# UNITED STATES
SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

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FORM 10-QSB

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

For the quarterly period ended September 30, 2006

Commission File No. 000-51632

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VIPER POWERSPORTS INC.
(Exact name of small business issuer as specified in its charter)

|Nevada                                                         | 41-1200215                       
|-------------------------------------------------------------- | ---------------------------------
|(State or other jurisdiction of incorporation or organization) | (IRS Employer Identification No.)

|19950 177th St., Suite F, Big Lake, Minnesota | 55309     
|--------------------------------------------- | ----------
|(Address of principal executive offices)      | (Zip Code)

(763) 263-5700(Issuers telephone number)

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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. Yes
xNoo

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

The number of shares of common stock outstanding was
9,993,047 as of November 14, 2006.

Transitional Small Business Disclosure Format (check one): Yes
oNox





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# TABLE OF CONTENTS

|PART I: FINANCIAL INFORMATION
|-----------------------------
|                             
|                             
|                             
|                             
|PART II: OTHER INFORMATION   
|                             
|                             
|SIGNATURE:                   
|                             
|INDEX TO EXHIBITS            
|                             
|                             
|                             



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PART I  FINANCIAL INFORMATION

Item 1:   Financial Statements

# Viper Powersports Inc.
(A Development Stage Company)
Consolidated Statements of Operations
(Unaudited)

|                                    | Three Months Ended |  | Nine Months Ended |           | Cumulative fromInceptionNovember 18, 2002throughSeptember 30, 2006
|----------------------------------- | ------------------ |  | ----------------- | --------- | ------------------------------------------------------------------
|
|                                   
|Revenue                             |                    |  | $                 | (24,313   | )                                                                 
|Cost of Revenue                     |                    |  |                   | 3,370     |                                                                   
|                                    |                    |  |                   |           |                                                                   
|Gross profit:                       |                    |  |                   | (27,683   | )                                                                 
|                                   
|Operating Expense:                  |                    | 
|Research and development cost       |                    |  |                   | 171,513   |                                                                   
|Selling, general and administrative |                    |  |                   | 334,264   |                                                                   
|                                    |                    |  |                   |           |                                                                   
|Total Operating Expense:            |                    |  |                   | 505,777   |                                                                   
|                                   
|                                    |                    |  |                   |           |                                                                   
|Loss from operations:               |                    |  |                   | (533,460  | )                                                                 
|                                   
|Other (expenses) income:            |                    | 
|Interest (expense)                  |                    |  |                   | (134,834  | )                                                                 
|Other income                        |                    |  |                   | 8,377     |                                                                   
|                                    |                    |  |                   |           |                                                                   
|Total other (expense) income:       |                    |  |                   | (126,457  | )                                                                 
|                                   
|                                    |                    |  |                   |           |                                                                   
|Net Loss:                           |                    |  | $                 | (659,917  | )                                                                 
|                                    |                    |  |                   |           |                                                                   
|                                   
|Net Loss Per Common Share:          |                    | 
|                                   
|                                    |                    |  |                   |           |                                                                   
|Basic and diluted                   |                    |  | $                 | (0.07     | )                                                                 
|                                    |                    |  |                   |           |                                                                   
|                                   
|Weighted Average Shares             |                    | 
|                                   
|                                    |                    |  |                   |           |                                                                   
|Common Stock Outstanding            |                    |  |                   | 9,993,047 |                                                                   
|                                    |                    |  |                   |           |                                                                   

See accompanying notes to financial statements.

2

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# Viper Powersports Inc.
(A Development Stage Company)
Consolidated Balance Sheet
(Unaudited)

|                                                                | September 30,2006
|--------------------------------------------------------------- | -----------------
|                                                                |                  
|Assets                                                         
|                                                               
|Current Assets:                                                 |                  
|Cash                                                            |                  
|Accounts receivable                                             |                  
|Inventory and supplies                                          |                  
|Prepaid expenses and other                                      |                  
|                                                                |                  
|Total Current Assets:                                           |                  
|                                                               
|Fixed Assets:                                                   |                  
|Office & computer equipment                                     |                  
|Manufacturing and development equipment                         |                  
|Vehicles                                                        |                  
|Leasehold improvements                                          |                  
|Accumulated depreciation                                        |                  
|                                                                |                  
|Total Fixed Assets:                                             |                  
|                                                               
|Other Assets:                                                   |                  
|Engine development costs                                        |                  
|Rental deposit and other                                        |                  
|                                                                |                  
|Total Other Assets:                                             |                  
|                                                               
|                                                                |                  
|Total Assets:                                                   |                  
|                                                                |                  
|                                                               
|Liabilities and Stockholder Equity                            
|                                                               
|Current Liabilites:                                             |                  
|Accounts payable                                                |                  
|Accrued liabilities                                             |                  
|Shareholder note                                                |                  
|Current portion of capital lease                                |                  
|                                                                |                  
|Total Current Liabilities:                                      |                  
|                                                               
|Long-Term Liabilities:                                          |                  
|Capital lease, less current portion                             |                  
|                                                                |                  
|Total Long-Term Liabilities:                                    |                  
|                                                               
|                                                                |                  
|Total Liabilities:                                              |                  
|Stockholders Equity:                                           |                  
|Preferred stock, $.001 par value; authorized 20,000,000 shares; |                  
|783,000 issued and outstanding at September 30, 2006            |                  
|                                                               
|Common stock, $.001 par value; authorized 100,000,000 shares;  
|9,993,047 issued and outstanding at September 30, 2006          |                  
|                                                               
|Additional Paid in Capital                                      |                  
|Accumulated deficit during the development stage                |                  
|                                                                |                  
|Total Stockholders Equity:                                     |                  
|                                                               
|                                                                |                  
|Total Liabilities and Stockholders Equity:                     |                  
|                                                                |                  

See accompanying notes to the financial statements.

3

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# Viper Powersports Inc.
(A Development Stage Company)
Statements of Cash Flows
(Unaudited)

|                                                                      | Nine Months Ended |  | Cumulative fromInceptionNovember 18, 2002throughSeptember 30, 2006
|--------------------------------------------------------------------- | ----------------- |  | ------------------------------------------------------------------
|
|Cash Flows Used in Operating Activities:                              |                   |  |                                                                   
|Net Loss                                                              |                   |  | $                                                                 
|                                                                     
|Expenses not requiring an outlay of cash:                             |                   | 
|Depreciation                                                          |                   |  |                                                                   
|Stock Based compensation                                              |                   |  |                                                                   
|                                                                      |                   |  |                                                                   
|                                                                     
|Net Cash Used in Operations                                           |                   |  |                                                                   
|                                                                     
|Changes to Operating Assets and Liabilities:                          |                   | 
|Decrease (Increase) in accounts receivable                            |                   |  |                                                                   
|Decrease (Increase) in supplies and prepaids                          |                   |  |                                                                   
|Decrease (Increase) in inventories                                    |                   |  |                                                                   
|Decrease (Increase) in rental deposits and other                      |                   |  |                                                                   
|Increase (Decrease) in accounts payable                               |                   |  |                                                                   
|Increase (Decrease) in accrued Liabilities                            |                   |  |                                                                   
|                                                                      |                   |  |                                                                   
|                                                                     
|Cash Flows Used in Operating Activities                               |                   |  |                                                                   
|                                                                     
|Cash Flows Used in Investing Activities:                              |                   | 
|Funding from Thor Performance for engine development                  |                   |  |                                                                   
|Purchase of intellectual property                                     |                   |  |                                                                   
|Purchase of fixed assets                                              |                   |  |                                                                   
|                                                                      |                   |  |                                                                   
|                                                                     
|Cash Flows Used in Investing Activities                               |                   |  |                                                                   
|                                                                     
|Cash Flows from Financing Activities:                                 |                   | 
|Net proceeds from sale of stock                                       |                   |  |                                                                   
|Checks in excess of bank balance (reduction)                          |                   |  |                                                                   
|Stockholder loan and capital lease payment                            |                   |  |                                                                   
|Loans from stockholders                                               |                   |  |                                                                   
|                                                                      |                   |  |                                                                   
|                                                                     
|Cash Flows from Financing Activities                                  |                   |  |                                                                   
|                                                                      |                   |  |                                                                   
|                                                                     
|Net Increase (decrease) in Cash                                       |                   |  |                                                                   
|                                                                     
|Cash at Beginning of Period                                           |                   |  |                                                                   
|                                                                     
|                                                                      |                   |  |                                                                   
|Cash at end of Period                                                 |                   |  | $                                                                 
|                                                                      |                   |  |                                                                   
|                                                                     
|Supplemental Non-Cash Financing Activities and Cash Flow Information:
|                                                                     
|Common Stock issued for accounts payable (expenses)                   |                   |  | $                                                                 
|                                                                      |                   |  |                                                                   
|                                                                     
|Common Stock issued for accrued liabilities (expenses)                |                   |  | $                                                                 
|                                                                      |                   |  |                                                                   
|                                                                     
|Preferred Stock ussued for Debt                                       |                   |  | $                                                                 
|                                                                      |                   |  |                                                                   
|                                                                     
|Common Stock issued for Debt                                          |                   |  | $                                                                 
|                                                                      |                   |  |                                                                   
|                                                                     
|Common Stock and Warrants issued for Services                         |                   |  | $                                                                 
|                                                                      |                   |  |                                                                   
|                                                                     
|Common Stock issued for software (assets)                             |                   |  | $                                                                 
|                                                                      |                   |  |                                                                   
|                                                                     
|Common Stock issued for Engine Development Technology                 |                   | 
|and engine development obligation of $150,000                         |                   |  | $                                                                 
|                                                                      |                   |  |                                                                   
|                                                                     
|Equipment Acquired via capital lease                                  |                   |  | $                                                                 
|                                                                      |                   |  |                                                                   
|                                                                     
|Stock Warrants issued with Convertible debt                           |                   |  | $                                                                 
|                                                                      |                   |  |                                                                   
|                                                                     
|Interest paid                                                         |                   |  | $                                                                 
|                                                                      |                   |  |                                                                   
|                                                                     
|Income taxed paid                                                     |                   |  | $                                                                 
|                                                                      |                   |  |                                                                   

See accompanying notes to financial statements.

4

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Viper Powersports Inc.



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



A.
        Basis of Presentation




The consolidated balance sheet as of September 30, 2006, the consolidated statements of operations for the three months and nine months ended September 30, 2006 and 2005 and  inception and the consolidated statements of cash flows for the nine months ended September 30, 2006 and 2005 and inception have been prepared by Viper Powersports Inc., (the Company) without audit. In the opinion of management, all adjustments (consisting only of normal recurring accruals) necessary to present fairly the financial position as of September 30, 2006, results of operations for the three and nine months ended September 30, 2006 and2005,and cash flows for the nine months ended September 30, 2006 and 2005 presented herein have been made.



Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. These financial statements should be read in conjunction with the Companys financial statements and notes thereto included in the Annual Report on Form I 0-KSB of the Company for the fiscal year ended December 31, 2005.



B.
        Going Concern




The accompanying financials statements have been prepared assuming the Company will continue as a going concern. The Company has no current revenues and has a negative working capital position of $(2,303,066) as of September 30, 2006. Current cash and cash available are not sufficient to fund operations beyond December 2006. These conditions create uncertainty as to the Companys ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.













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Item 2:   Managements Discussion and Analysis



The following discussion should be read and
considered along with our consolidated financial statements and related notes included in this 10-QSB. These financial statements
were prepared in accordance with United States Generally Accepted Accounting Principles (US GAAP.). This discussion and analysis
contains forward-looking statements that involve risks, uncertainties and assumptions. Our actual results may differ substantially
from those anticipated in these forward-looking statements as a result of various factors including those set forth in the
Risk Factors section of our 10-KSB filing for December 31, 2005.



Business Development Overview



Viper Powersports Inc., formerly ECCO Capital
Corporation (ECCO), was incorporated in Nevada in 1980 under an earlier name. Prior to 2001, ECCO was for years
actively engaged in an automobile leasing business. ECCO was unable to become profitable, and ceased all active operations in
2001. ECCO remained inactive until early 2005 when it acquired Viper Motorcycle Company, a Minnesota corporation. Incident to this
acquisition, ECCO changed its name to Viper Powersports Inc. The business combination between Viper Powersports Inc. and Viper
Motorcycle Company was effected as a reverse acquisition. Accordingly, Viper Powersports Inc. regards its inception as being the
incorporation of Viper Motorcycle Company in November 2002.



Effective March 31, 2005, Viper Powersports Inc.
acquired all of the outstanding capital stock of Viper Motorcycle Company through a stock exchange, resulting in Viper Motorcycle
Company becoming a wholly-owned subsidiary of Viper Powersports Inc. For accounting and operational purposes, this transaction was
a recapitalization of Viper Powersports Inc. through this reverse acquisition, and Viper Motorcycle Company is regarded as the
acquirer. Our financial statements reflecting this reverse acquisition have been prepared to give retroactive effect to the
incorporation of Viper Motorcycle Company on November 18, 2002 and represent the operations of Viper Motorcycle Company since its
inception. Since Viper Powersports Inc. had no assets or liabilities at the time of this acquisition, its book value has been
stated as zero on the recapitalized balance sheet.



The stock exchange for this reverse acquisition was
affected on a one-for-one basis, resulting in the stockholders of Viper Motorcycle Company exchanging all of their outstanding
capital stock for an equal and like amount of capital stock of Viper Powersports Inc. Viper Powersports Inc. issued 8,378,324
shares of its common stock and 783,000 shares of its preferred stock to shareholders of Viper Motorcycle Company to complete this
reverse acquisition, resulting in the former shareholders of Viper Motorcycle Company acquiring approximately 94% of the combined
entity from the acquisition. In addition, all holders of stock options and warrants for the purchase of common stock of Viper
Motorcycle Company received similar options and warrants to purchase common stock of Viper Powersports Inc.



Our reverse acquisition was part of a major
reorganization undertaken and completed by us in early 2005, during which we converted most of our debt into our capital stock. At
the time, we believed we could not survive as an ongoing entity and obtain further material financing unless we eliminated our
outstanding debt. Our debt conversions in this reorganization took place in January through February 2005, and they were all
effected on a conversion basis of $2.50 per share of capital stock of Viper Powersports Inc. These debt conversions included
accounts payable, accrued liabilities and matured loans. We satisfied total liabilities of $4,770,879 including $2,813,379 being
converted into 1,125,354 common shares and $1,957,500 being converted into preferred shares which are convertible into our common
shares on a one-for-one basis.



In March 2005, we also acquired major engine
development technology including the V-Twin engines which now power our Diablo and Diamondback cruisers, and will power other
motorcycle models designed and developed by us for the foreseeable future. This strategic asset purchase has enabled us to include
and offer our own proprietary engine in our motorcycles, and also to market and sell engines under our own brand in the large
motorcycle aftermarket. This engine technology was designed and developed over the past six to seven years by Melling Consultancy
Design (MCD), a leading engine design and development firm based in England. We purchased our engine development assets from Thor
Performance Inc., a Minnesota corporation in exchange for 2,996,575 shares of our common stock valued at $2.50 per
share.



Viper Performance Inc. was incorporated by us in March
2005 as a wholly-owned Minnesota corporation. We organized and incorporated Viper Performance Inc. for the purpose of receiving
and holding the engine development technology and related assets which we acquired from Thor Performance Inc.



6

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Operational Overview



We are a motorcycle companyin the business of designing, developing, producing and marketing a line of premium custom V-Twin motorcycles popularly known as cruisers. Our motorcycles will be distributed and sold under our Viper brand through a nationwide network of independent motorcycle dealers. Marketing of our motorcycles is targeted toward the upscale market niche of motorcycle enthusiasts who prefer luxury products and are willing to pay a higher price for enhanced performance, innovative styling and a distinctive brand. We believe there is a consistently strong demand for upscale or luxury products like our American-styled classic Viper cruisers and our premium V-Twin engines.



In 2004, we produced and sold to our initial dealer base a preliminary production run of our first cruiser model which was powered by a non-proprietary engine. These 2004 sales consisted of 25 motorcycles which generated revenues of approximately $600,000. We then discontinued any further production operations in order to concentrate on obtaining proprietary V-Twin engine technology as well as to complete certain other planned enhancements to our initial model. In early 2005, we completed the acquisition of our engine development technology to allow us to have our own V-Twin engines to power all Viper motorcycles. We completed extensive testing of our proprietary V-Twin engine prototypes in late 2005, and we have been very satisfied with their performance while powering our cruisers during all kinds of street and highway running conditions.



During 2005, we also completed certain planned styling enhancements and component modifications to our Diablo and Diamondback cruiser models, and we believe both of these motorcycles now satisfy all styling, performance and quality standards or criteria we established to be met before their commercial introduction.



During 2006 to date, we have been primarily involved in commercial production and marketing operations and activities. From February through August 2006, we attended and displayed our motorcycles at the leading annual dealer show for cruiser motorcycles in Cincinnati, the week-long Daytona rally, the Myrtle Beach Bike Show and the Sturgis Bike rally. We have been and are currently devoting considerable marketing efforts toward recruiting and retaining additional independent dealers for our distribution network. Regarding commercial production, we have ordered or sourced all materials and components necessary for our planned 2006 production, many of which are now being delivered to us. Our V-Twin engine requirements for 2006 are currently being produced for us in England.



In February 2006, we entered into a five-year lease for permanent corporate facilities of 36,000 square feet, which provides us with ample space and offices to satisfy our production, development, inventory storage, product warehousing, marketing and administrative needs for the foreseeable future. Our new facility is located in Big Lake, Minnesota, and we completed moving to the new facility in May 2006.



Results of Operations



Revenues



Since our 2002 inception, we have generated total revenues of $593,780, most of which occurred in 2004 before we discontinued offering a motorcycle with a non-proprietary engine. We anticipate that our future revenues for the next 12 months will be primarily from sale of Viper cruisers, although we expect to begin obtaining sales of our proprietary engines in the aftermarket in 2007. We anticipate receiving additional revenues from our planned line of custom parts and accessories for the motorcycle aftermarket as well as our Viper branded apparel and other merchandise.



We believe our future revenue stream will be most significantly affected by customer demand for Viper cruisers, performance of our proprietary V-Twin engines, our ability to timely manufacture our motorcycle products in response to dealer and customer orders, recruitment and retention of dealers who actively promote and sell our products, and dealer acceptance of our floor plan financing facility.



We currently have outstanding orders from our dealers for approximately 200 Viper cruisers.







7

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Comparison of Three and Nine Months Ended September 30, 2006 to Same Periods of 2005.



Revenues for the third quarter of 2006 ended September
30, 2006 were a negative $(24,313) (consisting of a product return) compared to $25,715 for the third quarter of 2005 (consisting
of the sale of one motorcycle). Revenues for the nine months ended September 30, 2006 were a negative $(48,343) compared to $1,126
for the same nine months of 2005.



Since none of our stated revenues for the three and
nine months ended September 30, 2006 and 2005 relate to any ongoing commercial production, a comparison of gross profits for these
periods would not be meaningful.



Research and development expenses decreased to
$171,513 in the third quarter of 2006, compared to $518,862 for the third quarter of 2005, due primarily to our completion of
motorcycle development prior to the third quarter of 2006. Research and development expenses decreases to $827,839 for the nine
months ended September 30, 2006 compared to $944,166 in the same nine month period of 2005, again primarily due to completion of
major motorcycle development prior to the end of the nine month period ended September 30, 2006



Selling, general and administrative expenses decreased
to $334,264 for the third quarter of 2006 compared to $1,601,542 for the third quarter of 2005, due primarily to personnel
reduction in late 2005 and lower marketing expenses in 2006 due to completion of our initial dealer network in 2005. Selling,
general and administrative expenses decreased to $1,739,342 for the nine months ended September 30, 2006 compared to $3,100,408
for the same nine month period of 2005, again primarily due to personnel reductions in 2005 and lowered marketing expenses in
2006.



Interest Expenses increased from $31,581 in the third
quarter of 2005 to $134,834 in the third quarter of 2006, and from $160,908 in the nine-month period ended September 30, 2005 to
$261,952 for the same nine months of 2006, with both increases due to increased debt in 2006 related to inventory financing to
support purchases of components and parts to commence commercial motorcycle production. .



Non-operating income of $8,377 for the third quarter
of 2006 (consisting of the sale of motorcycle parts) compared to $146,761 for the third quarter of 2005 (consisting primarily of
proceed from an insurance claim for facility water damage). Non-operating income of $17,651 for the nine months ended September
30, 2006 (consisting of sale of motorcycle parts and interest income) compared to $169,739 for the same nine-month period of 2005
(consisting again primarily of proceeds from an insurance claim).



The net loss decreased to $659,917 for the third
quarter of 2006 compared to $1,980,423 during the third quarter of 2005, which primarily reflected the foregoing mentioned ,
decreases in research and development and selling , general and administrative expenses for theses respective third quarters as
offset or increases by larger 2005 non-operating income and higher 2006 interest expenses. Net loss for the nine months ended
September 30, 2006 decreased to $2,863,260 compared to $4,035531for the same nine month period of 2005, which again was due
primarily to the foregoing mentioned decreases in operating expenses for these respective nine month periods as offset or
increases by larger non-operating income in 2005 and higher interest expenses in 2006..



Engine Production



We are currently outsourcing the production of our
major engine components to Melling Consultancy Design (MCD) to satisfy our initial planned production needs. Since MCD designed
and developed our proprietary V-Twin engines, we are particularly comfortable having our commercial engine components initially
being manufactured by MCD.



Liquidity and Capital Resources



Since our inception, we have financed our development,
capital expenditures, and working capital needs through sale of our common stock to investors in private placements and
substantial loans from our principal shareholders. We raised a total of approximately $6.1 million through the sale of our common
stock in private placements, and in excess of $6.1 million through loans from our principal shareholders.





8

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We also satisfied substantial employee compensation,
consulting fees, product development, marketing and administrative expenses directly through issuance of our common stock. Since
our 2002 inception, we have satisfied a total of approximately $2.4 million for such expenses through payment with our common
stock.



As of September 30, 2006, we had cash resources of
$495,975, total liabilities of $3,263,6943, and a negative working capital position of $(2,303,066).



We currently only maintain a cash position to fund our
ongoing operation until December 2006. We have anticipated receiving significant equity capital funding from an SB-2 public
offering attempted in the summer of 2006. Due to deteriorating market conditions in the late summer, however, the underwriter for
the public offering informed us that the offering could not be undertaken at this time. Accordingly, we postponed our public
offering and related SB-2 registration which has been filed with the Securities and Exchange Commission.



We are now in the process of raising $1.5 million in
private placement financing offered to certain accredited investors, which will fund our planned commercial operations. Although
we believe we will succeed in obtaining such financing to support our commercial production, there is no assurance it will happen
or that we will obtain enough funding to support our operations effectively. If we cannot obtain additional substantial financing
as needed, our business and operations will be curtailed substantially or may even be discontinued.



We estimate that our planned 2006 commercial
operations were delayed 3 to 4 months due to the inability to complete this planned public offering.



All development for our two initial cruisers has been
completed and we have commenced commercial production of our motorcycles to commence shipping finished Viper motorcycles to begin
filling the many orders we have received from our dealer network.



Production Inventory Financing



In October 2005, we entered into a Secured Inventory
Financing Agreement with David Palmlund Ill, one of our principal shareholders, as the Lender. This facility initially provided us
with inventory financing up to $1,500,000, which was later increased by $200,000. The entire $1,700,000 financing has been
utilized by us and has enabled us to order and pay for substantial motorcycle and engine components and supplies to support our
commercial production operations. We pay the Lender monthly interest of 2% of the average monthly outstanding amount, and we have
established a special bank account for this facility. If this agreement is still in effect when we commence shipments of
motorcycles to our dealers, we must deposit eighty percent (80%) of payments for motorcycles into the special bank account. Until
repaid by us, the Lender is secured with a lien against all Viper inventories.



Cash Flow Information



For the nine months ended September 30, 2006, the
Companys ending cash position decreased $194,377 compared to an increase of $1,618,533 in cash during the same nine-month
period of 2005. The Company used $2,413,363 in cash for operating activities during the first nine months of 2006, consisting
primarily of its development stage losses for the period offset by $79,874 of depreciation. The Company also used $42,179 in cash
for investing activities for the nine months ended September 30, 2006 for purchases of manufacturing equipment. Financing
activities of the Company for the first nine months of 2006 generated $2,261,165 which primarily represented the inventory
financing loans from a principal shareholder.



Sales of motorcycles in the United States are affected
materially by a pattern of seasonality experienced in the industry, which results in lower sales during winter months in colder
regions of the country. Accordingly, we anticipate that our sales will be greater during spring, summer and early fall months than
during late fall and winter periods. We also expect our revenues and operating results could vary materially from quarter to
quarter due to industry seasonality.



Recent Accounting Pronouncements



In December 2004, the Financial Accounting Standards
Board (FASB) issued SFAS No. 123(R) (Share Based Payment) which established accounting standards for stock-based compensation
transactions, including grants of options and warrants. SFAS No. 123(R) requires that all share-based compensation transactions be
reflected at fair value on the transaction date and expensed over the applicable vesting period or immediately if fully vested. We
comply with the provisions of SFAS 123 (R) regarding our stock-based compensation transactions. Future share-based compensation or
options to our employees or others could have a significant non-cash impact on our reported results of operations.

9

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We have considered other recent accounting
pronouncements of which we are aware, and we believe their adoption has not had, and will not have, any material impact on our
financial position or results of operations.



Off-Balance Sheet Arrangements



In January 2004 (as amended February 8, 2005), we
obtained a letter of credit (LOC) from Compass Bank of Dallas, Texas in the amount of $200,000 in favor of GE Commercial
Distribution Finance Corporation for the purpose of securing our floor plan financing facility. This LOC was guaranteed by David
Palmlund III, a principal shareholder of our company, who is being paid $3,000 monthly by us so long as this guarantee is
outstanding.



Forward-Looking Statements



This quarterly report on Form
10-QSB contains forward-looking statements within the meaning of the Securities Act of 1933 and the Securities
Exchange Act of 1934. Statements expressing expectations regarding our future and projections we make relating to products, sales,
revenues and earnings are typical of such statements. All forward-looking statements are subject to the risks and uncertainties
inherent in attempting to predict the future. Our actual results may differ materially from those projected, stated or implied in
our forward-looking statements as a result of many factors, including, but not limited to, our overall industry environment,
customer and dealer acceptance of our products, effectiveness of our dealer network, failure to develop or commercialize new
products, delay in the introduction of products, regulatory certification matters, production and/or quality control problems,
warranty and/or product liability matters, competitive pressures, inability to raise sufficient working capital, general economic
conditions and our financial condition.



Our forward-looking statements
speak only as of the date they are made by us. We undertake no obligation to update or revise any such statements to reflect new
circumstances or unanticipated events as they occur, and you are urged to review and consider all disclosures we make in this and
other reports that discuss risk factors germane to our business, including those risk factors in our 1O-KSB.



Item 3.   Controls and Procedures



Evaluation of disclosure controls and procedures.



The Companys Principal Executive and Principal
Financial Officer, John Lai and Jerome Posey, have reviewed the Companys disclosure controls and procedures as of the end of
the period covered by this report. Based upon this review, these two officers believe that the Companys disclosure controls
and procedures are effective in ensuring that information that is required to be disclosed by the Company in reports that it files
under the Securities Exchange Act of 1934 is recorded, processed and summarized and reported within the time periods specified in
the rules of the Securities and Exchange Commission.



Changes in internal controls.



There were no changes in the Companys internal
controls over financial reporting that occurred during the period covered by this report that have materially affected, or are
reasonably likely to materially affect, the Companys internal control over financial reporting.



PART II  OTHER INFORMATION



Item 6.   Exhibits



See Index of Exhibits.



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SIGNATURE



Pursuant to the requirements of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly
authorized.



| | VIPER POWERSPORTS INC.
| | ----------------------
|
| | By:                   
| |                       

November 14, 2006

Big Lake, Minnesota



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VIPER POWERSPORTS INC.

INDEX TO EXHIBITS





|Form 10-QSB forQuarter Ended September 30, 2006 | Commission File No. 000-51632
|----------------------------------------------- | -----------------------------





ExhibitNumber
        
        Description31.1
        
        Certification of Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 200231.2
        
        Certification of Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 200232.1
        
        Certification of Principal Executive Officer and Principal Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002




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