SECURITIES AND EXCHANGE
COMMISSION


Washington, D.C.
20549





FORM 10-KSB





Annual
Report Under Section 13 or 15(d) of


the
Securities Exchange Act of 1934





For the
Fiscal Year Ended: June30, 2007





Commission
FileNo. 000-52997





GREAT SPIRITS,
INC.


(Exact
Name of Small Business Issuer as specified in its charter)








Colorado
            20-5572519(State
      or other jurisdiction
            (IRS
      Employer File Number)of
      incorporation)





215 N. Washington
      StreetMonte
      Vista, Colorado
            81144(Address
      of principal executive offices)
            (zip
      code)





(719)
849-8162


(Registrant's
telephone number, including area code)





Securities
to be Registered Pursuant to Section 12(b) of the Act: None





Securities
to be Registered Pursuant to Section 12(g) of the Act:





Common Stock, $.0.001 per
share par value








Check
whether issuer is not required to file reports pursuant to Section 13 or 15(d)
of the Exchange Act [ ]
  Indicate
by check mark whether the Registrant (1) has filed all Reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days. Yes: [X] No: [ ]
 
 Check
if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B is contained in this form and no disclosure will be contained, to
the best of Registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-KSB.
[X]
 
 Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act): Yes [ ] No [X].
 
 Registrant's
revenues for its most recent fiscal year were $-0-. State the aggregate market
value of the voting stock held by nonaffiliates computed by reference to the
price at which the stock was sold, or the average bid and asked prices of such
stock, as of a specified date within the past 60 days: $-0-.  The
number of shares outstanding of the Registrant's common stock, as of the latest
practicable date, June 30, 2007, was 8,248,020.








FORM 10-KSB


Great Spirits,
Inc.





INDEX




PagePART
      IItem
      1. Description of Business
            3Item
      2. Description of Property
            9Item
      3. Legal Proceedings
            9Item
      4. Submission of Matters to a Vote of Security Holders
            9PART
      IIItem
      5. Market for Common Equity, Related Stockholder Matters and Issuer
      Purchases of Equity Securities
            9Item
      6. Management's Discussion and Analysis of Financial Condition and Results
      of Operations
            11Item
      7. Financial Statements
            F-1Item
      8. Changes in and Disagreements with Accountants on Accounting and
      Financial Disclosures
            17Item
      8A. Controls and Procedures
            17Item
      8B. Other Information
            17PART
      IIIItem
      9. Directors, Executive Officers, Promoters and Control Persons;
      Compliance with Section 16(a) of the Exchange Act
            17Item
      10. Executive Compensation
            19Item
      11. Security Ownership of Certain Beneficial Owners
      and Management
            19Item
      12. Certain Relationships and Related Transactions
            19Item
      13. Exhibits and Reports on Form 8-K
            19Item
      14. Principal Accountant Fees and Services
            20Financial
      Statements pages
            F-1
      – F-8Signatures
            20




-
2 -





All
references herein to “we,” “us,” and “our,” refer to Great Spirits, Inc., a
Colorado corporation and its wholly-owned subsidiary, Rocky Mountain
Distilleries, Inc. Except as we might otherwise specifically indicate, all
references us include our subsidiary.
 
 Forward-Looking
Statements
 
 The
following discussion contains forward-looking statements regarding us, our
business, prospects and results of operations that are subject to certain risks
and uncertainties posed by many factors and events that could cause our actual
business, prospects and results of operations to differ materially from those
that may be anticipated by such forward-looking statements. Factors that may
affect such forward-looking statements include, without limitation: our ability
to successfully develop new products and services for new markets; the impact of
competition on our revenues, changes in law or regulatory requirements that
adversely affect or preclude clients from using us for certain applications;
delays our introduction of new products or services; and our failure to keep
pace with our competitors.
 
 
 When used
in this discussion, words such as "believes", "anticipates", "expects",
"intends" and similar expressions are intended to identify forward-looking
statements, but are not the exclusive means of identifying forward-looking
statements. Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date of this report. We
undertake no obligation to revise any forward-looking statements in order to
reflect events or circumstances that may subsequently arise. Readers are urged
to carefully review and consider the various disclosures made by us in this
report and other reports filed with the Securities and Exchange Commission that
attempt to advise interested parties of the risks and factors that may affect
our business.





PART I





Item 1. DESCRIPTION OF
BUSINESS.








(a) RISK
FACTORS





You should carefully consider the
risks and uncertainties described below andthe other information in this
document before deciding to invest in shares ofour common
stock.





The occurrence of any of the
following risks could materially and adverselyaffect our business, financial
condition and operating result. In this case,the trading price of our common
stock could decline and you might lose all orpart of your
investment.





Risks Related to Our Business and
Industry


We
are recently formed, have no operating history, have never been profitable, and
may never be profitable.
 We were
formed as a Colorado business entity in August, 2006. Our wholly-owned
subsidiary was formed in September, 2005. At the present time, we are a
development stage company which is only minimally capitalized, has not engaged
in any substantial business activity, and has no successful operating
history. There can be no guarantee that we will ever be
profitable. From our inception on September 26, 2005 through June 30, 2007,
we have generated no revenue. From our inception on September 26, 2005 through
June 30, 2007 we had a net loss of $13,281.
  Because
we had incurred operating losses from our inception, our accountants have
expressed doubts about our ability to continue as a going
concern.
 For the
period ended June 30, 2007, our accountants have expressed doubt about our
ability to continue as a going concern as a result of our continued net losses.
Our ability to achieve and maintain profitability and positive cash flow is
dependent upon:
   -
3 -
  ·
                  our
      ability to begin active operations;
 
 ·
                  our
      ability to locate clients who will purchase our vodka products;
      and
 
 ·
                  our
      ability to generate revenues.
 Based
upon current plans, we may incur operating losses in future periods because we
may, from time to time, be incurring expenses but not generating sufficient
revenues. We expect approximately $50,000 in operating costs over the next
twelve months. We cannot guarantee that we will be successful in generating
sufficient revenues or other funds in the future to cover these operating costs.
Failure to generate sufficient revenues will cause us to go out of
business.
  We
have a lack of liquidity and will need additional financing in the future.
Additional financing may not be available when needed, which could delay our
development or indefinitely postponed.
  We are
only minimally capitalized. Because we are only minimally capitalized, we expect
to experience a lack of liquidity for the foreseeable future in our proposed
operations. We will adjust our expenses as necessary to prevent cash flow or
liquidity problems. However, we expect we will need additional financing of some
type, which we do not now possess, to fully develop our operations. We expect to
rely principally upon our ability to raise additional financing, the success of
which cannot be guaranteed. We will look at both equity and debt financing,
including loans from our principal shareholder. However, at the present time, we
have no definitive plans for financing in place, other than the funds which may
be loaned to us by Ms. Hyde, our President. In the event that we need additional
capital, Ms. Hyde has agreed to loan such funds as may be necessary through
December 31, 2008 for working capital purposes. To the extent that we experience
a substantial lack of liquidity, our development in accordance with our proposed
plan may be delayed or indefinitely postponed, our operations could be impaired,
we may never become profitable, fail as an organization, and our investors could
lose some or all of their investment.
  As
a company with no operating history, we are inherently a risky
investment.
  We have
no operating history. Because we are a company with no history, the operations
in which we engage in, to distill and market to the public a premium-priced
potato vodka, is an extremely risky business. An investor could lose his entire
investment.
  Our
operations are subject to our ability to successfully market our products. We
have no substantial history of being able to successfully market our
products.
  Our
operations will depend, among other things, upon our ability to develop and to
market our vodka product for sale to consumers. Further, there is the
possibility that our operations will not generate income sufficient to meet
operating expenses or will generate income and capital appreciation, if any, at
rates lower than those anticipated or necessary to sustain the investment. An
investor could lose his entire investment.
   -
4 -
  There
are factors beyond our control which may adversely affect
us.
  Our
operations may also be affected by factors which are beyond our control,
principally general market conditions and changing consumer
tastes.  Any of these problems, or a combination thereof, could have
affect on our viability as an entity. We may never become profitable, fail as an
organization, and our investors could lose some or all of their
investment.
  Intense
competition in our market could prevent us from developing revenue and prevent
us from achieving annual profitability. In either situation, we may never become
profitable, fail as an organization, and our investors could lose some or all of
their investment.
  We plan
to distill and market to the public a premium-priced potato vodka. While the
barriers to entry are significant, more importantly, it is necessary to gain a
share of the potato vodka market. The barriers to gaining a market share are
significant. We face strong competitors in all areas of our business. All
aspects of our business are highly competitive. All of our competitors are
larger than us and have greater financial resources than we do. All of our
competitors have substantially greater experience distilling and marketing to
the public premium-priced vodka, including potato vodka. Competition with these
companies could curtail price increases or could require price reductions or
significant spending on marketing and sales, any of which could adversely affect
our results of operations. Competition from larger and more established
companies is a significant threat and is expected to increase.
 Our
products could be rendered noncompetitive or obsolete. Any competition may cause
us to fail to gain or to lose market share, which could result in reduced
margins for our products. Competitive pressures may not only impair our margins
but may also impact our revenues and our growth.
  We
currently have no suppliers or third party distillery contracts and may never
acquire any suppliers or third party
contracts.
  We
currently have no contracts with any suppliers or third party distilleries for
the production of our product. We may never acquire either suppliers or third
party distilleries, either of which could cause our business to
fail.
  Fluctuations
in the supply and prices of raw materials could negatively impact our
financial results.
  Under
normal market conditions, raw materials for our proposed product are generally
available on the open market. From time to time, however, the prices and
availability of these raw materials may fluctuate significantly, which could
impair our ability to procure necessary products, or increase the cost of our
product. If material costs increase, and we are unable to pass along, or are
delayed in passing along, those increases to our customers, we will experience
reductions to our profit margins and our ability to generate a profit will be
reduced or eliminated completely.
  Our
success will be dependent upon our management’s efforts. We cannot sustain
profitability without the efforts of our management.
  Our
success will be dependent upon the decision making of our directors and
executive officers. These individuals intend to commit as much time as necessary
to our business, but this commitment is no assurance of success. The loss of any
or all of these individuals, particularly Ms. Dana Hyde our President, could
have a material, adverse impact on our operations. We have no written employment
agreements with any officers and directors, including Ms. Hyde. We have not
obtained key man life insurance on the lives of any of our officers or
directors.
  Our
stock has no public trading market and there is no guarantee a trading market
will ever develop for our securities.
  There has
been, and continues to be, no public market for our common stock. An active
trading market for our shares  has not, and may never develop or be
sustained. If you purchase shares of common stock, you may not be able to resell
those shares at or above the initial price you paid. The market price of our
common stock may fluctuate significantly in response to numerous factors, some
of which are beyond our control, including the following:
  *    actual
or anticipated fluctuations in our operating results;
  *    changes
in financial estimates by securities analysts or our failure to perform in line
with such estimates;
  *    changes
in market valuations of other companies, particularly those that market services
such as ours;
  *    announcements
by us or our competitors of significant innovations,  acquisitions,
strategic partnerships, joint ventures or    capital
commitments;
  -
5 -
  *    introduction
of product enhancements that reduce the need for our products;
  *    departures
of key personnel.
  Of our
total outstanding shares as of  November
1, 2007, a total of 8,067,020, or approximately 98%, will be restricted
from immediate resale but may be sold into the market in the near future. This
could cause the market price of our common stock to drop significantly, even if
our business is doing well.
  As
restrictions on resale end, the market price of our stock could drop
significantly if the holders of restricted shares sell them or are perceived by
the market as intending to sell them.
  Applicable
SEC rules governing the trading of “Penny Stocks” limit the liquidity of our
common stock, which may affect the trading price of our common
stock.
  Our
common stock is currently not quoted on in any market. If our common stock
becomes quoted, we anticipate that it will trade well below $5.00 per share. As
a result, our common stock is considered a “penny stock” and is subject to SEC
rules and regulations that impose limitations upon the manner in which our
shares can be publicly traded.  These regulations require the
delivery, prior to any transaction involving a penny stock, of a disclosure
schedule explaining the penny stock and the associated risks.  Under
these regulations, certain brokers who recommend such securities to persons
other than established customers or certain accredited investors must make a
special written suitability determination for the purchaser and receive the
written purchaser’s agreement to a transaction prior to
purchase.  These regulations have the effect of limiting the trading
activity of our common stock and reducing the liquidity of an investment in our
common stock.
  The
over-the-counter market for stock such as ours is subject to extreme price and
volume fluctuations.
  The
securities of companies such as ours have historically experienced extreme price
and volume fluctuations during certain periods. These broad market fluctuations
and other factors, such as new product developments and trends in the our
industry and in the investment markets generally, as well as economic conditions
and quarterly variations in our operational results, may have a negative effect
on the market price of our common stock.
  Buying
low-priced penny stocks is very risky and speculative.
  The
shares being offered are defined as a penny stock under the Securities and
Exchange Act of 1934, and rules of the Commission. The Exchange Act and such
penny stock rules generally impose additional sales practice and disclosure
requirements on broker-dealers who sell our securities to persons other than
certain accredited investors who are, generally, institutions with assets in
excess of $5,000,000 or individuals with net worth in excess of $1,000,000 or
annual income exceeding $200,000, or $300,000 jointly with spouse, or in
transactions not recommended by the broker-dealer. For transactions covered by
the penny stock rules, a broker-dealer must make a suitability determination for
each purchaser and receive the purchaser's written agreement prior to the sale.
In addition, the broker-dealer must make certain mandated disclosures in penny
stock transactions, including the actual sale or purchase price and actual bid
and offer quotations, the compensation to be received by the broker-dealer and
certain associated persons, and deliver certain disclosures required by the
Commission. Consequently, the penny stock rules may affect the ability of
broker-dealers to make a market in or trade our common stock and may also affect
your ability to resell any shares you may purchase in the public
markets.
  We
do not expect to pay dividends on common stock.
  We have
not paid any cash dividends with respect to our common stock, and it is unlikely
that we will pay any dividends on our common stock in the foreseeable future.
Earnings, if any, that we may realize will be retained in the business for
further development and expansion.
  -
6 -




(b)
NARRATIVE DESCRIPTION OF THE BUSINESS




We are a
Colorado corporation. We were incorporated on August 31, 2006. Our
wholly-owned subsidiary was formed in September, 2005. Our proposed business is
to distill and market to the public a premium-priced potato vodka. We are a
holding company to Rocky Mountain Distilleries, Inc., a wholly-owned subsidiary,
which was incorporated in September, 2005 and which will be the actual operating
company. Both we and our subsidiary are headquartered in Monte Vista, Colorado.
We acquired the capital stock of Rocky Mountain Distilleries, Inc. in a tax-free
exchange under the Internal Revenue Code in September, 2006.
  In June,
2007, we completed a registered offering of our common shares under the
provisions of the Colorado securities laws and under an exemption from the
federal securities laws. We sold a total of 181,000 common shares at a price of
$0.25 per share to a total of forty investors. We raised a total of $45,250 in
this offering.
 
 We have
not been subject to any bankruptcy, receivership or similar
proceeding.
 
 Our
address is 215 N. Washington Street, Monte Vista, Colorado 81144Our telephone number is
(719) 849-8162.
 
 Organization.
 
 As of
June 30, 2007, we are comprised of one corporation with one wholly-owned
subsidiary, Rocky Mountain Distilleries, Inc., which was incorporated in
September, 2005 and which will be the actual operating company. All of our
operations will be conducted through Rocky Mountain Distilleries,
Inc.
 
 (c)
PROPOSED OPERATIONS
 
 Overview
of our Operations.
  Our
principal effort at this point will be to develop a market for our
premium-priced vodka. We see our niche as being in the premium-priced potato
vodka business, as opposed to the distilled grain spirits market in general. No
single company currently dominates the premium-priced vodka
business.
 
 We plan
to begin our operations by marketing potato vodka which has been distilled for
us by third party contractors. Eventually, we plan to construct a distillery in
Monte Vista, Colorado and to distill and market a premium-priced potato vodka
produced at the distillery. Our initial marketing focus will be nationwide. We
plan to sell its product directly to the public through distributors of
alcoholic beverages.
 
 At the
present time, we have limited active operations. Through our subsidiary, we have
always been in the development phase. These operations consist of developing the
vodka formula and labeling and acquiring the distillery property. We plan to
finance the distillery through a real estate loan on the property guaranteed by
our principal officers.
 
 We are
not yet marketing any product. When the vodka has been produced, we expect to
utilize the expertise and existing business relationships of our principal
officers to develop our opportunities. Operational decisions will be made
solely by our management. Our management has had limited experience in the
distilled spirits business.
 
 It should
also be noted, however, that we do not have any history of operations. To
the extent that management is unsuccessful in keeping expenses in line with
income, failure to effect the events and goals listed herein would result in a
general failure of the business. This would cause management to consider
liquidation or merger.
  -
7 -
  
 Industry
Overview.
  We see
our principal competitors as all other premium vodka producers. The distilled
spirits business is a large market. However, we seek to develop a niche in the
premium vodka segment. We believe that this niche is substantial enough a new
product such as ours. There are a number of companies which market premium
vodka, but no single company dominates. There are recognized brand names such as
Absolut, Grey Goose, Stolichnaya, and Kettle One. However, consumer tastes are
very dynamic and subject to sudden change. In any event, almost all of the
companies in this industry have greater resources and expertise than we do. Our
principal effort at this point will be to develop a market for our
premium-priced vodka.
 
 (d)
MARKETING AND PROMOTION
 
 Our initial
marketing plan is to focus completely on developing a market niche. To that end,
we plan to develop a marketing program to differentiate ourselves from our
competitors’ products. The target market is anticipated to be professional and
wealthy males and females, twenty-five to seventy years old. We plan to
markets its product directly to the public through sales to liquor distributors.
We plan to utilize the expertise of our principal officers to develop our
business. Each individual will utilize previous contacts in business to develop
potential opportunities. As of the date of this prospectus, we have not yet
begun or marketing activity.
 
 (e) RAW
MATERIALS
 
 The use of raw materials is not a material factor in our operations at the
present time. The use of raw materials may become a material factor in the
future as we develop operations.
  (f)
COMPETITION
 
 We see
our principal competitors as all other premium vodka
producers.  All of our competitors are larger than us and have
substantially greater financial, marketing and other resources than we do. Our
business is highly competi­tive. We will be competing with numerous
established companies having substantially greater financial resources and
experience than we do. There can be no guarantee that we will ever be able
to compete successfully.
 
 (g)
BACKLOG
 
 At June 30, 2007, we had no backlogs.
 
 (h)
EMPLOYEES
 
 We have
one full-time employee: Ms. Hyde, our President. Ms. Hyde does not draw a salary
or receive any other kind of compensation. However, we reimburse our employee
for all necessary and customary business related expenses.  We have no
plans or agreements which provide health care, insurance or compensation on the
event of termination of employment or change in our control.  We do
not pay our Directors separately for any Board meeting they attend.
 
 (i)
PROPRIETARY INFORMATION
 
 We do not
currently have any patent or trademark protection for our proposed product but
plan to file for trademark protection.
 
  -
8 -
  (j)
GOVERNMENT REGULATION
 
 Our product will be regulated by the Federal
law regarding the production and sale of alcohol. Otherwise, we are not expected
to be subject to material governmental regulation. However, it is our policy to
fully comply with all governmental regulation and regulatory
authorities.
 
 (k)
RESEARCH AND DEVELOPMENT
 
 We have
not incurred any material research and development costs during the twelve
months ended June 30, 2007
 
 (l)
ENVIRONMENTAL COMPLIANCE
 
 We do not expect environmental laws to have any material impact on
us.
 
 (m) HOW
TO OBTAIN OUR SEC FILINGS
 
 We file
annual, quarterly, and special reports, proxy statements, and other information
with the Securities Exchange Commission (SEC). Reports, proxy statements
and other information filed with the SEC can be inspected and copied at the
public reference facilities of the SEC at 100 F Street N.E., Washington, DC 20549.
Such material may also be accessed electronically by means of the SEC's
website at www.sec.gov.
 
 Our
investor relations department can be contacted at our principal executive office
located at our principal office, 215 N. Washington Street, Monte Vista, Colorado
81144Our telephone
number is. Our phone number at our headquarters is (719) 849-8162. We currently
have no website.
 
 ITEM
2. DESCRIPTION OF PROPERTY.
 
 We occupy
a total of 19,000 square feet of office and manufacturing space on a rent-free
basis from one of our officers, Mrs. Hyde. This space is considered to be
sufficient for us at the present time. We have no plans to acquire additional
space.
  
 ITEM
3. LEGAL PROCEEDINGS.
 
 We are
not a party to any material legal proceedings, nor is our property the subject
of any material legal proceeding.
  
 ITEM
4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
 
 We held
no shareholders meeting in the fourth quarter of our fiscal year.
 
 
 PART
II
 
 ITEM
5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.
 
  -
9 -
  (a)
PRINCIPAL MARKET OR MARKETS
 
 No public market currently exists for shares of our
common stock. We intend to apply to have our common stock listed for quotation
on the Over-the-Counter Bulletin Board.
 
 We have
no outstanding stock options or other equity compensation plans.
  (b)
APPROXIMATE NUMBER OF HOLDERS OF COMMON STOCK
 
 As of
June 30, 2007, there were 97 record holders of our common stock and there were
8,248,020 shares of our common stock outstanding.
 
 (c)
DIVIDENDS
 
 We have
not previously declared or paid any dividends on our common stock and do not
anticipate declaring any dividends in the foreseeable future. The payment of
dividends on our common stock is within the discretion of our board of
directors. We intend to retain any earnings for use in our operations and the
expansion of our business. Payment of dividends in the future will depend on our
future earnings, future capital needs and our operating and financial condition,
among other factors that our board of directors may deem relevant. We are not
under any contractual restriction as to our present or future ability to pay
dividends.
  (d) THE
SECURITIES ENFORCEMENT AND PENNY STOCK REFORM ACT OF 1990
 
 The
Securities Enforcement and Penny Stock Reform Act of 1990 requires additional
disclosure and documentation related to the market for penny stock and for
trades in any stock defined as a penny stock. Unless we can acquire substantial
assets and trade at over $5.00 per share on the bid, it is more likely than not
that our securities, for some period of time, would be defined under that Act as
a "penny stock." As a result, those who trade in our securities may be required
to provide additional information related to their fitness to trade our shares.
These requirements present a substantial burden on any person or brokerage firm
who plans to trade our securities and would thereby make it unlikely that any
liquid trading market would ever result in our securities while the provisions
of this Act might be applicable to those securities.
 
 Any
broker-dealer engaged by the purchaser for the purpose of selling his or her
shares in us will be subject to Rules 15g-1 through 15g-10 of the Securities and
Exchange Act. Rather than creating a need to comply with those rules, some
broker-dealers will refuse to attempt to sell penny stock.
 
 The penny
stock rules require a broker-dealer, prior to a transaction in a penny stock not
otherwise exempt from those rules, to deliver a standardized risk disclosure
document prepared by the Commission, which:
 -
                  contains
      a description of the nature and level of risk in the market for penny
      stocks in both public offerings and secondary
  trading;
  -
                contains
      a description of the broker's or dealer's duties to the customer and of
      the rights and remedies available to the customer with respect to a
      violation to such duties or other requirements of the Securities Act of
      1934, as amended;
  -
10 -
  
 -
                contains
      a brief, clear, narrative description of a dealer market, including "bid"
      and "ask" prices for penny stocks and the significance of the spread
      between the bid and ask price;
 
 -
                contains
      a toll-free telephone number for inquiries on disciplinary
      actions;
 
 -
                defines
      significant terms in the disclosure document or in the conduct of trading
      penny stocks; and
 
 -
                contains
      such other information and is in such form (including language, type, size
      and format) as the Securities and Exchange Commission shall require by
      rule or regulation;
 
 The broker-dealer also must provide, prior to effecting any transaction in a
penny stock, to the customer:
 
 -
                the
      bid and offer quotations for the penny
stock;
 
 -
                the
      compensation of the broker-dealer and its salesperson in the
      transaction;
 
 -
                the
      number of shares to which such bid and ask prices apply, or other
      comparable information relating to the depth and liquidity of the market
      for such stock; and
 
 -
                monthly
      account statements showing the market value of each penny stock held in
      the customer's account.
 
 In
addition, the penny stock rules require that prior to a transaction in a penny
stock not otherwise exempt from those rules; the broker-dealer must make a
special written determination that the penny stock is a suitable investment for
the purchaser and receive the purchaser's written acknowledgment of the receipt
of a risk disclosure statement, a written agreement to transactions involving
penny stocks, and a signed and dated copy of a written suitability statement.
These disclosure requirements will have the effect of reducing the trading
activity in the secondary market for our stock because it will be subject to
these penny stock rules. Therefore, stockholders may have difficulty selling
their securities.
  
 ITEM
6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTSOF
OPERATIONS
 
 This
Management’s Discussion and Analysis or Plan of Operation contains
forward-looking statements that involve future events, our future performance
and our expected future operations and actions. In some cases, you can identify
forward-looking statements by the use of words such as “may”, “will”, “should”,
“anticipate”, “believe”, “expect”, “plan”, “future”, “intend”, “could”,
“estimate”, “predict”, “hope”, “potential”, “continue”, or the negative of these
terms or other similar expressions. These forward-looking statements are only
our predictions and involve numerous assumptions, risks and uncertainties. Our
actual results or actions may differ materially from these forward-looking
statements for many reasons, including, but not limited to, the matters
discussed in this report under the caption “Risk Factors”. We urge you not to
place undue reliance on these forward-looking statements, which speak only as of
the date of this prospectus. We undertake no obligation to publicly update any
forward-looking statements, whether as a result of new information, future
events, or otherwise.
 
 The
following discussion of our financial condition and results of operations should
be read in conjunction with our financial statements and the related notes
included in this report.
 
  -
11 -
  Results
of Operations.
 
 From our inception on September 26,
2005 through June 30, 2007, we generated no revenue and, therefore, had no cost
of goods sold or gross profit. As a result we have no operating history upon
which to evaluate our business. In addition, we have a history of losses. We had
a net loss of $13,281 for this period.
 
 As of June 30, 2007, our accountants
have expressed doubt about our ability to continue as a going concern as a
result of our history of net loss. Our ability to achieve and maintain
profitability and positive cash flow is dependent upon our ability to
successfully distill and market our premium-priced potato vodka and our ability
to generate revenues.
 
 Operating expenses, which consisted
solely of general and administrative expenses for the period from September 26,
2005 through June 30, 2007 was $13,281. The major components of general and
administrative expenses include accounting, consulting and stock transfer
fees.
 
 As a result of the foregoing, we had a
net loss of $13,281 for the period from September 26, 2005 through June 30,
2007. We currently have no revenue but continue to develop our plan to market
vodka through a third party contractor.
 
 Because we do not pay salaries, and our
major professional fees have been paid for the year, operating expenses are
expected to remain fairly constant. In the next twelve months, we plan to
develop a relationship with a contract distiller to begin distilling our potato
vodka. At the present time, we have no definitive agreement in place for any
contract distiller.
 
 To try to operate at a break-even level
based upon our current level of proposed business activity, we believe that we
must generate approximately $50,000 in revenue per year. However, if our
forecasts are inaccurate, we will need to raise additional funds. In the event
that we need additional capital, Ms. Hyde has agreed to loan such funds as may
be necessary through December 31, 2008 for working capital
purposes.
 
 On the other hand, we may choose to
scale back our operations to operate at break-even with a smaller level of
business activity, while adjusting our overhead to meet the revenue from current
operations. In addition, we expect that we will need to raise additional funds
if we decide to pursue more rapid expansion, the development of new or enhanced
products, appropriate responses to competitive pressures, or the acquisition of
complementary businesses or technologies, or if we must respond to unanticipated
events that require us to make additional investments. We cannot assure that
additional financing will be available when needed on favorable terms, or at
all.
 
 We expect to incur operating losses in
future periods because we will be incurring expenses and not generating
sufficient revenues. We expect approximately $50,000 in operating costs over the
next twelve months. We cannot guarantee that we will be successful in generating
sufficient revenues or other funds in the future to cover these operating costs.
Failure to generate sufficient revenues or additional financing when needed
could cause us to go out of business.
 
 Liquidity
and Capital Resources.
 
 As of June 30, 2007, we had cash or
cash equivalents of $33,605.
  -
12 -
  Net cash used for operating activities
was $11,46 our inception on September 26, 2005 through June 30,
2007.
 
 Cash flows used for investing
activities were $-0- from our inception on September 26, 2005 through June 30,
2007.
 
 Cash flows provided by financing
activities were $34,751 from our inception on September 26, 2005 through June
30, 2007.  These cash flows were all related to sales of stock and
deferred offering costs.
 
 Over the next twelve months our capital
costs will be approximately $10,000 to $12,000 primarily to develop operations.
We plan to buy office equipment to be used in our operations. In the next six
months, we plan to develop a relationship with a contract distiller to begin
distilling our potato vodka. At the present time, we have no definitive
agreement in place for any contract distiller. We do not anticipate an extensive
capital cost to develop this relationship. Eventually, we want to distill our
own vodka at our own distillery. However, we have no definite plans to do so at
this time and do not know what, if any, capital costs would be involved for
us.
 
 We believe that we have sufficient
capital in the short term for our current level of operations. This is because
we believe that we can attract sufficient product sales and services within our
present organizational structure and resources to become profitable in our
operations. Additional resources would be needed to expand into additional
locations, which we have no plans to do at this time. We do not anticipate
needing to raise additional capital resources in the next twelve months. In the
event that we need additional capital, Ms. Hyde has agreed to loan such funds as
may be necessary through December 31, 2008 for working capital
purposes.
 
 Our principal source of liquidity will
be our operations. We expect variation in revenues to account for the difference
between a profit and a loss. Also business activity is closely tied to the U.S.
economy. Because we plan to market a vodka product, a slow down in purchases of
consumer goods could have a negative impact to our business in the future. We
have no idea to what extent this may affect us. In any case, we try to operate
with minimal overhead. Our primary activity will be to seek to develop customers
and, consequently, our sales. If we succeed in developing customers for our
vodka and generating sufficient sales, we will become profitable. We cannot
guarantee that this will ever occur. Our plan is to build our company in any
manner which will be successful.
 Off-Balance
Sheet Arrangements
 
 We have
no off-balance sheet arrangements with any party.
 
 Plan
of Operation.
 
 At the
present time, we have no cash flow. However, we will adjust our expenses as
necessary to prevent cash flow or liquidity problems. We are not presently in
default or breach on any indebtedness. At the present time, we have no trade
payables or judgments.
 
 Currently,
we are in the development stage and have not begun active operations. In the
next six months, we plan to develop a relationship with a contract distiller to
begin distilling our potato vodka. At the present time, we have no definitive
agreement in place for any contract distiller. We do not anticipate an extensive
capital cost to develop this relationship. Eventually, we want to distill our
own vodka at our own distillery. However, we have no definite plans to do so at
this time and do not know what, if any, capital costs would be involved for
us.
  -
13 -
  
 Once
we develop a relationship with a contract distiller to begin distilling our
potato vodka, we will begin marketing our vodka through liquor distributors. We
have not identified any specific distributors at this time, but do not believe
that there will be a substantial cost involved in the relationship with the
distributors. Our principal cost will be marketing our product. At this point,
we do not know the scope of our potential marketing costs but will use our
existing resources to market our product. Our resources consist of our available
cash and advances from Ms. Hyde, who has agreed to loan such funds as may be
necessary through December 31, 2008 for working capital purposes.
  We
believe that once we begin generating revenues, we can become profitable within
one year, given sufficient sales. We believe that the timing of the completion
of the milestones needed to become profitable can be achieved as we are
presently organized with sufficient business.
 
 Other
than the shares offered by our last offering and advances from Ms. Hyde, no
other source of capital has been identified or sought.
 
 If we are
not successful in our proposed operations we will be faced with several
options:
 
 1.
                Cease
      operations and go out of business;
 
 2.
                Continue
      to seek alternative and acceptable sources of
  capital;
 
 3.
                Bring
      in additional capital that may result in a change of control;
      or
 
 4.
                Identify
      a candidate for acquisition that seeks access to the public marketplace
      and its financing sources
 
 Currently,
we believe that we have sufficient capital or access to capital to implement our
proposed business operations or to sustain them for the next twelve months. In
the event that we need additional capital, Ms. Hyde has agreed to loan such
funds as may be necessary through December 31, 2008 for working capital
purposes.
 
 If we can
sustain profitability, we could operate at our present level
indefinitely.
 
 To date,
we have never had any discussions with any possible acquisition candidate nor
have we any intention of doing so.
 
 Proposed
Milestones to Implement Business Operations
  At the
present time, we are located in one location in Monte Vista, Colorado. To try to
operate at a break-even level based upon our level of proposed business
activity, we believe that we must generate approximately $50,000 in revenue per
year. However, if our forecasts are inaccurate, we may need to raise additional
funds. In the event that we need additional capital, Ms. Hyde has agreed to loan
such funds as may be necessary through December 31, 2008 for working capital
purposes.
  -
14 -
  
 The
results of our operations will depend, among other things, upon our ability to
successfully distill and market a premium priced vodka product to the public.
Further, there is the possibility that our proposed operations will not generate
income sufficient to meet operating expenses or will generate income and capital
appreciation, if any, at rates lower than those anticipated or necessary to
sustain the investment. Our operations may be affected by many factors, some of
which are beyond our control.  The principal factors are the state of
the general economy and changing consumer tastes. Any of these problems, or a
combination thereof, could have a materially adverse affect on our viability as
an entity. We may never become profitable, fail as an organization, and our
investors could lose some or all of their investment.
 
 Eventually
we plan to establish its distillery, to distill premium priced potato vodka, and
to market this product on a nationwide basis. All sales would be made our
distillery, which will be located at our principal office in Monte Vista,
Colorado.
 
 We have
not yet built the distillery and are not marketing its product. When the vodka
has been produced, we expect to utilize the expertise and existing business
relationships of our principal officers to develop our opportunities.
Operational decisions will be made solely by our management. However, our
management has had limited experience in the distilled spirits
business.
 
 It should
be noted that we do not have any history of operations and have not yet
generat­ed revenues. We are in the process of developing operations.
During the first six months of 2008 we plan to finalize a contract with a third
party distiller and to begin advertising in various media. During this period,
we also plan to develop a web site for additional sales and promotions. To the
extent that management is unsuccessful in keeping expenses in line with income,
failure to affect the events and goals listed herein would result in a general
failure of the business. This would cause management to consider liquidation or
merger. We have no plans for any type of business combination.
  We
believe that we can be profitable or at break even at the end of the current
fiscal year, assuming sufficient sales. Based upon our current plans, we have
adjusted our operating expenses so that cash generated from operations and from
working capital financing is expected to be sufficient for the foreseeable
future to fund our operations at our currently forecasted levels. To try to
operate at a break-even level based upon our current level of anticipated
business activity, we believe that we must generate approximately $50,000 in
revenue per year. However, if our forecasts are inaccurate, we will need to
raise additional funds. In the event that we need additional capital, Ms. Hyde
has agreed to loan such funds as may be necessary through December 31, 2008 for
working capital purposes.
 
 On the
other hand, if we are not successful in our plan, we may choose to scale back
our operations to operate at break-even with a smaller level of business
activity, while adjusting our overhead to meet the revenue from current
operations. In addition, we expect that we will need to raise additional funds
if we decide to pursue more rapid expansion, the development of new or enhanced
products, appropriate responses to competitive pressures, or the acquisition of
complementary businesses or technologies, or if we must respond to unanticipated
events that require us to make additional investments. We cannot assure that
additional financing will be available when needed on favorable terms, or at
all.
 
 We expect
to incur operating losses in future periods because we will be incurring
expenses and not generating sufficient revenues. We expect approximately $50,000
in operating costs over the next twelve months. We cannot guarantee that we will
be successful in generating sufficient revenues or other funds in the future to
cover these operating costs. Failure to generate sufficient revenues or
additional financing when needed could cause us to go out of
business.
  -
15 -
  
 In the
event that we need additional capital, Ms. Hyde has agreed to loan such funds as
may be necessary through December 31, 2008 for working capital purposes.
Otherwise, no commitments to provide additional funds have been made by
management or current shareholders. There is no assurance that additional funds
will be made available to us on terms that will be acceptable, or at all, if and
when needed. We expect to continue to generate and increase sales, but there can
be no assurance we will generate sales sufficient to continue operations or to
expand.
 
 In
the next 12 months, we do not intend to spend any material funds on research and
development and do not intend to purchase any large equipment.
 
 Recently
Issued Accounting Pronouncements.
 
 We do not
expect the adoption of any recently issued accounting pronouncements to have a
significant impact on our net results of operations, financial position, or cash
flows.
 
 Seasonality.
 
 We do not
expect our sales to be impacted by seasonal demands for our products and
services.
 
 
 ITEM
7. FINANCIAL STATEMENTS.
 
 
  -
16 -












Great
Spirits, Inc.


(A
Development Stage Company)









FINANCIAL
STATEMENTS









With
Independent Accountant’s Audit Report





For the
Period September 26, 2005 (Inception) Through June 30, 2006,
 The Year
Ended June 30, 2007, For the Period September 26, 2005 (Inception) Through June
30, 2007


















TABLE OF
CONTENTS








PageIndependent
      Accountant’s Audit Report
            F-1Balance
      Sheet
            F-2Statement
      of Operations
            F-3Statement
      of Cash Flows
            F-4Statement
      of Shareholders’ Equity
            F-5Notes
      to Financial Statements
            F-6
      – F-9















RONALD R.
CHADWICK, P.C.


CertifiedPublic Accountant


2851 South ParkerRoad, Suite 720


Aurora,
Colorado  80014


Telephone
(303) 306-1967


Fax (303)
306-1944














REPORT OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM





Board of
Directors
 Great
Spirits, Inc.
 Monte
Vista, Colorado
 
 I have
audited the accompanying consolidated balance sheet of Great Spirits, Inc. (a
development stage company) as of June 30, 2007, and the related consolidated
statements of operations, stockholders’ equity and cash flows for the year ended
June 30, 2007, the period from September 26, 2005 (inception) through June 30,
2006, and for the period from September 26, 2005 (inception) through June 30,
2007. These financial statements are the responsibility of the Company's
management. My responsibility is to express an opinion on these financial
statements based on my audit.
 
 I
conducted my audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that I plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation.  I believe that my audit provides a
reasonable basis for my opinion.
 
 In my
opinion, the consolidated financial statements referred to above present fairly,
in all material respects, the consolidated financial position of Great Spirits,
Inc. as of June 30, 2007 and the related consolidated statements of operations,
stockholders’ equity and cash flows for the year ended June 30, 2007, the period
from September 26, 2005 (inception) through June 30, 2006, and for the period
from September 26, 2005 (inception) through June 30, 2007 in conformity with
accounting principles generally accepted in the United States of
America.
 
 The
accompanying consolidated financial statements have been prepared assuming that
the Company will continue as a going concern. As discussed in Note 2 to the
financial statements the Company has suffered losses from operations that raise
substantial doubt about its ability to continue as a going concern. Management's
plans in regard to these matters are also described in Note 2. The financial
statements do not include any adjustments that might result from the outcome of
this uncertainty.
 Aurora,
Colorado                                                      /s/
Ronald R. Chadwick, P.C.
 September
4,
2007                                                    RONALD
R. CHADWICK, P.C.


F - 1




Great
Spirits, Inc.
 (A
Development Stage Company)
 Consolidated
Balance Sheets


ASSETSJune
      30,2007Current
      Assets- Cash
              
              $
              33,605TOTAL
      ASSETS
              
              $
              33,605LIABILITIES
      AND SHAREHOLDERS' EQUITY (DEFICIT)LIABILITIESAccounts
      payable
              
              $
              4,635Advances
      from officer
              
              
              -Total
      current liabilities
              
              
              4,635TOTAL
      LIABILITIES
              
              $
              4,635SHAREHOLDERS'
      EQUITYPreferred
      stock, par value $.10 per share;  Authorized1,000,000
      shares; issued and outstanding -0- shares.
              
              
              -Common
      Stock, par value $.001 per share;  Authorized50,000,000
      shares; issued and outstanding 8,248,020 (2007) andnone
      (2006)
              
              
              8,248Capital
      paid in excess of par value
              
              
              34,003Deficit
      accumulated during development stage
              
              
              (13,281
              )TOTAL
      SHAREHOLDERS' EQUITY
              
              
              28,970TOTAL
      LIABILITIES AND SHAREHOLDERS' EQUITY
              
              $
              33,605




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




F - 2




Great
Spirits, Inc.
 (A
Development Stage Company)
 Consolidated
Statements of Operations




September
      26,
              
              
              September
      26,Year
              
              
              2005
      Inception
              
              
              2005
      Inceptionended
              
              
              through
              
              
              throughJune
      30,
              
              
              June
      30,
              
              
              June
      30,2007
              
              
              2006
              
              
              2007Revenue
              
              $
              -
              
              
              $
              -
              
              
              $
              -General
      and adminstrative expensesAccounting
              
              
              -
              
              
              
              -
              
              
              
              -Bank
      charges
              
              
              -
              
              
              
              -
              
              
              
              -Consulting
              
              
              7,500
              
              
              
              -
              
              
              
              7,500Licensing
              
              
              346
              
              
              
              -
              
              
              
              346Office
              
              
              -
              
              
              
              -
              
              
              
              -Research
      & development
              
              
              800
              
              
              
              -
              
              
              
              800Stock
      transfer fees
              
              
              4,635
              
              
              
              -
              
              
              
              4,635Total
      General and administrative expenses
              
              
              13,281
              
              
              
              -
              
              
              
              13,281Net
    (Loss)
              
              
              (13,281
              )
              
              
              -
              
              
              
              (13,281
              )Basic
      (Loss) Per Share
              
              
              (0.00
              )
              
              
              -
              
              
              
              (0.00
              )Weighted
      Average Common SharesOutstanding
              
              
              8,066,347
              
              
              
              -
              
              
              
              8,066,347
  The
accompanying notes are an integral part of these financial
statements.





F - 3








Great
Spirits, Inc.


(A
Development Stage Company)


Consolidated
Statements of Cash Flows






September
      26,
              
              
              September
      26,Year
              
              
              2005
      Inception
              
              
              2005
      Inceptionended
              
              
              through
              
              
              throughJune
      30,
              
              
              June
      30,
              
              
              June
      30,2007
              
              
              2006
              
              
              2007Net
      (Loss)
              
              $
              (13,281
              )
              
              $
              -
              
              
              $
              (13,281
              )Adjustments
      to reconcile decrease in net assets to net cash provided by operating
      activities:Stock
      issued for services
              
              
              7,500
              
              
              
              -
              
              
              
              7,500Increase
      in accounts payable
              
              
              4,635
              
              
              
              -
              
              
              
              4,635Net cash (used) in operation activities
              
              
              (1,146
              )
              
              
              -
              
              
              
              (1,146
              )Cash
      flows from investing activities:Advances
      received from officer
              
              
              1,000
              
              
              
              -
              
              
              
              1,000Advances
      paid to officer
              
              
              (1,000
              )
              
              
              -
              
              
              
              (1,000
              )Net
      cash (used) in investing activities
              
              
              -
              
              
              
              -
              
              
              
              -Cash
      flows from financing activities:Issuance
      of common stock
              
              
              45,251
              
              
              
              -
              
              
              
              45,251Deferred
      offering costs
              
              
              (10,500
              )
              
              
              -
              
              
              
              (10,500
              )Net
      cash provided from financing activities
              
              
              34,751
              
              
              
              -
              
              
              
              34,751Net
      increase in cash
              
              
              33,605
              
              
              
              -
              
              
              
              33,605Cash
      at beginning of period
              
              
              -
              
              
              
              -
              
              
              
              -Cash
      at end of period
              
              $
              33,605
              
              
              $
              -
              
              
              $
              33,605Supplemental
      disclosure information:Stock
      issued for services
              
              $
              7,500
              
              
              $
              -
              
              
              $
              7,500




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




F - 4





Great
Spirits, Inc.
 (A
Development Stage Company)
 Consolidated
Statements of Shareholders' Equity
    Number
      OfCommonShares Issued
      (1)
              
              
              CommonStock
              
              
              Capital
      Paidin
      Excessof Par
      Value
              
              
              RetainedEarnings(Deficit)
              
              
              TotalBalance
      at September 26, 2005 (Inception)
              
              
              -
              
              
              $
              -
              
              
              $
              -
              
              
              $
              -
              
              
              $
              -Net
      Income (Loss)
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -Balance
      at June 30, 2006
              
              
              -
              
              
              $
              -
              
              
              $
              -
              
              
              $
              -
              
              
              $
              -July
      1, 2006 issued 7,500,000shares
      of par value $.001 common stockto
      founders for services
              
              
              7,500,000
              
              
              
              7,500
              
              
              
              -
              
              
              
              
              
              
              
              7,500September
      1, 2006 issued 500,000shares
      of par value $.001 common stockfor
      cash of $500 or $.001 per share
              
              
              500,000
              
              
              
              500
              
              
              
              -
              
              
              
              
              
              
              
              500November
      10, 2006 issued 20,000shares
      of par value $.001 common stockfor
      cash of $3,000 or $.15 per share
              
              
              20,000
              
              
              
              20
              
              
              
              2,980
              
              
              
              
              
              
              
              3,000November
      24, 2006 issued 6,670shares
      of par value $.001 common stockfor
      cash of $1,000.50 or $.15 per share
              
              
              6,670
              
              
              
              7
              
              
              
              994
              
              
              
              
              
              
              
              1,001December
      11, 2006 issued 13,340shares
      of par value $.001 common stockfor
      cash of $2,001 or $.15 per share
              
              
              13,340
              
              
              
              13
              
              
              
              1,988
              
              
              
              
              
              
              
              2,001December11,
      2006 issued 13,670shares
      of par value $.001 common stockfor
      cash of $2,050 or $.15 per share
              
              
              13,670
              
              
              
              14
              
              
              
              2,036
              
              
              
              
              
              
              
              2,050January
      3, 2007 issued 13,340shares
      of par value $.001 common stockfor
      cash of $2,001 or $.15 per share
              
              
              13,340
              
              
              
              13
              
              
              
              1,988
              
              
              
              
              
              
              
              2,001June
      18, 2007 issued 147,000shares
      of par value $.001 common stockfor
      cash of $36,750 or $.25 per share
              
              
              147,000
              
              
              
              147
              
              
              
              36,603
              
              
              
              
              
              
              
              36,750Deferred
      offering costs
              
              
              -
              
              
              
              -
              
              
              
              (21,052
              )
              
              
              
              
              
              
              (21,052
              )June
      24, 2007 issued 34,000shares
      of par value $.001 common stockfor
      cash of $8,500 or $.25 per share
              
              
              34,000
              
              
              
              34
              
              
              
              8,466
              
              
              
              
              
              
              
              8,500Net
      (Loss)
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              (13,281
              )
              
              
              (13,281
              )Balance
      at June 30, 2007
              
              
              8,248,020
              
              
              $
              8,248
              
              
              $
              34,003
              
              
              $
              (13,281
              )
              
              $
              28,970Deferred
      offering costs
              
              
              
              
              
              
              
              
              
              
              (566
              )
              
              
              
              
              
              
              (566
              )Net
      (Loss)
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              (5,025
              )
              
              
              (5,025
              )_____________________________
                (1) As restated for a
      75,000 for 1 recapitalization on September 1, 2006




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





F - 5





Great
Spirits, Inc.
 (A
Development Stage Company)
 Notes to
Consolidated Financial Statements
 For the
Period September 26, 2005 (Inception) Through June 30, 2006, The Year Ended June
30, 2007,
 For the
Period September 26, 2005 (Inception) Through June 30, 2007





Note
1 - Organization and Summary of Significant Accounting
Policies
  ORGANIZATION
 Great
Spirits, Inc. (the “Company”), was incorporated as a holding company in the
State of Colorado on August 31, 2006. The Company was formed to distill and
market a premium priced potato vodka to the public.
  Rocky
Mountain Distilleries, Inc. is a wholly-owned subsidiary of the Company. It was
incorporated as a Colorado corporation on September 26, 2005 to act as a vodka
producer and marketer. The Company may also engage in any business that is
permitted by law, as designated by the board of directors of the
Company.
  On
September 1, 2006, in an acquisition classified as a transaction between parties
under common control, Great Spirits, Inc. acquired all the outstanding common
shares of Rocky Mountain Distilleries, Inc. (7,500,000 shares of Great Spirits,
Inc common shares were issued for 100 common shares of Rocky Mountain
Distilleries, Inc.), making Rocky Mountain Distilleries, Inc. a wholly owned
subsidiary of Great Spirits, Inc. Financial activity of the Company up to August
31, 2006 as represented in the financial statements is that of Rocky Mountain
Distilleries, Inc., as Great Spirits, Inc. had no activity. The results of
operations of Rocky Mountain Distilleries, Inc., and Great Spirits, Inc. have
been consolidated from August 31, 2006 forward.
  PRINCIPLES
OF CONSOLIDATION
  The
accompanying consolidated financial statements include the accounts of Eagle
Bend Holding Company and its wholly owned subsidiary. All intercompany accounts
and transactions have been eliminated in consolidation.
  DEVELOPMENT
STAGE
 The
Company is currently in the developmental stage and has no significant
operations to date.
  USE
OF ESTIMATES
  The
preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting
period.  Actual results could differ from those
estimates.




F
- 6




Great
Spirits, Inc.
 (A
Development Stage Company)
 Notes to
Consolidated Financial Statements
 For the
Period September 26, 2005 (Inception) Through June 30, 2006, The Year Ended June
30, 2007,
 For the
Period September 26, 2005 (Inception) Through June 30, 2007




Note
1 - Organization and Summary of Significant Accounting Policies
(continued)
  STATEMENT
OF CASH FLOWS
 For
purposes of the statement of cash flows, the Company considered demand deposits
and highly liquid-debt instruments purchased with maturity of three months or
less to be cash equivalents. Cash paid for interest during the period was
$0.  Cash paid for income taxes during the period was $0.
  BASIC
EARNINGS PER SHARE
 The basic
earnings (loss) per common share are computed by dividing the net income (loss)
for the period by the weighted average number of shares outstanding at June 30,
2007
  REVENUE
RECOGNITION
 The
Company will be producing and marketing vodka. The revenue is recognized when
the product is delivered. As of  June 30, 2007 the Company has had no
operations.
  Note
2 – Basis of Presentation
  In the
course of its life the Company has had limited operations.  This
raises substantial doubt about the Company’s ability to continue as a going
concern.  Management filed a Limited Offering Registration with the
State of Colorado to acquire capital.  Management believes this will
contribute toward its operations and subsequent profitability.  The
accompanying financial statements do not include any adjustments that might be
necessary if the Company is unable to continue as a going concern.
  Note
3 – Related Party Events
  The
Company currently has an office located at an address maintained by the
President on a rent free basis.
  Note
4 – Capital Stock
  The
Company authorized 50,000,000 shares of no par value common
stock.  Through December 31, 2006, the Company issued a total of
8,053,680 shares raising $8,552.






F
- 7




Great
Spirits, Inc.
 (A
Development Stage Company)
 Notes to
Consolidated Financial Statements
 For the
Period September 26, 2005 (Inception) Through June 30, 2006, The Year Ended June
30, 2007,
 For the
Period September 26, 2005 (Inception) Through June 30, 2007
   Note
4 – Capital Stock (continued)
  On
September 1, 2006 the Company issued 7,500,000 shares of $.001 par value common
stock for all of the shares of Rocky Mountain Distilleries, Inc. valued at
$7,500 or $.001 per share. The issuance has been reported in the consolidated
statements of shareholders’ equity as a retroactive recapitalization of the
shares issued to the founders of Rocky Mountain Distilleries, Inc. on July 1,
2006.
  On
September 1, 2006 the Company issued 500,000 shares of $.001 par value common
stock for $500 or $.001 per share.
  On
November 10, 2006 the Company issued 20,000 shares of $.001 par value common
stock for $3,000 or $.15 per share.
  On
November 24, 2006 the Company issued 6,670 shares of $.001 par value common
stock for $1,000.50 cash or $.15 per share.
  On
December 10, 2006 the Company issued 13,340 shares of $.001 par value common
stock for $2,001 cash or $.15 per share.
  On
December 10, 2006 the Company issued 13,670 shares of $.001 par value common
stock for $2,050.50 cash or $.15 per share.
  On
January 3, 2007 the Company issued 13,340 shares of $.001 par value common stock
for $2,001.00 cash or $.15 per share.
  On June
18, 2007, as part of a private offering,  the Company issued 147,000
shares of $.001 par value common stock for $36,750 cash or $..25 per
share.
  On June
24, 2007, as part of a private offering,  the Company issued 34,000
shares of $.001 par value common stock for $8,500 cash or $..25 per
share.
  In
addition the Company incurred deferred offering expenses of $21,052.33 that
directly reduces the proceeds received from the offering. If the offering had
been unsuccessful these expenses would have been deducted in the period in which
the offering was unsuccessful.






F
- 8




Great
Spirits, Inc.
 (A
Development Stage Company)
 Notes to
Consolidated Financial Statements
 For the
Period September 26, 2005 (Inception) Through June 30, 2006, The Year Ended June
30, 2007,
 For the
Period September 26, 2005 (Inception) Through June 30, 2007






Note
4 – Capital Stock (continued)
  The
Company authorized 1,000,000 shares of no par value, preferred stock, to have
such preferences as the Directors of the Company may assign from time to time.
No preferred stock is either issued or outstanding as of June 30,
2007.
  The
Company has declared no dividends through June 30, 2007.
   Note
5 -  Income Taxes
  At June
30, 2007, the Company had a tax loss of $(13,281). As of June 30, 2007 the
Company has fully allowed for these losses in the valuation allowance. The
valuation allowance offset the net deferred tax asset for which there is no
assurance of recovery.
  The net
operating loss carry forward will expire in 2027.


F
- 9
  ITEM
8. DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE.
  We did
not have any disagreements on accounting and financial disclosures with our
present accounting firm during the reporting period.
   ITEM
8A. CONTROLS AND PROCEDURES.
  Evaluation
of Disclosure Controls and Procedures
  As of the
end of the period covered by this annual report on Form 10-KSB, we evaluated the
effectiveness of the design and operation of its disclosure controls and
procedures (as defined in the Securities Exchange Act of 1934 Rules 13a-15(e)
and 15d-15(e)). That evaluation was performed under the supervision and with the
participation of our management, including our Chief Executive Officer and Chief
Financial Officer. Based on that evaluation, our Chief Financial Officer
concluded that our disclosure controls and procedures are effective in timely
alerting him to material information required to be included in its periodic SEC
filings.
  Changes
in Internal Control over Financial Reporting
  We have
made no significant change in our internal control over financial reporting
during the most recent fiscal quarter covered by this annual report on Form
10-KSB that has materially affected, or is reasonably likely to materially
affect, our internal control over financial reporting.
   ITEM
8B. OTHER INFORMATION.
  Nothing
to report.
   ITEM
9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS, AND CONTROL PERSONS; COMPLIANCE
WITH SECTION 16(a) OF THE EXCHANGE ACT.
  Our Directors and Executive Officers, their ages and positions held with us asof June
30, 2007 are shown below.




Each of
our directors is elected by the stockholders to a term of one year and serves
until his or her successor is elected and qualified. Each of our officers is
elected by the board of directors to a term of one year and serves until his or
her successor is duly elected and qualified, or until he or she is removed from
office.




The name, address, age and position of our officers and directors is set forth
below:





Name and Address
            Age
            Position(s)Dana
      Hyde
              215
      N. Washington Street
              Monte
      Vista, Colorado 81144
            70
            President,
      DirectorJames
      Hyde
              215
      N. Washington Street
              Monte
      Vista, Colorado 81144
            75
            Secretary,
      Treasurer and Director






-17
-






Background
Information about Our Officers and Directors.




Dana Hyde
has been our President and a Director since our inception.  She
has been involved in this business since 2005 through Rocky Mountain
Distilleries, Inc., our wholly-owned subsidiary. This has been her principal
occupation during this period. She worked as a Psychotherapist prior to this
time. She was in private practice from 1998 to 2005. In addition, she has the
following degrees from Trinity University: Bachelors of Science Degree in
Psychology, 1992 (Conferred with Distinction); Masters of Science Degree in
Psychology, 1995; and Doctorate of Philosophy in Psychology, 1999. Ms. Hyde
attended Arlington State College in 1954. James and Dana Hyde are husband and
wife.





James
Hyde has been our Secretary, Treasurers and a Director since its inception. He
has been involved in this business since 2005, through Rocky Mountain
Distilleries, Inc., our wholly-owned subsidiary. This has been his principal
occupation during this period.  He has been a State of New Mexico
Licensed Home Builder from 1994 to the present. He worked for  James
Hyde doing business as Taos Valley Construction from 1994 to 2005. He has also
been a self-employed Building Contractor since 1962, and a Texas Real Estate
Broker from 1959 to 1995. He attended Arlington State College from 1950 to1952.
He has a B.S. degree in Geology from Texas University. James and Dana Hyde are
husband and wife.





Our
Directors will serve in such capacity until the next annual meeting of the
Company's shareholders and until their successors have been elected and
qualified. The officers serve at the discretion of the Company's Directors.
There are no arrangements or understandings between any of the directors or
officers of the Company or any other person pursuant to which any officer or
director was or is to be selected as an officer or director.




Family
Relationships




James
and Dana Hyde are husband and wife. Neither can be considered to be independent
directors.





Committees
of the Board of Directors





There are
no committees of the Board of Directors.





Section 16(a)
Beneficial Ownership Reporting Compliance





Section 16(a)
of the Securities Exchange Act of 1934 (the “34 Act”) requires our officers and
directors and persons owning more than ten percent of the Common Stock, to file
initial reports of ownership and changes in ownership with the Securities and
Exchange Commission (“SEC”). Additionally, Item 405 of Regulation S-B
under the 34 Act requires us to identify in its Form 10-KSB and proxy statement
those individuals for whom one of the above referenced reports was not filed on
a timely basis during the most recent year or prior years. We have nothing to
report in this regard.




Code
of Ethics





Our board
of directors has not adopted a code of ethics but plans to do so in the
future.





Options/SAR
Grants and Fiscal Year End Option Exercises and Values





We have
not had a stock option plan or other similar incentive compensation plan for
officers, directors and employees, and no stock options, restricted stock or SAR
grants were granted or were outstanding at any time.




Compensation
of Directors





None of
our directors received or were entitled to receive remuneration for the fiscal
year ended June 30, 2007





-18
-




Item
10. EXECUTIVE COMPENSATION





Our
officers and directors do not receive any compensation for their services
rendered to us, nor have they received such compensation in the
past.  As of the date of this registration statement, we have no
funds available to pay the officers and directors.  Further, the
officers and directors are not accruing any compensation pursuant to any
agreement with us. We have no plans to pay any compensation to our officers or
directors in the future.




None
of our officers and directors will receive any finder’s fee, either directly or
indirectly, as a result of their respective efforts to implement our business
plan outlined herein.




No
retirement, pension, profit sharing, stock option or insurance programs or other
similar programs have been adopted by us for the benefit of its
employees.







ITEM
11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.





The
following sets forth the number of shares of our $.0.001 par value common stock
beneficially owned by (i) each person who, as of June 30, 2007, was known by
us to own beneficially more than five percent (5%) of its common stock; (ii) our
individual Directors and (iii) our Officers and Directors as a group. A total of
8,248,020 common shares were issued and outstanding as of June 30,
2007.





Name
      and Address of Beneficial Owner
            Amount
      and Nature of Beneficial Ownership (1)(2)
            Percent
      of ClassDana
      Hyde (2)
            7,414,000
            89.9%215
      N. Washington StreetMonte
      Vista, Colorado 81144James
      Hyde (2)
            7,414,000
            89.9%215
      N. Washington StreetMonte
      Vista, Colorado 81144All
      Officers and Directors as a Group
            7,414,000
            89.9%(two
      persons)


___________________





(1)
            All
      shares of owned beneficially or of record.(2)
            James
      and Dana Hyde collectively own 7,414,000 shares, which constitute 83% of
      the Company. No one else owns 10% or more of the Company. James Hyde and
      Dana Hyde are husband and wife.







ITEM
12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.





We
currently occupy office space on a rent-free basis from one of our officers, Ms.
Dana Hyde.







ITEM
13. EXHIBITS AND REPORTS ON FORM 8-K.





The
following financial information is filed as part of this report:







(a)   (1)
FINANCIAL STATEMENTS





(2)
SCHEDULES












-19
-





(3) EXHIBITS. are
incorporated by reference to previously filed documents:


Exhibit
              Number
            Description3.1*
            Articles
      of Incorporation3.2*
            Bylaws21.1*
            List
      of Subsidiaries31.1
            Certification
      of CEO/CFO pursuant to Sec. 30232.1
            Certification
      of CEO/CFO pursuant to Sec. 906





*
Previously filed with Form SB-2 Registration Statement, November 1,
2007.





(b)  Reports
on Form 8-K. No reports were filed under cover of Form 8-K for the fiscal year
ended June 30, 2007.







ITEM
14: PRINCIPAL ACCOUNTANT FEES AND SERVICES





Our
independent auditor, Ronald R. Chadwick, P.C., Certified Public Accountant,
billed an aggregate of $13,520 for the year ended June 30, 2007 and for
professional services rendered for the audit of the Company's annual financial
statements and review of the financial statements included in its quarterly
reports.





We do not
have an audit committee and as a result its entire board of directors performs
the duties of an audit committee. Our board of directors evaluates the scope and
cost of the engagement of an auditor before the auditor renders audit and
non-audit services.








SIGNATURES





In
accordance with Section 12 of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized on February 12, 2008.








GREAT
      SPIRITS, INC.Date:
      February 12, 2008
              By:
              /s/
      Dana HydeDana
      Hyde,Chief
      Executive Officer and President
                (principal
      executive officer)
  Pursuant
to the requirements of the Securities Exchange Act of 1934, this report has been
signed below by the following person on behalf of the Registrant and in the
capacity and on the date indicated.
 
 Date:
      February 12, 2008
              By:
              /s/
      James HydeJames
      Hyde,Chief
      Financial Officer
                (principal
      financial and accounting officer)




- 20
-