Item 1. Financial Statements

 
TANK SPORTS, INC. AND SUBSIDIARIES
            
CONSOLIDATED  BALANCE SHEETS
            
             
   
May 31,
    
February 29,
  
   
   
 
   
(Unaudited)
    
(Audited)
  
ASSETS
            
CURRENT ASSETS
            
Cash and cash equivalents
   $ 3,396,084     $ 2,889,820  
Accounts receivable, net
     160,972       134,863  
Prepaid expenses and other assets
     56,263       68,184  
Purchase advances
     344,586       276,380  
Due from related parties
     3,450,788       2,910,379  
Inventory
     2,901,996       3,999,891  
Assets from discontinued operations
     -       215,579  
                 
Total Current Assets
     10,310,689       10,495,096  
                 
PROPERTY AND EQUIPMENT, NET
     1,876,028       1,929,197  
DEPOSIT
     25,616       25,616  
INVESTMENT IN EQUITY
     47,335       55,096  
                 
INTANGIBLE ASSETS
                
Trademark, net
     2,999       2,812  
Licenses and permits
     1,211,027       1,184,090  
Land right, net
     3,950,398       3,870,978  
Goodwill
     1,178,492       1,178,492  
                 
Total Intangible Assets
     6,342,916       6,236,372  
                 
TOTAL ASSETS
   $ 18,602,584     $ 18,741,377  
                 
LIABILITIES AND STOCKHOLDERS' EQUITY
                
                 
CURRENT LIABILITIES
                
Accounts payable and accrued expenses
   $ 2,816,756     $ 2,610,576  
Notes payable
     1,500,000       2,000,740  
Loans Payable
     8,266,052       7,949,633  
Customer deposits
     387,152       162,578  
Deferred Revenue
     14,182       -  
Other payable
     132,378       131,385  
Due to related parties
     5,022,291       4,749,163  
Shares to be issued
     -       1,520,000  
Liabilities from discontinued operations
     -       76,300  
                 
Total Current Liabilities
     18,138,811       19,200,375  
                 
LONG-TERM LIABILITIES
                
Loans payable
     178,967       203,067  
                 
MINORITY INTEREST
     100,932       96,331  
                 
STOCKHOLDERS' EQUITY (DEFICIT)
                
Common stock (authorized 200,000,000 shares, $0.001 par value, 40,335,114 and
                
38,636,214 shares issued, 40,335,114 and 36,236,214 outstanding as of May 31, 2008
                
and February 29, 2008, respectively
     40,436       38,636  
Additional paid in capital
     7,441,888       5,823,688  
Accumulated deficit
     (7,458,235 )     (6,788,710 )
Other comprehensive income
     410,493       282,039  
Treasury stock, at cost (238,769 and 108,618 shares at May 31, 2008 and
                
February 29, 2008, respectively)
     (250,708 )     (114,049 )
Total Stockholders' Equity (Deficit)
     183,874       (758,396 )
                 
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
   $ 18,602,584     $ 18,741,377  
 
 
The accompanying notes are an integral part of these consolidated financial statements
        

 
 

TANK SPORTS, INC. AND SUBSIDIARIES
            
CONSOLIDATED STATEMENTS OF OPERATIONS
            
             
   
Quarters Ended May 31,
  
   
 
 
   
            (unaudited) 
  
             
REVENUE, NET
   $ 3,681,056     $ 3,883,151  
COST OF REVENUE
     3,222,726       3,025,060  
Gross profit
     458,330       858,091  
                 
OPERATING EXPENSES:
                
Selling expenses
     241,975       200,201  
General and administrative expenses
     869,245       1,140,653  
       Total operating expenses
     1,111,220       1,340,854  
                 
LOSS FROM CONTINUING OPERATIONS
     (652,890 )     (482,763 )