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UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C.
20549

FORM 10-KSB

[ X ] ANNUAL REPORT PURSUANT TO SECTION l3 OR l5 (d)
OFTHE SECURITIES EXCHANGE ACT OF l934

For the fiscal year endedDecember 31, 2006

OR

[   ] TRANSITION REPORT PURSUANT TO SECTION
13OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____________________ to ____________________

Commission file number000-28025

GLOBAL ENERGY INC.(Exact
name of small business issuer as specified in its charter)

|Nevada                                                               | 86-0951473                       
|-------------------------------------------------------------------- | ---------------------------------
|(State or other jurisdiction of incorporation
      or organization) | (IRS Employer Identification No.)

#520  1122 Mainland Street, Vancouver, BC, Canada V6B
5L1(Address of principal executive offices)

(778) 688-9194(Issuer's telephone
number)

#400-1055 Dunsmuir Street, Vancouver, BC, Canada, V7X
1J1(Former name, former address and former fiscal year, if changed
since last report)

Securities registered under Section 12(b) of the Exchange Act:Nil

Securities registered under Section 12(g) of the Exchange Act:

Title of each classCommon Stock, par value $0.001 per share

Check whether the issuer (1) has filed all reports required to
  be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
  the past 12 months (or for such shorter period that the registrant was required
  to file such reports), and (2) has been subject to such filing requirements
  for the past 90 days. Yes [ X ] No [   ]

Check if there is no disclosure of delinquent filers in response
  to Item 405 of Regulation S-B contained in this form, and no disclosure will
  be contained, to the best of 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.      [ X ]

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

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State issuers revenues for its most recent fiscal year:
  $0

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 prices of such common
  equity, as of a specified date within the past 60 days: $NIL

State the number of shares outstanding of each of the issuers
  classes of common equity, as of the latest practicable date:

23,012,764 SHARES OF COMMON STOCK, AS OF MARCH 19, 2007

DOCUMENTS INCORPORATED BY REFERENCE:None

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

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3

PART I

FORWARD LOOKING STATEMENTS

This annual report contains forward-looking statements as that
term is defined in the Private Securities Litigation Reform Act of 1995. These
statements relate to future events or our future financial performance. In some
cases, you can identify forward-looking statements by terminology such as may,
will, should, expects, plans, anticipates, believes, estimates,
predicts, potential or continue or the negative of these terms or other
comparable terminology. These statements are only predictions and involve known
and unknown risks, uncertainties and other factors, including the risks in the
section entitled Risk Factors, that may cause our or our industrys actual
results, levels of activity, performance or achievements to be materially
different from any future results, levels of activity, performance or
achievements expressed or implied by these forward-looking statements.

Although we believe that the expectations reflected in the
forward-looking statements are reasonable, we cannot guarantee future results,
levels of activity, performance or achievements. Except as required by
applicable law, including the securities laws of the United States, we do not
intend to update any of the forward-looking statements to conform these
statements to actual results.

ITEM 1. DESCRIPTION OF BUSINESS

SUMMARY

GLOBAL ENERGY INC. (the "Company") was incorporated under the
laws of Nevada on February 16, 1999, as Global Smartcards Inc. On April 28,
2003, the Company changed its name from Global Smartcards Inc. to Global Energy
Inc. The original Articles of the Company authorized the issuance of twenty-
five million (25,000,000) common shares, par value $0.001 per share. The Company
is currently engaged in the search for a new business opportunity.

As of March 19, 2007 the Company had twenty-three million
twelve thousand seven hundred and sixty-four (23,012,764) shares of its $0.001
par value common voting stock issued and outstanding which are held by seventy
(70) shareholders of record. In February of 2007, the Company began taking steps
to increase the number of authorized common shares to two hundred and fifty
million (250,000,000) with a view to effecting additional equity issuances
thereafter.

The Company had originally planned to market plastic cards with
embedded microprocessors ("Smart Cards"). However, the Company was unable to
complete negotiations to market Smart Cards. On June 5, 2003, the Company
purchased petroleum and natural gas producing properties and commenced
operations as an independent energy company engaged in the acquisition of crude
oil and natural gas properties in the United States. Prior to this date, the
Company was considered a development stage enterprise as defined by Statement of
Financial Accounting Standards (SFAS) No. 7.

Effective July 1, 2005, the Company entered into an agreement
with Roxbury Capital Group Ltd. and Qwest Capital Inc. pursuant to which the
Company agreed to sell, and Roxbury Capital Group Ltd. and Qwest Capital Inc.
agreed to buy, substantially all of the Companys assets for the sum of $50,000.
At July 1, 2005, these assets consisted primarily of a 6.5% working interest in
an oil and gas lease located in Wharton County Texas, a 12.5% working interest
in an oil and gas lease located in Live Oak County Texas, and certain other
assets ancillary to these oil and gas lease interests. The sale of these oil and
gas assets was completed on July 6, 2005 with a resulting gain on disposition of
$38,411. Income and expense relating to the operation of these assets have been
classified as discontinued operations in the Statement of Operations for all
comparative periods.

On October 25, 2006, we closed a private placement consisting
of 1,331,764 common shares in our company at a price of US$0.01 per share for
gross proceeds of $13,317.64.

As at December 31, 2006, the Company had negative working
capital of $45,386. Although the Company has sold its operating business and has
no current operating costs, it will continue to incur administrative, legal and
auditing costs as well as the costs associated with the search for a new
business.

In February of 2007, the Company completed a private placement
of 17,031,000 common shares at a price per share of $0.01 for aggregate proceeds
of $170,310 in cash and notes receivable, of which $40,910 was paid in cash and
$129,400 was paid via the issuance of a note payable with maturities ranging
from 90 days to one year.. Management expects to keep its operating costs to a
minimum such that the proceeds of the equity issuance will enable the company to
defray overhead and due diligence costs related to the search for new business
opportunities for the ensuing 6-9 months. Should the Company decide to enter
into new business transactions, additional financing will be required. There can
be no assurance that any such financing can be obtained on terms favorable to
the Company, or even whether such financing can be obtained at all.

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In view of these conditions, the ability of the Company to continue as a going concern is in substantial doubt and dependent upon the ability of the Company to obtain necessary financing to fund ongoing operations. Management believes that its
current and future plans enable it to continue as a going concern. These financial statements do not give effect to any adjustments which would be necessary should the Company be unable to continue as a going concern and therefore be required to
realize its assets and discharge its liabilities in other than the normal course of business and at amounts different from those reflected in the accompanying financial statements.

The Company is currently engaged in the search for a new business opportunity. The Company does not intend to restrict its search to any specific business, industry, or geographical location and it may participate in a business venture of any kind
or nature. The Company may seek business opportunities with entities that have recently commenced operations, or that wish to utilize the public marketplace in order to raise additional capital to expand into new products or markets, to develop a
new product or service, or for other corporate purposes.  The Company may acquire assets and establish wholly-owned subsidiaries in various businesses or acquire existing businesses as subsidiaries.  Therefore, the Company has virtually unlimited
discretion to search for and enter into negotiations with potential business opportunities. It is impossible to predict at this time the status of any business in which the Company may become engaged, in that such business may need to seek
additional capital, may desire to have its shares publicly traded, or may seek other perceived advantages which the Company offers.

The Company does not intend to seek capital to finance the acquisition of a business opportunity or the operation of any such business once acquired until the Company has negotiated the principal business terms related to the acquisition of a
business opportunity.  It is anticipated that the Company will incur expenses in connection with its review of other business opportunities.

Management anticipates that the search for an alternate business opportunity will be complex and that the acquisition of a business opportunity will be risky. Business opportunities may be available to the Company in many different industries and at
various stages of development, all of which will make the task of comparative investigation and analysis of such business opportunities extremely difficult and complex.

The Company has, and will continue to have, limited capital with which to provide the owners of business opportunities with any significant cash or other assets. However, management believes the Company will be able to offer owners of acquisition
candidates the opportunity to acquire an interest in a publicly registered company without incurring the cost and time required to conduct an initial public offering. The owners of the business opportunities will, however, incur significant legal
and accounting costs in connection with our acquisition of a business opportunity, including the costs of preparing annual (Form 10-K or 10-KSB), quarterly (Form 10-Q or 10-QSB) and current reports  (Form 8-K), agreements and related documents. The
Securities Exchange Act of 1934 specifically requires that any merger or acquisition candidate comply with all applicable reporting requirements, which includes providing audited financial statements to be included within the numerous filings
required under the Exchange Act. However, the Company has not conducted market research and is not aware of statistical data which would support the perceived benefits of a merger or acquisition transaction for the owners of a business
opportunity.

The Companys sole officer and director will analyze new business opportunities. The Company intends to concentrate on identifying preliminary prospective business opportunities which may be brought to its attention through present affiliations
and relationships of its officer and director, or by its shareholders. In analyzing prospective business opportunities, the Company will consider such matters as:

- available technical, financial and managerial resources;
- working capital and other financial requirements;
- history of operations, if any;
- prospects for the future, and the nature of present and expected competition;
- quality and experience of management services which may be available and the depth of that management;
- potential for further research, development, or exploration;
- potential for growth, expansion and profit; and
- perceived public recognition of name identification, products and services.

The Company's officer and director may meet personally with management and key personnel of the business opportunity as part of the "due diligence" investigation. To the extent possible, the Company intends to utilize written reports and personal
investigations to evaluate the above factors.

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5

The Company will rely upon the efforts of its officer and director and, to a lesser extent, the efforts of its shareholders, in implementing its identification and review of other business opportunities. To date, the Company has identified a number
of new business opportunities and it is currently performing due diligence investigations regarding these opportunities. The Company has not entered into any binding agreements with respect to any of these opportunities and is not currently in a
position to divulge the name or the nature of these business opportunities.

ACQUISITION STRUCTURE

In implementing a structure for a particular business acquisition, the Company may become a party to a merger, consolidation, reorganization, joint venture, or licensing agreement with another corporation or entity. The Company may also acquire
stock or assets of an existing business. On the consummation of a transaction, it is probable that the Company's present management and shareholders will no longer be in control of the Company. In addition, the Company's directors and officers may,
as part of the terms of the acquisition transaction, resign and be replaced by new directors and officers without a vote of the Company's shareholders.

It is anticipated that any securities issued in any such reorganization would be issued in reliance upon an exemption from registration under applicable federal and state securities laws. In some circumstances, however, as a negotiated element of
its transaction, the Company may agree to register all or a part of such securities immediately after the transaction is consummated or at specified times thereafter. If such registration occurs, of which there can be no assurance, it will be
undertaken by the surviving entity after the Company has successfully consummated a merger or acquisition. At this time, the Company does not anticipate registering any additional securities until a merger or acquisition is consummated.

While the actual terms of a transaction cannot be predicted, it may be expected that the parties will desire to avoid the creation of a taxable event and structure the acquisition in a so-called "tax-free" reorganization under the Internal Revenue
Code. In order to obtain tax-free treatment under the Internal Revenue Code, it may be necessary for the owners of the acquired business to own 80% or more of the voting stock of the surviving entity. In such event, the Company's shareholders would
retain 20% or less of the issued and outstanding shares of the surviving entity, which would result in significant dilution in the equity of the Company's shareholders.

The Company will participate in a business opportunity only after the negotiation and execution of appropriate written agreements. Although the terms of such agreements cannot be predicted, generally such agreements:

- require some specific representations and warranties by all of the parties;
- specify certain events of default;
- detail the terms of closing and the conditions that must be satisfied by each of the parties prior to and after such closing;
- outline the manner of bearing costs, including costs associated with the Company's attorneys and accountants;
- set forth remedies on default; and
- include miscellaneous other terms.

The Company does not intend to consider an opportunity where the entity cannot provide independent audited financial statements within a reasonable period of time after closing of the proposed transaction; however, there is no assurance that such
statements will, in fact, be provided within a reasonable time after closing of any proposed transaction.

RISK FACTORS

The Company's search for a business opportunity is subject to numerous risk factors, including the following:

NO REVENUE AND MINIMAL ASSETS. The Company does not have any operations or revenues. The Company has minimal assets and financial resources. The Company will, in all likelihood, continue to incur operating expenses until it can acquire another
business opportunity. There is no assurance that the Company can identify such a business opportunity and consummate such a combination. As a result, the Company may continue to incur net operating losses that will increase continuously.

SPECULATIVE NATURE OF OUR OPERATIONS.  In the event the Company completes a business combination, the success of the Company's operations may be dependent upon management of the successor firm or venture partner firm and numerous other factors
beyond the Company's control.

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6

SCARCITY OF AND COMPETITION FOR BUSINESS OPPORTUNITIES AND COMBINATIONS. The Company will continue to be an insignificant participant in the business of seeking mergers with, joint ventures with and acquisitions of small private and public entities.
A large number of established and well-financed entities, including venture capital firms, are active in mergers and acquisitions of companies that may be desirable target candidates for the Company. Nearly all such entities have significantly
greater financial resources, technical expertise and managerial capabilities than the Company and, consequently, the Company will be at a competitive disadvantage in identifying possible business opportunities and successfully completing a business
combination. Moreover, the Company will also compete in seeking merger or acquisition candidates with numerous other small public companies.

NO AGREEMENT FOR BUSINESS COMBINATION OR OTHER TRANSACTION. The Company has no arrangement, agreement or understanding with respect to engaging in a merger with, joint venture with or acquisition of, a private or public entity.  There can be no
assurance that the Company will be successful in identifying and evaluating suitable business opportunities or in concluding a business combination. Management has not identified any particular industry or specific business within an industry for
evaluation by the Company. The Company cannot make any assurances that it will be able to negotiate a business combination on terms favorable to the Company.

NO STANDARDS FOR BUSINESS COMBINATION. The Company has not established a specific length of operating history or a specified level of earnings, assets, net worth or other criteria which it will require a target business opportunity to have achieved.
Accordingly, the Company may enter into a business combination with a business opportunity having:

- no significant operating history;
- losses;
- limited or no potential for earnings;
- limited assets;
- negative net worth; or
- other characteristics that are indicative of development stage companies.

CONTINUED MANAGEMENT CONTROL, LIMITED TIME AVAILABILITY. While seeking a business combination, management anticipates devoting up to 20 hours per month to the Company's business. The Company has not entered into employment agreements with its
current officer and it is not expected to do so in the foreseeable future.  However, the Company is currently paying a monthly management fee of $3,000 to a corporation controlled by the sole director and officer of the Company. The Company has
not obtained key man life insurance on of its sole officer or director. Notwithstanding the limited experience and time commitment of management, loss of the services of the sole officer and director would adversely affect development of the
Company's business and its likelihood of continuing operations.

CONFLICTS OF INTEREST - GENERAL.  The Company's sole officer and director participates in numerous business ventures which could be deemed to compete directly with us. Additional conflicts of interest and non-arm's length transactions may also arise
in the event the Company's officer and director is involved in the management of any firm with which the Company transacts business.

REPORTING REQUIREMENTS MAY DELAY OR PRECLUDE ACQUISITION. Sections 13 and 15(d) of the Securities Exchange Act require reporting companies to provide certain information about significant acquisitions, including audited financial statements for the
company acquired, covering one, two, or three years, depending on the relative size of the acquisition. The time and additional costs that may be incurred by some target entities to prepare such statements may significantly delay or essentially
preclude the Company from consummating an otherwise desirable acquisition. Acquisition prospects that do not have or are unable to obtain the required audited statements may be inappropriate for acquisition so long as the reporting requirements of
the Securities Exchange Act are applicable.

LACK OF MARKET RESEARCH OR MARKETING ORGANIZATION. The Company has neither conducted, nor have others made available to the Company, results of market research indicating that market demand exists for the transactions the Company is contemplating.
Moreover, the Company does not have, and does not plan to establish, a marketing organization.  Even in the event demand is identified for a merger or acquisition contemplated by the Company, the Company cannot make any assurances it will be
successful in completing any such business combination.

LACK OF DIVERSIFICATION. The Company's operations, even if successful, will in all likelihood result in the Company engaging in a business combination with another entity. Consequently, the Company's activities may be limited to those engaged in by
any entity with which it merges or acquires. The Company's inability to diversify its activities into a number of areas may subject the Company to economic fluctuations within a particular business or industry and, therefore, increase the risks
associated with the Company's operations.

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GOVERNMENT REGULATION. Although the Company will be subject to the reporting requirements under the Securities Exchange Act, management believes the Company will not be subject to regulation under the Investment Company Act, insofar as the Company
will not be engaged in the business of investing or trading in securities. In the event the company engages in business combinations which result in the Company holding passive investment interests in a number of entities, the Company could be
subject to regulation under the Investment Company Act.  In such event, the Company would be required to register as an investment company and could be expected to incur significant registration and compliance costs. The Company has not obtained a
formal determination from the Securities and Exchange Commission as to its status under the Investment Company Act and, consequently, violation of the Investment Company Act could subject the Company to civil and criminal penalties and could cause
the Company to cease operations.

PROBABLE CHANGE IN CONTROL AND MANAGEMENT. A business combination involving the issuance of the Company's common stock will, in all likelihood, result in shareholders of a private company obtaining a controlling interest in the Company. Any such
business combination may require the Company's management and/or affiliates to sell or transfer all or a portion of the Company's common stock held by them and/or to resign as members of the Company's board of directors. The resulting change in
control of the Company could result in removal of the Company's present officer and director and a corresponding reduction in or elimination of their participation in the Company's future affairs.

REDUCTION OF PERCENTAGE SHARE OWNERSHIP FOLLOWING A BUSINESS COMBINATION. If the Company engages in a business combination with a private entity, in all likelihood; such a combination would result in the Company issuing securities to the owners of
such private entity. The issuance of the Company's previously authorized and unissued common stock would result in a reduction in the percentage of shares owned by the Company's present and prospective shareholders and may result in a change in
control or management of the Company.

"PENNY" STOCK REGULATION OF BROKER-DEALER SALES OF OUR SECURITIES. The SEC has adopted rules that regulate broker- dealer practices in connection with transactions in "penny stocks". Generally, penny stocks are equity securities with a price of less
than $5.00 (other than securities registered on certain national securities exchanges or quoted on the NASDAQ system). Since the Company's shares are traded for less than $5.00 per share, the shares are subject to the SEC's penny stock rules
until such time as (1) the Company's net tangible assets exceed $5,000,000 during the Company's first three years of continuous operations or $2,000,000 after the Company's first three years of continuous operations; or (2) the Company has
had average revenue of at least $6,000,000 for three years. The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document prescribed
by the SEC that provides information about penny stocks and the nature and level of risks in the penny stock market. The broker-dealer must obtain a written acknowledgment from the purchaser that the purchaser has received the disclosure document.
The broker-dealer also must provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction and monthly account statements showing the market value of each
penny stock held in the customer's account. In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from those rules, the broker-dealer must make a special written determination that the penny
stock is a suitable investment for the purchaser and receive the purchaser's written agreement to the transaction. These requirements may have the effect of reducing the level of trading activity in the secondary market for a stock that becomes
subject to the penny stock rules. Such rules and regulations may make it difficult for holders to sell the common stock of the Company, and they may be forced to hold it indefinitely.

TAXATION. Federal and state tax consequences will, in all likelihood, be major considerations in any business combination the Company may undertake. Currently, such transactions may be structured so as to result in tax-free treatment to both
companies, pursuant to various federal and state tax provisions. The Company intends to structure any business combination so as to minimize the federal and state tax consequences to both the Company and the target entity; however, there can be no
assurance that such business combination will meet the statutory requirements of a tax-free reorganization or that the parties will obtain the intended tax-free treatment upon a transfer of stock or assets. A non-qualifying reorganization could
result in the imposition of both federal and state taxes which may have an adverse effect on both parties to the transaction.

REQUIREMENT OF AUDITED FINANCIAL STATEMENTS MAY DISQUALIFY BUSINESS OPPORTUNITIES. Management believes that any potential business opportunity must provide audited financial statements for review for the protection of all parties to the business
combination. One or more attractive business opportunities may choose to forego the possibility of a business combination with the Company, rather than incur the expenses associated with preparing audited financial statements.

OIL AND GAS OPERATIONS

Prior to their disposition effective July 1, 2005, the Company held working interests in two oil and gas leases located in Texas. The Company sold its share of petroleum, natural gas and natural gas liquids produced from its wells to a variety of

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purchasers at the wellhead in the United States. All of its
sales were conducted with unaffiliated customers. These purchasers provided a
ready market for all of the Company's production and paid the local market
price, which can fluctuate based upon prevailing market conditions.

Total revenues reported for fiscal 2005 were $42,603. The
results of these operations have been classified as relating to discontinued
operations in the attached financial statements.

EMPLOYEES

The Company has no full time employees. Mr. Christopher Kape,
the sole director of the Company and the Company's Chief Executive Officer,
President, Secretary and Treasurer has agreed to allocate a portion of his time
to our activities. Mr. Kape anticipates that the Company's business plan can be
implemented by his devoting an aggregate of 20 hours per month to the Company's
business affairs and, consequently, conflicts of interest may arise with respect
to the limited time commitment by Mr. Kape. The Company does not expect any
significant changes in the number of employees, until it completes the
acquisition of another business.

The Company's sole officer and director is or may become
involved with other companies who have a business purpose similar to the
Company's. As a result, conflicts of interest may arise or the performance of
the Company may suffer. If a conflict of interest arises and the Company's
officer and director is presented with business opportunities under
circumstances where there may be a doubt as to whether the opportunity should
belong to the Company or another company he is affiliated with, he shall
disclose the opportunity to all such companies.

ITEM 2. DESCRIPTION OF FORMER BUSINESS PROPERTY

None

ITEM 3. LEGAL PROCEEDINGS

As at March 19, 2007, to the best of the knowledge of the
management of the Company, there are no legal proceedings to which the Company
is a party nor are any material legal proceedings contemplated.

We anticipate that, from time to time, we periodically may
become subject to other legal proceedings in the ordinary course of our
business. We are unable to ascertain the ultimate aggregate amount of monetary
liability or financial impact of the above matters which seek damages of
material or indeterminate amounts, and therefore cannot determine whether these
actions, suits, claims or proceedings will, individually or collectively, have a
material adverse effect on our business, results of operations, and financial
condition. We intend to vigorously defend these actions, suits, claims and
proceedings.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITYHOLDERS

No matters were submitted to a vote by shareholders of the
Company during the fourth quarter of the fiscal year ended December 31,
2006.

PART II

ITEM 5. MARKET FOR COMMON EQUITY, RELATED STOCKHOLDER MATTERS
AND SMALL BUSINESS ISSUER PURCHASES OF EQUITY SECURITIES.

MARKET INFORMATION

The Company's common stock has been listed on the
over-the-counter bulletin board ("OTCBB") since November 19, 2004, under the
symbol "GEYI"; however, based upon information received from the OTCBB, as of
March 19, 2007, no trades had taken place. The OTCBB reports that as of March
19, 2007, six bids were outstanding regarding the purchase of the Companys
common stock with the highest such bid being $2.00 per share. One block of
shares was offered at a price of $2,000.00 per share.

The quotations reflect inter-dealer prices, without retail
mark-up, mark down or commission and may not represent actual transactions.

HOLDERS OF OUR COMMON STOCK

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9

As of March 19, 2007, there were 70 shareholders of record of our common stock.

DIVIDENDS

The Company has not paid any cash dividends on its common stock and does not anticipate paying any cash dividends in the foreseeable future. The Company currently intends to retain future earnings, if any, to fund the development and growth of its
business. Any future determination to pay cash dividends will be at the discretion of the board of directors and will be dependent upon the Company's financial condition, operating results, capital requirements, applicable contractual restrictions
and other factors as the board of directors deems relevant.

SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS

There are no securities authorized for issuance under equity compensation plans.

STOCK OPTIONS AND SHARE PURCHASE WARRANTS

There are no outstanding stock options or share purchase warrants to purchase securities of the Company.

OUTSTANDING SHARES AND SHAREHOLDERS OF RECORD

As of March 19, 2007 the Company had twenty-three million twelve thousand seven hundred and sixty-four (23,012,764) shares of its $0.001 par value common voting stock issued and outstanding which are held by seventy (70) shareholders of record.

RECENT SALES OF UNREGISTERED SECURITIES

On October 24, 2006, the Company issued a total of 1,331,764 common shares at a price per share of $0.01 for aggregate consideration of $13,317.64. A total of 10 persons took part in the financing. We issued the securities to ten (10)
non-U.S. persons (as that term is defined in Regulation S of the Securities Act of 1933) in an offshore transaction relying on Regulation S and/or Section 4(2) of the Securities Act of 1933.

On February 7, 2007, the Company issued a total of 17,031,000 common shares at a price per share of $0.01 to 21 investors for aggregate proceeds of $170,310 of which $40,910 was paid in cash and $129,400 was paid via the issuance of
a note payable with maturities ranging from 90 days to one year. We issued the securities to the investors who are non U.S. persons (as that term is defined in Regulation S of the Securities Act of 1933) in an offshore transaction relying on
Regulation S and/or Section 4(2) of the Securities Act of 1933.

PURCHASES OF EQUITY SECURITIES BY THE COMPANY AND AFFILIATED PURCHASERS

We did not purchase any of our shares of common stock or other securities during the year ended December 31, 2006.

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

OVERVIEW

Global Energy Inc. (the "Company") was organized on February 16, 1999, under the laws of the State of Nevada, U.S.A. as Global Smartcards Inc. On April 28, 2003, the Company changed its name to Global Energy Inc.

The Company originally planned to market plastic cards with embedded microprocessors.  However, the Company was unable to complete negotiations to market Smart Cards.  By agreement dated June 5, 2003, the Company purchased petroleum and natural gas
producing properties and commenced operations as an independent energy company engaged in the acquisition of crude oil and natural gas properties in the United States.

During the month of April, 2005, our board of directors determined that it would be in our companys best interest to sell our oil and gas properties and seek alternative business opportunities. Effective July 1, 2005, the Company sold all of
the oil and

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10

gas interests and currently owns no assets. On July 6, 2005,
one of the two members of our Board of Directors resigned from all of his
positions with our company. We currently have one member of our Board of
Directors.

On October 25, 2006, we closed a private placement consisting
of 1,331,764 common shares in our company at a price of US$0.01 per share for
gross proceeds of $13,317.64.

As at December 31, 2006, the Company had negative working
capital of $45,386. Although the Company has sold its operating business and has
no current operating costs, it will continue to incur administrative, legal and
auditing costs as well as the costs associated with the search for a new
business.

In February of 2007, the Company completed a private placement
of 17,031,000 common shares at a price per share of $0.01 for aggregate proceeds
of $170,310 in cash and notes receivable, of which $40,910 was paid in cash and
$129,400 was paid via the issuance of a note payable with maturities ranging
from 90 days to one year. Management expects to keep its operating costs to a
minimum such that the proceeds of the equity issuance will enable the company to
defray overhead and due diligence costs related to the search for new business
opportunities for the ensuing 6-9 months. Should the Company decide to enter
into new business transactions, additional financing will be required. There can
be no assurance that any such financing can be obtained on terms favorable to
the Company, or even whether such financing can be obtained at all.

The Company is currently engaged in the search for a new
business opportunity and has identified a number of potential transactions. We
have not entered into any binding agreements with respect to any of these
opportunities and are not currently in a position to divulge the name or the
nature of these business opportunities. The Company does not intend to restrict
its search to any specific business, industry, or geographical location and it
may participate in a business venture of any kind or nature. The Company may
seek business opportunities with entities that have recently commenced
operations, or that wish to utilize the public marketplace in order to raise
additional capital to expand into new products or markets, to develop a new
product or service, or for other corporate purposes. The Company may acquire
assets and establish wholly-owned subsidiaries in various businesses or acquire
existing businesses as subsidiaries. Therefore, the Company has virtually
unlimited discretion to search for and enter into negotiations with potential
business opportunities. It is impossible to predict at this time the status of
any business in which the Company may become engaged, in that such business may
need to seek additional capital, may desire to have its shares publicly traded,
or may seek other perceived advantages which the Company offers.

GOING CONCERN

The accompanying financial statements have been prepared in
conformity with accounting principles generally accepted in the United States of
America, which contemplate continuation of the Company as a going concern. The
Company incurred a net loss for the year ended December 31, 2006 of $69,475 as
compared to net income of $5,560 realized for the year ended December 31, 2005.
As at December 31, 2006, had an accumulated deficit of $172,343 and negative
working capital of $45,386. These financial statements do not include any
adjustments that might result from the outcome of this uncertainty. These
financial statements do not include any adjustments relating to the
recoverability and classification of recorded asset amounts, or amounts and
classification of liabilities that might be necessary should the Company be
unable to continue as a going concern.

SIGNIFICANT ACCOUNTING POLICIES

ACCOUNTING ESTIMATES

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

CASH AND CASH EQUIVALENTS

As of December 31, 2006 there were cash and cash equivalents of
$10,633 while at December 31, 2005 there had been cash and cash equivalents of
$25,183. The decrease in cash and cash equivalents resulted from the excess of
operating expenses incurred over the proceeds or debt and equity financings
undertaken during the fiscal year.

---

11

CONCENTRATION OF CREDIT RISK

The Company places its cash and cash equivalents with financial
institutions. As of December 31, 2006 and 2005, the Company has no funds placed
in a bank beyond insured limits.

FOREIGN CURRENCY TRANSLATION

The Company maintains its accounting records in U.S.
dollars.

At the transaction date, each asset, liability, revenue and
expense is translated into U.S. dollars by the use of the exchange rate in
effect at that date. At the period end, monetary assets and liabilities are
translated into U.S. dollars by using the exchange rate in effect at that date.
The resulting foreign exchange gains and losses are included in operations.

FAIR VALUE OF FINANCIAL INSTRUMENTS

Fair value estimates of financial instruments are made at a
specific point in time, based on relevant information about financial markets
and specific financial instruments. As these estimates are subjective in nature,
involving uncertainties and matters of significant judgment, they cannot be
determined with precision. Changes in assumptions can significantly affect
estimated fair values.

Fair value approximates the amounts reflected in the financial
statements for cash, amounts receivable and accounts payable. Management is of
the opinion that the Company is not exposed to significant interest, credit or
currency risks arising from these financial instruments.

INCOME TAXES

The Company has adopted SFAS 109, "ACCOUNTING FOR INCOME
TAXES", which requires the Company to recognize deferred tax liabilities and
assets for the expected future tax consequences of events that have been
recognized in the Company's financial statements or tax returns using the
liability method. Under this method, deferred tax liabilities and assets are
determined based on the temporary differences between the financial statement
and tax bases of assets and liabilities using enacted tax rates in effect in the
years in which the differences are expected to reverse.

EARNINGS (LOSS) PER SHARE

Net earnings (loss) per share is provided in accordance with
SFAS 128, "EARNINGS PER SHARE". Basic earnings (loss) per share is computed by
dividing losses available to common stockholders by the weighted average number
of common shares outstanding during the period. Diluted earnings (loss) per
share reflects per share amounts that would have resulted if dilutive common
stock equivalents had been converted to common stock. As of December 31, 2006
and 2005, the Company has no dilutive common stock equivalents such as stock
options.

RECENT ACCOUNTING PRONOUNCEMENTS

In November 2004, the FASB issued SFAS 151, "INVENTORY COSTS",
which revised ARB 43, relating to inventory costs. This revision is to clarify
the accounting for abnormal amounts of idle facility expense, freight, handling
costs and wasted material (spoilage). This Statement requires that these items
be recognized as a current period charge regardless of whether they meet the
criterion specified in ARB 43. In addition, this Statement requires the
allocation of fixed production overheads to the costs of conversion be based on
normal capacity of the production facilities. SFAS 151 is effective for
inventory costs incurred during fiscal years beginning after June 15, 2005. The
Company does not believe the adoption of SFAS 151 will have a material impact on
the Company's financial statements.

In December 2004, the FASB issued SFAS 153, "EXCHANGES OF
NONMONETARY ASSETS", which changes the guidance in APB Opinion 29, "ACCOUNTING
FOR NONMONETARY TRANSACTIONS". This Statement amends Opinion 29 to eliminate the
exception for non-monetary exchanges of similar productive assets and replaces
it with a general exception for exchanges of non-monetary assets that do not
have commercial substance. A non-monetary exchange has commercial substance if
the future cash flows of the entity are expected to change significantly as a
result of the exchange. SFAS 153 is effective during fiscal years beginning
after June 15, 2005. The Company does not believe the adoption of SFAS 153 will
have a material impact on the Company's financial statements.

In May 2005, the FASB issued SFAS No. 154, entitled Accounting
Changes and Error Corrections--a replacement of APB Opinion No. 20 and FASB
Statement No. 3. This Statement replaces APB Opinion No. 20, Accounting Changes,
and FASB

---




12

Statement No. 3, Reporting Accounting Changes in Interim Financial Statements, and changes the requirements for the accounting for and reporting of a change in accounting principle. This Statement applies to all voluntary changes in accounting
principle. It also applies to changes required by an accounting pronouncement in the unusual instance that the pronouncement does not include specific transition provisions. Opinion 20 previously required that most voluntary changes in accounting
principle be recognized by including in net income of the period of the change the cumulative effect of changing to the new accounting principle.  This Statement requires retrospective application to prior periods' financial statements of changes in
accounting principle, unless it is impracticable to determine either the period-specific effects or the cumulative effect of the change. This Statement defines retrospective application as the application of a different accounting principle to prior
accounting periods as if that principle had always been used or as the adjustment of previously issued financial statements to reflect a change in the reporting entity. This Statement also redefines restatement as the revising of previously issued
financial statements to reflect the correction of an error. The adoption of SFAS 154 did not impact the financial statements.

The FASB has issued FIN 48 which prescribes rules for the financial statements accounting for uncertainty in income tax positions. FIN 48 requires all material tax positions to undergo a new two-step recognition and measurement process. All material
tax positions in all jurisdictions in all tax years in which the statute of limitations remains open upon the initial date of adoption are required to be assessed. The criteria for asset recognition is that it is more likely than not that a tax
position will be sustained upon examination based solely on its technical merits. If the recognition standard is not satisfied, then no tax benefit otherwise arising from the tax position can be recorded for financial statement purposes. If the
recognition standard is satisfied, the amount of tax benefit recorded for financial statement purposes is the largest amount of tax benefit with a greater than 50% likelihood of being realized upon ultimate settlement with a taxing authority. FIN 48
is effective for the Companys fiscal 2007 year. The Company does not anticipate the adoption of FIN 48 will have a material impact on the Companys financial position, results of the operations, or cash flows.

INTANGIBLE ASSETS

The Company has adopted SFAS 142, "GOODWILL AND OTHER INTANGIBLE ASSETS", which requires that goodwill and intangible assets with indefinite life are not amortized but rather tested at least annually for impairment. Intangible assets with a definite
life are required to be amortized over their useful life or estimated useful life.

The Company has not had any goodwill nor intangible assets with indefinite or definite life since the Company's inception.

ACCOUNTING FOR DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

The Company has adopted SFAS 133, "ACCOUNTING FOR DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES", which requires companies to recognize all derivatives contracts as either assets or liabilities in the balance sheet and to measure them at fair value.
If certain conditions are met, a derivative may be specifically designated as a hedge, the  objective of which is to match  the timing of gain or loss recognition on the hedging derivative with the recognition of (i) the changes in the fair value of
the hedged asset or liability that are attributable to the hedged risk or (ii) the earnings effect of the hedged forecasted transaction. For a derivative not designated as a hedging instrument, the gain or loss is recognized in income in the period
of change.

The Company has not, since incorporation, entered into derivative contracts either to hedge existing risks or for speculative purposes.

ADVERTISING EXPENSES

The Company expenses advertising costs as incurred. There were no advertising expenses incurred by the Company for the years ended December 31, 2006 and 2005.

STOCK-BASED COMPENSATION

During the year, the Company adopted SFAS No. 123(revised), "Share-Based Payment", to account for its stock options and similar equity instruments issued.  Accordingly, compensation costs attributable to stock options or similar equity
instruments granted are measured at the fair value at the grant date, and expensed over the expected vesting period. SFAS No. 123(revised) requires excess tax benefits be reported as a financing cash inflow rather than as a reduction of taxes paid.
The adoption of SFAS No. 123 (revise) did not have a material impact on the Companys financial statements.

---

13

The Company did not grant any stock options during the period
  ended December 31, 2006 and there is no stock option outstanding as at December
  31, 2006.

OPERATIONS

The following discussion of the results of operations of the Company for the fiscal years ended December 31, 2006, and 2005, should be read in conjunction with the financial statements of the Company and related notes included therein.

YEAR ENDED DECEMBER 31, 2006 COMPARED TO YEAR ENDED DECEMBER 31, 2005

During fiscal 2006, the Company realized no revenues. In fiscal 2005, it recognized $42,631 of primarily oil and gas revenues. Given the sale of all oil and gas assets in July of 2005, all revenues related to such activities have been classified
as relating to discontinued operations in the attached financial statements.

During fiscal 2006, the Company incurred $69,475 for general and administrative expenses, an increase of $7,015 from $62,460 reported for fiscal 2005. Expenses incurred in 2006 consisted of $15,381 (2005 - $11,272) for audit fees
and tax preparation fees; $30,937 (2005 - $38,917) for legal expenses, primarily for preparation of the Company's year end and regulatory filings as well as in the conduct of due diligence related to potential acquisitive transactions for
the Company that were ultimately not consummated; $19,144 (2005 - $8,973) for accounting and administration fees paid in 2006 to Jamco Capital Partners Inc., a company controlled by the President of the Company and paid in 2005 to Chase
Management Ltd. ("Chase"), a company controlled by the former President of the Company (see "Item 12. Certain Relationships and Related Transactions" on page 31) and $4,013 for office and miscellaneous expenses (2005 - $3,298). The increased
expenses in 2006 are primarily attributable to an increase in accounting and administration fees.

LIQUIDITY AND CAPITAL RESOURCES

As of December 31, 2006, the Company had negative working capital of $45,386 and an accumulated deficit of $172,343 and for the year ended December 31, 2006, incurred a net loss of $69,475. At this stage of its business, the Company is
not generating sufficient positive cash flow to fund its ongoing overhead. Certain of the Company's overhead may be reduced without negatively impacting on the Company's current operating cash flow. The Company currently has no planned capital
expenditures. However, the Company intends to continue to identify and review other business and investment opportunities. This may entail significant funding requirements.

Effective, November 19, 2004, the Company's common shares were approved for quotation on the OTCBB. Management believes having the shares quoted on the OTC-BB will assist the Company with fund raising activities.  If the Company needs to raise
additional funds, any additional funds raised through the issuance of equity or convertible debt securities, will result in the dilution of the percentage ownership of the stockholders of the Company and such securities may have rights, preferences
or privileges senior to those of the Company's common stock.  The Company does not currently have any contractual restrictions on its ability to incur debt and, accordingly, the Company could incur significant amounts of indebtedness to finance its
operations. Any such indebtedness could contain covenants which would restrict the Company's operations. There can be no assurance that additional financing will be available on terms favorable to the Company, or at all. If adequate funds are not
available or are not available on acceptable terms, the Company may not be able take advantage of acquisition opportunities, or respond to competitive pressures. The Company does not have any preliminary agreements or understandings between the
Company and its stockholders/officers and directors with respect to loans or financing to operate the Company.

The Company maintains its cash and cash equivalents primarily in Untied States dollars.  A small amount may also be retained in Canadian currency to pay administrative costs.

PLAN OF OPERATIONS

Given that the Company has sold its oil and gas assets and is not generating any revenues, management is seeking business opportunities. During the year ended December 31, 2006, the Company incurred significant professional fees in seeking and
reviewing other business and investment opportunities. Management believes that the Company will require additional funds in the next 12 months to maintain its current level of operations. The Company plans to continue to review other businesses
opportunities and properties for possible acquisition.  Financing may include the issuance of additional common stock. However, there are no assurances that the Company will be able to identify any other properties for acquisition or will be able to
complete any such acquisition.

---

14

As at December 31, 2006, the Company had negative working capital
  of $45,386. Although the Company has sold its operating business and has
  no current operating costs, it will continue to incur administrative, legal
  and auditing costs as well as the costs associated with the search for a new
  business.

On February 7, 2007, the Company issued a total of 17,031,000 common shares at a price per share of $0.01 for aggregate consideration of $170,310 of which $40,910 was paid in cash and $129,400 was paid via the issuance note payable
having maturities ranging from 90 days to one year. The Company expects such funding to be sufficient to enable it to discharge certain of its existing liabilities and to fund its operations for the ensuing 6-9 months unless additional business
investments are made thereby requiring additional funding. Should the Company decide to enter into new business transactions, additional financing will be required. There can be no assurance that any such financing can be obtained on terms favorable
to the Company, or even whether such financing can be obtained at all.

The Company does not expect any significant changes in the number of employees; however, if the Company acquires another business opportunity or property, the Company may increase the number of employees.

The Company currently does not expect to purchase or sell any of its equipment, since it owns no equipment; however, if the Company acquires another business or property, the Company may acquire equipment in connection with such acquisition.

The Company has, and will continue to have limited capital with which to finance its activities. The Company has incurred, and will continue to incur, expenses relating to its operations. Specifically, as long as the Company is required to file
reports under the Securities Exchange Act, it will continue to incur accounting and legal fees relating to its filings. The Company enjoys the non-exclusive use of office, telecommunication and incidental supplies of stationery, provided by Mr.
Kape. See the section entitled "Item 12. Certain Relationships And Related Transactions" on page 31 below.

During the twelve months following the filing of this report, the Company intends to further review certain investment opportunities it is currently exploring and possibly acquire another business opportunity. Such investment may be effected via an
exchange for the Company's securities. While the Company has not selected a particular acquisition target and has not entered into any material negotiations regarding such an acquisition, it has commenced a review of several potential
investments.

OFF BALANCE SHEET ARRANGEMENTS

The Company does not have any material off balance sheet arrangements that have or are reasonably likely to have a current or future effect on the Company's financial condition, changes in financial condition, revenues or expenses, results of
operations, liquidity, capital expenditures or capital resources.

---

ITEM 7. FINANCIAL STATEMENTS

GLOBAL ENERGY INC.(A DEVELOPMENT STAGE COMPANY)

FINANCIAL STATEMENTSFOR THE YEARS ENDEDDECEMBER 31, 2006
AND 2005

(EXPRESSED IN U.S. DOLLARS)



F-1

GLOBAL ENERGY INC.(A DEVELOPMENT STAGE COMPANY)

I N D E X

|Report of Independent Registered Public Accounting Firm |            
|------------------------------------------------------- | -----------
|(Vellmer
      & Chang)                                 | F-2        
|                                                        |            
|Balance Sheets                                          |            
|December
      31, 2006 and 2005                        | F-3        
|                                                        |            
|Statements of Operations                                |            
|Years
      Ended December 31, 2006 and 2005            | F-4        
|                                                        |            
|Statements of Stockholders' Equity                      |            
|Years
      Ended December 31, 2006 and 2005            | F-5        
|                                                        |            
|Statements of Cash Flows                                |            
|Years
      Ended December 31, 2006 and 2005            | F-6        
|                                                        |            
|Notes to Financial Statements                           | F-7 to F-13

---

F-2

|Vellmer & Chang           
|--------------------------
|Chartered Accountants     
|406  455 Granville Street
|Vancouver, B.C., V6C 1T1  
|Tel: 604-687-3776         
|Fax: 604-687-3778         

REPORT OF INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM

To the Board of Directors and Stockholders of

GLOBAL ENERGY INC.(A development stage company)

We have audited the balance sheets of Global Energy Inc.(the Company) (a development stage company) as at December 31, 2006 and
2005 and the related statements of operations, stockholders equity, and cash
flows from July 7, 2005 (date of becoming a development stage company) to
December 31, 2006 and statements of operations, stockholders equity, and cash
flows for the years ended December 31, 2006 and 2005. These financial statements
are the responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the
Public Company Accounting Oversight Board (United States). Those standards
require that we plan and perform an audit to obtain reasonable assurance whether
the financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above
present fairly, in all material respects, the financial position of the Company
as at December 31, 2006 and 2005 and the results of their operations and their
cash flows for the years ended December 31, 2006 and 2005 and for the period
from July 7, 2005 (date of becoming a development stage company) to December 31,
2006 in conformity with generally accepted accounting principles in the United
States of America.

The accompanying financial statements have been prepared
assuming that the Company will continue as a going concern. As discussed in Note
1, the Company has incurred operating losses. These factors, among others, raise
substantial doubt about the Companys ability to continue as a going concern.
Managements plans in regard to these matters are described in Note 1. The
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.

|Vancouver, Canada | VELLMER & CHANG    
|----------------- | ---------------------
|February 9, 2007  | Chartered Accountants

---

F-3

GLOBAL ENERGY INC.(A DEVELOPMENT STAGE COMPANY)BALANCE
SHEETSAS AT DECEMBER 31, 2006 AND 2005(EXPRESSED IN U.S. DOLLARS)

|                                                        |  | 2006    |   |  | 2005    |  
|------------------------------------------------------- |  | ------- | - |  | ------- | -
|                                                        |  | $       |   |  | $       |  
|                                                        |  |         |   |  |         |  
|ASSETS                                                  | 
|                                                        |  |         |   |  |         |  
|CURRENT ASSETS                                          |  |         |   |  |         |  
|                                                        |  |         |   |  |         |  
|Cash and cash equivalents                               |  | 10,633  |   |  | 25,183  |  
|TOTAL CURRENT ASSETS                                    |  | 10,633  |   |  | 25,183  |  
|TOTAL ASSETS                                            |  | 10,633  |   |  | 25,183  |  
|                                                        |  |         |   |  |         |  
|LIABILITIES & STOCKHOLDERS'
      EQUITY (DEFICIENCY)   | 
|                                                        |  |         |   |  |         |  
|CURRENT LIABILITIES                                     |  |         |   |  |         |  
|                                                        |  |         |   |  |         |  
|Accounts payable                                        |  | 10,019  |   |  | 18,551  |  
|Promissory note payable                                 |  | 28,000  |   |  | 0       |  
|Demand loans payable  Related parties                  |  | 18,000  |   |  | 0       |  
|TOTAL CURRENT LIABILITIES                               |  | 56,019  |   |  | 18,551  |  
|STOCKHOLDERS' EQUITY (DEFICIENCY)                       |  |         |   |  |         |  
|                                                        |  |         |   |  |         |  
|Common stock, $0.001 par value;                         |  |         |   |  |         |  
|Authorized - 25,000,000 shares                          |  |         |   |  |         |  
|Issued and
      outstanding  5,981,764 shares         |  |         |   |  |         |  
|(2005
      - 4,650,000 shares)                         |  | 5,982   |   |  | 4,650   |  
|Additional paid-in capital                              |  | 116,836 |   |  | 104,850 |  
|Share subscription received                             |  | 4,139   |   |  | -       |  
|Accumulated (deficit) during development
      stage    |  | (98,998 | ) |  | (29,523 | )
|(Deficit)                                               |  | (73,345 | ) |  | (73,345 | )
|TOTAL STOCKHOLDERS' EQUITY (DEFICIENCY)                 |  | (45,386 | ) |  | 6,632   |  
|TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY) |  | 10,633  |   |  | 25,183  |  

NATURE OF OPERATIONS AND GOING CONCERN (Note 1)

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF
THESEFINANCIAL STATEMENTS.

---

F-4

GLOBAL ENERGY INC.(A DEVELOPMENT STAGE
COMPANY)STATEMENTS OF OPERATIONSFOR THE PERIODS ENDED DECEMBER 31, 2006
AND 2005(EXPRESSED IN U.S. DOLLARS)

|                                                           |  |           |   |  |           |   |  | Cumulative   |  
|---------------------------------------------------------- |  | --------- | - |  | --------- | - |  | ------------ | -
|                                                           |  |           |   |  |           |   |  | from         |  
|                                                           |  |           |   |  |           |   |  | July 7, 2005 |  
|                                                           |  |           |   |  |           |   |  | to           |  
|                                                           |  |           |   |  |           |   |  | December 31  |  
|                                                           |  | 2006      |   |  | 2005      |   |  | 2006         |  
|                                                           |  | $         |   |  | $         |   |  | $            |  
|OPERATING EXPENSES                                         |  |           |   |  |           |   |  |              |  
|                                                           |  |           |   |  |           |   |  |              |  
|General and administration                                 |  | (69,475   | ) |  | (62,460   | ) |  | (98,998      | )
|NET (LOSS) FROM CONTINUING OPERATIONS                      |  | (69,475   | ) |  | (62,460   | ) |  | (98,998      | )
|                                                           |  |           |   |  |           |   |  |              |  
|NET INCOME FROM DISCONTINUED OPERATIONS                    |  |           |   |  |           |   |  |              |  
|(NET OF TAX)                                               |  | -         |   |  | 68,020    |   |  | -            |  
|NET INCOME (LOSS) FOR THE PERIOD                           |  | (69,475   | ) |  | 5,560     |   |  | (98,998      | )
|                                                           |  |           |   |  |           |   |  |              |  
|BASIC AND DILUTED NET INCOME (LOSS) PER COMMON
      SHARE |  |           |   |  |           |   | 
|NET (LOSS) FROM CONTINUING
      OPERATIONS                |  | (0.01     | ) |  | (0.01     | ) |  |              |  
|NET INCOME FROM DISCONTINUED OPERATIONS                    |  | 0.00      |   |  | 0.01      |   |  |              |  
|NET INCOME (LOSS) FOR THE YEAR                             |  | (0.01     | ) |  | 0.00      |   |  |              |  
|WEIGHTED AVERAGE NUMBER OF COMMON SHARES                   |  |           |   |  |           |   |  |              |  
|OUTSTANDING - BASIC AND
      DILUTED                      |  | 4,901,758 |   |  | 4,650,000 |   |  |              |  

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF
THESEFINANCIAL STATEMENTS.

---

F-5

GLOBAL ENERGY INC.(A DEVELOPMENT STAGE
COMPANY)STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIENCY)FOR THE PERIODS
ENDED DECEMBER 31, 2006 AND 2005(EXPRESSED IN U.S. DOLLARS)

|                          |  | Common Stock |  |   |        |  |   |            |  |   |              |  |   |             |   |   |           |  
|------------------------- |  | ------------ |  | - | ------ |  | - | ---------- |  | - | ------------ |  | - | ----------- | - | - | --------- | -
|                          |  |              |  |   |        |  |   |            |  |   |              |  |   |             |   |   |           |  
|                          |  |              |  |   |        |  |   |            |  |   |              |  |   | Accumulated |   |   |           |  
|                          |  |              |  |   |        |  |   |            |  |   |              |  |   | (Deficit)   |   |   |           |  
|                          |  |              |  |   |        |  |   | Additional |  |   | Share        |  |   | During      |   |   |           |  
|                          |  |              |  |   |        |  |   | Paid-in    |  |   | subscription |  |   | Development |   |   |           |  
|                          |  | Shares       |  |   | Amount |  |   | Capital    |  |   | received     |  |   | Stage       |   |   | (Deficit) |  
|                          |  |              |  | $ |        |  | $ |            |  | $ |              |  | $ |             |   | $ |           |  
|                          |  |              |  |   |        |  |   |            |  |   |              |  |   |             |   |   |           |  
|Balance                   |  |              |  |   |        |  |   |            |  |   |              |  |   |             |   |   |           |  
|December 31, 2004         |  | 4,650,000    |  |   | 4,650  |  |   | 104,850    |  |   | -            |  |   | -           |   |   | (108,428  | )
|                          |  |              |  |   |        |  |   |            |  |   |              |  |   |             |   |   |           |  
|Net (loss) for the period |  |              |  |   |        |  |   |            |  |   |              |  |   | (29,523     | ) |   |           |  
|                          |  | -            |  |   | -      |  |   | -          |  |   | -            |  |   |             |   |   | 35,083    |  
|                          |  |              |  |   |        |  |   |            |  |   |              |  |   |             |   |   |           |  
|Balance                   |  |              |  |   |        |  |   |            |  |   |              |  |   | (29,523     | ) |   |           |  
|December 31, 2005         |  | 4,650,000    |  |   | 4,650  |  |   | 104,850    |  |   | -            |  |   |             |   |   | (73,345   | )
|                          |  |              |  |   |        |  |   |            |  |   |              |  |   |             |   |   |           |  
|Net (loss) income for the |  |              |  |   |        |  |   |            |  |   |              |  |   | (69,475     | ) |   |           |  
|period                    |  | -            |  |   | -      |  |   | -          |  |   | -            |  |   |             |   |   | -         |  
|                          |  |              |  |   |        |  |   |            |  |   |              |  |   |             |   |   |           |  
|Equity Issuance on        |  | 1,331,764    |  |   | 1,332  |  |   | 11,986     |  |   | -            |  |   |             |   |   | -         |  
|October 24, 2006          |  |              |  |   |        |  |   |            |  |   |              |  |   |             |   |   |           |  
|                          |  |              |  |   |        |  |   |            |  |   |              |  |   |             |   |   |           |  
|Share subscription        |  |              |  |   |        |  |   |            |  |   |              |  |   |             |   |   |           |  
|received                  |  |              |  |   |        |  |   |            |  |   | 4,139        |  |   |             |   |   |           |  
|                          |  |              |  |   |        |  |   |            |  |   |              |  |   |             |   |   |           |  
|Balance                   |  |              |  |   |        |  |   |            |  |   |              |  |   |             |   |   |           |  
|December 31, 2006         |  | 5,981,764    |  |   | 5,982  |  |   | 116,836    |  |   | 54,139       |  |   | (98,998     | ) |   | (73,245   | )

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL
STATEMENTS.

---

F-6

GLOBAL ENERGY INC.(A DEVELOPMENT STAGE
COMPANY)STATEMENTS OF CASH FLOWSFOR THE PERIODS ENDED DECEMBER 31, 2006
AND 2005(EXPRESSED IN U.S. DOLLARS)

|                                                                              |  |         |   |  |         |   |  | Cumulative   |  
|----------------------------------------------------------------------------- |  | ------- | - |  | ------- | - |  | ------------ | -
|                                                                              |  |         |   |  |         |   |  | from         |  
|                                                                              |  |         |   |  |         |   |  | July 7, 2005 |  
|                                                                              |  |         |   |  |         |   |  | to           |  
|                                                                              |  |         |   |  |         |   |  | December 31  |  
|                                                                              |  | 2006    |   |  | 2005    |   |  | 2006         |  
|                                                                              |  | $       |   |  | $       |   |  | $            |  
|                                                                              |  |         |   |  |         |   |  |              |  
|CASH FLOWS PROVIDED BY OPERATING ACTIVITIES                                   |  |         |   |  |         |   |  |              |  
|                                                                              |  |         |   |  |         |   |  |              |  
|Net (loss) income for the period                                              |  | (69,475 | ) |  | 5,560   |   |  | (98,998      | )
|                                                                              |  |         |   |  |         |   |  |              |  
|Item not involving cash                                                       |  |         |   |  |         |   |  |              |  
|Depreciation and depletion                                                    |  | -       |   |  | 1,127   |   |  | -            |  
|Gain on disposal
      of assets                                              |  | -       |   |  | (38,411 | ) |  | -            |  
|Changes in assets and liabilities                                             |  |         |   |  |         |   |  |              |  
|Decrease in
      amounts receivable                                          |  | -       |   |  | 16,312  |   |  | -            |  
|Increase (Decrease) in accounts
      payable                                 |  | (8,532  | ) |  | (11,465 | ) |  | (21,827      | )
|Net cash (used in) provided by operating
      activities                     |  | (78,007 | ) |  | (26,877 | ) |  | (120,825     | )
|                                                                              |  |         |   |  |         |   |  |              |  
|CASH FLOWS USED IN INVESTING ACTIVITY                                         |  |         |   |  |         |   |  |              |  
|                                                                              |  |         |   |  |         |   |  |              |  
|Net proceeds from sale of petroleum and natural
      gas resource properties |  | -       |   |  | 50,000  |   |  | -            |  
|                                                                              |  |         |   |  |         |   |  |              |  
|CASH FLOWS PROVIDED BY FINANCING ACTIVITY                                     |  |         |   |  |         |   |  |              |  
|                                                                              |  |         |   |  |         |   |  |              |  
|Net proceeds from debt issuance                                               |  | 46,000  |   |  | -       |   |  | 46,000       |  
|Net proceeds from issuance common shares                                      |  | 13,318  |   |  | -       |   |  | 13,318       |  
|Share subscription received                                                   |  | 4,139   |   |  |         |   |  | 4,139        |  
|Net cash provided by financing activities                                     |  | 63,457  |   |  | -       |   |  | 63,457       |  
|                                                                              |  |         |   |  |         |   |  |              |  
|NET (DECREASE) INCREASE IN CASH AND                                           |  |         |   |  |         |   |  |              |  
|CASH EQUIVALENTS                                                              |  | (14,550 | ) |  | 23,123  |   |  | (61,507      | )
|                                                                              |  |         |   |  |         |   |  |              |  
|CASH AND CASH EQUIVALENTS  BEGINNING OF
      PERIOD                         |  | 25,183  |   |  | 2,060   |   |  | 57,368       |  
|CASH AND CASH EQUIVALENTS - END OF PERIOD                                     |  | 10,633  |   |  | 25,183  |   |  | 10,633       |  

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF
THESEFINANCIAL STATEMENTS.

---

F-7

GLOBAL ENERGY INC.(A DEVELOPMENT STAGE COMPANY)NOTES TO
FINANCIAL STATEMENTSFOR THE YEARS ENDED DECEMBER 31, 2006 AND
2005(EXPRESSED IN U.S. DOLLARS)

|1. | NATURE OF BUSINESS AND GOING
CONCERN
|-- | ------------------------------------

Global Energy Inc. (the "Company") was organized on February
16, 1999, under the laws of the State of Nevada, U.S.A. The Company originally
planned to market plastic cards with embedded microprocessors ("Smart Cards").
However, the Company was unable to complete negotiations to market Smart Cards.
By agreement dated June 5, 2003, the Company purchased petroleum and natural gas
producing properties and commenced operations as an independent energy company
engaged in the acquisition, exploration and development of crude oil and natural
gas properties in the United States. The properties consisted primarily of a
6.5% working interest in an oil and gas lease located in Wharton County Texas, a
12.5% working interest in an oil and gas lease located in Live Oak County Texas,
and certain other assets ancillary to these oil and gas lease interests.

Effective July 1, 2005, the Company sold all of its oil and gas
assets for the sum of $50,000. The sale of these oil and gas assets was
completed on July 6, 2005 with a resulting gain on disposition of $38,411. The
income and expense relating to these operations have been classified as
discontinued operations in the Statement of Operations for all comparative
periods (Note 3).

Subsequent to the disposal of the Companys principal operation
 petroleum and natural gas resource properties, the Company is considered as a
development stage enterprise since July 7, 2005 as defined by Statement of
Financial Accounting Standards (SFAS) No. 7  Accounting and Reporting by
Development Stage Enterprise. The accompany financial statements has disclosed
cumulative amounts since inception (July 7, 2005) of becoming a development
stage enterprise, in the statements of operations and cash flows.

As of December 31, 2006, the Company had negative working
capital of $45,386, an accumulated deficit of $172,343 and has not yet located a
profitable business operation, thereby raising substantial doubt about the
Companys ability to continue as a going concern. These financial statements
have been prepared in accordance with generally accepted accounting principles
applicable to a going concern which assumes the Company will realize its assets
and discharge its liabilities in the normal course of business. Realizable
values may be substantially different from the carrying values shown in the
financial statements should the Company be unable to continue as a going
concern. Management intends to raise additional equity financing to fund ongoing
operations and settle its liabilities as they come due. However, there are no
assurances that such financings will be completed. Failure to continue as a
going concern would require restatement of assets and liabilities on a
liquidation basis, which could differ materially from the going concern
basis.

|2. | SIGNIFICANT ACCOUNTING POLICIES
|-- | -------------------------------
|   |                                
|   | (a)                            
|   |                                
|   |                                

---

F-8

GLOBAL ENERGY INC.(A DEVELOPMENT STAGE COMPANY)NOTES TO
FINANCIAL STATEMENTSFOR THE YEARS ENDED DECEMBER 31, 2006 AND
2005(EXPRESSED IN U.S. DOLLARS)

|2. | SIGNIFICANT ACCOUNTING POLICIES (contd)
|-- | ----------------------------------------
|   |                                         
|   | (b)                                     
|   |                                         
|   |                                         
|   |                                         
|   | (c)                                     
|   |                                         
|   |                                         
|   |                                         
|   | (d)                                     
|   |                                         
|   |                                         
|   |                                         
|   | (e)                                     
|   |                                         
|   |                                         
|   |                                         
|   | (f)                                     
|   |                                         
|   |                                         
|   |                                         
|   |                                         
|   |                                         
|   | (g)                                     
|   |                                         
|   |                                         
|   |                                         
|   |                                         

---

F-9

GLOBAL ENERGY INC.(A DEVELOPMENT STAGE COMPANY)NOTES TO
FINANCIAL STATEMENTSFOR THE YEARS ENDED DECEMBER 31, 2006 AND
2005(EXPRESSED IN U.S. DOLLARS)

|2. | SIGNIFICANT ACCOUNTING POLICIES (contd) (g) Petroleum
      and Natural Gas Interests (contd)
|-- | -----------------------------------------------------------------------------------------------

In applying the full cost method, the
Company performed a ceiling test whereby the carrying value of petroleum and
natural gas interests and production equipment, net of deferred income taxes,
was compared periodically to an estimate of future net cash flow from the
production of proven reserves. Net cash flow was estimated using period end
prices, less estimated future expenditures to be incurred in developing and
producing the proved reserves and income taxes. Should this comparison indicate
an excess carrying value, the excess would be charged against earnings.

Prior the disposition of the oil and
gas assets, substantially all of the Company's petroleum and natural gas
exploration, development and production activities were conducted jointly with
others and, accordingly, the accounts reflected the Company's proportionate
interest in such activities.

|(h) | Impairment                                                                                                                                                                                                                                                                                                                                                                                                                              
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    | The Company has adopted SFAS 144, "ACCOUNTING FOR THE
      IMPAIRMENT OR DISPOSAL OF LONG- LIVED ASSETS" which requires that
      long-lived assets to be held and used be reviewed for impairment whenever
      events or changes in circumstances indicate that the carrying amount of an
      asset may not be recoverable. SFAS 144 established a single accounting
      model for long-lived assets to be disposed of by sale.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                         
|(i) | Fair Value of Financial
Instruments                                                                                                                                                                                                                                                                                                                                                                                                     

Fair value estimates of financial
instruments are made at a specific point in time, based on relevant information
about financial markets and specific financial instruments. As these estimates
are subjective in nature, involving uncertainties and matters of significant
judgment, they cannot be determined with precision. Changes in assumptions can
significantly affect estimated fair values.

Fair value approximates the amounts
reflected in the financial statements for cash, amounts receivable and accounts
payable. Management is of the opinion that the Company is not exposed to
significant interest, credit or currency risks arising from these financial
instruments.

|(j) | Income Taxes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    | The Company has adopted SFAS 109, "ACCOUNTING FOR INCOME
      TAXES", which requires the Company to recognize deferred tax liabilities
      and assets for the expected future tax consequences of events that have
      been recognized in the Company's financial statements or tax returns using
      the liability method. Under this method, deferred tax liabilities and
      assets are determined based on the temporary differences between the
      financial statement and tax bases of assets and liabilities using enacted
      tax rates in effect in the years in which the differences are expected to
      reverse.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|(k) | Earnings (Loss) Per Share                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    | Net earnings (loss) per share is provided in accordance
      with SFAS 128, "EARNINGS PER SHARE". Basic earnings (loss) per share is
      computed by dividing losses available to common stockholders by the
      weighted average number of common shares outstanding during the period.
      Diluted earnings (loss) per share reflects per share amounts that would
      have resulted if dilutive common stock equivalents had been converted to
      common stock. As of December 31, 2006 and 2005, the Company has no
      dilutive common stock equivalents such as stock
options.                                          

---

F-10

GLOBAL ENERGY INC.(A DEVELOPMENT STAGE COMPANY)NOTES TO
FINANCIAL STATEMENTSFOR THE YEARS ENDED DECEMBER 31, 2006 AND
2005(EXPRESSED IN U.S. DOLLARS)

|2. | SIGNIFICANT ACCOUNTING POLICIES (contd)
|-- | ----------------------------------------
|   |                                         
|   | (l)                                     
|   |                                         
|   |                                         
|   |                                         
|   |                                         
|   |                                         
|   |                                         
|   |                                         
|   |                                         
|   |                                         

|(m) | Intangible Assets                                                                                                                                                                                                                                                                                                                                                           
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                             
|    | The Company has adopted SFAS 142, "GOODWILL AND OTHER
        INTANGIBLE ASSETS", which requires that goodwill and intangible assets
        with indefinite life are not amortized but rather tested at least annually
        for impairment. Intangible assets with a definite life are required to
        be amortized over their useful life or estimated useful life.
|    |                                                                                                                                                                                                                                                                                                                                                                             
|    | The Company does not have any goodwill nor intangible
        assets with indefinite or definite life since inception.                                                                                                                                                                                                                                                      

---

F-11

GLOBAL ENERGY INC.(A DEVELOPMENT STAGE COMPANY)NOTES TO
FINANCIAL STATEMENTSFOR THE YEARS ENDED DECEMBER 31, 2006 AND
2005(EXPRESSED IN U.S. DOLLARS)

|2. | SIGNIFICANT ACCOUNTING POLICIES (contd)
|-- | ----------------------------------------
|   |                                         
|   | (n)                                     
|   |                                         
|   |                                         
|   |                                         
|   |                                         
|   |                                         
|   | (o)                                     
|   |                                         
|   |                                         
|   |                                         
|   | (p)                                     
|   |                                         
|   |                                         
|   |                                         
|   |                                         

---

F-12

GLOBAL ENERGY INC.(A DEVELOPMENT STAGE COMPANY)NOTES TO
FINANCIAL STATEMENTSFOR THE YEARS ENDED DECEMBER 31, 2006 AND
2005(EXPRESSED IN U.S. DOLLARS)

|3. | DISPOSAL OF PETROLEUM AND NATURAL GAS RESOURCE
      PROPERTIES                                                             
|-- | ----------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                             
|   | The following table summarizes the result of discontinued
      operations for the years ended December 31, 2006 and
  2005:



| |                                                            |   | 2006 |  |   | 2005   | 
| | ---------------------------------------------------------- | - | ---- |  | - | ------ | 
| |                                                            | $ |      |  | $ |        | 
| |                                                            |   |      |  |   |        | 
| | Revenue                                                    |   | -    |  |   | 42,631 | 
| | Income from discontinued operations                        |   |      |  |   |        | 
| | (net of tax)                                               |   | -    |  |   | 29,609 | 
| | Gain on disposal of oil and gas properties (net of tax)    |   | -    |  |   | 38,411 | 
| | Net income from discontinued operations
      (net of tax) |   | -    |  |   | 68,020 | 

|4. | PROMISSORY NOTE PAYABLE                                                                                                                                                                                                     
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                             
|   | On September 1, 2006, the Company issued a promissory
      note of $28,000 to a third party. The promissory note payable is
      unsecured, bearing interest rate at 3% per annum and due on
  demand.                    
|   |                                                                                                                                                                                                                             
|5. | DEMAND LOAN PAYABLE  RELATED PARTIES                                                                                                                                                                                       
|   |                                                                                                                                                                                                                             
|   | The Company borrowed a total sum of $18,000 from 4
      substantial shareholders of the Company on May 4, 2006, $4,500 from each.
      The demand loan payable is unsecured, non-interest bearing and due on
      demand.
|   |                                                                                                                                                                                                                             
|6. | STOCKHOLDERS EQUITY                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                             
|   | On October 24, 2006, the Company issued 1,331,764 common
      stock at $0.01 per share for a total proceeds of $13,318.                                                                                                    
|   |                                                                                                                                                                                                                             
|   | As at December 31, 2006, the Company received share
      subscription of $4,139 which was issued subsequent to the year end. (See
      Note 11)                                                                           
|   |                                                                                                                                                                                                                             
|7. | INCOME TAXES                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                             
|   | (a)                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                             

---

F-13

GLOBAL ENERGY INC.(A DEVELOPMENT STAGE COMPANY)NOTES TO
FINANCIAL STATEMENTSFOR THE YEARS ENDED DECEMBER 31, 2006 AND
2005(EXPRESSED IN U.S. DOLLARS)

|(b) | The tax effects of temporary differences that give rise
      to the Company's deferred tax asset (liability) are as
  follows:
|--- | -------------------------------------------------------------------------------------------------------------------------------

| |                        |   | 2006    |   |   | 2005    |  
| | ---------------------- | - | ------- | - | - | ------- | -
| |                        | $ |         |   | $ |         |  
| |                        |   |         |   |   |         |  
| | Tax loss carryforwards |   | 60,000  |   |   | 35,000  |  
| | Valuation allowance    |   | (60,000 | ) |   | (35,000 | )
| |                        |   | -       |   |   | -       |  

|8.  | RELATED PARTY TRANSACTIONS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    | During the year ended December 31, 2006, the Company was
      charged $19,144 (2005 - $8,973) for accounting and administration fees. In
      2006, the fees were paid to Jamco Capital partners Inc., a company
      controlled by the current President of the Company. In 2005, the fees were
      paid to by Chase Management Ltd., a company controlled by the former
      President of the Company. As of December 31, 2006, no amount remained
      unpaid by the Company for past fees and disbursements incurred on behalf
      of the Company.                                                                                                                                                                                                                                                                                                                                                                                                                          
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|9.  | SEGMENT REPORTING                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    | In June 1997, SFAS 131, "DISCLOSURE ABOUT SEGMENTS OF AN
      ENTERPRISE AND RELATED INFORMATION", was issued. Operating segments, as
      defined in the pronouncement, are components of an enterprise about which
      separate financial information is available and that are evaluated
      regularly by the Company in deciding how to allocate resources and in
      assessing performance. The financial information is required to be
      reported on the basis that is used internally for evaluating segment
      performance and deciding how to allocate resources to segments.                                                                                                                                                                                                                                                                                                                                                                                    
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    | Prior to the disposition of the oil and gas assets, the
      Company had one reportable segment, the exploration and development of oil
      and gas properties. Due to the disposition of such properties, the results
      of operations related to these properties have been classified as relating
      to discontinued operations.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|10. | COMPREHENSIVE INCOME                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    | There are no adjustments necessary to the net income
      (loss) as presented in the accompanying statements of operations to derive
      comprehensive income in accordance with SFAS 130, Reporting Comprehensive
      Income.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|11. | SUBSEQUENT EVENTS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    | On February 7, 2007, the Company issued a total of
      17,031,000 common shares at a price per share of $0.01 for aggregate
      consideration of $170,310 of which $40,910 was paid in cash and $129,400
      was paid via the issuance of notes payable having maturities ranging from
      90 days to one year. As at December 31, 2006, $4,139 of the proceeds had
      been collected and recorded as the share subscription received in the
      stockholders equity. The Company expects such funding to be sufficient to
      enable it to discharge certain of its existing liabilities and to fund its
      operations for the ensuing 6-9 months unless additional business
      investments are made thereby requiring additional funding. In addition, in
      February of 2007, the Company took steps to increase the number of
      authorized common shares from the existing 25 million to 250 million in
      contemplation of future equity financings.

---

|12. | COMMITMENTS AND CONTINGENCIES                                                                                                                                                                                                                                                                                                                                      
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                    
|    | The Company may be subject to various possible contingencies which are derived primarily from interpretations of federal and state laws and regulations affecting the oil and gas industry. Although management believes it has
complied with the various laws and regulations, new rulings and interpretations may require the Company to make future adjustments.

---

15

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

None.

ITEM 8A. CONTROLS AND PROCEDURES

As required by SEC rules, the Company has evaluated the effectiveness of the design and operation of its disclosure controls and procedures at the end of the period covered by this report. This evaluation was carried out under the supervision and
with the participation of the Company's management, including Mr. Christopher Kape, the Company's sole executive and financial officer.  Based on this evaluation, Mr. Kape has concluded that the design and operation of the Company's disclosure
controls and procedures are effective. There were no changes in the Company's internal control over financial reporting or in other factors that have materially affected, or are reasonably likely to materially affect, the Company's internal control
over financial reporting.

Disclosure controls and procedures are the Company's controls and other procedures that are designed to ensure that information required to be disclosed by the Company in the reports that its files or submits  under the Exchange Act is recorded,
processed, summarized and reported, within the time periods specified in the SEC's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed
by the Company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the Company's management, including its principal executive officer and principal financial officer, as appropriate, to allow timely
decisions regarding required disclosure.

ITEM 8B. OTHER INFORMATION

Not Applicable.

---

16

PART III

ITEM 9. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

|NAME             | AGE | POSITION                                                                                         
|---------------- | --- | -------------------------------------------------------------------------------------------------
|                 |     |                                                                                                  
|Christopher Kape | 33  | President, Chief Executive
      Officer, Treasurer, Secretary and director, since April 6, 2005.

Mr. Kape currently holds senior officer positions within a
several private companies engaged in online marketing and skin care activities.
Mr. Kape is also President and CEO of iGaming Corporation (IGA - TSX Venture).
Previously Mr. Kape has held a variety of positions including owner and
President of Interactive Classified Corporation, an online classified based
company that he successfully sold in 2004 after a buyout and 3 year operations
turnaround. From 2001 to March 2005, Mr. Kape was Chief Financial Officer of
Isee3d Inc. (ICG.H - TSX Venture). Mr. Kape holds a Bachelor of Arts in
Administrative and Commercial Studies (Finance and Economics) from the
University of Western Ontario and a Masters of Business Administration from the
John Molson School of Business (Concordia) of Montreal, Quebec. Mr. Kape
currently serves as an officer and director of the following other public
reporting company:

|NAMES OF REPORTING ISSUERS | POSITIONS HELD | MARKET | STARTING DATE    
|-------------------------- | -------------- | ------ | -----------------
|                           |                |        |                  
|iGaming Corporation        | Director       | TSXV   | December 20, 2005

LEGAL PROCEEDINGS

None of the Company's officers or directors, nor to the knowledge
  of the Company, any of the Company's control persons, has:

| | (1) | had any bankruptcy petition filed by or against any
      business of which such person was a general partner or executive officer
      either at the time of the bankruptcy or within two years prior to that
      time;                                                                                                   
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                               
| | (2) | been convicted in a criminal proceeding or is subject to
      a pending criminal proceeding (excluding traffic violations and other
      minor offenses);                                                                                                                                                                   
| |     |                                                                                                                                                                                                                                                                                                                               
| | (3) | been subject to any order, judgment, or decree, not
      subsequently reversed, suspended or vacated, of any court of competent
      jurisdiction, permanently or temporarily enjoining, barring, suspending or
      otherwise limiting his involvement in any type of business, securities or
      banking activities; or
| |     |                                                                                                                                                                                                                                                                                                                               
| | (4) | been found by a court of competent jurisdiction (in a
      civil action), the Securities and Exchange Commission or the Commodity
      Futures Trading Commission to have violated a federal or state securities
      or commodities law, where the judgment has not been reversed, suspended or
      vacated.            

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Mr. Kape became an officer and director of the Company on April
6, 2005. As such, he was required to file a Form 3 with the Securities and
Exchange Commission on or before April 15, 2005. Mr. Kape filed a Form 3 with
the Securities and Exchange Commission on April 8, 2005. Mr. Kape has never
owned any shares of the Company's common stock.

COMMITTEES

The Company does not have any audit, compensation, and
executive committees of its board of directors. Our sole director is serving as
the Company's audit committee. At this time, our sole director has determined
that he meets the requirements of an audit committee financial expert. Mr. Kape
is not considered "independent" as that term is defined in Rule 4200(a)(14) of
the NASD Rules.

---

17

CONFLICTS OF INTEREST

Mr. Kape is associated with other firms involved in a range of
business activities. Consequently, there are potential inherent conflicts of
interest in his acting as an officer and director of the Company. Insofar as Mr.
Kape is engaged in other business activities, management anticipates he will not
devote all of his time to the Company's affairs.

Mr. Kape is now and may in the future become a shareholder,
officer or director of other companies, which may be formed for the purpose of
engaging in business activities similar to the Company. Accordingly, additional
direct conflicts of interest may arise in the future with respect to his acting
on behalf of the Company or other entities. Moreover, additional conflicts of
interest may arise with respect to opportunities which come to the attention of
Mr. Kape in the performance of his duties or otherwise. Currently, the Company
does not have a right of first refusal pertaining to opportunities that come to
Mr. Kape's attention and may relate to the Company's business operations.

Mr. Kape is, so long as he is an officer or director of the
Company, subject to the restriction that all opportunities contemplated by the
Company's plan of operation which come to his attention, either in the
performance of their duties or in any other manner, will be considered
opportunities of, and be made available to the Company and the companies that he
is affiliated with on an equal basis. A breach of this requirement will be a
breach of the fiduciary duties of the officer or director. If the Company or the
companies with which the officer and director is affiliated both desire to take
advantage of an opportunity, then said officer and director would abstain from
negotiating and voting upon the opportunity. However, Mr. Kape may still
individually take advantage of opportunities if the Company should decline to do
so. Except as set forth above, the Company has not adopted any other conflict of
interest policy with respect to such transactions.

CODE OF ETHICS

The Company has not yet adopted a code of ethics that applies
to the Company's principal executive officers, principal financial officer,
principal accounting officer or controller, or persons performing similar
functions. Given the Company's current operations, management does not believe a
code of ethics is necessary at this stage of the Company's development.

ITEM 10. EXECUTIVE COMPENSATION

The following table sets forth certain compensation paid or
accrued by the Company to former and current officers during the fiscal years
ended December 31, 2006, 2005 and 2004.

Name & Principal Position
    Year Ending
    Annual Compensation
    Long Term CompensationAwards
    PayoutSalary
    Bonus
    Other annual Compen- sation
    Restricted Stock Awards ($)
    Securities Underlying Options /
      SARS (#)
    LT Payout
    All Other Compen- sationChristopher Kape (1) (President, Chief Executive
      Officer and Director)
    2006
    Nil
    Nil
    Nil
    Nil
    Nil
    Nil
    $19,080 (3)2005
    Nil
    Nil
    Nil
    Nil
    Nil
    Nil
    NilNick DeMare (2) (Former President, Chief
      Executive Officer, Secretary Treasurer and Director)
    2005
    Nil
    Nil
    Nil
    Nil
    Nil
    Nil
    $8,973 (4)2004
    Nil
    Nil
    Nil
    Nil
    Nil
    Nil
    $14,955(4)


| | (1) | Elected as Director of the Company and appointed
      President, Chief Executive Officer, Secretary and Treasurer of the Company
      on April 5, 2005.                                                                                                                                
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (2) | On September 30, 2002, Mr. DeMare was elected as Director
      of the Company and appointed President, Chief Executive Officer, Secretary
      and Treasurer of the Company. He resigned as Director, President, Chief
      Executive Officer, Secretary and Treasurer on July 6, 2006
| | (3) | Charged by Jamco Capital Partners Inc., a private company
      owned by Christopher Kape, for office, secretarial and accounting
      services.                                                                                                                                        

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18

| | (4) | Charged by Chase Management Ltd., a private company
        owned by Nick Demare, for office, secretarial and accounting services.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------

SUMMARY COMPENSATION

Name and Principal Position
      Year
      Salary ($)
      Bon us ($)
      Stock Awards ($)
      Option Awards ($)
      Non-Equity Incentive Plan Compensa- tion ($)
      Change in Pension Value and Nonqualified Deferred Compensation Earnings ($)
      All Other Compensa- tion ($)
      Total ($)(a)
      (b)
      (c)
      (d)
      (e)
      (f)
      (g)
      (h)
      (i)
      (j)Christopher 
        Kape (1)
        (President, 
        Chief 
        Executive 
        Officer and 
        Director)
      2006
      Nil
      Nil
      Nil
      Nil
      Nil
      Nil
      Nil
      Nil


(1) Elected as Director of the Company
and appointed President, Chief Executive Officer, Secretary and Treasurer of
Company on April 5, 2005.

GRANTS OF PLAN-BASED AWARDS

Name
      Grant Date
      Estimated Future
        Payout Under Non-Equity Incentive Plan Awards
      Estimated Future
        Payouts Under Equity Incentive Plan Awards
      All Other Stock Awards:Number of
        Shares of Stock or Units (#)
      All Other Option
        Awards: Number of Securities Underlying
        Options (#)
      Exercise or Base Price of Option Awards
        ($/Sh)Threshold ($)
      Target ($)
      Maximum($)
      **Threshold**
        (#)
      Target (#)
      Maximum (#)(a)
      (b)
      (c)
      (d)
      (e)
      (f)
      (g)
      (h)
      (i)
      (j)
      (k)Christopher 
        Kape (1)
        (President, 
        Chief 
        Executive 
        Officer and 
        Director)
      n/a
      Nil
      Nil
      Nil
      Nil
      Nil
      Nil
      Nil
      Nil
      Nil


(1) Elected as Director of the Company
and appointed President, Chief Executive Officer, Secretary and Treasurer of the
Company on April 5, 2005.

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19

OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END

Options Awards
      Stock AwardsName
      Number
        of Securities Underlying Unexercised Options (#) Exercisable
      Number
        of Securities Underlying Unexercised Options (#) Unexercisable
      Equity
        Incentive Plan Awards: Number of Securities Underlyi ng Unexercis ed Unearned Options (#)
      Option
        Exercise Pric e ($)
      OptionExpirat ion Date
      **Number**
        of Shares or Units of Stock That Have Not Vested (#)
      Market
        Value of Shares or Units of Stock That Have NotVested ($)
      Equity
        Incentive Plan Awards: Number of Unearned Shares, Units or Other **Rights That** Have Not Vested (#)
      Equity
        Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)(a)
      (b)
      (c)
      (d)
      (e)
      (f)
      (g)
      (h)
      (i)
      (j)Christopher 
        Kape (1)
        (President, 
        Chief 
        Executive 
        Officer and 
        Director)
      Nil
      Nil
      Nil
      Nil
      Nil
      Nil
      Nil
      Nil
      Nil


(1) Elected as Director of the Company
and appointed President, Chief Executive Officer, Secretary and Treasurer of the
Company on April 5, 2005.

OPTION EXERCISES AND STOCK VESTED

Options Awards
      Stock AwardsName
      Number of Shares Acquired on Exercise (#)
      Value Realized Upon Exercise ($)
      Number of Shares Acquired on Vesting (#)
      Value Realized on Vesting ($)(a)
      (b)
      (c)
      (d)
      (e)Christopher Kape 
        (1) 
        (President, Chief 
        Executive Officer 
        and Director)
      Nil
      Nil
      Nil
      Nil


(1) Elected as Director of the Company
and appointed President, Chief Executive Officer, Secretary and Treasurer of the
Company on April 5, 2005.

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20

PENSION BENEFITS

Name
      Plan Name
      Number of Years Credited Service (#)
      Present Value of Accumulated Benefit ($)
      Payments During Last Fiscal Year ($)(a)
      (b)
      (c)
      (d)
      (e)Christopher Kape 
        (1) 
        (President, Chief 
        Executive Officer 
        and Director)
      Nil
      Nil
      Nil
      Nil


(1) Elected as Director of the Company
and appointed President, Chief Executive Officer, Secretary and Treasurer of the
Company on April 5, 2005.

NONQUALIFIED DEFERRED COMPENSATION

Name
      Executive Contributions in Last Fiscal Year ($)
      Registrant Contributions in Last Fiscal Year ($)
      Aggregate Earnings in Last Fiscal Year ($)
      Aggregate Withdrawals/ Distributions ($)
      Aggregate Balance at Last Fiscal Year-End ($)(a)
      (b)
      (c)
      (d)
      (e)
      (f)Christopher 
        Kape (1)
        (President, 
        Chief 
        Executive 
        Officer and 
        Director)
      Nil
      Nil
      Nil
      Nil
      Nil


(1) Elected as Director of the Company
and appointed President, Chief Executive Officer, Secretary and Treasurer of the
Company on April 5, 2005.

DIRECTOR COMPENSATION

Name
      Fees Earned or Paid in Cash ($)
      Stock Awards ($)
      Option Awards ($)
      Non-Equity Incentive Plan Compensation ($)
      Change in Pension Value and Nonqualified Deferred Compensation Earnings
      All Other Compensation ($)
      Total ($)(a)
      (b)
      (c)
      (d)
      (e)
      (f)
      (g)
      (h)Christoph 
        er Kape (1)
        (President, 
        Chief 
        Executive 
        Officer 
        and 
        Director)
      Nil
      Nil
      Nil
      Nil
      Nil
      Nil
      Nil


(1) Elected as Director of the Company
and appointed President, Chief Executive Officer, Secretary and Treasurer of the
Company on April 5, 2005.

OPTION GRANTS IN LAST FISCAL YEAR

Since its inception, the Company has not granted any stock
options or stock appreciation rights.

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21

COMPENSATION OF DIRECTORS

None of the Directors of the Company received director's fees
or other compensation in fiscal 2006. However, Jamco Capital partners Inc., a
private company owned by Christopher Kape, received $19,080 for the provision of
office, secretarial and accounting services. In fiscal 2005, Chase Management
Ltd., a private company owned by Nick DeMare, provided similar services to the
Company. During fiscal 2006 and 2005, the Company was charged $19,144 and
$8,973, respectively. As at December 31, 2006, no balance remained unpaid.

EMPLOYMENT CONTRACTS

The Company does not currently have any employment agreements
in effect.

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

The following table sets forth, as of March 19, 2007,
information with respect to the beneficial ownership by each person who is known
to the Company to be the beneficial owner of more than 5% of the Company's
common shares and of Mr. Kape. All persons named below have sole voting and
investment power over their shares except as otherwise noted. The Company's
common stock is the only class of voting securities outstanding.

Name and Address of Beneficial Owner
    Beneficial Ownership
    Percentage of Class(1)Carrigain Investment Ltd. (2)Jasmine Court,
      Regent Street Belize City, Belize
    12,000,000
    52.1%Christopher Kape 2148 West 47thVancouver, B.C. Canada, V6M 2M7 President, Chief Executive
      Officer, Secretary, Treasurer and Director
    Nil
    NilOfficers and
      directors as a group
    Nil
    Nil


(1) Where persons listed on this table have the right to obtain
additional shares of common stock through the exercise of outstanding options or
warrants or through the conversion of debentures within 60 days of March 19,
2007, these additional shares are deemed to be outstanding for the purpose of
computing the percentage of common stock owned by such persons, but are not
deemed to be outstanding for the purpose of computing the percentage owned by
any other person. Based on 23,012,764 shares of common stock outstanding as of
March 19, 2007.

(2) Carrigain Investment Ltd. is controlled by Ariel Malik and
Zeev Bronfeld.

STOCK OPTION PLAN

As of the date of this report, the Company does not have a
stock option plan or any other compensation plans or contracts under which
equity securities of the Company may be issued to its directors, officers or
employees.

PENSION PLANS

The Company does not have a defined benefit pension plan that
provides annual benefits to any Executive Officers.

CHANGE OF CONTROL

As of the date of this report, there are no arrangements known
to the Company which may at a subsequent date result in a change of control of
the Company; however, a business combination involving the issuance of the
Company's common stock

---

22

will, in all likelihood, result in shareholders of a private
  company obtaining a controlling interest in the Company. Any such business combination
  may require the Company's current shareholders to sell or transfer all or a
  portion of their common stock and/or resign from their positions as officers
  and/or directors of the Company. The resulting change in control of the Company
  could result in removal of the current management, and a corresponding reduction
  in or elimination of their participation in the Company's future affairs.

On February 7, 2007 our company issued 12,000,000 shares to
Carrigain Investment Ltd., which comprised approximately 52.14% of our
outstanding shares. Carrigain Investment Ltd. is controlled by Ariel Malik and
Zeev Bronfeld of Israel.

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Other than as disclosed below, during the fiscal years ended
December 31, 2006 and 2005, none of the Company's present directors (or any
nominees for election as a director), officers or principal shareholders (as
listed in "Item 11. Security Ownership of Certain Beneficial Owners And
Management and Related Stockholders Matters"), nor any family member of the
foregoing, nor, to the best of the Company's information and belief, any of the
Company's former directors, senior officers or principal shareholders, nor any
family member of such former directors, officers or principal shareholders, has
or had any material interest, direct or indirect, in any transaction, or in any
proposed transaction which has materially affected or will materially affect the
Company.

During the fiscal years ended December 31, 2006 and 2005 the
Company was charged $19,144 and $8,973, respectively, by companies controlled by
the current and former Presidents of the Company respectively. The rates charged
by these companies are comparable with those charged in other arms length
relationships for the services being provided. At December 31, 2006, no amount
remained unpaid by the Company for past fees and disbursements incurred on
behalf of the Company.

ITEM 13. EXHIBITS

|REGULATION | EXHIBIT
|---------- | -------
|S-B NUMBER |        

|3.1  | Articles of Incorporation, as amended
        (2)                   
|---- | --------------------------------------------------------------------
|     |                                                                     
|3.2  | Bylaws (1)                                                          
|     |                                                                     
|10.1 | Assignment and Bill of Sale Agreement
        dated June 5, 2003 (3)
|     |                                                                     

|31.1* | Rule 13(a) 14 (a)/15(d)
      - 14(a) Certification of Principal Executive Officer and Principal Financial
      Office                                                                                
|----- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|      |                                                                                                                                                                                                        
|32.1* | Certification of Principal
      Executive Officer and Principal Financial Officer Pursuant to 18 U.S.C.
      Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act
      of 2002

|(1) | Incorporated by reference to the exhibits to the
      Company's Form 10-SB filed November 10, 1999, file number 000-
    28025.                                                                                    
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                     
|(2) | Incorporated by reference to the exhibits to the
      Company's quarterly report on Form 10-QSB/A Amendment No. 1 for the
      quarter ended March 31, 2003, filed on April 14, 2004, file number
      000-28025.
|    |                                                                                                                                                                                                                     
|(3) | Incorporated by reference to the exhibits to the
      Company's current report on Form 8-K dated June 5, 2003, filed June 19,
      2003, file number 000-28025.                                                   
|    |                                                                                                                                                                                                                     
|(4) | Incorporated by reference to the exhibits to the
      Company's current report on Form 8-K dated May 4, 2006, filed May 9, 2006,
      file number 000-28025.                                                      
|    |                                                                                                                                                                                                                     
|(5) | Incorporated by reference to the exhibits to the
      Company's current report on Form 8-K dated September 1, 2006, filed
      September 11, 2006, file number 000-28025.                                         

* Filed herewith.

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23

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

AUDIT FEES

For the fiscal years ended December 31, 2006 and 2005, expenses
in respect of services provided by the Company's principal accountants amounted
to $14,173 and $10,483, respectively, for the audit of the Company's annual
financial statements and review of financial statements included in the
Company's Form 10-QSB filings.

AUDIT-RELATED FEES

For the fiscal years ended December 31, 2006 and 2005, the
Company's principal accountant did not charge fees for assurance and related
services that were related to the performance of the audit or review of the
Company's financial statements outside of those fees disclosed above under
"Audit Fees".

TAX FEES

For the fiscal years ended December 31, 2006 and 2005, the
Company's tax advisors billed $1,206 and $789, respectively, for tax compliance,
tax advice, and tax planning services.

PRE-APPROVAL POLICIES AND PROCEDURES

Prior to engaging the Company's accountants to perform a
particular service, the Company's board of directors obtains an estimate for the
service to be performed. The board of directors, in accordance with procedures
for the Company, approved all of the services described above prior to the
services being performed.

PRINCIPAL ACCOUNTING FIRM HOURS

To the best of the Company's knowledge, the percentage of hours
expended on the Company's principal accountant's engagement to audit the
Company's financial statements for the fiscal year ended December 31, 2006, that
were attributed to work performed by persons other than the principal
accountant's full-time, permanent employees was less than or equal to 50%.

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

GLOBAL ENERGY
INC.Per:     /s/ CHRISTOPHER
KAPE    
----------------------     Christopher
Kape     President and
Director     Dated: March 19, 2007

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

Signatures:

/s/ CHRISTOPHER
KAPE---------------Christopher KapePresident and Director (Principal
ExecutiveOfficer, Principal Financial Officer, andPrincipal Accounting
Officer)

Dated: March 19, 2007

---