UNITED
      STATES


SECURITIES
      AND EXCHANGE COMMISSION


Washington,
      D.C. 20549





Form
      10-KSB








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





For
      the
      fiscal year ended February 28, 2006








[ 
      ]  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










1


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)





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.  [
      X
      ]Yes  [
      ]No





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





State
      issuer’s revenues for its most recent fiscal year. $7,539,336





As
      of
      February 28, 2006, we had 8,125,700 shares of our $0.001 par value common stock
      issued and outstanding. On February 28, 2006, the aggregate market value of
      our
      common stock held by non-affiliates was approximately $
      1,446,500.





DOCUMENTS
      INCORPORATED BY REFERENCE


None





Transitional
      Small Business Disclosure Form (Check one):   Yes
      [
      ]  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
            14ITEM
                8
            CHANGES
              IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
              DISCLOSURE
            27ITEM
                8A
            CONTROLS
                AND PROCEDURES
            27PART
                IIITEM
                9
            DIRECTORS,
                EXECUTIVE OFFICERS. PROMOTERS AND CONTROL PERSONS; COMPLIANCE WITH
                SECTION
                16(a)
            27ITEM
                9B
            COMPLIANCE
                WITH SECTION 16(a) OF THE EXCHANGE ACT
            28ITEM
                10
            EXECUTIVE
                COMPENSATION
            28ITEM
                11
            SECURITY
                OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
            28ITEM
                12
            CERTAIN
                RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
            28ITEM
                13
            EXHIBITS
              AND REPORTS ON FORM 8-K
            29SIGNATURES
            31





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 a web site at http://www.tank-sports.com .





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 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 Tank Sports, Inc., as well as a
      network of about 151 dealers and distributors worldwide, with over 100 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 Finland.





We
      offer
      a full product line consisting of four cruiser motorcycles, seven dirt bike
      motorcycles, eight scooters, and seven 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 150cc and the ATVs models
      are 70cc to 250cc. We also offer a bicycle line consisting of “ ***Trials*** ”,
      bikes
      for skill oriented riders, “ ***Cruisers*** ”,
      for
      common use, “ ***BMX*** ”
and
      Mountain Bikes. Since we launched motorcycle and ATVs products in 2003, we
      have
      switched our focus from bicycles to the sales and distribution of motorcycles
      and ATVs.




Our
      motorcycle and ATV products are manufactured in China. Our products are
      manufactured according to our proprietary designs and standards. **** We
      make
      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
      issues 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.
      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.




4




ITEM 1. DESCRIPTION OF BUSINESS - continued




·
            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.





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.







7




ITEM 1. DESCRIPTION OF BUSINESS - continued




Employees





We
      currently have a total of eighteen (18) full time employees.





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.





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 not listed on any exchange and there is no public trading market
      for the common stock.





Approximate
      Number of Common Stock Holders





As
      of
      February 28, 2006, we had 39 shareholders of record. We have no outstanding
      warrants or options to purchase our securities.





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





From
      October 10, 2005 through October 30, 2005, we conducted an offering of 125,700
      shares of our common stock to 32 investors residing in China and Mexico at
      a
      price of $1.00 per share for an aggregate value to our company of
      $125,700.





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
      financial condition and Plan of Operation and should be read 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 commenced the sale and distribution of motorcycles and ATV’s under
      the brand name of TANK. In
      order
      to succeed, we intend to do the following:





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 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 have identified 25 dealers that we expect will enter
      into dealer agreements with us. 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 Brand.* To
      date,
      our products have appeared in over 10 publications. We believe this publicity
      is
      critical to creating awareness of the TANK brand. 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
      brand.





Our
      focus
      in the next 12 months has been to seek necessary working capital, and to develop
      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 $180,000. 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.





FOR
      THE
      FISCAL YEAR ENDED FEBRUARY 28, 2006





We
      generated revenues of $7,539,336 for the fiscal year ending February 28, 2006,
      as compared to $2,858,609 in revenues for the fiscal year ended February 28,
      2005. The increase is primarily attributable to increased sales.





Our
      net
      loss for fiscal year ended February 28, 2006 was approximately ($206,713) as
      compared to a net loss for fiscal year ended February 28, 2005 of approximately
      ($121,478). The increase in our net loss is primarily attributable to increase
      in operating expenses, especially in advertising, trade show, freight out and
      rents, and product liability and warranty insurances.





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. During the fiscal year ended
      February 28, 2005, we recorded operating expenses of $809,909, consisting
      primarily of (i) $316,858 in general and administrative expenses; and (ii)
      $493,051 in selling expenses.


9




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


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





Net
      cash
      flow provided by (used in) operating activities were ($1,383,580) and $212,036
      during the fiscal years ended February 28, 2006 and 2005, respectively.





Net
      cash
      flows used in investing activities were $78,818 and $50,796 during the fiscal
      years ended February 28, 2006 and 2005, respectively





Net
      cash
      flow provided by (used in) financing activities were $1,584,355 and $(187,195)
      during the fiscal years ended February 28, 2006 and 2005, 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, 2006, our current assets were $1,960,504, current liabilities
      were
      $2,908,656, resulting in a working capital deficit of $948,152.





At
      February 28, 2006, we had cash and cash equivalents of $163,528.





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 no lines of credit or other bank financing arrangements.
      However, the Company is meeting its requirements from line of credit obtained
      by
      a related party. SEE CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS SECTION.
      Generally, we have financed operations to date through cash flow and shareholder
      loans. In connection with our business plan, management anticipates additional
      increases in operating expenses and capital expenditures relating to
      advertisement and marketing of our brand name and the expansion of dealership
      networks. We intend to finance these expenses from current and future revenues
      from operations.





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.





PURCHASE
      OF SIGNIFICANT EQUIPMENT





We
      do not
      intend to purchase any significant equipment during the next twelve


(12)
      months.





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.








10


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




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 of Financial Assets and Extinguishments of
      Liabilities,* with
      respect to the accounting for separately recognized servicing assets and
      servicing liabilities. This Statement:






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 servicer 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.



















11


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




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.











12


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 six months for its ATVs, Dirt bikes, Go Cars, and Scooters with
      a
      50cc engine, for a period of one year 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.








13


ITEM
      7.
      FINANCIAL STATEMENTS.




**Index
      to Financial Statements**




Page**Report
              of Independent Registered Public Accounting fim**
            15**Financial
              Statements:**
            16**BALANCE
                SHEET****FEBRUARY
                28, 2006**
            16**STATEMENTS
                OF OPERATIONS****FOR THE YEARS ENDED FEBRUARY 28, 2006 AND
                2005**
            17**STATEMENT
              OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)****FOR THE YEAR
              ENDED FEBRUARY 28, 2006 AND 2005**
            18**STATEMENT
              OF CASH FLOWS****FOR
              THE YEARS ENDED FEBRUARY 28, 2006 AND 2005**
            19**NOTES
                TO FINANCIAL STATEMENTS**
            20
                - 26







14




**REPORT********OF********INDEPENDENT********REGISTERED********PUBLIC********ACCOUNTING********FIRM**
  To
        the
        Board of Directors and Stockholders Tank
        Sports, Inc.
  We
        have
        audited the accompanying balance sheet of Tank Sports, Inc. as of February
        28,
        2006 and the related statements of operations, stockholders' equity, and
        cash
        flows for each of the two years in the period ended February 28, 2006. These
        financial statements are the responsibility of the Company's management.
        Our
        responsibility is to expiss 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
        iquire that we plan and perfoim the audit to obtain reasonable assurance
        about
        whether the financial statements are free of matial 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 pisentation.
        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., as of February
        28, 2006, and the iesults of its opations and its cash flows for each of
        the two
        years ended Febmaiy 28, 2006, in confoimity with accounting principles generally
        accepted in the United States of Amica.
  The
        Company's frnancial 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 noimal course
        of
        business. The Company has accumulated deficit of $794,666 at February 28,
        2006
        including a net loss of $206,713 during the year ended February 28, 2006.
        These
        factors as discussed in Note 3 to the frnancial statements, mises 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
 April
        21,2006


15






**TANK
        SPORTS, INC.**


**BALANCE
      SHEET**


**FEBRUARY
        28, 2006**




**ASSETS****CURRENT
                  ASSETS**Cash
                  & cash equivalents
              
              $
              163,528Accounts
                  receivable, net
              
              
              270,583Other
                  Receivable
              
              
              33,411Inventory
              
              
              1,426,092Prepaid
                  Expenses
              
              
              66,890Total
                  current assets
              
              
              1,960,504**PROPERTY
                  AND EQUIPMENT, NET**
              
              
              65,740**LOANS
                  RECEIVABLE**
              
              
              211,846**OTHER
                  ASSETS**
              
              
              11,600$
              2,249,690**LIABILITIES
                  AND STOCKHOLDERS' DEFICIT****CURRENT
                  LIABILITIES**Auto
                  Loan Payable
              
              $
              34,029Equipment
                  Loan Payable
              
              
              1,425Due
                  to affiliate
              
              
              2,713,628Other
                  payables
              
              
              64,851Accrued
                  liabilities
              
              
              94,723Total
                  current liabilities
              
              
              2,908,656**STOCKHOLDERS'
                  DEFICIT**Share
                  capital (authorized 50,000,000 shares, $0.001 par value,8,125,700
                  shares issued and outstanding)
              
              
              135,700Accumulated
                  deficit
              
              
              (794,666
              )Total
                  stockholders' deficit
              
              
              (658,966
              )**TOTAL
                  LIABILITIES AND STOCKHOLDERS' EQUITY**
              
              $
              2,249,690
  The
        accompanying notes are an integral part of these financial
        statements




16






**TANK
        SPORTS, INC.**
 **STATEMENTS
          OF OPERATIONS**


**FOR
        THE YEARS ENDED FEBRUARY 28, 2006 AND 2005**


**Years
                  Ended February 28,****2006**
              
              
              **2005****NET
                  REVENUE**
              
              $
              7,539,336
              
              $
              2,858,609**COST
                  OF REVENUE**
              
              
              5,671,178
              
              
              2,170,044**GROSS
                  PROFIT**
              
              
              1,868,158
              
              
              688,565**OPERATING
                  EXPENSES**Selling
                  expenses
              
              
              1,419,033
              
              
              493,051General
                  and administrative expenses
              
              
              775,352
              
              
              316,858Total
                  operating expenses
              
              
              2,194,385
              
              
              809,909**LOSS
                  FROM OPERATIONS**
              
              
              (326,227
              )
              
              (121,344
              )**NON-OPERATING
                  INCOME (EXPENSES)**Other
                  income
              
              
              123,171
              
              
              765Interest
                  expense
              
              
              (3,657
              )
              
              (899
              )Total
                  non-operating income (expenses)
              
              
              119,514
              
              
              (134
              )**NET
                  LOSS**
              
              $
              (206,713
              )
              $
              (121,478
              )**WEIGHTED
                  AVERAGE SHARES OF COMMON STOCK****OUTSTANDING,
                  BASIC AND DILUTED**
              
              
              8,031,296
              
              
              8,000,000**BASIC
                  AND DILUTED NET LOSS PER SHARE**
              
              $
              (0.03
              )
              $
              (0.02
              )


The
        accompanying notes are an integral part of these financial
        statements




17
 
  **TANK
          SPORTS, INC.**
 **STATEMENT
          OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)**
 **FOR
          THE YEAR ENDED FEBRUARY 28, 2006 AND 2005**
 **Common
                    Stock****Total****Number
                    of**
                
                
                
                
                
                **Accumulated**
                
                
                **stockholders'****shares**
                
                
                **Amount**
                
                
                **Deficit**
                
                
                **equity
                    (deficit**)******Balance
                    at February 29, 2004**
                
                
                8,000,000
                
                $
                10,000
                
                $
                (466,475
                )
                $
                (456,475
                )Net
                    loss for the year ended February 28, 2005
                
                
                -
                
                
                -
                
                
                (121,478
                )
                
                (121,478
                )**Balance
                    at February 28, 2005**
                
                
                8,000,000
                
                
                10,000
                
                
                (587,953
                )
                
                (577,953
                )Stock
                    issuance for cash
                
                
                125,700
                
                
                125,700
                
                
                -
                
                
                125,700Net
                    loss for the year ended February 28, 2006
                
                
                -
                
                
                -
                
                
                (206,713
                )
                
                (206,713
                )**Balance
                    at February 28, 2006**
                
                
                8,125,700
                
                $
                135,700
                
                $
                (794,666
                )
                $
                (658,966
                )
 The
        accompanying notes are an integral part of these
        financial statements


18




**TANK
      SPORTS, INC.**


**STATEMENT
        OF CASH FLOWS**


**FOR
        THE YEARS ENDED FEBRUARY 28, 2006 AND 2005**




**2006**
              
              
              **2005****CASH
                  FLOWS FROM OPERATING ACTIVITIES**Net
                  Loss
              
              $
              (206,713
              )
              $
              (121,478
              )Adjustments
                  to reconcile net loss to net cashprovided
                  by (used in) operating activities:Depreciation
                  and amortization
              
              
              13,083
              
              
              6,203(Increase)
                  decrease in current assets:Accounts
                  receivable
              
              
              (180,184
              )
              
              (2,231
              )Other
                  receivable
              
              
              (10,411
              )
              
              (23,000
              )Inventory
              
              
              (1,092,997
              )
              
              359,284Prepaid
                  expense
              
              
              (60,646
              )
              
              (214
              )Other
                  assets
              
              
              12,523
              
              
              10,417Increase
                  (decrease) in current liabilities:Other
                  payables
              
              
              76,870
              
              
              (17,942
              )Accrued
                  liabilities
              
              
              64,897
              
              
              997Net
                  cash provided by (used in) operating activities
              
              
              (1,383,580
              )
              
              212,036**CASH
                  FLOWS FROM INVESTING ACTIVITIES**Payment
                  on purchase of property
              
              
              (62,960
              )
              
              (629
              )Increase
                  in loans receivable
              
              
              (15,228
              )
              
              (50,167
              )Net
                  cash used in investing activities
              
              
              (78,188
              )
              
              (50,796
              )**CASH
                  FLOWS FROM FINANCING ACTIVITIES**Proceeds
                  from loans
              
              
              30,922
              
              
              -Due
                  to affiliate
              
              
              1,427,733
              
              
              (187,195
              )Proceeds
                  from stock issuance
              
              
              125,700
              
              
              -Net
                  cash provided by (used in) investing activities
              
              
              1,584,355
              
              
              (187,195
              )**NET
                  INCREASE (DECREASE) IN CASH & CASH
                  EQUIVALENTS**
              
              
              122,587
              
              
              (25,955
              )**CASH
                  & CASH EQUIVALENTS, BEGINNING BALANCE**
              
              
              40,941
              
              
              66,896**CASH
                  & CASH EQUIVALENTS, ENDING BALANCE**
              
              $
              163,528
              
              $
              40,941


The
      accompanying notes are an integral part of these
      financial statements




19
 **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.





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





**Use
      of estimates**





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





**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. Allowance for doubtful debts amounted to $30,000 as of
      February 28, 2006.





**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. Inventories comprised of finished goods amounting $1,426,092 as of
      February 28, 2006.





**Loans
      receivable**





On
      January 10, 2004 and December 20, 2004, the Company loaned $146,451 and $50,167
      to two unrelated parties at interest rate of 6% per annum, respectively. The
      loans are unsecured, both principal and interest are payable on January 10,
      2007
      and December 20, 2007, respectively. Accrued interest on the loans amounted
      to
      $15,228 at February 28, 2006.





**Other
      assets**





Other
      assets comprised of deposits amounting $11,600 as of February 28,
      2006.























20
 
 **TANK
          SPORTS, INC.**
 **NOTES
          TO FINANCIAL STATEMENTS**




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


**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. 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
      equipment is provided using the straight-line method for substantially all
      assets with estimated lives of 5 years for office equipment and machinery.
      At
      February 28, 2006, the following were the details of the property and
      equipment:






Machinery
                & equipment
            
            $
            87,342Less:
                Accumulated depreciation
            
            
            (21,602
            )$
            65,740








**Due
      to affiliate**





The
      Company issues purchase orders to third party vendors in China. However, the
      third party vendors are paid by a US company owned by the shareholder 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 this affiliated company, which in turn pays to the vendors. As of February
      28, 2006, the amount due to this affiliate was $2,713,628. The amount is due
      on
      demand, interest free and unsecured.





**Long-lived
      assets**





Effective
      January 1, 2002, the Company adopted Statement of Financial Accounting Standards
      No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets" ("SFAS
      144"), which addresses financial accounting and reporting for the impairment
      or
      disposal of long-lived assets and supersedes SFAS No. 121, "Accounting for
      the
      Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of,"
      and the accounting and reporting provisions of APB Opinion No. 30, "Reporting
      the Results of Operations for a Disposal of a Segment of a Business." The
      Company periodically evaluates the carrying value of long-lived assets to be
      held and used in accordance with SFAS 144. SFAS 144 requires impairment losses
      to be recorded on long-lived assets used in operations when indicators of
      impairment are present and the undiscounted cash flows estimated to be generated
      by those assets are less than the assets' carrying amounts. In that event,
      a
      loss is recognized based on the amount by which the carrying amount exceeds
      the
      fair market value of the long-lived assets. Loss on long-lived assets to be
      disposed of is determined in a similar manner, except that fair market values
      are reduced for the cost of disposal. Based on its review, the Company believes
      that, as of February 28, 2006, there were no impairments of its long-lived
      assets.





**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.





21
 
 **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. Advertising costs for the years ended
      February 28, 2006 and February 28, 2005 were $155,268 and $50,772,
      respectively.





**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 year ended February 28, 2006 and 2005.





**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
      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.





22
 
 **TANK
          SPORTS, INC.**
 **NOTES
          TO FINANCIAL STATEMENTS**




2.SUMMARY
      OF SIGNIFICANT ACCOUNTING POLICIES
      - continued


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 of Financial Assets and Extinguishments of
      Liabilities,* with
      respect to the accounting for separately recognized servicing assets and
      servicing liabilities. This Statement:






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 servicer 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.




**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
      $794,666 including a net loss of $206,713 during the year ended February 28,
      2006. 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.





23
 
 **TANK
          SPORTS, INC.**
 **NOTES
          TO FINANCIAL STATEMENTS**





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


Management
      has taken the following 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. Management devoted considerable effort
      towards (i) build “Tank” brand (ii) set up sales channels to increase sales
      (iii) liquidate less profitable products, and focus on selling more profitable
      motorcycles (vi) obtain additional equity.





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





**4.**
            **INCOME
                TAXES**







Through
      February 28, 2006, the Company incurred net operating losses for tax purposes
      of
      approximately $794,666. Differences between financial statement and tax losses
      consist primarily of bad debts allowance of $30,000 at February 28, 2006. 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, 2006 was $305,866. 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, 2006 are as follows:








February
              28, 2006Net
              operating loss
            
            $
            317,866Allowance
              for bad debt
            
            
            (12,000
            )Deferred
              tax asset
            
            
            305,866Less:
              valuation allowance
            
            
            (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, 2006
            February
                28, 2005Tax 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
            -
            -







**5.**
            **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”. 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. Weighted average number
      of
      shares used to compute basic and diluted loss per share is the same since the
      effect of dilutive securities is anti-dilutive.








24
 
 **TANK
          SPORTS, INC.**
 **NOTES
          TO FINANCIAL STATEMENTS**





**6.**
            **STOCKHOLDERS’
                EQUITY**







On
      October 10, 2005, Tank Sports, Inc. amended its articles to increase its number
      of authorized shares from 1,000,000 to 50,000,000 shares, at par value of $0.001
      and a forward split of 800 shares for one. The financial statements have been
      retroactively restated for the effects of forward stock splits.




On
      October 10, 2005, Tank Sports, Inc. board consented a Regulation S offering of
      300,000 shares of common stock at $1.00 per share. As of October 30, 2005,
      Tank
      Sports, Inc. closed the Regulation S offering, 125,700 shares were issued and
      collected $125,700 from 32 shareholders.




On
      November 23, 2005, the Company filed a registration statement under the
      Securities Act of 1933 (SB-2) to register 1,446,500 shares of its common stock.
      The registration statement is under the review of has been declared effective
      on
      April 25, 2006 by the Security and Exchange Commission. Neither the Securities
      and Exchange Commission nor any state securities commission has approved or
      disapproved of these securities.





**7.**
            **CURRENT
                VULNERABILITY DUE TO CERTAIN
                CONCENTRATIONS**





The
      Company had one major vendor that provided over 10% of the Company’s purchases
      for the year ended February 28, 2006. Total purchase from the vendor was 43%
      of
      the Company’s inventory purchases for the year ended February 28, 2006. The
      Company had two major vendors that each provided over 10% of the Company’s
      inventory for the year ended February 28, 2005. Total purchases from these
      vendors were 85% of the Company’s total inventory purchases for the year ended
      February 28, 2005.





There
      were no major customers whose purchases accounted for over 10% of the Company’s
      total revenue for the year ended February 28, 2006. There was one major customer
      whose purchases accounted for 13% of the total revenue for the year ended
      February 28, 2005.





**8.**
            **SHIPPING
                AND HANDLING EXPENSES**





Tank
      has
      included $596,604 and $193,219 freight out shipping and handling expenses for
      the years ended February 28, 2006 and February 28, 2005 into selling
      expenses.





**9.**
            **RECLASSIFICATIONS**





Certain
      prior period amounts have been reclassified to conform to the current year
      presentation.





**10.**
            **RELATED
                PARTIES**







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, 2006, the amount due was $0. The amount is due on demand,
      interest free and unsecured.





Minimum
      annual rent expense for Tank for the year subsequent to February 28, 2006 is
      as
      follows:






Period
            Amount2007
            $
                238,800











25
 
 **TANK
          SPORTS, INC.**
 **NOTES
          TO FINANCIAL STATEMENTS**




**10.********RELATED
      PARTIES**** - continued**


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, 2006, the amount due was $5,745. 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 this affiliated company, which in turn pays to the vendors. As of
      February 28, 2006, the amount due to this affiliate was $2,713,626. 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, 2006. This $100,000 has been recorded
      as
      other income.






**11.**
            **COMMITMENTS**





In
      August
      16, 2003, Tank and its affiliated company commonly entered into a lease
      agreement for the facilities in which they operate. The term of the lease is
      36
      months with monthly payments of $7,840, of which approximately $4,075 is
      allocated to Tank. The lease was terminated in March 2006,





On
      August
      1, 2005, Tank entered into a new lease agreement. 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.





Rent
      expense was $189,873 and $63,170 for the years ended February 28, 2006 and
      February 28, 2005.





**12.**
            **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 $3,657 and $899 for interest for the years ended February 28,
      2006
      and February 28, 2005, respectively. The Company paid $800 each year for income
      tax for the years ended February 28, 2006 and February 28, 2005.












26




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.





Within
      the 90 days prior to the filing date of 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-14. 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 significant changes in our internal controls or in other factors that
      could significantly affect those controls since the most recent evaluation
      of
      such controls.





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
            50
            ChairmanJing
                Jing Long
              10925
                  Schmidt Road
                El
                  Monte, CA 91733
            53
            President, Treasurer and
              DirectorJim
                Ji
              10925
                Schmidt Road
              El
                Monte, CA 91733
            25
            Secretary and
              Director




27


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 50** ,
      has
      served as CEO and 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**  **53** ,
      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**  **25** ,
      has
      served as general manager, secretary and director of Tank Sports, Inc. since
      September, 2003; 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.





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, 2006. 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
            2006
              2005
              2004
              2003
            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
            2006
              2005
              2004
              2003
            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
            31,200.00
              27,527.52
              24,113.04
              1,541.30
            -0-
              -0-
              -0-
              -0-
            -0-
              -0-
              -0-
              -0-







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





The
      following table sets forth, as of February 28, 2006, 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
            2,679,200
            32.97%Jing Jing Long
              President, Treasurer
              and Director
            4,000,000
            49.23%Jim Ji
              Secretary and Director
            0
            0.00%All Officers, Directors
              And 5% Shareholders
            6,679,200
            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.




28


ITEM
      12. CERTAIN RELATIONSHIPS AND RELATED PARTY
      TRANSACTIONS - continued




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, 2006, the amount due was $0. The amount is due on demand,
      interest free and unsecured.





Minimum
      annual rent expense for Tank for the year subsequent to February 28, 2006 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, 2006, the amount due was $5,745. 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 this affiliated company, which in turn pays to the vendors. As of
      February 28, 2006, the amount due to this affiliate was $2,713,626. 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, 2006. 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




None





29




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, 2006, 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, 2006 were $17,500 net of expenses.





Audit-Related
      Fees





$ 
      3,000





Tax
      Fees





$ 
      0





30


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:
                May
                30, 2006
            
            
            Date:
              May
              30, 2006/s/ Jing
              Jong
              Long
            
            
            /s/ Jing
              Jong
              LongJing
              Jong
              LongTitlePrincipal Executive Officer
            
            
            Jing
                Jong LongPrincipal Accounting OfficerMore
              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: May
              30,
              2006
            By:
            /s/ Jing
              Jong
              LongJing
              Jong LongDirector Date: May
              30,
              2006
            By:
            /s/ Jiangyong
              JiJiangyong
              JiDirector Date: May
              24,
              2006
            By:
            /s/ Jim
              JiJim
              JiDirector


31