**U.S.
      SECURITIES AND EXCHANGE COMMISSION**


Washington,
      D.C. 20549




**FORM
      10-QSB**


(Mark
      One)




**x
      QUARTERLY REPORT
      PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES**


**EXCHANGE
      ACT OF 1934**




For
      the
      Quarterly period ended December 31, 2006




**o
      TRANSITION REPORT UNDER
      SECTION 13 OR 15(d) OF THE EXCHANGE ACT**




For
      the
      transition period from ______________ to ______________




*Commission
      file number 000-28195*




**CARSUNLIMITED.COM,
      INC.**


(Exact
      name of small business issuer as specified in its charter)





Nevada
              (State
                or other jurisdiction of
              incorporation
                of organization)
            11-3535204
              (State
                or I.R.S. Employer
              Identification
                Number)




305
      Madison Avenue, Suite 4510, New York, New York 10165


(Address
      of principal executive offices)




212-986-0886


(Issuer's
      telephone number including area code)




Indicate
      by check mark whether the registrant (1) has filed all reports required to
      be
      filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months
      (or for such shorter period that the registrants were required to file such
      reports) and (2) has been subject to such filing requirements for the past
      90
      days.




Yes
x No
o





Indicate
      by check mark whether the registrant is a shell company (as defined in Rule
      12B-2 of the Exchange Act).




Yes
o   
No
x




**APPLICABLE
      ONLY TO CORPORATE ISSUERS**




Indicate
      the number of shares outstanding of each of the issuer's class of common stock,
      as of the latest practicable date: 609,259,259 shares of common stock, par
      value
      $0.001 per share, as of February 19, 2007 .





**CARSUNLIMITED.COM,
      INC.**


FORM
      10-QSB


QUARTERLY
      REPORT


For
      the Six Months Ended December 31, 2006





TABLE
      OF CONTENTS


Part
                  I - Financial InformationItem
                  1. Consolidated Financial Statements:Consolidated
                  Balance Sheet
              
              1Consolidated
                  Statements of Operations
              
              2Consolidated
                  Statements of Cash Flows
              
              3-4Notes
                  to Consolidated Financial Statements
              
              5-13Item
                  2. Management's Discussion and Analysis of Financial Condition
                  and Results
                  of Operations
              
              14-18Item
                  3. Controls and Procedures
              
              19Part
                  II. - Other Information
              
              20-21Signatures
              
              22Exhibit
                  31Exhibit
                  32










**Item
                1. Financial Statements****CARSUNLIMITED.COM,
                INC.**




**CONSOLIDATED
      BALANCE SHEET**




**December
                31,****2006****(unaudited)****ASSETS****Current
                assets**Cash
            
            $
            444,900Due
                from affiliates
            
            
            50,700Accounts
                receivable
            
            
            316,947Inventories
            
            
            587,767Prepaid
                expenses and other current assets
            
            
            164,459Total
                current assets
            
            
            1,564,773**Property
                and equipment,**net
            
            
            2,172,879**Other
                assets**Deferred
                financing costs
            
            
            700,000Security
                deposit
            
            
            34,155Total
                other assets
            
            
            734,155$
            4,471,807**LIABILITIES
                AND STOCKHOLDERS' DEFICIT****Current
                liabilities**Note
                and interest payable
            
            $
            114,526Notes
                and interest payable, related parties
            
            
            1,456,116Interest
                payable on convertible note
            
            
            300,000Due
                to licensor
            
            
            437,500Accounts
                payable and accrued expenses
            
            
            1,512,280Due
                to related parties
            
            
            168,127Customer
                deposits
            
            
            18,911Total
                current liabilities
            
            
            4,007,460**Long-term
                liabilities**Convertible
                note and interest payable, net of debt discount of
                $534,856
            
            
            7,201,454Customer
                advance
            
            
            700,000Derivative
                financial instruments
            
            
            840,495Sublease
                security deposit, affiliate
            
            
            6,8308,748,779**Commitments
                and contingencies****Stockholders'
                deficit**Preferred
                stock, $.001 par value, 100 million shares authorized,zero
                issued and outstandingCommon
                stock, $.001 par value, 1.3 billion shares authorized,609,259,259
                issued and outstanding
            
            
            609,259Additional
                paid-in-capital
            
            
            874,847Accumulated
                deficit
            
            
            (9,768,538
            )Total
                stockholders' deficit
            
            
            (8,284,432
            )$
            4,471,807


*See
        accompanying condensed notes to consolidated financial
        statements*
  1




**CARSUNLIMITED.COM,
                  INC.**
 **CONSOLIDATED
          STATEMENTS OF OPERATIONS**
  **Six
                  Months Ended**
              
              **Three
                  Months Ended****December
                  31,**
              
              **December
                  31,****2006**
              
              **2005**
              
              **2006**
              
              **2005****(unaudited)**
              
              **(unaudited)**
              
              **(unaudited)**
              
              **(unaudited)****Net
                  revenues**
              
              $
              440,970
              
              $
              57,420
              
              $
              421,495
              
              $
              44,620**Cost
                  of revenues**Direct
                  costs
              
              
              413,691
              
              
              48,499
              
              
              391,926
              
              
              37,059Indirect
                  costs
              
              
              315,872
              
              
              186,881
              
              
              166,932
              
              
              94,383729,563
              
              
              235,380
              
              
              558,858
              
              
              131,442**Gross
                  margin**
              
              
              (288,593
              )
              
              (177,960
              )
              
              (137,363
              )
              
              (86,822
              )**Operating
                  expenses**General
                  and administrative
              
              
              1,483,709
              
              
              843,405
              
              
              786,531
              
              
              459,971**Loss
                  from operations**
              
              
              (1,772,302
              )
              
              (1,021,365
              )
              
              (923,894
              )
              
              (546,793
              )**Other
                  income (expenses)**Sublease
                  income, affiliates
              
              
              19,248
              
              
              48,960
              
              
              9,624
              
              
              24,480Interest
                  expense
              
              
              (586,306
              )
              
              (87,503
              )
              
              (325,301
              )
              
              (60,325
              )Interest
                  expense, related parties
              
              
              (55,874
              )
              
              (75,472
              )
              
              (23,997
              )
              
              (37,681
              )Amortization
                  of debt discount
              
              
              (261,503
              )
              
              
              
              
              (225,289
              )Amortization
                  of financing costs
              
              
              (158,836
              )
              
              (40,286
              )
              
              (84,000
              )
              
              (26,478
              )Loss
                  on derivative financial instruments
              
              
              (44,136
              )
              
              
              
              
              (44,136
              )Gain
                  (loss) on foreign currency exchange
              
              
              (21,503
              )
              
              2,299
              
              
              (17,496
              )
              
              1,568(1,108,910
              )
              
              (152,002
              )
              
              (710,595
              )
              
              (98,436
              )**Net
                  loss**
              
              $
              (2,881,212
              )
              $
              (1,173,367
              )
              $
              (1,634,489
              )
              $
              (645,229
              )**Weighted
                  average common shares outstanding**Basic
              
              
              573,486,747
              
              
              479,797,785
              
              
              598,476,799
              
              
              479,797,785Diluted
              
              
              594,877,756
              
              
              511,979,343
              
              
              609,259,259
              
              
              511,979,343**Loss
                  per common share**Basic
                  and Diluted
              
              $
              (0.005
              )
              $
              (0.002
              )
              $
              (0.003
              )
              $
              (0.001
              )




*See
        accompanying condensed notes to consolidated financial
        statements*
  2




**CARSUNLIMITED.COM,
                  INC.**
  **CONSOLIDATED
          STATEMENTS OF CASH FLOWS**
  **Six
                  Months Ended****December
                  31,****2006**
              
              **2005****(unaudited)**
              
              **(unaudited)****Cash
                  flows from operating activities**Net
                  loss
              
              $
              (2,881,212
              )
              $
              (1,173,367
              )Adjustments
                  to reconcile net loss to net cashused
                  in operating activities:Depreciation
                  and amortization
              
              
              168,343
              
              
              108,238Amortization
                  of financing costs
              
              
              158,836
              
              
              40,286Amortization
                  of debt discount
              
              
              261,503Loss
                  on derivative financial instruments
              
              
              44,136Changes
                  in operating assets and liabilities:Due
                  from affiliates
              
              
              808
              
              
              (23,156
              )Accounts
                  receivable
              
              
              (208,568
              )
              
              (64,841
              )Inventories
              
              
              (473,872
              )
              
              (23,888
              )Prepaid
                  expenses and other current assets
              
              
              (114,023
              )
              
              (16,312
              )Due
                  to licensor
              
              
              157,426
              
              
              27,767Accounts
                  payable and accrued expenses
              
              
              827,474
              
              
              (32,874
              )Due
                  to related parties
              
              
              8,945
              
              
              1,755Customer
                  deposits
              
              
              (10,618
              )
              
              33,873Interest
                  payable
              
              
              746,573
              
              
              131,370**Net
                  cash used in operating activities**
              
              
              (1,314,249
              )
              
              (991,149
              )**Cash
                  flows from investing activities**Purchase
                  of equipment
              
              
              (1,379,506
              )
              
              (351,946
              )Payments
                  for merger costs
              
              
              (142,919
              )Payments
                  for financing costs
              
              
              
              
              
              (62,500
              )Distributions
                  to investors
              
              
              (12,663
              )Net
                  cash acquired from merger
              
              
              95**Net
                  cash used in investing activities**
              
              
              (1,534,993
              )
              
              (414,446
              )**Cash
                  flows from financing activities**Proceeds
                  from issuance of convertible note
              
              
              1,706,846
              
              
              450,000Proceeds
                  from issuance of notes
              
              
              
              
              
              1,850,000Proceeds
                  from customer advance
              
              
              700,000Payment
                  on notes payable to related parties
              
              
              (30,000
              )Payments
                  on equipment lease
              
              
              
              
              
              (81,914
              )**Net
                  cash provided by financing activities**
              
              
              2,376,846
              
              
              2,218,086**Net
                  increase in cash**
              
              
              (472,396
              )
              
              812,491**Cash,
                  beginning of period**
              
              
              917,296
              
              
              55,244**Cash,
                  end of period**
              
              $
              444,900
              
              $
              867,735




See accompanying condensed notes to consolidated financial
      statements




3




**CARSUNLIMITED.COM,
                  INC.**
 **CONSOLIDATED
          STATEMENTS OF CASH FLOWS (CONTINUED)**
  **Six
                  Months Ended****December
                  31,****2006**
              
              **2005****(unaudited)**
              
              **(unaudited)****Supplemental
                  disclosure of cash flow information,**cash
                  paid during the period for interest
              
              $
              427,423
              
              $
              2,401**Supplemental
                  disclosure of non-cash investing and financing,
                  activities:**Convertible
                  debentures converted to common stock
              
              $
              1,200,000
              
              $
              -Debt
                  discount related to convertible note
              
              $
              635,142
              
              $
              -Accounts
                  payable converted into promissory note
              
              $
              -
              
              $
              104,284Reclassification
                  of deferred financing cost to accounts payable
              
              $
              175,000
              
              $
              -Issuance
                  of Mellon convertible notes
              
              $
              7,500,000Payments
                  made directly to debtholders
              
              
              (4,517,154
              )Merger
                  and financing costs
              
              
              (1,026,000
              )Payment
                  made directly to licensor
              
              
              (250,000
              )Net
                  proceeds received
              
              $
              1,706,846




See accompanying condensed notes to consolidated financial
      statements




4




**CARSUNLIMITED.COM,
      INC.**


**NOTES
      TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS**


**DECEMBER
      31, 2006**





**Note
      1. ORGANIZATION AND BASIS OF PRESENTATION**





**Organization
      and Nature of Operations**





CARSUNLIMITED.COM,
      Inc. (hereinafter referred to as “Registrant”), a Nevada publicly traded
      corporation, prior to August 9 th ,
      2006,
      was a development stage company with limited operations and revenues and only
      nominal assets. Its intended purpose was to offer users the ability to search
      a
      database that contained products and information about the Automobile industry,
      new and used car sales (classified ads), as well as automotive products such
      as
      extended warranty information and anti-theft body part marking.





On
      August
      9, 2006, Registrant executed an Agreement and Plan of Merger (“Merger
      Agreement”) with Pump Acquisition Corp., a wholly-owned subsidiary of Registrant
      ("PAC"), Innopump, Inc. D/B/A Versadial (“Innopump”), a Nevada corporation which
      was formed on April 1, 2005, and certain Innopump stockholders. Pursuant to
      the
      Merger Agreement, the Registrant issued 568,134,259 shares of its common stock
      to shareholders of Innopump in consideration of Innopump merging with and into
      PAC and becoming a wholly-owned subsidiary of Registrant ("Merger"). Registrant,
      prior to the Merger, is sometimes referred to herein as OLDCO .The Merger is
      more fully described in Note 3. As a result of the merger, Innopump became
      a
      majority-owned subsidiary of OLDCO and the holders of Innopump common stock
      and
      debt acquired a majority interest of OLDCO. The accounting of this transaction
      differs from its legal form, as Innopump is considered the accounting acquirer
      and OLDCO the acquired entity. The transaction has been accounted for as a
      reverse acquisition under the purchase method of accounting, whereby the assets
      of OLDCO were revalued and the purchase price allocated to those assets acquired
      and liabilities assumed. Innopump’s historical financial statements were carried
      forward subsequent to the merger as those of the combined entity (hereinafter
      referred to as “NEWCO” or the “Company”).





Innopump
      is engaged in the manufacture of a dispenser that enables the user to blend
      two
      liquids in varying proportions. The dispensers are manufactured in Germany
      and
      are currently being utilized in the food and cosmetic industries.





On
      May
      25, 2005, Innopump acquired all of the assets and assumed certain liabilities
      of
      Sea Change Group, LLC ("SCG"), a privately held New York Limited Liability
      Company formed in 1999. This transaction between Innopump and SCG, which were
      entities under common control, was accounted for in a manner similar to a
      pooling of interests whereby the assets and liabilities of SCG were transferred
      to Innopump at historical amounts. Prior to the merger with OLDCO, the financial
      statements of Innopump were prepared as if the transaction had occurred at
      the
      beginning of the period presented, and present the financial data of previously
      separate entities.




**Basis
      of Presentation**





NEWCO’s
      fiscal year ends on June 30, and therefore references to fiscal 2006 and 2005
      refer to the fiscal years ended June 30, 2006 and June 30, 2005, respectively.
      OLDCO’s fiscal year end was December 31, which was changed to June 30 to conform
      to the year end of Innopump, the accounting acquirer.





The
      accompanying condensed consolidated financial statements of the Company reflect
      the historical results of the predecessor entity, Innopump, prior to August
      9,
      2006 and the consolidated results of operations of NEWCO subsequent to the
      acquisition date of August 9, 2006.





The
      common stock and per share information in the consolidated financial information
      and related notes have been retroactively adjusted to give effect to the reverse
      merger on August 9, 2006.





The
      accompanying unaudited consolidated financial statements have been prepared
      in
      accordance with generally accepted accounting principles for interim financial
      statements and with the instructions to Form l0-QSB and Item 310(b) of
      Regulation S-B. Accordingly, they do not include all the information and
      disclosures required for annual financial statements. These financial statements
      should be read in conjunction with the financial statements and related
      footnotes for the year ended December 31, 2005 of OLDCO, included in the Annual
      Report filed on Form l0-KSB for the year then ended. These financial statements
      should also be read in conjunction with Form 8-K of CARSUNLIMITED.COM, Inc.
      filed on August 11, 2006 and Form 8-K/A of CARSUNLIMITED.COM, Inc. filed on
      October 13, 2006 with the SEC, which include the audited financial statements
      of
      Innopump for the years ended June 30, 2006 and 2005. These statements reflect
      all adjustments which are of a normal recurring nature and which, in the opinion
      of management, are necessary for a fair statement of the results for the fiscal
      six months ended December 31, 2006 and 2005. The results of operations for
      the
      first six months of fiscal 2007 are not necessarily indicative of the results
      to
      be expected for the full year.





5





**Note
      2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**





**Principles
      of Consolidation**





In
      December 2003, the Financial Accounting Standards Board (“FASB”) revised FASB
      Interpretation 46, “Consolidation of Variable Interest Entities” (FIN 46r”). FIN
      46r requires certain variable interest entities (“VIE”) to be consolidated by
      the primary beneficiary entity if the equity investors in the entity do not
      have
      the characteristics of a controlling financial interest or do not have
      sufficient equity at risk for the entity to finance its activities without
      additional subordinated financial support from other parties.





The
      Company is the primary beneficiary of SCG under FIN 46r. SCG, as a result of
      the
      business acquisition described in Note 1, is no longer an operating entity
      and
      is dependent on the Company for all of its income consisting of future royalties
      and license fees. The Company consolidated the results of SCG’s operations for
      the six months ended December 31, 2006, consisting of approximately $64,000
      in
      net income derived from a $150,000 license fee from the Company, net of interest
      and other operating expenses. SCG’s assets at December 31, 2006 approximated
      $172,000 consisting mainly of cash, sublease income receivable and a security
      deposit on a lease. SCG’s liabilities at December 31, 2006 approximated
      $1,466,000 consisting primarily of loans due to partners which were not assumed
      by the Company as part of the business acquisition described in Note 1. These
      assets and liabilities are included in the consolidated financial
      statements.





The
      consolidated financial statements include the accounts of the Company and SCG.
      All intercompany transactions and balances have been eliminated in
      consolidation.





**Revenue
      Recognition**





Revenues
      are generally recognized at the time of shipment. The Company requires deposits
      from certain customers which are recorded as current liabilities until the
      time
      of shipment.





**Impairment
      of Long-Lived Assets**





Certain
      long-lived assets of the Company are reviewed at least quarterly to determine
      whether there are indications that their carrying value has become impaired,
      pursuant to guidance established in SFAS No. 144, "Accounting for the Impairment
      or Disposal of Long-Lived Assets". Management considers assets to be impaired
      if
      the carrying value exceeds the future projected cash flows from related
      operations (undiscounted and without interest charges). If impairment is deemed
      to exist, the assets will be written down to fair value. Management also
      reevaluates the periods of amortization to determine whether subsequent events
      and circumstances warrant revised estimates of useful lives. As of December
      31,
      2006, management expects these assets to be fully recoverable.





**Foreign
      Currency Transactions**




The
      Company complies with SFAS No. 52 “Foreign Operations and Currency Translation”.
      All foreign currency transaction gains and losses are included in the Company’s
      net income (loss) in the period the exchange rate changes.





**Fair
      Value of Financial Instruments**





The
      fair
      value of the Company's assets and liabilities, which qualify as financial
      instruments under SFAS No. 107, "Disclosures About Fair Value of Financial
      Instruments," approximate the carrying amounts presented in the consolidated
      balance sheet.





6




**Derivative
      Financial Instruments**





The
      Company accounts for non-hedging contracts that are indexed to, and potentially
      settled in, its own common stock in accordance with the provisions of EITF
      No.
      00-19, "Accounting for Derivative Financial Instruments Indexed to, and
      Potentially Settled in, a Company's Own Stock". These non -hedging contracts
      accounted for in accordance with EITF No. 00-19 include freestanding warrants
      and options to purchase the Company's common stock as well as embedded
      conversion features that have been bifurcated from the host financing contract
      in accordance with the requirements of SFAS No. 133, "Accounting for Derivative
      Instruments and Hedging Activities". Under certain circumstances that could
      require the Company to settle these equity items in cash or stock, and without
      regard to probability, EITF 00-19 could require the classification of all or
      part of the item as a liability and the adjustment of that reclassified amount
      to fair value at each reporting date, with such adjustments reflected in the
      Company's consolidated statements of operations.





**Use
      of Estimates**





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




**Note
      3. MERGER AGREEMENT**





On
      August
      9, 2006, OLDCO executed an Agreement and Plan of Merger (“Merger Agreement”)
      with Pump Acquisition Corp., a wholly-owned subsidiary of OLDCO ("PAC"),
      Innopump, and certain Innopump stockholders. Pursuant to the Merger Agreement,
      the Company issued 568,134,259 shares of its common stock to shareholders of
      Innopump in consideration of Innopump merging with and into PAC and becoming
      a
      wholly-owned subsidiary of OLDCO ("Merger"). Holders of Innopump convertible
      notes, warrants and options received equivalent amount of notes, warrants and
      options convertible or exercisable into that number of Registrant common stock
      had they converted or exercised immediately prior to the closing.





The
      Merger Agreement required OLDCO to issue to the Innopump stockholders 1,950
      shares of common stock for each share of Innopump common stock outstanding
      at
      the closing date of August 9, 2006. At the closing, there were 262,500
      outstanding shares of Innopump common stock plus 28,792 shares issued on
      conversion of certain debt for a total of 291,292 shares which resulted in
      the
      issuance of 568,134,259 shares of common stock and resulted in OLDCO
      stockholders retaining approximately 6.75% (41,125,000 shares) of the
      outstanding stock and Innopump stockholders receiving approximately 93.25%
      of
      the outstanding stock on a pre-diluted basis.





The
      parties’ completion of the transactions contemplated under the Merger Agreement
      were subject to the satisfaction of certain contingencies including, without
      limitation, requisite approvals and consents and that OLDCO shall have no less
      than $7,500,000 in cash or cash equivalents and no more than $80,000 in
      liabilities immediately prior to closing (see Note 5). These conditions were
      deemed satisfied at the closing.





NEWCO
      incurred merger costs of approximately $503,000, which were charged to equity,
      consisting of approximately a $350,000 advisory fee payable to the investment
      banker and $153,000 in legal fees. The investment banker agreed to defer payment
      of $175,000 of the advisory fee until February 2007. The deferred portion of
      the
      fee was paid on February 9, 2007 pursuant to the agreement with the investment
      banker. All other fees were paid at or subsequent to the closing.





The
      following supplemental pro forma information is presented to illustrate the
      effects of the acquisition of Innopump on the historical operating results
      for
      the six and three months ended December 31, 2006 and 2005 as if the acquisition
      had occurred at the beginning of the respective period:





Six
                Months Ended
            
            Three
                Months EndedDecember,
                31
            
            December,
                312006
            
            2005
            
            2006
            
            2005Revenues
            
            $
            440,970
            
            $
            57,420
            
            $
            421,495
            
            $
            44,620Net
                loss
            
            $
            (2,975,288
            )
            $
            (2,079,994
            )
            $
            (1,634,489
            )
            $
            (1,090,649
            )Net
                loss per share
            
            $
            (0.005
            )
            $
            (0.003
            )
            $
            (0.003
            )
            $
            (0.002
            )




7




The
      above
      unaudited pro forma condensed financial information is presented for
      illustrative purposes only and is not necessarily indicative of the condensed
      consolidated results of operations that actually would have been realized had
      Innopump and OLDCO been a combined company during the specified
      periods.


**


**Note
      4. GOING CONCERN**





The
      accompanying financial statements have been prepared in conformity with
      accounting principles generally accepted in the United States of America, which
      contemplate continuation of the Company as a going concern. At December 31,
      2006, the Company has incurred cumulative losses of approximately $9.8 million
      since inception and $2.9 million for the six months ended December 31, 2006.
      The
      Company has a working capital deficit of approximately $2.4 million and a
      stockholders’ deficit of approximately $8.3 million as of December 31, 2006.





On
      August
      9, 2006, concurrent with the merger, OLDCO sold 10% senior redeemable
      convertible debt (“Convertible Debt”) in the principal amount of $7.5 million to
      Mellon HBV Master U.S. Event Driven Fund, L.P. and Mellon HBV Master Global
      Event Driven Fund, L.P. (now known as [Fursa Alternative Strategies LLC];
      collectively, the “Investors”) . The note bears interest at 10% per annum and is
      due on February 9, 2009 (see Note 5). The proceeds were first used to pay
      approximately $1 million in financing and legal fees, $4.5 million in current
      notes payable and accrued interest and $250,000 in other current obligations
      which became due on the date of the merger. The Company received net proceeds
      of
      approximately $1.7 million, which management used for working capital
      needs.





At
      June
      30, 2006, the Company had approximately $7.1 million in current notes payable
      and accrued interest. On August 9, 2006, prior to the reverse merger with OLDCO,
      the Company converted $1.2 million of these notes into common stock. As noted
      above, the Company repaid approximately $4.5 million with the proceeds from
      the
      $7.5 million financing. The remaining current notes payable of approximately
      $1.5 million are primarily due to shareholders which management believes will
      be
      extended prior to maturity (see Note 10).





On
      September 29, 2006, the Company received $700,000 from a customer in the
      consumer products industry in exchange for the Company’s undertaking to deliver
      pre-production samples of a specially designed dual chamber dispensing pump
      and
      to fund pre-production tooling and mold expenses. The Company has no obligation
      to repay the advance, should the samples not satisfy the customer’s
      requirements. However, if the requirements are met, management anticipates
      that
      the Company will enter into an exclusive supply relationship with this customer
      for a term in excess of one year. The $700,000advance will be applied against
      future revenues and the customer will advance additional funds at that time
      (see
      Note 7).




On
      February 1, 2007 the Company entered into a Secured Line Of Credit Agreement
      (“Credit Agreement”) with Fursa Alternative Strategies, LLC (“Fursa”), allowing
      the Company to draw upon a $3,000,000 line of credit with a Maturity Date of
      1
      year from the date of the Credit Agreement, which may be extended for an
      additional 3 months. Fursa was previously known as Mellon U.S. Event Driven
      Fund, L.P. and Mellon HBV Master Global Event Driven Fund, L.P. which were
      parties to the Securities Purchase Agreement with Company dated August 9, 2006,
      as amended, described above and in Note 5. The per annum base Interest Rate
      applicable in each month that advances are drawn down or outstanding pursuant
      to
      the Credit Agreement is equal to the three month LIBOR rate as published on
      the
      first date of such month in the “Money Rates” section of The Wall Street Journal
      (rounded up or down to the nearest one-sixteenth of one percent) plus 700 basis
      points (7.0%). Upon a default under the terms of the Note, the Interest Rate
      would increase by 4%. (see Note 10).





Management
      recognizes that the Company must generate additional revenue and sufficient
      gross profits to achieve profitable operations. Management's plans to increase
      revenues include the continued building of its customer base and product line,
      especially in the food and cosmetic industries. Management believes that the
      capital received as a result of the above transactions and the credit available
      under the secured line of credit will enable the Company to purchase the
      necessary capital equipment needed to expand its product line and increase
      production capacity during the next twelve months. In addition, it will allow
      the Company to continue to build its customer base as well as increase revenues
      with existing customers.





There
      can
      be no assurance that the Company will be successful in building its customer
      base and product line or that the available capital will be sufficient to fund
      current operations and the necessary capital expenditures until such time that
      the revenues increase. If the Company is unsuccessful in building its customer
      base or is unable to obtain additional financing, if necessary, on terms
      favorable to the Company there could be a material adverse effect on the
      financial position, results of operations and cash flows of the Company. The
      accompanying financial statements do not include any adjustments that might
      be
      necessary if the Company is unable to continue as a going concern.





8




**Note
      5. CONVERTIBLE DEBT AND DERIVATIVE FINANCIAL INSTRUMENTS**





On
      August
      9, 2006, concurrent with the merger closing, OLDCO sold 10% senior redeemable
      convertible debt (“Convertible Debt”) in the principal amount of $7.5 million to
      Mellon HBV Master U.S. Event Driven Fund, L.P. and Mellon HBV Master Global
      Event Driven Fund, L.P. ( now
      known
      as [Fursa Alternative Strategies LLC]; collectively, the
“Investors”)  under
      the terms of a Securities Purchase Agreement in exchange for $7.5 million in
      cash. Interest accrues at 10% per annum, payable in cash or payable in kind
      (“PIK”) at the holders’ option, on the one year anniversary of the date of
      issuance with respect to the first year of accrued interest and quarterly in
      arrears thereafter. Any interest not paid when due will accrue and will be
      added
      to the principal in determining the number of shares of Common Stock issuable
      upon conversion of the Convertible Debt. The Convertible Debt matures 30 months
      after the date of issuance (“Maturity Date”). The holder does not have the
      option to prepay the Convertible Debt prior to the Maturity Date and must redeem
      100% of the Convertible Debt, unless earlier converted, for an amount equal
      to
      120% ($9.0 million) of the outstanding principal plus accrued but unpaid
      interest, on the Maturity Date. The proceeds from the Convertible Debt are
      being
      used for working capital, capital expenditures, mandatory debt repayment, and
      general corporate purposes. Interest expense for the six and three months ended
      December 31, 2006 approximated $536,000 and $334,000 consisting of approximately
      $300,000 and $192,000 currently due on August 9, 2007 and $236,000 and $142,000
      due upon maturity calculated using the effective interest method for the 20%
      premium due at maturity, respectively.





The
      Convertible Debt is convertible into shares of the Company’s common stock at the
      fully diluted, post-reverse merger valuation at Closing of $16 million. The
      price per share is equal to $16 million divided by the number of outstanding
      shares (611,847,827) of the post reverse-merger on a fully-diluted basis
      (“Original Purchase Price”). This conversion price of approximately $.02615 per
      share would result in the issuance of approximately 287 million shares upon
      conversion of the debt and is subject to weighted-average, anti-dilution
      protection on all subsequent financings by the Company.





In
      addition, the Investors received warrants (“Investors Warrants”) aggregating 22%
      of the shares issuable on conversion to purchase approximately 63 million shares
      of common stock at an exercise price of approximately $.02615 per share. The
      Investors Warrants have a five (5) year term which were valued at the grant
      date
      at approximately $635,000. The fair value was calculated using the Black-Scholes
      model with an expected volatility of 40% and a risk free interest rate of 4.91%.





The
      Company signed a Registration Rights Agreement with the Investor on August
      9,
      2006 whereby the Company is obligated to register the resale of its shares
      of
      common stock issuable upon the exercise of the Investors Warrants and have
      the
      registration statement declared effective by the Securities and Exchange
      Commission on or prior to February 5, 2007, which date was extended to May
      31,
      2007. If the registration statement is not declared effective within the time
      frame described, of if the registration is suspended, the Company will be
      obligated to issue additional warrants (“Liquidated Damages Warrants”) to the
      Investor. Initially, the Company will be obligated to issue to the Investor
      2%
      of the number of shares of common stock issuable to the Investor upon conversion
      of the Convertible Debt or approximately 5.7 million shares. In addition, for
      each full thirty (30) day period after the date that the registration statement
      has not been declared effective, the Company is obligated to issue to the
      Investors warrants exercisable for a number of shares of common stock equal
      to
      2% percent of the number of shares of common stock issuable to the Investors.
      (see Note 10).





The
      debt
      discount will be charged to operations over the life of the underlying debt
      with
      a corresponding increase to the Convertible Debt. For the six and three months
      ended December 31, 2006, approximately $100,000 and $64,000 was charged to
      operations as financing costs for these warrants, respectively.





The
      agreement also requires the Company to meet certain requirements such as
      effecting a reverse stock split and redomiciling in Delaware (see Note
      10).





Financing
      fees in connection with this debt approximated $840,000 which are being
      amortized over the term of the convertible debt. For the six and three months
      ended December 31, 2006, the amortization of financing costs approximated
      $140,000 and $84,000, respectively.





On
      October 17, 2006, the Company issued additional warrants to purchase an
      aggregate of 14,340,183.45 shares of the Company’s common stock to the Investors
      at an exercise price of approximately $.02615 per share. The warrants expire
      on
      August 9, 2011. These warrants were issued in exchange for the Investor deleting
      a provision in the original Securities Purchase Agreement whereby the Investor
      would be granted additional future warrants based on the Company not meeting
      certain earnings targets (the “EBIDTA Shortfall Warrants”). The warrants were
      valued at the grant date at approximately $161,000. The fair value was
      calculated using the Black-Scholes model with an expected volatility of 42%
      and
      a risk free interest rate of 4.70%. In addition, the Investor was granted the
      right to receive potential further additional warrants to purchase an aggregate
      of 14,340,183.45 shares of the Company’s common stock at an exercise price of
      $.02615 per share. These warrants, if issued, will expire on August 9, 2011.
      These additional warrants will be issued if the Company does not pass the
      testing requirements of a prospective customer by March 31, 2007. This customer
      advanced the Company $700,000 in September 2006 (see Note 7).





9




Pursuant
      to Paragraph 14 of EITF No. 00-19, "Accounting for Derivative Financial
      Instruments Indexed to, and Potentially Settled in, a Company's Own Stock",
      the
      Investor Warrants meet the requirements of and are accounted for as a liability
      since the Investors Warrants contain registration rights where Liquidated
      Damages Warrants would be required to be issued to the holder in the event
      the
      Company failed to receive an effective registration. The initial value of the
      Investor Warrants granted on August 9, 2006 was treated as a discount to the
      convertible notes payable (debt discount) and recorded as a liability
      (derivative financial instruments). The value of the additional warrants granted
      on October 17, 2006 was treated as additional debt discount expense and recorded
      as a liability (derivative financial instruments). Using the Black-Scholes
      option-pricing method, the value of the derivative financial instruments are
      reassessed at each balance sheet date and marked to market as a derivative
      gain
      or loss until exercised or expiration. Upon exercise of the derivative financial
      instruments, the related liability is removed by recording an adjustment to
      additional paid-in-capital. The derivative financial instruments had a value
      of
      approximately $840,000 at December 31, 2006.





**Note
      6. DEBT CONVERSION AND REPAYMENT**





As
      a
      result of the merger with OLDCO, on August 9, 2006, the Company was able to
      obtain approximately $7.5 million in financing as described above. From the
      proceeds of this financing, the Company repaid approximately $4.4 million of
      Innopump’s current notes and interest payable and converted $1.2 million of
      Innopump’s current principal notes into 28,792 chares of Innopump stock which
      were subsequently converted to 56,154,916 shares of the Company’s common stock
      (see Note 3).





The
      debt
      repayment of $4.4 million consisted of principal and interest due to related
      parties of approximately $746,000, principal and interest due to other parties
      of approximately $3,567,000 and interest due to parties converting debt of
      approximately $114,000. Interest expense for the six and three months ended
      December 31, 2006 on these notes approximated $68,000 and -0-,
      respectively.





In
      addition, the Company expensed approximately $18,000 of unamortized financing
      costs associated with prior debt that was repaid at the closing.





**Note
      7. CUSTOMER ADVANCE**





On
      September 29, 2006, the Company received $700,000 from a customer in the
      consumer products industry in exchange for the Company’s undertaking to deliver
      pre-production samples of a specially designed dual chamber dispensing pump
      and
      to fund pre-production tooling and mold expenses. The Company has no obligation
      to repay the advance, should the samples not satisfy the customer’s
      requirements. However, if the requirements are met, management anticipates
      that
      the Company will enter into an exclusive supply relationship with this customer
      for a term in excess of one year. The $700,000 advance will be applied against
      future revenues and the customer has agreed to advance the Company additional
      funds at that time of $1.0 million. In addition, if the requirements are met,
      management anticipates that a promissory note of $1.7 million will be issued
      at
      that time and that the advance will be repaid to the customer with payments
      to
      start six months after the first product is shipped for commercial purposes
      and
      based on repayment at a rate of a certain amount per piece for all products
      shipped. This advance has been classified as long-term at December 31, 2006.





**Note
      8. STOCKHOLDERS’ DEFICIT**





**Capitalization**





The
      Company’s initial authorized capitalization consists of 50 million (50,000,000)
      shares of common stock, par value $.001 and no preferred stock. Prior to the
      merger, the certificate of incorporation was amended to increase the
      capitalization of the Company to 1.3 billion (1,300,000,000) shares of common
      stock, par value $.001 and 100 million (100,000,000) shares of preferred stock,
      par value $.001.





10




**Issuance
      of Common Stock**





On
      August
      8, 2006, ODC Partners, LLC, a debtholder of OLDCO, agreed to convert its
      outstanding debt of approximately $100,000 and accrued interest into 10,000,000
      shares of the Company’s common stock. This conversion resulted in an aggregate
      of 41,125,000 shares outstanding prior to the merger of OLDCO.





On
      August
      9, 2006, as a result of the merger, the Company issued an aggregate of
      511,979,343 shares to Innopump shareholders (a conversion of approximately
      1950
      shares of NEWCO stock for each share of Innopump stock, 262,500 shares
      outstanding). In addition the Company issued an aggregate of 56,154,916 shares
      to Innopump debtholders who elected to convert their debt to equity prior to
      the
      merger (a conversion of approximately 1950 shares of NEWCO stock for each share
      of Innopump stock). These debtholders converted $1.2 million in debt to 28,792
      shares of Innopump stock prior to the merger. Subsequent to the merger, the
      Company has 609,259,259 common shares outstanding.





**Issuance
      of Other Warrants**





In
      addition to the Investors warrants described in Note 5, on August 9, 2006,
      under
      the terms of prior agreements with Innopump debtholders and the investment
      banker, the Company issued an aggregate of 2,588,567 warrants. All of these
      warrants are exercisable for a period of five (5) years at exercise prices
      between $.021 and $.022 per share. An aggregate of 1,800,000 of these warrants
      were issued to the Innopump debtholders that converted $1.2 million in debt
      prior to the merger, 80,000 warrants were issued to the investment banker,
      500,000 warrants were issued to a related party Innopump debtholder , and
      208,567 warrants were issued to a current debtholder of the
      Company.




**Loss
      Per Share**





Basic
      loss per share excludes dilution and is calculated by dividing the net loss
      attributable to common shareholders by the weighted average number of common
      shares outstanding for the period. Diluted loss per share reflects the potential
      dilution that could occur if securities or other contracts to issue common
      stock
      were exercised or converted into common stock and resulted in the issuance
      of
      common stock. At December 31, 2005, basic loss per share does not include
      approximately 32,181,558 shares which were redeemable by the shareholders as
      described below.




The
      basic
      and diluted loss per common share does not include an aggregate of 80,025,558
      warrants outstanding and 286,803,669 shares issuable under the terms of
      convertible debt (see Note 5). The effect of these securities would be
      antidilutive. These warrants are currently exercisable at prices that range
      between $.021-$.026 and expire on August 9 th ,
      2011.





**Common
      Stock Subject to Redemption**





In
      April
      2005, $825,000 of SCG convertible debt was converted into 8.25 membership
      interests at a conversion ratio of 1 interest for each $100,000 of convertible
      debt. The debt holders were also issued an additional 16,500 common shares
      of
      Innopump stock in connection with the convertible notes. On August 9, 2006,
      the
      date of the merger, these shares were exchanged for 32,181,558 shares of the
      Company’s common stock.





A
      provision in the May 25, 2005 Asset Purchase Agreement between Innopump and
      SCG
      provided the prior debt holders a put option whereby they could sell their
      Innopump shares, which were subsequently exchanged for the Company’s shares,
      back to the Company between September 30, 2006 and October 30, 2006, at an
      amount equal to the principal and interest which would have been due upon
      conversion of the original debt. The aggregate amount of $887,403 (which
      includes $62,403 in accrued interest through the conversion date) was included
      on the balance sheet as a liability at September 30, 2006. The put options
      expired on October 30, 2006 and none of the stock was redeemed. The aggregate
      amount of the put options is included in additional paid-in capital subsequent
      to October 30, 2006.





11




**Note
      9. COMMITMENTS AND CONTINGENCIES**





**Manufacturing
      Agreement**





On
      September 20, 2006, the Company entered into a 30-month manufacturing agreement
      with an outside contractor located in Germany. The agreement calls for the
      contractor to develop certain production molds for the Company for a new size
      dispenser. The Company will place all customer orders relating to the product
      with the contractor until at least eighty percent (80%) of the manufacturer’s
      production capacity is utilized based on five (5) days per week, three (3)
      shifts per day. The agreement calls for the Company to make payments in the
      aggregate of approximately $3 million for the required molds. The payments
      start
      in October 2006, vary in amount, and will be made over the 30-month term of
      the
      agreement. Title of the molds will transfer to the Company upon final
      payment.




As
      of
      December 31, 2006, the Company has made payments of approximately $773,000
      for
      the molds which is included in property and equipment.




**Note
      10. SUBSEQUENT EVENTS**





**Debt
      Extensions**





SCG
      has
      an outstanding note with a related party in the amount of $1,098,536 which
      bears
      interest at 8% and matures on October 30, 2006. On November 9, 2006, the lender
      agreed to extend the maturity date, under the same terms and conditions as the
      original note to November 30, 2006. The note was not paid when due. On January
      26, 2007, the lender agreed to extend the maturity date, under the same terms
      and conditions as the original note, to March 31, 2007.





SCG
      has
      an outstanding note with a related party in the amount of $100,000 which bears
      interest at 8% and matures on October 30, 2006. On October 16, 2006, SCG repaid
      $30,000 of the note. On November 9, 2006, the lender agreed to extend the
      maturity date on the remaining $70,000 balance and all accrued interest, under
      the same terms and conditions as the original note to November 30, 2006. The
      note was not paid when due. On January 26, 2007, the lender agreed to extend
      the
      maturity date, under the same terms and conditions as the original note, to
      March 31, 2007.





The
      Company has an outstanding note in the amount of $104,284 which bears interest
      at 8% and matures on October 31, 2006. On November 9, 2006, the lender agreed
      to
      extend the maturity date, under the same terms and conditions as the original
      note to November 30, 2006. The note was not paid when due. On February 8, 2007,
      the lender agreed to extend the maturity date, under the same terms and
      conditions as the original note, to February 28, 2007.





**Amendment
      to Securities Purchase Agreement - Investor**





On
      November 10, 2006, the Investors agreed to amend the original agreement (see
      Note 5) in regards to certain requirements of the Company. The Investors agreed
      to extend the requirement for the Company to effect a reverse stock split from
      fourteen (14) days after the closing until December 31, 2006 and to extend
      the
      requirement of the Company to domicile in Delaware from within forty five (45)
      days of the closing until December 31, 2006. The Investor also agreed to extend
      the requirement for the Company to file a Registration Statement from ninety
      (90) days after the closing until December 31, 2006 and extended the requirement
      to have the Registration Statement effective from one hundred eighty (180)
      days
      after the closing until March 31, 2007. These requirements were not met by
      December 31, 2006.





On
      February 15th, 2007, the Investors agreed to an additional amendment to the
      original agreement (see Note 5) in regards to these requirements. The Investors
      agreed to extend the requirement for the Company to effect a reverse stock
      split
      from fourteen (14) days after the closing until March 16, 2007 and to extend
      the
      requirement of the Company to domicile in Delaware from within forty five (45)
      days of the closing until within forty five (45) days following demand at any
      time commencing on the first anniversary of the Closing Date and ending on
      the
      third anniversary of the Closing Date. The Investor also agreed to extend the
      requirement for the Company to file a Registration Statement from ninety (90)
      days after the closing until March 16, 2007 and extended the requirement to
      have
      the Registration Statement effective from one hundred eighty (180) days after
      the closing until June 15, 2007.





12




**Secured
      Line of Credit Agreement**





On
      February 1, 2007 the Company entered into a Secured Line Of Credit Agreement
      (“Credit Agreement”) with Fursa Alternative Strategies, LLC (“Fursa” or
“Lender”), allowing the Company to draw upon a $3,000,000 line of credit with a
      Maturity Date of 1 year from the date of the Credit Agreement, which may be
      extended for an additional 3 months. Fursa was previously known as Mellon U.S.
      Event Driven Fund, L.P. and Mellon HBV Master Global Event Driven Fund, L.P.
      which were parties to the Securities Purchase Agreement with Company dated
      August 9, 2006, as amended (see Note 5). The per annum base Interest Rate
      applicable in each month that advances are drawn down or outstanding pursuant
      to
      the Credit Agreement is equal to the three month LIBOR rate as published on
      the
      first date of such month in the “Money Rates” section of The Wall Street Journal
      (rounded up or down to the nearest one-sixteenth of one percent) plus 700 basis
      points (7.0%). Upon a default under the terms of the Note, the Interest Rate
      would increase by 4%.





In
      conjunction with the Credit Agreement, the Company granted warrants to each
      of
      Lender and Sagamore Hill Capital, LLC, an affiliate of the Lender (“Sagamore”),
      to purchase respectively, forty-eight million eight hundred four thousand four
      hundred and twenty four (48,804,424) shares of the Company’s common stock (the
“Warrants”). The Warrants are exercisable for five years from the date of
      issuance at an initial exercise price equal to $0.055 per share subject to
      adjustment under certain events.





In
      the
      event that the Company does not secure certain purchase order(s) on or prior
      to
      March 31, 2007, the applicable Interest Rate after such date shall increase
      by
      2% and the Company shall issue to each of the Lender and Sagamore additional
      warrants (collectively, the “Additional Warrants”) to purchase shares of the
      Company’s common stock representing in aggregate 48,804,424 shares at an initial
      strike price of $0.055 per share subject to adjustment under certain events,
      exercisable for five years from the date of issuance.





Where
      Company does secure such purchase orders on or prior to June 30, 2007, 25%
      of
      the total number of initial Warrants issued shall be automatically redeemed
      by
      the Company for no additional consideration. Upon the expiration or termination
      of the credit facility under the Agreement, whichever occurs first, the Company
      has the option to purchase 25% of the total number of initial Warrants issued
      at
      an aggregate purchase price of $250,000.





In
      addition to other obligations as are standard to an agreement such as the Credit
      Agreement, the Company agreed (i) to certain operational obligations, (ii)
      to
      appoint a Chief Operating Officer on or prior to April 30, 2007, subject to
      prior approval by the Lender, which approval shall not be unreasonably withheld
      and (iii) to appoint a representative of Lender to the Board of Directors of
      Company.


13


**Item
      2. Management's Discussion and Analysis of Financial Condition and** **Results
      of Operations**





The
      following discussion should be read along with our financial statements, which
      are included in another section of this 10-QSB. This discussion contains
      forward-looking statements about our expectations for our business and financial
      needs. These expectations are subject to a variety of uncertainties and risks
      that may cause actual results to vary significantly from our expectations.
      The
      cautionary statements made in this Report should be read as applying to all
      forward-looking statements in any part of this 10-QSB. The forward-looking
      statements are made as of the date of this Form 10-QSB, and the Company assumes
      no obligation to update the forward-looking statements, or to update the reasons
      actual results could differ from those projected in such forward-looking
      statements.




**Organization**





CARSUNLIMITED.COM,
      Inc. (hereinafter referred to as “Registrant”), a Nevada publicly traded
      corporation, prior to August 9 th ,
      2006,
      was a development stage company with limited operations and revenues and only
      nominal assets. Its intended purpose was to offer users the ability to search
      a
      database that contained products and information about the Automobile industry,
      new and used car sales (classified ads), as well as automotive products such
      as
      extended warranty information and anti-theft body part marking.





On
      August
      9, 2006, Registrant executed an Agreement and Plan of Merger (“Merger
      Agreement”) with Pump Acquisition Corp., a wholly-owned subsidiary of Registrant
      ("PAC"), Innopump, Inc. D/B/A Versadial (“Innopump”), a Nevada corporation which
      was formed on April 1, 2005, and certain Innopump stockholders. Pursuant to
      the
      Merger Agreement, the Registrant issued 568,134,259 shares of its common stock
      to shareholders of Innopump in consideration of Innopump merging with and into
      PAC and becoming a wholly-owned subsidiary of Registrant ("Merger"). Registrant,
      prior to the Merger, is sometimes referred to herein as OLDCO .The Merger is
      more fully described below. As a result of the merger, Innopump became a
      majority-owned subsidiary of OLDCO and the holders of Innopump common stock
      and
      debt acquired a majority interest of OLDCO. The accounting of this transaction
      differs from its legal form, as Innopump is considered the accounting acquirer
      and OLDCO the acquired entity. The transaction has been accounted for as a
      reverse acquisition under the purchase method of accounting, whereby the assets
      of OLDCO were revalued and the purchase price allocated to those assets acquired
      and liabilities assumed. Innopump’s historical financial statements were carried
      forward subsequent to the merger as those of the combined entity (hereinafter
      referred to as “NEWCO” or the “Company”).





Innopump
      is engaged in the manufacture of a dispenser that enables the user to blend
      two
      liquids in varying proportions. The dispensers are manufactured in Germany
      and
      are currently being utilized in the food and cosmetic industries.





On
      May
      25, 2005, Innopump acquired all of the assets and assumed certain liabilities
      of
      Sea Change Group, LLC ("SCG"), a privately held New York Limited Liability
      Company formed in 1999. This transaction between Innopump and SCG, which were
      entities under common control, was accounted for in a manner similar to a
      pooling of interests whereby the assets and liabilities of SCG were transferred
      to Innopump at historical amounts. Prior to the merger with OLDCO, the financial
      statements of Innopump were prepared as if the transaction had occurred at
      the
      beginning of the period presented, and present the financial data of previously
      separate entities.





NEWCO’s
      fiscal year ends on June 30, and therefore references to fiscal 2006 and 2005
      refer to the fiscal years ended June 30, 2006 and June 30, 2005, respectively.
      OLDCO’s fiscal year end was December 31, which was changed to June 30 to conform
      to the year end of Innopump, the accounting acquirer.




**Merger
      Agreement**





On
      August
      9, 2006, OLDCO executed an Agreement and Plan of Merger (“Merger Agreement”)
      with Pump Acquisition Corp., a wholly-owned subsidiary of OLDCO ("PAC"),
      Innopump, and certain Innopump stockholders. Pursuant to the Merger Agreement,
      the Company issued 568,134,259 shares of its common stock to shareholders of
      Innopump in consideration of Innopump merging with and into PAC and becoming
      a
      wholly-owned subsidiary of OLDCO ("Merger"). Holders of Innopump convertible
      notes, warrants and options received equivalent amount of notes, warrants and
      options convertible or exercisable into that number of Registrant common stock
      had they converted or exercised immediately prior to the closing.





The
      Merger Agreement required OLDCO to issue to the Innopump stockholders 1,950
      shares of common stock for each share of Innopump common stock outstanding
      at
      the closing date of August 9, 2006. At the closing, there were 262,500
      outstanding shares of Innopump common stock plus 28,792 shares issued on
      conversion of certain debt for a total of 291,292 shares which resulted in
      the
      issuance of 568,134,259 shares of common stock and resulted in OLDCO
      stockholders retaining approximately 6.75% (41,125,000 shares) of the
      outstanding stock and Innopump stockholders receiving approximately 93.25%
      of
      the outstanding stock on a pre-diluted basis.




14





The
      parties’ completion of the transactions contemplated under the Merger Agreement
      were subject to the satisfaction of certain contingencies including, without
      limitation, requisite approvals and consents and that OLDCO shall have no less
      than $7,500,000 in cash or cash equivalents and no more than $80,000 in
      liabilities immediately prior to closing. These conditions were deemed satisfied
      at the closing.





NEWCO
      incurred merger costs of approximately $503,000, which were charged to equity,
      consisting of approximately a $350,000 advisory fee payable to the investment
      banker and $153,000 in legal fees. The investment banker agreed to defer payment
      of $175,000 of the advisory fee until February 2007. The deferred portion of
      the
      fee was paid on February 9, 2007 pursuant to the agreement with the investment
      banker. All other fees were paid at or subsequent to the closing.




Innopump,
      Inc, was established to capitalize on the commercial opportunities for
      innovation in packaging and dispensing within the consumer products industries.
      Innopump holds the exclusive worldwide license for a patented multi-chambered
      variable dispensing system for all category uses, marketed under the registered
      trademark "Versadial(R)". The patented system utilizes multiple volumetric
      pumps, controlled by a rotating head and disc system, providing the dispensing
      of precise fixed or variable ratios of distinct and separate fluids. The
      Versadial(R) custom blending dual dispensing head provides consumer packaged
      goods manufacturers with a new and innovative dispensing technique permitting
      precision measured blending by the consumer of lotions, creams and
      liquids.





See
      the
      Company’s Report on Form 8-K dated August 9, 2006, filed with the SEC on August
      11, 2006, for a more detailed description of the Merger.




**Liquidity
      and Capital Resources**





The
      following table sets forth the working capital deficit of the Company as at
      December 31, 2006:


At
                  December 31,2006Current
                  assets
              
              $
              1,564,773Current
                  liabilities
              
              
              4,007,460Working
                  capital deficit
              
              $
              (2,442,687
              )





At
      December 31, 2006, the Company has incurred cumulative losses of approximately
      $9.8 million since inception and $2.9 million for the six months ended December
      31, 2006. The Company has a working capital deficit of approximately $2.4
      million and a stockholders’ deficit of approximately $8.5 million as of December
      31, 2006.





On
      August
      9, 2006, concurrent with the merger, OLDCO sold 10% senior redeemable
      convertible debt (“Convertible Debt”) in the principal amount of $7.5 million to
      Mellon HBV Master U.S. Event Driven Fund, L.P. and Mellon HBV Master Global
      Event Driven Fund, L.P. (now known as [Fursa Alternative Strategies LLC];
      collectively, the “Investors”). The note bears interest at 10% per annum and is
      due on February 9, 2009. The proceeds were first used to pay approximately
      $1
      million in financing and legal fees, $4.5 million in current notes payable
      and
      accrued interest and $250,000 in other current obligations which became due
      on
      the date of the merger. The Company received net proceeds of approximately
      $1.7
      million, which management used for working capital needs.





At
      June
      30, 2006, the Company had approximately $7.1 million in current notes payable
      and accrued interest. On August 9, 2006, prior to the reverse merger with OLDCO,
      the Company converted $1.2 million of these notes into common stock. As noted
      above, Innopump repaid approximately $4.5 million with the proceeds from the
      $7.5 million financing. The remaining current notes payable of approximately
      $1.5 million are primarily due to shareholders which management believes will
      be
      extended prior to maturity.





On
      September 29, 2006, the Company received $700,000 from a customer in the
      consumer products industry in exchange for the Company’s undertaking to deliver
      pre-production samples of a specially designed dual chamber dispensing pump
      and
      to fund pre-production tooling and mold expenses. The Company has no obligation
      to repay the advance, should the samples not satisfy the customer’s
      requirements. However, if the requirements are met, management anticipates
      that
      the Company will enter into an exclusive supply relationship with this customer
      for a term in excess of one year. The $700,000advance will be applied against
      future revenues and the customer will advance additional funds at that
      time.




15





On
      February 1, 2007 the Company entered into a Secured Line Of Credit Agreement
      (“Credit Agreement”) with Fursa Alternative Strategies, LLC (“Fursa”), allowing
      the Company to draw upon a $3,000,000 line of credit with a Maturity Date of
      1
      year from the date of the Credit Agreement, which may be extended for an
      additional 3 months. Fursa was previously known as Mellon U.S. Event Driven
      Fund, L.P. and Mellon HBV Master Global Event Driven Fund, L.P. which were
      parties to the Securities Purchase Agreement with Company dated August 9, 2006,
      as amended, described above. The per annum base Interest Rate applicable in
      each
      month that advances are drawn down or outstanding pursuant to the Credit
      Agreement is equal to the three month LIBOR rate as published on the first
      date
      of such month in the “Money Rates” section of The Wall Street Journal (rounded
      up or down to the nearest one-sixteenth of one percent) plus 700 basis points
      (7.0%). Upon a default under the terms of the Note, the Interest Rate would
      increase by 4%.





Management
      recognizes that the Company must generate additional revenue and sufficient
      gross profits to achieve profitable operations. Management's plans to increase
      revenues include the continued building of its customer base and product line,
      especially in the food and cosmetic industries. Management believes that the
      capital received as a result of the above transactions and the credit available
      under the secured line of credit will enable the Company to purchase the
      necessary capital equipment needed to expand its product line and increase
      production capacity during the next twelve months. In addition, it will allow
      the Company to continue to build its customer base as well as increase revenues
      with existing customers.




Based
      on
      the current operating plan and available cash and cash equivalents currently
      available, the Company does not expect to need to obtain additional financing
      through the sale of equity securities, private placements, and/or bridge loans
      within the next 12 months, but there is no assurance that additional financing
      may not be needed. Additional financing, whether through public or private
      equity or debt financing, arrangements with stockholders or other sources to
      fund operations, may not be available, or if available, may be on terms
      unacceptable to the Company. The ability to maintain sufficient liquidity is
      dependent on the Company’s ability to successfully build its customer base and
      product line with the required capital equipment. If additional equity
      securities are issued to raise funds, the ownership percentage of existing
      stockholders would be reduced. New investors may demand rights, preferences
      or
      privileges senior to those of existing holders of common stock. Debt incurred
      by
      the Company would be senior to equity in the ability of debt holders to make
      claims on the Company’s assets. The terms of any debt issued could impose
      restrictions on the operations of the Company .





There
      can
      be no assurance that the Company will be successful in building its customer
      base and product line or that the available capital will be sufficient to fund
      current operations and the necessary capital expenditures until such time that
      the revenues increase. If the Company is unsuccessful in building its customer
      base or is unable to obtain additional financing, if necessary, on terms
      favorable to the Company there could be a material adverse effect on the
      financial position, results of operations and cash flows of the Company. The
      accompanying financial statements do not include any adjustments that might
      be
      necessary if the Company is unable to continue as a going concern.




**Results
      of Operations**




*Six
      months ended December 31, 2006 and 2005*





REVENUES.
      Revenues during the six months ended December 31, 2006 were $440,970 as compared
      to revenues of $57,420 during the six months ended December 31, 2005, an
      increase of approximately 667%. In the period ended December 31, 2006, revenues
      were mainly attributable to two new customers in the cosmetic industry. In
      the
      period ended December 31, 2005, revenues were attributable to two small
      customers in the food industry. We believe that our sales will continue to
      grow
      in the future as we strengthen our sales force, increase our production capacity
      with both new and improved equipment, and are able to introduce new products
      into the market which will enable us to diversify and increase our customer
      base.





GROSS
      MARGIN. Cost of revenues - direct costs, which consist of direct labor, overhead
      and product costs, were $413,691 (94% of revenues) for the six months ended
      December 31, 2006 as compared to $48,499 (84% of revenues) for the period ended
      December 31, 2005. The increase for 2006 is a result of the increase in
      revenues. The increase as a percent of revenues is related to additional labor
      costs required on one product line which is not yet fully automated. Cost of
      revenues - indirect costs, which consist of indirect labor, quality control
      costs, factory maintenance, product development and depreciation, were $315,872
      for the six months ended December 31, 2006 as compared to $186,881 for the
      period ended December 31, 2005. The increase was due primarily to increased
      depreciation of approximately $60,000 due to the purchase of more manufacturing
      equipment, approximately $106,000 in product design including samples and
      prototype parts, and additional labor for overseas administration, testing
      and
      development in 2006 as compared to approximately $76,000 in 2005 and increased
      quality control and factory maintenance costs as the revenues increased. Gross
      margin was a deficit of $(288,593) for the six months ended December 31, 2006
      as
      compared to a deficit of $(177,960) for the period ended December 31, 2005,
      representing gross margins of approximately (65)% and (310)% of revenues,
      respectively. The negative gross margin percentage in both periods is
      attributable to revenues which could not cover indirect costs. Management
      believes that these indirect costs, which are primarily related to depreciation
      and the development of a new smaller dispenser, will decrease as products become
      introduced into the marketplace and that revenues will increase to cover these
      costs. Management also believes direct costs will decrease on a percentage
      of
      revenue basis as labor becomes streamlined with the addition of new assembly
      equipment and that production capacity will increase with the purchase of
      additional molds with higher cavity production capabilities.




16





OPERATING
      EXPENSES. General and administrative expenses totaled $1,483,709 for the six
      months ended December 31, 2006, as compared to $843,405 for the period ended
      December 31, 2005, an increase of approximately 76%. This increase of
      approximately $641,000 is primarily attributable to an increase in the royalties
      due the licensor under contract of $50,000, an increase in consulting fees
      of
      $301,000 as more general consultants were used in 2006 for sales, administrative
      and development functions, an increase in salaries and benefits of $264,000
      as
      the Company established a financial and sales staff which did not exist in
      2005,
      and an increase in other general expenses of approximately $26,000 due to the
      growth of the operations of the Company.





NET
      LOSS.
      The net loss during the six months ended December 31, 2006 aggregated $2,881,212
      as compared to $1,173,367 for the six months ended December 31, 2005, an
      increase of approximately $1,698,000. The increase in net loss is attributable
      to the increases in general and administrative and cost of revenues as described
      above. In addition, interest expense increased by approximately $640,000 in
      2006
      due to increased debt obligations. The Company also incurred financing and
      debt
      discount costs which are being amortized over the life of the related debt
      obligations of approximately $302,000 for the six months ended December 31,
      2006
      as compared to approximately $40,000 for the period ended December 31, 2005
      due
      to the increased debt in the current period. Management believes that revenues
      will continue to increase as new products are introduced and the Company is
      able
      to grow its customer base, and direct costs will decrease as production becomes
      more automated, allowing operating expenses and indirect costs to be covered
      and
      an improvement in the gross margin.




*Three
      months ended December 31, 2006 and 2005*





REVENUES.
      Revenues during the three months ended December 31, 2006 were $421,495 as
      compared to revenues of $44,620 during the three months ended December 31,
      2005,
      an increase of approximately 884%. In the period ended December 31, 2006,
      revenues were mainly attributable to two new customers in the cosmetic industry.
      In the period ended December 31, 2005, revenues were attributable to two small
      customers in the food industry. We believe that our sales will continue to
      grow
      in the future as we strengthen our sales force, increase our production capacity
      with both new and improved equipment, and are able to introduce new products
      into the market which will enable us to diversify and increase our customer
      base.





GROSS
      MARGIN. Cost of revenues - direct costs, which consist of direct labor, overhead
      and product costs, were $391,926 (93% of revenues) for the three months ended
      December 31, 2006 as compared to $37,059 (83% of revenues) for the period ended
      December 31, 2005. The increase for 2006 is a result of the increase in
      revenues. The increase as a percent of revenues is related to additional labor
      costs required on one product line which is not yet fully automated. Cost of
      revenues - indirect costs, which consist of indirect labor, quality control
      costs, factory maintenance, product development and depreciation, were $166,932
      for the three months ended December 31, 2006 as compared to $94,383 for the
      period ended December 31, 2005. The increase was due primarily to increased
      depreciation of approximately $32,000 due to the purchase of more manufacturing
      equipment, approximately $56,000 in product design including samples and
      prototype parts, and additional labor for overseas administration, testing
      and
      development in 2006 as compared to approximately $39,000 in 2005 and increased
      quality control and factory maintenance costs as the revenues increased. Gross
      margin was a deficit of $(137,363) for the three months ended December 31,
      2006
      as compared to a deficit of $(86,822) for the period ended December 31, 2005,
      representing gross margins of approximately (33)% and (195)% of revenues,
      respectively. The negative gross margin percentage in both periods is
      attributable to revenues which could not cover indirect costs. Management
      believes that these indirect costs, which are primarily related to depreciation
      and the development of a new smaller dispenser, will decrease as products become
      introduced into the marketplace and that revenues will increase to cover these
      costs. Management also believes direct costs will decrease on a percentage
      of
      revenue basis as labor becomes streamlined with the addition of new assembly
      equipment and that production capacity will increase with the purchase of
      additional molds with higher cavity production capabilities.





OPERATING
      EXPENSES. General and administrative expenses totaled $786,531 for the three
      months ended December 31, 2006, as compared to $459,971 for the period ended
      December 31, 2005, an increase of approximately 71%. This increase of
      approximately $327,000 is primarily attributable to an increase in the royalties
      due the licensor under contract of $25,000, an increase in consulting fees
      of
      $187,000 as more general consultants were used in 2006 for sales, administrative
      and development functions, and an increase in salaries and benefits of $115,000
      as the Company established a financial and sales staff which did not exist
      in
      2005.




17





NET
      LOSS.
      The net loss during the three months ended December 31, 2006 aggregated
      $1,634,489 as compared to $645,229 for the three months ended December 31,
      2005,
      an increase of approximately $989,000. The increase in net loss is attributable
      to the increases in general and administrative and cost of revenues as described
      above. In addition, interest expense increased by approximately $412,000 in
      2006
      due to increased debt obligations. The Company also incurred financing and
      debt
      discount costs which are being amortized over the life of the related debt
      obligations of approximately $192,000 for the three months ended December 31,
      2006 as compared to approximately $26,000 for the period ended December 31,
      2005
      due to the increased debt in the current period. Management believes that
      revenues will continue to increase as new products are introduced and the
      Company is able to grow its customer base, and direct costs will decrease as
      production becomes more automated, allowing operating expenses and indirect
      costs to be covered and an improvement in the gross margin.




18


**ITEM
      3. CONTROLS AND PROCEDURES**




**Evaluation
      of Disclosure Controls and Procedures**




For
      purposes of rule 13a-14 and 15d-14 of the Securities Exchange Act of 1934
      ("Exchange Act") the term "disclosure controls and procedures" refers to the
      controls and other procedures of a company that are designed to ensure that
      information required to be disclosed by a company in the reports that it files
      under the Exchange Act is recorded, processed, summarized and reported within
      the required time periods. As of the last date of the end of the period covered
      by this report ("Evaluation Date"), the Company carried out an evaluation under
      the supervision and with the participation of its Chief Executive Officer and
      Principal Accounting Officer, who are the same person, of the effectiveness
      of
      the design and operation of its disclosure controls and procedures. Based on
      that evaluation, the Chief Executive Officer has concluded that, as of the
      Evaluation Date, such controls and procedures were effective at ensuring that
      required information will be disclosed on a timely basis in our periodic reports
      filed under and pursuant to the Exchange Act.




**Changes
      in Internal Controls**




The
      Company made no significant changes in its internal controls or in other factors
      that could significantly affect those controls subsequent to the date of the
      evaluation of those controls subsequent to the Evaluation Date.




19




**PART
      II. OTHER INFORMATION**




**ITEM
      1. Legal Proceedings**




None




**ITEM
      2. Unregistered Sales of Equity Securities**




There
      have been no changes in the instruments defining the rights or rights evidenced
      by any class of registered securities.




There
      have been no dividends declared.




**ITEM
      3. Defaults Upon Senior Securities**




None




**ITEM
      4. Submission of Matters to Vote of Security Holders**




None




**ITEM
      5. Other Information**




None




**ITEM
      6. Exhibits and Reports on Form 8-K**




(A)
      Exhibits




2.1
            Agreement
                and Plan of Merger by and between the Registrant, Innopump, Inc.
                and
                certain shareholders of Innopump dated August 9, 2006
                (3)3.1
            Certificate
                of Amendment to Articles of Incorporation (2)3.2
            Certificate
                of Amendment to Articles of Incorporation (1)4.1
            Registration
                Rights Agreement by and among the Registrant and Mellon HBV Master
                U.S.
                Event Driven Fund, L.P. and Mellon HBV Master Global Event Driven
                Fund,
                L.P. (collectively referred to as the “Investor”) dated as of August 9,
                2006 (3)4.2
            Form
                of Convertible Note (3)4.3
            Form
                of Warrant (3)4.4
            Secured
                Line of Credit Agreement dated as of February 1, 2007 between Registrant
                and Fursa Alternative Strategies, LLC
                (6)




10.1
            Note
                Conversion Agreement between the Company and ODC Partners, LLC
                (2)




10.2
            Amendment
                No. 1 to Securities Purchase Agreement between the Company and Mellon
                HBV
                Master U.S. Event Driven Fund LP and Mellon HBV Master Global Event
                Driven
                Fund LP (4)




10.3
            Amendment
                No. 2 to Securities Purchase Agreement between the Company and Mellon
                HBV
                Master U.S. Event Driven Fund LP and Mellon HBV Master Global Event
                Driven
                Fund LP (5)




31
            Certification
                of CEO and CFO pursuant to Securities Exchange Act rules 13a-15 and
                15d-15(c) as adopted pursuant to section 302 of the Sarbanes-Oxley
                Act of
                2002.*




32
            Certification
                of Chief Executive Officer and Chief Financial Officer, pursuant
                to 18
                U.S.C. section 1350, as adopted pursuant to section 906 of the
                Sarbanes-Oxley Act of 2002.*




20




(1)
            Filed
                with the Company’s Form 8-K on August 2, 2006 and incorporated by
                reference.




(2)
            Filed
                with the Company’s Form 8-K on August 9, 2006 and incorporated by
                reference.




(3)
            Filed
                with the Company’s Form 8-K on August 11, 2006 and incorporated by
                reference.




(4)
            Filed
                with the Company’s Form 8-K on October 23, 2006 and incorporated by
                reference.




(5)
            Filed
                with the Company’s Form 8-K on November 15, 2006 and incorporated by
                reference.




(6)
            Filed
                with the Company’s Form 8-K on February 7, 2007 and incorporated by
                reference.




*
      Filed
      herewith





(B)
      Reports on Form 8-K





Current
      reports on Form 8-K during the quarter ended December 31, 2006 and the
      subsequent interim period ended February 19, 2007 are as follows:




·
            Report
                on Form 8-K filed with the SEC on October 4, 2006, announcing under
                Item
                8.01 a transaction with a consumer products
                company.


·
            Report
                on Form 8-K/A filed with the SEC on October 13, 2006, amending Form
                8-K
                filed on August 11, 2006, amended to include proforma and audited
                financial statements of Innopump, Inc. for the fiscal year end June
                30,
                2006 under Item 9.01.


·
            Report
                on Form 8-K filed with the SEC on October 23, 2006, announcing under
                Item
                1.01 an amendment to the Securities Purchase Agreement between the
                Registrant and Mellon HBV Master U.S. Event Driven Fund LP and Mellon
                HBV
                Master Global Event Driven Fund LP.


·
            Report
                on Form 8-K filed with the SEC on November 15, 2006, announcing under
                Item
                1.01 an amendment to the Securities Purchase Agreement between the
                Registrant and Mellon HBV Master U.S. Event Driven Fund LP and Mellon
                HBV
                Master Global Event Driven Fund LP.


·
            Report
                on Form 8-K filed with the SEC on December 15, 2006, announcing under
                Item
                5.02 the resignation of a Director of
                Registrant.


·
            Report
                on Form 8-K filed with the SEC on February 7, 2007, announcing under
                Item
                1.01 the entering into a Secured Line of Credit Agreement between
                the
                Registrant and Fursa Alternative Strategies, LLC and reporting under
                Item
                5.02 the appointment of five (5) Directors.


·
            Report
                on Form 8-K filed with the SEC on February 13, 2007,reporting
                under Item 5.02 the resignation of a Director.




21


**SIGNATURES**




Pursuant
      to the requirements of the Exchange Act, the registrant caused this report
      to be
      signed on its behalf by the undersigned, thereunto duly authorized.




**CARSUNLIMITED.COM,
                INC.**By:
            /s/
                Geoffrey DonaldsonChief
                Executive Officer, Principal Accounting Officer
              and
                DirectorDated: February 19, 2007  22