each incentive stock
option granted pursuant to the Option Plan shall be no less than the fair market
value of the Common Stock on the date the option is granted, or 110% of such
fair market value in the case of any optionee holding in excess of 10% of the
combined voting power of all classes of our capital stock as of the date of
grant. Provided that our Common Stock is publicly traded on an exchange or on an
over the counter market, the fair market value will equal to the closing price
of our Common Stock on such exchange or market on the date of grant (or on the
last date preceding such date on which a sale was reported). The purchase price
and method of exercise of each nonqualified option granted to officers and other
key employees shall be determined by the Compensation Committee/Board of
Directors. The purchase price is payable in full by cash, check, and if approved
by the Compensation Committee/Board of Directors, by the surrender of shares of
our Common Stock having a market value equal to the option price of the shares
to be purchased, or by any other manner of cashless exercises permitted by law.

                                       23
<PAGE>

         Options granted under the Option Plan become exercisable and shall
expire on such dates as determined by the Compensation Committee/Board of
Directors, provided, however, that no term may exceed ten years from the date of
grant, or five years from the date of grant in the case of any optionee holding
more than 10 percent of the combined voting power of all classes of our capital
stock as of the date of grant. After options become exercisable they may be
exercised at any time or from time to time as to any part thereof. The
Compensation Committee/Board of Directors may, at any time after grant of the
option and from time to time increase the number of shares purchasable in any
installment, subject to certain limitations.

         Options granted under the Option Plan expire on such date as the
Compensation Committee/Board of Directors has determined. Options are not
transferable except by will or by the laws of descent and distribution; during
the life of the person to whom the option is granted, that person alone may
exercise them. All rights to exercise options terminate 90 days from the date a
grantee ceases to be an employee for any reason other than termination for
cause, death or disability.

         If an option grantee is terminated for cause, the option terminates on
the date of such termination of employment. If a grantee dies while in our
employ, his or her option may be exercised at any time within one year following
the grantee's death by his or her estate or by the person or persons to whom the
grantee's rights under the option passed by will or operation of law, but only
to the extent such option was exercisable by the grantee at the time of his or
her death. Except for certain stated provisions covering termination, disability
or death, no option may be exercised after the expiration of its original term.

         To date, since we had not established a Compensation Committee, the
Option Plan has been administered by the entire Board. As of December 31, 2006,
there were outstanding options under the Option Plan to purchase approximately
9,290,000 shares of our common stock at a weighted- average exercise price of
approximately $0.062 per share.

Indemnification of Directors and Officers

         Our bylaws authorize the corporation to indemnify its directors,
officers, employees and agents of the Registrant to the fullest extent permitted
by the laws of the State of Nevada. Section 78.7502 of the Nevada General
Corporation Law permits a corporation to indemnify any of its directors,
officers, employees or agents against expenses actually and reasonably incurred
by such person in connection with any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(except for an action by or in right of the corporation) by reason of the fact
that such person is or was a director, officer, employee or agent of the
corporation, provided that it is determined that such person acted in good faith
and in a manner which he reasonably believed to be in, or not opposed to, the
best interests of the corporation and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was unlawful. Section
78.751 of the Nevada General Corporation Law requires that the determination
that indemnification is proper in a specific case must be made by:

o    the stockholders,

o    the board of directors by majority vote of a quorum consisting of directors
     who were not parties to the action, suit or proceeding or

o    independent legal counsel in a written opinion if a majority vote of a
     quorum consisting of disinterested directors is not possible or if such an
     opinion is requested by a quorum consisting of disinterested directors.

         Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable.


ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
         RELATED STOCKHOLDER MATTERS

         The following table sets forth certain information regarding beneficial
ownership of our common stock as of March 31, 2007 (a) by each person known by
us to own beneficially 5% or more of any class of our common stock, (b) by each
of our executive officers named in the Summary Compensation Table under
"Executive Compensation" and our directors and (c) by all executive officers and
directors of this company as a group. As of March 31, 2007 there were
376,533,966 shares of our common stock issued and outstanding. Unless otherwise
noted, we believe that all persons named in the table have sole voting and
investment power with respect to all the shares beneficially owned by them.
Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission and generally includes voting or investment
power with respect to securities. Shares of common stock subject to options,
warrants and convertible securities currently exercisable or convertible, or
exercisable or convertible within 60 days, are deemed outstanding, including for
purposes of computing the percentage ownership of the person holding such
option, warrant or convertible security, but not for purposes of computing the
percentage of any other holder.

                                       24
<PAGE>

         As a result of (i) Shareholder Agreement, dated December 29, 2006,
described below (the "Shareholder Agreement") entered into certain of the
principal stockholders and (ii) rights to purchase additional shares of our
Series B Shares that we granted to Great White Shark Enterprises, Inc. and
Leisurecorp LLC (a subsidiary Istithmar) under a Securities Purchase Agreement
(the "Securities Purchase Agreement"), dated November 13 2006, these
stockholders are deemed to beneficially own significantly more shares than they
current own. Accordingly, the parties to these agreements (and their affiliates)
appear to beneficially own more shares of common stock than we are authorized to
issue or that are currently outstanding. For example, Leisurecorp LLC,
Istithmar's subsidiary, currently owns 1,000,000 Series B Shares (which shares
are convertible into 163,934,426 shares of common stock) and warrants to
purchase up to 40,983,607 shares of common stock. However, because it is a party
to the Shareholders Agreement (and therefore is deemed to beneficially own the
shares of the other parties to that agreement), and because it has the right,
exercisable until April 28, 2007, to purchase additional Series B Shares and
warrants (that collectively are convertible or exercisable for an additional
204,918,033 shares of common stock), Istithmar is deemed to beneficially own
584,326,006 shares (even though we currently only have 376,533,966 shares of our
common stock issued and outstanding). Further information on the effect of these
agreements is provided in the footnotes below and is summarized in the
"Supplementary Table on 5% Beneficial Owners"

           Unless otherwise indicated, the address for each shareholder listed
in the following table is c/o GPS Industries, Inc., Suite 214, 5500 152nd St.,
Surrey, British Columbia V3S 5J9 Canada. This table is based upon information
supplied by directors, officers and principal shareholders and reports filed
with the Securities and Exchange Commission.
<TABLE>
<CAPTION>

                                                            Shares Beneficially          Percentage of Total
      Name and Address of Beneficial Owner (1)                     Owned                    Common Stock
                                                           ----------------------     --------------------------

5% Beneficial Owners
--------------------
<S>                                                          <C>         <C>              <C>
Gregory John Norman                                          600,236,319 (1)              62.35 %
501 North A1A, Jupiter,
Florida,  33477

Great White Shark Enterprises, Inc.                          584,326,006 (2)              60.81 %
501 North A1A, Jupiter,
Florida,  33477

Istithmar  PJSC                                              584,326,006 (3)              60.81 %
P.O. Box 17000,
Dubai, UAE


Directors and Officers
----------------------
Robert C. Silzer, Sr.                                         37,240,158 (4)               9.44%

Alex Doaga                                                     3,336,000 (5)               0.88%

Doug Wood                                                     73,376,087 (6)              16.73%

Bart Collins                                                     166,667 (7)               0.04%

Robert Linn                                                           -0-                    --

Marc Potter                                                           -0-                    --

Total Directors and Officers as a Group (6 persons)         114,118, 912                  24.86%
</TABLE>

         (1) Consists of (i) 13,822,007 shares of Common Stock held in the name
of the Greg Norman Intangible Trust 12/01/2004, (ii) 188,306 shares of Common
Stock held in the name of the Greg Norman Intangible Trust 12/01/2005, (iii)
warrants to purchase 1,900,000 shares, which warrants are held in the name of
the Greg Norman Intangible Trust 12/01/2004, and (iii) 174,489,940 shares
beneficially owned by Great White Shark Enterprises, Inc. (see, footnote (2)
below). Greg Norman is the principal and sole beneficiary of the Greg Norman
Intangible Trust 12/01/2004, which owns all of the issued and outstanding
capital stock of Great White Shark Enterprises, Inc. ("GWSE"). Mr. Norman also
is the sole Director and Chief Executive Officer of GWSE. In addition, GWSE is a
party to a Shareholder Agreement, dated December 29, 2006, with Leisurecorp LLC
and certain other parties (the "Shareholder Agreement"). Under the Shareholder
Agreement, GWSE and Leisurecorp LLC have agreed to vote their Series B Shares in
favor of the election to the GPSI Board of Directors of two designees of
Leisurecorp LLC and one designee of GWSE. See, "Description of Capital
Stock--Shareholder Agreement." Accordingly, GWSE is deemed to have shared voting
power with respect to the 409,836,066 shares of Common Stock beneficially owned
by Leisurecorp LLC.

         (2) Consists of (i) 574,089 Series B Shares (convertible into
94,112,951 shares of Common Stock), (ii) warrants to purchase up to 18,901,579
shares of Common Stock, and (iii) the right, exercisable until April 28, 2007,
to purchase additional Series B Shares and warrants that collectively are
convertible/exercisable for an additional 61,475,410 shares of Common Stock. In
addition, as a result of the voting agreement under the Shareholder Agreement,
GWSE is deemed to have shared voting power with respect to the 409,836,066
shares of Common Stock beneficially owned by Leisurecorp LLC.

                                       25
<PAGE>

         (3) Consists of the following securities registered in the name of, or
otherwise owned by Leisurecorp LLC: (i) 1,000,000 Series B Shares (convertible
into 163,934,426 shares of Common Stock), (ii) warrants to purchase up to
40,983,607 shares of Common Stock, and (iii) the right, exercisable until April
28, 2007, to purchase additional Series B Shares and warrants that collectively
are convertible/exercisable for an additional 204,918,033 shares of Common
Stock. In addition, as a result of the voting agreement under the Shareholder
Agreement, Leisurecorp LLC is deemed to have shared voting power with respect to
the 113,014,530 shares of Common Stock issuable to GWSE upon the conversion of
the 574,089 Preferred Shares owned by GWSE and the right of GWSE, exercisable
until April 28, 2007, to purchase additional Series B Shares and warrants that
collectively are convertible/ for an additional 61,475,410 shares of Common
Stock. Leisurecorp is a direct wholly owned subsidiary of Istithmar PJSC. By
virtue of its relationship with Leisurecorp, Istithmar has the power to cause
Leisurecorp to vote, or to dispose of, certain securities which Leisurecorp
beneficially owns. Accordingly, Istithmar may be deemed, under Rule 13d-3 under
the Exchange Act, to beneficially own 584,326,006 shares of Common Stock
beneficially owned by Leisurecorp LLC.

         (4) Consists of 19,166,388 shares of Common Stock, warrants to purchase
3,073,770 shares and 15,000,000 shares subject to Common Stock purchase options.

         (5)      Consists of 1,086,000 shares of Common Stock, and options to
purchase 2,250,000 shares.

         (6) Consists of 11,234,010 shares of Common Stock, warrants to purchase
up to 12,961,749 shares of Common Stock and 300,000 Series B Shares (convertible
into 49,180,328 shares of Common Stock).

         (7) Consists of 100,000 shares of Common Stock and warrants to purchase
up to 66,667 shares of Common Stock. This excludes the shares owned by GWSE, of
which Mr. Collins is the President.

         Supplementary Table on 5% Beneficial Owners

         The table below shows holdings excluding the impact of the provisions
of both the Shareholder Agreement and the Securities Purchase Agreement. For the
purposes of this table, "Shares Beneficially Owned" therefore only include (i)
shares of common stock currently owned, (ii) shares of common stock that can be
acquired upon the conversion of the Series B Shares, and (iii) shares of common
stock that can be acquired upon the exercise of currently owned, exercisable
stock purchase warrants.
<TABLE>
<CAPTION>

                                                            Shares Beneficially          Percentage of Total
        Name and Address of Beneficial Owner                       Owned                    Common Stock
------------------------------------------------------     ----------------------     --------------------------
<S>                                                             <C>                        <C>
Gregory John Norman                                             128,924,843(1)             26.23 %

Great White Shark Enterprises, Inc.                             113,014,530                23.09 %

Istithmar  PJSC                                                 214,918,033                35.24 %
         ______________________________
         (1) These shares include shares owned by Mr. Norman and all of the
113,014,530 shares owned by Great White Shark Enterprises, Inc.
</TABLE>



ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         This section describes the transactions we have engaged in with persons
who were directors, officers or affiliates at the time of the transaction, and
persons known by us to be the beneficial owners of 5% or more of our common
stock since January 1, 2006.

         On November 13, 2006, we obtained a $1,500,000 unsecured, short-term
loan (the "$1,500,000 Loan") from Great White Shark Enterprises, Inc. ("GWSE").
During 2006, GWSE was, and currently still is, a lender to GPSI under an
existing purchase order credit facility. Bart Collins, one of our directors, is
the President of GWSE. The $1,500,000 Loan bore interest on the outstanding
unpaid principal balance at a rate 4.83% per annum (11% per annum in the event
of default), and was due and payable on the earliest to occur of (i) March 31,
2007, and (ii) the closing of the purchase by GWSE and Leisurecorp LLC of Series
B Shares and warrants pursuant to that certain Securities Purchase Agreement we
entered into on November 13, 2006 with GWSE and Leisurecorp. As permitted by the
$1,500,000 promissory note that evidenced the $1,500,000 Loan, the entire
outstanding balance of the $1,500,000 Loan was applied to the purchase price of
the Series B Shares and warrants that GWSE purchased at the closing of the sale
of the Series B Shares and warrants on December 29, 2006.

                                       26
<PAGE>

         On December 29, 2006, we sold a total of 1,574,089 shares of newly
authorized Series B Shares and warrants to purchase up to 59,885,186 shares of
common stock to GWSE and Leisurecorp LLC. The purchase price of the foregoing
shares and warrants was $15,740,890. GWSE purchased 574,089 shares in
consideration for $3,000,000 in cash and the cancellation of the $1,500,000
Loan. Leisurecorp paid $10,000,000 for its 1,000,000 Series B Shares and
warrants by paying $5,000,000 in cash and canceling a $5,000,000 loan it had
extended to us on November 13, 2006.

         In connection with the sale of the 1,574,089 shares of newly authorized
Series B Shares and warrants to purchase up to 59,885,186 shares of common stock
to GWSE and Leisurecorp LLC, and as a condition to the closing of that sale on
December 26, 2006 (the "Closing"), Robert C. Silzer and Douglas Wood converted
obligations owed to them by GPSI into our securities as follows:

o    At the Closing, Mr. Silzer, our Chief Executive Officer and our Chairman of
     the Board, exchanged $750,000 of obligations owed to him by the company for
     12,295,082 shares of Common Stock and warrants to purchase 3,073,770 shares
     of Common Stock. The shares of common stock were sold at the same price as
     the conversion price of Series B Shares ($0.061 per share). The warrants
     that he received with his shares of common stock were identical to the
     warrants issued to GWSE and Leisurecorp at the Closing. The $750,000
     obligation owed to Mr. Silzer consisted of the forgiveness of a $471,560
     promissory note, a $12,869 short term loan Mr. Silzer had extended to us,
     accrued and unpaid vacation pay of $106,643 we owed him, and accrued
     interest of $158,928 on the foregoing promissory note and short term loan.

o    At the Closing, Douglas Wood, one of our directors, exchanged $3,000,000 of
     cash loans made by him during 2006 to us for (i) 300,000 Series B Shares
     and (ii) warrants to purchase 12,295,082 shares of Common Stock. The Series
     B Shares and warrants were sold for the same price as the Series B Shares
     and warrants sold to GWSE and Leisurecorp LLC at the Closing.

         On December 3, 2004, we entered into a Credit Agreement with Great
White Shark Enterprises, Inc. ("GWSE") for GWSE to provide a Term Loan of
$3,000,000 to GPSI. These funds were received by GPSI as follows: $1,000,000 on
November 22, 2004 and the balance of $2,000,000 on December 3, 2004 (less
outstanding service fees owed by us to GWSE to December 31, 2004 of $548,750
pursuant to a Merchandising Agreement dated April, 2003). Collateral for the
loan was (a) a first priority security interest in (a) all of the shares of the
capital stock of Optimal, (b) a second security interest in the Optimal Patents
and (c) a first security interest in the Pinranger Patents acquired by us
pursuant to an Agreement dated July 2, 2004 between GPSI and Pinranger
(Australia) Pty. Ltd. and PagiSat, LLC.

         On December 29, 2006, at the closing of our sale of the Series B
Shares, GWSE purchased $3,000,000 of our Series B Shares and warrants and also
simultaneously converted the remaining outstanding principal amount of the Term
Loan, and another outstanding short term loan, into 274,089 Series B Shares in
full settlement of the principal balance due. For a period of two years from the
conversion date GWSE will continue to receive 20% of the license payments we
receive as a result of the licenses we have granted under the Optimal patents,
which interest in the license payment that we receive will increase thereafter
to 40% of the license payments for the remaining life of the patents.

         In March 2004 we entered into an agreement with Douglas J. Wood, one of
our directors, and two other persons pursuant to which they provided the
security we needed to obtain a $1,000,000 line of credit from HSBC Bank Canada
to be used for manufacturing purposes. On June 22, 2006 this line of credit was
increased to $1,400,000. As of December 31, 2006, we had drawn down $1,433,864
under this line of credit. As consideration for the security provided, we agreed
to pay Mr. Wood and the others 15% per annum of the maximum amount outstanding
during any month, payable 50% in cash and 50% in shares of common stock, which
shares were issued at a 10% discount to market based on the seven day average
price prior to each quarter end. In addition, we agreed to issue to Mr. Wood and
the two other persons warrants to purchase 666,667 shares of common stock at
$0.15 per share. We also granted Mr. Wood and the two others a security interest
in all of our inventory. This letter of credit and our agreement with Mr. Wood
expired February 28, 2007, at which point the line of credit was removed. As of
December 31, 2006, we owed approximately $1,923,646 to Doug Wood and the Wood
Family Trust as unpaid interest on the foregoing line of credit arrangement and
as principal and interest under other short-term loans that Mr. Wood advanced to
us. This amount includes interest, payable at 8% per annum.

         As of December 31, 2006 we owed approximately $27,723 to Robert C.
Silzer, Sr. This amount includes accrued interest, payable at 8% per annum.

                                       27
<PAGE>

ITEM 13. EXHIBITS
<TABLE>
<CAPTION>

Exhibit Number          Description

<C>                                                                                                       <C>
3.1                     Articles of Incorporation as filed with the Nevada Secretary of State on December 12,
                        1995 (1)

3.2                     Certificate of Amendment to the Articles of Incorporation as filed with the Nevada
                        Secretary of State on January 3, 2000 (2)

3.3                     Certificate of Amendment to the Articles of Incorporation as filed with the Nevada
                        Secretary of State on January 20, 2000 (2)

3.4                     Certificate of Amendment to Articles of Incorporation (8)

3.5                     Bylaws (1)

3.6                     Amendments to Bylaws (5)

3.7                     Amendment to Bylaws (7)

4.1                     Certificate Of Designation Of Series B Convertible Preferred Stock (5)
4.2                     Form of Warrant to Purchase Common Stock (5)
10.1                    Securities Purchase Agreement, dated as of September 20, 2005 (3)

10.2                    Registration Rights Agreement, dated as of September 20, 2005 (3)

10.3                    Guaranty and Pledge Agreement, dated as of April 7, 2005 (3)

10.4                    Security Agreement dated as of September 20, 2005 by and between the Company and the
                        Secured Party named therein (3)

10.5                    Intellectual Property Security Agreement dated September 20, 2005 by and between the
                        Company and Secured Party named therein (3)

10.6                    Form of Callable Secured Convertible Note (3)

10.7                    Form of Warrant issued in connection with the Callable Secured Convertible Notes (3)

10.8                    First Amendment to Stock Purchase Agreement, dated as of May 28, 2005 by and among
                        Optimal Golf Solutions, Inc., Darryl Cornish, Charles Houston, and the Company (9)

10.9                    Securities Purchase Agreement, dated November 13, 2006, by and among GPS Industries,
                        Inc. and the purchasers named therein (5)

10.10                   Form of Registration Rights Agreement, dated December 29, 2006, between the Company,
                        Great White Shark Enterprises, Inc., Leisurecorp LLC, Robert C. Silzer, Sr. and Douglas
                        Wood (5)

10.11                   Form of Promissory Notes to be issued to Great White Shark Enterprises, Inc. and
                        Leisurecorp LLC (5)

10.12                   Agreement, dated November 8, 2006, by and among GPS Industries, Inc. and the note
                        purchasers set forth on the signature page thereof regarding the repayment of the
                        Callable Secured Convertible Notes (5)

10.13                   Settlement Agreement dated October 26, 2006 among GPS Industries, ProLink Solutions LLC,
                        Elumina Iberica S.A. and Elumina Iberica Limited (6)

10.14                   Shareholder Agreement, dated December 29, 2006, between the Company, with Great White
                        Shark Enterprises, Inc., Leisurecorp LLC, Robert C. Silzer, Sr. and Douglas Wood (7)

10.15                   Second Amendment to Stock Purchase Agreement dated as of December 8, 2006 by and among
                        the Company, the Sellers an Optimal Golf Solutions, Inc. (4)

10.16                   Employment Agreement, dated December 19, 2006, between GPS Industries, Inc. and Robert
                        C. Silzer, Sr.**

21.1                    Subsidiaries of GPS Industries, Inc. (9)

23.1                    Consent of Sherb & Co.**

31.1                    Certification of the Registrant's Principal Executive
                        Officer under Exchange Act Rule 15d-14(a), as adopted
                        pursuant to Section 302 of the Sarbanes-Oxley Act of
                        2002.**

31.2                    Certification of the Registrant's Principal Financial
                        Officer under Exchange Act Rule 15d-14(a), as adopted
                        pursuant to Section 302 of the Sarbanes-Oxley Act of
                        2002.**

32.1                    Certification of the Registrant's Principal Executive
                        Officer under 18 U.S.C. Section 1350, as adopted
                        pursuant to Section 906 of the Sarbanes-Oxley Act of
                        2002.**

                                       28
<PAGE>

32.2                    Certification of the Registrant's Principal Financial
                        Officer under 18 U.S.C. Section 1350, as adopted
                        pursuant to Section 906 of the Sarbanes-Oxley Act of
                        2002.**
</TABLE>

* Indicates a management contract or compensatory plan or arrangement.

** Filed with this Annual Report on Form 10-KSB.
(1)  Previously filed by us on June 4, 1999 as an exhibit to our Registration
     Statement on Form 10SB12G and incorporated herein by reference.

(2)  Previously filed by us on April 14, 2000 as an exhibit to our Annual Report
     on Form 10-KSB and incorporated herein by reference.

(3)  Previously filed by us on September 26, 2005 as an exhibit to our Current
     Report on Form 8-K and incorporated herein by reference.

(4)  Previously filed by us on December 15, 2006 as an exhibit to our Current
     Report on Form 8-K and incorporated herein by reference.

(5)  Previously filed by us on November 17, 2006 as an exhibit to our Current
     Report on Form 8-K and incorporated herein by reference.

(6)  Previously filed by us on November 1, 2006 as an exhibit to our Current
     Report on Form 8-K and incorporated herein by reference.

(7)  Previously filed by us on January 8, 2007 as an exhibit to our Current
     Report on Form 8-K and incorporated herein by reference.

(8)  Previously filed by us on December 12, 2006 as an appendix to our proxy
     statement.

(9)  Previously filed by us on October 21, 2005 as an exhibit to our
     Registration Statement on Form SB-2 and incorporated herein by reference.


ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

         The Audit Committee has appointed Sherb & Co. as our independent
registered public accounting firm for the fiscal year ending December 31, 2006.
The following table shows the fees that were paid or accrued by us for audit and
other services provided by Sherb & Co. for the 2005 and 2006 fiscal years.
<TABLE>
<CAPTION>

                                                                                2005             2006
                                                                            -------------    -------------
<S>        <C>                                                                 <C>              <C>
Audit Fees (1) ....................................................            $50,500          $73,500
Tax Fees (2).......................................................            $20,000          $10,000
All Other Fees (3).................................................            $14,590          $11,250
                                                                            -------------    -------------
Total.....................................................................     $85,090          $94,750
                                                                            =============    =============
</TABLE>

(1)  Audit fees represent fees for professional services provided in connection
     with the audit of our annual financial statements and the review of our
     financial statements included in our Form 10-QSB quarterly reports and
     services that are normally provided in connection with statutory or
     regulatory filings for the 2005 and 2006 fiscal years.

(2)  Tax fees represent fees for professional services related to tax
     compliance, tax advice and tax planning.

(3)  All other fees include services rendered in connection with the review of
     our Registration Statements and Edgarization services for our SEC Edgar
     filings.

         All audit related services, tax services and other services rendered by
Sherb & Co. were pre-approved by our Board of Directors or Audit Committee. The
Audit Committee has adopted a pre-approval policy that provides for the
pre-approval of all services performed for us by Sherb & Co. The policy
authorizes the Audit Committee to delegate to one or more of its members
pre-approval authority with respect to permitted services. Pursuant to this
policy, the Board delegated such authority to the Chairman of the Audit
Committee. Pre-approval is generally provided for up to one year and any
pre-approval is detailed as to the particular service or category of services.
The independent auditor and management are required to periodically report to
the Audit Committee regarding the extent of services provided by the independent
auditor in accordance with this pre-approval. The Audit Committee has concluded
that the provision of the non-audit services listed above is compatible with
maintaining the independence of Sherb & Co.



                                       29
<PAGE>

                                   SIGNATURES

         In accordance with Section 13 or 15(d) of the Securities Exchange Act
of 1934, the registrant caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.

                             GPS INDUSTRIES, INC.

                             By:       /s/ Robert C. Silzer, Sr.
                                           Robert C. Silzer, Sr.
                                           President and Chief Executive Officer


         In accordance with the Securities Exchange Act of 1934, this report has
been signed below by the following persons on behalf of the registrant in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>

                Signature                                     Title                               Date
<S>                                                                                           <C> <C>
/s/ Robert C. Silzer, Sr.                   President & Chief Executive Officer         April 16, 2007
-------------------------                   (Principal Executive Officer)
Robert C. Silzer, Sr.

/s/ Michael Martin                          Controller                                  April 16, 2007
-------------------------                   (Principal Accounting Officer)
Michael Martin

/s/ Bart Collins                            Director                                    April 16, 2007
-------------------------
Bart Collins

/s/ Douglas J. Wood                         Director                                    April 16, 2007
-------------------------
Douglas J. Wood

/s/ Robert Linn                             Director                                    April 16, 2007
-------------------------
Robert Linn

</TABLE>

                                       30