Golden Star Enterprises Ltd. - Annual Report: 2008 (Form 10-K)

United States Securities and Exchange Commission

Washington, D.C. 20549

FORM 10-K

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

FOR THE FISCAL YEAR ENDED DECEMBER 31, 2008

OR

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

FOR THE TRANSITION PERIOD FROM              TO            

COMMISSION FILE NUMBER 0-14278

GOLDEN SPIRIT ENTERPRISES LTD.

719 30TH AVENUE, POINTE CALUMET, QUEBEC, CANADA J0N 1G1

(514) 688-3289

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

COMMON STOCK    OTC:BB

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

Common Stock, Par Value $.0001

(Title of Class)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes [x]    No [ ]

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act.    Yes [ ]     No [x]

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

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not 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-K or any amendment to this Form 10-K. [x]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,”“accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer [ ]         

Accelerated filer [ ];         

Non-accelerated filer [ ]   (Do not check if a smaller reporting company)                Smaller reporting company [ x ]

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

As of December 31 2008, there were 18,042,024 shares of the issuer's $0.0001 par value common stock issued and outstanding.

Golden Spirit Enterprises Ltd.
FORM 10-K

For The Fiscal Year Ended December 31, 2008

INDEX

PART I

3

ITEM 1.    BUSINESS

3

ITEM 1A.  RISK FACTORS

10

ITEM 1B.  UNRESOLVED STAFF COMMENTS

10

ITEM 2.    PROPERTIES

10

ITEM 3.    LEGAL PROCEEDINGS

11

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

11

PART II

11

ITEM 5.    MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS, AND ISSUER PURCHASES OF

                     EQUITY SECURITIES

11

ITEM 6.    SELECTED FINANCIAL DATA

14

ITEM 7.    MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

15

ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

15

ITEM 8.    FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

16

ITEM 9.    CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS  ON ACCOUNTING AND FINANCIAL DISCLOSURE

30

ITEM 9A.  CONTROLS AND PROCEDURES EVALUATION OF  DISCLOSURE CONTROLS AND PROCEDURES

31

ITEM 9B.  OTHER INFORMATION

32

PART III

32

ITEM 10.    DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

32

ITEM 11.    EXECUTIVE COMPENSATION

33

ITEM 12.    SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER  

                        MATTERS

34

ITEM 13.    CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND  DIRECTOR INDEPENDENCE

35

ITEM 14.    PRINCIPAL ACCOUNTING FEES AND SERVICES

36

PART IV

36

ITEM 15.    EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

36

SIGNATURES

37

Note About Forward-Looking Statements

Certain statements in this report, other than purely historical information, including estimates, projections, statements relating to our business plans, objectives and expected operating results, and the assumptions upon which those statements are based, are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements generally are identified by the words “believe,” “project,” “expect,” “anticipate,” “estimate,” “intend,” “strategy,” “future,” “opportunity,” “plan,” “may,” “should,” “will,” “would,” “will be,” “will continue,” “will likely result,” and similar expressions. Forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties which may cause actual results to differ materially from the forward-looking statements. A detailed discussion of these and other risks and uncertainties that could cause actual results and events to differ materially from such forward-looking statements is included in the section entitled “Risk Factors” (refer to Part I, Item 1A). We undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise.

PART I

ITEM 1.    BUSINESS GENERAL

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

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

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

We were originally incorporated to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of Delaware. We were inactive from September 13, 1993, through November 1998, when we began the process of identifying potential business interests, including, but not necessarily limited to, interests in oil and natural gas producing properties. The Company will be involved in the development, production, financing and packaging of innovative film and television programming. In addition, the Company has signed an agreement with Eneco Industries to participate in a series of Municipal Solid Waste (garbage) fueled Recycling and Resource Recovery Plants.

3

OUR BUSINESS

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

We had limited success with both our internet activities and our mineral exploration and development activities. In mid 2005, management of the Company decided to focus on online gaming and in June 2006. On June 30, 2006, the Company changed its name and focus from gaming to reflect the Company’s plan to expand its operations to include the marketing of other products and venues. The Company will be involved in the development, production, financing and packaging of innovative film and television programming. On September 30, 2006, Congress passed the Unlawful Internet Gambling Enforcement Act of 2006.  The new proposed legislation prohibits banks, credit card companies, money transmitting businesses, and other third-party payment providers from knowingly processing online gaming transactions. Due to this ruling and the negative impact it would have on the Golden Spirit poker website, management decided to discontinue its online gaming operations in 2006.

The Company will be involved in the development, production, financing and packaging of innovative film and television programming. In addition, the Company has signed an agreement with Eneco Industries to participate in a series of Municipal Solid Waste (garbage) fueled Recycling and Resource Recovery Plants. The Agreement calls for a joint venture utilizing EnEco's expertise and technology to develop a municipal solid waste (garbage) recycling and biomass derived renewable energy facility. Golden Spirit and EnEco will build and operate a series of solid waste recycling and biomass derived renewable energy facility with greenhouse and algae subsystems that will utilize our Thermal Oxidation Process System (TOPS) technology to generate electricity for sale to the local power grid. Further details on the new Golden Spirit - Eneco project can be viewed on our website www.goldenspirit.ws.

Our Investment in Available for sale securities – related parties

Organa Gardens International Inc. (formerly Shotgun Energy Corporation)

The Company owns common shares of Organa Gardens International Inc. (“Organa”), a public company with directors and significant shareholders in common, that does not represent a position of control of or significant influence over Organa.  During 2007 the Company recorded an unrealized loss in the carrying value of its available-for-sale securities totalling $3,775, which was recorded as other comprehensive income (loss).  As at December 31, 2007, the Company owns 53,450 shares of Organa’s common stock with a market value of $7,216. During year ended December 31, 2008, the Company recorded an unrealized loss in the carrying value of its available-for-sale securities totalling $(5,612), which was recorded as other comprehensive income (loss).  As at December 31, 2008, the Company owns 53,450 shares of Organa’s common stock with a market value of $1,604 (2007 - $7,216).

The Company owns common shares of Legacy Wine & Spirits International Ltd. (“Legacy”), a public company with directors and significant shareholders in common, that does not represent a position of control of or significant influence over Legacy.  During 2007 the Company recorded an unrealized gain in the carrying value of its available-for-sale securities totalling $590,993. As at December 31, 2007, the Company owns 1,272,377 shares of Legacy’s common stock with a market value of $636,189. During the year ended December 31, 2008, the Company acquired 23,200 shares valued at $19,532 sold 99,400 shares resulting in a realized gain of $28,645(net of commissions of $2,132) and recorded an unrealized gain in the carrying value of its available-for-sale securities >totalling $385,314, which was recorded as other comprehensive income.  As at December 31, 2008, the Company owns 1,196,177 shares of Legacy’s common stock with a market value of $980,864. (2007 - $636,188).

Available for sale securities – related parties include the following:

4

FILM PRODUCTION & DEVELOPMENT SECTOR

Film Projects in Post Production

“TALES OF RAIN AND MAGIC” – is currently in post-production

Synopsis:

Misty lives with her opera singer grandmother and her orphaned cousin Rain in a charming small town along the banks of a river. Sent by her parents at an early age to study Sichuanese opera with her grandmother, Misty enjoys an idyllic and carefree childhood. At the age of four, she learns that her mother died while taking photographs of a mountain known as “Goddess Peak”, which begins Misty’s fascination with the legend of the same name. She and her cousin Rain spend many happy hours exploring a nearby cave and hoping for a glimpse of the goddess said to inhabit it. Several years later, Misty is distraught to learn of her father’s remarriage. She returns to the cave but instead of finding the goddess, she runs into her great-uncle, who happens to be in the cave taking photographs.  Great-uncle begins teaching Misty the art of photography, just as he taught her mother many years before. Photography brings Misty closer to the memory of her mother, and she soon develops a passion for taking photos.

Grandmother’s favorite student is a lovely young girl named Spring. Spring is an aspiring opera singer and an admirer of Misty’s older cousin Rain. As Misty reaches adolescence and begins experiencing physical and emotional changes, she also becomes aware of the blossoming romance between Rain and Spring. This presents a problem, for Misty is also secretly in love with her cousin Rain. Her jealously leads her to snap a photo of Spring and Rain in a very compromising position and post it for everyone in the village to see. This act leads to a series of unforeseen consequences that will change Misty’s life forever...With its stories of wind and water, rain and magic, love and loss, the film unfolds like a charming fairytale.

The Company is pleased to reports that its Reception Gala and World Premiere Screening of the Chinese Feature Film “Tales of Rain and Magic” was a  success, raising over $8,000 CDN for the Greater Vancouver Food Bank Society. The film played to a full capacity audience with standing room only left. The film received an enthusiastic round of applause and overwhelming accolades at the end with many of the guests inquiring as to when it will be in wide release. “Tales of Rain and Magic” was also well received when it was recently shown at the Shanghai, Moscow, and Rhode Island Film Festivals.

The Company has acquired from Beijing Dadu Sunshine Film & Culture Co. Ltd., the exclusive distribution rights worldwide, except for Asia, for the film “Tales of Rain and Magic”. Under the terms of the License Agreement dated March 23, 2007, the Company will receive twenty-five (25) percent interest of the gross receipts earned from sales in those countries.

As at December 31, 2008, the Company is seeking various avenues to distribute this film

As of December 31, 2008, due to uncertainty of realization, the Company has written down this project to a value of  $Nil. (2007 - $28,535)

Film Productions in Progress

“THE CABIN” – is currently in pre-production.

The Company will act as Distributor for this high energy horror film about five beautiful university students who decide to spend a “girls only” weekend at a remote picturesque rustic cabin only to learn that there is an evil entity lurking in the Cabin that wants them to stay forever and does not intend for them to leave alive.

Synopsis:

The ad simply read; “The perfect place. Rustic 19^th century log cabin with luxurious 21^st century amenities. Historic location. Details upon request.” Josie knew right away that this was, as the ad read, the perfect place for the Delta Phi Sister annual study week retreat. A bit unsettling that the ad had mysteriously popped up in the Craig’s List ‘Vacation wanted’ section at the very moment Josie was ready to close the already thoroughly perused daily listings.

The friends decide to make it a ‘girls only’ getaway, and after some not so gentle persuading of their somewhat promiscuous friend Heather, they all agree and catch a ferry to New Haven Island off the coast of Maine. Unbeknownst to the group, Heather secretly informs her boyfriend and his Omega friends of the location of the remote cabin. On the ferry ride over, the girls meet a mysterious and slightly creepy old man who gives them a ‘token of protection’ against what he eerily refers to as ‘The Haunting’. He informs the girls that nearly two hundred years ago, an evil coven of witches were burned at the stake by the priests of the Christian church. Their bones were ferried over to New Haven Island and entrusted to a ‘Keeper’ who built a sanctified burial ground for the bones of the burnt witches and swore an oath of eternal secrecy and protection of the bones to the church. The cabin has, over the centuries, been believed to be the eternal battleground for a mutual and unholy vendetta between the witches and the Christian priests. Undaunted and skeptical, the girls decide to press on, determined that the old guy was more than just a little insane and that the idea of some clash of the spirits is just a little too far fetched. The “girls only” weekend is shortly crashed by the arrival of the Alpha Omega boys.  Amidst the steam of the hot tub truth or dare sessions, strip shooter games and secret midnight ‘girl swapping’, the group discovers a Ouija board amongst the board games left in the cabin and enter themselves into a dangerous game of black magic, revenge and blood sacrifice.   

5

The Company has signed an Agreement dated February 15, 2007 to represent “The Cabin”, a teen-oriented, horror/thriller feature film written by Canadian writers, Keir MacPherson and Kaelen Green. As distributor of the film, Golden Spirit will receive a fee of twenty-five percent (25%) from the gross amounts of all sales or distribution deals made internationally and twenty percent (20%) from the gross amounts of all sales or distribution deals made in the United States. If Golden Spirit decides to use a sub-distributor, sub-agent and/or sub-licensee to sell, license or distribute the Territory Rights to one or more distributors, then Golden Spirit will increase the distribution fee an additional ten percent (10%) provided that the owner gives prior written approval for such an increase.

As of December 31, 2008, due to uncertainty of realization, the Company has written down this project to a value of  $Nil. (2007 - $3,301)

“THE BROTHERHOOD OF THE PHOENIX” – is currently in pre-production.

The Company will act as distributor for this high concept action drama that deals with a CIA operative who is called upon to work with an infamous international arms dealer that he has been tracking for years, in an effort to rescue this daughter from an ultra-radical terrorist group who are demanding to be given the secret plans for a biological weapon of mass distribution in exchange for her freedom.

Synopsis:

When Sabella Phoenix Zahra, the only daughter of infamous, international arms dealer Asim-Abdul Zahra is kidnapped by an ultra-radical terrorist group known as Black Fist, he realizes he has only two choices; give the terrorists the secret plans for a biological weapon of mass destruction that they plan to unleash on the United States and Britain or try and enlist the help of CIA agent Arlen Atkinson, the very man who’s been trying to bring him to justice for a decade.

Arlen is woken in the middle of the night by a phone call from Asim, who informs him of the situation, suggesting the two work together in an effort to rescue his daughter while at the same time, eliminating a very real threat to the safety of the United States. Arlen is torn between his desire to bring down this dangerous arms dealer and his sworn duty to faithfully protect the sovereignty of his country from a potentially catastrophic biological attack.  Choosing the lesser of two evils, Arlen contacts longtime friend, Captain Cole Herrick, commander of the ultra-secret anti-terrorism group known as The Nine.

Captain Herrick begins assembling his group of nine operatives from their various assignments around the world and begins the planning and training operations for a covert mission into the heavily fortified Indonesian jungle where Black Fist makes it’s headquarters. Having mixed feelings about his team being used to help an arms dealer who’s long been supplying the very weapons responsible for killing thousands world wide, including some of his own operatives, he informs his team that after the rescue of the girl and the disposal of Black Fist, they will bring Asim to justice.

The team penetrates the heavily guarded jungle fortress with very little resistance and is able to successfully retrieve Sabella quite easily… maybe a little too easily. On the way out, however, the team seems to be getting ambushed at every turn and it begins to become more and more apparent that there is a mole among The Nine working for Black Fist.  While deep inside enemy territory and Black Fist aware of their every move, Captain Herrick and The Nine must use every ounce of their training and instinct to get themselves and Sabella out alive. Rick and The Nine must use every ounce of their training and instinct to get themselves and Sabella out alive.  

The Company has signed an Agreement dated March 15, 2007  to represent “The Brotherhood of the Phoenix”, a high concept action drama feature film written by Canadian writers, Keir MacPherson, Kaelen Green and May Joan Liu.. 

As distributor of the film, Golden Spirit will receive a fee of twenty-five percent (25%) from the gross amounts of all sales or distribution deals made internationally and twenty percent (20%) from the gross amounts of all sales or distribution deals made in the United States. If Golden Spirit decides to use a sub-distributor, sub-agent and/or sub-licensee to sell, license or distribute the Territory Rights to one or more distributors, then Golden Spirit will increase the distribution fee an additional ten percent (10%) provided that the owner gives prior written approval for such an increase.

As of December 31, 2008, due to uncertainty of realization, the Company has written down this project to a value of  $Nil. (2007 - $2,942)

6

“AMAZING SUPER BUDDIES” – is currently in production.

The Company will act as the Producer and Distributor for a 3D Television Series for children known as “ASB: Power Force”. The entire first series will consist of one pilot and twenty-five episodes, each having a length of twenty-two minutes. The ASB: Power Force Series is intended for distribution in Video/DVD/Television markets worldwide.

Synopsis:

After saving their world from the crystal hunting space villain Gor Vandall and his ravaging robot army, the Power Force are granted permission to explore the Universe on a mission of “Knowledge, Peace and Good Times”, First stop on their incredible inter-galactic tour is Earth, where the Power Force learn all about the wonders of the World, one country per episode. But all is not what it seems... Little do the Power Force realize that their old nemesis and co-founder, Gor Vandall is still alive and on the hunt! Determined to destroy the order of the Power Force and reunite the lost piece of the “Crystal of the Ages”, Gor will stop at nothing to attain his objectives. Only their superior skills and teamwork can save the daring buddies for Gor and his “all powerful” knowledge vacuum as they explore the countries of Earth on their quest for knowledge, peace and good times. More information on the Series and its characters can be seen at www.amazingsuperbuddies.com.

The Company has signed an Agreement dated March 15, 2007 with Amazing Super Buddies Productions Inc. to act as the Producer and Distributor for a 3D Television Series for children known as “ASB: Power Force”. The entire first series will consist of one pilot and twenty-five episodes, each having a length of twenty-two minutes. In return for advancing $54,000 U.S. to produce the series, the Company will receive a guaranteed fifteen (15) percent interest of gross receipts earned worldwide, inclusive of all character licensing and merchandise sold from the “ASB: Power Force Series.” In addition, the Company was granted distribution rights for the “ASB: Power Force Series” and its characters under a joint arrangement with Industry Works Distribution, Inc. The Company and Industry Works Distribution, Inc. will be entitled to a joint distribution fee of fifteen (15) percent of gross receipts identified as sold by the Company and Industry Works Distribution, Inc., as well as five (5) percent of gross receipts sold by other distributors.

At June 30, 2008, the Company has been advised by ASB that all 26 episodes of the children’s series have been written and the Company is currently talking to various parties to distribute the series and has received serious interest from three parties. However, none of three parties have committed to distribuition as at December 31, 2008.

As of December 31, 2008, due to uncertainty of realization, the Company has written down this project to a nominal value of  $1. (2007 - $56,434)

“THE MISTS OF TIME” – is currently in pre-production.

The Company will be co-producing this love story to be filmed mainly in Shanghai, China in late 2007 or early 2008. This dramatic film is set during the Japanese occupation of Shanghai.

Synopsis:

Set in the 1930’s Shanghai, a train from Harbin steams in, with crowds of Russians and Chinese disembarking.  Amongst them a young ballet dancer named Ninushka.  At the same time a small boat from Hong Kong docks in the harbour.  Mathias, a Chinese-European, visibly unkept crosses the gangway and disappears into the crowd.

Ninushka, the dancer, and Mathias, the illusionist, begin working at La Laterne, a very large, notorious casino and dance club in Shanghai. The elegant Europeans and Chinese are a part of their prestigious clientele.  This is where Ninushka and Mathias meet and fall deeply in love.  

The bombing of Shanghai and the Japanese invasion destroy everything that Mathias and Ninushka have, arresting Mathias in the process.  This is the last time that Mathias and Ninushka see each other for a very long time. She continues to appear at La Laterne, refusing to accept his death as long as she hasn’t seen his body.  

To escape from the occupation, Ninushka decides to accept the offer from the Russian Consulate to return to the motherland. Sixty years pass and a train arrives in present day Shanghai Station from Moscow, a beautiful, older woman steps off the train. At the same time a boat from Hong Kong arrives in the harbour with Mathias, sixty years older, still dressed in white with his dark rimmed glasses. But this time someone is waiting for him, Ninushka. History is repeating itself.

As of December 31, 2008, the Company has spent $ Nil on this project.

7

SUMMARY:

       The $84,970 for acquired film rights consists of the following:

Cash payment for rights to Amazing Super Buddies (ASB)

         $ 54,000

Cash payment for rights to Tales of Rain and Magic (TRM)

         25,000

35 mm film reels and gala screening costs for TRM

                          3,535

Compact Discs and costs for trailer for ASB

         2,435

Total                                                                                                       $ 84,970

The $5,793 for films in progress consists of the following:

Cash payment for rights to The Cabin

                     $   1,000

Cash payment for rights to Brotherhood of the Phoenix

                          1,000

Filming of trailers for The Cabin and Brotherhood of the Phoenix

         3,793

Total

         $    5,793

The Company reviews the impairment issue at each quarter on its completed films and films in progress. The Company has letters of intent on hand with distribution partners for its films. The Company expected those assets to generate revenue in the fourth quarter of 2008. The Company received no firm commitments to distribute its films as of December 31, 2008, therefore, due to uncertainty of realization, the Company has written down the above projects to a nominal value of  $1

Ownership Interests.

The following chart specifies our stock ownership at December 31, 2008

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

Percent          

Entity

Nature of Ownership

Ownership

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

7.0%

Legacy Wine & Spirits Internatiional Ltd.

  1,196,977  Shares of Common Stock

0.3%

Organa Gardens Internationanl Inc.                             53,450  Shares of Common Stock

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

Employees.

We currently have 3 full-time employees. None of our employees are subject to any collective bargaining agreements.

8

Change in Directors

On January 24, 2008, the Company appointed of Jeff Scheive to the Board of Directors. On February 27, 2008 the Company issued 30,000 restricted common shares valued at $3,300 for his current services. In June of 2008, Jeff Scheive passed away and on June 3, 2008,his brother, Marc Scheive was appointed a Director.

On August 7, 2008, Janice Chow, a Chinese businesswoman was appointed a Director and on August 18, 2008, Jaclyn Cruz was appointed a Director.

On November 18, 2008, Christopher Scheive was appointed a Director.

On January 24, 2008, the Company accepted the resignation of Carlton Parfitt as Secretary, Treasurer, Director and Chief Financial Officer of the Company. On November 18, 2008, the Comapny accepted the resignation of Robert Klein as Secretary, Treasurer, Director and Chief Financial Officer of the Company. On November 18, 2008, the Comapny accepted the resignation of Marc Scheive as Secretary, Treasurer, Director and Chief Financial Officer of the Company. On November 18, 2008, the Registrant accepted the resignation of Janice Chow aa Director.   

None of the sbove resignations were motivated by a disagreement with the Company.

The current Directors are Christopher Scheive (President & CEO) and Jaclyn Cruz.(Secretary, Treasurer, & CFO)

The Company also announced that it has moved its Administrative Office to: 719 30th Ave, Pointe-Calumet ,Quebec JON 1G1.  Fax - 1 888 265 0498: Phone – 514- 688 3289.

Termination of agreement

The Company's due diligence process determined that Computainer Systems International Inc. ("CSII") has not been able to deliver the necessary and relevant documents pertaining to the Computainer Shuffle System technology. Hence, the Company has decided on January 25, 2008 that the Agreement dated October 29, 2007 between the Company and CSII is null and void.

Entering into a new agreement

The Company has signed an Agreement dated March 28, 2008 with EnEco Industries Ltd. ("EnEco"), a waste management company that has been in operation for fifteen years, to form an alliance for a renewable energy entity, where Golden Spirit will take majority interest in a series of Municipal Solid Waste (garbage) fueled Recycling and Resource Recovery Plants designed by EnEco. These plants will be in strategically located areas diverting tons of garbage from landfills and drastically reducing greenhouse gas outputs.

The Agreement calls for a joint venture utilizing EnEco's expertise and technology to develop a municipal solid waste (garbage) recycling and biomass derived renewable energy facility.

Golden Spirit and EnEco will build and operate a series of solid waste recycling and biomass derived renewable energy facility with greenhouse and algae subsystems that will utilize our Thermal Oxidation Process System (TOPS) technology to generate electricity for sale to the local power grid.

Further details on the new Golden Spirit - Eneco project can be viewed on our website www.goldenspirit.ws

ITEM 1A.    RISK FACTORS

Not applicable to smaller reporting companies

ITEM 1B.    UNRESOLVED STAFF COMMENTS

The Division of Investment Management has reviewed Golden Spirit’s filings and based on its review of our investment is available securities – related parties (See discussion above), needs clarification that Golden Spirit may fall into the category of “investment company” in Section 3(a)(1)(c) of the Investment Company Act of 1940.

The Company’s initial response to the staff was that it may rely on the exemption from the definition of “investment company” provided in Section 3(b)(1) of the Act because the current operations of the Company are in the film production and distribution industry, as well as the municipal solid waste (garbage) recycling industry. The staff is citing that we have not provided sufficient information or analysis for a proper evaluation whether we can rely on Section 3(b)(1) of the Act.

The Company has forwarded the staff comment letter to its legal counsel, who are currently researching the Investment Act of 1940 to provide a sufficient analysis for the Divcision of Investment Management. This response is expected to be filed in April, 2009.

ITEM 2.    PROPERTIES

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

Property

December 31, 2008

December 31, 2007

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

Cash

US $ 1,655

US $6,282

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

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

Our Facilities.  

We do not own any real property. Golden Spirit Enterprises Ltd. has leased 1250 sq. ft of office space from Holm Investments Ltd. at $2,050 per month for a period of 3 years and has been renewed for an additional 3 years at $2,050 per month. The current tenancy agreement began August 1, 2008 for a period of three years at $2,200 per month. Golden Spirit Enterprises Ltd.’s principal corporate offices are located at 719 30TH Avenue, Pointe Calumet, Quebec, Canada, J0N 1G1.

10

ITEM 3.    LEGAL PROCEEDINGS

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

On September 28, 2005, the Company received notice of a lawsuit from Thomas L. Franklin, a professional poker player formerly under contract with 4KE, for an alleged breach of contract for services rendered based on the original contract between the Company and 4KE dated July 18, 2005.  The Company, 4KE, and certain individuals, are being sued for $967,500, plus interest at the rate of 8% per annum from August 22, 2005, and all costs pertaining to this legal matter.  An attorney in Mississippi has been retained to defend this action and to apply for a dismissal of the case, based on Mississippi being the wrong jurisdiction for this suit and to defend the Company from the claims made by the plaintiff.  The court case was dismissed in favour of the Company in the second quarter of 2008.

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

None

PART II

ITEM 5.    MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS, AND ISSUER PURCHASES OF EQUITY SECURITIES

As at December 31, 2008 there were approximately 2,000 holders of the outstanding shares of the Golden Spirit Gaming Ltd.'s $0.0001 par value common stock.  Golden Spirit Gaming Ltd. participates in the OTC Bulletin Board Electronic Quotation System maintained by the National Association of Securities Dealers, Inc. On or about April 18, 2000, we were removed from the Over-the-Counter Bulletin Board ("OTCBB") for failure to comply with NASD Rule 6530, which requires any company listed on the OTCBB to be current in its public reporting obligations pursuant to the Securities and Exchange Act of 1934. The Company was re-instated on the OTCBB on October 7, 2002 under the symbol "TWOU". Commensurate with the name change and forward stock split, the Company also took the necessary steps to change its symbol and CUSIP Number. Therefore, the Registrant's CUSIP Number has changed from 9021014 20 7 to 3811194 10 9.  On October 8, 2003, being 6:30 A.M. EST, the Registrant's symbol changed from TWOU to "GSPM". On October 19, 2004, being 6:30 A.M. EST, the Registrant's symbol changed from GSPM to "GSML".

Effective at the opening on July 18^th, 2005 the Company’s symbol changed from GSML to “GSGL” and the CUSIP Number became 38119U 10 1.

Effective at the opening on June 30^th, 2006, the Company’s symbol changed from GSGL to “GSPT” and the CUSIP Number is now 38119N 10 7.

11

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

Quarter

High

Low

2006 First Quarter

$0.06

$0.03

2006 Second Quarter

$0.03

$0.01

2006 Third Quarter

$0.03

$0.02

2006 Fourth Quarter

$0.03

$0.01

2007 First Quarter

$0.18

$0.11

2007 Second Quarter

$0.10

$0.31

2007 Third Quarter

$0.10

$0.33

2007 Fourth Quarter

$0.20

$0.33

2008 First Quarter

$0.27

$0.10

2008 Second Quarter

$0.25

$0.14

2008 Third Quarter

$0.14

$0.04

2008 Fourth Quarter

$0.10

$0.02

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

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

Common Stock:

The Company is authorized to issue 500,000,000 shares of common stock, $.0001 par value, each share of common stock having equal rights and preferences, including voting privileges.  The shares of $.0001 par value common stock of the Company constitute equity interests in the Company entitling each shareholder to a pro rata share of cash distributions made to shareholders, including dividend payments.  The holders of the Company's common stock are entitled to one vote for each share of record on all matters to be voted on by shareholders.  There is no cumulative voting with respect to the election of directors of the Company or any other matter, with the result that the holders of more than 50% of the shares voted for the election of those directors can elect all of the Directors. The holders of the Company's common stock are entitled to receive dividends when, as and if declared by the Company's Board of Directors from funds legally available therefore; provided, however, that the cash dividends are at the sole discretion of the Company's Board of Directors. In the event of liquidation, dissolution or winding up of the Company, the holders of common stock are entitled to share ratably in all assets remaining available for distribution to them after payment of liabilities of the Company and after provision has been made for each class of stock, if any, having preference in relation to the Company's common stock.  Holders of the shares of Company's common stock have no conversion, preemptive or other subscription rights, and there are no redemption provisions applicable to the Company's common stock.  All of the outstanding shares of the Company's common stock are duly authorized, validly issued, fully paid and non-assessable. As of December 31, 2008, 18,842,024 shares of Golden Spirit Enterprises Ltd. common stock were issued and outstanding.

12

Legacy Mining Ltd. Stock Transfer.  

On August 16, 1999, we issued to each of our shareholders entitled to receive dividends, one (1) share of Legacy Mining Ltd.’s common stock for every eight (8) shares of our common stock held by the shareholder.  We issued a total of 2,199,779 shares of Legacy Mining Ltd.’s common stock to our shareholders. These shares were subsequently reverse split on a 2:1 basis. The shares of Legacy Mining Ltd. began trading on the OTC:BB on October 30, 2007 under the symbol “LEYM”. On April 8, 2008, a Certificate of Amendment to its Articles of Incorporation was filed with the State of Nevada changing the name to Legacy Wine & Spirits International Ltd. Effective at the opening of business on May 27, 2008, the symbol changed from LEYM to “LWSP”.

(1)

2008 Stock Transactions

             During the year ended December 31, 2008:

(a)

On February 27, 2008 the Company issued 30,000 restricted common shares valued at $3,300 to a director for his current services

(b)

On June 18, 2008 the Company issued 25,000 restricted common shares valued at $3,500 to a consultant for his current services

(c)

820,730 incentive stock options were exercised at $0.10 per share for proceeds of $82,073.

(d)

On September 16, 2008 the Company issued 25,000 restricted common shares valued at $1,000 to a director for her current services

(2)

2007 Stock Transactions

During the year ended December 31, 2007, the Company issued:

  (a)

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

  (b)

1,810,000 post reverse-split options were exercised pursuant to the Company’s 2005 and 2006 Stock Incentive and  Option Plans, were exercised at $0.09 and $0.10 per share for cash proceeds of $171,400.

  (c)

225,000 post reverse-split shares were issued pursuant to a Private Placement Agreement, for cash proceeds of  $55,000.

  (d)

7,500 post reverse-split shares were issued for consulting services with a fair value of $2,250.

  (e)   200,000 restricted common shares valued at $36,000 were issued pursuant to a prepaid services agreement

 (3)

 2008 - Stock Options

             During the year ended December 31, 2008, the Company did not grant any stock options to directors, employees or consultants.

The Company’s stock option activity  is as follows:

13

 (4)       2007 - Stock Options

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

During 2007, the Company granted a total of 3,800,000 post reverse split, 5 year common stock options at an exercise prices ranging from $0.10 per share.  The Company recognized stock-based   compensation of $228,000 in accordance with SFAS 123R which represented the fair value of stock   options granted to consultants in exchange for services rendered to the Company.

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

ITEM 6.    SELECTED FINANCIAL DATA

FINANCIAL HIGHLIGHTS

14

ITEM 7.    MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

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

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

.

Liquidity and Capital Resources.

For the year ended December 31, 2008, we had total assets of $1,015,455, compared to total assets in 2007 of $740,556. This includes a cash balance of $1,655, compared to $6,282 in 2007. We have available for sale securities with a fair value of $982,468 as at December 31, 2008, Film production & Development Costs of $1 and Furniture and Equipment of $Nil.

At December 31, 2008, we had current liabilities of $324,635, which was represented by accounts payable and accrued liabilities of $43,155, due to Organa Gardens International Inc. of 32,747, and $248,733 due to related parties. At December 31, 2007 we had current liabilities of $349,054. The decrease in liabilities was essentially due to an decrease in amounts payable to Organa Gardens Internationanl Inc..  At December 31, 2008, we had a working capital deficiency of $(322,980) (2007 - $(342,772)).

Results of Operations

We realized revenue in 2008 of $Nil (2007- $ 43) and other income ot $28,645 (2007 - $34,424) as the result of a gain on the sale of securities of a related party. In prior years, our revenues from prior businesses totaled $167,406.  During the year ended December 31, 2008 our loss was $245,550 (2006 - $422,958). This decrease in loss was due to a decrease in consulting fees, and stock based compensation expenses.

From inception to December 31, 2008, we have incurred cumulative net losses of $16,752,561 resulting primarily from a write-down and equity loss in Organa Gardens International Inc. (a related party) of $1,707,581, a   $600,000 property option loss as a recorded value of certain restricted shares issued to Legacy Wine & Spirits International Ltd. (a related party – see our Investment in Available for sale securities (b) Legacy Wine & Spirits International Ltd. above) and  general and administrative expenses of $15,392,784, the majority of which is made up of consulting fees and stock based compensation expense totaling $7,385,085.

The cash and equivalents constitute our present internal sources of liquidity. Because we are not generating any significant revenues, our only external source of liquidity is the sale of our capital stock and any advances from officers, directors or shareholders.

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

-payment of increased operating expenses, and further implementation of  film industry business strategies.

-payment of undetermined expenses relating to the Eneco venture

No assurance can be given, however, that we will have access to the capital markets in the future, or that financing will be available on acceptable terms to satisfy our cash requirements needed to implement our business strategies. Our inability to access the capital markets or obtain acceptable financing could have a material adverse effect on our results of operations and financial condition and could severely threaten our ability to operate as a going concern. Our forecast of the period of time through which our financial resources will be adequate to support our operations is a forward-looking statement that involves risks and uncertainties, and actual results could vary as a result of a number of factors.

Our Plan of Operation for the Next 12 Months.  We anticipate that we will need to raise additional capital within the next 12 months in order to continue as a going concern.  Anticipated revenues for the first quarter of 2008 are not expected to be significant.   Therefore, additional capital may be raised through additional public or private financings, as well as borrowings and other resources.  To the extent that additional capital is raised through the sale of equity or equity-related securities, the issuance of such securities could result in dilution of our stockholders.  There can be no assurance that additional funding will be available on favorable terms, if at all.  If adequate funds are not available within the next 12 months, we may be required to curtail our operations significantly or to obtain funds through entering into arrangements with collaborative partners or others that may require us to relinquish rights to certain of our assets that we would not otherwise relinquish.

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

ITEM 7A.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Securities held in our equity and other investments portfolio and equity derivatives are subject to price risk, and generally are not hedged.

15

ITEM 8.    FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders

Golden Spirit Enterprises Ltd.

Quebec, Canada

We have audited the accompanying consolidated balance sheets of Golden Spirit Enterprises Ltd. (a development stage company) as of December 31, 2008 and 2007, and the related consolidated statements of operations, stockholders’ equity (deficit), and cash flows for the years ended December 31, 2008 and 2007 and for the cumulative period from September 13, 1998 (inception) to December 31, 2008.  These financial statements are the responsibility of the Company’s management.  Our responsibility is to express an opinion on these financial statements based on our audits.

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

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Golden Spirit Enterprises Ltd. as of December 31, 2008 and 2007, and the results of its activities and cash flows for the years ended December 31, 2008 and 2007and for the cumulative period from September 13, 1993 (inception) to December 31, 2008 in conformity with accounting principles generally accepted in the United States.

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

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

L.L. Bradford & Company, LLC

April 15, 2009

Las Vegas, Nevada

16

GOLDEN SPIRIT ENTERPRISES LTD.

( (A development stage company)

CONSOLIDATED BALANCE SHEETS

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

17

GOLDEN SPIRIT ENTERPRISES LTD.

(A development stage company)

CONSOLIDATED STATEMENTS OF OPERATIONS

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

18

19

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

.

20

GOLDEN SPIRIT ENTERPRISES LTD.

 (A development stage company)

CONSOLIDATED STATEMENTS OF CASH FLOWS

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

21

GOLDEN SPIRIT ENTERPRISES LTD.

 (A development stage company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 – NATURE OF OPERATIONS AND BASIS OF PRESENTATION

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

The consolidated financial statements have been prepared on the basis of a going concern which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.  The Company has incurred losses since inception of $17,574,507 and at December 31, 2008 had a working capital deficiency of $322,980.  The Company and its subsidiaries are in the development stage and further significant losses are expected to be incurred in developing its business.  The recoverability of the carrying value of assets and the ability of the Company to continue as a going concern is dependent on raising additional capital and ultimately on generating future profitable operations.  There can be no assurance that the Company will be able to raise the necessary funds when needed to finance its ongoing costs. Given the Company’s limited operating history, lack of sales, and its operating losses, there can be no assurance that it will be able to achieve or maintain profitability. The Company intends to fund the marketing of its business with both equity financing and joint venture opportunities, although there are no assurances these opportunities will be successful. Accordingly, these factors raise substantial doubt regarding the ability of the Company to continue as a going concern.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation

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

Furniture and Equipment

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

Use of Estimates and Assumptions

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

.

22

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Fair Value of Financial Instruments

The Company’s financial instruments include cash, receivables, available-for-sale securities, amounts due from Legacy Wine & Spirits International Ltd., accounts payable and accrued liabilities, amounts due to Organa Gardens International Inc., and due to related parties.  Management believes the fair values of these financial instruments approximate their carrying values due to their short-term nature.  

The Company adopted SFAS No. 157 for all financial assets and liabilities and nonfinancial assets and liabilities that are recognized or disclosed at fair value in the financial statements on a recurring basis (at least annually).  SFAS No. 157 defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements.SFAS No. 157 defines fair value as the price that would be received upon sale of an asset or paid upon transfer of a liability in an orderly transaction between market participants at the measurement date and in the principal or most advantageous market for that asset or liability. The fair value should be calculated based on assumptions that market participants would use in pricing the asset or liability, not on assumptions specific to the entity. In addition, the fair value of liabilities should include consideration of non-performance risk including our own credit risk.

In addition to defining fair value, SFAS No. 157 expands the disclosure requirements around fair value and establishes a fair value hierarchy for valuation inputs. The hierarchy prioritizes the inputs into three levels based on the extent to which inputs used in measuring fair value are observable in the market.  Each fair value measurement is reported in one of the three levels which is determined by the lowest level input that is significant to the fair value measurement in its entirety. These levels are:

-       Level 1 – inputs are based upon unadjusted quoted prices for identical instruments traded in active markets.

-        Level 2 – inputs are based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

-        Level 3 – inputs are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. The fair values are therefore determined using model-based techniques that include option pricing models, discounted cash flow models, and similar techniques

In general, and where applicable, we use quoted prices in an active market for identical derivative assets and liabilities that are traded on exchanges. These derivative assets and liabilities are included in Level 1.

Foreign Currency Translation

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

Available For Sale Securities – Related Party

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

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Revenue Recognition

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

Income Taxes

The Company follows the liability method of accounting for income taxes as set forth in SFAS No. 109 “Accounting for Income Taxes”.  Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax balances.  Deferred tax assets and liabilities are measured using enacted or substantially enacted tax rates expected to apply to the taxable income in the years in which those differences are expected to be recovered or settled.  The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the date of enactment or substantive enactment.  A valuation allowance is provided for deferred tax assets if it is more likely than not that the Company will not realize the future benefit, or if the future deductibility is uncertain.On January 1, 2007, the Financial Accounting Standards Board (“FASB”) issued FASB Interpretation No. 48 (“FIN No. 48”), Accounting for Uncertainty in Income Taxes—an interpretation of FASB Statement No. 109 (“SFAS No. 109”). This interpretation introduces a new approach that changes how enterprises recognize and measure tax benefits associated with tax positions and how enterprises disclose uncertainties related to income tax positions in their financial statements. The company does not currently expect that adoption of FIN 48 will not have a material impact on the company’s consolidated results of operations and financial position.

Loss per Common Share

The Company computes loss per share in accordance with SFAS No. 128, “Earnings per Share” which requires presentation of both basic and diluted earnings per share on the face of the statement of operations.  Basic loss per share is computed by dividing net loss available to common shareholders by the weighted average number of outstanding common shares during the period.  Diluted loss per share gives effect to all dilutive potential common shares outstanding during the period including stock options, using the treasury method.  Dilutive loss per share excludes all potential common shares if their effect is anti-dilutive.  

Stock-Based Compensation

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

The Company adopted SFAS 123R using the modified-prospective-transition method.  Under this method, compensation cost recognized for the year ended December 31, 2007 includes: a) compensation cost for all share-based payments granted prior to, but not yet vested as of December 31, 2006, based on the grant-date fair value estimated in accordance with the original provisions of SFAS 123, and b) compensation cost for all share-based payments granted subsequent to December 31, 2005, based on the grant-date fair value estimated in accordance with the provisions of SFAS 123R.  In addition, deferred stock compensation related to non-vested options is required to be eliminated against additional paid-in capital upon adoption of SFAS 123R.  The results for the prior periods have not been restated.

23

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

The Company’s results of operations for the year ended December 31, 2007 were no different than if the Company had not adopted SFAS 123R because (i) all previously granted stock options had fully vested as at December 31, 2005, (ii) all stock options granted during the year ended December 31, 2007 were granted to consultants with the related fair value accounting consistent under SFAS 123 and SFAS 123R, and (iii) the Company did not modify any previously existing stock options.  As a result, no pro forma disclosure of the impact of adopting SFAS 123R has been provided for the year ended December 31, 2007.

The Company accounts for equity instruments issued in exchange for the receipt of goods or services from other than employees in accordance with SFAS No. 123 and the conclusions reached by the Emerging Issues Task Force (“EITF”) in Issue No. 96-18.  Costs are measured at the estimated fair market value of the consideration received or the estimated fair value of the equity instruments issued, whichever is more reliably measurable.  The value of equity instruments issued for consideration other than employee services is determined on the earliest of a performance commitment or completion of performance by the provider of goods or services as defined by EITF 96-18.

Recent Accounting Pronouncements

In February 2007, FASB issued SFAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities Including an Amendment of FASB Statement No. 115.” The fair value option permits entities to choose to measure eligible financial instruments at fair value at specified election dates. The entity will report unrealized gains and losses on the items on which it has elected the fair value option in earnings. SFAS 159 is effective beginning in fiscal year 2008. The Company is currently evaluating the effect of adopting SFAS 159, but does not expect it to have a material impact on its results of operations or financial condition.

In December 2007, the SEC issued Staff Accounting Bulletin (“SAB”) 110 Share-Based Payment. SAB 110 amends and replaces Question 6 of Section D.2 of Topic 14, “Share-Based Payment,” of the Staff Accounting Bulletin series. Question 6 of Section D.2 of Topic 14 expresses the views of the staff regarding the use of the “simplified” method in developing an estimate of the expected term of “plain vanilla” share options and allows usage of the “simplified” method for share option grants prior to December 31, 2007. SAB 110 allows public companies which do not have historically sufficient experience to provide a reasonable estimate to continue use of the “simplified” method for estimating the expected term of “plain vanilla” share option grants after December 31, 2007. SAB 110 is effective January 1, 2008. The Company currently uses the “simplified” method to estimate the expected term for share option grants as it does not have enough historical experience to provide a reasonable estimate. The Company will continue to use the “simplified” method until it has enough historical experience to provide a reasonable estimate of expected term in accordance with SAB 110. The Company does not expect SAB 110 will have a material impact on its balance sheets, statements of operations and cash flows.

In December 2007, the Financial Accounting Standards Board (“FASB”) issued Statement No. 141R, Business Combinations, and Statement No. 160, Non-controlling Interests in Consolidated Financial Statements, an amendment of ARB No. 51. Statement No. 141R modifies the accounting and disclosure requirements for business combinations and broadens the scope of the previous standard to apply to all transactions in which one entity obtains control over another business. Statement No. 160 establishes new accounting and reporting standards for non-controlling interests in subsidiaries. The Company will be required, if applicable, to apply the provisions of the new standards in the first quarter of 2009. Early adoption is not permitted for these new standards.

In March 2008, the Financial Accounting Standards Board, or FASB, issued SFAS No. 161, Disclosures about Derivative Instruments and Hedging Activities—an amendment of FASB Statement No. 133.  This standard requires companies to provide enhanced disclosures about (a) how and why an entity uses derivative instruments, (b) how derivative instruments and related hedged items are accounted for under Statement 133 and its related interpretations, and (c) how derivative instruments and related hedged items affect an entity’s financial position, financial performance, and cash flows. This Statement is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008, with early application encouraged. The Company has not yet adopted the provisions of SFAS No. 161, but does not expect it to have a material impact on its consolidated financial position, results of operations or cash flows.

 NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

In May 2008, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 162, “The Hierarchy of Generally Accepted Accounting Principles”.  SFAS No. 162 sets forth the level of authority to a given accounting pronouncement or document by category. Where there might be conflicting guidance between two categories, the more authoritative category will prevail. SFAS No. 162 will become effective 60 days after the SEC approves the PCAOB’s amendments to AU Section

411 of the AICPA Professional Standards. SFAS No. 162 has no effect on the Company’s financial position, statements of operations, or cash flows at this time.

In May 2008, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 163, “Accounting for Financial Guarantee Insurance Contracts-and interpretation of FASB Statement No. 60”.  SFAS No. 163 clarifies how Statement 60 applies to financial guarantee insurance contracts, including the recognition and measurement of premium revenue and claims liabilities. This statement also requires expanded disclosures about financial guarantee insurance contracts. SFAS No. 163 is effective for fiscal years beginning on or after December 15, 2008, and interim periods within those years. SFAS No. 163 has no effect on the Company’s financial position, statements of operations, or cash flows at this time.

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NOTE 3 – AVAILABLE–FOR-SALE SECURITIES – RELATED PARTIES

Organa Gardens International Inc. (formerly Shotgun Energy Corporation)

The Company owns common shares of Organa Gardens International Inc. (“Organa”), a public company with directors and significant shareholders in common, that does not represent a position of control of or significant influence over Organa.  During 2007 the Company recorded an unrealized loss in the carrying value of its available-for-sale securities totalling $3,775, which was recorded as other comprehensive income (loss).  As of December 31, 2007, the Company owns 53,450 shares of Organa’s common stock with a market value of $7,216. During year ended December 31, 2008, the Company recorded an unrealized loss in the carrying value of its available-for-sale securities totalling $(5,612), which was recorded as other comprehensive income (loss).  As at December 31, 2008, the Company owns 53,450 shares of Organa’s common stock with a market value of $1,604 (2007 - $7,216).

The Company owns common shares of Legacy Wine & Spirits International Ltd. (“Legacy”), a public company with directors and significant shareholders in common, that does not represent a position of control of or significant influence over Legacy.  During 2007 the Company recorded an unrealized gain in the carrying value of its available-for-sale securities totalling $590,993. As at December 31, 2007, the Company owns 1,272,377 shares of Legacy’s common stock with a market value of $636,189. During the year ended December 31, 2008, the Company acquired 23,200 shares valued at $19,532 sold 99,400 shares resulting in a realized gain of $28,645(net of commissions of $2,132) and recorded an unrealized gain in the carrying value of its available-for-sale securities totalling $385,317, which was recorded as other comprehensive income.  As of December 31, 2008, the Company owns 1,196,177 shares of Legacy’s common stock with a market value of $980,864. (2007 - $636,188).

Available for sale securities – related parties include the following:

NOTE 4 – FILM PRODUCITON AND DEVELOPMENT COSTS

Film Production and development costs at December 31, 2008 are made up as follows:

Acquired Films and Film Rights

The Company has acquired from Beijing Dadu Sunshine Film & Culture Co. Ltd., the exclusive distribution rights worldwide, except for Asia, for the film “Tales of Rain and Magic”.  Under the terms of the License Agreement dated March 23, 2007, the Company will receive twenty-five (25) percent interest of the gross receipts earned from sales in those countries. “Tales of Rain and Magic” portrays a young girl’s coming of age, and of the psycho-logical and physiological changes that she encounters along the way to adulthood. As of December 31, 2008, due to uncertainty of realization, the Company has written down this project to a value of  $Nil. (2007 - $28,535)

The Company has signed an Agreement dated March 15, 2007 with Amazing Super Buddies Productions Inc. to act as the Producer and Distributor for a 3D Television Series for children known as “ASB: Power Force”. In return for advancing $54,000 U.S. to produce the series, the Company will receive a guaranteed fifteen (15) percent interest of gross receipts earned worldwide, inclusive of all character licensing and merchandise sold from the “ASB: Power Force Series.” As of December 31, 2008, due to uncertainty of realization, the Company has written down this project to a nominal value of  $1. (2007 - $56,434)

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Films in progress

The Company has signed an Agreement dated February 15, 2007  to represent “The Cabin”, a teen-oriented, horror/thriller feature film . As distributor of the film, Golden Spirit will receive a fee of twenty-five percent (25%) from the gross amounts of all sales or distribution deals made internationally and twenty percent (20%) from the gross amounts of all sales or distribution deals made in the United States. As of December 31, 2008, due to uncertainty of realization, the Company has written down this project to a value of  $Nil. (2007 - $3,301)

The Company has signed an Agreement dated March 15, 2007  to represent “The Brotherhood of the Phoenix”, a high concept action drama feature film. As distributor of the film, Golden Spirit will receive a fee of twenty-five percent (25%) from the gross amounts of all sales or distribution deals made internationally and twenty percent (20%) from the gross amounts of all sales or distribution deals made in the United States. As of December 31, 2008, due to uncertainty of realization, the Company has written down this project to a value of  $Nil. (2007 - $2,942)

The Company has signed a Memorandum of Understanding dated March 23, 2007 with Pentafilms, SARL of France and Beijing Dadu Sunshine Film & Culture Co. Ltd. to co-produce and distribute a film called “The Mists of Time”. The financial contribution for production by each party, the final percentage of distribution rights, final casting and budget will be determined in the final agreement. As of December 31, 2008, the Company has spent $ Nil on this project.

NOTE 5 – OTHER PROPERTIES

The Company has signed an Agreement dated March 28, 2008 with EnEco Industries Ltd. ("EnEco"), a waste management company that has been in operation for fifteen years, to form an alliance for a renewable energy entity, where Golden Spirit will take majority interest in a series of Municipal Solid Waste (garbage) fueled Recycling and Resource Recovery Plants designed by EnEco. These plants will be in strategically located areas diverting tons of garbage from landfills and drastically reducing greenhouse gas outputs.

NOTE 6 – DEFERRED COMPENSATION

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

a)

On June 2, 2006, the Company entered into an agreement with a consultant, for a three-year term, whereby the consultant will provide consulting services to the Company (valued at $110,000) in exchange for 555,556 post reverse-split shares of the Company’s common stock.  To December 31, 2008, a total of $91,667 has been expensed. (2007 - $58,058)

b)

On June 2, 2006, the Company signed an agreement with an effective date of October 1, 2005 with a consultant, for a three-year term, whereby the consultant will provide services to the Company (valued at $82,500) in exchange for 416,667 post reverse-split shares of the Company’s common stock.  To December 31, 2008, a total of $68,750 has been expensed. (2007 - $61,875)

c)

On August 15, 2007, the Company entered into an agreement with Palisades Financial Ltd. (“Palisades”), a private company controlled by a significant shareholder, with a two-year term, whereby Palisades will provide investment-banking services to the Company (valued at $36,000) in exchange for 200,000 post reverse-split restricted shares of the Company’s common stock.  To December 31, 2008, a total of $24,750 has been expensed. ( 2007 - $6,750)

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NOTE 7 – CAPITAL STOCK

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

(1)

2008 Stock Transactions

.              During the year ended December 31, 2008:

-On February 27, 2008 the Company issued 30,000 restricted common shares valued at $3,300 to a director forhis current services

-On June 18, 2008 the Company issued 25,000 restricted common shares valued at $3,500 to a consultant for his current services

-820,730 incentive stock options were exercised at $0.10 per share for proceeds of $82,073.

-On September 16, 2008 the Company issued 25,000 restricted common shares valued at $1,000 to a director for her current services

NOTE 7 – CAPITAL STOCK (con’t.)

(2)

2007 Stock Transactions

During the year ended December 31, 2007, the Company issued:

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

1,810,000 post reverse-split options were exercised pursuant to the Company’s 2005 and 2006 Stock Incentive and  Option Plans, were exercised at $0.09 and $0.10 per share for cash proceeds of $171,400.

225,000 post reverse-split shares were issued pursuant to a Private Placement Agreement, for cash proceeds of $55,000.

7,500 post reverse-split shares were issued for consulting services with a fair value of $2,250.

              200,000 restricted common shares valued at $36,000 were issued pursuant to a prepaid services agreement

 (3)

2008 - Stock Options

              During the year ended December 31, 2008, the Company did not grant any stock options to directors, employees or

              consultants.

The Company’s stock option activity  is as follows:

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 (4)  2007 - Stock Options

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

During 2007, the Company granted a total of 3,800,000 post reverse split, 5 year common stock options at an exercise prices ranging from $0.10 per share.  The Company recognized stock-based compensation of $228,000 in accordance with SFAS 123R which represented the fair value of stock options granted to consultants in exchange for services rendered to the Company.

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

NOTE 8 – RELATED PARTY TRANSACTIONS

During 2008, companies controlled by significant shareholders earned $18,000 (2007 - $20,500) pursuant to investment banking services contracts (refer to Note 6).

During 2008, the Company paid $4,300 (2007 - $2,133) to two directors for management fees.

During 2008, the Company incurred expenses for office rent of $25,350 (2007 - $22,417) to a private company controlled by a significant shareholder.

At December 31, 2008, a total of $32,747 ( 2007 - $149,605) was owing to Organa Gardens International Inc., a public company with common directors and officers, for cash advances. This amount is unsecured, non-interest bearing and has no specified terms of repayment.

At December 31, 2008, a total of $31,331 (2007 – ($656)) was due from Legacy Wine & Spirits International Ltd. (“Legacy”), a company with common directors and officers, for cash advances. This amount is unsecured, non-interest bearing and has no specified terms of repayment.

The following amounts are due to related parties at:

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

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NOTE 9 – COMMITMENTS AND CONTINGENCIES

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

On September 28, 2005, the Company received notice of a lawsuit from Thomas L. Franklin, a professional poker player formerly under contract with 4KE, for an alleged breach of contract for services rendered based on the original contract between the Company and 4KE dated July 18, 2005.  The Company, 4KE, and certain individuals, are being sued for $967,500, plus interest at the rate of 8% per annum from August 22, 2005, and all costs pertaining to this legal matter.  An attorney in Mississippi has been retained to defend this action and to apply for a dismissal of the case, based on Mississippi being the wrong jurisdiction for this suit and to defend the Company from the claims made by the plaintiff.  The court case was dismissed in favour of the Company in the second quarter of 2008.

As of August 1, 2002, Golden Spirit Enterprises Ltd. has leased 1250 sq. ft of office space from Holm Investments Ltd. at $1,000 per month for a period of 3 years and has been renewed for an additional 3 years at $2,050 per month. The current tenancy agreement expires August 1, 2008 and it was renewed for an additional 3 years at $2,200.

NOTE 10 – INCOME TAXES

As of December 31, 2008, the Company had net operating loss carryforwards of approximately $17,575,000 that may be available to reduce future years' taxable income and will expire between the years 2009 - 2028.  Availability of tax losses is subject to change of ownership limitations under Internal Revenue Code 382.  Future tax benefits which may arise as a result of these losses have not been recognized in these financial statements, as their realization is determined not likely to occur and accordingly, the Company has recorded a valuation allowance for the deferred tax asset relating to these tax loss carryforwards.

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

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

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

During the year ended December 31, 2008:

The Company issued 30,000 restricted common shares valued at $ 3,300 to a Director

The Company issued 25,000 restricted common shares valued at $ 3,500 to a Consultant.

The Company issued 25,000 restricted common shares valued at $ 1,000 to a Director

The Company also received proceeds on the exercise of 845,730 stock options totalling $85,573.

During the year ended December 31, 2007:

The Company issued 200,000 restricted common shares with a fair value of $36,000 for prepaid consulting service agreements. The Company also received proceeds on the exercise of certain stock options totalling $186,700. The Company issued 7,500 restricted shares valued at $2,250 for a consulting services agreement. The Company issued 225,000 restricted shares for proceeds of $55,000 pursuant to two private placement agreements

ITEM 9.    CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

There have been no disagreements with Golden Spirit Minerals Ltd.'s auditors since formation of the company that require disclosure pursuant to Item 304 of Regulation S-B.

ITEM 9A.    CONTROLS AND PROCEDURES EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

We maintain a system of internal and disclosure controls and procedures designed to ensure that information required to be disclosed by us in the reports we file or submit under the Exchange Act, is recorded, processed, summarized and reported on a timely basis, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

Our management, under the supervision and with the participation of our Chief Executive Officer and our Chief Financial Officer, have evaluated the effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) or 15d-15(e)) under the Securities Exchange Act of 1934, as amended) as of the end of the period covered by this Annual Report. Based on such evaluation, our Chief Executive Officer and our Chief Financial Officer they have concluded that, as of the evaluation date, our disclosure controls and procedures are effective in alerting them on a timely basis to material information relating to us required to be included in our reports filed or submitted under the Exchange Act.

Internal Controls Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Our management, including our Chief Executive Officer and Chief Financial Officer, conducted an evaluation of the effectiveness of our internal control over financial reporting based on criteria established in the framework in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this evaluation, our management concluded that our internal control over financial reporting was effective as of December 31, 2007. Further, this evaluation did not identify any significant changes to our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

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

This Annual Report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our registered public accounting firm pursuant to temporary rules of the SEC that permit us to provide only management’s report in this Annual Report.

Changes In Internal Controls

No changes in the Company's internal controls over financial reporting occurred during the period endedDecember 31, 2008 that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.

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Code of Ethics

We intend to adopt a code of ethics in 2008 that applies to our principle executive officer, principal financial officer, principle accounting officer or controller, other persons  performing similar functions.  We intend to post the text of our code of ethics on our website in connection with our "Investor Relations" materials.  In addition, we intend to promptly disclose (1) the nature of any amendment to our code of ethics that applies to our principle executive officer principal  financial officer, principle accounting officer or controller, other persons  performing similar functions (2) the nature of any wavier, including an implicit wavier, from a provision of our code of ethics that is granted to one of these specific officers, the name of such person who is granted the waiver and the date of the waiver on our web site in the future.

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

ITEM 9B.    OTHER INFORMATION

Not applicable.

PART III

ITEM 10.    DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

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

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

Name and Address

                  Age       

Position

Date of Appointment

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

Christopher Scheive        46

President & Director & CEO

November 18, 2008

Jaclyn Cruz    

 33

Secretary, Treasurer   

August 18, 2008

& Director  & CFO  

The chart above specifies Golden Spirit Enterprises Ltd.’s current officers and directors.

All directors of the Company hold office until the next annual meeting or until their successors have been elected and qualified.  All officers serve at the discretion of the Board of Directors.

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On January 24, 2008, the Company appointed of Jeff Scheive to the Board of Directors. On February 27, 2008 the Company issued 30,000 restricted common shares valued at $3,300 for his current services. In June of 2008, Jeff Scheive passed away and on June 3, 2008,his brother, Marc Scheive was appointed a Director.

On August 7, 2008, Janice Chow, a Chinese businesswoman was appointed a Director and on August 18, 2008, Jaclyn Cruz was appointed a Director.

On November 18, 2008, Christopher Scheive was appointed a Director.

On January 24, 2008, the Company accepted the resignation of Carlton Parfitt as Secretary, Treasurer, Director and Chief Financial Officer of the Company. On November 18, 2008, the Comapny accepted the resignation of Robert Klein as Secretary, Treasurer, Director and Chief Financial Officer of the Company. On November 18, 2008, the Comapny accepted the resignation of Marc Scheive as Secretary, Treasurer, Director and Chief Financial Officer of the Company. On November 18, 2008, the Registrant accepted the resignation of Janice Chow aa Director.   

There are no familial relationships between our officers and directors.

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

ITEM 11.    EXECUTIVE COMPENSATION

Directors' Compensation: A total of $4,300 (2007-$2,133) was paid to two directors in cash for the year ended December 31, 2008.

Stock-based Compensation . During the year ended December 31, 2008, $Nil (2007-$228,000) in stock-based compensation was recorded in our financial statements.  Stock-based compensation is an estimate of the intrinsic value placed in respect to stock options granted to officers, directors, employees and an estimate of the fair value of stock options granted to consultants using the Black-Scholes option pricing model. We do expect further stock-based compensation in 2009.

ITEM 12.    SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The following table sets forth certain information regarding the beneficial ownership of our common stock as of December 31, 2007, by each person or entity known by us to be the beneficial owner of more than 5% of the outstanding shares of common stock, each of our directors and named executive officers, and all of our directors and executive officers as a group.

Name of                  

Amount & Nature of

Percent of Class

Title of Class    

Beneficial Owner   

Beneficial Owner  

Common Stock

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

Common Stock     

CEDE & Co. (1)                  

12,586,461          

66.80 %

The Depository Trust Co.

P.O. Box 222 Bowling Green Station

New York, New York 10274

 Christopher Scheive

400 Blvd. Thomas

-

  0.00%

President /Director /CEO   

Unit 400 Lachute, Quebec,

J8H 1V7

Jaclyn Cruz

P.O. Box 63

25,000                0.0013%

Sec,Treas/.Director/CFO

Farmingville, New York

11738

All directors and Officers as a group    

             25,000         

0.0013%

(1) In 2008, we requested a listing of Non-Objecting Beneficial Owners, commonly referred to as a NOBO List. According to the NOBO List, there were no holders of more than 5% of our issued and outstanding shares.

Security Ownership by Management.  As above, at December 31, 2008, our directors, Christopher Scheive owned Nil shares and Jaclyn Cruz owned 25,000 shares for and aggregate total of 25,000 shares or 0.0003% of the common stock outstanding.