UNITED
      STATES


SECURITIES
      AND EXCHANGE COMMISSION


Washington,
      D.C. 20549





Form
          10-KSB/A
 First
          Amended


x  ANNUAL
      REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934





For
      the
      fiscal year ended February 28, 2007








o  TRANSITION
      REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934





For
      the
      transition period from ______________ to
      __________________




Commission
      File No.: 333-129910








TANK
      SPORTS, INC.


(Name
      of
      small business issuer in its charter)









California
            95-4849012(State
                or other jurisdiction of incorporation or organization)
            (I.R.S.
                Employer Identification No.)











10925
      Schmidt Road


El
      Monte, California 91733


(Address,
      including zip code, of principal executive offices)








Issuer’s
      telephone number : (626) 350-4039








Securities
      registered under Section 12(b) of the Exchange Act: None




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




Common
      Stock, Par Value $.001 Per Share


(Title
      of
      class)





1





Check
      whether the issuer (1) filed all reports required to be filed by Section 13
      or
      15(d) of the Exchange Act during the past 12 months (or for such shorter period
      that the registrant was required to file such reports), and (2) has been subject
      to such filing requirements for the past 90 days.  xYes  oNo





Check
      if
      there is no disclosure of delinquent filers in response to Item 405 of
      Regulation S-B contained in this form, and no disclosure will be contained,
      to
      the best of registrant’s knowledge, in definitive proxy or information
      statements incorporated by reference in Part III of this Form 10-KSB or any
      amendment to this Form 10-KSB. x





Indicate
      by check mark whether the registrant is an accelerated filer (as defined in
      exchange A Rule 12b-2)





Yes   ̈    No  x





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





Yes   ̈    No  x





State
      issuer’s revenues for its most recent fiscal year. $9,588,238.





As
      of
      February 28, 2007, we had 32,902,800 shares of our $0.001 par value common
      stock
      issued and outstanding.  On February 28, 2007, the aggregate market value
      of our common stock held by non-affiliates was approximately $
      16,451,400.







DOCUMENTS
      INCORPORATED BY REFERENCE


None





Transitional
      Small Business Disclosure Form (Check one):  Yes o  No x





To
      simplify the language in this Form 10-KSB, Tank Sports, Inc., a California
      corporation, is referred to herein as “Tank”, the "Company" or
      "We."





2





**Table
      of Contents**




PagePART
                IITEM
                  1
            DESCRIPTION
                  OF BUSINESS
            4ITEM
                  2
            DESCRIPTION
                  OF PROPERTY.
            8ITEM
                  3
            LEGAL
                  PROCEEDINGS
            8ITEM
                  4
            SUBMISSION
                  OF MATTERS TO A VOTE OF SECURITY HOLDERS
            8ITEM
                  5
            MARKET
                  FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
            8ITEM
                  6
            MANAGEMENT’S
                  DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
            9ITEM
                  7
            FINANCIAL
                  STATEMENTS
            15ITEM
                  8
            CHANGES
                  IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
                  DISCLOSURE
            34ITEM
                  8A
            CONTROLS
                  AND PROCEDURES
            34PART
                  IIITEM
                  9
            DIRECTORS,
                  EXECUTIVE OFFICERS. PROMOTERS AND CONTROL PERSONS; COMPLIANCE WITH
                  SECTION
                  16(a)
            34ITEM
                  9B
            COMPLIANCE
                  WITH SECTION 16(a) OF THE EXCHANGE ACT
            35ITEM
                  10
            EXECUTIVE
                  COMPENSATION
            35ITEM
                  11
            SECURITY
                  OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
                  MANAGEMENT
            36ITEM
                  12
            CERTAIN
                  RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
            36ITEM
                  13
            EXHIBITS
                  AND REPORTS ON FORM 8-K
            37ITEM
                  14
            PRINCIPAL
                  ACCOUNTANT FEES AND SERVICES
            37SIGNATURES
            38




3




PART
      I





This
      report on Form 10-KSB and documents incorporated herein by reference contain
      certain “forward-looking statements” as defined by the Private Securities
      Litigation Reform Act of 1995 which involve substantial risks and uncertainties.
      When used in this report and in other reports filed by the Company, the
      forward-looking statements are often identified by the use of such terms and
      phrases as “anticipates,” “believes,” “intends,” “plans,”
“expects,” “seeks,” “scheduled,” “foreseeable future’ and similar
      expressions. Although the Company believes the understandings and assumptions
      on
      which the forward-looking statements in this report are based are reasonable,
      the Company’s actual results, performance and achievements could differ
      materially from the results in, or implied by, these forward-looking statements.
      Certain factors that could cause or contribute to such differences include
      those
      discussed in “Management’s Plan of Operations” and elsewhere
      herein.





ITEM
      1.
      DESCRIPTION OF BUSINESS.





Corporate
      History





Tank
        Sports, Inc. was originally incorporated under the laws of the State of
        California on March 5, 2001, as Bi-Tank, Inc. On June 21, 2004, we amended
        our
        Articles of Incorporation changing our name to “Tank Sports, Inc.” Our principal
        office and warehouse is located at 10925 Schmidt Road, El Monte, California
        91733. We currently maintain websites at
http://www.tank-sports.com and http://www.redcatmotors.com
        for vehicles,  http://www.atvpartsusa.com and
http://www.tanksportsdealers.com for parts and
        service .




The
        company has product lines, including motorcycles, both on-road and
        off-road, scooters, go karts, dirt bikes and ATVs with customer service and
        parts support centralized in El Monte, California.











Current
      Business Operations





We
        market, sell and distribute recreational and transportation motorcycles,
        all-terrain vehicles (“ATVs”), dirt bikes, scooters and Go Karts in the United
        States and other international markets. We complement each of product lines
        with
        an assortment of replacement parts and accessories, which are available at
        our
        dealerships. We market our products through a dealer network of about over
        550
        dealers and distributors worldwide, with over 500 dealers in the United States.
        Outside of the United States, we sell our products through an international
        network of dealers and distributors serving countries such as Mexico, Ecuador,
        Jamaica, and Brazil .





We
        offer
        a full product line consisting of 5 cruiser motorcycles, 2 dirt bike
        motorcycles, 18 scooters, and 6 all-terrain vehicles. The cruiser motorcycles
        ranges in sizes from 50cc to 250cc, dirt bikes range in size from 70cc to
        250cc,
        scooter ranges in sizes from 50cc to 250cc and the ATV models are from 70cc
        to
        400cc.   Through the acquisition that we have done on January
        2007, we also obtained 11 ATV models under the brand name of RedCat. All
        motorcycle and ATV products are manufactured in China. Our products are
        manufactured according to our proprietary designs and standards. Up to October
        2006,  We made purchases of motorcycle and ATV products from third
        party vendors in China by financing through Steady Star, a related party.
        With
        each purchase, Steady Star issued a letter of credit and Purchase Order (“P.O.”)
        according to specific instructions from us on Models, Quantity, Color(s),
        and
        terms and conditions on payments, shipment, packaging, import/export
        responsibilities and other remarks. Since November 2006, we have stopped
        this
        type of financing activity with Steady Star, Inc.  All Purchase Orders
        are written in a standard format to all vendors. Following is an example
        of the
        standard format of terms and conditions written in our Purchase
        Orders:





·
            Vendor
                shall provide Buyer 1% (or 2.5% for certain products) of the easily
                damageable parts as “Cost-free after sales items.” Buyer should provide
                Vendor with a list of easily damageable
                parts.


·
            Vendor
                shall be responsible for any problem caused by
                packaging.


·
            Prior
                to completion of packaging, Vendor shall notify Buyer to conduct
                quality
                inspections.


·
            All
                engine marks for various models listed on the P.O. shall be “TANK”. All
                engines must be stamped with proper marks. Vehicle shall be marked
“TK’ or
                “TANK”. There shall not be any other Chinese / English marks or stamps
                other than specified by the Buyer.


·
            Vendor
                shall not manufacturer any of the vehicle models or its parts listed
                in
                the P.O. to any company or individual other than the
                Buyer.


·
            Vendor
                shall not sell to the United States market using any method or for
                any
                reason.






Each
      of
      our Purchase Orders are based on the market condition at the time of issuance.
      Thus the exact terms and conditions might vary from those listed above. SEE
      CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.


4




ITEM 1. DESCRIPTION OF BUSINESS - continued




In
        the
        year of 2006, Tank Sports and Redcat Motors has jointly distributed over
        33,000
        units of motorcycles and ATVs in the US market from China, which took 9.5%
        of
        market shares of  Chinese motorcycle and ATV imports in the US domestic
        market, according to the statistics by the Commerce
        Department.







China
      Market Opportunity





China
        is
        currently the largest motorcycle producer in the world with 17.8 millions
        units
        produced in 2005. There are 155 motorcycle unit manufacturers and more 800
        parts
& accessories manufacturers. The industry employs 3 million workers in the
        country. Most of the motorcycles and scooters that produced in China are
        smaller engine displacement products, from 50cc to 200cc. The ownership rate
        of
        motorcycle and scooter in the population is only 5%, which is very low compared
        to 42% in Taiwan and 14% in Thailand. In its 11th 5 year
        social and
        economic development plan, Chinese government has decided to put more investment
        on improving its road system and public transportation infrastructure in
        the
        country area, where 65% of its 1.3 population lives. With the economy grows
        with
        higher rate, the consumer need of motorcycles and scooters, especially in
        the
        suburban area in China, will experience a high growth in the years to
        come.





According
        to government policy, China is intended to consolidate the number of
        motorcycle/scooter manufacturers from 155 to 108. It
        will
        give Tank Sports, Inc a unique opportunity to expand its market exposure
        in
        China. We are planning to enter China market through acquiring motorcycle
        and
        ATV factories fitting our criteria,


·
              Strong
                  dealership network in China
                  market.


·
              Restricted
                  quality controlling system in
                  place.


·
              Core
                  competency in engine
                  R&D  technology


·
              Well-known
                  branding in the market place.


·
              Well-trained
                  technology and engineering personnel and skillful management
                  team





Through
        its M&A strategy and proper funding in place, Tank Sports will be poised to
        take larger market shares in China soon.











Industry
      Background




Motorcycles




We
      are
      engaged in the sales and distribution of motorcycles, mainly off road vehicles,
      dirt bikes, scooters, ATVs and Go Karts. According to MIC (Motorcycle Industry
      Council, a not-for-profit, national trade association crated to promote and
      preserve motorcycling and the U.S. motorcycle industry.), new motorcycle retail
      sales equaled an estimated 8.2 billion dollars in 2003. On-highway motorcycles
      accounted for 86%, while off-highway motorcycles and dual motorcycles
      represented 12% and 2% respectively. There were 8.8 million motorcycles in
      operation in the United States, or 3 motorcycles for every 100 persons. Of
      those, 6.9 million were used on public roads and highways, and 2.4 million
      were
      used off-road; these figures include 500,000 dual-purpose bikes, which are
      designed for use on public roads and for off-highway recreational
      purposes.





In
      the
      8.8 million motorcycles in use, 23.5 million people operated a motorcycle in
      2003. The MIC is the national trade association created to promote
      motorcycling and to enhance the U.S. Motorcycle industry. More than 300 members
      represent manufacturers and distributors of motorcycles, scooters, parts and
      accessories, and interface with allied trades (such as publishing, insurance
      and
      consultants) that support the continued development of statistics, effective
      governmental efforts and industry relations. At the present time, according
      to
      MIC, 13,924 retail outlets sell motorcycles and related products in the United
      States. 45% of these retail outlets are authorized to sell new motorcycles,
      scooters or all-terrain vehicles based on MIC estimates.




All-terrain
      Vehicles (“ATVs”)




ATVs
      are
      four-wheel vehicles with balloon style tires designed for off-road use and
      traversing rough terrain, swamps and marshland. ATVs are used for recreation,
      in
      such sports as fishing and hunting, as well as for utility purposes on farms,
      ranches and construction sites. ATVs were introduced to the North American
      market in 1971 by Honda. Other Japanese motorcycle manufacturers including
      Yamaha, Kawasaki and Suzuki entered the North American ATV market in the late
      1970s and early 1980s. We entered the ATV market in 2003. Also in 2003, John
      Deere announced its planned entrance into the North American ATV market in
      early
      2004. In 1985, the number of three- and four-wheel ATVs sold in North America
      peaked at approximately 650,000 units per year, then dropped dramatically
      to a low of 148,000 in 1989. Since that time, the industry has grown
      consistently. According to Polaris, during the calendar year 2004 the industry
      grew seven percent (7%) with approximately 1,129,000 ATVs sold
      worldwide.


5


ITEM
      1.
      DESCRIPTION OF BUSINESS - continued





Competition





The
      ATV
      and motorcycle markets in the United States are highly competitive. A handful
      of
      competitors dominate the powersports industry in the United States. Our main
      competitors includes three North American competitors (Polaris, Arctic Cat
      and
      Bombardier) and four Japanese competitors (Honda, Kawasaki, Suzuki and Yamaha)
      Competition in such markets is based upon a number of factors, including price,
      quality, reliability, styling, product features and warranties. At the dealer
      level, competition is based on a number of factors including sales and
      marketing support programs (such as financing and cooperative advertising).
      Certain of our competitors are more diversified and have financial and marketing
      resources which are substantially greater than those of our company. Our
      products are competitively priced and management believes our sales and
      marketing support programs for dealers are comparable to those provided by
      its
      competitors. Our products compete with many other recreational products for
      the
      discretionary spending of consumers. The following discussion is brief overview
      of our main competitors:





**Polaris:**Polaris Industries, Inc. engages in designing, engineering,
      manufacturing, and marketing motorized products for recreation and utility
      use,
      including all-terrain vehicles,, snowmobiles, and motorcycles together with
      related replacement parts, garments, and accessories. This company also markets
      a line of recreational apparel, including helmets, jackets, bibs and pants,
      leathers, and hats for its snowmobile, ATV, and motorcycle lines. It sells
      its
      products through dealers and distributors principally located in the United
      States, Canada, and Europe. Polaris Industries was formed in 1994 and is
      headquartered in Medina, Minnesota. Polaris competes in ATVs, snowmobiles,
      motorcycles, personal watercraft (“PWC”), and jet boats. Polaris is the market
      leader in snowmobiles with more than 30% market share worldwide and is the
      No. 2
      competitor in ATVs with more than 20% market share worldwide. Sharing
      overlapping geographies and similar brand heritage, our company and Polaris
      compete for the American consumer.





**Arctic
      Cat:**Arctic Cat, Inc. engages in the design, engineering, manufacture,
      and marketing of snowmobiles and all-terrain vehicles. It produces snowmobiles
      in 56 models and ATVs in 26 models. The company also sells snowmobile and ATV
      parts, such as electric start and reverse kits, luggage racks and bags,
      backrests, machine covers, windshields, track studs, carbide runners, winch
      kits, snow plow kits, portable lights, and utility bags. In addition, Arctic
      Cat
      offers garments and accessories, including suits, jackets, pants, pull-overs,
      sweatshirts, T-shirts, riding gloves, hats, helmets, caps, boots, and gear
      bags.
      This company sells its products in the United States, Canada, Europe, the Middle
      East, and Asia through a network of independent dealers and distributors. Arctic
      Cat’s principal executive offices are located in Thief River Falls, Minnesota.
      Based in Thief River Falls, Minnesota, Arctic Cat is our rival. Arctic Cat
      competes directly with us in the ATV market. Sharing overlapping geographies and
      similar brand heritage, our company and Arctic Cat compete for the American
      consumer.. Arctic Cat recently surpassed Bombardier to become the No. 2
      competitor in snowmobiles in the United States (No. 3 worldwide) and is the
      No. 6 competitor in ATVs worldwide, in management’s estimation.





**Bombardier:**Bombardier operates under the Sea-DooTM and Ski-DooTM names in the PWC
      and snowmobile markets, respectively, and recently entered the ATV market (1998)
      using the Bombardier name. Bombardier is the No. 1 competitor in PWC and is
      the
      No. 2 manufacturer of snowmobiles worldwide behind Polaris. In March 2001,
      Bombardier purchased Outboard Marine Corp., acquiring the Johnson and Evinrude
      brands of outboard motors along with the Fish-Hawk line of boats. Bombardier
      is
      also one of the largest producers of two- and four-stroke engines (called
      ROTAX), used primarily in snowmobile, watercraft, and ATV
      vehicles.


6


ITEM
      1.
      DESCRIPTION OF BUSINESS - continued





**Honda:**Honda Motor Co., Ltd. engages in the development, production, and
      manufacture of motor products, ranging from small general purpose engines to
      specialty sports cars. Its motorcycle business includes motorcycles, all-terrain
      vehicles, and personal watercraft. This company produces motorcycles, ranging
      from the 50 cubic capacity (cc) class to the 1800cc class in cylinder
      displacement. Honda’s motorcycle line consists of sports, business, and commuter
      models. Honda also manufactures various power products, including power tillers,
      portable generators, general purpose engines, grass cutters, outboard engines,
      water pumps, snow throwers, power carriers, power sprayers, lawn mowers, and
      lawn tractors. In addition, it also provides financing for the sale of its
      motorcycles, automobiles, and power products. This company’s products are
      distributed primarily in Japan through outlets, including PROS authorized
      dealerships. Honda Motor Co. was incorporated in 1948 and is based in Tokyo,
      Japan. With combined ATV and motorcycle sales of approximately $8 billion
      annually, Honda is our largest competitor in the powersports industry. Honda
      is
      the pioneer and market leader in ATVs and holds the No. 2 position in
      motorcycles behind Harley-Davidson. Honda entered the PWC market last year
      with
      two 1,235cc models and has added an additional PWC model for its 2003 model
      year. Honda’s move into PWC marks its first entry into a new recreational
      products category since 1971, when it introduced the industry’s first
      ATV.





**Yamaha:**Yamaha Motor Company manufacture and sales of motorcycles, scooters,
      electro-hybrid bicycles, boats, sail boats, Water Vehicles, pools, utility
      boats, fishing boats, outboard motors, diesel engines, 4-wheel ATVs,
      side-by-side vehicles, racing karts, golf cars, multi-purpose engines,
      generators, water pumps, snowmobiles, small-sized snow throwers, automotive
      engines, intelligent machinery, industrial-use remote control helicopters,
      electrical power units for wheelchairs, helmets. Yamaha competes in each of
      our
      major segments, including ATVs and motorcycles. Yamaha started out in the
      motorcycle business in 1955 and is now a large producer of both on-highway
      motorcycles (cruisers, touring, and sport bikes) and off-highway dirt bikes.
      In
      1968, Yamaha entered the snowmobile market. Yamaha produced its first ATV
      in 1979 and currently offers more than a dozen ATV models, including the 660cc
      sport performance Raptor.





**Suzuki:**Suzuki Motor Corporation's principal activity is the design and
      manufacture of automobiles, motorcycles, outboard engines, general-purpose
      engines and other products. Operations are carried out through the following
      sectors: motorcycles: motor bikes, pushbikes; four-wheeled cars: light cars,
      small-sized cars, normal-sized cars and others: houses, dynamos.
      Four-wheeled cars accounted for 79% of fiscal 2002 revenues; motorcycles and
      other two-wheelers, 19% and other operations, 2%. Oversea sales accounted for
      52.8% of fiscal 2002 revenues. Suzuki competes in the motorcycle and ATV
      segments of the powersports industry. Suzuki introduced the first four-wheeled
      ATV in 1982, and maintains a small market share (7%) in ATVs. In March 2002,
      Suzuki and Kawasaki formed a strategic partnership for product development,
      engineering, and manufacturing of both ATVs and motorcycles. Suzuki is also
      a
      34% owner of Arctic Cat, Inc. and provides Arctic Cat with engines used in
      its
      snowmobiles and ATVs.





**Kawasaki:**Kawasaki Heavy Industries’ principal activities are the manufacture of
      a wide range of industrial products. Operations are carried out through the
      following divisions: General machinery (motorcycles, jet-skis, buggies and
      gasoline engines); Industrial plant (industrial machinery, boiler and
      environment equipment); Gas turbine (jet engines, general gas turbines and
      motors); Aerospace ( air planes); Transportation equipment (trains, construction
      machinery and precision machinery); Shipbuilder and Other. General machinery
      accounted for 25 % of fiscal 2002 revenues; industrial plant, 20%; gas turbine,
      15%; aerospace; 14%; transport equipment; 11%; shipbuilder, 8% and other,
      7%. From the class leading Ninja® sportbikes and thundering VulcanTM cruisers to
      the rugged Brute ForceTM ATVs, MuleTM utility vehicles and JET SKI® watercraft,
      Kawasaki products lead the powersports industry around the globe. Kawasaki's
      success is in designing and manufacturing products that offer balanced
      performance, high quality, reliability and excellent fit and finish. Kawasaki
      is
      the No. 3 competitor in PWC, the No. 4 competitor in heavyweight motorcycles,
      and the No. 4 competitor in ATVs. This company is also a market leader in the
      utility vehicle segment of the ATV market. Kawasaki has a full line of ATVs
      and
      introduced the first V-Twin 700cc four-stroke “ultra high performance” sport ATV
      in the first quarter of 2003.







Employees





We
      currently have a total of twenty-nine (29) full time
      employees.


7


ITEM
      2.
      DESCRIPTION OF PROPERTY.





Our
      principal office and warehouse is located at 10925 Schmidt Road, El Monte,
      CA
      91733. On August 1, 2005, we entered into a lease agreement with Jing Jing
      Long
      and Jiang Yong Ji for the facilities in which we operate. The term of the lease
      is 60 months with monthly payments of $19,900. The landlords are also officers,
      directors and majority shareholders of the Company.****SEE
      CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.





In
          January 2007, we acquired 5 satellite warehouses through the acquisition
          of
          Lowprice.com, Inc d/b/a Redcat Motors ( see Item 6 MANAGEMENT’S DISCUSSION AND
          ANALYSIS OR PLAN OF OPERATION ). On May 31, we closed down warehouse in
          Phoenix,
          AZ and consolidated all the parts and customer service into centralized
          parts-only warehouse in El Monte, CA. We also leased a warehouse in City
          of
          Industry, CA for all the vehicles inbound to California.   The
          following sets forth the Company’s material facilities as of February 28,
          2007.




**Owned
                or****Location**
            
            **Facility
                Type/Use**
            
            **Leased**El
                Monte, CA
            
            Office
                & Warehouse
            
            LeasedPhoenix,
                AZ
            
            Office
            
            LeasedSt.
                Joseph, MI
            
            Warehouse
            
            LeasedSpLackson,
                MS
            
            Warehouse
            
            LeasedCherryville,
                NC
            
            Warehouse
            
            LeasedCity
                of Industry, CA
            
            Warehouse
            
            Leased







ITEM
      3.
      LEGAL PROCEEDINGS.





We
      were
      not a party to any legal proceedings during the reporting period, and we know
      of
      no legal proceedings pending or threatened or judgments entered against any
      director or officer of the Company in his or her capacity as such.





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





None





ITEM
      5.
      MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.





Principal
      Market or Markets




Our
        common stock is currently  listed on the Over-the-Counter Bulletin
        Board by NASDAQ. The 10 day average trading volume as of Feb 28, 2006 is
 63,490 shares.





Approximate
      Number of Common Stock Holders





As
        of
        February 28, 2007, we had over  250 shareholders
        in  record. We have  545,000 warrants to purchase our common
        stock share at price of $2.00 per share valid until February 28,
        2008.


Dividend
      Policy





We
      have
      never declared or paid cash dividends on our common stock and anticipate that
      future earnings, if any, will be retained for development of our
      business.





Recent
      Sales of Unregistered Securities




We
        conducted a private placement  whereby we sold 1,144,500 shares of our
        common stock and granted 545,000 shares of Warrants to 18 investors. The
        cash
        proceeds for the issuance of shares amounted to $1,090,000.





We
      relied
      upon Regulation S of the Securities Act of 1933, as amended (the "Act"). Our
      officers and directors determined the sophistication of our investors, as the
      investors were all foreign accredited investors. Each investor completed a
      subscription agreement whereby the investors certified that they were purchasing
      the shares for their own accounts, with investment intent. This offering was
      not
      accompanied by general advertisement or general solicitation and the shares
      were
      issued with a Rule 144 restrictive legend. No shares were sold to investors
      residing within the United States of America. In addition, we complied with
      the
      applicable requirements of Rules 902 and 903 of the Act.


8


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





The
      following discussion is intended to provide an analysis of the Company’s Plan of
      Operation and financial condition after its acquisition of Lowprice.com, Inc.
      in
      conjunction with the Company’s financial statements and the notes thereto set
      forth herein. The matters discussed in this section that are not historical
      or
      current facts deal with potential future circumstances and developments. The
      Company’s actual results could differ materially from the results discussed in
      the forward-looking statements. Factors that could cause or contribute
      to such differences include those discussed below.





Plan
      of
      Operation





Since
      our
      inception, we have commenced the sale and distribution of motorcycles and ATV’s
      under the brand name of TANK, and RedCat, the brand which we obtained through
      the acquisition of Lowprice.com, Inc.





Consolidation
      and Integration after Acquisition





On
      January 30, 2007, Tank Sports Inc. successfully completed its acquisition of
      one
      hundred percent (100%) of the issued and outstanding common stock of
      Lowprice.com, Inc., an Arizona corporation d/b/a RedCat Motors (the
“Company”).





The
      consolidation and integration measures that have been taken by the company
      to
      further strengthen its market position included, but not limited to,
      restructuring of management and operation team, consolidation of regional
      warehouse facility, ERP system integration, inventory control, development
      of
      marketing promotion and sales plan, improvement of customer service
      infrastructure. With all steps taken, the company believes that it will
      significantly increase Tank’s overall productivity and revenues, and reduce
      unnecessary costs and expenses. These measures Tank has been taking will help
      achieve a goal of high profit margin with the controlled budget.




Since
      Tank has established stronger OEM manufacturing resources in China , its
      successful acquisition of Lowprice.com, Inc.has strengthened a complementary
      to
      regional dealership network and synergy in a wider product mix of on and
      Off-road power sports vehicles. After acquisition, the Redcat and Tank
      dealership network has a total of 580-combined dealers.




The
      company has started the operation under the Tier I ERP system that obtained
      thru
      the acquisition to manage its sales through five warehouses nationwide. The
      system will allow the customers to place product and parts orders, make payment
      of the orders, and monitoring the order status 24/7 without personnel
      involvement. By using the system, the company is building up a largest parts
      center warehouse for the Chinese motorcycles and ATVS in the US
      territory in El Monte by combining parts departments in Tank and Redcat
      Motors, where more than 3000 types of products and parts/accessories are in
      bar-coded and scanned into bin locations. Because of this, Tank/Redcat
      after-sell service platform will become a value-added product to its customers
      and bring additional profitability. Parts
      and
      accessories has become a major focus for our business expansion. Tank expects
      to
      supply its dealers with helmets, goggles, apparel and other personalized
      products to boost sales and profit. Tank intents to gain its brand identity
      and
      increases new sales and profit margin.





Tank’s
      Operational Model





Tank
      has
      been developing a global development plan to further integrate its ability
      in
      R&D, OEM sourcing and manufacturing, sales and service network.





For
      further expansion of its sales network worldwide and capacity of OEM
      manufacturing of a variety product lines, Tank has been actively seeking for
      strategic investment and business partners and alliances through merger and
      acquisition. Tank has also planned to expand its market shares to the areas
      of
      South America, Middle East, Africa. For example, Tank is in the process of
      negotiating with a leading ATV products manufacturer in China to increase the
      distributorship of this product line in the U.S. and Mexico markets. In
      addition, Tank is negotiating a joint venture deal with a leading 600CC on-road
      motorcycle manufacturer in China to increase its larger capacity product
      lines.





9


ITEM
      6.
      MANAGEMENT’S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION -
      continued




Tank’s
      Operational and Sales Goal in 2007-2008





Tank
      has
      planed to achieve a total number of dealership of 900, which includes 100
      exclusive dealers (dealers that only sell Tank products) with a sales objective
      of each dealer I amount of $150,000 - $500,000. Currently, Tank has a total
      number of 580 dealers in the US market.





With
      partnership with leading manufacturers and suppliers and its joint R&D
      effort to develop new generation products, Tank intents to enhance its
      dealership standardization by adding more product lines to its
      dealers.





Tank
      is
      undertaking a redundancy cut-off plan for a cost effective operation . So far,
      Tank has reduced its total number of employees from 42 to 29 through the
      execution of the plan. Tank targets to achieve a goal of $1 million in sales
      per
      employee. An analysis of Tank’s basic operational expenses done by the company
      has found that the current level of staffing can still keep overall expenses
      under $4.30 million annually. This level of expense can support the company’s
      revenue up to between $23 and $30 million. This Plan hopefully will result
      in
      increased gross profit and net income. The average gross profit margin at and
      above 25% is likely achieved by the company, by estimation. The company is
      to
      achieve annual revenue of $23 millions with the goal of breaking through up
      to
      $30 millions. The net income is predicted to reach 6-9% or more. In other words,
      the company is expecting to have gross profit of $5.80 to $7.50 million with
      a
      net income of $1.50 to $3.20 million.




Reasons
      for Increase of Expenses for 2008 Fiscal Year





The
      following factors have contributed to the increase of expenses for the 2008
      fiscal year:





(1)
            Filing
                and overheadexpenses
                for auditing and
                reporting to OTCBB board


(2)
            Adjustment
                of dealership
                structure (drop in dealership number due to standardizing dealership
                selection criteria)


(3)
            Fees
                and requirements of filing
                and permitting for new product models’entry to the
                market


(4)
            Increased
                premium of insurance
                coverage (increase of insured
                items)


(5)
            Overpaid
                dealership incentive and
                commission package (need to be
                adjusted)


(6)
            Break-even
                of sales volume for
                maximum profit margin


(7)
            Additional
                compensation for
                staffing adjustments
                (release and rehiring)


(8)
            Additional
                expenses for
                storage/sales facility
                relocation




1.
            *Generate
                Dealer Interest and
                Recruit Dealers.*We have
                used our power sports
                vehicles to create awareness within the power sports industry. We
                have
                also displayed
                these
                vehicles at trade shows and events to generate dealer interest in
                TANK and
                RedCat products. We intend to continue our promotional efforts through
                public relations program, attending and displaying our products at
                dealer
                trade shows, direct
                mail efforts and direct
                solicitations of prospective customers. We believe our dealer
                qualification criteria are strict and they include experience, reputation,
                ability to serve the geographic territory and financial
                strength.




2.
            *Generate
                Consumer Interest and Develop the TANK and Redecat Brand Awareness.*To date, our products have appeared in over 10 publications.
                We
                believe this publicity is critical to creating awareness of the TANK
                and
                RedCat brands. We intend to continue our public relations efforts
                to
                create additional consumer interest and to support our dealers in
                targeted
                advertising and marketing efforts in their geographic territories.
                We also
                plan to continue to attend trade shows and events targeted to consumers
                to
                provide them with opportunities to see, and in some cases ride, our
                products. We believe these efforts, as well as mailing information
                to
                persons who have inquired about our products, will generate the customer
                awareness we believe is necessary to sell our products, and to develop
                the
                TANK and RedCat brands.





3.
              *Continue
                  to**M**erge**and Acquire More Industry**E**ntities
                  in**B**oth
                  US**and China Market.*The
                  Tank
                  management has realized that thebusinessexpansionhas
                  to be achieved by organic
                  growth and M&A.With the
                  first merger transaction
                  done with the Lowprice.com, Inc, the company
                  has beenableto gain skills and knowledge to
                  do similartransactionsin the future.**





Our
      focus
      in the next 12 months has been to seek necessary working capital, and to further
      execute our marketing plan. Our marketing plan focuses on dealers and the retail
      market, through comprehensive print advertising, participation in trade shows
      and other direct marketing efforts. Our marketing strategy is based on a
      reliable product, consistent quality and the delivery of a unique name and
      image. We estimate the necessary proceeds to implement this marketing campaign
      to be $220,000. We do not plan to carry out these actions until we have secured
      funds from our cash flows to fully fund this marketing plan. At this time,
      it is
      uncertain as if we can secure necessary financing.


10


ITEM
      6.
      MANAGEMENT’S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION -
      continued





FOR
      THE
      FISCAL YEAR ENDED FEBRUARY 28, 2007





We
      generated revenues of $ 9,588,238 for the fiscal year ending February 28, 2007,
      as compared to $7,539,336 in revenues for the fiscal year ended February 28,
      2006. The increase is primarily attributable to increased sales.





Our
        net
        loss for fiscal year ended February 28, 2007 was approximately ($249,325)
        as
        compared to a net loss for fiscal year ended February 28, 2006 of approximately
        ($206,713). The increase in our net loss is primarily attributable to increase
        in operating expenses, especially in increased payroll and taxes after merger
        of
        Lowprice.com, advertising, trade show, freight out and rents, and product
        liability and warranty insurances.





During
      the fiscal year ended February 28, 2007, we recorded operating expenses of
      $
      3,197,979 , consisting primarily of (i) $2,157,498 in general and administrative
      expenses; and (ii) $1,040,481 in selling expenses. During the fiscal year ended
      February 28, 2006 , we recorded operating expenses of $ 2,194,385, consisting
      primarily of (i) $ 775,352 in general and administrative expenses; and (ii)
      $
      1,419,033 in selling expenses.




General
      and administrative expenses generally include corporate overhead, financial
      and
      administrative services.





Net
      cash
      flow provided by (used in) operating activities were ($385,751) and ($1,383,580)
      during the fiscal years ended February 28, 2007 and 2006 ,
      respectively.





Net
      cash
      flows (used in) investing activities were ($55,308) and ($78,188) during the
      fiscal years ended February 28, 2007 and 2006, respectively.





Net
      cash
      flow provided by financing activities were $3,088,541 and $1,584,355 during
      the
      fiscal years ended February 28, 2007 and 2006 , respectively. Our net cash
      flows
      used in financing activities consisted primarily of payment of loans borrowed
      from Steady Star, an S Corp in California and a related company. SEE CERTAIN
      RELATIONSHIPS AND RELATED TRANSACTIONS.





LIQUIDITY
      AND CAPITAL RESOURCES





At
        February 28, 2007, our current assets were $6,080,066, current liabilities
        were
        $6,946,319, resulting in a working capital deficit of
        $866,253.





At
      February 28, 2007, we had cash and cash equivalents of $2,876,915.





The
        Company anticipates the future cash flow from revenue and existing financing
        facilities would be adequate to fund our operations over the next twelve
        (12)
        months. We have lines of credit from UCB bank and other financing arrangements.
        Generally, we have financed operations to date through cash flow and equity
        investors. In connection with our business plan, management anticipates
        additional increases in operating expenses and capital expenditures relating
        to
        advertisement and marketing of our brand names, the expansion of dealership
        networks, and Mergers & Acquisitions. We intend to finance these expenses
        from current and future revenues from operations and from other financing
        arrangement.





OFF-BALANCE
      SHEET ARRANGEMENTS





We
      have
      no off-balance sheet arrangements.





MATERIAL
      COMMITMENTS





We
      have
      no material commitments as at the date of this registration
      statement.


11


ITEM
      6.
      MANAGEMENT’S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION -
      continued




PURCHASE
      OF SIGNIFICANT EQUIPMENT





Tank
      has
      purchased an automatic vacuum packaging equipment line at cost of $28,000 in
      the
      fiscal year of 2007.





Tank
        also
        acquired a complete Enterprise Resource Planning (ERP) system. With the
        integration of the system, we will be able to handle revenue up to 100 millions
        without significant personnel increase in the future.





RECENT
      ACCOUNTING PRONOUNCEMENTS





In
      May
      2005, the FASB issued SFAS No. 154, "Accounting Changes and Error Corrections."
      This statement applies to all voluntary changes in accounting principle and
      requires retrospective application to prior periods' financial statements of
      changes in accounting principle, unless this would be impracticable. This
      statement also makes a distinction between "retrospective application" of an
      accounting principle and the "restatement" of financial statements to reflect
      the correction of an error. This statement is effective for accounting changes
      and corrections of errors made in fiscal years beginning after December 15,
      2005.





In
      February 2006, FASB issued SFAS No. 155, “Accounting for Certain Hybrid
      Financial Instruments”. SFAS No. 155 amends SFAS No 133, “Accounting for
      Derivative Instruments and Hedging Activities”, and SFAF No. 140, “Accounting
      for Transfers and Servicing of Financial Assets and Extinguishments of
      Liabilities”. SFAS No. 155, permits fair value remeasurement for any hybrid
      financial instrument that contains an embedded derivative that otherwise would
      require bifurcation, clarifies which interest-only strips and principal-only
      strips are not subject to the requirements of SFAS No. 133, establishes a
      requirement to evaluate interest in securitized financial assets to identify
      interests that are freestanding derivatives or that are hybrid financial
      instruments that contain an embedded derivative requiring bifurcation, clarifies
      that concentrations of credit risk in the form of subordination are not embedded
      derivatives, and amends SFAS No. 140 to eliminate the prohibition on the
      qualifying special-purpose entity from holding a derivative financial instrument
      that pertains to a beneficial interest other than another derivative financial
      instrument. This statement is effective for all financial instruments acquired
      or issued after the beginning of the Company’s first fiscal year that begins
      after September 15, 2006.





In
      December 2004, the FASB issued FASB Statement No. 123R, "Share-Based Payment,
      an
      Amendment of FASB Statement No. 123" ("FAS No. 123R"). FAS No. 123R requires
      companies to recognize in the statement of operations the grant- date fair
      value
      of stock options and other equity-based compensation issued to employees. FAS
      No. 123R is effective beginning in the Company's first quarter of fiscal
      2006.





In
      June
      2005, the EITF reached consensus on Issue No. 05-6, determining the Amortization
      Period for Leasehold Improvements ("EITF 05-6.") EITF 05-6 provides guidance
      on
      determining the amortization period for leasehold improvements acquired in
      a
      business combination or acquired subsequent to lease inception. The guidance
      in
      EITF 05-6 will be applied prospectively and is effective for periods beginning
      after June 29, 2005. EITF 05-6 is not expected to have a material effect on
      its
      consolidated financial position or results of operations.




In
      March
      2006 FASB issued SFAS 156 ‘Accounting for Servicing of Financial Assets’ this
      Statement amends FASB Statement No. 140, *Accounting for Transfers and
      Servicing o**f Financial Assets and Extinguishments of Liabilities,*
      with respect to the accounting for separately recognized servicing assets and
      servicing liabilities. This Statement:


12


ITEM
      6.
      MANAGEMENT’S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION -
      continued




1.
            Requires
                an entity to recognize a servicing asset or servicing liability each
                time
                it undertakes an obligation to service a financial asset by entering
                into
                a servicing contract.




2.
            Requires
                all separately recognized servicing assets and servicing liabilities
                to be
                initially measured at fair value, if
                practicable.




3.
            Permits
                an entity to choose ‘Amortization method’ or ‘Fair value measurement
                method’ for each class of separately recognized servicing assets and
                servicing liabilities.




4.
            At
                its initial adoption, permits a one-time reclassification of
                available-for-sale securities to trading securities by entities with
                recognized servicing rights, without calling into question the treatment
                of other available-for-sale securities under Statement 115, provided
                that
                the available-for-sale securities are identified in some manner as
                offsetting the entity’s exposure to changes in fair value of servicing
                assets or servicing liabilities that a service elects to subsequently
                measure at fair value.




5.
            Requires
                separate presentation of servicing assets and servicing liabilities
                subsequently measured at fair value in the statement of financial
                position
                and additional disclosures for all separately recognized servicing
                assets
                and servicing liabilities.




APPLICATION
      OF CRITICAL ACCOUNTING POLICIES





Our
      significant accounting policies are identified and described in Note 2 to the
      financial statements. The preparation of our financial statements in conformity
      with U.S. generally accepted accounting principles require management to make
      estimates and assumptions that affect the reported amounts of assets an
      liabilities and disclosures of contingent assets and liabilities at the date
      of
      the financial statements, and the reported amounts of revenue and
      expenses during the reporting period. Actual results could differ
      materially from those estimates. Tank continually evaluates its critical
      accounting policies and estimation procedures. Estimates are often based on
      historical experience and on assumptions that are believed to be reasonable
      under the circumstances, but which could change in the future. Some of Tank's
      accounting policies and estimation procedures require the use of substantial
      judgment, and actual results could differ materially from the estimates
      underlying the amounts reported in the consolidated financial statements. A
      summary of our significant accounting policies is included in Note 2 to our
      financial statements which are included in PART I. FINANCIAL INFORMATION of
      this
      Form 10 - KSB.





In
      applying these policies, estimates and judgments affect the amounts at which
      accounts receivable, inventory, and certain liabilities are recorded and the
      useful lives of property and equipment. We apply our accounting policies on
      a
      consistent basis. Changes in circumstances are considered in our estimates
      and
      judgments. Future changes in circumstances could result in changes in amounts
      at
      which assets and liabilities are recorded. Future changes could also affect
      the
      estimated useful levels of property and equipment, which could result in changes
      in depreciation expense or write offs or write downs of such
      assets.




Revenue
      Recognition. The Company's revenue recognition policies are in compliance with
      Staff Accounting Bulletion (SAB) 104. Sales revenue is recognized when the
      delivery to customers (independent dealers and distributors) is completed and
      ownership is transferred, the price is fixed and determinable, no other
      significant obligations of the Company exist and collectibility is reasonably
      assured. Payments received prior to completing all aforementioned criteria
      are
      recorded as unearned revenue. The Company's dealers enter into an annual
      renewable contract and are required to maintain status as an authorize dealer
      in
      order to continue selling company's products. Dealers are required to assemble
      and prep the vehicles before its sold, inform customer on warranties information
      and to repair and service the vehicles. The Company sets a fixed pricing
      structure each year. All dealers must follow the pricing structure or no more
      than 12% above or below the MSRP. Any additional discounts will need approval
      from the Company. The Company offers a limited and parts only warranties to
      all
      its dealers, distributors and retail customers. Tank requires its customer
      to be
      responsible for a 15% restocking fee for all unused return and shipping fees
      are
      non refundable. Used merchant cannot be returned without reason and the
      defective merchandise must be repaired. Tank has not historically recorded
      any
      significant sales return allowances because it has not been required to
      repurchase a significant number of units. However, should there be an adverse
      change in retail sales could cause this situation to change.





Allowance
      for Doubtful Accounts. The Company maintains reserves for potential credit
      losses on accounts receivable. Management reviews the composition of accounts
      receivable and analyzes historical bad debts, customer concentrations, customer
      credit worthiness, current economic trends and change in customer payment
      patterns to evaluate the adequacy of these reserves. Reserves are recorded
      primarily on a specific identification basis.





Inventory.
      Inventories are valued at the lower of cost (determined on a weighted average
      basis) or market. Machinery and equipment. Machinery and Equipment are stated
      at
      cost. Expenditures for maintenance and repairs are charged to earnings as
      incurred; additions, renewals and betterments are
      capitalized.


13


ITEM
      6.
      MANAGEMENT’S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION -
      continued




Income
      taxes. The Company utilizes SFAS No. 109, "Accounting for Income Taxes," which
      requires the recognition of deferred tax assets and liabilities for the expected
      future tax consequences of events that have been included in the financial
      statements or tax returns. Under this method, deferred income taxes are
      recognized for the tax consequences in future years of differences between
      the
      tax bases of assets and liabilities and their financial reporting amounts at
      each period end based on enacted tax laws and statutory tax rates applicable
      to
      the periods in which the differences are expected to affect taxable income.
      Valuation allowances are established, when necessary, to reduce deferred tax
      assets to the amount expected to be realized.





Product
      warranties and insurance. Tank provides a limited warranty for parts only for
      a
      period of twelve months for its ATVs, Dirt bikes, Go Cars, and Scooters with
      a
      50cc engine, for a period of three years for its cruiser motorcycles with
      Trademark "VISION" and Scooters with 150cc and 250 cc engines. Tank's standard
      warranties require the Company or its dealers to repair or replace defective
      products during such warranty periods at no cost to the consumer.
      Major cost incurred in connection with warranty obligations is the cost of
      new parts replacing the damage/defective parts. We have not recorded a liability
      for warranty obligations because they were immaterial for the periods presented;
      and we have recorded expenses when the costs were actually incurred. Tank
      insures its product liability claims with ACORD Jordan and Jordan Insurance
      Agency, LLC. The product liability coverage are up to $1,000,000 limit per
      occurrence, $50,000 limits on damage to rented premises, $1,000,000 to personal
      injury, $2,000,000 to general aggregate and $2,000,000 limit to products comp/or
      aggregate. Historically, the Company has not experienced any threatened
      litigation or product liability claim. The Company believes that based on its
      historical product liability claim experience, the product liability insurance
      will be sufficient to cover any such claim.


































14


ITEM
      7.
      FINANCIAL STATEMENTS





**Index
      to Financial Statements**




Page**Report
                  of Independent Registered Public Accounting
                  firm**
            16**Financial
                  Statements:****CONSOLIDATED
                  BALANCE SHEET AS OF FEBRUARY 28, 2007**
            17**CONSOLIDATED
                  STATEMENTS OF OPERATIONS FOR THE YEARS ENDED FEBRUARY 28, 2007
                  AND
                  2006**
            18**CONSOLIDATED
                  STATEMENT OF CASH FLOWS FOR THE YEARS ENDED FEBRUARY 28, 2007 AND
                  2006**
            19**CONSOLIDATED
                  STATEMENT OF STOCKHOLDERS DEFICIT FOR THE YEAR ENDED FEBRUARY 28,
                  2007 AND 2006**
            20**NOTES
                  TO FINANCIAL STATEMENTS**
            21-33








15




**REPORT
      OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**




To
      the
      Board of Directors and Stockholders


Tank
      Sports, Inc. and subsidiary




We
      have
      audited the accompanying balance sheet of Tank Sports, Inc. (the Company) and
      its subsidiary as of February 28, 2007 and the related consolidated statements
      of operations, stockholders' deficit, and cash flows for each of the two years
      in the period ended February 28, 2007. These financial statements are the
      responsibility of the Company's management. Our responsibility is to express
      an
      opinion on these financial statements based on our audits.




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




In
      our
      opinion, the financial statements referred to above present fairly, in all
      material respects, the financial position of Tank Sports Inc. and its
      subsidiary, as of February 28, 2007, and the results of its operations and
      its
      cash flows for each of the two years ended February 28, 2007, in conformity
      with
      accounting principles generally accepted in the United States of
      America.




The
      Company’s financial statements are prepared using the generally accepted
      accounting principles applicable to a going concern, which contemplates the
      realization of assets and liquidation of liabilities in the normal course of
      business. The Company has accumulated deficit of $1,043,992 at February 28,
      2007
      including a net loss of $249,325 during the year ended February 28, 2007. These
      factors as discussed in Note 3 to the financial statements, raises substantial
      doubt about the Company’s ability to continue as a going concern.
      Management’s plans in regard to these matters are also described in Note 3. The
      financial statements do not include any adjustments that might result from
      the
      outcome of this uncertainty.







KABANI
      & COMPANY, INC.


CERTIFIED
      PUBLIC ACCOUNTANTS




Los
      Angeles, California


May
      8,
      2007




16







**TANK
                SPORTS, INC. AND SUBSIDIARY****CONSOLIDATED
                BALANCE SHEET****AS
                OF FEBRUARY 28, 2007****ASSETS****CURRENT
                  ASSETS:**Cash
                  and cash equivalents
            
            $
            2,876,915Accounts
                  receivable, net
            
            
            358,537Related
                  parties receivable
            
            
            195,301Prepaid
                  expenses
            
            
            236,218Inventory
            
            
            2,161,855Loans
                  receivable
            
            
            251,240Total
                  Current Assets
            
            
            6,080,066**PROPERTY,
                  PLANT AND EQUIPMENT, NET**
            
            
            509,876**DEPOSITS**
            
            
            51,470**GOODWILL**
            
            
            1,615,716$
            8,257,128**LIABILITIES
                  AND STOCKHOLDERS' DEFICIT****CURRENT
                  LIABILITIES:**Accounts
                  payable and accrued expenses
            
            $
            700,506Taxes
                  payable
            
            
            16,502Customer
                  deposits
            
            
            82,032Notes
                  payable
            
            
            4,937,279Related
                  party payable
            
            
            120,000Shares
                  to be issued
            
            
            1,090,000Total
                  Current Liabilities
            
            
            6,946,319**LONG-TERM
                  LIABILITIES:**Notes
                  payable
            
            
            280,987Related
                  party payable
            
            
            1,482,114Total
                  long-term liabilities
            
            
            1,763,101Total
                  Liabilities
            
            
            8,709,420**STOCKHOLDERS'
                  DEFICIT**Common
                  stock (authorized 200,000,000 shares, $0.001 par
                  value,32,902,800
                  shares issued and outstanding)
            
            
            32,903Additional
                  paid in capital
            
            
            558,797Accumulated
                  deficit
            
            
            (1,043,992
            )Total
                  Stockholders' Deficit
            
            
            (452,292
            )$
            8,257,128The
                  accompanying notes are an integral part of these consolidated financial
                  statements






17






**TANK
                SPORTS, INC. AND SUBSIDIARY****CONSOLIDATED
                STATEMENTS OF OPERATION****FOR
                THE YEARS ENDED FEBRUARY 28, 2007 AND 2006****2007**
            
            
            **2006****NET
                  REVENUE**
            
            $
            9,588,238
            
            $
            7,539,336**COST
                  OF GOODS SOLD**
            
            
            6,803,322
            
            
            5,671,178**GROSS
                  PROFIT**
            
            
            2,784,916
            
            
            1,868,158**OPERATING
                  EXPENSES**Selling
                  expenses
            
            
            1,040,481
            
            
            1,419,033General
                  and administrative expenses
            
            
            2,157,498
            
            
            775,352Total
                  operating expenses
            
            
            3,197,979
            
            
            2,194,385**LOSS
                  FROM OPERATIONS**
            
            
            (413,063
            )
            
            (326,227
            )**NON-OPERATING
                  INCOME (EXPENSES)**Other
                  income
            
            
            203,143
            
            
            123,171Interest
                  incomes
            
            
            55,201
            
            
            -Interest
                  expenses
            
            
            (93,806
            )
            
            (3,657
            )Total
                  non-operating income
            
            
            164,538
            
            
            119,514**NET
                  LOSS BEFORE INCOME TAX**
            
            
            (248,525
            )
            
            (206,713
            )**PROVISION
                  FOR INCOME TAX**
            
            
            800
            
            
            -**NET
                  LOSS**
            
            $
            (249,325
            )
            $
            (206,713
            )**WEIGHTED
                  AVERAGE SHARES OF COMMON STOCK****OUTSTANDING,
                  BASIC AND DILUTED**
            
            
            32,525,814
            
            
            8,031,296**BASIC
                  AND DILUTED NET LOSS PER SHARE**
            
            $
            (0.01
            )
            $
            (0.03
            )The
                  accompanying notes are an integral part of these consolidated financial
                  statements






18







**TANK
                SPORTS, INC. AND SUBSIDIARY****CONSOLIDATED
                STATEMENT OF CASH FLOWS****FOR
                THE YEARS ENDED FEBRUARY 28, 2007 AND 2006****CASH
                  FLOWS FROM OPERATING ACTIVITIES**
            
            
            **2007**
            
            
            **2006**Net
                  Loss
            
            $
            (249,325
            )
            $
            (206,713
            )Adjustments
                  to reconcile net loss to net cashused
                  in operating activities:Depreciation
                  and amortization
            
            
            36,570
            
            
            13,083(Increase)
                  / decrease in current assets:Accounts
                  receivable
            
            
            (123,542
            )
            
            (180,184
            )Others
                  receivable
            
            
            (160,221
            )
            
            (10,411
            )Prepaid
                  expenses
            
            
            (51,006
            )
            
            (60,646
            )Deposits
            
            
            (23,400
            )
            
            -Other
                  assets
            
            
            59,832
            
            
            12,523Inventory
            
            
            428,823
            
            
            (1,092,997
            )Increase
                  / (decrease) in current liabilities:Accounts
                  payable and accrued expenses
            
            
            (338,957
            )
            
            64,897Customer
                  deposits
            
            
            21,000
            
            
            76,870Tax
                  payable
            
            
            14,475
            
            
            -**Net
                  cash used in operating activities**
            
            
            (385,751
            )
            
            (1,383,580
            )**CASH
                  FLOWS FROM INVESTING ACTIVITIES**Payment
                  on purchase of property and equipment
            
            
            (15,914
            )
            
            (62,960
            )Increase
                  of loans receivable
            
            
            (39,394
            )
            
            (15,228
            )**Net
                  cash used in investing activities**
            
            
            (55,308
            )
            
            (78,188
            )**CASH
                  FLOWS FROM FINANCING ACTIVITIES**Cash
                  received against common stocks to be issued
            
            
            1,090,000
            
            
            -Issuance
                  of common stocks
            
            
            456,000
            
            
            125,700Proceeds
                  from loans
            
            
            3,965,267
            
            
            30,922Receipt
                  (repayment)of loan from affiliates
            
            
            (1,111,514
            )
            
            1,427,733Repayments
                  of long-term notes payable
            
            
            (1,311,212
            )
            
            -**Net
                  cash provided by financing activities**
            
            
            3,088,541
            
            
            1,584,355**NET
                  INCREASE IN CASH AND CASH EQUIVALENTS**
            
            
            2,647,483
            
            
            122,587**CASH
                  AND CASH EQUIVALENTS, BEGINNING BALANCE**
            
            
            229,432
            
            
            40,941**CASH
                  AND CASH EQUIVALENTS, ENDING BALANCE**
            
            $
            2,876,915
            
            $
            163,528**SUPPLEMENTAL
                  DISCLOSURES:**
            
            
            0Interest
                  paid
            
            $
            38,108
            
            $
            3,657Income
                  tax paid
            
            $
            800
            
            $
            800The
                  accompanying notes are an integral part of these consolidated financial
                  statements







19







**TANK
                SPORTS, INC. AND SUBSIDIARY****CONSOLIDATED
                STATEMENT OF STOCKHOLDERS DEFICIT****FOR
                THE YEARS ENDED FEBRUARY 28, 2007 AND 2006****Common
                Stock**
            
            
            
            
            
            
            
            
            **Total****Number
                of**
            
            
            
            
            
            **Paid
                in**
            
            
            **Accumulated**
            
            
            **stockholders'****shares**
            
            
            **Amount**
            
            
            **Capital**
            
            
            **Deficit**
            
            
            **deficit****Balance
                  at February 28, 2005**
            
            
            32,000,000
            
            $
            10,000
            
            $
            -
            
            $
            (587,953
            )
            $
            (577,953
            )Stock
                  issuance for cash
            
            
            502,800
            
            
            125,700
            
            
            -
            
            
            -
            
            
            125,700Net
                  loss for the year ended February 28, 2006
            
            
            -
            
            
            -
            
            
            -
            
            
            (206,713
            )
            
            (206,713
            )**Balance
                  at February 28, 2006**
            
            
            32,502,800
            
            
            135,700
            
            
            -
            
            
            (794,666
            )
            
            (658,966
            )Adjustment
                  to the par value
            
            
            -
            
            
            (103,197
            )
            
            103,197
            
            
            -
            
            
            -Stock
                  issuance for cash
            
            
            400,000
            
            
            400
            
            
            455,600
            
            
            -
            
            
            456,000Net
                  loss for the year ended February 28, 2007
            
            
            -
            
            
            -
            
            
            -
            
            
            (249,325
            )
            
            (249,325
            )**Balance
                  at February 28, 2007**
            
            
            32,902,800
            
            $
            32,903
            
            $
            558,797
            
            $
            (1,043,992
            )
            $
            (452,292
            )The
                  accompanying notes are an integral part of these consolidated financial
                  statements






20
 TANK
              SPORTS, INC.
 NOTES
              TO FINANCIAL
              STATEMENTS


**1.**
            **ORGANIZATION
                AND DESCRIPTION OF
                BUSINESS**





Tank
      Sports, Inc. (“Tank” or “the Company”) was incorporated on March 5, 2001. The
      Company is located in the city of El Monte, California, U.S.A. The Company
      is
      engaged in the sales and distribution of high quality recreational and
      transportation motorcycles, all-terrain vehicles (“ATVs”), dirt bikes, scooters,
      and Go Karts. The Company’s motorcycles and ATVs products are manufactured in
      China and Mexico.





On
      January 30, 2007, the Company acquired Lowprice.com, Inc., an Arizona
      corporation d/b/a Redcat Motors (“Redcat”) as its wholly owned subsidiary (Refer
      to Note 23). Redcat was created in 2003 in New Orleans, Louisiana and
      subsequently relocated to Phoenix, Arizona in September 2005 after Hurricane
      Katrina. Redcat is engaged in importing ATVs and distributing those with brand
      name of RedCat nationwide through its Dealer Network.








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





**Use
      of estimates**





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





**Principles
      of Consolidation**





The
      consolidated financial statements for the fiscal year ended February 28, 2007
      include the financial statements of the Company (for the full period) and its
      wholly owned subsidiary Redcat (from the acquisition date). The consolidated
      financial statements for the fiscal year ended February 28, 2006 contained
      the
      financial statements of the Company as the Company did not own any subsidiary
      during that year. Additionally, all historical share count and per share
      information has been adjusted for the Company’s 4-for-1 forward stock split that
      became effective on November 6, 2006





The
      results of the subsidiary acquired during the year are consolidated from the
      effective date of acquisition.





All
      significant inter-company transactions and balances have been eliminated on
      consolidation.





**Cash
      and cash equivalents**





Cash
      and
      cash equivalents include cash on hand and cash in time deposits, certificates
      of
      deposit and all highly liquid debt instruments with original maturities of
      three
      months or less.





**Accounts
      receivable and other receivable**





Accounts
      receivable and other receivable are recorded at net realizable value consisting
      of the carrying amount less an allowance for uncollectible accounts, as
      needed.





The
      Company maintains reserves for potential credit losses on accounts receivable.
      Management reviews the composition of accounts receivable and analyzes
      historical bad debts, customer concentrations, customer credit worthiness,
      current economic trends and changes in customer payment patterns to evaluate
      the
      adequacy of these reserves. Terms of the sales vary from COD through
      a credit term up to 10 days and 30 days. Reserves are recorded primarily on
      a specific identification basis.




21
 TANK
              SPORTS, INC.
 NOTES
              TO FINANCIAL
              STATEMENTS




**2.**
            **SUMMARY
                OF SIGNIFICANT ACCOUNTING
                POLICIES -
                continued**





**Inventory**





Inventories
      are valued at the lower of cost (determined on a weighted average basis) or
      market. Management compares the cost of inventories with the market value and
      an
      allowance is made for writing down the inventories to the market value, if
      lower.





**Property,
      Plant and Equipment**





Property,
      Plant and Equipment are stated at cost. Expenditures for maintenance and repairs
      are charged to earnings as incurred; additions, renewals and betterments are
      capitalized. When property and equipment are retired or otherwise disposed
      of,
      the related cost and accumulated depreciation are removed from the respective
      accounts, and any gain or loss is included in operations. Depreciation of
      property and equipment is provided using the straight-line method for
      substantially all assets with estimated useful lives of 5 to 39
      years.





**Intangible
      Assets**





The
      Company evaluates intangible assets for impairment, at least on an annual basis
      and whenever events or changes in circumstances indicate that the carrying
      value
      may not be recoverable from its estimated future cash flows. Recoverability
      of
      intangible assets, other long-lived assets and, goodwill is measured by
      comparing their net book value to the related projected undiscounted cash flows
      from these assets, considering a number of factors including past operating
      results, budgets, economic projections, market trends and product development
      cycles. If the net book value of the asset exceeds the related undiscounted
      cash
      flows, the asset is considered impaired, and a second test is performed to
      measure the amount of impairment loss.





**Fair
      value of financial instruments**





Statement
      of financial accounting standard No. 107, Disclosures about fair value of
      financial instruments, requires that the Company disclose estimated fair values
      of financial instruments. The carrying amounts reported in the statements of
      financial position for current assets and current liabilities qualifying as
      financial instruments are a reasonable estimate of fair value.





**Revenue
      recognition**





The
      Company's revenue recognition policies are in compliance with Staff Accounting
      Bulletin (SAB) 104. Sales revenue is recognized when the delivery is completed,
      the price is fixed or determinable, no other significant obligations of the
      Company exist and collectability is reasonably assured. Payments received before
      all of the relevant criteria for revenue recognition are satisfied to be
      recorded as unearned revenue.





The
      Company determines title transfer based upon delivery date.  For the
      customers with FOB shipping term, the Company recognizes sales and determines
      title transferred when delivery of items takes place.  For the customers on
      CNF (cost and freight), the Company recognizes sales and determines title has
      passed when goods arrive in the port of destination.





**Segment
      reporting**





Statement
      of Financial Accounting Standards No. 131 ("SFAS 131"), "Disclosure about
      Segments of an Enterprise and Related Information" requires use of the
      "management approach" model for segment reporting. The management approach
      model
      is based on the way a company's management organizes segments within the company
      for making operating decisions and assessing performance. Reportable segments
      are based on products and services, geography, legal structure, management
      structure, or any other manner in which management disaggregates a company.
      SFAS
      131 has no effect on the Company's consolidated financial statements as
      substantially all of the Company's operations are conducted in one industry
      segment.


22
 TANK
              SPORTS, INC.
 NOTES
              TO FINANCIAL
              STATEMENTS




**2.**
            **SUMMARY
                OF SIGNIFICANT ACCOUNTING
                POLICIES -
                continued**





**Advertising
      costs**





The
      Company expenses the cost of advertising as incurred or, as appropriate, the
      first time the advertising takes place.





**Stock-based
      compensation**





In
      October 1995, the FASB issued SFAS No. 123, “Accounting for Stock-Based
      Compensation”. SFAS No. 123 prescribes accounting and reporting standards for
      all stock-based compensation plans, including employee stock options, restricted
      stock, employee stock purchase plans and stock appreciation rights. SFAS No.
      123
      requires compensation expense to be recorded (i) using the new fair value method
      or (ii) using the existing accounting rules prescribed by Accounting Principles
      Board Opinion No. 25, “Accounting for stock issued to employees” (APB 25) and
      related interpretations with pro forma disclosure of what net income and
      earnings per share would have been had the Company adopted the new fair value
      method. The Company uses the intrinsic value method prescribed by APB 25 and
      has
      opted for the disclosure provisions of SFAS No.123. The Company did not
      issue any option during the fiscal years ended February 28, 2007 and
      2006.





**Income
      taxes**





The
      Company utilizes SFAS No. 109, "Accounting for Income Taxes," which requires
      the
      recognition of deferred tax assets and liabilities for the expected future
      tax
      consequences of events that have been included in the financial statements
      or
      tax returns. Under this method, deferred income taxes are recognized for the
      tax
      consequences in future years of differences between the tax bases of assets
      and
      liabilities and their financial reporting amounts at each period end based
      on
      enacted tax laws and statutory tax rates applicable to the periods in which
      the
      differences are expected to affect taxable income. Valuation allowances are
      established, when necessary, to reduce deferred tax assets to the amount
      expected to be realized.





**Basic
      and diluted net loss per share**





Net
      loss
      per share is calculated in accordance with the Statement of financial accounting
      standards No. 128 (SFAS No. 128), “Earnings per share”. SFAS No. 128 superseded
      Accounting Principles Board Opinion No.15 (APB 15). Net loss per share for
      all
      periods presented has been restated to reflect the adoption of SFAS No. 128.
      Basic net loss per share is based upon the weighted average number of common
      shares outstanding. Diluted net loss per share is based on the assumption that
      all dilutive convertible shares and stock options were converted or exercised.
      Dilution is computed by applying the treasury stock method. Under this
      method, options and warrants are assumed to be exercised at the beginning of
      the
      period (or at the time of issuance, if later), and as if funds obtained thereby
      were used to purchase common stock at the average market price during the
      period.





**Recent
      pronouncements**





In
      February 2007, FASB issued FASB Statement No. 159, The Fair Value Option for
      Financial Assets and Financial Liabilities. FAS 159 is effective for fiscal
      years beginning after November 15, 2007. Early adoption is permitted subject
      to
      specific requirements outlined in the new Statement. Therefore, calendar-year
      companies may be able to adopt FAS 159 for their first quarter 2007
      financial statements.





The
      new
      Statement allows entities to choose, at specified election dates, to measure
      eligible financial assets and liabilities at fair value that are not otherwise
      required to be measured at fair value. If a company elects the fair value option
      for an eligible item, changes in that item's fair value in subsequent reporting
      periods must be recognized in current earnings. FAS 159 also establishes
      presentation and disclosure requirements designed to draw comparison between
      entities that elect different measurement attributes for similar assets and
      liabilities. The management is currently evaluating the effect of this
      pronouncement on financial statements.


23
 TANK
              SPORTS, INC.
 NOTES
              TO FINANCIAL
              STATEMENTS




**2.**
            **SUMMARYOF
                SIGNIFICANT ACCOUNTING
                POLICIES -
                continued**





In
      September 2006, FASB issued SFAS 158 ‘Employers’ Accounting for Defined Benefit
      Pension and Other Postretirement Plans—an amendment of FASB Statements No. 87,
      88, 106, and 132(R)’ This Statement improves financial reporting by requiring an
      employer to recognize the over funded or under funded status of a defined
      benefit postretirement plan (other than a multiemployer plan) as an asset or
      liability in its statement of financial position and to recognize changes
      in that funded status in the year in which the changes occur through
      comprehensive income of a business entity or changes in unrestricted net assets
      of a not-for-profit organization. This Statement also improves financial
      reporting by requiring an employer to measure the funded status of a plan as
      of
      the date of its year-end statement of financial position, with limited
      exceptions. An employer with publicly traded equity securities is required
      to
      initially recognize the funded status of a defined benefit postretirement plan
      and to provide the required disclosures as of the end of the fiscal year ending
      after December 15, 2006. An employer without publicly traded equity securities
      is required to recognize the funded status of a defined benefit postretirement
      plan and to provide the required disclosures as of the end of the fiscal year
      ending after June 15, 2007. However, an employer without publicly traded equity
      securities is required to disclose the following information in the notes to
      financial statements for a fiscal year ending after December 15, 2006, but
      before June 16, 2007, unless it has applied the recognition provisions of this
      Statement in preparing those financial statements:




a.  A
      brief description of the provisions of this Statement




b.  The
      date that adoption is required




c.  The
      date the employer plans to adopt the recognition provisions of this Statement,
      if earlier.




The
      requirement to measure plan assets and benefit obligations as of the date of
      the
      employer’s fiscal year-end statement of financial position is effective for
      fiscal years ending after December 15, 2008. The management is currently
      evaluating the effect of this pronouncement on financial
      statements.





In
      September 2006, FASB issued SFAS 157 ‘Fair Value Measurements’. This Statement
      defines fair value, establishes a framework for measuring fair value in
      generally accepted accounting principles (GAAP), and expands disclosures about
      fair value measurements. This Statement applies under other accounting
      pronouncements that require or permit fair value measurements, the Board having
      previously concluded in those accounting pronouncements that fair value is
      the
      relevant measurement attribute. Accordingly, this Statement does not require
      any
      new fair value measurements. However, for some entities, the application of
      this
      Statement will change current practice. This Statement is effective for
      financial statements issued for fiscal years beginning after November 15, 2007,
      and interim periods within those fiscal years. The management is currently
      evaluating the effect of this pronouncement on financial
      statements.





**Reclassifications**





Certain
      comparative amounts have been reclassified to conform to the current year's
      presentation.





**3.**
            **GOING
                CONCERN**





The
      accompanying financial statements have been prepared in conformity with
      generally accepted accounting principles which contemplate continuation of
      the
      Company as a going concern. However, the Company has accumulated deficit of
      $1,043,992 including a net loss of $249,325 during the year ended February
      28,
      2007. The continuing losses have adversely affected the liquidity of the
      Company. Losses might continue for the immediate future. The Company faces
      some
      business risks, which includes but not limited to, its ability to maintain
      vendor and supplier relationships by making timely payments when
      due.





In
      view
      of the matters described in the preceding paragraph, recoverability of a major
      portion of the recorded asset amounts shown in the accompanying balance sheet
      is
      dependent upon continued operations of the Company, which in turn is dependent
      upon the Company’s ability to raise additional capital, to increase more sales
      and to succeed in its future operations. The financial statements do not include
      any adjustments relating to the recoverability and classification of recorded
      asset amounts or amounts and classification of liabilities that might be
      necessary should the Company be unable to continue as a going
      concern.





Currently,
        the company purchases products and parts & accessories from China. The
        exchange rate of RMB Yuan to US dollar has tendency to appreciate. If the
        rate
        goes up, it will increasing cost of goods purchased from
        China.


24
 TANK
              SPORTS, INC.
 NOTES
              TO FINANCIAL
              STATEMENTS




**3.**
            **GOING
                CONCERN -
                continued**





Management
      has taken many steps to revise its operating and financial requirements, which
      it believes are sufficient to provide the Company with the ability to continue
      as a going concern. The acquisition and consolidation measures have strengthen
      its market position, included, but not limited to, restructuring of management
      and labor resources, consolidation of regional marketing facility, ERP system
      integration, inventory control, development of marketing promotion and
      sales network, and improvement of customer service infrastructure. With all
      steps taken, the Company believes that it will significantly increase its
      overall productivity and revenues, reduce unnecessary costs and expenses, and
      achieve a goal of high profit margin with the controlled budget. Management
      has
      devoted considerable effort towards (i) build “Tank” and “Redcat” brand names
      (ii) set up more dealers to increase sales (iii) liquidate less profitable
      products, and focus on selling more profitable motorcycles (iv) strive to reduce
      product costs and operating expenses, and (v) obtain additional
      equity.





Management
      believes that the above actions will allow the Company to continue operations
      through the next fiscal year.








**4.**
            **ACCOUNTS
                RECEIVABLE**





Accounts
      receivable was $358,537, net of allowance for doubtful debts amounted to $52,706
      as of February 28, 2007.





**5.**
            **RELATED
                PARTIES
                RECEIVABLE**





As
      of
      February 28, 2007 related parties receivable of the Company amounted to
      $195,301, which included $1,066 as receivable from officer, 5,798 as advance
      to
      employees, $180,670 as receivable from an affiliated company “LONG Sa De CV” and
      $7,767 receivable from former officers of Redcat . The receivables are
      unsecured, due on demand and interest free.





**6.**
            **PREPAID
                EXPENSES**





The
      total
      prepaid expenses amounted to $236,219 as of February 28, 2007. The composition
      of the prepaid expenses is reflected as follows:




Prepaid
                  Purchases
            
            $
            163,914Prepaid
                  Insurance
            
            
            72,304Total
            
            $
            236,218




**7.**
            **INVENTORIES**





Inventories
      consist of the following as of February 28, 2007:




ATV’s
                    & Scooters
              
              $
              1,575,297Parts
              
              
              496,761Accessories
              
              
              128,143Less:
                    Reservation for inventory obsolesce and slow-moving
              
              
              (38,346
              )Total
              
              $
              2,161,855








25
 TANK
              SPORTS, INC.
 NOTES
              TO FINANCIAL
              STATEMENTS





**8.**
            **LOANS
                RECEIVABLE**






On
                  January 10, 2004, the Company loaned $146,451 to a non-related
                  party at an
                  interest rate of 6% per annum. The loan is unsecured, both principal
                  and
                  interest are payable on May 31, 2007. Interest income has been
                  accrued and
                  recorded in loan receivable.As
                  of February 28, 2007, the loan receivable is
            
            $167,636




On
                  December 20, 2004, the Company loaned $50,167 to a non-related
                  party at
                  interest rate of 6% per annum. The loan is unsecured, both principal
                  and
                  interest are payable on December 20, 2007. Interest income has
                  been
                  accrued and recorded in loan receivable.As
                  of February 28, 2007, the loan receivable is
            
            56,765On
                  July 27, 2004, the Company loaned $23,000 to a non-related party
                  at
                  interest rate of 5% per annum. The loan is unsecured, and both
                  principal
                  and interest are due on demand. Interest income has been accrued
                  and
                  recorded in loan receivable.As
                  of February 28, 2007, the loan receivable is
            
            26,839Total
            $251,240





**9.**
            **PROPERTY,
                PLANT &
                EQUIPMENT**




Property,
      Plant & Equipment consist of the following as of February 28,
      2007:




Machinery
                  & Equipment
            
            $
            187,885Furniture
                  & Fixtures
            
            
            78,796Electronic
                  Equipment
            
            
            399,
                  031Automobile
            
            
            40,036Leasehold
                  Improvement
            
            
            4,500Less:
                  Accumulated Depreciation
            
            
            (200,372
            )Total
            
            $
            509,876




Depreciation
      expenses were $36,570 and $13,083 for the fiscal years ended February 28, 2007
      and 2006, respectively.





**10.**
            **DEPOSITS**





As
      of
      February 28, 2007, the Company had recorded a security deposit of $35,000 for
      a
      bank line-of-credit, and deposit for rent and utilities of $16,470. The security
      deposit was returned subsequently on the conclusion of the bank line-of-credit
      pursuit to the agreement.


26
 TANK
              SPORTS, INC.
 NOTES
              TO FINANCIAL
              STATEMENTS




**11.**
            **ACCOUNTS
                PAYABLE AND ACCRUED
                EXPENSES**







Following
      is the detail of accounts payable and accrued expenses as of February 28,
      2007:





Accounts
                  Payable
            
            $
            389,057Accrued
                  payroll expense
            
            
            100,152Accrued
                  warranty claim expense
            
            
            11,322Accrued
                  Expenses
            
            
            199,975Total
            
            $
            700,506




**12.**
            **CUSTOMER
                DEPOSIT**





Payments
      received before all of the relevant criteria for revenue recognition satisfied
      are recorded as customer deposit. Customer deposit amounted to $82,032 as of
      February 28, 2007.





**13.**
            **NOTES
                PAYABLE**





On
      June
      1, 2005, the company signed a five year note payable against auto loan. The
      loan
      was unsecured, with an interest of 5.90% with monthly payment of $743. As of
      February 28, 2007, this note payable was $26,928, of which $7,531 is current
      payable and $19,391 is non-current payable.





On
      March
      20, 2006, the company obtained a loan payable of $372,259 from a non-related
      party. The note is secured by various computer equipments and software purchased
      from Microsoft Capital, with an annual interest rate of 5.00%, and due on June
      1, 2011. As of February 28, 2007, the balance of the note payable was $332,862,
      of which $71,272 is current payable and $261,590 is non-current payable.
      Interest expense was $ 1,295 for the one month period ended February 28
      2007.





On
      July
      14, 2006, the company obtained a line of credit of $5,500,000 from a bank.
      The
      outstanding payable ends the earlier of July 31, 2007 or when the Company pays
      the note in full, including principal, interest, and all the expenses involved.
      The annual interest rate on the loan is 8.5%. The line of credit is secured
      by
      the Company’s business assets, real property, a certificate of deposit of
      $1,500,000 and guaranteed by the major shareholders and by the Company’s
      affiliate. As of February 28, 2007, $3,956,341 was used as banker’s acceptance
      and $38,040 was used as commercial letter of credit. The outstanding loan
      payable under this line of credit amounted to 1,450,653 as of February 28,
      2007.
      The interest expense for the year ended was $38,902.





As
      the
      Company did not meet the requirement of the line of credit to maintain the
      minimum Effective Tangible Net Worth (ETNW) to $1,000,000 as of February 28,
      2007, pursuit to the agreement, all the indebtedness immediately will become
      due
      and payable at the lender’s option.





On
      August
      14, 2006, the company borrowed $1,500,000 from a non-related party with an
      interest rate of 5.25%. This unsecured note payable is due on August 15, 2007.
      The note payable is subordinated to the line of credit of $5,500,000. As of
      February 28, 2007; the outstanding loan payable was 1,500,000. The interest
      expense for the year ended was $40,108.





On
      January 30, 2007 the company obtained a promissory note of $1,000,000 from
      a
      bank. The note payable ends the earlier of July 31, 2007 or when the Company
      pays the note in full, including principal, interest, and all the expenses
      involved. The interest on the note is subject to change based on the Wall Street
      Journal Prime Rate Index. The effective interest rate as of February 28, 2007
      was 8.5%. The line of credit is secured by a Certificate of Deposit of
      $1,000,000 that the Company had in the same bank. The interest of $7,083 has
      been accrued on the note as of February 28, 2007.





27
 TANK
              SPORTS, INC.
 NOTES
              TO FINANCIAL
              STATEMENTS




**13.**
            **NOTES
                PAYABLE -
                continued**




The
      scheduled payments on the notes are as follows:





Years
                  ended2007-2008
            
            $
            4,937,2792009
            
            
            101,9442010
            
            
            66,2222011
            
            
            86,645Thereafter
            
            
            26,176Total
            
            
            5,218,266Current
                  portion
            
            
            4,937,279Non-current
                  portion
            
            $
            280,987








**14.**
            **SHARES
                TO BE
                ISSUED**




The
      Company classifies all amounts received for the issue of shares, against which
      shares have not been issued, as shares to be issued. Once the company issues
      shares, the amounts are classified as Common stock. As of February 28, 2007
      the
      Company has total shares to be issued balance of $1,090,000 pursuant to the
      Private Placement Memorandum dated December 28, 2006 (refer to Note
      15).





**15.**
            **INCOME
                TAXES**







Through
      February 28, 2007, the Company incurred net operating losses for tax purposes
      of
      approximately $249,325. Differences between financial statement and tax losses
      consist primarily of bad debts allowance of $22,706 at February 28, 2007. The
      net operating loss carry forward may be used to reduce taxable income through
      the year 2026. Net operating loss for carry forward for the State of California
      is generally available to reduce taxable income through the year 2011. The
      availability of the Company's net operating loss carry forward is subject to
      limitation if there is a 50% or more positive change in the ownership of the
      Company's stock. The provision for income taxes consists of the state minimum
      tax imposed on corporations.





The
      gross
      deferred tax asset balance, due to net operating loss carry forward and
      allowance for bad debts, as of February 28, 2007 was $530,000. A 100% valuation
      allowance has been established against the deferred tax assets, as the
      utilization of the loss carry forward cannot reasonably be assured. Components
      of deferred tax assets at February 28, 2007 are as follows:




2007
            
            
            2006Net
                  operating loss
            
            $
            530,000
            
            $
            305,866Less
                  Valuation allowance
            
            
            (530,000
            )
            
            (305,866
            )$
            -
            
            $
            -




The
      following is a reconciliation of the provision for income taxes at the U.S.
      federal and California state income tax rate to the income taxes reflected
      in
      the Statements of Operations:




February
                  28,
            
            
            February
                  28,2007
            
            
            2006Tax
                  expense (credit) at statutory rate-federal
            
            
            (34
            )%
            
            (34
            )%State
                  tax expense net of federal tax
            
            
            (
                  6
            )
            
            (
                  6
            )Changes
                  in valuation allowance
            
            
            40
            
            
            40Tax
                  expense at actual rate
            
            
            -
            
            
            -





28
 TANK
              SPORTS, INC.
 NOTES
              TO FINANCIAL
              STATEMENTS




**16.**
            **STOCKHOLDERS’EQUITY**





On
      November 6, 2006, the company’s board of directors approved a 4-for-1 forward
      stock split of the Company’s common shares. Each shareholder of record at the
      close of business on November 27, 2006 received three (3) additional shares
      for
      every outstanding share held as of the date hereof. The financial statements
      have been adjusted retroactively to reflect the stock split.





On
      December 4, 2006, the Company entered into an Investment Agreement with an
      investor, Dutchess Private Equities Fund, L.P. (“the Investor”). Pursuant to
      this Agreement, the Investor shall commit to purchase up to $10,000,000 of
      the
      Company’s common stock over the course of thirty-six (36) months. The amount
      that the Company shall be entitled to request from each purchase shall be equal
      to, at the Company’s election, either (i) $150,000 or (ii) 200% of the average
      daily volume (U.S. market only) of the common stock for the three (3) trading
      days prior to the applicable put notice date, multiplied by the average of
      the
      three (3) daily closing prices immediately preceding the put date. The put
      date
      shall be the date that the Investor receives a put notice of a draw down by
      the
      Company. The purchase price shall be set at ninety-five percent (95%) of the
      lowest closing Best Bid price of the common stock during the pricing period.
      The
      pricing period shall be the five (5) consecutive trading days immediately after
      the put notice date. There are put restrictions applied on days between the
      put
      date and the closing date with respect to that particular Put. During this
      time,
      the Company shall not be entitled to deliver another put notice. Further, the
      Company shall reserve the right to withdraw that portion of the Put that is
      below seventy-five percent (75%) of the lowest closing bid prices for the
      10-trading day period immediately preceding each put notice. As of February
      28,
      2007, the Company has not sold any shares to the investor.





On
      December 22, 2006, the Company signed Web Site Development Agreement with a
      consultant and agreed to pay $17,500 worth of S-8 stock after the completion
      of
      the website. As of February 28, 2007, no S-8 stocks have been issued and $5,979
      consulting fee has been accrued.





On
      January 30, 2007, the Company completed the acquisition of one hundred percent
      (100%) of the issued and outstanding common stock of Lowprice.com, Inc., an
      Arizona corporation d/b/a RedCat Motors (the “Redcat”) pursuant to a Stock
      Purchase Agreement, as amended (the “Agreement”) by and among the Company, (the
      Shareholders), the Company and Hexagon. The Company purchased 100% of the common
      stock of Redcat from the Shareholders for an aggregate purchase price of $1.00.
      Further, the Company made a capital contribution to the Company consisting
      of
      $1,000,000 in cash, which was paid to the Company upon the Closing. The Company
      further issued to Hexagon 400,000 shares of the common stock of the Company
      which was valued at the fair market price and an additional $200,000 capital
      contribution in cash for the settlement of debt.





On
      December 28, 2006, the Company board of directors approved the Private Placement
      Memorandum and started to offer up to 500 units of the Company’s securities at
      $10,000 per unit. Each unit consists of 10,500 shares of the Company’s common
      stock (“Shares”) and 5,000 warrants (“Warrants”) to purchase one share of
      the Company’s common stock at an exercise price of $2.00 per share. The Warrants
      will be immediately exercisable and will remain exercisable for one year. The
      Unit offered including the Shares, Warrants and the common shares issuable
      exercise of the Warrants, are being issued as restricted securities under the
      federal securities laws, and investors’ right to sell, transfer, pledge or
      otherwise dispose of any of the shares will be limited by the 1933 Act and
      the
      rules and regulations and any applicable state securities laws. No sales
      commissions will be paid to the Company in connection with this offering. The
      offering was terminated on February 27, 2008 and the Company sold 1,144,500
      shares of common stock and granted 545,000 shares of Warrants in this offering.
      The cash proceeds for the issuance of shares amounted to $1,090,000. The fair
      value of the warrants was $27,567 and was calculated using the Black-Scholes
      option pricing model using the following assumptions: risk free rate of return
      of 4.75%, volatility of 103%, dividend yield of 0% and expected life of one
      year.





On
      February 1, 2007, the Company board of directors approved to issue $51,383
      worth
      of unrestricted shares to former RedCat employees as bonus for 90 days of
      employment starting February 1, 2007. As of February 28, 2008, no shares have
      been issued and $16,948 consulting fee has been accrued.


29
 TANK
              SPORTS, INC.
 NOTES
              TO FINANCIAL
              STATEMENTS




**17.**
            **WARRANTS**





Following
      is a summary of the warrant activity for the year ended February 28,
      2007:





Outstanding,
                  February 28, 2006
            
            
            -Granted
                  during the year
            
            
            545,000Forfeited
                  during the year
            
            
            -Exercised
                  during the year
            
            
            -Outstanding,
                  February 28, 2007
            
            
            545,000





Following
      is a summary of the status of warrants outstanding at February 28,
      2007:





Outstanding
                Warrants
            
            Exercisable
                WarrantsExercise
              Price
            Number
            Average
                Remaining Contractual Life
            Average
                Exercise Price
            Number
            Intrinsic
                Value$2.00
            545,000
            1.00
            $2.00
            545,000
            $0
                  .00





The
      assumptions used in calculating the fair value of options granted using the
      Black-Scholes option pricing model are as follows:




The
      545,000 warrants granted on February 27, 2007:





Risk-free
                  interest rate
            
            
            4.75
            %Expected
                  life of the options
            
            
            1.00
                  yearExpected
                  volatility
            
            
            103
            %Expected
                  dividend yield
            
            
            0








**18.**
            **CURRENT
                VULNERABILITY DUE TO
                CERTAIN
                CONCENTRATIONS**





The
      Company had one major vendor that provided over 46% of the Company’s purchases
      for the fiscal year ended February 28, 2007. The Company had other two major
      vendors that each provided over 10% of the Company’s inventory for the fiscal
      year ended February 28, 2007. Total purchases from these three vendors were
      75%
      of the Company’s total inventory purchases for the fiscal year ended February
      28, 2007. The accounts payable to these vendors amounted to $611,841 as of
      February 28, 2007.





There
      were no major customers whose purchases accounted for over 10% of the Company’s
      total revenue for the fiscal years ended February 28, 2007 and
      2006.





**19.**
            **SHIPPING
                AND HANDLING
                EXPENSES**





Tank
      has
      included $708,172 and $596,604 freight out shipping and handling expenses for
      the fiscal years ended February 28, 2007 and 2006 into selling
      expenses.





**20.**
            **RELATED
                PARTIES**





Lease





On
      August 1, 2005, Tank enteredinto a lease agreement
      for
      the new facilities in which they operate. The lessors are Tank’s
      two main shareholders who are also
      Tank’s
      directors. The term of the lease is
      60 months with monthly payments of $19,900. As of February 28, 2007, the amount
      due was
      $0.





Rent
      expenses were $250,800 and $189,873 for the fiscal years ended February 28,
      2007
      and 2006, respectively.


30
 TANK
              SPORTS, INC.
 NOTES
              TO FINANCIAL
              STATEMENTS




**20.**
            **RELATED
                PARTIES -
                continued**




Letter
      of credit charge





On
      August
      1, 2007, the Company signed a credit agreement with LONG Sa De CV (“Long
      Company”), whereas the Company agrees to let Long Company to utilize the line of
      credit of the Company up to $5,500,000 for the Letter of Credit issued to
      vendors in China for one year. In exchange, Long Company agrees to pay up to
      6%
      of service charges to the Company to cover the lending costs and service charges
      from its bank. The Company’s Chairman and Director are also the officers of
      Long Company. As of February 28, 2007, total $180,670 was charged to Long
      Company for opening letter of credit and was recorded as other receivable
      in the accompanying financial statements.





Due
      to
      affiliate





The
      Company has an affiliated company Steady Star facilitated the Company to
      purchase merchandize from China. Steady Star obtains the international letter
      of
      credit from bank and then pay for the vendors in China for the merchandize
      purchased by the Company. After the Company receives the merchandise, the
      Company makes payment to Steady Star. The Company’s Chairman and Director and is
      the main shareholder of Steady Star Company. As of February 28, 2007, the amount
      due to this affiliate was $1,602,114, of which $120,000 is current payable
      and
      $1,482,114 is non-current payable. The amount is due on demand, interest free,
      and unsecured.








**21.**
            **COMMITMENTS**





On
      August
      1, 2005, Tank entered into a lease agreement with one of the Company’s director
      for a term of 60 months with monthly payments of $19,900.





Minimum
      annual rent expense for Tank for the next 4 years subsequent to February 28,
      2007 is as follows:




Period
            
            
            Amount1
                  year after
            
            $
            238,8002
                  year after
            
            $
            238,8003
                  year after
            
            $
            238,8004
                  year after
            
            $
            238,800





On
      December 25, 2005, the Company’s subsidiary Redcat entered into a lease
      agreement for a term of 36 months until January 31, 2009. The rent expense
      for
      one month ended February 28, 2007 was $20,271.





Minimum
      annual rent expense for Redcat for the next 3 years subsequent to February
      28,
      2007 is as follows:




Period
            
            
            Amount1
                  year after
            
            $
            171,0122
                  year after
            
            $
            175,392




On
      December 4, 2006, the Company entered into an Investment Agreement with an
      investor, Dutchess Private Equities Fund, L.P... Pursuant to this Agreement,
      the
      Investor shall commit to purchase up to $10,000,000 of the Company’s common
      stock over the course of thirty-six (36) months. The Company is obligated to
      file a registration statement with the Securities and Exchange Commission (SEC)
      covering 6,000,000 shares of the common stock underlying the Investment
      Agreement within 21 days after the closing date. In addition, the Company is
      obligated to use all commercially reasonable efforts to have the registration
      statement declared effective by the SEC within 90 days after the closing date.
      The Company shall have an ongoing obligation to register additional shares
      of
      common stock as necessary underlying the draw downs.


31
 TANK
              SPORTS, INC.
 NOTES
              TO FINANCIAL
              STATEMENTS




**22.**
            **SUPPLEMENTAL
                DISCLOSURE OF CASH
                FLOWS**





The
      Company prepares its statements of cash flows using the indirect method as
      defined under the Financial Accounting Standard No. 95.





The
      Company paid $38,108 and $3,657 for interest for the fiscal years ended February
      28, 2007 and 2006, respectively. The Company paid $800 each year for income
      tax
      for the fiscal years ended February 28, 2007 and 2006.





Supplemental
      schedule of non-cash investing and financing activities:





The
      Company purchased one hundred percent (100%) of the issued and outstanding
      common stock of RedCat for $1. In conjunction with the acquisition, assets
      and
      liabilities were assumed are as follows:




Fair
                  value of Assets Acquired
            
            $
            1,891,576Fair
                  value of Liabilities Assumed
            
            
            (3,507,291
            )




**23.**
            **BUSINESS
                COMBINATIONS**





On
      January 30, 2007, the Company completed the acquisition of one hundred percent
      (100%) of the issued and outstanding common stock of Lowprice.com, Inc., an
      Arizona corporation d/b/a RedCat Motors (the “Redcat”) pursuant to a Stock
      Purchase Agreement, as amended (the “Agreement”) by and among the Company, (the
      Shareholders), the Redcat and Hexagon Financial Group (as “Creditor”). The
      Company purchased 100% of the common stock of the Redcat from Shareholders
      for
      an aggregate purchase price of 1.00. Further, the Company made a capital
      contribution to the Redcat consisting of $1,000,000 in cash, which was paid
      to
      the Redcat upon the Closing. The Company further issued to Hexagon 400,000
      shares of the common stock of the Company for the settlement of debt and made
      an
      additional $200,000 capital contribution in cash.





The
      following table presents the allocation of the acquisition cost to the assets
      acquired and liabilities assumed:








Cash
                  and cash equivalents
            
            $
            65,903Inventory
            
            
            1,164,586Other
                  assets
            
            
            196,294Fixed
                  assets
            
            
            464,793Total
                  assets
            
            
            1,891,576Accounts
                  payable
            
            
            769,638Others
                  payable
            
            
            208,895Loans
                  payable
            
            
            2,528,758Total
                  Liabilities
            
            
            3,507,291Total
                  cost of investment
            
            
            -1,615,715Total
                  acquisition cost
            
            
            1Goodwill
            
            $
            1,615,716




The
      accompanying pro forma condensed consolidated financial statements are provided
      for informational purposes only.  The Pro Forma Combined Statement of
      Operations are unaudited and are not necessarily indicative of the consolidated
      financial position which actually would have occurred if the above transaction
      had been consummated on February 28, 2007 and 2006, nor does it purport to
      present the operating results that would be achieved for future
      periods.


32
 TANK
              SPORTS, INC.
 NOTES
              TO FINANCIAL
              STATEMENTS




**23.**
            **BUSINESS
                COMBINATIONS -
                continued**




The
      acquisition is to be recorded as a purchase acquisition.  The Pro Forma
      Consolidated Balance Sheet included herein reflects the use of the purchase
      method of accounting for the above transaction.





The
      following is the pro forma financial information of the Company assuming the
      transaction had been consummated at the beginning of the fiscal years ended
      February 28, 2007 and 2006:





**Statement
                of Operation Pro Forma:**For
                the year
            
            
            For
                the yearEnded
                February 28
            
            
            Ended
                February 282006
            
            
            2007Revenues
            $
            27,164,392
            
            $
            25,354,507Cost
                  of Sales
            
            21,876,061
            
            
            20,744,920Gross
                  Profit
            
            5,288,331
            
            
            4,609,587Operating
                  Expenses
            
            4,102,626
            
            
            6,629,699Income
                  (loss) from operations
            
            1,185,705
            
            
            (2,020,112
            )Total
                  Non-operating income (expenses)
            
            (310,551
            )
            
            142,296Net
                  Income (loss) before income taxes
            
            875,154
            
            
            (1,877,616
            )Provision
                  for income taxes
            
            -
            
            
            800Net
                  Income (loss)
            $
            875,154
            
            $
            (1,878,616
            )Earnings
                  Per Share:Basic
                  and diluted
            $
            0.027
            
            $
            (0.058
            )Weighted
                  average number of shares outstanding
            
            32,125,184
            
            
            32,502,800





**24.**
            **SUBSEQUENT
                EVENTS
                (Unaudited)**





**Shares
      to be Issued**




Pursuant
      to the Private Placement Memorandum dated December 18, 2006 the Company has
      total 1,144,500 shares of common stocks to be issued in the amount of $1,090,000
      as of February 28, 2007. The 1,144,500 shares totaling $1,090,000 were actually
      issued at the price of $0.95 as of March 9, 2007.





**Shares
      issued to S-8 Employee**





On
      April
      3, 2007 the Company completed the filing of the Registration Statement relating
      to 3,000,000 shares of its common stock, par value $0.001 per share, issuable
      to
      eligible employees of the Company under its 2007 Employee/Consultant Common
      Stock Plan. The 81,914 shares were actually issued at the market prices to
      the
      eligible employees and consultants as of April 11, 2007.





**Shares
      issued to Dutch Fund**


Pursuant
      to the Investment Agreement with the investor of Dutchess Private Equities
      Fund,
      L.P. dated December 4, 2006, the 27,000 shares were actually issued to the
      investor at the market price of $0.52 on April 9, 2007.




33




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





There
      have been no changes in and/or disagreements with Kabani & Company, Inc. on
      accounting and financial disclosure matters.





ITEM
      8A.
      CONTROLS AND PROCEDURES





Evaluation
      of Disclosure Controls and Procedures





Disclosure
      controls and procedures are designed to ensure that information required to
      be
      disclosed in the reports filed or submitted under the Exchange Act of 1934
      is
      recorded, processed, summarized and reported, within the time periods specified
      in the rules and forms of the Securities and Exchange Commission. Disclosure
      controls and procedures include, without limitation, controls and procedures
      designed to ensure that information required to be disclosed in the reports
      filed under the Securities Exchange Act of 1934 is accumulated and communicated
      to management, including our Chief Executive Officer, as appropriate, to allow
      timely decisions regarding required disclosure.





At
      end of
      the period covered by this report, we carried out an evaluation of the
      effectiveness of the design and operation of our disclosure controls and
      procedures pursuant to Exchange Act Rule 13a-15 and 15d-15(e). This evaluation
      was done under the supervision and with the participation of our Principal
      Executive Officer. Based upon that evaluation, he concluded that our
      disclosure controls and procedures are effective in gathering, analyzing and
      disclosing information needed to satisfy our disclosure obligations under the
      Exchange Act.





Changes
      in Internal Controls





There
      were no changes in our internal controls or in other factors during the last
      fiscal year that materially affected, or was reasonably likely to materially
      affect, internal control over financial reporting.





PART
      II





ITEM
      9.
      DIRECTORS, EXECUTIVE OFFICERS. PROMOTERS AND CONTROL PERSONS; COMPLIANCE WITH
      SECTION 16(a)





The
      following table sets forth the names and ages of the directors and executive
      officers of the Company through the date of this Report, as well as the current
      officers and directors; the principal offices and positions with the Company
      held by each person and the date such person became a director or executive
      officer of the Company. Each serves until the next annual meeting of the
      stockholders.







NAME
            AGE
            POSITION
                WITH THE COMPANYJiangyong
                  Ji
              10925
                  Schmidt Road
              El
                  Monte, CA 91733
            52
            ChairmanJing
                  Jing Long
              10925
                  Schmidt Road
              El
                  Monte, CA 91733
            55
            President,
                  Treasurer and DirectorJim
                  Ji
              10925
                  Schmidt Road
              El
                  Monte, CA 91733
            27
            Secretary
                  and DirectorWei
                  Luo
              10925
                  Schmidt Road
              El
                  Monte, CA 91733
            44
            Vice
                  PresidentMike
                  Turber
              10925
                  Schmidt Road
              El
                  Monte, CA 91733
            41
            Director
                  of Marketing and Sales


34





ITEM
      9.
      DIRECTORS, EXECUTIVE OFFICERS. PROMOTERS AND CONTROL PERSONS; COMPLIANCE WITH
      SECTION 16(a) - continued




The
      following is a brief account of the education and business experience of each
      director, executive officer and key employee during at least the past five
      years, indicating each person's principal occupation during the period, and
      the
      name and principal business of the organization by which he or she was
      employed.





**Jiangyong
        Ji, age 5****2**, has served as Chairman and  CEO,
        director of Tank Sport, Inc. from March 2001 to present; served as co-founder
        of
        Steady Star, Inc, a California Corporation from 1994 to present; served as
        President, CEO and director of LONG Sa De CV from September 1998 to present;
        served as President, CEO and director of KTMMEX SA DE CV from February 2002
        to present. Mr. Ji was the accounting manager for Beijing Group Wuzhou Hotel,
        a
        hotel management company, from Sep 1987 to Dec 1992. Mr. Ji has a bachelor
        degree from the Air Force Medical School of People’s Republic of
        China.





**Jing
      Jing Long, age** **5****5**, has served as
      treasurer and director of Tank Sport, Inc. from March 2001 to present; served
      as
      President and co-founder of Steady Star, Inc., a California Corporation from
      1994 to present; served as Manager of Panama Hua Mei Group, Co. from 1988 to
      1991. Ms. Long received a bachelor degree from First Army Medical School of
      People’s Republic of China.





**Jim
        Ji, age** **2****7**, has served as Chief
        Operation Manager , secretary and director of Tank Sports, Inc. ; served
        as
        Technical Support department supervisor of Giga Fast Ethernet, Inc., a
        California Corporation, from September 1999 to September 2003. Mr. Ji has
        received a bachelor’s degree from ITT Technical College.





**Wei
        Luo, Vice Presi****dent, age 4****4****,**has 19 years
        of experience in the machinery and financial services
        industry. Prior to joining the Company, he served as registered Principal
        of
        Pruco Securities, LLC and Manager in Financial Services with Prudential
        Financial  . He  supervises the company’s IR , corporate finance
        department and help the CEO of the company in
        administration.





**Mike
      Turber, Director of Marketing & Sales, age 40,**brings over 20 years
      in sales and marketing. Prior to Tank Sports, he served as sales & general
      manager for a leading powersports company. Before then he was a sales manager
      for Tandy Name Brands and personally built 4 multi-million dollar companies.
      He
      will bring his experience in sales and marketing & help the company to
      achieve its sales goals.




Ms.
      Jing
      Jing Long is the spouse of Mr. Jiangyong Ji, and Mr. Jim
      Ji is
      the son of Mr. Jiangyong Ji.





ITEM
      9B:
      COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT





Section
      16(a) of the Securities Exchange Act of 1934 requires our officers, directors
      and person who own more than 10% of our Common Stock to file reports of
      ownership and changes in ownership with the Securities and Exchange Commission.
      All of the aforesaid persons are required by SEC regulation to furnish us with
      copies of all Section 16(a) forms they file. No changes in the holdings of
      any
      officer, director or other person took place and therefore, no other reports
      were required to be filed.





ITEM
      10.
      EXECUTIVE COMPENSATION





None
      of
      our executive officers received an annual salary and bonus that exceeded
      $100,000 during the fiscal year ending February 28, 2007. The following table
      sets forth the compensation received by Jiangyong Ji, Jing Jing Long and Jim
      Ji.
      We currently do not have any compensation or employment agreements with any
      of
      our executive officers, and we do not anticipate entering into any such
      agreements in the foreseeable future.




ANNUAL
                COMPENSATION
            LONG
                TERMCOMPENSATIONFISCAL
            SALARY
            OTHER
            SECURITIESPRINCIPAL
                POSITION
            YEAR
            OPTIONS
            UNDERLYINGJiangyong
                  Ji
              Chairman
            2007
              2006
              2005
              2004
              2003
            15,600.00
              15,600.00
              12,506.88
              17,964.23
              25,932.80
            -0-
              -0-
              -0-
              -0-
            -0-
              -0-
              -0-
              -0-


Jing
                  Jing
              President,
                  Treasurer
              Director
            2007
              2006
              2005
              2004
              2003
            13,200.00
              13,200.00
              10,856.40
              16,481.15
              24,674.00
            -0-
              -0-
              -0-
              -0-
            -0-
              -0-
              -0-
              -0-Jim
                  Ji
              Secretary
                  and  Director
            2006
              2005
              2004
              2003
            96,000.00
              31,200.00
              27,527.52
              24,113.04
              1,541.30
            -0-
              -0-
              -0-
              -0-
            -0-
              -0-
              -0-
              -0-




35


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





The
      following table sets forth, as of February 28, 2007, certain information with
      respect to the beneficial ownership of our common stock by each stockholder
      known by us to be the beneficial owner of more than 5% of our common stock
      and
      by each of our current directors and executive officers. All shares included
      in
      the table represent all shares that could be obtained by the individuals listed
      within sixty (60) days from the date of this Registration Statement. Each person
      has sole voting and investment power with respect to the shares of common stock,
      except as otherwise indicated. Beneficial ownership consists of a direct
      interest in the shares of common stock, except as otherwise
      indicated.




NAME
                AND ADDRESS OF
              BENEFICIAL
                OWNER
            AMOUNT
                AND NATURE OF
              BENEFICIAL
                OWNERSHIP
            PERCENT
                OF
              BENEFICIAL
                OWNERSHIPJiangyong
                  Ji
              Chairman
            10,716,800
            32.97%Jing
                  Jing Long
              President,
                  Treasurer
              and
                  Director
            16,000,000
            49.23%Jim
                  Ji
              Secretary
                  and Director
            0
            0.00%All
                  Officers, Directors
              And
                  5% Shareholders
            26,716,800
            81.20%





ITEM
      12.
      CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS.





In
      April
      2001, Steady Star, Inc., an S Corp, owned by Mr. Ji and Ms. Long (each 50%)
      (“Steady Star”) loaned a total of $90,000 to Tank. Steady Star also invested
      $10,000 in “paid in capital” into Tank.  Steady Star then become the 100%
      shareholder of Tank. Steady Star received 10,000 shares of common stock of
      Tank
      for its $10,000 investment. The $90,000 was no interest bearing loan with
      maturation date of April 2002. We were able to fund our start up operations
      with
      this loan. As of April 30, 2002, both Steady Star and the Company reached
      mutual agreement on the loan. The Company had paid principal in full as of
      July
      21, 2002.




On
      January 30, 2005, the board of Steady Star consented to a non-liquidation
      dividend of its ownership of the 10,000 shares of Tank to its only 2
      shareholders, Mr. Ji and Ms. Long, each 5,000 shares.




On
      March
      15, 2005, Mr. Ji gifted a total of 1,501 shares to 8 individuals.




On
      August
      16, 2003, Tank and Steady Star, a related company, jointly entered into a lease
      agreement for the term of 36 months with a monthly payment of $7,840, of which
      $4,075 was allocated to Tank. The leased space was located at 1718 Floradale
      Ave, South El Monte, CA 91733 with 15,404 square feet for warehouse and office
      use. As we expanded, the space lacked efficient warehouse space and office
      presentation required for us to further our business development.




On
      August
      1, 2005, Tank entered into another lease agreement for the new facilities in
      which they operate. The lessors are Tank’s 2 shareholders who are also Tank’s
      directors. The term of the lease is 60 months with monthly payments of $19,900.
      As of February 28, 2007, the amount due was $0. The amount is due on demand,
      interest free and unsecured.


36


ITEM
      12.
      CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS - continued




Minimum
      annual rent expense for Tank for the year subsequent to February 28, 2007 is
      as
      follows:




Period
            Amount2007
            $
                  238,800




Tank
      and
      its affiliated company share one credit card. The credit card is a commonly
      held
      card under Tank’s 2 shareholders who are also Tank’s directors. The credit card
      is for business related purposes only. Tank and its affiliated company will
      make
      payments for each company’s share of the expenses accordingly directly to the
      credit card company. As of February 28, 2007, the amount due was $9905.00.
      The
      amount is due on demand, interest free and unsecured.





The
      Company issues purchase
      orders to third party vendors in China. However,the third
      party vendors are
      paid by a US company owned by some of the shareholders of the Company. This
      affiliated company issues letter of credit in favor of vendors when the Company
      issues purchase order to the vendors. The Company makes payment to
      thisaffiliated company, which in
      turn pays to the vendors. As of February 28, 2007, the amount due to this
      affiliate was $ 1,602,141. There are long term of $1,482,114, and short term
      of
      $120,000. The amount is due on demand, interest free and
      unsecured.





The
      company has earned $100,000 for providing motorcycle designs for the affiliated
      company in the year ended February 28, 2007. This $100,000 has been recorded
      as
      other income.




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




(a)
      Exhibits





Exhibit
      No.  Description and Method of Filing




31.1
            Certificate
                of Principal Executive Officer as Required by Rule
                13a-14(a)/15d-14




31.2
            Certificate
                of Principal Accounting Officer as Required by Rule
                13a-14(a)/15d-14




32.1
              Certificate
                  of Principal Executive Officer as Required by Rule 13a-14(b) and
                  Rule 15d-
                  14(b) (17 CFR 240.15d-14(b)) and Section 1350 of Chapter 63 of
                  Title 18 of
                  the United States Code
  32.2
                Certificate
                    of Principal Accounting Officer as Required by Rule 13a-14(b)
                    and Rule
                    15d-14(b) (17 CFR 240.15d-14(b) and Section 1350 of Chapter 63
                    of Title 18
                    of the United States
                    Code




(b)
      Reports On Form 8-K




8-K/A
      filed 4/12/2007


8-K
      filed
      4/11/2007


8-K/A
      filed 4/10/2007


8-K
      filed
      2/02/2007


8-K/A
      filed 1/03/2007


8-K
      filed
      1/03/2007




ITEM
      14.
      PRINCIPAL ACCOUNTANT FEES AND SERVICES





Our
      Board
      of Directors reviews and approves audit and permissible non-audit services
      performed by its independent accountants, as well as the fees charged for such
      services. In our review of non-audit service fees and its appointment of Kabani
      & Company, Inc., as our independent accountants, our Board of Directors
      considered whether the provision of such services is compatible with maintaining
      independence. All of the services provided and fees charged by Kabani &
Company, Inc., in fiscal year ended February 28, 2007, were approved by our
      board of directors.





Audit
      Fees





The
      aggregate fees billed by Kabani & Company, Inc. for professional services
      for the audit of our annual financial statements for our fiscal year ended
      February 28, 2007 were $7,500 net of expenses.


Audit-Related
                  Fees
            
            $
            3,000Tax
                  Fees
            
            $
            0





37




SIGNATURES





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




TANK
      SPORTS, INC.





Date:
                June 27, 2007
            
            
            Date:
                June 27, 2007/s/ Jing
                Jing Long
            
            
            /s/ Jing
                Jing LongJing
                Jing Long
              Principal
                Executive Officer
            
            
            Jing
                Jing Long
              Principal
                Accounting Officer
              Principal
                Financial Officer




Pursuant
      to the requirements of the Securities Exchange Act of 1934, this Report has
      been
      signed by the following persons on behalf of the Registrant and in the
      capacities and on the dates indicated.




Date: June
                27, 2007
            By:
            /s/ Jing
                Jing LongDirectorDate:
                June 27, 2007
            By:
            /s/ Jiangyong
                JiDirectorDate: June
                27, 2007
            By:
            /s/ Jim
                JiDirector





38