UNITED STATES SECURITIES AND EXCHANGE
COMMISSION


Washington, D.C. 20549





FORM 10-KSB



|           |  |                                                                                             
|---------- |  | --------------------------------------------------------------------------------------------
|(Mark One) |  |                                                                                             
|þ          |  | Annual report pursuant to Section 13 or
    15(d) of the Securities Exchange Act of 1934    
|           |  | For the fiscal year ended December 31,
    2006                                             
|or        
|o          |  | Transition report pursuant to Section 13 or
    15(d) of the Securities Exchange Act of 1934
|           |  | For the transition period
    from                          to                              
|           |  |                                                                                             

GOLDEN SPIRIT ENTERPRISES LTD.


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


|                                                                    |  |                                     
|------------------------------------------------------------------- |  | ------------------------------------
|Delaware                                                            |  | 52-2132622                          
|(State of incorporation)                                            |  | (I.R.S. employer identification no.)
|                                                                   
|1288 Alberni Street, Suite 806, Vancouver, British Columbia, Canada |  | V6E 4N5                             
|(Address of principal executive
    offices)                        |  | (Zip code)                          

888-488-6882

(Registrants telephone number, including
area code)


Securities registered pursuant to
Section 12(b) of the Act:

|     |  | 
|---- |  | 
|NONE
|    

Securities registered pursuant to
Section 12(g) of the Act:

Common Stock Par Value $.0001


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      No



Check if there is no disclosure of delinquent filers in response to Item 405 of Regulation S-B is not 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 or any amendment to this Form 10-KSB.



State issuers revenues for its most recent fiscal year. $18,553



State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was sold, or the average bid and asked price of such common equity, as of a specified date within the past 60 days. (See definition of affiliate in Rule 12b-2 of the Exchange Act.)



As of December 31, 2006, there were 15,528,624 shares of the issuer's $0.0001 par value common stock issued and outstanding.



Documents incorporated by reference.  There are no annual reports to security holders, proxy information statements, or any prospectus filed pursuant to Rule 424 of the Securities Act of 1933 incorporated herein by reference.



Transitional Small Business Disclosure format (check one):

Yes

No





GOLDEN SPIRIT ENTERPRISES LTD.

A Delaware corporation



Index to Registration Statement on Form 10-KSB



PAGE



PART I.



ITEM 1.

Description of Business

4



ITEM 2.

Description of Property

13



ITEM 3.

Legal Proceedings

13



ITEM 4.

Submission of Matters to a Vote of Security Holders

14



ITEM 5.

Market Price for the Golden Spirit Minerals Ltd. Corporations

Common Equity and Related Stockholders Matters

14



ITEM 6.

Management's Discussion and Analysis of Financial Condition and

Results of Operations



18



ITEM 7.

Financial Statements

F-1



ITEM 8.

Changes in and Disagreements with Accountants

20



ITEM 9.

Directors, Executive Officers, Promoters and Control Persons



22



ITEM 10.

Executive Compensation - Remuneration of Directors and Officers



23



ITEM 11.

Security Ownership of Certain Beneficial Owners and Management

24



ITEM 12.

Certain Relationships and Related Transactions

24



ITEM 13.

Principal Accountant Fees and Services

25



ITEM 14.

Exhibites

26





THIS REPORT ON FORM 10-KSB IS FOR THE YEAR ENDING DECEMBER 31, 2006.  THE REPORT HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION IN MARCH 2007.  TO THE EXTENT PRACTICABLE, THE DISCLOSURE CONTAINED HEREIN HAS BEEN PREPARED TO SPEAK AS OF DECEMBER 31, 2006. GOLDEN SPIRIT ENTERPRISES LTD. HAS INCLUDED A SECTION BELOW ENTITLED SUBSEQUENT EVENTS WHICH DISCUSSES CERTAIN MATERIAL EVENTS WHICH OCCURRED SUBSEQUENT TO DECEMBER 31, 2006.





PART I



Item 1. Description of Business.



Our Background. Golden Spirit Enterprises Ltd., formerly Golden Spirit Gaming Ltd., formerly Golden Spirit Mining Ltd., formerly Golden Spirit Minerals Ltd., formerly 2UOnline.com, Inc., formerly Power Direct, Inc., was incorporated in the State of Delaware on September 13, 1993, and we maintain our principal executive offices at 1288 Alberni Street, Suite 806, Vancouver, British Columbia, Canada V6E 4N5. Our offices in the United States are located at 177 Telegraph Road, Suite 541, Bellingham, Washington 98226.



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



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



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



Our Business. Given the popularity of the Internet in general and the relatively high profit margins and low overhead associated with the Internet gaming business, we are directing our efforts towards online poker. Our overall success and viability are therefore directly dependent upon the success of the Golden Spirit poker.com website.  The Company then entered into a Software Sub-licensing (SSL) Agreement with Arc 2 Entertainment, Inc. (Arc2), a British Virgins Island Corporation on July 12, 2005, to begin developing the Companys online gaming website (see Online Business Development below).



4





During 2005, the Company entered into an Acquisition Agreement with 4 of a Kind Enterprises, who does business as EverythingAboutPoker.com. 4KE specializes in the business of marketing poker related merchandise, internet media, educational card playing and boot-camp events.  4KE also sponsors professional poker players in major televised tournaments.  The completion date was extended to March 31, 2006 and after the Company concluded its due diligence in connection with the proposed acquisition of 4KE, the Companys Board of Directors determined not to proceed with this acquisition.  On April 18, 2006, the Company gave formal written notice to 4KE that the agreement was terminated. There are no further obligations arising from the termination of this agreement (see Online Business Development below).



The Company has ownership of Golden Spirit Poker.com (GSP), an offshore online poker information and gaming website. GSP is an online poker site which has a broad player based network, enabling players to readily find a table to have a game of poker.  GSPs poker site is easy to navigate and offers free lessons for novices with the basics of the game to significantly speed up the learning curve.

The www.goldenspiritpoker4fun.net site provides free play with play money so that players may practice their skills in poker games with various limits without the risk of losing real money.  People who previously had no way to learn and improve their game because they had no one to play with, are now able to learn the game at a quicker pace and gain invaluable experience from free money play.

GSPs site will offer players the chance to play in private tables (Invitation Only) with their own select group of friends or certain celebrities during special events.  Regular tournaments and satellite tournaments will be available by which players can win jackpots and have an opportunity to win entries into real life poker tournaments.

The Company has a multi-year agreement with Anna the GoldDigger Benson to promote, market, and play on the Companys site.  Bensons poker and personal websites, www.golddiggerpoker.com and www.annabenson.net, are affiliated with GSP.  In addition, the company has contracted one of the top professional card players in the world, Mr. Jean Robert Bellande, to exclusively market its poker related products.

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



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



We had limited success with both our internet activities and our mineral exploration and development activities. In mid 2005, management of the Company decided to focus on online gaming and in June 2006, the Company decided to diversify its business by adding film production and distribution.



Our Investment in Avalon Energy Corporation



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

5



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



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



Our Mineral Properties:



(i) Niger Property



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



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



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



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



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



2.

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

6



On December 31, 2003, the Companys interest in Legacy was reduced from 59% to 4%.  As Legacy had a negative carrying value on consolidation, and the Company disposed of the majority of its interest for nominal consideration, the Company has recorded a dilution gain of $762,805. At the same time, management has determined that its receivable from Legacy of $428,718 is impaired and therefore has written off the receivable against the dilution gain.  The net dilution gain on the reduction in interest ownership of Legacy was $334,087.  Commencing January 1, 2004, the Company will account for its investment in Legacy using the cost method.  In October 2005, the Company entered into an agreement to sell its interest in Ester Creek to Legacy for 750,000 shares of Legacys common stock; which increased the Companys ownership in Legacy back up to 7.39%.  As at December 31, 2006, the carrying value of the Company's investment in Legacy is $nil.



Online Business Development:



Arc2 Entertainment

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



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



(a)

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



(b)

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



(c)

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

7



(d)

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



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



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



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



a)

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



b)

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



c)

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



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

8

Online Gaming Operations:



Gross revenues for the year ended December 31, 2006 were $18,553. Total expenses for the year ended December 31, 2006 were $27,576, which consisted primarily of poker royalties, monthly support and processing fees of $22,153.



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



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



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



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



Sponsorships



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





i)

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



ii)

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



iii)

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



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



a)

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



b)

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



c)

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



9



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



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



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



4 of A Kind Enterprises



On July 11, 2005, the Company entered into an agreement with 4 of A Kind Enterprises (4KE), a Nevada Corporation, whereby the Company agreed to acquire one hundred percent (100%) of 4KE. The Company placed 1,388,889 post reverse-split restricted common shares in escrow pending completion of this acquisition of 4KE, doing business as EverythingAboutPoker.com.  Upon signing the agreement, the shareholders of 4KE placed 100% of their issued and outstanding stock, being 10,000,000 common shares in trust to the Company.  4KE specializes in the business of marketing poker related merchandise, internet media, educational card playing and boot-camp events through its website EverythingAboutPoker.com.  4KE also sponsors professional poker players in major televised tournaments.



The completion date was extended to March 31, 2006 by mutual consent and the finalization of the agreement was subject to the satisfactory completion of due diligence including the receipt of 4KEs audited financial statements, the Companys approval thereof, and the resolution to the satisfaction of the Company of the lawsuit from an individual formerly under contract with 4KE.



The Company has concluded its due diligence in connection with the proposed acquisition of 4KE and the Companys Board of Directors determined not to proceed with this acquisition and on April 18, 2006, gave formal written notice to 4KE that the agreement was terminated. There are no further obligations arising from the termination of this agreement.





Ownership Interests. The following chart specifies our stock ownership at December 31, 2006:



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

Percent

Entity



Nature of Ownership

Ownership

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

7.39%

Legacy Mining Ltd.



1,263,376 Shares of Common

Stock



0.02%

Avalon Energy Corporation

10,351 Shares of Common

Stock

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



10



Employees. We currently have 1 full-time employee and 2 part-time employees.  None of our employees are subject to any collective bargaining agreements.



The Following are Material Subsequent Events (Occurring after December 31, 2006).



On February 1, 2007, a total of 170,000 post reverse-split options, pursuant to the 2006 Stock Option Plan, were exercised at $0.09 per share for cash proceeds of $15,300.

On March 12, 2007, thirty days notice was given to Arc 2 Entertainment to terminate the Amended SSL Agreement dated January 12, 2006.  Effective April 15, 2007, the Companys online gaming operations will be discontinued



Item 1.A - Risk Factors:

The following risk factors should be given special consideration when evaluating the Company.



(a)

Legal and Regulatory: The ability to profitably sell various products or services on the Internet is dependent upon the legal and regulatory authorities of various levels of governments on a worldwide basis. The Company and its BVI subsidiary, to a great extent, are dependent upon international government rulings in respect of the permissibility of certain Internet commerce activities, specifically those involving gaming. The Company could be materially adversely affected by negative rulings relating to Internet commerce activities by international governments, particularly in the United States.  The laws in the United States and throughout the world both relating to the Internet and to Internet gaming specifically are expected to continue to be developed over a number of years. The Company's business plan is based on its ability to first develop and then market and sell its services on the Internet. The permissible scope of gaming and betting on the Internet varies from country to country and within various jurisdictions within each country. Until the legal issues are resolved either through legislation or the courts, the future of Internet gaming and betting is uncertain in many jurisdictions. Internet gaming and betting has received increased scrutiny by legal agencies, and in some cases, legal proceedings have been initiated alleging that such activities are illegal, primarily in the U.S. The Company is unable to predict the outcome of such proceedings and the ultimate impact on the Company's business. If it is held that Internet gaming and betting such as that proposed to be conducted by the Company's BVI subsidiary is illegal in a significant number of jurisdictions, it would have a material adverse effect on the business of the Company. Furthermore, the existence of claims of illegality may result in litigation costs and an indefinite interruption in the business activities of the Company. Although each country or jurisdiction will create its own legislation, the United States' current and proposed legislation represents some of the most stringent laws in this industry. Due to the uncertainty of the regulatory environment, management is unable to determine the effect of the current and proposed legal regulations and their applications in the United States or elsewhere. Management believes that this uncertainty in respect of the legislation, the jurisdictions and the enforcement will continue for a number of years to come. This belief is based on the requirement for cooperation between legislative bodies in various countries in order to properly enforce any Internet laws. Negative rulings, restrictive legislation and the application of any restrictive legislation could adversely affect the gaming and betting operations of the Company subject to political risks inherent in all foreign operations. (Please see Our Business and Material Subsequent Event sections in Item 1 above.)



(b)

Software: The Company and the Companys British Virgin Islands (BVI) subsidiary, through its licensor, Arc 2 Entertainment Ltd.(Arc 2), a BVI Company, is utilizing software that may not be commercially successful.



(b)

Competition: The products and services offered by the Company and the Company's BVI subsidiary will compete against those of other new and developing companies as well as companies established in existing and other markets, some of which have greater financial, marketing, software programming and other resources than those of the Company and its BVI subsidiary.  Amongst other features, these competitors may be able to provide greater functionality in their web site operations.  The entry of well-financed land-based casino operators would significantly and negatively impact the competitive position of the Company.

11



(c)

Reliance on the Internet and the Internet Service Providers: The Company and the Company's BVI subsidiary will rely on the Internet as a means of promoting and selling the products and services offered by the Company and its BVI subsidiary. Any changes in the Internet's role as the premier computer network information service, or any shutdown of Internet service by significant Internet service providers, will impact the Company's ability to generate revenues.  Furthermore, the Company can be adversely affected by power failures, internet interruptions, software failures and hackings.



(d)

Reliance on Employees: The Company and its BVI subsidiary will be relying heavily on their employees for researching, developing, enhancing, operating and marketing of their products and services, the loss of any of whom could have an adverse effect on the Company.



(e)

Reliance on Licensees: The Company will be relying on licensees for the purpose of operating the Gaming Software, the loss of any of whom could have an adverse effect on the Company and its BVI subsidiary.



(f)

Product Obsolescence: The Internet continues to change and evolve in both its systems and its accepted methods of marketing. The Company and its BVI subsidiary are at risk if, in respect of any products and services which they develop or license, they do not continue to upgrade and improve such products and services to avoid rendering the existing software obsolete. Internal cash generated by operations may not permit the level of research and development spending required in maintaining a stream of new product improvements.



(g)

Liquidity:The revenue expected to be generated, initially in 2006, from the software will be insignificant and not sufficient to sustain the ongoing operations of the Company. There are no assurances whatsoever that the software will generate sufficient revenues in order to make the Company profitable.  Moreover, there can be no assurance whatsoever that the current levels of cash in the Company will sufficiently sustain the Company's operations. Additional funding will be required in order for the Company to meet its contractual obligations and, there can be no certainty that the Company will be able to obtain additional financing to fund its own operations.  This could have a material adverse impact on the business of the Company.



(h)

Marketplace:The marketplace in which the Company and its BVI subsidiary intend to compete is constantly undergoing changes. Internet commerce services are continuing to develop based on a largely untapped and unproven market. The ability of the Company to generate profitable earnings from the Internet is based on their ability to successfully enter and develop this untapped and unproven market.



(i)

Marketing:The Internet has not been established as a long term profitable medium for generating revenue specifically with gaming operations.  Poor market acceptance of any products offered by the Company or other unanticipated events may result in lower revenues than anticipated. Additional and significant funding will be required to permit the level of advertising and promotion required to establish a market presence and generate any meaningful revenue and such funding may not be available.



(j)

Dilution: There are a number of outstanding securities and agreements pursuant to which common shares of the Company may be issued in the future. This will result in further dilution to the Company's shareholders.



(k)

Revenues and Dividends: Neither the Company nor its subsidiary currently generate any meaningful revenues and, as a consequence, if additional funds are required for the development of software or for other internet related purposes, or for general working capital, which is likely, the Company will have to seek equity or debt financings which may or may not be available. Furthermore, the Company has not paid cash dividends
in the past and does not expect to pay cash dividends in the future. In the event of generating any meaningful earnings, the Company shall retain its earnings to finance further growth.

12



(l)

Penny Stock:  The Company's securities are deemed to be Penny Stocks and are therefore subject to Penny Stock rules as defined in Rule 3a(51)(1) of the 1934 Exchange Act.  The Penny Stock disclosure requirements may have the effect of reducing the level of trading activity of the Company's securities in the secondary market.  Penny Stocks are low-priced shares of small companies not traded on a U.S. national exchange or quoted on Nasdaq.  The Company's securities are quoted for trading on the OTC Bulletin Board (Symbol: GSGL).  Penny Stocks, such as the Company's securities, can be very risky.  Prices of Penny Stocks are often not available.  Investors in Penny Stocks are often unable to sell stock back to the dealer that sold them the stock.  Investors may lose all their investment in Penny Stocks.  There is no guaranteed rate of return on Penny Stocks.  Before an investor purchases any Penny Stock, U.S. Federal law requires a salesperson to tell the investor the "offer" and the "bid" on the Penny Stock, and the "compensation" the salesperson and the firm receive for the trade.  The firm also must mail a confirmation of these prices to the investor after the trade.  The Investor's Broker-dealer is required to obtain the investor's signature to show that the investor has received the statement titled "Important Information on Penny Stocks" before the investor first trades in a Penny Stock.  This Statement is required by the U.S. Securities and Exchange Commission ("SEC") and contains important information on Penny Stocks.  Furthermore, under penalty of Federal Law the Investor's brokerage firm must tell the investor at two different times - before the investor agrees to buy or sell a Penny Stock, and after the trade, by written confirmation the following:  1) the bid and offer price quotes for the Penny Stock, and the number of shares to which the quoted prices apply, 2) the brokerage firm's compensation for the trade, 3) the compensation received by the brokerage firm's salesperson for the trade.  In addition, to these items listed above the investors brokerage firm must send the investor monthly account statements and a written statement of the investor's financial situation and investment goals as required by the Securities Enforcement and Penny Stock Reform Act of 1990.



Item 2.  Description of Property.



Property Held by Us.  As of the dates specified in the following table, we held

the following property in the following amounts:



Property

December 31, 2006

December 31, 2005

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

Cash



US $7,547



US $          -

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



We do not presently own any interests in real estate. We do not presently own any inventory or equipment.



Our Facilities.  We do not own any real property.  However, we do lease space from Holm Investments Ltd., a shareholder of the Company.  We lease the space for a total of $2,083.33Cdn a month. The term of the lease expires on August 1, 2009.



Item 3.  Legal Proceedings.



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



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



13



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



Item 4.  Submission of Matters to Vote of Security Holders



A majority of the shareholders voted to effect certain changes to the Articles of Incorporation of the Company, filed June 1, 2006, with the State of Delaware:



(a)  Effective at the opening of business June 30, 2006 the Company changed its name to "Golden Spirit Enterprises Ltd." The new trading symbol is "GSPT" and the new CUSIP number is 38119N 10 7.



(b)  On June 1, 2006, the Company announced a one for eighteen (1:18) reverse stock split of all of the Companys outstanding common stock without any change in par value for the shares of common stock. The capitalization of 500,000,000 shares with a par value of $0.0001 per share remains the same after the split. Shareholder approval was obtained to effect the reverse stock split and on June 6, 2006 the Company filed a certificate with the Secretary of State of Delaware authorizing the 1:18 reverse stock split. The split became effective on June 30, 2006. The Company had 15,168,624 post reverse-split common shares issued and outstanding immediately after the split.  All references to shares of common stock and weighted average common shares outstanding have been restated to give effect to the 1:18 reverse stock split unless otherwise stated.



PART II



Item 5.  Market Price for Common Equity and Related Stockholder Matters.



As at December 31, 2006 there were approximately 2,000 holders of the outstanding shares of the Golden Spirit Enterprises Ltd.'s $0.0001 par value common stock.  Golden Spirit Enterprises Ltd. participates in the OTC Bulletin Board Electronic Quotation System maintained by the National Association of Securities Dealers, Inc. On or about April 18, 2000, we were removed from the Over-the-Counter Bulletin Board ("OTCBB") for failure to comply with NASD Rule 6530, which requires any company listed on the OTCBB to be current in its public reporting obligations pursuant to the Securities and Exchange Act of 1934. The Company was re-instated
on the OTCBB on October 7, 2002 under the symbol "TWOU". Commensurate with the name change and forward stock split, the Company also took the necessary steps to change its symbol and CUSIP Number. Therefore, the Registrant's CUSIP Number has changed from 9021014 20 7 to 3811194 10 9.  On October 8, 2003, being 6:30 A.M. EST, the Registrant's symbol changed from TWOU to "GSPM". On October 19, 2004, being 6:30 A.M. EST, the Registrant's symbol changed from GSPM to "GSML".  At the opening on July 18th, 2005 the Registrants symbol changed from GSML to GSGL and the CUSIP Number became 38119U 10 1.

14



Effective at the opening on June 30th, 2006, the Registrants symbol changed from GSGL to GSPT and the CUSIP Number is now 38119N 10 7.



According to quotes provided by stockhouse.com, the Golden Spirit Enterprises Ltd.s common stock closed at:



Quarter



High



Low

2004 First Quarter





$0.90

$0.36

2004 Second Quarter



$2.34



$0.18

2004 Third Quarter



$2.88

$0.90

2004 Fourth Quarter



$2.88

$0.90

2005 First Quarter

$1.08

$0.54

2005 Second Quarter

$0.54

$0.18

2005 Third Quarter

$0.54

$0.36

2005 Fourth Quarter

$0.54

$0.18

2006 First Quarter

$1.06

$0.24

2006 Second Quarter

$0.58

$0.11

2006 Third Quarter

$0.15

$0.10

2006 Fourth Quarter

$0.22

$0.06





The Company traded as 2UOnline.com from January 1, 2003 to October 8, 2003, as Golden Spirit Minerals Ltd. from October 9, 2003 to October 18, 2004, as Golden Spirit Mining Ltd. from October 19, 2004 to July 17, 2005, Golden Spirit Gaming Ltd. from July 18, 2005 to June 29, 2006, and Golden Spirit Enterprises Ltd. From June 30, 2006 to date. Such quotations reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not represent actual transactions.



The public may read and copy any materials filed with the SEC at the SEC's Public Reference Room at 450 Fifth Street NW, Washington, D.C. 20549. The public may also obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC maintains an Internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC. The address of that site is http://www.sec.gov.



Common Stock: The Company is authorized to issue 500,000,000 shares of common stock, $.0001 par value, each share of common stock having equal rights and preferences, including voting privileges.  The shares of $.0001 par value common stock of the Company constitute equity interests in the Company entitling each shareholder to a pro rata share of cash distributions made to shareholders, including dividend payments.  The holders of the Company's common stock are entitled to one vote for each share of record on all matters to be voted on by shareholders.  There is no cumulative voting with respect to the election of directors of the Company or any other matter, with the result that the holders of more than 50% of the shares voted for the election of those directors can elect all of the Directors.  The holders of the Company's common stock are entitled to receive dividends when, as and if declared by the Company's Board of Directors from funds legally available therefore; provided, however, that the cash dividends are at the sole discretion of the Company's Board of Directors. In the event of liquidation, dissolution or winding up of the Company, the holders of common stock are entitled to share ratably in all assets remaining available for distribution to them after
payment of liabilities of the Company and after provision has been made for each class of stock, if any, having preference in relation to the Company's common stock.  Holders of the shares of Company's common stock have no conversion, preemptive or other subscription rights, and there are no redemption provisions applicable to the Company's common stock.  All of the outstanding shares of the Company's common stock are duly authorized, validly issued, fully paid and non-assessable.

15



As of December 31, 2006, 15,528,624 post-reverse split shares of Golden Spirit Enterprises Ltd. common stock were issued and outstanding.



Legacy Mining Ltd. (formerly CardStakes.com and formerly our subsidiary) Stock Transfer.  On August 16, 1999, we issued to each of our shareholders entitled to receive dividends, one (1) share of Legacy Mining Ltd.s common stock for every eight (8) shares of our common stock held by the shareholder.  We issued a total of 2,199,779 shares of Legacy Mining Ltd.s common stock to our shareholders. These shares were subsequently reverse split on a 2:1 basis.



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



2006 Transactions



During the year ended December 31, 2006, the Company issued:



(a)

906,371 post reverse split common shares on exercise of options granted pursuant to the Companys 2005 and 2006 Stock Incentive and Option Plans at prices ranging from $0.09 per  share to $0.54 per share for total proceeds of $293,190 of which $106,900 was received in cash  and $186,290 was received by way of settlement of amounts previously owing to the option  holders.



(b)

1,666,667 post reverse-split restricted Rule 144 shares of the Companys common stock pursuant
to a memorandum of understanding dated April 4, 2005 with a private corporation in connection  with the Niger Property transaction.



(c)

116,667 post reverse-split restricted Rule 144 shares of the Companys common stock with a fair
value of $28,000 to two individuals for advisory board and other services.





(d)

972,222 post reverse-split restricted Rule 144 shares of the Companys common stock with a fair value of $192,500 in connection with two prepaid service contracts.



2005 Transactions



(a)

On January 12, 2005, the Company filed a Registration Statement on Form S-8 to cover 1,055,556 post reverse-split shares of common stock to be issued pursuant to the Companys 2005 Stock Incentive and Option Plan (the Plan).



16







(b)

On June 13, 2005, the Company filed a Registration Statement on Form S-8 to cover an additional 1,055,556 post reverse-split shares of common stock to be issued pursuant to the Companys 2005 Stock Incentive and Option Plan (the Plan).



(c)

During 2005, 855,555 post reverse-split options were exercised for total proceeds of $373,750 at exercise prices ranging from $0.36 to $0.48 per share.



(d)

During 2005, a total of 152,778 post reverse-split common shares were issued at $0.36 per share in connection with a private placement for total proceeds of $55,000.



(e)

On June 15, 2005, the Company entered into an agreement with a private company controlled by a significant shareholder, with a two year term, whereby this company will provide investment-banking services to the Company (valued at $60,000) in exchange for the issuance of 166,666 restricted shares of the Companys common stock.



(f)

On July 12, 2005, the Company entered into a Software Sub License Agreement (the
Agreement) with Arc2 Entertainment (Arc2), an online gaming software development and marketing company incorporated in the British Virgin Islands.  Under the terms of the Agreement, Arc2 will build and operate the Companys online gaming website in connection with which Arc2 will license to the Company Arc2s software utilized for the operation of online gaming.  Upon the signing of the Agreement, the Company issued 5,555,556 post reverse-split (with a fair value of $2,000,000) Rule 144 restricted shares of its common stock to Arc2 and its designees as payment for the marketing and management services to be provided over the 3-year term of the Agreement. See Website Development Costs section above.



2006 Stock Options Transactions



(a)

During 2006, the Company granted a total of 1,102,778 post reverse split, 5 year common stock options at exercise prices ranging from $0.09 per shares to $0.36 per share.  The Company recognized stock-based compensation of $66,600 in accordance with SFAS 123R which represented the fair value of stock options granted to consultants in exchange for services rendered to the Company.



(b)

The Companys stock option activity (presented on a post reverse split basis) is as follows:



|                          |                   |                                 |                                            
|------------------------- | ----------------- | ------------------------------- | -------------------------------------------
|                          | Number of options | Weighted Average Exercise Price | Weighted Average Remaining Contractual Life
|Balance,December 31, 2004 | 1,111             | $              1.08             | 3.04 years                                 
|Granted during 2005       | 2,008,333         | 0.45                            |                                            
|Cancelled during 2005     | (166,667)         | 0.36                            |                                            
|Exercised during 2005     | (855,555)         | 0.44                            |                                            
|Balance,December 31, 2005 | 987,222           | 0.49                            | 4.25 years                                 
|Granted during 2006       | 1,102,778         | 0.11                            |                                            
|Exercised during 2006     | (906,371)         | 0.32                            |                                            
|Balance,December 31, 2006 | 1,183,629         | $              0.26             | 3.08 years                                 



17



(c)

On January 27, 2006 and September 11, 2006, the Company filed Registration Statements on Form S-8 to cover a total of 4,800,000 post reverse-split shares of common stock to be granted pursuant to the Companys 2006 Stock Incentive and Option Plan



2005 Stock Option Transactions



(a)

On January 12, 2005, the Company filed a Registration Statement on Form S-8 to cover 1,055,555 post reverse-split shares of common stock to be issued pursuant to the 2005 Plan.  On February 8, 2005 169,444 post reverse-split stock options were granted to an employee at $0.54 per share and 886,111 post reverse-split stock options were granted to consultants at $0.54 per share.  A fair value of $570,000 for these options ($91,500 for the employee options and $478,500 for the consultant options) was estimated using the Black-Scholes option pricing model assuming an expected life of 5 years, a risk-free interest rate of 3.75% and an expected volatility of 244%.  For the year ended December 31, 2005, the consultant options have been expensed and the employee options have been disclosed on a pro-forma basis in the financial statement notes.



(b)

On June 13, 2005, the Company filed a Registration Statement on Form S-8 to cover an additional 1,055,555 post reverse-split shares of common stock to be issued pursuant to the 2005 Plan. On June 14, 2005, 16,667 post reverse-split stock options were granted to an employee at $0.36 per share and 530,556 post reverse-split stock options were granted to consultants at $0.36 per share. A fair value of $294,500 for these options ($6,000 for the employee options and $191,000 for the consultant options) was estimated using the Black-Scholes option pricing model assuming an expected life of 5 years, a risk-free interest rate of 3.75% and an expected volatility of 234%. During the year, 166,667 post reverse-split stock options granted to consultants with a fair value of $60,000 were cancelled.  On August 9, 2005, 33,333 post reverse-split stock options were granted to an employee at $0.36 per share and 372,222 post reverse-split stock options were granted to consultants at $0.36 per share. A fair value of $146,000 for these options ($12,000 for the employee options and $134,000 for the consultant options) was estimated using the Black-Scholes option pricing model assuming an expected life of 5 years, a risk-free interest rate of 4.13% and an expected volatility of 239%. During the year ended December 31, 2005, the consultant options, net of those cancelled, have been expensed and the employee options have been disclosed on a pro-forma basis in the financial statement notes.





Item 6.  Management's Discussion and Analysis of Financial Condition or Plan of Operation.



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



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

18



Results of Operations. We have not yet realized any significant revenue from operations.  Loss from operations increased from $1,000 for the year ended December 31, 1997, to $10,797 for the year ended December 31, 1998, to $4,201,051 for the year ended December 31,1999, to $1,350,249 for the year ended December 31, 2000, to $1,495,844 for the year ended December 31, 2001, to $1,025,820 for the year ended December 31, 2002  $1,279,867 for the year ended December 31, 2003, $1,883,337, for the year ended December 31, 2004, to $1,842,055 for the year ended December 31, 2005, and to $2,954,033 for the year ended December 31, 2006.  Our net loss increased from 2005 to 2006 primarily due to an increase in consulting fees of $457,237,amortization expenses in the amount of $100,000, the write-down of our website development costs of $80,000, and $600,000 in property option loss. Our losses from September 13, 1993 (inception) to December 31, 2006, were $16,044,053. However, the Company is contemplating legal action to recover approximately $93,000 of the monies advanced for the tournaments as a breach of contract as the tournaments were not televised.



Liquidity and Capital Resources.   At December 31, 2006, we had a bank overdraft of $Nil (2005-$52), total current assets of $32,064 (2005-$2,812) and total current liabilities of $381,949 (2005-$316,669).  At December 31, 2006, total current liabilities exceeded total current assets by $349,885. Cash on hand constitutes our present internal sources of liquidity.  We do not believe that our available cash is sufficient to pay our day-to-day expenditures, therefore, we rely on management to provide the necessary funds to pay these day-to-day expenditures. We have one other external source of liquidity, that being the sale of our common stock.



To address the going concern problem discussed in our financial statements, we will require additional working capital.  We will also require additional funds to implement our business strategies, including funds for:



o

payment of increased operating expenses, and

o

further implementation of  business strategies.



No assurance can be given; however, that we will have access to the capital markets in the future, or that financing will be available on acceptable terms to satisfy our cash requirements needed to implement our business strategies. Our inability to access the capital markets or obtain acceptable financing could have a material adverse effect on our results of operations and financial condition and could severely threaten our ability to operate as a going concern.



Our forecast of the period of time through which our financial resources will be adequate to support our operations is a forward-looking statement that involves risks and uncertainties, and actual results could vary as a result of a number of factors.



Our Plan of Operation for the Next 12 Months.  We anticipate that we will need to raise additional capital within the next 12 months in order to continue as a going concern.  Anticipated revenues for the first quarter of 2006 are not expected to be significant.   Therefore, additional capital may be raised through additional public or private financings, as well as borrowings and other resources.  To the extent that additional capital is raised through the sale of equity or equity-related securities, the issuance of such securities could result in dilution of our stockholders.  There can be no assurance that additional funding will be available on favorable terms, if at all.  If adequate funds are not available within the next 12 months, we may be required to curtail our operations significantly or to obtain funds through entering into arrangements with collaborative partners or others that may require us to relinquish rights to certain of our assets that we would not otherwise relinquish.

19



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



Audit Committee As of the date of this Annual Report, we have not appointed members to an audit committee and, therefore, the respective role of an audit committee has been conducted by our Board of Directors.  When established, the audit committee's primary function will be to provide advice with respect to our financial matters and to assist the Board of Directors in fulfilling oversight responsibilities regarding finance, accounting, tax and legal compliance. The audit committee's primary duties and responsibilities will be to: (i) serve as an independent and objective party to monitor our financial reporting process and internal control system; (ii) review and appraise the audit efforts of our independent accountants; (iii) evaluate our quarterly financial performance as well as compliance with laws and regulations; (iv) oversee management's establishment and enforcement of financial policies and business practices; and (v) provide and open avenue of communication among the independent accountants, management and the board of directors.





Item 7.   Financial Statements.

GOLDEN SPIRIT ENTERPRISES LTD.

(Formerly Golden Spirit Gaming Ltd.)



(A development stage company)



CONSOLIDATED FINANCIAL STATEMENTS



DECEMBER 31, 2006 and 2005





REPORTS OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMS...F-1-F-1a



CONSOLIDATED BALANCE SHEETS.................................................................................F-2



CONSOLIDATED STATEMENTS OF OPERATIONS.......................................................F-3



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



CONSOLIDATED STATEMENTS OF CASH FLOWS......................................................F-5



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







REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM





To the Board of Directors and Stockholders

Golden Spirit Enterprises, Ltd.

(Formerly Golden Spirit Gaming Ltd.)

(A Development Stage Company)

Vancouver, British Columbia, Canada



We have audited the accompanying consolidated balance sheet of Golden Spirit Enterprises, Ltd. (a development stage company) (formerly Golden Spirit Gaming Ltd.) as of December 31, 2006, and the related consolidated statements of operations, stockholders deficit, and cash flows for the year then ended.  These financial statements are the responsibility of the Companys management.  Our responsibility is to express an opinion on these financial statements based on our audit. We did not audit the cumulative data from September 13, 1993 (inception) to December 31, 2005 in the consolidated statements of operations, stockholders deficit and cash flows, which were audited by another independent registered public accounting firm whose report dated March 17, 2006, which expressed an unqualified opinion (the report was modified related to the uncertainty of the Companys ability to continue as a going concern), has been furnished to us. Our opinion, insofar as it relates to the amounts included for the cumulative period from September 13, 1993 (inception) to December 31, 2006, is based solely on the reports of the other independent registered public accounting firm.



We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States).Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.  The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.  Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Companys internal control over financial reporting.  Accordingly, we express no such opinion.  An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements.  An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.  We believe that our audit provides a reasonable basis for our opinion.



In our opinion, based on our audit and the report of the other independent registered public accounting firm, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Golden Spirit Enterprises, Ltd. (formerly Golden Spirit Gaming Ltd.) (a development stage company) as of December 31, 2006, and the results of its activities and cash flows for the year then ended and for the cumulative period from September 13, 1993 (inception) to December 31, 2006 in conformity with accounting principles generally accepted in the United States.



The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Companys current liabilities exceed current assets, has incurred significant losses since inception, all of which raise substantial doubt about the Companys ability to continue as a going concern.  Managements plans in regards to these matters are also described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.



/s/ L.L. Bradford & Company, LLC

L.L. Bradford & Company, LLC

March 29, 2007

Las Vegas, Nevada

F-1

[auditreport2002.gif]



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM





To the Stockholders and Board of Directors of Golden Spirit Gaming Ltd. (formerly Golden Spirit Mining Ltd.)



We have audited the consolidated balance sheets of Golden Spirit Gaming Ltd. (formerly Golden Spirit Mining Ltd.), a development stage company, as at December 31, 2005 and 2004 and the consolidated statements of operations, stockholders deficit and cash flows for the years then ended.  These financial statements are the responsibility of the Company's management.  Our responsibility is to express an opinion on these financial statements based on our audits.



We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States).  Those standards require that we plan and perform an audit to obtain reasonable assurance whether the financial statements are free of material misstatement.  The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Companys internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements.  An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.  We believe that our audits provide a reasonable basis for our opinion.



In our opinion, these consolidated financial statements present fairly, in all material respects, the financial position of the Company as at December 31, 2005 and 2004 and the results of its operations and its cash flows and the changes in stockholders deficit  for the years then ended in accordance 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 1 to the financial statements, to date the Company has not generated significant revenues since inception, has incurred substantial losses in developing its business, and further losses are anticipated.  The Company requires additional funds to meet its obligations and the costs of its operations.  These factors raise substantial doubt about the Companys ability to continue as a going concern.  Managements plans in this regard are described in Note 1.  The financial statements do not include any adjustments that might result from the outcome of this uncertainty.



/s / Dale Matheson Carr-Hilton LaBonte

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

Dale Matheson Carr-Hilton LaBonte

CHARTERED ACCOUNTANTS



Vancouver, Canada

March 17, 2006



F-1a

GOLDEN SPIRIT ENTERPRISES LTD.

(Formerly Golden Spirit Gaming Ltd.)

(A development stage company)



CONSOLIDATED BALANCE SHEETS



December 31,December 31,20062005ASSETSCURRENT ASSETSCash$               7,547$                      -Sales tax receivable2,9661,156Available-for-sale securities  related party1,0871,656Prepaids and Deposits20,464-Total Current Assets32,0642,812DUE FROM LEGACY MINING LTD.20,08216,029FURNITURE AND EQUIPMENT, net of depreciation of $7,038 (2005-$6,718)427747WEBSITE DEVELOPMENT COSTS-80,000$            52,573$           99,588LIABILITIESCURRENTBank overdraft$                       -$                  52Accounts payable and accrued liabilities57,02067,184Due to Avalon Energy Corporation215,054167,291Due to related parties109,87582,142Total Current Liabilities381,949316,669CONTINGENCIESSTOCKHOLDERS DEFICITCommon stock, $0.0001 par value, 500,000,000 shares authorizedIssued and outstanding:15,528,624 (2005  11,866,677) common shares1,5531,187Additional paid-in capital16,726,24415,546,320Deferred compensation(150,490)(1,812,507)Deficit accumulated during the development stage(16,905,999)(13,951,966)Accumulated other comprehensive loss(684)(115)(329,376)(217,081)$            52,573$           99,588




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



F-2





GOLDEN SPIRIT ENTERPRISES LTD.

(Formerly Golden Spirit Gaming Ltd.)

(A development stage company)



CONSOLIDATED STATEMENTS OF OPERATIONS

September 13,1993 (inception)Year EndedYear Endedto December 31,December 31, 2006December 31, 20052006REVENUESProcessing fees$                       -$                       -$            98,425Gaming Revenue18,553-18,553Sale of oil and gas interest--47,501Interest income--2,92718,553-167,406COST OF SALESPoker royalties and processing fees27,576-27,576GROSS PROFIT (LOSS)(9,023)139,830GENERAL AND ADMINISTRATIVE EXPENSESAdvertising and marketing7,436146,62688,667Consulting fees1,848,2451,391,0086,985,648Depreciation and amortization100,320320132,142Exploration costs-11,009241,754Investor relations117,37098,034694,503Loss on settlement of debt--302,500Management fees8,43312,227376,314Office and general57,57777,425467,813Poker Sponsorships52,500-52,500Professional fees49,90074,267548,699Travel and accommodation22,23227,312214,779Wages and salaries9973,827239,707Write-off of website development costs80,000-425,682Write-down (recovery) of URL costs--1,571,657Write-down of technology license--2,055,938Write-off of other assets--265,8862,345,0101,842,05514,664,189LOSS BEFORE THE FOLLOWING:(2,354,033)(1,842,055)(14,524,359)EQUITY LOSS FROM AVALON--(1,394,280)WRITE-DOWN OF INVESTMENT IN AVALON--(313,301)LOSS ON SALE OF SECURITIES--(26,178)DILUTION GAIN  LEGACY--334,087PROPERTY OPTION LOSS(600,000)-(600,000)MINORITY INTEREST IN LEGACYS LOSS--479,978NET LOSS$      (2,954,033)$      (1,842,055)$   (16,044,053)BASIC AND DILUTED LOSS PER COMMON SHARE$               (0.20)$               (0.23)BASIC AND DILUTED WEIGHTED AVERAGE COMMON SHARES OUTSTANDING14,412,3207,970,178




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



F-3





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



F-4

GOLDEN SPIRIT ENTERPRISES LTD.

(Formerly Golden Spirit Gaming Ltd.)

(A development stage company)



CONSOLIDATED STATEMENTS OF CASH FLOWS

September 13,Year endedYear ended1993 (inception)December 31,December 31,to December 31,200620052006OPERATING ACTIVITIESNet loss$                (2,954,033)$             (1,842,055)$          (16,044,053)Adjustments to reconcile net loss to net cash used in operating activities:Depreciation100,320320132,142Fees and services paid for with shares1,882,517520,2094,896,678Loss on settlement of debt--302,500Stock-based compensation66,600743,5001,980,169Non-cash component of URL write-down--1,214,193Resource property acquisition and exploration costs600,000-763,000Write-down of technology license--2,055,938Write-off of website development costs80,000-206,876Equity loss from Avalon Energy Corporation--1,394,280Write-down of investment in Avalon Energy Corporation--313,301Loss on sale of marketable securities--26,178Dilution gain  Legacy Mining Ltd.--(334,087)Minority interest in Legacy Mining Ltd.s loss--(479,978)Net changes in operating assets and liabilities(32,438)51,729317,958CASH FLOWS USED IN OPERATING ACTIVITIES(257,034)(526,297)(3,254,905)INVESTING ACTIVITIESDeposit--(75,000)Technology license--(135,938)Acquisition of furniture and equipment--(32,696)Website development costs(100,000)(80,000)(306,876)Other intangible assets--(5,189)Net proceeds from sale of shares of Avalon Energy Corporation--99,470Net cash on disposition of Legacy Mining Ltd.--209,955CASH FLOWS (USED IN) PROVIDED BY INVESTING ACTIVITIES(100,000)(80,000)(246,274)FINANCING ACTIVITIESIncrease in bank overdraft (repayment)(52)52-Net advances from related parties257,733175,399707,076Net proceeds on sale of common stock106,900428,7502,801,650CASH FLOWS PROVIDED BY FINANCING ACTIVITIES364,581604,2013,508,726NET DECREASE IN CASH7,547(2,096)7,547CASH, BEGINNING OF YEAR-2,096-CASH , END OFYEAR$                         7,547$                               -$                     7,547SUPPLEMENTAL CASH FLOW INFORMATION AND NONCASH INVESTING ANDFINANCING ACTIVITIES




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



F-5





GOLDEN SPIRIT ENTERPRISES LTD.

(Formerly Golden Spirit Gaming Ltd.)

(A development stage company)



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2006 AND 2005



NOTE 1  NATURE OF OPERATIONS AND BASIS OF PRESENTATION



The Company was incorporated on September 13, 1993 in the State of Delaware as Power Direct, Inc.  On January 31, 2000 the Company changed its name to 2U Online.com Inc. to reflect managements decision to shift the Companys focus from oil and gas exploration and development to internet-based business development.  On October 8, 2003, the Company changed its name to Golden Spirit Minerals Ltd. to reflect managements decision to shift the Companys focus from internet-based business development to mineral exploration. On October 19, 2004, the Company changed its name to Golden Spirit Mining Ltd. On July 18, 2005, the Company changed its name to Golden Spirit Gaming Ltd. to reflect managements decision to develop an online gaming business.  The launch of the updated goldenspiritpoker.com website featuring real cash games, in addition to play money games, occurred in January 2006.  By agreement dated July 18, 2005 as amended September 20, 2005 (the Amended Agreement), the Company agreed to acquire 100% of the issued and outstanding common shares of 4 Of A Kind Enterprises (4KE) doing business as EverythingAboutPoker.com for consideration of 1,388,889 post-reverse split restricted shares of the Companys common stock which were placed in trust pending finalization of the agreement.  The parties have agreed to complete this acquisition, subject to satisfactory completion of due diligence (See Note 5), effective March 31, 2006. Effective June 30, 2006, the Company completed a 1 for 18 reverse stock split (refer Note 7) and changed its name to Golden Spirit Enterprises Ltd. to reflect the Companys plan to expand its operations to include the marketing of other products and venues not related to gaming. The Company will be involved in the development, production, financing and packaging of innovative film and television programming.



The consolidated financial statements have been prepared on the basis of a going concern which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.  The Company has incurred losses since inception of $16,044,053 and at December 31, 2006 had a working capital deficiency of $349,885.  The Company and its subsidiaries are in the development stage and further significant losses are expected to be incurred in developing its business.  The recoverability of the carrying value of assets and the ability of the Company to continue as a going concern is dependent on raising additional capital and ultimately on generating future profitable operations.  There can be no assurance that the Company will be able to raise the necessary funds when needed to finance its ongoing costs. Given the Companys limited operating history, lack of sales, and its operating losses, there can be no assurance that it will be able to achieve or maintain profitability. The Company intends to fund the marketing of its business with both equity financing and joint venture opportunities, although there are no assurances these opportunities will be successful. Accordingly, these factors raise substantial doubt regarding the ability of the Company to continue as a going concern.



NOTE 2  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES



Principles of Consolidation

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



Furniture and Equipment

Furniture and equipment is carried at acquisition cost less accumulated depreciation. Depreciation is provided over the estimated useful lives of the assets on a 30% declining balance basis per annum.



Use of Estimates and Assumptions

Preparation of the Companys financial statements in conformity with accounting principles generally accepted in the United Stares requires management to make estimates and assumptions that affect certain reported amounts and disclosures.  Accordingly, actual results could differ from those estimates.  The significant areas requiring managements estimates and assumptions relate to determining the fair value of stock-based compensation, fair value of shares issued for services and the acquisitions and useful lives of long-lived assets.



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



F-
 6

GOLDEN SPIRIT ENTERPRISES LTD.

(Formerly Golden Spirit Gaming Ltd.)

(A development stage company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

|                          
|--------------------------
|DECEMBER 31, 2006 and 2005





NOTE 2  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)



Fair Value of Financial Instruments

The Companys financial instruments include cash, receivables, available-for-sale securities, amounts due from Legacy Mining Ltd., accounts payable and accrued liabilities, amounts due to Avalon Energy Corporation, and due to related parties.  Management believes the fair values of these financial instruments approximate their carrying values due to their short-term nature.  The fair value of the Companys available-for-sale securities is estimated based on their market value.



Foreign Currency Translation

The financial statements are presented in United States dollars.  In accordance with Statement of Financial Accounting Standards (SFAS) No. 52, Foreign Currency Translation, foreign denominated monetary assets and liabilities are translated to their United States dollar equivalents using foreign exchange rates that prevailed at the balance sheet date.  Non-monetary assets and liabilities are translated at exchange rates prevailing at the transaction date. Revenue and expenses are translated at average rates of exchange during the year.  Related translation adjustments are reported as a separate component of stockholders equity, whereas gains or losses resulting from foreign currency transactions are included in results of operations.



Available For Sale Securities  Related Party

The Company holds marketable equity securities which are available-for-sale and as such, their carrying value is adjusted to market at the end of each reporting period.  As required by SFAS 130, unrealized gains and losses on these investments are recorded as a component of accumulated other comprehensive income (loss) and are recorded as a component of net income (loss) when realized.  However, if there is a permanent decline in the market value of available-for-sale securities, this permanent market value adjustment is taken into income in the period.



Website Development Costs

The Company has adopted the provisions of EITF No.00-2 "Accounting for Web Site Development Costs" and AICPA SOP 98-1 Accounting for the Costs of Computer Software Developed or Obtained for Internal Use whereby costs incurred in the preliminary project phase are expensed as incurred; costs incurred in the application development phase are capitalized; and costs incurred in the post-implementation operating phase are expensed as incurred.  The website development costs will be amortized straight line over a 3-year period.  In connection with the change of business focus, the Company accelerated the amortization of these costs resulting in the costs being fully amortized as at December 31, 2006 (refer to Note 5).



Revenue Recognition

The Company recognizes revenue from its online gaming business in accordance with Securities and Exchange Commission (SEC) Staff Accounting Bulletin (SAB) No. 104, Revenue Recognition in Financial Statements.  Revenue will be recognized only when the price is fixed or determinable, persuasive evidence of an arrangement exists, the product is delivered or service is made, and collectibility is reasonably assured.Revenues are earned based on rake splits established in contracts and can vary depending on the agreement with the licensor.  When a player joins a game, they are immediately charged a non-refundable rake fee.  Accordingly, the Company recognizes rake revenue at the time a player joins a game.  In addition, the Company recognizes revenues and costs from its Online Casino once a player loses or gains the wager.  Allowances for non-collection of revenues will be made when collectibility becomes uncertain.



Income Taxes

The Company follows the liability method of accounting for income taxes as set forth in SFAS No. 109 Accounting for Income Taxes.  Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax balances.  Deferred tax assets and liabilities are measured using enacted or substantially enacted tax rates expected to apply to the taxable income in the years in which those differences are expected to be recovered or settled.  The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the date of enactment or substantive enactment.  A valuation allowance is provided for deferred tax assets if it is more likely than not that the Company will not realize the future benefit, or if the future deductibility is uncertain.



F-7



GOLDEN SPIRIT ENTERPRISES LTD.

(Formerly Golden Spirit Gaming Ltd.)

(A development stage company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

|                          
|--------------------------
|DECEMBER 31, 2006 and 2005





NOTE 2  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)



Loss per Common Share

The Company computes loss per share in accordance with SFAS No. 128, Earnings per Share which requires presentation of both basic and diluted earnings per share on the face of the statement of operations.  Basic loss per share is computed by dividing net loss available to common shareholders by the weighted average number of outstanding common shares during the period.  Diluted loss per share gives effect to all dilutive potential common shares outstanding during the period including stock options, using the treasury method.  Dilutive loss per share excludes all potential common shares if their effect is anti-dilutive. Loss per common share figures, as presented, has been restated to reflect the reverse stock split as described in Note 7.



Stock-Based Compensation

On January 1, 2006, the Company adopted the fair value recognition provisions of Financial Accounting Standards Board (FASB) Statement No. 123(R), Share-Based Payment,(SFAS 123R).  Prior to January 1, 2006, the Company accounted for share-based payments under the recognition and measurement provisions of APB Opinion No. 25, Accounting for Stock Issued to Employees(APB 25), and related Interpretations, as permitted by FASB Statement No. 123, Accounting for Stock-Based Compensation(SFAS 123).  In accordance with APB 25, no compensation cost was required to be recognized for options granted to employees that had an exercise price equal to the market value of the underlying common stock on the date of grant.



The Company adopted SFAS 123R using the modified-prospective-transition method.  Under this method, compensation cost recognized for the year ended December 31, 2006 includes: a) compensation cost for all share-based payments granted prior to, but not yet vested as of December 31, 2005, based on the grant-date fair value estimated in accordance with the original provisions of SFAS 123, and b) compensation cost for all share-based payments granted subsequent to December 31, 2005, based on the grant-date fair value estimated in accordance with the provisions of SFAS 123R.  In addition, deferred stock compensation related to non-vested options is required to be eliminated against additional paid-in capital upon adoption of SFAS 123R.  The results for the prior periods have not been restated.



The Companys results of operations for the year ended December 31, 2006 were no different than if the Company had not adopted SFAS 123R because (i) all previously granted stock options had fully vested as at December 31, 2005, (ii) all stock options granted during the year ended December 31, 2006 were granted to consultants with the related fair value accounting consistent under SFAS 123 and SFAS 123R, and (iii) the Company did not modify any previously existing stock options.  As a result, no pro forma disclosure of the impact of adopting SFAS 123R has been provided for the year ended December 31, 2006.



The following table illustrates the effect on net loss and net loss per share had the Company applied the fair value recognition provisions of SFAS No. 123 to stock-based compensation for the comparative year ended December 31, 2005 using the assumptions as described in Note 7:



|                                            |             |                            
|------------------------------------------- | ----------- | ---------------------------
|                                            |             | Years ended                
|December 31, 2005                          
|                                            |             |                            
|Net loss                                    | As reported | $           (1,842,055)    
|Additional SFAS No.123 compensation expense |             | (109,500)                  
|                                            |             |                            
|Net loss under SFAS No.123                  | Pro-forma   | $           (1,951,555)    
|                                            |             |                            
|Basic net loss per share under SFAS No.123  | Pro-forma   | $                    (0.01)



The Company accounts for equity instruments issued in exchange for the receipt of goods or services from other than employees in accordance with SFAS No. 123 and the conclusions reached by the Emerging Issues Task Force (EITF) in Issue No. 96-18.  Costs are measured at the estimated fair market value of the consideration received or the estimated fair



F-8



GOLDEN SPIRIT ENTERPRISES LTD.

(Formerly Golden Spirit Gaming Ltd.)

(A development stage company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

|                          
|--------------------------
|DECEMBER 31, 2006 and 2005





value of the equity instruments issued, whichever is more reliably measurable.  The value of equity instruments issued for consideration other than employee services is determined on the earliest of a performance commitment or completion of performance by the provider of goods or services as defined by EITF 96-18.

NOTE 2  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)



Recent Accounting Pronouncements

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



In March 2006, the FASB issued SFAS No. 156, "Accounting for Servicing of Financial Assets, an amendment of FASB Statement No. 140, Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities".  This statement requires all separately recognized servicing assets and servicing liabilities be initially measured at fair value, if practicable, and permits for subsequent measurement using either fair value measurement with changes in fair value reflected in earnings or the amortization and impairment requirements of Statement No. 140.  The subsequent measurement of separately recognized servicing assets and servicing liabilities at fair value eliminates the necessity for entities that manage the risks inherent in servicing assets and servicing liabilities with derivatives to qualify for hedge accounting treatment and eliminates the characterization of declines in fair value as impairments or direct write-downs.  SFAS No. 156 is effective for an entity's first fiscal year beginning after September 15, 2006.  The adoption of this statement is not expected to have a significant effect on the Companys future reported financial position or results of operations.



In September 2006, the FASB issued SFAS No. 157, Fair Value Measures. This Statement defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles (GAAP), expands disclosures about fair value measurements, and applies under other accounting pronouncements that require or permit fair value measurements.  SFAS No. 157 does not require any new fair value measurements.  However, the FASB anticipates that for some entities, the application of SFAS No. 157 will change current practice.  SFAS No. 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007, which for the Company would be the fiscal year beginning January 1, 2008.  The Company is currently evaluating the impact of adopting SFAS No. 157 but does not expect that it will have a significant effect on its financial position or results of operations.



In September 2006, the FASB issued SFAS No. 158, Employers Accounting for Defined Benefit Pension and Other Postretirement Plans.  This Statement requires an employer to recognize the over funded or under funded status of a defined benefit post retirement plan (other than a multiemployer plan) as an asset or liability in its statement of financial position, and to recognize changes in that funded status in the year in which the changes occur through comprehensive income.  SFAS No. 158 is effective for fiscal years ending after December 15, 2006.  The adoption of this statement did not have a significant effect on the Companys financial position or results of operations..



In September 2006, the SEC issued Staff Accounting Bulletin (SAB) No. 108, Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements. SAB No. 108 addresses how the effects of prior year uncorrected misstatements should be considered when quantifying misstatements in current year financial statements.  SAB No. 108 requires companies to quantify misstatements using a balance sheet and income statement approach and to evaluate whether either approach results in quantifying an error that is material in light of relevant quantitative and qualitative factors.  SAB No. 108 is effective for interim periods ending after November 15, 2006.  The Company is currently evaluating the impact of adopting SAB No. 108 but does not expect that it will have a significant effect on its financial position or results of operations.





F-9



GOLDEN SPIRIT ENTERPRISES LTD.

(Formerly Golden Spirit Gaming Ltd.)

(A development stage company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

|                          
|--------------------------
|DECEMBER 31, 2006 and 2005





NOTE 3  AVAILABLEFOR-SALE SECURITIES  RELATED PARTY



The Company owns common shares of Avalon Energy Corporation (Avalon), a public company with directors and significant shareholders in common, that does not represent a position of control of or significant influence over Avalon.  During 2006 the Company recorded an unrealized loss in the carrying value of its available-for-sale securities totalling $569  (2005  unrealized gain of $1,112), which was recorded as other comprehensive income (loss).  As at December 31, 2006, the Company owns 10,351 shares of Avalons common stock with a market value of $1,087 (2005 - $1,656).





NOTE 4  RESOURCE PROPERTIES



Second Chance Claims

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



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



Niger Property

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





NOTE 5  ONLINE GAMING BUSINESS DEVELOPMENT



Arc2 Entertainment

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



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



(a)

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





F-10



GOLDEN SPIRIT ENTERPRISES LTD.

(Formerly Golden Spirit Gaming Ltd.)

(A development stage company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

|                          
|--------------------------
|DECEMBER 31, 2006 and 2005





(b)

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



NOTE 5  ONLINE GAMING BUSINESS DEVELOPMENT (continued)



(c)

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



(d)

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



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



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



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



a)

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



b)

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



c)

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



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



F-11



GOLDEN SPIRIT ENTERPRISES LTD.

(Formerly Golden Spirit Gaming Ltd.)

(A development stage company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

|                          
|--------------------------
|DECEMBER 31, 2006 and 2005



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



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

NOTE 5  ONLINE GAMING BUSINESS DEVELOPMENT (continued)



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



Due to this ruling and the negative impact it would have on the Golden Spirit poker website, management has decided to discontinue its online gaming operations (See Note 12).



Poker Sponsorships



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



i)

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



ii)

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



iii)

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



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



a)

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



b)

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



c)

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



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



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



F-12



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



NOTE 5  ONLINE GAMING BUSINESS DEVELOPMENT (continued)



4 of A Kind Enterprises



On July 11, 2005, the Company entered into an agreement with 4 of A Kind Enterprises (4KE), a Nevada Corporation, whereby the Company agreed to acquire one hundred percent (100%) of 4KE. The Company placed 1,388,889 post reverse-split restricted common shares in escrow pending completion of this acquisition of 4KE, doing business as EverythingAboutPoker.com.  Upon signing the agreement, the shareholders of 4KE placed 100% of their issued and outstanding stock, being 10,000,000 common shares in trust to the Company.  4KE specializes in the business of marketing poker related merchandise, internet media, educational card playing and boot-camp events through its website EverythingAboutPoker.com.  4KE also sponsors professional poker players in major televised tournaments.



The completion date was extended to March 31, 2006 by mutual consent and the finalization of the agreement was subject to the satisfactory completion of due diligence including the receipt of 4KEs audited financial statements, the Companys approval thereof, and the resolution to the satisfaction of the Company of the lawsuit from an individual formerly under contract with 4KE (See Note 9).



The Company has concluded its due diligence in connection with the proposed acquisition of 4KE and the Companys Board of Directors determined not to proceed with this acquisition and on April 18, 2006, gave formal written notice to 4KE that the agreement was terminated. There are no further obligations arising from the termination of this agreement.



NOTE 6  DEFERRED COMPENSATION



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



a)

On June 15, 2005, the Company entered into an agreement with Palisades Financial Ltd. (Palisades), a private company controlled by a significant shareholder, with a two-year term, whereby Palisades will provide investment-banking services to the Company (valued at $60,000) in exchange for 166,666 post reverse-split restricted shares of the Companys common stock.  To December 31, 2006, a total of $46,250 (December 31, 2005 - $16,250) has been expensed.



b)

On July 12, 2005, the Company entered into the SSL Agreement with Arc2.  Under the terms of the SSL Agreement, Arc2 will build and operate the Companys online gaming website in connection with which Arc2 will license to the Company Arc2s software utilized for the operation of online gaming.  Upon the signing of the SSL Agreement, the Company issued 5,555,556 post reverse-split (valued at $2,000,000) Rule 144 restricted shares of its common stock to Arc2 and its designees as payment for the marketing and management services to be provided over the 3-year term of the Agreement (See Note 5).  To December 31, 2006, a total of $2,000,000 (December 31, 2005 - $333,333) has been expensed.



F-13



GOLDEN SPIRIT ENTERPRISES LTD.

(Formerly Golden Spirit Gaming Ltd.)

(A development stage company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

|                          
|--------------------------
|DECEMBER 31, 2006 and 2005





c)

On October 1, 2004, the Company entered into agreements with Holm Investments Ltd. (Holm) a private company controlled by a shareholder, for a three-year term, whereby Holm will provide investor relations services to the Company (valued at $175,000) in exchange for 97,222 post reverse-split restricted shares of the Companys common stock. The investor relations services include researching, editing and generating a company profile, technical chart analysis, relaying the Companys business perspectives and distribution of corporate updates, including press releases.  To December 31, 2006, a total of $175,000 (December 31, 2005 - $72,910) has been expensed.



d)

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



e)

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



NOTE 7  CAPITAL STOCK



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



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



(1)

2006 Stock Transactions

During the year ended December 31, 2006, the Company issued:



(a)

906,371 post reverse split common shares on exercise of options granted pursuant to the Companys 2005 and 2006 Stock Incentive and Option Plans at prices ranging from $0.09 per share to $0.54 per share for total proceeds of $293,190 of which $106,900 was received in cash and $186,290 was received by way of settlement of amounts previously owing to the option holders.

(b)

1,666,667 post reverse-split restricted Rule 144 shares of the Companys common stock pursuant to a memorandum of understanding dated April 4, 2005 with a private corporation in connection with the Niger Property transaction (Refer to Note 4).

(c)

116,667 post reverse-split restricted Rule 144 shares of the Companys common stock with a fair value of $28,000 to two individuals for advisory board and other services.

(d)

972,222 post reverse-split restricted Rule 144 shares of the Companys common stock with a fair value of $192,500 in connection with two prepaid service contracts (refer to Note 6).



(2)

2005 Stock Transactions

During the year ended December 31, 2005, the Company issued:



(a)

855,555 post reverse split common shares on exercise of options granted pursuant to the Companys 2005 Stock Incentive and Option Plan at prices ranging from $0.36 per share to $0.48 per share for total proceeds of $373,750.

(b)

152,778 post reverse-split shares of the Companys common stock at $0.36 per share in connection with a private placement for proceeds of $55,000.

(c)

166,666 post reverse-split restricted Rule 144 shares of the Companys common stock with a fair value of $60,000 in connection with a prepaid investment banking services contract (refer to Note 6).



F-14



GOLDEN SPIRIT ENTERPRISES LTD.

(Formerly Golden Spirit Gaming Ltd.)

(A development stage company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

|                          
|--------------------------
|DECEMBER 31, 2006 and 2005





(d)

5,555,556 post reverse-split restricted Rule 144 shares of the Companys common stock with a fair value of $2,000,000 in connection with the SSL Agreement with Arc2 (refer to Note 5).



(3)

2006 - Stock Options

(a)

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



|                        |       
|----------------------- | ------
|                        |       
|Expected dividend yield | 0%    
|Risk-free interest rate | 4.08% 
|Expected volatility     | 136%  
|Expected option life    | 1 year





NOTE 7  CAPITAL STOCK (continued)



(3)

2006 - Stock Options (continued)



(b)

During 2006, the Company granted a total of 1,102,778 post reverse split, 5 year common stock options at exercise prices ranging from $0.09 per shares to $0.36 per share.  The Company recognized stock-based compensation of $66,600 in accordance with SFAS 123R which represented the fair value of stock options granted to consultants in exchange for services rendered to the Company.



(c)

The Companys stock option activity (presented on a post reverse split basis) is as follows:



|                           |                   |                                 |                                            
|-------------------------- | ----------------- | ------------------------------- | -------------------------------------------
|                           | Number of options | Weighted Average Exercise Price | Weighted Average Remaining Contractual Life
|Balance, December 31, 2004 | 1,111             | $              1.08             | 3.04 years                                 
|Granted during 2005        | 2,008,333         | 0.45                            |                                            
|Cancelled during 2005      | (166,667)         | 0.36                            |                                            
|Exercised during 2005      | (855,555)         | 0.44                            |                                            
|Balance, December 31, 2005 | 987,222           | 0.49                            | 4.25 years                                 
|Granted during 2006        | 1,102,778         | 0.11                            |                                            
|Exercised during 2006      | (906,371)         | 0.32                            |                                            
|Balance, December 31, 2006 | 1,183,629         | $              0.26             | 3.08 years                                 



(d)

On January 27, 2006 and September 11, 2006, the Company filed Registration Statements on Form S-8 to cover a total of 4,800,000 post reverse-split shares of common stock to be granted pursuant to the Companys 2006 Stock Incentive and Option Plan



(4)

2005 - Stock Options

(a)

The fair value of the common stock options granted during 2005 was measured at the grant date using the Black-Scholes option pricing model with the following weighted average assumptions:



|                                |       
|------------------------------- | ------
|                                |       
|Expected dividend yield         | 0%    
|Risk-free interest rate         | 3.838%
|Expected volatility             | 240%  
|Expected option life (in years) | 5     





F-15



GOLDEN SPIRIT ENTERPRISES LTD.

(Formerly Golden Spirit Gaming Ltd.)

(A development stage company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

|                          
|--------------------------
|DECEMBER 31, 2006 and 2005





(b)

During 2005, the Company granted a total of 2,008,333 post reverse split, 5 year common stock options at exercise prices ranging from $0.36 per share to $0.54 per share.  Of these options, a total of 219,444 were granted to employees and 1,788,889 were granted to consultants.  The stock options granted to employees vested immediately upon grant.  The Company recognized stock-based compensation of $743,500 in accordance with SFAS 123 which represented the fair value of the options granted for consulting services rendered by consultants to the Company.  The 219,444 stock options granted to employees were valued at $ 109,500 which has been recorded on a pro-forma basis and is disclosed in Note 2.



(c)

On January 12, 2005 and June 13, 2005, the Company filed Registration Statements on Form S-8 to cover a total of 2,111,111 post reverse-split shares of common stock to be granted pursuant to the Companys 2005 Stock Incentive and Option Plan



NOTE 8  RELATED PARTY TRANSACTIONS



During 2006, companies controlled by significant shareholders earned $30,000 (2005 - $87,882) pursuant to investment banking services contracts (refer to Note 6).



During 2006, private companies controlled by significant shareholders earned $102,090 (2005 - $58,749) pursuant to investor relations services contracts (refer to Note 6).



During 2006, the Company paid $8,433 (2005 - $12,227) to two directors for management fees.



During 2006, the Company incurred expenses for office rent of $22,171 (2005 - $22,173) to a private company controlled by a significant shareholder.



At December 31, 2006, a total of $212,054 (December 31, 2005 - $167,291) was owing to Avalon Energy Corporation, a public company with common directors and officers, for cash advances. This amount is unsecured, non-interest bearing and has no specified terms of repayment.



At December 31, 2006, a total of $20,082 (December 31, 2005 - $16,029) was due from Legacy Mining Ltd. (Legacy), a company with common directors and officers, for cash advances. This amount is unsecured, non-interest bearing and has no specified terms of repayment.



The following amounts are due to related parties at:

|                         |                   |                    
|------------------------ | ----------------- | -------------------
|                         | December 31, 2006 | December 31, 2005  
|                         |                   |                    
|Significant shareholders | $         109,875 | $            82,142



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





NOTE 9  CONTINGENCIES



On May 2, 2003, the Company issued 25,000 post reverse-split common shares valued at $9,000 to a consultant pursuant to a stock option incentive plan.  The consultant failed to meet the terms of the stock option agreement by not paying the exercise price and as a result, the Company requested the return of the 25,000 post reverse-split shares.  The consultant refused to return the shares; therefore, the Company issued a stop transfer and commenced legal proceedings to recover the shares.  The



F-16



GOLDEN SPIRIT ENTERPRISES LTD.

(Formerly Golden Spirit Gaming Ltd.)

(A development stage company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

|                          
|--------------------------
|DECEMBER 31, 2006 and 2005





consultant subsequently filed a Statement of Claim against the Company for damages of $53,000 Cdn.  On April 29, 2005, the Supreme Court of British Columbia issued a judgment awarding the plaintiff $15,000 Cdn in damages and $7,180 Cdn in costs; however, the 25,000 post reverse-split shares were to be returned to the Company (not yet received).In September 2005, the Company and the plaintiff agreed to payment terms to settle this damage award by a payment of $6,080 Cdn (paid) and a payment schedule of $1,000 Cdn per month for the remaining balance of the judgment commencing December 1, 2005.  The $6,080 Cdn payment was made as the result of a bailiffs executed court order on September 28, 2005, which seized the Companys bank account.  No further payments have been made towards the settlement agreement due to the Plaintiffs refusal to sign the order.



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



NOTE 10  INCOME TAXES



As of December 31, 2006, the Company had net operating loss carryforwards of approximately $16,800,000 that may be available to reduce future years' taxable income and will expire between the years 2007 - 2026.  Availability of tax losses is subject to change of ownership limitations under Internal Revenue Code 382.  Future tax benefits which may arise as a result of these losses have not been recognized in these financial statements, as their realization is determined not likely to occur and accordingly, the Company has recorded a valuation allowance for the deferred tax asset relating to these tax loss carryforwards.



The actual income tax provisions differ from the expected amounts calculated by applying the federal income tax statutory rate to the Companys loss before income taxes. The components of these differences are as follows:



|                                              |                         |                              |                             
|--------------------------------------------- | ----------------------- | ---------------------------- | ----------------------------
|                                              |                         | Year ended
December 31, 2006 | Year ended
December 31, 2005
|                                              |                         |                              |                             
|                                              |                         |                              |                             
|Loss before income taxes                      | $     (2,954,033)       | $        (1,842,055)        
|Combined federal and state corporate tax rate | 42.7%                   | 42.7%                       
|                                              |                         |                              |                             
|Expected tax expense (recovery)               | (1,261,000)             | (787,000)                   
|Non-deductible stock based compensation       | 28,000                  | 317,000                     
|Unrecognized loss carry forward and other     | 1,233,000               | 470,000                     
|                                              |                         |                              |                             
|Income tax provision                          | $                     - | $                       -   



The Companys tax-effected deferred income tax assets and liabilities are estimated as follows:



|                                |   |             |   |            
|------------------------------- | - | ----------- | - | -----------
|                                |   | 2006        |   | 2005       
|                                |   |             |   |            
|Non-capital loss carry forwards | $ | 7,190,000   | $ | 5,957,000  
|Valuation allowance             |   | (7,190,000) |   | (5,957,000)
|Net deferred tax asset          | $ | -           | $ | -          





F-17



GOLDEN SPIRIT ENTERPRISES LTD.

(Formerly Golden Spirit Gaming Ltd.)

(A development stage company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

|                          
|--------------------------
|DECEMBER 31, 2006 and 2005





NOTE 11  SUPPLEMENTAL CASH FLOW INFORMATION AND NON-CASH INVESTING AND FINANCING ACTIVITIES



|                                                                       |  |                     |  |                    
|---------------------------------------------------------------------- |  | ------------------- |  | -------------------
|Cash paid during the nine months ended December 31, 2006 and 2005 for: |  | 2006                |  | 2005               
|                                                                       |  |                     |  |                    
|Interest                                                               |  | $                 - |  | $                 -
|                                                                       |  |                     |  |                    
|Income taxes                                                           |  | $                 - |  | $                 -



During the year ended December 31, 2006:



The Company issued 972,222 post reverse-split restricted common shares with a fair value of $192,500 for prepaid consulting service agreements, 116,667 post reverse-split restricted common shares with a fair value of $28,000 for advisory board and other services and 1,666,667 post reverse-split restricted common shares with a fair value of $600,000 in connection with Niger property acquisition.  The Company also received proceeds on the exercise of certain stock options totalling $186,290 by way of settlement of amounts previously owing.



NOTE 11  SUPPLEMENTAL CASH FLOW INFORMATION AND NON-CASH INVESTING AND FINANCING ACTIVITIES  (continued)



During the year ended December 31, 2005:



The Company issued 5,555,556 post reverse split common shares with a fair value of $2,000,000 for prepaid marketing and management fees in connection with the development of the Companys online gaming website, as described in Note 6 which has been recorded as deferred compensation.



NOTE 12  SUBSEQUENT EVENTS



On February 1, 2007, a total of 170,000 post reverse-split options, granted pursuant to the Companys 2006 Stock Incentive and Option Plan, were exercised at $0.09 per share for cash proceeds of $15,300.



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





F-18





Item 8.  Changes in and Disagreements with Accountants.



Previous Independent Accountants

On December 5, 2006, the Company dismissed DMCL as its independent registered public accounting firm. The Companys Board of Directors approved the decision to change independent accountants.



The report of DMCL on the consolidated financial statements as of and for the year ended December 31, 2004 did not contain an adverse opinion or disclaimer of opinion and was not qualified, but was modified as to uncertainty due to substantial doubt regarding the Companys ability to continue as a going concern. The report of DMCL on the consolidated financial statements as of and for the year ended December 31, 2005 did not contain an adverse opinion or disclaimer of opinion and was not qualified, but was modified as to uncertainty due to substantial doubt regarding the Companys ability to continue as a going concern.



In connection with their audits for the years ended December 31, 2004 and December 31, 2005 and through the subsequent interim periods preceding the change there have been no disagreements with DMCL on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which disagreements, if not resolved to the satisfaction of DMCL would have caused them to make reference thereto in their reports on financial statements for such years.



The Company has requested DMCL to furnish it with a letter addressed to the Securities and Exchange Commission stating whether or not it agrees with the above statements.

20



New Independent Accountants



On December 5, 2006, the Company engaged LLB as the Registrants independent registered public accounting firm for the fiscal year ending December 31, 2006, and to perform procedures related to the financial statements included in the Companys quarterly reports on Form 10-Q, beginning with, and including, the quarter ended December 31, 2006. The Companys Board of Directors made the decision to engage LLB and that decision was approved and adopted.  The Company has not consulted with LLB during its two most recent fiscal years or during any subsequent interim period prior to its appointment as auditor regarding either (i) the application of accounting principle to a specified transaction, either completed or proposed; or the type of audit opinion that might be rendered on the Registrants consolidated financial statements, and neither a written report was provided to the Company nor oral advice was provided that LLB concluded was an important factor considered by the Company in reaching a decision as to the accounting, auditing or financial reporting issue; or (ii) any matter that was either the subject of disagreement (as defined in Item 304(a)(1)(iv) of Regulation S-K and the related instructions) or a reportable event (within the meaning of Item 304(a)(1)(v) of Regulation S-K).



In deciding to select LLB, the Companys Board of Directors considered LLBs experience and expertise related to public companies as well as reviewed auditor independence issues and existing commercial relationships with LLB. The Board of Directors concluded that LLB has no commercial relationship that would impair its independence and had the appropriate expertise that the Company required regarding its current operations.



DMCL had been the Companys independent registered public accounting firm since 2001. The Board of Directors and the Company thank DMCL for its service to the Company over the past 5 years. The Audit Committee and the Company believe DMCL consistently provided quality services to the Company. The Company expects to similarly receive long-term quality service from LLB.



ITEM 8A.CONTROLS AND PROCEDURES



EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES



Our Chief Executive Officer, and our Chief Financial Officer, have performed an evaluation of the Company's disclosure controls and procedures, as that term is defined in Rule 13a-15(e) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), as of December 31, 2005 and each has concluded that such disclosure controls and procedures are effective to ensure that information required to be disclosed in our periodic reports filed under the Exchange Act is recorded, processed, summarized and reported within the time periods specified by the Securities and Exchange Commission's rules and forms.



MANAGEMENT'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING



Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule 13a-15(f). The Company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.



Because of its inherent limitations, internal control over financial reporting may not prevent of detect misstatements.  Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.



Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, the Company conducted an assessment of the effectiveness of its internal control over financial reporting as of December 31, 2005. Based on this assessment, management concluded that our internal control over financial reporting was effective as of December 31, 2005. Management's assessment of the effectiveness of the Company's internal control over the financial reporting period ended December 31, 2005 has been audited by our auditors, an independent registered public accounting firm, as stated in their report included herein.



21



CHANGES IN INTERNAL CONTROLS



No changes in the Company's internal controls over financial reporting occurred during the period ending December 31, 2006 that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.



CODE OF ETHICS



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



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





PART III



Item 9.  Directors, Executive Officers, Promoters and Control Persons.



Executive Officers and Directors. We are dependent on the efforts and abilities of certain of our senior management.  The interruption of the services of key management could have a material adverse effect on our operations, profits and future development, if suitable replacements are not promptly obtained. We anticipate that we will enter into employment agreements with each of our key executives; however, no assurance can be given that each executive will remain with us during or after the term of his or her employment agreement. In addition, our success depends, in part, upon our ability to attract and retain other talented personnel. Although we believe that our relations with our personnel are good and that we will continue to be successful in attracting and retaining qualified personnel, there can be no assurance that we will be able to continue to do so. Our officers and directors will hold office until their resignation or removal.



Our directors and principal executive officers are as specified on the following table:



Name and Address

Age       Position

Date of Appointment

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

Robert Klein

429 West 41st



59

President

/Director

March 16, 2001

Vancouver, B.C.

V7S 2V6



Carlton Parfitt

40

Secretary/Treasurer/Director

November 30, 2004

Suite 801

1875 Robson Street

Vancouver, BC

V6G 1E5



Robert Klein is our President and a member of our Board of Directors.  Mr. Klein graduated in 1971 from the University of Waterloo with a degree in Applied Math.  Mr. Klein belongs to the Fellow of Canadian Securities Institute. From October 6, 1972 to May 30, 1982, Mr. Klein was a Vice President of Corporate Finance at Bond Street International Securities. From June 1, 1982 to January 31, 1988, he was on the Board of Directors of Yorkton Securities. From February 1, 1988 to January 31, 1989, he was on the Board of Directors of First Vancouver Securities. From February 1, 1989 to January 31, 1992, Mr. Klein was a salesman for Georgia Pacific Securities. From February 1, 1992 to the present, Mr. Klein has worked as a self-employed consultant. The majority of Mr. Klein's consulting work involved the analytical review and discussion of the merits of properties in the oil and gas industry.

22



Carlton Parfitt is a member of our Board of Directors.  Mr. Parfitt, bilingual in English and Japanese, graduated in 1991 with Honors from Simon Fraser University, British Columbia. While attending university, Mr. Parfitt worked as a co-op student for the Department of National Defense (Canada). After completing his Bachelor of Science in Physics, and before becoming involved in the digital media industry, Carlton Parfitt was a research scientist at companies such as TRIUMF, on the campus of the University of British Columbia, and CTF Communications Inc. based in Coquitlam, British Columbia.



Between the years 1998 and 2000, Mr. Parfitt was the founder and director of Elgrande.com Inc., an OTC: BB Company. During this time, he was intimately involved in Board operations, governance, as well as strategic business development and financing. Responsibilities for strategic market development included building strategic Blue Chip clients globally. Here, he drew upon his business consulting experience in Japan where he was a consultant for several years. While in Japan, Mr. Parfitt also participated in contract negotiations, shareholder relations and operations. Currently, Carlton Parfitt is the president of Third Wave Consulting Inc., a company specializing in digital media. His focuses include marketing consulting, project management, event planning and corporate communications for new media production.



There are no familial relationships between our officers and directors.



Section 16(a) Beneficial Ownership Reporting Compliance. Not all of our officers, directors, and principal shareholders have filed all reports required to be filed by those persons on, respectively, a Form 3 (Initial Statement of Beneficial Ownership of Securities), a Form 4 (Statement of Changes of Beneficial Ownership of Securities), or a Form 5 (Annual Statement of Beneficial Ownership of Securities).



Transactions with Promoters.



On October 1, 2004, the Company entered into an agreement with Holm Investments Ltd. ("Holm") a private company controlled by a shareholder, for a three year term, whereby the private company will provide investor relations services to the Company (valued at $175,000) in exchange for 97,222 post reverse-split restricted shares of the Company's common stock.



Item 10.  Executive Compensation.



Directors' Compensation: A total of $8,433 (2005-$12,227) was paid to two directors in cash for the year ended December 31, 2006.



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Stock-based Compensation. During the year ended December 31, 2006, $66,600 (2005-$743,500) in stock-based compensation was recorded in our financial statements.  Stock-based compensation is an estimate of the intrinsic value placed in respect to stock options granted to officers, directors, employees and an estimate of the fair value of stock options granted to consultants using the Black-Scholes option pricing model. We do expect further stock-based compensation in 2007.



Item 11. Security Ownership of Certain Beneficial Owners and Management.



The following table sets forth certain information regarding the beneficial ownership of our common stock as of December 31, 2005, by each person or entity known by us to be the beneficial owner of more than 5% of the outstanding shares of common stock, each of our directors and named executive officers, and all of our directors and executive officers as a group.







Amount and

Percent



Name of

Nature of

of Class

Title of Class

Beneficial Owner

Beneficial Owner

Common Stock

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

Common Stock

CEDE & Co. (1)



6,464,514

41.6 %



The Depository Trust Co.

P.O. Box 222 Bowling Green Station

New York, New York 10274



(1) In 2001, we requested a listing of Non-Objecting Beneficial Owners, commonlyreferred to as a NOBO List. According to the NOBO List, there were no holders of more than 5% of our issued and outstanding shares.  Currently we do not know who the beneficial owners of these shares are.



Security Ownership by Management.  As of December 31, 2006, our directors, Robert Klein owned 5,000 shares and Carlton Parfitt owned 100,000 shares for and aggregate total of 250,000 shares or 0.10% of the common stock outstanding.



Changes in Control.  Our management is not aware of any arrangements which may result in "changes in control" as that term is defined by the provisions of Item 403(c) of Regulation S-B.



Item 12.  Certain Relationships and Related Transactions.



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



a)

On June 15, 2005, the Company entered into an agreement with Palisades Financial Ltd. (Palisades), a private company controlled by a significant shareholder, with a two-year term, whereby Palisades will provide investment-banking services to the Company (valued at $60,000) in exchange for 166,666 post reverse-split restricted shares of the Companys common stock.  To December 31, 2006, a total of $46,250 (December 31, 2005 - $16,250) has been expensed.



b)

On July 12, 2005, the Company entered into the SSL Agreement with Arc2.  Under the terms of the SSL Agreement, Arc2 will build and operate the Companys online gaming website in connection with which Arc2 will license to the Company Arc2s software utilized for the operation of online gaming.  Upon the signing of the SSL Agreement, the Company issued 5,555,556 post reverse-split (valued at $2,000,000) Rule 144 restricted shares of its common stock to Arc2 and its designees as payment for the marketing
y>and management services to be provided over the 3-year term of the Agreement.  To December 31, 2006, a total of $2,000,000 (December 31, 2005 - $333,333) has been expensed.



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c)

On October 1, 2004, the Company entered into agreements with Holm Investments Ltd. (Holm) a private company controlled by a shareholder, for a three-year term, whereby Holm will provide investor relations services to the Company (valued at $175,000) in exchange for 97,222 post reverse-split restricted shares of the Companys common stock. The investor relations services include researching, editing and generating a company profile, technical chart analysis, relaying the Companys business perspectives and distribution of corporate updates, including press releases.  To December 31, 2006, a total of $175,000 (December 31, 2005 - $72,910) has been expensed.



d)

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



e)

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





At December 31, 2006 and 2005, the following amounts are due to related parties:

|                         |  |           |  |         
|------------------------ |  | --------- |  | --------
|                         |  | 2006      |  | 2005    
|Significant shareholders |  | $ 109,875 |  | $ 82,142



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



Future Related Party Transactions. Although we have not yet formally adopted a policy for the resolution of conflicts regarding related party transactions, we do anticipate that we will fully disclose any and all related party transactions, including, but not limited to,



o  disclosing such transactions in prospectus' where required;



o  disclose in any and all filings with the Securities and Exchange Commission, where required;



o  obtain uninterested directors consent;



o  obtain shareholder consent where required; and (v) take any and all other action required by relevant law

and/or our governing documents



Item 13. Principal Accountant Fees and Services

1. Audit Fees: Aggregate fees billed for each of the last two (2) fiscal years for professional services rendered by the principal accountant for the audit of the annual financial statements and review of financial statements included on Form 10-KSB:

2005: $25,573

2006: $16,500



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2. Audit-Related Fees: Aggregate fees billed in each of the last two (2) fiscal years for assurance and related services by the principal accountant that are reasonably related to the performance of the audit or review of the financial statements and are not reported previously.



2005: $0

2006: $0



3. Tax Fees: Aggregate fees billed in each of the last two (2) fiscal years for professional services rendered by the principal accountant for tax compliance, tax advice, and tax planning.



2005: $0

2006: $0



4. All Other Fees: Aggregate fees billed in each of the last two (2) fiscal years for products and services provided by the principal accountant, other than the services previously reported.



2005: $0

2006: $0



5. Audit Committee Pre-Approval Procedures. The Board of Directors has not, to date, appointed an Audit Committee.



.

Item 14.  Exhibits



a) Exhibits



Exhibit 31.1 - Section 906 Certification of Periodic Report of the Chief Executive Officer



Exhibit 31.2 - Section 906 Certification of Periodic Report of the Chief Financial Officer



Exhibit 32.3 - Section 302 Certification of Periodic Report of the Chief Executive Officer



Exhibit 32.4 - Section 302 Certification of Periodic Report of the Chief Financial Officer



b) Form 8-K:



(i) Reports on Form 8-K dated April 18, 2006 with respect to the termination of a material definitive agreement with respect to the acquisition of 4 of a Kind Enterprises.



(ii) Reports on Form 8-K dated June 30, 2006 with respect to the corporate name change and the reverse stock-split.



(iii) Reports on Form 8-K dated November 24, 2006 with respect to the change of auditor.

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SIGNATURES



In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this amended report to be signed on its behalf by the undersigned,

thereunto duly authorized, on March  30  , 2007.



Golden Spirit Enterprises Ltd.,

a Delaware corporation



By:

/s/Robert Klein

Robert Klein

Its:

President and a Director



In accordance with the Exchange Act, this amended report has been signed below by the following persons on behalf of the registrant and in the capacities and

on the dates indicated.



/s/Robert Klien



March 30, 2007

Robert Klein

President and a Director



/s/Carlton Parfit                                    March 30,  2007

Carlton Parfitt

Director



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