I still think that bike would handle like a brick with that engine. Also, is that engine governed or ungoverned, either way the pocket bike engine will rev higher, without performance parts (that one is rated at 2.6 hp @ 7000 rpm). So, I remember you said the flatheads power somewhere, but I don't remember what it was.
Also, you need a new exhaust pipe, unless you plan on using that one as a seat.