|UNITED STATES                                
|---------------------------------------------
|SECURITIES AND EXCHANGE COMMISSION           
|Washington, D.C. 20549                       
|                                             
|FORM 10-QSB                                  
|                                             
|[ X ]                                        
|THE SECURITIES EXCHANGE ACT OF
      1934    
|For the quarterly period ended March 31,
2006
|                                             
|OR                                           

[ ] TRANSITION REPORT UNDER SECTION 13 OR
15(d) OF THE

EXCHANGE ACT

For the transition period from _________to
__________



|Commission file number
      000-51808
|--------------------------------------

GOLDEN WEST
BREWING COMPANY, INC.

(Exact Name of Small Business Issuer as
Specified in its Charter)

|Delaware                                 |                       | 90-0158978     
|---------------------------------------- | --------------------- | ---------------
|(State or other jurisdiction             |                       | I.R.S. Employer
|of incorporation or organization)        | Identification number
|                                        
|945 West 2nd Street, Chico,
      CA     |                       | 95928          
|(Address of principal executive offices) |                       | (Zip Code)     



|Issuer's telephone number: (530)
      894-7906
|-----------------------------------------------

__________________________________________________________________Former
name, former address, and former fiscal year, if changed since last
report

Check whether the Issuer (1) filed all reports
required to be filed by Section 13 or 15(d) of the Exchange Act during the last
12 months (or for such shorter period that the Registrant was required to file
such reports), and (2) has been subject to such filing requirements for the past
90 days. Yes [ X ] No [ ]

As of May 15, 2006, the Registrant had 2,000,000
shares of its Common Stock outstanding.

Transitional Small Business Disclosure Format
(check one) Yes [ ] No [ X ]

---

|        | INDEX                                                                  |     
|------- | ---------------------------------------------------------------------- | ----
|        | PART I -- FINANCIAL
      INFORMATION                                  |     
|Item 1. | Financial
      Statements                                             | Page
|        | Consolidated Balance Sheet as of December 31,
      2005 and March 31, | 4   
|        | 2006
      (unaudited)                                                 |     

|     | Consolidated
      Statements of Operations for the three months ended |    |                                                                                 
|---- | ---------------------------------------------------------------------- | -- | --------------------------------------------------------------------------------
|     |                                                                        |    | March 31, 2006 and March 31, 2005
      (unaudited)                             
|     |                                                                        |    |                                                                                 
|     |                                                                        |    | Consolidated Statement of Stockholdres
      Equity                            
|     |                                                                        |    | March 31, 2006
      (unaudited)                                                
|     |                                                                        |    |                                                                                 
|     | Consolidated
      Statements of Cash Flows for the three months ended |    |                                                                                 
|     |                                                                        |    | March 31, 2006 and March 31, 2005
      (unaudited)                             
|     |                                                                        |    |                                                                                 
|     |                                                                        |    | Notes to Consolidated Financial Statements
      (unaudited)                    
|     |                                                                        |    |                                                                                 
|     |                                                                        |    |                                                                                 
|     |                                                                        |    |                                                                                 
|Item |                                                                        | 2. | Management's Discussion and Analysis of Financial
      Condition and Results of
|     |                                                                        |    | Operations                                                                      
|     |                                                                        |    |                                                                                 
|     |                                                                        |    | Plan of Operations                                                              
|     |                                                                        |    |                                                                                 
|     |                                                                        |    | Liquidity and Capital Resources                                                 
|    
|     |                                                                        |    |                                                                                 
|Item |                                                                        | 3. | Controls &
      Procedures                                                     
|     |                                                                        |    |                                                                                 
|     |                                                                        |    |                                                                                 
|     |                                                                        |    | PART II - OTHER
      INFORMATION                                               
|     |                                                                        |    |                                                                                 
|Item |                                                                        | 1. | Legal
      Proceedings                                                         
|     |                                                                        |    |                                                                                 
|Item |                                                                        | 2. | Changes in
      Securities                                                     
|     |                                                                        |    |                                                                                 
|Item |                                                                        | 3. | Defaults Upon Senior
      Securities                                           
|     |                                                                        |    |                                                                                 
|Item |                                                                        | 4. | Submission of Matters to a Vote
      of Security Holders                       
|     |                                                                        |    |                                                                                 
|Item |                                                                        | 5. | Other
      Information                                                         
|     |                                                                        |    |                                                                                 
|Item |                                                                        | 6. | Exhibits and Reports on Form
      8-K                                          



|2
|-

---



|PART 1. FINANCIAL
      INFORMATIONItem 1. Financial
      Statements
|---------------------------------------------------------------------

The consolidated financial statements included
herein have been prepared by Golden West Brewing Company, Inc. (the "Company")
without audit, pursuant to the rules and regulations of the Securities and
Exchange Commission (SEC). Certain information and footnote disclosures normally
included in financial statements prepared in accordance with accounting
principles generally accepted in the United States of America have been omitted
pursuant to such SEC rules and regulations. In the opinion of management of the
Company the accompanying statements contain all adjustments necessary to present
fairly the financial position of the Company as of December 31, 2005 and March
31, 2006, and its results of operations for the three month periods ended March
31, 2006 and 2005 and its cash flows for the three month periods ended March 31,
2006 and 2005 and the statement of stockholders equity as of March 31, 2006.
The results for these interim periods are not necessarily indicative of the
results for the entire year. The accompanying financial statements should be
read in conjunction with the financial statements and the notes thereto filed as
a part of the Company's annual report on Form 10-KSB.

3

---

|GOLDEN WEST BREWING COMPANY,
      INC. AND SUBSIDIARY                   
|-------------------------------------------------------------------------
|                                                                         
|CONSOLIDATED BALANCE SHEET AS
      OF                                   
|                                                                         
|ASSETS                                                                   
|Current
    Assets:                                                      
|Cash
      and cash equivalents                                          
|Accounts receivable, net of allowance for
    doubtful                   
|accounts of $659                                                         
|Inventory (Note 1 )                                                      
|Prepaid Expenses                                                         
|Total
      current assets                                               
|                                                                         
|                                                                         
|Fixed
    Assets:                                                        
|Property and equipment, net of accumulated depreciation
      of $8,722  
|and $15,264 March 31, 2006, respectively                                 
|                                                                         
|Other
    Assets:                                                        
|Deferred Offering Costs (Note 6 )                                        
|Goodwill (Notes 1 & 9 )                                                  
|Intangibles, net of accumulated
    amortization                         
|Other
      assets                                                       
|                                                                         
|Total other
    assets                                                   
|                                                                         
|Total
    Assets                                                         
|                                                                         
|LIABILITIES AND
      STOCKHOLDERS' EQUITY                               
|Current
      Liabilities:                                               
|Checks written in excess of available
    funds                          
|Accounts payable                                                         
|Accrued expenses                                                         
|Lines
      of credit payable (Note 2)                                   
|Notes
      payable - other, current portion (Note 2)                    
|Notes
      payable, related party, current portion (Note 2)             
|                                                                         
|Total current liabilities                                                
|                                                                         
|Long-term
      liabilities:                                             
|Notes
      payable, net of current portion (Note 2)                     
|Notes
      payable - related party, net of current portion (Note 2)     
|                                                                         
|Total long-term liabilities                                              
|Common stock issued
      subject to rescission (Notes 5 & 11)           
|Total Liabilities                                                        
|                                                                         
|Commitments and
      Contingencies (Notes 1,2,3,4, 5, 6,7, 8, 10 and 11)
|Stockholders'
      Equity                                               
|Preferred stock, $.0001 par value, 5,000,000
      shares                
|authorized, none issued and outstanding                                  
|                                                                         
|Common Stock, $.0001 par value, 20,000,000
    shares                    
|authorized, 2,000,000 shares issued and                                  
|outstanding at December 31, 2005 and March 31,
      2006                
|Additional paid-in capital                                               
|Accumulated (Deficit)                                                    
|Total Stockholders' Equity                                               
|                                                                         
|                                                                         
|Total Liabilities and
      Stockholders' Equity                         
|                                                                         

See accompanying notes to these financial
statements

4

---

GOLDEN WEST BREWING COMPANY AND
SUBSIDIARY

CONSOLIDATED STATEMENTS OF
OPERATIONS

FOR THE THREE MONTHS ENDED MARCH 31, 2006
& 2005 (UNAUDITED)

|                                        | 2006             |  | 2005                        
|--------------------------------------- | ---------------- |  | ----------------------------
|                                       
|Revenues                                | $    194,900     |  | $
                  
      -
|Less: Excise taxes                      | (10,020)         |  | -                           
|                                        |                  |  |                             
|Net revenues                            | 184,880          |  | -                           
|                                       
|Cost of sales                           | 126,611          |  | -                           
|                                        |                  |  |                             
|                                       
|Gross profit                            | 58,269           |  | -                           
|                                        |                  |  |                             
|                                       
|Operating expenses:                     |                  |  |                             
|Depreciation and
      amortization     | 7,824            |  | -                           
|Legal and
    accounting                | 41,578           |  | 6,666                       
|Management
      compensation           | 19,807           |  | -                           
|Outside sales
      compensation        | 23,254           |  | -                           
|Rent                                    | 9,450            |  | -                           
|Selling
    expenses                    | 23,726           |  | -                           
|Other                                   | 54,223           |  | 2,795                       
|                                        |                  |  |                             
|Total operating expenses                | 179,862          |  | 9,461                       
|                                        |                  |  |                             
|                                       
|Operating (Loss)                        | (121,593)        |  | (9,461)                     
|                                       
|Other Income (Expense):                 |                  |  |                             
|Miscellaneous
    income                | 369              |  |                             
|Interest
    expense                    | (13,201)         |  | -                           
|                                        |                  |  |                             
|Total
      other (expense)             | (12,832)         |  | -                           
|                                        |                  |  |                             
|                                       
|                                       
|Net (Loss)                              | $  (134,425)     |  | $  
     (9,461)            
|                                       
|Net (Loss) Per Share                    | $          (.07) |  | $       
      (.01)        
|                                       
|Weighted Average Shares
    Outstanding | $  2,000,000     |  | $1,500,000                  
|                                        |                  |  |                             

See accompanying notes to these financial
statements

5

---

GOLDEN WEST BREWING COMPANY, INC. AND
SUBSIDIARY

CONSOLIDATED STATEMENT OF STOCKHOLDERS'
EQUITY

MARCH 31, 2006 (UNAUDITED)

|                                                           |                   |        |              |        |           |             |                      |  | Additional                   |           |  |           |  |         |  |      
|---------------------------------------------------------- | ----------------- | ------ | ------------ | ------ | --------- | ----------- | -------------------- |  | ---------------------------- | --------- |  | --------- |  | ------- |  | -----
|                                                           | Preferred Stock   |        | Common Stock |        | Paid-In   | Accumulated |                      |  |                              |          
|                                                           | Shares
    Amount | Shares |              | Amount |           | Capital     | (Deficit)            |  | Totals                      
|Balance, inception                                         | -                 |        | $            | -      | -         |             | $          
       - |  | $                  
       - | $         |  | -         |  | $       |  | -    
|                                                          
|Stock issued for assets at                                 |                   |        |              |        |           |             |                      |  |                              |           |  |           |  |         |  |      
|$0.15                                                      | -                 |        |              | -      | 400,000   |             | 40                   |  | 59,960                       |           |  | -         |  | 60,000 
|                                                          
|Stock issued for cash at $0.25                             |                   |        |              |        |           |             |                      |  |                              |           |  |           |  |         |  |      
|                                                           | -                 |        |              | -      | 300,000   |             | 30                   |  | 74,970                       |           |  | -         |  | 75,000 
|                                                          
|Net (loss)                                                 | -                 |        |              | -      | -         |             | -                    |  | -                            |           |  | (447)     |  |         |  | (447)
|                                                           |                   |        |              |        |           |             |                      |  |                              |           |  |           |  |         |  |      
|Balance, December 31,                                      |                   |        |              |        |           |             |                      |  |                              |           |  |           |  |         |  |      
|2003                                                       | -                 |        |              | -      | 700,000   |             | 70                   |  | 134,930                      |           |  | (447)     |  | 134,553
|                                                          
|Stock issued for cash at $0.25                             | -                 |        |              | -      | 800,000   |             | 80                   |  | 199,920                      |           |  | -         |  | 200,000
|                                                          
|Net (loss)                                                 | -                 |        |              | -      | -         |             | -                    |  | -                            | (62,543)  |  | (62,543) 
|                                                           |                   |        |              |        |           |             |                      |  |                              |           |  |          
|                                                          
|Balance, December 31, 2004                                 |                   |        |              |        |           |             |                      |  |                              |           |  |           |  |         |  |      
|                                                           | -                 |        |              | -      | 1,500,000 |             | 150                  |  | 334,850                      | (62,990)  |  | 272,010  
|                                                          
|Stock issued for conversion of                             |                   |        |              |        |           |             |                      |  |                              |           |  |           |  |         |  |      
|liabilities at $0.25                                       |                   |        |              |        |           |             |                      |  |                              |           |  |           |  |         |  |      
|                                                           | -                 |        |              | -      | 120,000   |             | 12                   |  | 29,988                       |           |  |           |  | 30,000 
|                                                          
|Stock issued for acquisition
of                            | -                 |        |              | -      | 200,000   |             | 20                   |  | 49,980                       |           |  | -         |  | 50,000 
|Butte Creek at $0.25                                       |                   |        |              |        |           |             |                      |  |                              |           |  |           |  |         |  |      
|                                                          
|Stock issued for conversion of                             |                   |        |              |        | 180,000   |             | 18                   |  | 44,982                       |           |  |           |  | 45,000 
|liabilities at $0.25                                       |                   |        |              |        |           |             |                      |  |                              |           |  |           |  |         |  |      
|                                                          
|Stock issued for conversion of                             |                   |        |              |        |           |             |                      |  | (10,000)                     |           |  |           |  |         |  |      
|liabilities subject to
    recission                       |                   |        |              |        |           |             |                      |  |                              |           |  |           |  |         |  |      
|                                                          
|Net (Loss)                                                 | -                 |        |              | -      | -         |             | -                    |  | -                            | (127,785) |  | (127,785)
|                                                           |                   |        |              |        |           |             |                      |  |                              |           |  |          
|                                                          
|Balance, December 31, 2005                                 | -                 |        |              | -      | 2,000,000 |             | 200                  |  | 449,800                      | (190,775) |  | 269,225  
|                                                          
|Net (Loss)                                                 | -                 |        |              | -      | -         |             | -                    |  | -                            | (134,425) |  | (134,425)
|                                                           |                   |        |              |        |           |             |                      |  |                              |           |  |          
|Balance, March 31, 2006                                    | -                 |        |              | -      | 2,000,000 |             | 200                  |  | 449,800                      | (325,200) |  | 124,800  
|                                                           |                   |        |              |        |           |             |                      |  |                              |           |  |          
|(Unaudited)                                                |                   |        |              |        |           |             |                      |  |                              |           |  |           |  |         |  |      
|                                                          
|                                                          
|See
      accompanying notes to these financial statements
|                                                           |                   |        |              |        | 6         |             |                      |  |                              |           |  |          

---

|GOLDEN WEST BREWING COMPANY AND
      SUBSIDARY           
|----------------------------------------------------------
|CONSOLIDATED
      STATEMENTS OF CASH FLOWS               
|FOR THE THREE MONTHS ENDED MARCH 31                       
|(Unaudited)                                               
|                                                          
|                                                          
|                                                          
|Cash Flows from Operating
      Activities:               
|Net loss                                                  
|Adjustments to reconcile
      net loss to net cash used  
|in
      operating activities:                            
|Depreciation                                              
|Amortization of intangibles                               
|Changes in operating assets
      and liabilities:        
|(Increase) decrease in:                                   
|Accounts Receivable                                       
|Inventories                                               
|Prepaid expenses and other receivables                    
|Increase (decrease) in:                                   
|Checks written in excess of funds
    available           
|Accounts payable                                          
|Accounts payable  Related Party                          
|Accrued Expenses                                          
|                                                          
|                                                          
|Net cash (used in) operating activities                   
|                                                          
|                                                          
|Cash Flows from Investing
      Activities:               
|Equipment
      deposits                                  
|Investment in fixed
      assets                          
|Investment in
      intangibles and other assets          
|Advances to Butte
      Creek                             
|Net cash (used in) investing activities                   
|                                                          
|Cash Flows from Financing
      Activities:               
|Proceeds from Paid-In
      Capital                       
|Deferred offering
      costs                             
|Net Increase in
      Advances and Notes Payable          
|                                                          
|Net cash provided by financing activities                 
|                                                          
|                                                          
|Increase in Cash and Cash
      Equivalents               
|Cash and Cash
      Equivalents, beginning of
      period
|Cash and Cash
      Equivalents, end of
      period      
|                                                          
|Supplemental Schedule of Cash
      Flow Information:     
|Cash paid for
      interest                              
|                                                          
|Issuance of stock for conversion of
      liabilities     
|                                                          
|See accompanying notes to these financial
      statements

7

---

GOLDEN WEST BREWING COMPANY, INC. AND
SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2006

(UNAUDITED)

1. Nature of Business and Significant
Accounting Policies:

This summary of significant accounting policies
of is presented to assist in understanding the Company's financial statements.
The financial statements and notes are representations of management who is
responsible for their integrity and objectivity. These accounting policies
conform to generally accepted accounting principles in the United States of
America and have been consistently applied in preparation of the financial
statements. The Company has selected December 31 as its year end.

Description of Business- Golden West Brewing Company, Inc., a Delaware Corporation, and its
wholly-owned California subsidiary Golden West Brewing Company (hereinafter
referred to as The Company on a consolidated basis) were formed in 2003 for
the purpose of acquiring Butte Creek Brewing Company, LLC ("Butte Creek"). The
acquisition of Butte Creek was completed on August 31, 2005.

In the opinion of management of the Company the
accompanying statements contain all adjustments necessary to present fairly the
financial position of the Company as of December 31, 2005 and March 31, 2006,
and its results of operations for the three month periods ended March 31, 2006
and 2005 and its cash flows for the three month periods ended March 31, 2006 and
2005 and the statement of stockholders equity as of March 31, 2006. The results
for these interim periods are not necessarily indicative of the results for the
entire year. The accompanying financial statements should be read in conjunction
with the financial statements and the notes thereto filed as a part of the
Company's annual report on Form 10-KSB.All
inter-company account balances and transactions are eliminated in consolidation.

Accounts Receivable- Accounts receivable are reported at net realizable value. The
Company has established an allowance for doubtful accounts based on factors
pertaining to the credit risk of specific customers. Historical trends and other
information. Delinquent accounts are written-off when it is determined that the
amounts are uncollectible.

Inventory -Inventory is stated at the lower-of-average cost or market computed
on a first-in first-out basis.

Income Recognition- The Company recognizes revenues at the point of sale when title to
the product changes hands to the buyer.

Accounting Estimates- The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the amounts reported in the financial statements and
the accompanying notes. The actual results could differ from those estimates.
The Company's financial statements are based upon a number of significant
estimates including the allowance for doubtful accounts. Due to the
uncertainties inherent in the estimation process, it is at least reasonably
possible that the estimates for these items could be further revised in the near
term and such revisions could be material.

Financial Instruments- The Company discloses fair value information about financial
instruments when it is practicable to estimate that value. The carrying value of
the Company's cash, cash equivalents, and accounts payable approximate their
estimated fair values due to their short-term maturities.

8

---

Concentrations of Credit Risk- Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents and advances. At
December 31, 2005 and March 31, 2006, the Company had no amounts of cash or cash equivalents in financial institutions in excess of amounts insured by agencies of the U.S. Government.

Valuation of Long-Lived Assets- The Company evaluates the carrying value of long-lived assets to be held and used whenever events or changes in circumstances indicate that the carrying amount may
not be recoverable. The carrying value of a long-lived asset is considered impaired when the projected undiscounted future cash flows are less than its carrying value. The Company measures impairment based on the amount by which the carrying value
exceeds the fair market value. Fair market value is determined primarily using the projected cash flows discounted at a rate commensurate with the risk involved. Losses on long-lived assets to be disposed of are determined in a similar manner,
except that fair market values are reduced for the cost to dispose.

Income Taxes- The Company recognizes deferred tax assets and liabilities for temporary differences between the tax bases of assets and liabilities and the amounts at which they are carried in the
financial statements, the effect of net operating losses, based upon the enacted tax rates in effect for the year in which the differences are expected to reverse. A valuation allowance is established when necessary to reduce deferred tax assets to
the amount expected to be realized.

Intangibles- Intangibles consists of goodwill, trade names and trademarks. Intangibles other than goodwill are amortized using the straight-line method over the estimated useful life of the
intangibles. The $25,000 of acquired intangible assets relate to tradenames and trademarks that have an expected remaining useful life of approximately five years. Assets determined to have indefinite lives are no longer amortized in accordance
with SFAS No. 142, "Goodwill and Other Intangibles," but are tested for impairment on an annual basis.

Recent Accounting Pronouncements- There were various accounting standards and interpretations issued during 2005 and 2004, none of which are expected to have a material impact on the Company's
consolidated financial position, operations or cash flows.

Development Stage Enterprise- Until August 31, 2005, the Company was a development stage enterprise since planned principal operations had not yet commenced. As a result of the acquisition of
Butte Creek on August 31, 2005, the Company is no longer considered a development stage enterprise (Note 9).

Per Share Information- Per share information is computed by dividing the net income or loss by the weighted average number of shares outstanding during the period.

Cash and Cash Equivalents- The Company considers cash and cash equivalents to consist of cash on hand and demand deposits in banks with an initial maturity of 90 days or less.

Risks and Uncertainties- The Company is subject to substantial business risks and uncertainties inherent in starting a new business. There is no assurance that the Company will be able to generate
sufficient revenues or obtain sufficient funds necessary for launching a new business venture.

Basis of Presentation - Going Concern- Generally accepted accounting principles in the United States of America contemplates the continuation of the Company as a going concern. However, the
Company has sustained losses from operations, and has net working capital deficit, which raise substantial doubt about the Company's ability to continue as a going concern. Management of the Company believes that the additional capital from the
proposed public offering and improved results from operations will be sufficient for the continued viability of the company, however there can be no assurance that either will occur.

9

---

In view of these matters, realization of certain
of the assets in the accompanying balance sheet is dependent upon continued
operations of the Company, which in turn is dependent upon the Company's ability
to meet its financial requirements, raise additional capital, and the success of
its future operations.



|2. Advances and Notes
      Payable:
|------------------------------------

On November 1, 2004, J. Andrew Moorer, a Director
of the Company, made an uncollateralized advance of $8,750. The advance
continues to be uncollateralized and due on demand. This advance started to
accrue interest at 8% on January 1, 2006 and had accrued interest as of March
31, 2006 of $175.

Between March and September 2005, the Company
borrowed a total of $125,000 from three lenders: $50,000 in July 2005 from Power
Curve, Inc. (a company controlled by John Power); $50,000 in May 2005 from Lone
Oak Vineyards, Inc. (a company controlled by Brian Power); and $25,000 in March
2005 from Tiffany Grace, an unaffiliated party. The loans were used to payoff
Butte Creek's loans to Tri County Economic Development Corporation, purchase
additional equipment and provide working capital. The Tiffany Grace note, which
was executed on September 9, 2005 accrues interest at the rate of 9% per annum,
is payable in monthly payments of principal and interest based upon a five year
amortization, and is due in full March 2008. As of March 31, 2006, the Tiffany
Grace note had current maturities of $4,534 and a long-term maturity of $16,320.
The Power Curve and Lone Oak notes were executed in September, 2005, accrue
interest at the rate of 9% per annum, and are payable in full in 2008. The loans
are collateralized by a security interest covering all of our tangible and
intangible assets. As of March 31, 2006, the Power Curve and Lone Oak notes had
accrued interest of $2,023 and long-term maturities of $100,000.

On December 30, 2005, John Power and Power Curve,
Inc. converted $215,000 and $90,000, respectively, in outstanding advances into
collateralized long-term debt. The notes bear interest at 9% and mature December
31, 2008 and are collateralized by a security interest covering all of our
tangible and intangible assets but are junior to the security interest granted
to Power Curve, Inc.($50,000), Lone Oak Vineyards, Inc.($50,000) and Tiffany
Grace ($25,000) in September 2005 described above. As of March 31, 2006, these
notes had current maturities of $0 and $0 respectively and long-term maturities
of $215,000 and $90,000 respectively and had accrued interest of $4,838 and
$2,025 respectively.

As part of the acquisition of Butte Creek, the
Company assumed an $8,136 note payable to Bruce Detweiler, a member of Butte
Creek, and a $10,098 note payable to Richard Atmore, Jr., a member of Butte
Creek and the brother of Tom Atmore, a managing member of Butte Creek

The Company has pledged substantially all of its
assets to secure some of the notes. Should the Company default in the payment of
these secured notes, the collateral could be subject to forfeiture.

In the three months ended March 31, 2006, John
Power and Power Curve, Inc. have made advances to the Company of $57,300 and $
62,050 respectively. The advances are uncollateralized and due on
demand



|Lines of
Credit
|---------------

The Company assumed
a $25,000 balance on a credit card issued by Wells Fargo Bank, with interest at
the rate of 17.25% . The card is uncollateralized and guaranteed by Tom Atmore,
Butte Creek's Managing Member and former general manager. The outstanding
balance as of March 31, 2006 was $24,238.

The Company assumed
a $15,400 line of credit on a Butte Creek credit card with MBNA with interest at
the rate of 29.98% . The debt on the credit card is uncollateralized but
guaranteed by Tom Atmore, Butte Creek's managing member and our former general
manager. The outstanding balance as of March 31, 2006 was $11,233.

10

---

|31-Dec-05                                                                            |  | Current                                                                                                     |  | LT       |  | Interest
      Maturity |  |       
|------------------------------------------------------------------------------------ |  | ----------------------------------------------------------------------------------------------------------- |  | -------- |  | ----------------------- |  | ------
|                                                                                     |  |                                                                                                             |  | Portion  |  | Portion                 |  | Rate  
|Lines of
      Credit                                                                |  |                                                                                                             |  |          |  |                         |  |       
|                                                                                     |  | Atmore - MBNA                                                                                               |  | $11,233  |  | 0                       |  | 29.98%
|                                                                                     |  | Atmore - Wells Fargo                                                                                        |  | $24,238  |  | 0                       |  | 17.25%
|Total                                                                                |  | $35,471                                                                                                     |  |          |  |                         |  |       
|Notes Payable - Related
      Parties                                                |  |                                                                                                             |  |          |  |                         |  |       
|                                                                                     |  | Power Curve, Inc.                                                                                           |  | $62,050  |  | $50,000                 |  | 9%    
|                                                                                     |  | Power Curve, Inc.                                                                                           |  |          |  | $90,000                 |  | 9%    
|                                                                                     |  | John C. Power                                                                                               |  | $57,300  |  | $215,000                |  | 9%    
|                                                                                     |  | Lone Oak Vineyards,
      Inc.                                                                              |  | $50,000  |  | 9%                      |  | Sep-08
|                                                                                     |  | J. Andrew Moorer                                                                                            |  | $8,750   |  | 0                       |  | 8%    
|                                                                                     |  | R. Atmore, Jr.                                                                                              |  | $10,098  |  | 0                       |  | 8%    
|                                                                                     |  | B. Detweiler                                                                                                |  | $8,136   |  | 0                       |  | 8%    
|Total                                                                                |  | $146,334                                                                                                    |  |          |  |                         |  |       
|Notes Payable -
      Unaffiliated                                                   |  |                                                                                                             |  |          |  |                         |  |       
|                                                                                     |  | Tiffany Grace                                                                                               |  | $4,534   |  | $16,320                 |  | 9%    
|                                                                                    
|TOTALS                                                                               |  | $186,339                                                                                                    |  | $421,320 |  |                         |  |       
|                                                                                    
|                                                                                    
|                                                                                    
|3.                                                                                   |  | Related Party Transactions                                                                                  |  |          |  |                         |  |       
|                                                                                    
|(a)                                                                                  |  | At inception, the
      Company issued 400,000 shares valued at $60,000 to five investors in
      exchange
|for certain assets the
      investors had acquired from the Alta Group (see below). |  |                                                                                                            

The assets acquired had been sold by Alta
California Broadcasting, Inc. and its affiliates Nova Redwood, LLC and Four
Rivers Broadcasting, Inc. (hereinafter referred to as the "Alta group"). John C.
Power, an officer, director and founder of the Company, is also a former officer
and director of all three entities that comprise the Alta group.

Alta California Broadcasting, Inc. had acquired
the domain name www.ales.com. On September 29, 2002, Four Rivers Broadcasting,
Inc. filed a trademark application number 78169062 with the Unites States Patent
and Trademark Office ("USPTO") for Mount Shasta Ale based on its intent to use
the proposed mark. In 2003, Nova Redwood, LLC had advanced $59,500 to Butte
Creek Brewing Company, LLC as part of a planned acquisition. In October 2003,
the Alta Group decided to not pursue the acquisition of Butte Creek and sold the
domain name www.ales.com, all rights to the Federal Trademark application for
Mount Shasta Ale and the advances to Butte Creek for $60,000 to a group of five
investors who became founding shareholders of the Company. Subsequently, the
Company abandoned the trademark application pending with the USPTO for Mount
Shasta Ale, and rather will rely upon common law trademark principles to
protect its use of the mark.

(b) On December 1, 2003, an officer and director
of the Company purchased a delivery vehicle (2003 Ford Van) for the purposes of
assisting Butte Creek Brewing Company, LLC ("Butte Creek") maintain and expand
its self-distribution capabilities. The vehicle is 100% utilized by Butte Creek
as a delivery vehicle. The purchase price of the vehicle was $22,920.70 and was
financed for 60 months with Ford Credit at an annual percentage rate of 5.99% .
The payments on the vehicle are paid and expensed by the Company. The liability
to Ford Credit is in the name of the officer and director of Golden West
Brewing

11

---

company, Inc. and is not recorded as a liability on these financial statements. There are no written agreements between the Company and the officer and director memorializing this transaction. The balance owing as of March 31,
2006 was $13,517.10.

(c) In July 2004, an officer and director of the Company purchased a delivery vehicle (2004 Ford Van) for the purpose of assisting Butte Creek maintain and expand its self-distribution capabilities. The vehicle is 100% utilized by
Butte Creek as a delivery vehicle. The purchase price was $26,155.91 and was financed for 60 months with Ford Credit at an annual percentage rate of 0.90% . The payments on the vehicle are paid and expensed by the Company. The liability to Ford
Credit is the name of the officer and director of the Company and is not recorded as a liability on these financial statements. There are no written agreements between the Company and the officer and director memorializing this transaction. The
balance owing as of March 31, 2006 was $18,014.69.

(d) In 2003, an officer and director of the Company guaranteed a $25,000 line of credit for Butte Creek with one of its key suppliers. No compensation has been paid by either the Company or Butte Creek for the
guarantee.

(e) In 2004, the Company purchased certain hops rhizomes for research and development purposes. The rhizomes were planted on the property of a former director of the Company. The rhizomes were expensed as research and development
expense in 2004. The value of the personal real property used by the former director to farm the hops was an insignificant portion of his property.

(f) On November 1, 2004, J. Andrew Moorer, a Director of the Company, made an uncollateralized advance of $8,750. The advance continues to be uncollateralized and due on demand. This advance started to accrue interest at 8% on
January 1, 2006.

(g) In January 2005, John Power converted $22,500 in outstanding advances to the Company into 90,000 shares of common stock.

(h) Between March and September 2005, the Company borrowed a total of $125,000 from three lenders: $50,000 in July 2005 from Power Curve, Inc. (a company controlled by John Power); $50,000 in May 2005 from Lone Oak
Vineyards, Inc. (a company controlled by Brian Power); and $25,000 in March 2005 from Tiffany Grace, an unaffiliated party. The loans were used to payoff Butte Creek's loans to Tri County Economic Development Corporation, purchase additional
equipment and provide working capital. The Tiffany Grace note, which was executed on September 9, 2005 accrues interest at the rate of 9% per annum, is payable in monthly payments of principal and interest based upon a five year amortization, and is
due in full March 2008. As of March 31, 2006, the Tiffany Grace note had current maturities of $4,534 and a long-term maturity of $16,320. The Power Curve and Lone Oak notes were executed in September, 2005, accrue interest at the rate of 9%
per annum, and are payable in full in 2008. The loans are collateralized by a security interest covering all of our tangible and intangible assets. As of March 31, 2006, the Power Curve and Lone Oak notes had accrued interest of $2,059 and
$0 and long-term maturities of $50,000 and $50,000 respectively.

(i) On December 30, 2005, John Power converted $10,000 in outstanding advances to the Company into 40,000 shares of common stock.

(j) On December 30, 2005, John Power and Power Curve, Inc. converted $215,000 and $90,000, respectively, in outstanding advances into collateralized long-term debt. The notes bear interest at 9% and mature December 31,
2008 and are collateralized by a security interest covering all of our tangible and intangible assets but are junior to the security interest granted to Power Curve, Inc. ($50,000), Lone Oak Vineyards, Inc.($50,000) and Tiffany Grace
($25,000) in September 2005 described above. As of March 31, 2006, these notes had accrued interest of $4,838 and $2,025 with no current maturities and long-term maturities of $215,000 and $90,000 respectively.

12

---

(k) Effective December 30, 2005, our attorney
Clifford Neuman converted $25,000 in accrued fees payable into 100,000 shares of
common stock at a conversion price of $.25 per share. The accrued fees were
incurred in connection with this offering. Mr. Neuman immediately gifted the
shares to his two children equally.

(l) In the three months ended March 31, 2006,
John Power and Power Curve, Inc. have made advances to the Company of $57,300
and $62,050 respectively. The advances are unsecured and due on
demand.

(m) Subsequent to March 31, 2006, John Power and
Power Curve, Inc., have made advances to the Company of $5,000 and $31,360
respectively. The advances are unsecured and due on demand.

4. Operating Leases

Effective July 1, 2005, the Company entered into
a five year lease for office and warehouse space in Chico, California for Butte
Creek. The lease provides for initial monthly rents of $3,150, which will
increase to $3,726 beginning July 2006 with increases per year subject to annual
Consumer Price Index increases, and expires in 2010.

Future minimum lease payments under this lease
are as follows:

|Year Ending December 31, |  |        
|------------------------ |  | -------
|                        
|2006                     |  | $41,256
|2007                     |  | $44,712
|2008                     |  | $44,712
|2009                     |  | $44,712
|2010                     |  | $44,712



|5. Commitments &
      Contingencies
|------------------------------------

A. On December 30, 2005, an unsecured outstanding
advance to the Company by an unaffiliated party in the amount of $10,000 was
converted into 40,000 shares of common stock. In February 2006, the Company was
notified by the SEC that this conversion of $10,000 into 40,000 shares of common
stock to an unaffiliated third party might have been a violation of Section 5 of
the Securities Act of 1933 (the "33 Act"). While Management disagrees with this
view, if it is determined that this transaction constituted a primary offering
by or on behalf of the Company in violation of Section 5 of the 33 Act, then the
Company may be subject to remedial sanctions. Such sanctions may include the
payment of disgorgement, prejudgment interest and civil or criminal penalties.
Management of the Company is not aware of any pending claims for sanctions
against it based on Section 5 of the 33 Act, and intends to vigorously defend
against any such claims if they arise. However, due to the notification by the
SEC, the Company has classified the advance, amounting to $10,000 as of March
31, 2006, as a liability under amounts subject to rescission in the accompanying
March 31, 2006 balance sheet. The shares issued are included in our total number
of shares outstanding as of March 31, 2006. A contingency exists with respect
this matter, the ultimate resolution of which cannot be determined at this
time.

13

---



| | B. Delinquent Taxes &
  Rent
| | ----------------------------

At March 31, 2006
the Company had outstanding payroll tax liabilities of $50,029. Of these amounts
$41,009 are considered delinquent.

California
Redemption Value (CRV) is a tax collected on all package sales to retailers,
processed through the California Department of Conservation and refunded through
the State's recycling program. The United States Bureau of Alcohol, Tobacco and
Firearms ("BATF"), now the TTB, and various state agencies collect excise taxes
often referred to as "alcohol taxes" with the amount based on the volume of beer
sold. At March 31, 2006, the Company had alcohol related taxes payable to
federal and state taxing authorities of $67,904. Of these amounts, $62,500 is
considered delinquent. The detail of those taxes payable is as
follows:

|                                              |  | March
      31, 2006 |  |           
|--------------------------------------------- |  | -------------------- |  | ----------
|Tax Agency                                    |  | Due                  |  | Delinquent
|Internal Revenue Service                      |  | $36,416              |  | $30,900   
|CA Employment Development
      Department    |  | $13,613              |  | $10,109   
|Bureau of Alcohol, Tobacco and
      Firearms |  | $39,954              |  | $35,324   
|CA Board of Equalization                      |  | $5,751               |  | $4,413    
|CA Department of Conservation                 |  | $24,559              |  | $23,785   
|Butte County & CA Franchise Tax
      Board   |  | $18,170              |  | $18,170   

Most of these
delinquent payables have been assumed by the Company in connection with our
acquisition of Butte Creek as the continuation of regulatory compliance is
material to the Company's ability to continue as a going concern. Continued
operations could be severely impaired should the TTB or any other governmental
agency seek to collect any of the delinquent payables before we are able to pay
them.

At March 31, 2006
the Company had outstanding rent obligations on our operating facility of
$17,950. We have entered into a verbal forbearance agreement with the landlord
whereby the landlord will not proceed with collection actions to enforce its
rights under the lease as long as the Company pays current rent and 8% interest
on the outstanding rent obligation timely.

C. California Department of Alcoholic Beverage
Control

On March 15, 2006, the Company was notified that
the California Department of Alcoholic Beverage Control had filed an Accusation
alleging that it had violated California regulations by participating in a beer
tasting at the Mt. Shasta Board & Ski Park, not sponsored by a non-profit.
As a result, the Company may face sanctions ranging from a warning to either a
fine of up to $10,000 or the temporary suspension of ten days of its
manufacturing license. The matter is still pending; however, management of the
Company does not believe the matter will have a material adverse effect on our
ability to conduct business.

14

---



|6. Deferred Offering
    Costs:
|-------------------------------

As of March 31, 2006, the Company had incurred
$198,122.50 related to the pending public offering of its securities. The
Company has carried $150,000 of the costs as deferred offering costs and has
expensed $11,295 in its fiscal 2005 and $36,827.50 in the 3 months ended March
31, 2006. If the offering is successful, the deferred offering costs will be
charged against the proceeds. All legal and accounting costs incurred in excess
of $150,000 will be charged as an expense. Management believes this is the
maximum amount of offering costs that should be charged against the proceeds for
an offering of this size.

The Company's SB-2 registration statement was
declared effective by the Securities and Exchange Commission on February 14,
2006. The offering consists of a minimum of 400,000 shares at $0.50 per share
and a maximum of 1,000,000 shares at $0.50 per share. To date, no shares have
been sold in the offering.



|7. Common
  Stock:
|------------------

At inception, the Company issued 400,000 shares
of its common stock at $0.15 per share for assets valued at $60,000. During the
period ended December 31, 2003, the Company issued 300,000 shares of its common
stock at $0.25 per share for cash of $75,000.

During the period ended December 31, 2004, the
Company issued 800,000 shares of its common stock at $0.25 per share for cash of
$200,000.

In January, 2005, the Company issued 90,000
shares of its common stock at $0.25 per share for conversion of advances payable
of $22,500, and 30,000 shares of common stock in conversion of outstanding
indebtedness in the amount of $7,500.

In connection with the acquisition of Butte Creek
on August 31, 2005, the Company issued 200,000 shares of common stock to Butte
Creek.

Effective December 30, 2005, John Power converted
$10,000 in accrued advances payable into 40,000 shares of common stock, at a
conversion price of $.25 per share.

Effective December 30, 2005, our attorney
Clifford Neuman converted $25,000 in accrued fees payable into 100,000 shares of
common stock at a conversion price of $.25 per share. The accrued fees were
incurred in connection with this offering. Mr. Neuman immediately gifted the
shares to his two children equally.

On December 30, 2005, an uncollateralized
outstanding advance to the Company by an unaffiliated party in the amount of
$10,000 was converted into 40,000 shares of common stock. In February 2006, the
Company was notified by the SEC that this conversion of $10,000 into 40,000
shares of common stock to an unaffiliated third party might have been a
violation of Section 5 of the Securities Act of 1933 (the "33 Act"). While
Management disagrees with this view, if it is determined that this transaction
constituted a primary offering by or on behalf of the Company in violation of
Section 5 of the 33 Act, then the Company may be subject to remedial sanctions.
Such sanctions may include the payment of disgorgement, prejudgment interest and
civil or criminal penalties. Management of the Company is not aware of any
pending claims for sanctions against it based on Section 5 of the 33 Act, and
intends to vigorously defend against any such claims if they arise. However, due
to the notification by the SEC, the Company has classified the advance,
amounting to $10,000 as of March 31, 2006, as a liability under amounts subject
to rescission in the accompanying March 31, 2006 balance sheet. The 40,000
shares issued are included in our total number of shares outstanding as of March
31, 2006. A contingency exists with respect this matter, the ultimate resolution
of which cannot be determined at this time.

15

---



|8. Income
Taxes
|---------------

The Company has an estimated net operating loss
carry forward of approximately $63,000 and $191,000 at December 31, 2004 and
December 31, 2005, respectively, to offset future taxable income. The net
operating loss carry forward, if not used, will expire in various years through
2025, and may be restricted if there is a change in ownership. No deferred
income taxes have been recorded because of the uncertainty of future taxable
income to be offset.

Significant components of the Company's net
deferred income tax asset are as follows:

|                                       | March          |   | December | December
|-------------------------------------- | -------------- | - | -------- | --------
|                                       | 31,
      2006 |   | 31,2005  |         
|Net operating losses carry
    forward | $      134,425 | $ | 191,000  | $       
|Deferred income tax allowance          | (24,869)       |   | (35,335) |         
|Net deferred income tax asset          | $ -            | $ | -        | $       
|                                       |                |   |          |         

The reconciliation of income tax (benefit)
computed at the federal statutory rate to income tax expense (benefit) for all
periods presented is as follows:

Tax (benefit) at Federal statutory
    rate
    
    (15.00)%State tax (benefit) net of Federal
      benefit
    
    (3.50)Valuation allowance
    
    18.50Tax provision (benefit)
    
    -




|9.
Acquisition
|--------------

On August 31, 2005, the Company acquired all the
assets and certain liabilities of Butte Creek Brewing Company, LLC (Butte
Creek). The results of Butte Creek's operations have been included in the
consolidated financial statements since that date. Butte Creek was a
manufacturer of craft beers, specializing in organic beers. The Company made the
acquisition to become an organic craft brewer and expects to continue to produce
organic craft beers and to market them strategically in niche markets to
capitalize on dedication to the use of organic ingredients.

This business combination was accounted for as a
purchase of Butte Creek by the Company under the purchase method of accounting
in accordance with Statement of Financial Accounting Standards No. 141, Business
Combinations. Under the purchase method of accounting, the total purchase price,
including transaction costs, is allocated to the net tangible and intangible
assets acquired by the Company in connection with the transaction, based on
their fair values as of the completion of the transaction. The aggregate
purchase price was $983,084, including $567,400 cash, $365,684 assumed
liabilities, and common stock valued at $50,000. The $567,400 cash consisted of
advances to Butte Creek of $215,035 and $134,965 during the years ended December
31, 2004 and 2003, respectively, and advances of $217,400 during the eight
months ended August 31, 2005. These advances were prepayments on the purchase of
assets and were uncollateralized. The value of the 200,000 common shares issued
was determined based on the offering price of the Company's common shares in its
prospectus, which management believes to be the fair value.

16

---

The following table summarizes the fair values of
the assets acquired and liabilities assumed at the date of
acquisition.

|                              |  | At August 31, 2005
|----------------------------- |  | ------------------
|                             
|Current assets                |  | $197,612          
|Property, plant and equipment |  | 287,969           
|Intangible assets             |  | 25,000            
|Goodwill                      |  | 472,503           
|Total assets acquired         |  | 983,084           
|Current liabilities           |  | 365,684           
|Total liabilities assumed     |  | 365,684           
|Net assets acquired           |  | $617,400          

The $25,000 of
acquired intangible assets relate to tradenames and trademarks that have an
expected remaining useful life of approximately five years.



|10. Equity Incentive
  Plan:
|----------------------------

On December 10, 2004, we adopted our 2004 Equity
Incentive Plan for our officers, directors and other employees, plus outside
consultants and advisors. Under the Equity Incentive Plan, our employees,
outside consultants and advisors may receive awards of non-qualified options and
incentive options, stock appreciation rights or shares of stock. A maximum of
500,000 shares of our common stock are subject to the Equity Incentive Plan. No
stock appreciation rights, options or bonus stock have been granted under the
Equity Incentive Plan.

The Equity Incentive Plan may be administered by
the Board or in the Board's sole discretion by the Compensation Committee of the
Board or such other committee as may be specified by the Board to perform the
functions and duties of the Committee under the Equity Incentive Plan. Subject
to the provisions of the Equity Incentive Plan, the Committee and the Board
shall determine, from those eligible to be participants in the Equity Incentive
Plan, the persons to be granted stock options, stock appreciation rights and
restricted stock, the amount of stock or rights to be optioned or granted to
each such person, and the terms and conditions of any stock option, stock
appreciation rights and restricted stock.



|11. Subsequent
  Events:
|------------------------

A. Subsequent to March 31, 2006, John Power and
Power Curve, Inc., have made advances to the Company of $5,000 and $31,360
respectively. The advances are unsecured and due on demand.

B. The general manager of our brewery, Tom
Atmore, resigned his position effective March 31, 2006. Mr. Atmore will serve as
a consultant for a period of 90 days thereafter.

17

---

|ITEM 2. |  | MANAGEMENT'S DISCUSSION AND
      ANALYSIS OF FINANCIAL
|------- |  | -------------------------------------------------------
|        |  | CONDITION AND RESULTS OF
      OPERATIONS              



|Plan of
  Operations
|--------------------

Golden West Brewing
Company, Inc. (the "Company" or "Golden West") was formed in December 2003 to
acquire substantially all of the business assets of Butte Creek Brewing Company,
LLC ("Butte Creek" or "Butte"). We are currently a holding company for our
wholly-owned subsidiary Golden West Brewing Company, a California corporation,
which acquired the assets and certain liabilities of Butte Creek on August 31,
2005. Butte Creek has been operating as a craft brewery in Chico, California
since 1996. It specializes in brewing certified organic craft beers. Upon
completion of the proposed initial public offering, we hope to increase our
production, increase sales and reduce our operating losses, although there is no
assurance that we can achieve these goals. In 2005, we doubled our production
capacity from 4,000 barrels per year to approximately 8,000 barrels per year
with the acquisition of two 80 barrel fermentation tanks and one 80 barrel
conditioning or "brite" tank. We still face operational challenges as our sales
and production levels increase. The following are the key issues and challenges
facing the Company:

|· | Sales. We
      believe that our minimum level of sales for our operating subsidiary,
      Butte Creek, to break-even is $100,000 per month. Butte Creek has only
      achieved this level of sales during a month once in its history. It is
      critical for us to improve our sales so that we can achieve at least a
      break-even operating level. There is no assurance that we will be able to
      achieve this level of sales, or if we achieve it, that we will be able to
      maintain it. Our business plan is to (a) introduce new products (b) add
      new sales territories and (c) increase our penetration in existing
      territories.
|- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| 
|  | Increase Gross Profit
      Margin. In addition, our gross profit margin
      must be increased to at least 35% of sales. Our plan is to take advantage
      of our increased production capacity and increase our production which we
      believe will lower our average cost per barrel of beer produced. Also, we
      are trying to improve our product mix with higher margin products.
      Finally, we raised our prices in early 2006 and believe they will need to
      be raised again in January 2007. There is no assurance that we will be
      successful in implementing our plan to increase our gross profit
      margin.                   
| 
|  | Control Selling, General &
      Administrative Expenses. In addition to
      raising sales, we must control our expenditures to achieve a break-even
      operating level. We have taken steps to reduce our monthly operating
      expenses by reducing our employee head-count.                                                                                                                                                                                                                                                                                                                                                                                 
| 
|· | Working Capital
      Shortage. Our history of working capital
      deficiencies make it difficult to build finished inventory. We owe
      delinquent taxes to several Federal and State agencies. In addition, we
      have increased our production capacity and launched new products that will
      require increased levels of inventory.                                                                                                                                                                                                                                                                                                                   
| 
|· | Lack of Marketing
      Materials. We have very limited marketing
      budgets and are not competitive with other breweries of our size in the
      amount and quality of marketing materials needed to support our
      distribution network.                                                                                                                                                                                                                                                                                                                                                                                                                     
| 

18

---

|· | Continued Operating
      Losses. Our history of operating losses makes
      it difficult to raise capital for our working capital needs.                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| 
|· | Lack of Inventory
      Controls. We need to improve our control and
      management of our finished inventory to reduce the amount of shrinkage we
      have experienced due, we believe, to unsupervised employees. We do not
      believe our lack of inventory control has materially impacted our
      business. We conduct physical inventories on a monthly basis and recently
      upgraded our accounting software to improve our inventory control. If
      these measures do not provide improved inventory controls, we would expect
      our margins to erode and our sales to decline.
| 

Both Golden West
and Butte Creek have sustained losses from operations. Golden West has a working
capital deficit which raise substantial doubts about their ability to continue
as a going concern. Our audited financial statements have received going concern
qualifications from our Independent Registered Public Accounting
Firm.

The following
discussion and analysis is for the three month period ended March 31, 2006 and
should be read in conjunction with the Notes thereto of Golden West Brewing
Company, Inc. financial statements We were a development stage entity prior to
our acquisition of Butte Creek on August 31, 2005.



|Possible Section 5
    Violation
|--------------------------------

It is possible that
it may be determined that we violated Section 5 of the Securities Act. Section 5
of the Securities Act prohibits the use of any means or instruments of
transportation or communication in interstate commerce or of the mails to sell a
security unless a registration statement is in effect as to such security.
Section 5(c) of the Securities Act prohibits the use of any means or instruments
of transportation or communication in interstate commerce or of the mails to
offer to sell or offer to buy a security unless a registration statement has
been filed as to such security.

The transaction
that may have caused such a violation of Section 5 is as follows: In December,
2004, we made the initial filing of the registration statement of which this
prospectus forms a part. In June 2005, an unaffiliated third-party, Bob Vogt,
loaned us the sum of $10,000. The loan was unsecured and undocumented. It was
our intention to repay the loan in a short period of time; however, we were
unable to do so due to our lack of working capital. In December 2005, in an
effort to improve our balance sheet, we offered Mr. Vogt an opportunity to
convert his $10,000 loan into shares of our common stock. In December 2005, we
effected the conversion of Mr. Vogt's loan into shares of our common stock in a
transaction in which we relied upon an exemption from the registration
requirements of the Securities Act contained in Section 4(2), which exempts
transactions not involving a public offering.

Under the
principals of integration, two or more offerings of securities may be integrated
and deemed to be one offering under certain circumstances. Factors considered in
determining whether offers and sales of securities should be integrated
are:

|· | Whether the sales are part of a single
      plan of financing;              
|- | -----------------------------------------------------------------------------
| 
|· | Whether the sales involve the issuance
      of the same class of securities;
| 
|· | Whether the sales have been made at or
      about the same time;            
| 

19

---

|· | Whether the same type of consideration
      is being received; and,
|- | --------------------------------------------------------------------
| 
|· | Whether the sales were made for the same
      general purpose.     
| 

If it were to be
determined that the conversion of Mr. Vogt's note payable into shares of common
stock is integrated with the offering covered by the registration statement and
this prospectus, then we could not rely upon the exemption contained in Section
4(2) of the Securities Act for the Vogt conversion, and as a result, it may be
determined that the conversion of the Vogt loan into shares of common stock
constituted a violation of Section 5 of the Securities Act. If this were to
occur, we would become subject to remedial actions, which would include the
payment of disgorgement, pre-judgment interest and civil or criminal penalties
pursuant to Sections 12(a)(1), 8A and 24 of the Securities Act. We are not aware
of any pending claims for sanctions against us based upon a Section 5 violation
and we intend to vigorously defend any such claim should it arise. However, in
our financial statements, we have classified the advance payable to Mr. Vogt as
subject to rescission. A rescission offer would require that we file a
registration statement covering the offer and, once the registration statement
has been declared effective by the Securities and Exchange Commission, redeeming
the shares of common stock and repaying the loan to Mr. Vogt. In addition, we
could face possible civil penalties in an undetermined amount. This could have a
significant impact on our working capital and impair our ability to continue as
a going concern.

Furthermore, any
claim for rescission would make it difficult for us to raise additional debt or
equity financing needed to run our business, and would not be viewed favorably
by analysts or investors.



|Critical Accounting Policies And
      Estimates
|------------------------------------------------

In the ordinary
course of business, we have made a number of estimates and assumptions relating
to the reporting of results of operations and financial condition in the
preparation of our financial statements in conformity with accounting principles
generally accepted in the United States of America. Actual results could differ
significantly from those estimates under different assumptions and conditions.
We believe that the following discussion addresses our most critical accounting
policies, which are those that are most important to the portrayal of our
financial condition and results. We constantly re-evaluate these significant
factors and make adjustments where facts and circumstances dictate.

The preparation of
financial statements in conformity with generally accepted accounting principles
requires management to make estimates and assumptions that affect the amounts
reported in the financial statements and the accompanying notes. The actual
results could differ from those estimates. Our financial statements are based
upon a number of significant estimates, the allowance for doubtful accounts,
obsolescence of inventories and the estimated useful lives selected for property
and equipment. Due to the uncertainties inherent in the estimation process, it
is at least reasonably possible that the estimates for these items could be
further revised in the near term and such revisions could be
material.

20

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Overview - Factors Affecting Results of
Operations

Sales in the craft
beer industry generally reflect a degree of seasonality, with the first and
fourth quarters historically being the slowest and the rest of the year
typically demonstrating stronger sales. We have historically operated with
little or no backlog and, therefore, our ability to predict sales for future
periods is limited.

Our sales are
affected by several factors, including consumer demand, price discounting and
competitive considerations. We compete in the craft brewing market as well as in
the much larger specialty beer market, which encompasses producers of import
beers, major national brewers that produce fuller-flavored products, and large
spirit companies and national brewers that produce flavored alcohol beverages.
Beyond the beer market, craft brewers also face competition from producers of
wines and spirits. The craft beer segment is highly competitive due to the
proliferation of small craft brewers, including contract brewers, and the large
number of products offered by such brewers. Imported products from foreign
brewers have enjoyed resurgence in demand since the mid-1990s. Certain national
domestic brewers have also sought to appeal to this growing demand for craft
beers by producing their own fuller-flavored products. In 2001 and 2002, the
specialty segment saw the introduction of flavored alcohol beverages, the
consumers of which, industry sources generally believe, correlate closely with
the consumers of the import and craft beer products. While sales of flavored
alcohol beverages were initially very strong, these growth rates slowed in 2003
and 2004. The wine and spirits market has experienced a surge in the past
several years, attributable to competitive pricing, increased merchandising, and
increased consumer interest in spirits. Because the number of participants and
number of different products offered in this segment have increased
significantly in the past ten years, the competition for bottled product
placements and especially for draft beer placements has intensified.



|Operating and Financial Review and
      Prospects
|--------------------------------------------------



|Operating
  Results
|-------------------

For the quarter ended March 31, 2006 compared
to the quarter ended March 31, 2005:

SALES. Net sales for the quarter ended March 31,
2006 were $184,880 compared to $0.00 in the quarter ended March 31, 2005. The
increase was due to our acquisition of Butte Creek which occurred on August 31,
2005. Our sales by segment consisted of:

|Case Beer Sales  |  | 87.9%
|---------------- |  | -----
|Draft Beer Sales |  | 8.7% 
|Contract Brewing |  | 3.4% 

COST OF GOODS SOLD. Cost of goods sold for the
quarter ended March 31, 2006 was $126,611 or 68.5% of net sales. There was no
comparison to fiscal 2004 as we were still a development stage company in the
corresponding period. Our cost of goods sold for each segment was:

Case Beer
Sales64.3%

21

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|Draft Beer Sales |  | 44.5%
|---------------- |  | -----
|Contract Brewing |  | 78.4%

In addition we had $2,315 in shipping costs that
were not allocated to any segment but was part of our cost of goods
sold.

GROSS PROFIT. Gross profit for the quarter ended
March 31, 2006 was $58,269 or 31.5% of net sales. Our goal is to increase our
gross profit to at least 35% of net sales. There was no comparison to fiscal
2004 as we were still a development stage company in the corresponding
period.

OPERATING EXPENSES. Total operating expenses
increased $170,401 or 1800% to $179,862 for of the quarter ended March 31, 2006
compared to $9,461 in the quarter ended March 31, 2005. The increase was
primarily due to our acquisition of Butte Creek in 2005. In addition, we had
$36,828 in legal and accounting costs that were expensed in the quarter related
to our self-underwritten public offering that commenced on February 14, 2006.



| | Components of operating expenses
      were:
| | --------------------------------------------

|· | Depreciation & Amortization
      expensewas $7,824 for the quarter ended March
      31, 2006. The increase was the result of tangible and intangible assets
      acquired from Butte Creek on August 31, 2005 and additional brewing
      equipment acquired in 2005. We did not own any assets in the first
      quarter of 2005 that were subject to depreciation or amortization.
|- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| 
| 
|· | Management compensationwas $19,807 for the quarter ended March 31,
      2006 compared to zero in the corresponding quarter ended March 31, 2005.
      The increase was solely related to our acquisition of Butte Creek on
      August 31, 2005.                                                                                                                                      
| 
|· | Rent expensewas $9,450 for the quarter ended March 31, 2006 compared to
      zero in the corresponding quarter in 2005. The increase was the rent paid
      for our Chico, California brewery during the period which we did not
      operate until our acquisition of Butte Creek on August 31, 2005.                                                                                
| 
|· | Selling expensewas $23,726 for the quarter ended March 31, 2006 compared to
      zero in the prior fiscal year. The increase was due to our acquisition of
      Butte Creek on August 31, 2005.                                                                                                                                                                                        
| 
|· | Outside Sales Compensationwas $23,254 for the quarter ended March 31,
      2006 compared to zero in the prior fiscal year. The increase was the
      result of purchase of Butte Creek on August 31, 2005.                                                                                                                                                                             
| 
|· | Other General & Administrative
      Operating Expensesincreased $51,428 or 1,840%
      for quarter ended March 31, 2006 compared to $2,795 for the quarter ended
      March                                                                                                                                                                                                           
| 

22

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31, 2005. The increase was a result of our
acquisition of Butte Creek in 2005. This categories primary components are
insurance, payroll and payroll related expenses.

OPERATING LOSS. The operating loss for the
quarter ended March 31, 2006 increased $112,132 or 1185% to $121,593 from $9,461
compared to the corresponding quarter ended March 31, 2005 as a result of our
acquisition of Butte Creek on August 31, 2005. In addition, we have incurred
substantial legal and accounting expense in the quarter related to our pending
public offering.

OTHER INCOME & EXPENSE. Total other expense
was $12,832 for the quarter ended March 31, 2006 compared to zero for the
corresponding quarter ended March 31, 2005. The primary component was interest
expense of $13,201 related to debt that was incurred as part of the Butte Creek
acquisition on August 31, 2005.

NET LOSS. Net loss increased $124,964 or 1320% to
$134,425 for the quarter ended March 31, 2006 compared to $9,461 for the
corresponding period of 2005. The increase in our net loss was a result of the
operating losses incurred by Butte Creek in the first quarter of 2006. We did
not own Butte Creek in the first quarter of 2005. In addition, we incurred
$36,828 in legal and accounting costs during the quarter related to our pending
self-underwritten public offering.



|Liquidity and Capital
      Resources
|-------------------------------------

We have required
capital principally for the purchase of Butte Creek and the funding of operating
losses and working capital. To date, we have financed our capital requirements
through the sale of equity and short and long-term borrowings. We expect to meet
our future financing needs and working capital and capital expenditure
requirements through cash on hand, borrowings and offerings of debt or equity
securities, although there can be no assurance that our future financing efforts
will be successful beyond this offering. The terms of future financings could be
highly dilutive to investors in this offering.

The minimum net
proceeds of our pending self-underwritten public offering should satisfy our
working capital requirements for approximately three months; if the maximum
offering is sold, the proceeds should be sufficient to satisfy our working
capital needs for nine months. We have no commitments, understandings or
arrangements for any additional working capital. If this offering is not
successful, or if we are unable to secure additional financing to cover our
operating losses until break-even operations can be achieved, we may not be able
to continue as a going concern.

We had no cash and
cash equivalents and a negative working capital of $377,838 at March 31, 2006.
Our long-term debt was $421,320 at March 31, 2006. We do not have sufficient
cash on hand or available credit facilities to continue operations for more than
30 days and are dependent upon the completion of this offering to provide
adequate working capital to continue operations. In the interim, we have raised
capital through the sales of unregistered securities and advances and/or loans
from its officers and directors to acquire Butte Creek, and fund its operations
after its acquisition. There are no assurances that we will be able to secure
additional capital to maintain the operations of Butte Creek until the proposed
initial public offering is completed.

During the quarter ended
March 31, 2006, the Company's capital expenditures totaled $6,551.

23

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|Available
  Credit
|------------------

The Company assumed
a $25,000 balance on a credit card issued by Wells Fargo Bank, with interest at
the rate of 16.25% . The card is uncollateralized and guaranteed by Tom Atmore,
Butte Creek's Managing Member and former general manager. The outstanding
balance as of March 31, 2006 was $24,238

The Company assumed
a $15,400 line of credit on a Butte Creek credit card with MBNA with interest at
the rate of 29.98% . The debt on the credit card is uncollateralized but
guaranteed by Tom Atmore, Butte Creek's managing member and our former general
manager. The outstanding balance as of March 31, 2006 was $11,233.



|Notes
Payable
|-------------

On November 1,
2004, J. Andrew Moorer, a Director of the Company, made an uncollateralized
advance of $8,750. This advance started to accrue interest at 8% on January 1,
2006. Between March and September 2005, the Company borrowed a total of $125,000
from three lenders: $50,000 in July 2005 from Power Curve, Inc. (a company
controlled by John Power); $50,000 in May 2005 from Lone Oak Vineyards, Inc. (a
company controlled by Brian Power); and $25,000 in March 2005 from Tiffany
Grace, an unaffiliated party. The loans were used to payoff Butte Creek's loans
to Tri County Economic Development Corporation, purchase additional equipment
and provide working capital. The Tiffany Grace note, which was executed on
September 9, 2005 accrues interest at the rate of 9% per annum, is payable in
monthly payments of principal and interest based upon a five year amortization,
and is due in full March 2008. As of December 31, 2005, the Tiffany Grace note
had current maturities of $4,336 and a long-term maturity of $18,638. The Power
Curve and Lone Oak notes were executed in September, 2005, accrue interest at
the rate of 9% per annum, and are payable in full in 2008. The loans are
collateralized by a security interest covering all of our tangible and
intangible assets. As of March 31, 2006, the Power Curve and Lone Oak notes had
accrued interest of $2,059 and long-term maturities of $100,000.

On December 30,
2005, John Power and Power Curve, Inc. converted $215,000 and $90,000,
respectively, in outstanding advances into collateralized long-term debt. The
notes bear interest at 9% and mature December 31, 2008 and are collateralized by
a security interest covering all of our tangible and intangible assets but are
junior to the security interest granted to Power Curve, Inc. ($50,000), Lone Oak
Vineyards, Inc. ($50,000) and Tiffany Grace ($25,000) in September 2005
described above. As of March 31, 2006, these notes had accrued interest of
$4,838 and $2,025 respectively and long-term maturities of $215,000 and $90,000
respectively.

As part of our
acquisition of Butte Creek, the Company assumed an $8,136 note payable to Bruce
Detweiler, a member of Butte Creek, and a $10,098 note payable to Richard
Atmore, Jr., a member of Butte Creek and the brother of Tom Atmore, a managing
member of Butte Creek

The Company has
pledged substantially all of our assets to secure some of the notes. Should the
Company default in the payment of these secured notes, the collateral could be
subject to forfeiture.

In the three months
ended March 31.2006, John Power and Power Curve, Inc. have made advances to the
Company of $57,800 and $ 52,150 respectively. The advances are uncollateralized
and due on demand.

Subsequent to March 31,
2006, John Power and Power Curve, Inc., have made advances to the Company of
$5,000 and $31,360 respectively. The advances are unsecured and due on
demand.

24

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| | Delinquent Taxes &
    Rent
| | ---------------------------

Delinquent Taxes &
Rent

At March 31, 2006
the Company had outstanding payroll tax liabilities of $50,029. Of these amounts
$41,009 are considered delinquent.

California
Redemption Value (CRV) is a tax collected on all package sales to retailers,
processed through the California Department of Conservation and refunded through
the State's recycling program. The United States Bureau of Alcohol, Tobacco and
Firearms ("BATF"), now the TTB, and various state agencies collect excise taxes
often referred to as "alcohol taxes" with the amount based on the volume of beer
sold. At March 31, 2006, the Company had alcohol related taxes payable to
federal and state taxing authorities of $67,904. Of these amounts, $62,500 is
considered delinquent. The detail of those taxes payable is as
follows:

|                                              |  | March
      31, 2006 |  |           
|--------------------------------------------- |  | -------------------- |  | ----------
|Tax Agency                                    |  | Due                  |  | Delinquent
|Internal Revenue Service                      |  | $36,416              |  | $30,900   
|CA Employment Development
      Department    |  | $13,613              |  | $10,109   
|Bureau of Alcohol, Tobacco and
      Firearms |  | $39,954              |  | $35,324   
|CA Board of Equalization                      |  | $5,751               |  | $4,413    
|CA Department of Conservation                 |  | $24,559              |  | $23,785   
|Butte County & CA Franchise Tax
      Board   |  | $18,170              |  | $18,170   

Most of these
delinquent payables have been assumed by the Company in connection with our
acquisition of Butte Creek as the continuation of regulatory compliance is
material to the Company's ability to continue as a going concern. Continued
operations could be severely impaired should the TTB or any other governmental
agency seek to collect any of the delinquent payables before we are able to pay
them.

At March 31, 2006
the Company had outstanding rent obligations on our operating facility of
$17,950. We have entered into a verbal forbearance agreement with the landlord
whereby the landlord will not proceed with collection actions to enforce its
rights under the lease as long as the Company pays current rent and 8% interest
on the outstanding rent obligation timely.

Off Balance Sheet Arrangements

The Company does not have and has never had any
off-balance sheet arrangements.

25

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|Overview of Product
      Distribution
|--------------------------------------

Our products are
available for sale directly to consumers in draft and bottles at restaurants,
bars and liquor stores, as well as in bottles at supermarkets, warehouse clubs
and convenience stores. Like substantially all craft brewers, our products are
delivered to these retail outlets through a network of local distributors whose
principal business is the distribution of beer and, in some cases, other
alcoholic beverages, and who traditionally have local distribution relationships
with one or more national beer brand.

Sales in the craft
beer industry generally reflect a degree of seasonality, with the first and
fourth quarters historically being the slowest and the rest of the year
typically demonstrating stronger sales. We have historically operated with
little or no backlog and, therefore, our ability to predict sales for future
periods is limited.

Certain Considerations: Issues and
Uncertainties

We do not provide
forecasts of future financial performance or sales volume, although this
prospectus contains certain other types of forward-looking statements that
involve risks and uncertainties. Those risks and uncertainties are discussed
more fully in the section of this prospectus titled "Risk Factors." While we are
optimistic about our long-term prospects, the following issues and
uncertainties, among others, should be considered in evaluating its business
prospects and any forward-looking statements.

In light of
uncertain contingencies relating to our acquisition of Butte Creek, we
anticipate that a material impairment charge is reasonably likely to occur in
the future, resulting in a material impact on our financial statements and
results of operations. Since the acquisition has been consummated, we will be
required to determine if a valuation allowance with respect to our investment in
Butte Creek. Based upon the financial history of Butte Creek, it appears to us
that a valuation allowance is reasonably likely.



|Recent Accounting
      Pronouncements
|--------------------------------------

There were various
accounting standards and interpretations issued during 2005, 2004 and 2003, none
of which are expected to have a material impact on the Company's consolidated
financial position, operations or cash flows.

ITEM 3. CONTROLS AND PROCEDURES

The Company's Principal Executive Officer and
Principal Financial Officer, John C. Power, has established and is currently
maintaining disclosure controls and procedures for the Company. The disclosure
controls and procedures have been designed to provide reasonable assurance that
the information required to be disclosed by the Company in reports that it files
under the Exchange Act is recorded, processed, summarized and reported within
the time periods specified in the rules and forms of the SEC and to ensure that
information required to be disclosed by the Company is accumulated and
communicated to the Company's management as appropriate to allow timely
decisions regarding required disclosure.

The Principal Executive Officer and Principal
Financial Officer conducted an update review and evaluation of the effectiveness
of the Company's disclosure controls and procedures and have concluded, based on
his evaluation as of the end of the period covered by this Report, that our

26

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disclosure controls and procedures are not effective to provide reasonable assurance that information required to be disclosed in the reports that you file or submit under the Exchange Act is accumulated and communicated to
management, including our principal executive officer and our principal financial officer, to allow timely decisions regarding required disclosure and we refer you to Exchange Act Rule 13a-15(e). We initially became subject to the reporting
requirements of Section 13a of the Exchange Act on February 16, 2006. The principal deficiency in our disclosure controls and procedures is our lack of a dedicated Chief Financial Officer who is primarily responsible for our public disclosures and
financial reporting. We intend to retain a qualified Chief Financial Officer during the present fiscal year. There have been no material changes in our internal controls or in other factors that could materially affect these controls subsequent to
the date of the previously mentioned evaluation.

27

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|PART II. OTHER
      INFORMATIONItem 1. Legal
      Proceedings
|---------------------------------------------------------------

On March 15, 2006, we were notified that the
California Department of Alcoholic Beverage Control had filed an Accusation
alleging that we had violated California regulations by participating in a beer
tasting at the Mt. Shasta Board & Ski Park, not sponsored by a non-profit.
As a result, we may face sanctions ranging from a warning or up to $10,000 in
fines or a temporary suspension of ten days of our manufacturing license. The
matter is still pending; however, we do not believe the matter will have a
material adverse effect on our ability to conduct business.

There are no material legal proceedings in which
either we or any of our affiliates are involved which could have a material
adverse effect on our business, financial condition or future
operations.

Item 2. Unregistered Sales of Equity
Securities and Use of Proceeds

None, except as previously
disclosed.Item 3. Defaults Upon Senior
SecuritiesNone, except as previously
disclosed.

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

None, except as previously
disclosed.



|Item
5.
|-------



|Other
  Information
|-------------------



|None, except as previously
      disclosed.
|-------------------------------------------

Item 6. Exhibits and Reports on Form
8-K



| | Exhibits
| | --------

|31. | Certification                                         
|--- | ------------------------------------------------------
|   
|32. | Certification pursuant to 18 U.S.C.
      Section 1350
|   



|Reports on Form
  8-K
|---------------------

Current Report on Form 8-K, Items 5.02 and 9.01,
dated March 31, 2006, as filed with the Commission on April 6, 2006.

28

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|SIGNATURES
|----------

Pursuant to the
requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the
Registrant has duly caused this Quarterly Report to be signed on its behalf by
the undersigned, thereunto duly authorized.



| | GOLDEN WEST BREWING COMPANY,
    INC.
| | -------------------------------------



| | Date:May 19,
      2006By:/s/ John C.
      Power
| | -------------------------------------------------



| | John C. Power, President, Chief Financial Officer,
      Principal Accounting
Officer
| | -------------------------------------------------------------------------------------

29

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