10KSB/A 1 natcoannualreport2007.txt RESTATED ANNUAL REPORT MARCH 2007 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-KSB/A Annual Report Under Section 13 OR 15(d)of The Securities Exchange Act of 1934 For the fiscal year ended March 31, 2007 Commission File Number: 333-91190 NATCO INTERNATIONAL INC. (Name of Small Business Issuer in its Charter) DELAWARE 98-0234680 (State of incorporation) (I.R.S. Employer Identification Number) UNIT 204, 13569 - 76 AVENUE SURREY, BRITISH COLUMBIA, CANADA, V3W 2W3 (Address of principal executive offices) (Zip code) Telephone Number: (604) 592-0047 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 Check whether the issuer is not required to file reports pursuant to Section 13 or 15(d) of the exchange act. [X] 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 [X] No [ ]. Check if there is no disclosure of delinquent filers in response to Item 405 of Regulation S-B, and no disclosure will be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-KSB or any amendment to this Form 10-KSB. [X] Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the exchange Act). Yes [ ] No [X] The issuer's revenues for the fiscal year ended March 31, 2007 were $0. State the aggregate market value of the voting and non-voting Common equity held by non-affiliates computed by reference to the price at which the common equity was sold, or the average bid and asked price of such common equity, as of a specified date within the past 60 days. THE AGGREGATE MARKET VALUE OF THE COMMON STOCK HELD BY NON-AFFILIATES ON JUNE 30, 2007 WAS $12,799,049.00. Check whether the issuer has filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of securities under a plan confirmed by a court. Yes [X] No [ ]. SHARES OF $0.001 PAR VALUE COMMON STOCK OUTSTANDING AT JUNE 30, 2007: 15,047,614 DOCUMENTS INCORPORATED BY REFERENCE None Transitional Small Business Disclosure Format (check one): Yes [ ] No [X] PART I ITEM 1. DESCRIPTION OF BUSINESS Organizational Development Natco International Inc. (the "Company" or "Natco"), a Delaware corporation, started as Spectrum Trading Inc., a British Columbia, Canada company on November 21, 1990 to import leather products from India and sell them in Canada. However, the supplier in India did not materialize and the Company remained dormant until 1997 when the chemical manufacturing business was launched by the Company's current President, Raj-Mohinder Gurm. Spectrum Trading, Inc. domesticated into a Delaware corporation on May 14, 1999 as Spectrum International Inc. and changed its name to Natco International Inc. on June 3, 2004. Natco International Inc (formerly Spectrum International, Inc.) commenced its existence as a Delaware Corporation on May 14, 1999 as a result of above mentioned "Domestication". This procedure was intended to utilize provisions of the Delaware Corporate Code, Sec. 388, whereby a non-U.S. company may, by filing a Certificate of Domestication and Certificate of Incorporation under that section, utilize provisions thereof which provide that upon filing the Certificates, a corporation becomes subject to Delaware law, except that its existence shall be deemed to have commenced when it was originally formed in the foreign jurisdiction, rather than upon filing in Delaware as is the case in a typical new corporation. Said Section also provides that the obligations and liabilities prior thereto are not affected by the Domestication. The predecessor company was incorporated in British Columbia. No opinion is expressed as to what legal effect that procedure has on the Company, except that the financial statements assume the financial continuation, and we refer to both the current company and its predecessor as the "Company". Most of our current shareholders were shareholders of the original British Columbia Company and "migrated" to the Delaware company as a consequence of the Domestication In June, 2000, Management of the Company determined that a reverse acquisition by an Ontario, Canada Company would be desirable. The structure of the transaction was that all of the shareholders of the Delaware company would exchange their shares of the company for shares of the Ontario Company, Bisson Bio-Technologies, Ltd. ("Bisson") pro rata, with each other, but also including the prior shareholders of Bisson. This resulted in the Company becoming a wholly owned subsidiary of Bisson, with its business activities continuing in Spectrum. Page 2 Bisson had no business activities, and the purpose of the transaction was to seek a listing on one of the stock exchanges in Canada which was never effected. Consequently, in January, 2001, an agreement was entered into between Bisson, its subsidiary Spectrum, and certain shareholders of Bisson (those who had been former Spectrum shareholders) to "reverse" the transaction, and transfer the Spectrum shares held by Bisson back to the former shareholders of Spectrum. The agreement provided that the former Spectrum shareholders would submit their shares of Bisson back to Bisson in exchange for the 6,050,661 shares of Spectrum which had been originally exchanged. Shareholders were to be put back in their original position, except that there had been a few transactions, which Management believes, was of minor impact on the relative shareholder positions. On May 9, 2005, the company's SB-2 became effective, and on July 29, 2005, it was approved to start being quoted on the OTCBB. On August 19, 2005, shares of the company commenced trading on the OTCBB. Business of the Company. Natco manufactured two distinct product lines that had separate customer bases and manufacturing processes: a jewelry cleaner line and a tire sealant line. The Company phased out both lines of product in the last 12 months. The company announced a Letter of Agreement with Photo Violation Technologies Corp, a Canadian company engaged in manufacture and sales of parking equipment. Overview Photo Violation Technologies Corp. (PVT) is a private Canadian company, headquartered in Vancouver, British Columbia, with manufacturing facilities in Thailand, and a subsidiary in the United Kingdom. Photo Violation Technologies Corp. core product is a fully-automated, wireless, digital parking meter - the PhotoViolationMeter(tm) - that comes with a built-in camera and in-ground sensors that allow it to detect both the presence and absence of a vehicle. The Company holds the exclusive, worldwide license for the PhotoViolationMeter(tm) (PVM) and the PVM System. The PVM System is a proprietary, integrated parking management system that utilizes the patented PhotoViolationMeter(tm) and MeterLink(tm), through which PVT offers a state-of-the-art, superior parking solution for cities and municipalities. Products/Services The PhotoViolationMeter(tm) is a fully patented, automated, wireless, digital parking meter with a built-in camera. It enforces parking regulations by issuing a parking violation electronically using digital photo evidence. MeterLink(tm) is the Company's back-end parking management software package that is fully integrated with the PVM. This revolutionary new parking Page 3 system is designed to increase a city's parking revenues by five times or more. In addition to increasing the revenue by more than 5 times, the PVM offers user friendly features such as the No Fine(tm) Feature, the Grace Period(tm) Feature and the Every Way to Pay(tm) Feature. The Company is currently testing, on a pilot basis, the PhotoViolationMeter(tm) and the PVM System on the University Endowment Lands at the University of British Columbia, through arrangements with the Provincial Government of British Columbia. These PhotoViolationMeters(tm) were recently installed in early July 2006. These PVM'S and the PVM System are operating successfully, and the initial results of operations have exceeded the Company's expectations. To make our business models "work", the PVM needed to issue 15 violations per month: it is now issuing over 150 violations per month compared to a national average of 3 violations per month. Photo Violation Technologies Corp has an advanced stage start-up having already progressed through the following stages: 1. Design and development 2.Prototyping 3.Testing 4.Patenting Stage 5.Trial Stage at present since June 2006 (University of British Columbia, Vancouver, Canada), trial in Port of San Francisco since October 2006, and most recently in Niagara Falls, New York. These ongoing pilot projects and the delivery of first orders are subject to the Company being able to raise further capital to manufacture its meters, and for working capital. Competition Aforementioned features allow the PVM to detect both the absence and presence of a vehicle and if needed, issue violations. For these reasons, the PVM is said to be a self-enforcing meter - the first of its kind. The PhotoViolationMeter(tm) is extremely user friendly, easy to use and accepts a wide variety of payment methods. Patents are in place to effectively lock out any competition. Market Opportunities Our market consists of mainly large municipalities (approximately 2600 in North America) and/or private parking firms that manage their own properties or city contracts. The International Parking Institute ("IPI") estimates that there are more than 105.2 million parking spaces just in the US. It estimates that the parking industry generates at least US $26 billion of revenue annually on that space. An average size city has 6500 parking meters and represents a one time sales revenue of $39,000,000 USD with an annuity stream revenue over 5 years at approximately $32,500,000USD. Page 4 ITEM 2. DESCRIPTION OF PROPERTY The company wrote off all its assets (inventory, equipment etc) as of March 31, 2007. Some of the old equipment and outdated inventory was thrown in the garbage. However, there is some equipment and inventory that the company believes that can be sold. It has been put into storage and when this is sold the proceeds will have to be declared as income. ITEM 3. LEGAL PROCEEDINGS In May 2007 the company took a local brokerage house to court on behalf of itself and its shareholders. This action was taken because the company and some shareholders had a reason to believe that this particular Brokerage house was lending the shares to another broker Dealer for the purpose of shorting. When the shareholders demanded that their shares be converted to share certificates, the brokerage house did not produce the certificates in a reasonable time period. The company went to Supreme Court of British Columbia to force them to a) deliver the share certificates to shareholders, b) to stop lending out our shares, c) to stop shorting of the company's shares. The company managed to accomplish all three because judge agreed with the company and an order was issued to deliver the shares to shareholders immediately. We have not dropped this case as of June 30, 2007, but no further action against this Brokerage house is contemplated at this time. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS No matter was submitted to a vote of the Registrant's shareholders during the registrant's 2007 fiscal year. However, we will be calling a meeting in the near future to seek approval of the reverse merger. Page 5 Part II ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS The company's SB-2 was declared effective on May 9, 2005 and the quotation on the Over-the-Counter Bulletin Board ("OTCBB") started on July 29, 2005 under the symbol NCII. As of June 30, 2007 there are 15,047,614 shares of common stock outstanding. There are no preferred shares outstanding. Management believes all of said stock would be eligible for sale under Rule 144. Management assumes that said shares would be subject to the volume limitations of Rule 144 manner of sale, notice and other requirements for shares held more than one year but less than two years, but has not sought an SEC no action letter on this issue. If an earlier period should apply, many of these shares would be tradable under Rule 144(k), which does not impose volume and manner of sales requirements on non-affiliates. As of March 31, 2006, the Company had 1,552,000 share purchase options outstanding. Various other options are authorized for Mr. Gurm. Management proposes to set aside 2,000,000 or more other shares for employee/consultant options. Terms have not been finalized. There have been no cash dividends declared on the Company's common stock since the Company's inception. ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION Background and Overview The following summary should be read in conjunction with the financial statements and accompanying notes to them included elsewhere in this report. We have been in existence as a company (including our predecessor British Columbia Corporation) since 1990. However, we began to concentrate on our Chemical Manufacturing business activities in 1997; prior to that time we had few shareholders and were primarily dormant. We never make a profit on Chemical Manufacturing operations. As of March 31, 2007, we had incurred a deficit of $(1,765,523) and $(1,530,951) as of March 31, 2006, which has continued to increase. This deficit includes losses incurred by our predecessor over the several years of our development. Most of our losses have been recent and incurred in the development of our chemical product lines. As an example, our deficit as of October 31, 1998 was approximately $(130,000). We have had sales in both the jewelry cleaner and tire sealants product lines since 1998, but sales did not contributed a significant amount to offset expenses. In the twelve months ended March 31, 2007 compared to the year ended March 31, 2006, we had net loss of $(234,572) and $(201,498) respectively. Consequently, we discontinued all manufacturing activities and are in the process of doing a reverse merger with photo Violation Technologies Corp of Vancouver, British Columbia, Canada Page 6 On December 5, 2006, the company announced a Letter of Intent has been signed with Photo Violation Technologies Corp. ("PVT") of Vancouver, Canada that will lead to the shareholders of PVT holding 85% of the outstanding shares of NATCO at the conclusion of the transaction. The shareholders of NATCO will retain a 15% interest in the re-organized company. On March 19, the company announced the signing of a binding Letter of Agreement with PVT. A definitive agreement is expected to be signed by he end of July 2007 PVT is a private company with subsidiaries in Europe and Asia that has developed a patented, technologically innovative parking meter system - the PhotoViolationMeter(TM). This user friendly high tech meter will generate significantly more revenue than current parking meters through greatly improved compliance and zero double usage of time. The PhotoViolationMeter has already advanced to field trials and is being tested at the University of British Columbia Endowment Lands and at the Port of San Francisco. Based on data provided by PVT, Sean Lanigan B.Eng. (Civil), MBA, LL.B of Wishing Tree Inc. has established a fair market value for the PVT patent of $133 million USD. This value of the United Sates Patent does not include additional patents that have been issued and are still pending. Results of Operations Twelve month period ended March 31, 2007 The company is in the process of completing the RTO agreement. It is expected that the agreement will be done in August 2007 and the RTO will be completed in the next 4 months. Consequently we had no sales in the twelve months ended March 31, 2007. Therefore, it is not meaningful to compare our results of operations to our prior year since our prior year's operations have been discontinued. Liquidity and Capital Resources Natco has financed its operations through equity investment from investors, shareholder loans, and credit facilities from Canadian chartered banks and increases in payables and share subscriptions. Most of the financing has been debt financing from related parties. During the twelve months ended March 31, 2007: Natco used $120,368(2006 -$63,273) of cash to pay for its operating activities, primarily for general and administrative expenses such as SEC compliance, legal, accounting, and rent. Cash provided by financing activities was $154,613 (2005 - $107,451. Notes to the RBS and TD banks were paid off in the period ended March 31, 2007. The company issued capital Stock of $559,235 to related parties in exchange for debit. The company still owes $753,273 to related parties, the breakdown of which is listed in the financial statements, Note 7. Page 7 The Company has been sustaining a loss on operations of about $200,000 per year in the past two fiscal years. We plan to satisfy our current liabilities of $865,079 as of March 31, 2007 by converting most of our debt to equity and paying the balance of approximately $300,0000 with additional financing. We estimate that if we can raise $600,000 in additional capital either through long term debt, equity or some combination, which is yet to be obtained then we can pay the current obligations we believe we need to pay, and have enough working capital until the RTO is completed. We believe this sum, less the payments we have indicated, would provide us with sufficient working capital t0 meet our obligation to complete the RTO Post RTO entity will need additional capital. We estimate we will have to raise an additional $2,000,000 in the next 6 to 8 months to provide for sufficient working capital for the post RTO entity. Our estimated fixed costs at this time are approximately $6,500 per month, which includes $1,500 for lease payments, $1,000 for utilities, $3,000 for loan interest and principle payments, and $1,000 for miscellaneous expenses. We will have to raise approximately $6,500 per month until additional funding is in place. If we are unable to finance the company by debt or equity financing, or combination of the two, we will have to look for other sources of funding to meet our requirements. That source has not been identified as yet but most likely will be debt financing using the management's trading shares as collateral. However there is no guarantee that we will be successful in raising any additional capital. Our financial statements have been prepared on the going concern basis under which an entity is considered to be able to realize its assets and satisfy its liabilities in the ordinary course of business. Operations to date have been primarily financed by long-term debt and equity transactions as well as increases in payables and related party loans. Our future operations are dependent upon the identification and successful completion of additional long-term or permanent equity financing, the continued support of creditors and shareholders, and, ultimately, the achievement of profitable operations. There can be no assurance that we will be successful. If we are not, we will be required to reduce operations or liquidate assets. We will continue to evaluate our projected expenditures relative to our available cash and to seek additional means of financing in order to satisfy working capital and other cash requirements. Our auditors' report on the March 31,2006 financial statements includes an explanatory paragraph that states that as we have suffered recurring losses from operations, substantial doubt exists about our ability to continue as a going concern. The consolidated financial statements do not include any adjustments relating to the recoverability of assets and classification of assets and liabilities that might be necessary should we be unable to continue as a going concern. Page 8 ITEM 7. FINANCIAL STATEMENTS Restated - August 22, 2008 NATCO INTERNATIONAL INC. Development Stage company FINANCIAL STATEMENTS MARCH 31, 2007 and 2006 (Expressed in US Dollars) MOORE & ASSOCIATES, CHARTERED ACCOUNTANTS AND ADVISORS PCAOB REGISTERED REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors Natco International Inc. (Formerly Spectrum International Inc.) We have audited the accompanying restated balance sheets of Natco International Inc. as of March 31, 2007 and March 31, 2006, and the related restated statements of operations, stockholders' equity and cash flows as of March 31, 2007 and 2006 and since inception through March 31, 2007. These restated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the restated financial statements referred to above present fairly, in all material respects, the financial position of Natco International Inc. as of March 31, 2007 and March 31, 2006, and the related restated statements of operations, stockholders' equity and cash flows as of March 31, 2007 and 2006 and since inception through March 31, 2007, in conformity with accounting principles generally accepted in the United States of America. The accompanying restated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company has incurred significant operating losses over the past three years and has a substantial stockholders' deficiency and a working capital deficiency which raises substantial doubt about its ability to continue as a going concern. Management's plans concerning these matters are also described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. /S/ MOORE & ASSOCIATES, CHARTERED Moore & Associates Chartered Las Vegas, Nevada August 22, 2008 2675 S. Jones Blvd. Suite 109, Las Vegas, NV 89146 (702) 253-7499 Fax (702) 253-7501 Page 9 NATCO INTERNATIONAL INC. Development Stage Company Financial Statements Balance Sheet at March 31[st] (Expressed in US Dollars) Restated

2007 2006 Audited Audited ASSETS CURRENT ASSETS Cash $ - $ - Accounts Receivable - - Tax Receivable - - Inventory - 8,643 Prepaid Assets 15,646 629 Assets held in discontinued operations 2,765 3,199 Total Current Assets 18,411 12,471 LONG TERM ASSETS Interest Receivable on Loan to PVT Product Rights (Note 5) 1 1 Total Assets $ 18,412 $ 12,472 LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Bank Indebtedness (Note 6) $ 19,132 $ 62,985 Accounts Payable 80,460 85,874 Accrued Liabilities 12,214 29,532 Due to related Parties (Note 7) 753,273 1,062,039 Liabilities held in discontinued operations - 5,613 Total Current Liabilities 865,079 1,246,043 Total Liabilities 865,079 1,246,043 Continued Operations (Note 1) Discontinued Operations (Note 12) Subsequent events (Note 13) STOCKHOLDERS' EQUITY Authorized: 5,000,000 Preferred Shares, with a par value $0.001, 50,000,000 Common Shares with a par value $0.001, Issued: Preferred Shares - None Common Shares - 15,047,614 (2006 - 9,377,364) respectively Paid in Capital -Statement 3 15,047 9,377 Additional Paid-in Capital -Statement 3 1,072,687 469,172 Share Subscriptions 70,853 33,063 Other Comprehensive Income - Statement 3 (239,731) (205,653) Deficit Accumulated during Development Stage -Statement 3 (1,765,523) (1,530,951) Total Stockholders' Equity (846,667) (1,224,992) Total Liabilities and Stockholders' Equity $ 18,412 $ 21,051 The accompanying notes are an integral part of these statements

NATCO INTERNATIONAL INC. Development Stage Company Financial Statements Statements of Operations (Expressed in US Dollars) Restated

Twelve Months Twelve Months Since Inception Ending March 31 Ending March 31 to March 31st 2007 2006 2007 Audited Audited Restated INCOME Sales $ - $ 730 $ 392,635 - Cost of Sales - 447 239,602 - Gross Profit $ - $ 283 $ 153,033 - OPERATING EXPENSES Advertising and Promotion 790 3,219 68,153 Amortization - 2,489 46,985 Automotive 37,035 Bad Debts 8,474 Bank Charges 3,093 1,830 14,653 Commissions 3,509 Consulting Fees 2,514 17,980 Insurance 17,481 Legal and Accounting 43,404 50,566 318,530 Office and other 1,571 3,969 53,489 Rent 11,080 14,098 201,904 Research and Development 1,817 105,537 Salaries and benefits 115,709 62,774 666,539 Telephone and Utilities 2,225 2,852 52,633 Travel and trade shows 6,712 44,737 Currency Exchange Loss (Gain) 962 - Total Expenses 184,584 146,128 1,658,601 - Net Loss from Operations (184,584) (145,845) (1,505,568) OTHER ITEMS Interest on PVT Loan - - Other Income 184 1,006 25,389 Cancellation of Options - Interest Expense (28,602) (48,366) (255,481) $ (28,418) $ 47,360) $ 230,092) Loss from Continued operations (213,002) (193,205) (1,735,660) Net Income (loss) from discontinued operations (Note 12) (21,570) (8,293) (29,863) - Net Loss (234,572) (201,498) (1,765,523) - Other comprehensive income (34,078) (44,178) (239,731) Net Loss and Comprehensive loss $ (268,650) $ 245,676) $ 2,005,254) Basic and Diluted (Loss) per Share $ (0.02) $ 0.03) $ 0.12) Weighted Average Number of Shares 15,047,614 9,377,364 15,047,614 The accompanying notes are an integral part of these statements

NATCO INTERNATIONAL INC. Development Stage Company Financial Statements Stockholder Equity at March 31[st] (Expressed in US Dollars) Restated

Common Common Additional Shares Other Shares Shares Paid-In Subscribed Comprehensive (Number) (Amount) Capital Income (Loss) Deficit Total Balance (deficiency) 8,393,928 $ 8,394 $ 417,516 $ 33,549 $ 19,886 $ -822,300 $ -342,955 March 31, 2002 Issuance of shares at 430,714 431 18,207 -18,638 - - - CDN$0.07 per share (Note 9b) Issuance of shares at 160,000 160 14,751 -14,911 - - - CDN$0.15 per share (Note 9b) Issuance of shares at 85,714 85 3,732 - - - 3,817 CDN$0.07 per share (Note 9b) Issuance of shares at CDN$0.08 per share plus warrant (Note 9b) 307,008 307 14,966 - - - 15,273 Share subscription (Note 9c) - - - 20,000 - - 20,000 Change in foreign currency - - - - -33,224 - -33,224 translation adjustment Net loss - - - - - -186,247 -186,247 Balance (deficiency) 9,377,364 9,377 469,172 20,000 -13,338 -1,008,547 -523,336 March 31, 2003 Change in foreign currency - - - - -73,045 - -73,045 translation adjustment Net loss - - - - - -153,084 -153,084 Balance (deficiency) 9,377,364 $ 9,377 $ 469,172 $ 20,000 $ -86,383 $ -1,161,631 $ -749,465 March 31, 2004 Share subscription (Note 9c) - - - 5,000 - - 5,000 Change in foreign currency - - - - -75,092 - -75,092 translation adjustment Net loss - - - - - -167,822 -167,822 Balance (deficiency) 9,377,364 $ 9,377 $ 469,172 $ 25,000 $ $ $ March 31, 2005 (161,475) (1,329,453) (987,379) Share subscription (Note 9c) - - - 8,063 - - 8,063 Change in foreign currency - - - - - translation adjustment (44,178) (44,178) Net loss - - - - - (201,498) (201,498) Balance (deficiency) 9,377,364 $ 9,377 $ 469,172 $ 33,063 $ $ $ March 31, 2006 (205,653) (1,530,951) (1,224,992) Share subscription (Note 9c) - - - 50,000 - - 50,000 Issuance of shares At CDN$0.06/share (Note 9b) 100,000 100 4,047 (4,147) - - - Issuance of shares At CDN$0.10/share (Note 9b) 100,000 100 7,963 (8,063) - - - Issuance of shares At CDN $0.10 per share(Note 5,470,250 5,470 541,555 - - - 547,025 9b) Issuance of Stock Options - - 49,950 - - - 49,950 Change in foreign currency - - - - - translation adjustment (34,078) (34,078) Net loss - - - - - (234,572) (234,572) Balance (deficiency) 15,047,614 $ 15,047 $ 1,072,687 $ 70,853 $ $ $ March 31, 2007 (239,731) (1,765,523) (846,667)

NATCO INTERNATIONAL INC. Development Stage Company Financial Statements Statements of Cash Flow (Expressed in US Dollars) Restated

Twelve Months Twelve Months (Inception) Ended March 31 Ended March 31 to March 31st 2007 2006 2007 Audit Audit Restated OPERATING ACTIVITIES Audited Audited Net (Loss) $ (234,572) $ (193,205) $ 1,765,523) Adjustments to reconcile Net (Loss) Common Stock issued for Services - - Depreciation - 2,489 46,985 Bad Debts - - 1,672 Write off of assets from discontinued operations Interest due to related parties 24,034 40,030 67,639 Wages accrued to director 65,579 64,591 466,501 stock based compensation 49,500 49,500 Changes in Operating Assets and Liabilities (Increase)/Decrease in Accounts Receivable - 402 - Interest receivable - - - Inventory - 1,493 - Prepaid expense (15,021) 333 (15,646) Increase/(Decrease) in Accounts Payable (5,414) 7,190 80,460 Increase/(Decrease) in Accrued Liabilities (17,318) 6,341 12,214 Net Cash Provided by Operating Activities (133,212) (68,664) (1,056,198) Net cash provided by (used in ) 12,497 5,391 11,219 Discontinued operations (120,715) (63,273) (1,044,979) INVESTMENT ACTIVITIES Purchase of Equipment - - (62,642) Net Cash (Used) by Investment Activities - - (62,642) FINANCING ACTIVITIES Bank Indebtedness (43,853) (250) 19,132 Due to Related party (398,379) 99,638 219,133 Proceeds from Subscriptions Receivable 37,790 8,063 70,853 Proceeds from sale of Common Stock 559,235 - 1,038,234 Net Cash Provided by Financing Activities 154,793 107,451 1,347,352 Foreign Exchange (34,078) (44,178) (239,731) Change in cash and cash equivalents - - - Cash, Beginning of Period - - - Cash, End of Period $ - $ - $ - SUPPLEMENTAL INFORMATION: Interest Paid $ 4,568 $ 8,336 $ 135,435 Income Taxes Paid $ - $ - $ -

Page 13 Natco International Inc. Development Stage Company Notes to Financial Statements March 31, 2007 and 2006 (Expressed in US Dollars) Restated ============================================================================= 1. Nature of Operations and Going Concern The Company was incorporated as Spectrum Trading Inc. under the laws of the Province of British Columbia, Canada, on November 21, 1990. On May 14, 1999, the Company was discontinued in British Columbia and was reincorporated as Spectrum International Inc. in the State of Delaware, U.S.A. Effective September 3, 2004, the Company changed its name from Spectrum International Inc. to Natco International Inc. The company had two products, jewellery cleaner and a tire sealant. During the current fiscal year, the Company discontinued its production of both lines. The company has signed a binding letter of agreement with Photo violation Technologies Corp.(PVT), which will lead PVT to take over the Company in a Reverse merger. These financial statements have been prepared on the basis of accounting principles applicable to a going concern which assumes that the company will continue in operation for the foreseeable future and will be able to realize its assets and discharge its liabilities in the normal course of operations. The Company has incurred significant operating losses over the past three years and has a substantial stockholders' deficiency and a working capital deficiency. The company's continued existence is dependent upon its ability to raise additional capital and to achieve profitable operations through the proposed reverse merger with Photo Violation Technologies Corp. If the going concern assumption were not appropriate for these financial statements, then adjustments would be necessary in the carrying values of assets and liabilities, the reported revenues and expenses and the balance sheet classifications used. ============================================================================= 2. Summary of Significant Accounting Policies a) Fiscal Period The Company's fiscal year ends on March 31. b) Cash and Cash Equivalents Cash and cash equivalents include cash on hand, term deposits and short term highly liquid investments with a term to maturity of less than one year from inception which are readily convertible to known amounts of cash and which, in the opinion of management, are subject to an insignificant risk of changes in value. c) Use of Estimates In conformity with accounting principles generally accepted in the United States of America, management is required to make estimates and assumptions that could 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 year. Actual results could vary materially from those reported. Page 14 Natco International Inc. Development Stage Company Notes to Financial Statements March 31, 2007 and 2006 (Expressed in US Dollars) Restated ============================================================================= 2. Summary of Significant Accounting Policies - Continued d) Foreign Currency Transactions The Company's functional currency is the Canadian dollar and the reporting currency is the U.S. dollar. Assets and liabilities are translated from the functional to the reporting currency at the exchange rate in effect at the balance sheet date and equity at the historical exchange rates. Revenue and expenses are translated at rates in effect at the time of the transactions. Resulting translation gains and losses are accumulated in a separate component of stockholders' equity - other comprehensive income (loss). Realized foreign currency transaction gains and losses are credited or charged directly to operations. e) Inventory Inventory is stated at the lower of cost and net realizable value. Cost includes all costs of purchase, cost of conversion and other costs incurred in bringing the inventory to its present location and conditions, and is calculated using the first-in first-out method. Net realizable value is determined by reference to sales proceeds of items sold in the ordinary course of business after the balance sheet date or by management estimates based on prevailing market conditions. f) Property, Plant and Equipment Property, plant and equipment is recorded at cost. Depreciation is provided annually on the diminishing balance method to write-off the assets over their estimated useful lives as follows: * Computer and office equipment - 30% * Manufacturing equipment - 20% g) Income Taxes Income taxes are accounted for using the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry-forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is provided for significant deferred tax assets when it is more likely than not that such assets will not be recovered. h) Fair value of Financial Instruments The company's financial instruments consist of accounts receivable, bank indebtedness, accounts payable and amounts due to related parties. Unless otherwise noted, it is management's opinion that this Company is not exposed to significant interest or credit risks arising from these financial instruments. The fair values of these financial instruments approximate their carrying values unless otherwise noted. Page 15 Natco International Inc. Development Stage Company Notes to Financial Statements March 31, 2007 and 2006 (Expressed in US Dollars) Restated ============================================================================= 2. Summary of Significant Accounting Policies - Continued i) Stock-Based Compensation Effective January 1, 2006, the Company adopted the provisions of Statement of Financial Accounting Standards ("SFAS") No. 123(R), "Share-Based Payment", which establishes accounting for equity instruments exchanged for employee services. Under the provisions of SFAS 123(R), stock-based compensation cost is measured at the grant date, based on the calculated fair value of the award, and is recognized as an expense over the employees' requisite service period (generally the vesting period of the equity grant). Before January 1, 2006, the Company accounted for stock-based compensation to employees in accordance with Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees," and complied with the disclosure requirements of SFAS No. 123, "Accounting for Stock-Based Compensation". The Company adopted SFAS 123(R) using the modified prospective method, which requires the Company to record compensation expense over the vesting period for all awards granted after the date of adoption, and for the unvested portion of previously granted awards that remain outstanding at the date of adoption. Accordingly, financial statements for the periods prior to January 1, 2006 have not been restated to reflect the fair value method of expensing share-based compensation. Adoption of SFAS No. 123(R) does not change the way the Company accounts for share-based payments to non-employees, with guidance provided by SFAS 123 (as originally issued) and Emerging Issues Task Force Issue No. 96-18, "Accounting for Equity Instruments That Are Issued to Other Than Employees for Acquiring, or in Conjunction with Selling, Goods or Services". j) Revenue Recognition Revenues are recognized when all of the following criteria have been met: persuasive evidence for an arrangement exists; delivery has occurred; the fee is fixed or determinable; and collection is reasonably assured k) Advertising Policy The Company expenses the cost of advertising when incurred. l) Research and Development Research and development is expensed as incurred. m) Shipping and Handling The company includes the cost of shipping and handling as a component of cost of sales in accordance with Emerging Issues Task Force ("EITF") Issue No. 00-10, "Accounting for Shipping and Handling Fees and Costs." Page 16 Natco International Inc. Development Stage Company Notes to Financial Statements March 31, 2007 and 2006 (Expressed in US Dollars) Restated ============================================================================= 2. Summary of Significant Accounting Policies - Continued n) Long-Lived Assets The company monitors the recoverability of long-lived assets, including property, plant and equipment and product rights, based on estimates using factors such as current market value, future asset utilization, business climate and future undiscounted cash flows expected to result from the use of the related assets. The company policy is to record any impairment loss in the period when it is determined that the carrying amount of the asset may not be recoverable equal to the excess of the asset's carrying value over its fair value. o) Loss Per Share The company computes net loss per common share using SFAS No. 128 "Earnings Per Share." Basic loss per common share is computed based on the weighted average number of shares outstanding for the period. Diluted loss per share is computed by dividing net loss by the weighted average shares outstanding assuming all dilutive potential common shares were issued. There were no dilutive potential common shares at March 31, 2007 and 2006. Because the company has incurred net losses and has no potentially dilutive common shares, basic and diluted loss per share are the same. Additionally, for the purposes of calculating diluted loss per share, there were no adjustments to net loss. p) Obligations Under Capital Leases Leases are classified as either capital or operating. Leases that transfer substantially all of the benefits and risks of ownership of property to the company are accounted for as capital leases. At the time a capital lease is entered into, an asset is recorded with its related long-term financing. Payments under operating leases are expensed as incurred. q) Segmented Reporting SFAS No. 131, "Disclosures about Segments of an Enterprise and Related Information", changed the way public companies report information about segments of their business in their quarterly reports issued to stockholders. It also requires entity-wide disclosures about the products and services an entity provides, the material countries in which it holds assets and reports revenues and its major customers. The company's sales are generated in one geographical area, Canada. The company operated in two product segments: jewellery cleaners and accessories, and tire sealants. During the current fiscal year, the company discontinued its jewellery cleaners business. r) Comprehensive Income SFAS No. 130, "Reporting Comprehensive Income", establishes standards for reporting and display of comprehensive income and its components in a full set of general-purpose financial statements. s) Derivative Financial Instruments The company was not a party to any derivative financial instruments during any of the reported fiscal periods. Page 17 Natco International Inc. Development Stage Company Notes to Financial Statements March 31, 2007 and 2006 (Expressed in US Dollars) Restated ============================================================================= 2. Summary of Significant Accounting Policies - Continued t) Product Warranty The company's policy was to replace tire sealant and jewellery cleaner products if faulty. Products will be replaced within a reasonable time from the date of sale. The company stopped manufacturing all products January 2007, therefore, there are no warranty issues anymore. u) Variable Interest Entities In January 2003, the FASB issued FIN 46, "Consolidation of Variable Interest Entities, an Interpretation of ARB No. 51." FIN 46 requires certain variable interest entities to be consolidated by the primary beneficiary of the entity if the equity investors in the entity do not have the characteristics of a controlling financial interest or do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support from other parties. FIN 46 is effective for all new variable interest entities created or acquired after January 31, 2003. For variable interest entities created or acquired prior to February 1, 2003, the provisions of FIN 46 must be applied for the first interim or annual period beginning after June 15, 2003. However, in December 2003, the FASB published a revision to FIN 46 to clarify some of the provisions of FIN 46, and to exempt certain entities from its requirements. Under the new guidance, there are new effective dates for companies that have interests in structures that are commonly referred to as special-purpose entities. The rules are effective in financial statements for periods ending after March 15, 2004. The adoption did not have any impact on the company's financial statements. v) Recent Accounting Pronouncements i) SFAS No. 151 In November 2004, the FASB also issued SFAS No.151, "Inventory Costs, an amendment of ARB No.43, Chapter 4". This standard is effective for the fiscal years beginning after June 15, 2005, therefore the Company will adopt it on April 1, 2006. This standard clarifies that abnormal amounts of idle facility expense, freight, handling costs and wasted material should be expensed as incurred and not included in overhead. In addition, this standard requires that the allocation of fixed production overhead costs to inventory be based on the normal capacity of the production facilities. The adoption of this standard is not expected to have a material effect on the Company's results of operations or financial position. ii) SFAS No. 153 In December 2004, the FASB issued SFAS 153 - Exchanges of Non-Monetary Assets - An amendment of APB 29. This statement amends APB 29, which is based on the principle that exchanges of non-monetary assets should be measured at the fair value of the assets exchanged with certain exceptions. SFAS 153 eliminates the exception for non-monetary exchanges of similar productive assets and replaces it with a general exception for exchanges of non-monetary assets that do not have commercial substance. A non-monetary exchange has commercial substance if the future cash flows of the entity are expected to change significantly as a result of the exchange. This statement is effective for non-monetary asset exchanges occurring in fiscal periods beginning on or after June 15, 2005. Page 18 Natco International Inc. Development Stage Company Notes to Financial Statements March 31, 2007 and 2006 (Expressed in US Dollars) Restated ============================================================================= 2. Summary of Significant Accounting Policies - Continued v) Recent Accounting Pronouncements - Continued iii) SFAS No. 154 In May 2005, the FASB issued SFAS 154, "Accounting Changes and Error Corrections," which replaces APB Opinion No. 20, "Accounting Changes," and supersedes FASB Statement No. 3, "Reporting Accounting Changes in Interim Financial Statements - an amendment of APB Opinion No. 28." SFAS 154 requires retrospective application to prior periods' financial statements of changes in accounting principle, unless it is impracticable to determine either the period-specific effects or the cumulative effect of the change. When it is impracticable to determine the period-specific effects of an accounting change on one or more individual prior periods presented, SFAS 154 requires that the new accounting principle be applied to the balances of assets and liabilities as of the beginning of the earliest period for which retrospective application is practicable and that a corresponding adjustment be made to the opening balance of retained earnings for that period rather than being reported in an income statement. When it is impracticable to determine the cumulative effect of applying a change in accounting principle to all prior periods, SFAS 154 requires that the new accounting principle be applied as if it were adopted prospectively from the earliest date practicable. SFAS 154 shall be effective for accounting changes and corrections of errors made in fiscal years beginning after December 15, 2005. The Company does not expect the provisions of SFAS 154 will have a significant impact on its results of operations. iv) SFAS No. 155 In February 2006, the FASB issued SFAS No. 155, "Accounting for Certain Hybrid Financial Instruments, an amendment of FASB Statements No. 133 and 140." This statement permits fair value re-measurement for any hybrid financial instrument that contains an embedded derivative that otherwise would require bifurcation. It establishes a requirement to evaluate interests in securitized financial assets to identify interests that are freestanding derivatives or that are hybrid financial instruments that contain an embedded derivative requiring bifurcation. In addition, SFAS 155 clarifies which interest-only strips and principal-only strips are not subject to the requirements of Statement 133. It also clarifies that concentrations of credit risk in the form of subordination are not embedded derivatives. SFAS 155 amends Statement 140 to eliminate the prohibition on a 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 an entity's first fiscal year that begins after September 15, 2006. The adoption of this standard is not expected to have a significant effect on the Company's results of operations or financial position. Page 19 Natco International Inc. Development Stage Company Notes to Financial Statements March 31, 2007 and 2006 (Expressed in US Dollars) Restated ============================================================================= 2. Summary of Significant Accounting Policies - Continued v) Recent Accounting Pronouncements - Continued v) SFAS No. 156 In March 2006, the FASB issued SFAS 156, "Accounting for Servicing of Financial Assets-an amendment of FASB Statement No. 140". 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 in any of the following situations: (a) a transfer of the servicer's financial assets that meets the requirements for sale accounting, (b) a transfer of the servicer's financial assets to a qualifying special-purpose entity in a guaranteed mortgage securitization in which the transferor retains all of the resulting securities and classifies them as either available-for-sale securities or trading securities in accordance with FASB Statement No. 115, "Accounting for Certain Investments in Debt and Equity Securities", (c) an acquisition or assumption of an obligation to service a financial asset that does not relate to financial assets of the servicer or its consolidated affiliates; (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 either of the following subsequent measurement methods for each class of separately recognized servicing assets and servicing liabilities: (a) Amortization method-Amortize servicing assets or servicing liabilities in proportion to and over the period of estimated net servicing income or net servicing loss and assess servicing assets or servicing liabilities for impairment or increased obligation based on fair value at each reporting date, or (b) Fair value measurement method-Measure servicing assets or servicing liabilities at fair value at each reporting date and report changes in fair value in earnings in the period in which the changes occur; (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; and (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. An entity should adopt this statement as of the beginning of its first fiscal year that begins after September 15, 2006. Earlier adoption is permitted as of the beginning of an entity's fiscal year, provided the entity has not yet issued financial statements, including interim financial statements, for any period of that fiscal year. The effective date of this Statement is the date an entity adopts the requirements of this statement. Page 20 Natco International Inc. Development Stage Company Notes to Financial Statements March 31, 2007 and 2006 (Expressed in US Dollars) Restated ============================================================================= 3. Inventory Details are as follows: 2007 2006 -------------------------------- Raw materials $ - $ 7,866 Finished Goods - 777 -------------------------------- $ - $ 8,643 ----------------------------------------------------------------------- 4. Property, Plant and Equipment Details are as follows: All plant equipment has been written off as of March 31, 2007 ======================================================================= 5. Product Rights The company has the exclusive and continuing rights to the product formulations and distribution of a tire sealant product. These rights were acquired from a related party and have been recorded at $1, representing the carrying value to the related party. ============================================================================= Page 21 Natco International Inc. Development Stage Company Notes to Financial Statements March 31, 2007 and 2006 (Expressed in US Dollars) Restated ============================================================================= 6. Bank Indebtedness Details are as follows: 2007 2006 -------------------------- Checks written in excess of funds on deposit $ - $ 1,562 HSBC demand revolving loan for a maximum amount of CDN$20,00 ($17,136), secured by a General Security Agreement on all assets of the company (first charge) and by personal guarantees made by a director and officer of the company, interest at bank prime plus 2%. 19,132 19,136 TD Canada Trust, loan secured by a General Security Agreement on all assets of the company and by personal guarantees made by two shareholders including a director and officer of the company, interest at bank prime plus 2% (2005 - 2%). The loan is due on demand; however, the bank allowed the company to repay the loan by making fixed monthly payments of CDN$416. - 1,630 Royal Bank, loan secured by a General Security Agreement on all assets of the company and by a personal guarantee of a director and officer, interest at bank prime plus 2% (2005 - 2%). The loan is due on demand; however, the bank allowed the company to repay the loan by making fixed monthly payments of CDN$673. - 7,565 Wells Fargo Bank, loan unsecured with interest at bank prime plus 7.25%. The bank allows the company to make monthly interest payments only; however the loan is due on demand, therefore the entire loan is classified as a current liability. - 35,092 ----------------------------- 19,132 62,985 Less: Current Portion (19,132) (62,985) ----------------------------- Long-term portion $ - $ - ----------------------------- =============================================================================== Page 22 Natco International Inc. Development Stage Company Notes to Financial Statements March 31, 2007 and 2006 (Expressed in US Dollars) Restated ============================================================================= 7. Related Party Transactions Other than as disclosed elsewhere in these financial statements, the following amounts have been recorded as transactions with related parties: a) Amounts due to related parties are as follows: 2007 2006 ------------------------- Loans payable to relatives of a director and officer of the company. The loans are unsecured, are due on demand, and bear interest at bank prime plus 0.5% (2006 - 0.5%). $ 13,125 $ 168,774 Loans payable to a director and officer of the company. The loans are unsecured, do not have fixed terms of repayment, and bear interest at 8.33% to 11% (2006 - 8.33% to 11%). It is expected that these loans will be repaid within the next 12 months. 260,605 433,510 Wages and bonus payable to a director and officer of the company. This liability is unsecured, due on demand and non-interest bearing (2006 - nil%). 473,961 422,106 Loan payable to a relative of a director and officer of the company. The loan is unsecured, due on demand, bears an interest at 7% per annum and requires monthly payments of interest only. 5,582 37,679 ------------------------- $ 753,273 $ 1,062,039 Less: Current portion ( 753,273) (1,062,039) ------------------------- Long-term portion $ - - ------------------------- b) Interest expense on amounts due to directors and an officer was $24,034 (2006 - $40,030). c) Salaries and benefits include $115,709(2006 - $62,774) paid to a director and officer of the Company. d) As at March 31, 2007, a director and officer of the Company held approximately 51% of the issued and outstanding shares of the Company. e) The Company's director and officer owns approximately 58.1% of the Company's outstanding shares. ============================================================================= 8. Capital Stock a) Authorized Stock The company has authorized 50,000,000 common shares with a par value of $0.001 per share. Each common share shall entitle the holder to one vote, in person or proxy on any matter on which action of the stockholder of the corporation is sought. The company has authorized 5,000,000 shares of preferred stock with a par value of $0.001 per share. The holders of preferred stock have no rights except as determined by the Board of Directors of the company and/or provided by Delaware General Corporate Law. Page 23 Natco International Inc. Development Stage Company Notes to Financial Statements March 31, 2007 and 2006 (Expressed in US Dollars) Restated ============================================================================= 8. Capital Stock - Continued b) Share Issuances i) During fiscal 2002, the Company agreed to issue 430,714 common shares to settle debt in the amount of $18,638 to a director and officer of the Company and two directors. These shares were issued in fiscal 2003. ii) During fiscal 2002, the Company agreed to issue 160,000 common shares to settle debt in the amount of $14,911 to non-related parties. These shares were issued in fiscal 2003. iii) During fiscal 2003, the Company issued 85,714 common shares for proceeds of $3,817 to a Company owned by a director of the company. iv) During fiscal 2003, the Company issued 307,008 common shares for proceeds of $15,273. Of these shares, 281,424 were issued to a company owned by a director of the Company. v) During fiscal 2007, the Company issued 5,670,250 common shares for Debit and subscriptions from previous years. Of these shares, 250,000 were issued to a director of the company, another 45,450 was issued to a company owned by a director of the Company and 2,504,920 were issued to a director/CEO of the company. c) Share Subscriptions During fiscal 2003, the Company received $20,000 as subscriptions for 200,000 shares at $0.10 per share. During fiscal 2005, the Company received $5,000 as subscriptions for 100,000 shares at $0.05 per share. During fiscal 2006, the company received CDN$10,000 as subscriptions for 100,000 shares at CDN$0.10 per share. During the current period, the company received $50,000 as a subscription for 500,000 shares at $0.10 per share. d) Warrants During fiscal 2003, the Company issued 307,008 units, consisting of 307,008 shares and 307,008 share purchase warrants. These warrants were convertible to shares at a price of $0.25 per share. These warrants expired on September 6, 2004. e) Stock Options Stock option activity pursuant to the employees stock option plan is summarized as follows: Weighted Number of Exercise Average Expiry Options Price Exercise Date Price ------------------------------------------------- April 2002 Outstanding at March 31, 2002 134,000 CDN $0.15 CDN $0.15 April 2004 Expired (67,000) CDN $0.15 CDN $0.15 April 2002 Cancelled to be re-priced (67,000) CDN $0.15 CDN $0.15 April 2004 Granted (re-priced) 67,000 $0.10 $0.10 May 8, 2007 Granted 517,000 $0.10 $0.10 May 8, 2007 ------------------------------------------------- Outstanding at March 31, 2003 584,000 $0.10 $0.10 May 8, 2007 Granted 67,000 $0.10 $0.10 Apr 30, 2008 ------------------------------------------------- May 8, 2007 Outstanding at March 31, 2004 651,000 $0.10 $0.10 Apr 30, 2008 Granted 67,000 $0.10 $0.10 Apr 30, 2009 ------------------------------------------------- May 8, 2007 Outstanding at March 31, 2005 718,000 $0.10 $0.10 - Apr 30, 2009 Granted 67,000 $0.10 $0.10 Apr 30, 2010 ------------------------------------------------- May 8, 2007 Outstanding at March 31, 2006 785,000 $0.10 $0.10 - Apr 30,2010 Granted 67,000 $0.10 $0.10 - Apr 30,2011 Granted 700,000 $0.10 $0.10 - May 30,2011 ------------------------------------------------- May 8, 2007 Outstanding at March 31, 2007 1,552,000 $0.10 $0.10 - Apr 30, 2011 Page 24 Natco International Inc. Development Stage Company Notes to Financial Statements March 31, 2007 and 2006 (Expressed in US Dollars) Restated ============================================================================= 8. Capital Stock - Continued e) Stock Options - Continued The Company has also committed to issue to the Chief Executive Officer 67,000 share purchase options every April. These options will be exercisable at $0.10 per share and will expire five years after the date of grant. Further bonus options are available to the Chief Executive Officer. These bonus options entitle the Chief Executive Officer to purchase shares at 20% below the market price up to a value determined by 5% of the amount of annual profits from sales in excess of $2,500,000 up to $3,999,999 and 8% of the amount of annual profits from sales in excess of $4,000,000. To date, sales have not exceeded $2,500,000 and thus no bonus options have been issued. Until December 31, 2005, the Company accounted for its stock option plan in accordance with the provisions of APB Opinion No. 25, Accounting for Stock Issued to Employees. Effective January 1, 2006, the Company is accounting for stock based compensation using SFAS 123(R) Share Based Payment. Had compensation cost for the stock option plan been determined for the entire fiscal year based on the fair value at the grant date consistent with the method of SFAS No. 123, Accounting for Stock-Based Compensation, the total pro forma value of stock options expense granted to directors and officers for the year ended March 31, 2006 would be $3,431 (2005 - $4,180). This value is estimated at the date of the grant using the Black-Scholes option- pricing model with the following weighted average assumptions: 2007 2006 ----------------------------- Risk-free interest rate 2.5% 2.5% Expected dividend yield - - Expected stock price volatility 73% 73% Expected option life in years 5 5 The resulting pro forma loss per share for the year is as follows: 2007 2006 ----------------------------- Loss as reported $ (234,572) (201,498) Stock compensation expense - (3,431) ----------------------------- Pro forma loss $ (234,572) $ (204,929) ----------------------------- Loss per common share $ (0.02) $ (0.02) Pro forma loss per common share $ (0.02) $ (0.02) Option pricing models require the input of highly subjective assumptions including the expected stock price volatility. Changes in the subjective input assumptions can materially affect the fair value estimate, and therefore, the existing models do not necessarily provide a reliable single measure of the fair value of the company's stock options. =============================================================================== Page 25 Natco International Inc. Development Stage Company Notes to Financial Statements March 31, 2007 and 2006 (Expressed in US Dollars) Restated ============================================================================= 9. Income Taxes The Company has accumulated net operating losses for federal income tax purposes of approximately $917,000, which may be carried forward and used to reduce taxable income of future years. These losses expire as follows: 2020 $ 180,000 2021 117,000 2022 135,000 2023 141,000 2024 97,000 2025 109,000 2026 138,000 ------- $ 917,000 ------- Details of future income tax assets are as follows: March 31, March 31, Future income tax assets: 2007 2006 -------------------------------------- Non-capital tax loss $ 312,000 $ 265,000 Valuation allowance (312,000) (265,000) -------------------------------------- $ - $ - -------------------------------------- The potential future tax benefits of these losses have not been recognized in these financial statements due to uncertainty of their realization. When the future utilization of some portion of the carry forwards is determined not to be "more likely than not," a valuation allowance is provided to reduce the recorded tax benefits from such assets. 10. Commitments The Company was committed to lease office and warehouse space at CDN $1,402 per month until September 2007. However the company gave up the building on Feb 28, 2007. Therefore, there is no lease obligation to the company. =============================================================================== Page 26 Natco International Inc. Development Stage Company Notes to Financial Statements March 31, 2007 and 2006 (Expressed in US Dollars) Restated ============================================================================= 11. Discontinued Operations The Company discontinued operations of its jewelry cleaners and accessories line due to lack of demand for the product in March 2006. The tire sealant operations were also discontinued in February 2007 There were no property, plant and equipment remaining to produce these operations. As at March 2007 and 2006, accounts receivable relating to the jewelry cleaners and Tire sealant lines were $2,765 and $3,199 respectively. As of March 31, 2007 and 2006, inventory relating to the discontinued line of business were $Nil and accounts payable were $nil and $5,613, respectively. Net loss from discontinued operations is as follows: 2007 2006 ------------------------------- Sales $ 800 $ 6,954 Cost of Sales 2,469 ------------------------------- Gross Profits 800 4,485 Write down of inventory (10,585) (12,778) Disposal of Fixed assets (11,618) ------------------------------- Net loss from Discontinued Operations $ (21,403) $ (8,293) --------------------------------- 12. Subsequent Events Since March 31, 2007, the company has loaned $950,000 to Photo Violation Technologies Corp (PVT) as per agreement signed on March 19, 2007. Another $1,050,000 will be paid to PVT By the end of August 2007. The company appointed CG Capital as the Investor relation firm. The Company will pay them with restricted stock (1.5 Million Common Shares) 13. Reverse Merger Agreement On March 19, 2007 company signed a binding Letter of agreement with Photo Violation Technologies Corp, a Canadian company that manufactures Parking Meters. 14. These statements are being restated because the original manufacturing business was closed and written off in preparation for new business as of March 31, 2007. The statements should have been done to reflect the development stage of the company, and that was not done. The mistake is being corrected. Page 27 ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURES Since the Company's incorporation on May 17, 1999, the Company has retained four auditors. The Company's initial auditors were Thorne Little in Surrey, British Columbia, Canada, which were originally retained by Spectrum Trading Inc., a British Columbia corporation. Since the Company was incorporated pursuant to the laws of the State of Delaware, the Company determined it was in the corporation's best interests to retain an auditing firm based in the United States. On October 31, 1999, the Company retained Grant Thornton LLP as its Auditors (Vancouver BC Office). Due to disagreement regarding fees and Delays in completion of work Grant Thornton LLP was asked by the company to resign in July 2003. Since then we have not been able to settle the fees issue. On March 12, 2004 we retained Staley, Okada and Partners to be our auditors. In September 2006 the ceased to Exist. Therefore, we switched to Moore and Associate of Las Vegas. We discussed the need to use the generally accepted accounting principles of United States (USGAAP)with them and their qualifications regarding the USGAAP. No discussion took place as to what type of audit opinion will be rendered and no written or oral advice was provided. ITEM 8A. CONTROLS AND PROCEDURES As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of our chief executive officer and chief financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures. BASED ON THIS EVALUATION, OUR CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER CONCLUDED THAT OUR DISCLOSURE CONTROLS AND PROCEDURES ARE DESIGNED TO PROVIDE REASONABLE ASSURANCE OF ACHIEVING THE OBJECTIVES OF TIMELY ALERTING THEM TO MATERIAL INFORMATION REQUIRED TO BE INCLUDED IN OUR PERIODIC SEC REPORTS AND OF ENSURING THAT SUCH INFORMATION IS RECORDED, PROCESSED, SUMMARIZED AND REPORTED WITH THE TIME PERIODS SPECIFIED. Our chief executive officer and chief financial officer also concluded that our disclosure controls and procedures were effective as of the end of the period covered by this report to provide reasonable assurance of the achievement of these objectives. ITEM 8B. OTHER INFORMATION NOT APPLICABLE. PART III ITEM 9. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT The directors and principal executive officers of the Company are as follows: Page 28 Executive Officers of the Company: Name: Age: Office(s): Raj-Mohinder S. Gurm 47 President and CFO John H. Rennie 70 Secretary Board of Directors of the Company:

Name: Age: Term Expires Director Since (1) Raj-Mohinder S. Gurm 47 Director Next AGM Nov. 1990 John H. Rennie 70 Director Next AGM Mar. 1999 Gerry Podersky-Cannon 60 Director Next AGM June 2000 Stephen Sleigh 54 Director Next AGM June 2003

------------------------------------------------------------- (1) Directors Terms are staggered over a three year period. Directors may only be removed for cause and by a 75% majority vote of the shareholders. ITEM 10. EXECUTIVE COMPENSATION Any compensation received by officers, directors and management personnel of the Company will be determined from time to time by the Board of Directors of the Company. Officers, directors and management personnel of the Company will be reimbursed for any out-of-pocket expenses incurred on behalf of the Company. Summary Compensation Table. The table set forth below summarizes the annual and long-term compensation for services in all capacities to the Company payable to the Chief Executive Officer of the Company and the other executive officers of the Company whose total annual salary and bonus exceeded $50,000 during the years ending March 31. The Board of Directors of the Company may adopt an incentive stock option plan for its Directors and executive officers which would result in additional compensation.

------------------------------------------------------------------------------------------------------------------ SUMMARY COMPENSATION TABLE ------------------------------------------------------------------------------------------------------------------ Long Term Compensation ------------------------------------------------------------------------------------------------------------------ Annual Compensation Awards Payouts ------------------------------------------------------------------------------------------------------------------ (a) (b) c) d) (e) (f) (g) (h) (i) ------------------------------------------------------------------------------------------------------------------ Name Other Restricted Securities And Annual Stock Underlying LTIP All Other Principle Salary Bonus Compensation Award(s) Options/SARs Payouts Compensation Position Year ($) ($) ($) ($) (#) ($) ($) ------------------------------------------------------------------------------------------------------------------ CEO 2007 $62,774(3) 0.00 0.00 0.00 267,000(2) 0.00 0.00 Raj-Mohinder Gurm 2006(6) 62,774(1) 0.00 0.00 0.00 67,000(2) 0.00 0.00 2005(7) 58,859(1) 0.00 0.00 0.00 67,000(2) 0.00 0.00 ------------------------------------------------------------------------------------------------------------------

(1) In April 1999 the board approved an employment contract with Mr. Gurm, which allowed for an annual salary of $62,774(72,000CDN), a signing bonus of $10,000 and an option to purchase 134,000 shares of the Company's common stock for $0.10 per share. The employment contract called for an additional option to purchase 67,000 shares of the Company's common stock for Page 29 $0.10 per share to be issued to Mr. Gurm on an annual basis. All options expire five years after the issue date. The salary due Mr. Gurm since April 1999 has been accrued by the Company, except for $62,774 which was forgiven by Mr. Gurm in March of 2001. The salary amount accrued includes vacation pay the contract is automatically renewed at the same terms every year on April 30, unless cancelled or opened for renegotiating by either Mr. Gurm or the board of directors of the Company. The Company has no other Employment contracts with any other party. (2) These stock purchase options were issued pursuant to Mr. Gurm's employment contract dated April 30, 1999. These options vest immediately, and can be exercised at $0.10 per share within 5 years from the date of grant. (3) Salary accrued from April 1, 2005 to March 31, 2007 includes vacation pay. (6) Year ended on March 31, 2006 (7) Year ended on March 31, 2005 OPTION TABLE

--------------------------------------------------------------------------------------------------------- Option Grants --------------------------------------------------------------------------------------------------------- Individual Grants --------------------------------------------------------------------------------------------------------- (a) (b) (c) (d) (e) --------------------------------------------------------------------------------------------------------- Number of Securities %of Total Options Exercise Name Underlying Options Granted to Employees Price Expiration Granted (#) ($/Sh) (USD) Date --------------------------------------------------------------------------------------------------------- Raj-Mohinder Gurm 200,000 26.08 $0.10 Apr 30, 2011 67,000 8.74 $0.10 Apr 30, 2011 --------------------------------------------------------------------------------------------------------- John H. Rennie 150,000 19.55 $0.10 Apr 30, 2011 --------------------------------------------------------------------------------------------------------- Stephen Sleigh 200,000 26.08 $0.10 Apr 30, 2011 --------------------------------------------------------------------------------------------------------- Canafra Financial 150,000 19.55 $0.10 Apr 30, 2011 ---------------------------------------------------------------------------------------------------------

The board of directors has approved the issuance of currently outstanding options to purchase 700,000 shares of Company's common stock to directors of Company, exercisable at $0.10 per share within five years from date of grant. Mr. Gurm's Employment contract calls for annual incentive option grants to purchase 67,000 shares of the Company' common stock at an exercise price of $0.10 per share or 20% below the market price if the shares are trading on the OTCBB, In addition the board of directors approved granting Mr. Gurm annual bonus option based upon the following formula: Options to purchase shares at 20% below market price (if trading on OTCBB, otherwise at $.10 per share) up to the value determined by 5% of the amount of annual profits from sales between $2,500,000 to $3,999,999 and 8% of the amount of annual profits from sales in excess of $4,000,000. Exercise terms and other option exercise details have not yet been finalized. Previously issued options were re- priced at $.10 US from $0.15 CDN. ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS The following table sets forth certain information regarding the beneficial Page 30 ownership of the Company's common stock as of the date of this Prospectus by (i) each person or entity known by the Company to be the beneficial owner of more than 5 % of the outstanding shares of common stock, (ii) each of the Company's directors and named executive officers, and (iii) all directors and executive officers of the Company as a group.

---------------------------------------------------------------------------------------------------- ---------------------------------------------------------------------------------------------------- Name and Address of Amount and Nature of Title of Class Beneficial Owner Beneficial Owner Percent of Class(1) ---------------------------------------------------------------------------------------------------- $.001 Par Raj-Mohinder S. Gurm Value 13718 91st Avenue Officer & Director 50.63% Common Stock Surrey, BC, Canada 8,404,280 Common(2) V3V 7X1 ---------------------------------------------------------------------------------------------------- $.001 Par Gerry Podersky-Cannon. Value 126-1628 W 1st, Avenue Officer & Director 5.63% Common Stock Vancouver, BC, Canada 934,186 Common(3)(4) V6J 1G1 ---------------------------------------------------------------------------------------------------- $.001 Par John Herman Rennie Value #402 5976 Tisdall Street Officer & Director 3.88% Common Stock Vancouver, BC, Canada 645,000 Common(3) V5Z 3N2 ---------------------------------------------------------------------------------------------------- $.001 Par Value All officers and directors Common Stock as a group (3 Persons) 9,983,466(2)(3)(4) 60.14% ----------------------------------------------------------------------------------------------------

(1)Percentages are calculated based on 15,047,614 shares outstanding as of June 30,2007 already subscribed for. Pursuant to Rule 13d-3(d)(1), the percentage of shares owned for each person includes shares deemed to be outstanding upon the exercise of options by such person within 60 days of the reported date, but are not deemed to be outstanding for the purpose of computing the percentage of the class by any other person. (2) Includes 685,000 shares currently issuable upon exercise of options at a price of$.10 per share. (3) Includes 300,000 shares currently issuable upon exercise of options at a price of $.10 per share to each of Messrs. Rennie and Podersky-Cannon. (4) Includes 713,152 shares held of record by Canafra Financial Ltd., a British Columbian corporation owned by Mr. Podersky-Cannon and his spouse, Donna Y. Maroz. Beneficial ownership is determined in accordance with the rules of the Commission and generally includes voting or investment power with respect to securities. Shares of the Company's common stock which may be acquired upon exercise of stock options which are currently exercisable or which become exercisable within 60 days of the date of the table are deemed beneficially owned by the option holders. Subject to community property laws, where applicable, the persons or entities named in the table above have sole voting and investment power with respect to all shares of the Company's common stock indicated as beneficially owned by them. Page 31 ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS As at March 31, 2007, the company owed $753,273 to related parties. Included in this amount is $582,083 owing to a Raj-Mohinder Gurm, a director and officer of the company, $106,051 owing to John Rennie, a director of the company, and $65,210 owing to various relatives of the director and officer of the company. During the current year, $11,835 of interest expense has been accrued as owing to a director and officer of the company, $8,490 to a director of the company, and $3,708 to relatives of a director and officer of the company. As at March 31, 2007, Raj-Mohinder Gurm, a director and officer of the company, owned approximately 51% of the issued and outstanding share of the company, and all directors and officers of the company owned approximately 60% of the company's shares. During the year ended March 31, 2007, the company granted to Raj-Mohinder Gurm, a director and officer of the company, 267,000 stock purchase options exercisable at $0.10 per share on or before April 30, 2011. The company also granted options to other three directors of the company as well. John Rennie and Gerry Podersky-Cannon received 150,000 options each and Stephen Sleigh received 200,000 option exercisable at $0.10 on or before April 30, 2011. As at March 31, 2007, directors and officers of the company held 1,552,000 share purchase options exercisable at $0.10 per share expiring between May 8, 2007 and April 30, 2011. ITEM 13. EXHIBITS Exhibit No. Description 3.1 Restated Certificate of Incorporation. (1) 3.2 Bylaws. (1) 10.1 Distributor agreement between Spectrum International Inc. and Canafra Management & Consulting Services dated Feb. 24, 2000 Raj-Mohinder Gurm dated April 12, 1999. (1) 10.7 Indenture between Raj-Mohinder S. Gurm and Spectrum Trading Inc. dated April 30, 1999. (2) 23.1 Consent of Auditors 31.1 Certificate of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 31.2 Certificate of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 32.1 Certificate of Chief Financial Officer and Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. (1) Incorporated herein by reference to Form SB-2A filed with the U.S. filed with the U.S. Securities and Exchange Commission on May 14, 2003. Page 32 (2) Incorporated herein by reference to Form SB-2 filed with the U.S. filed with the U.S. Securities and Exchange Commission on June 26, 2002. ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES The following table sets forth fees billed to us by our auditors during the fiscal years ended March 31, 2007 and March 31, 2006 for: (i) services rendered for the audit of our annual financial statements and the review of our quarterly financial statements, (ii) services by our auditor that are reasonably related to the performance of the audit or review of our financial statements and that are not reported as Audit Fees, (iii) services rendered in connection with tax compliance, tax advice and tax planning, and (iv) all other fees for services rendered. March 31, March 31, 2007 2006 ----------------------------- Audit Fees $ 9,400 $ 24,929 Audit Related Fees - - Tax Fees - - All Other Fees - - ----------------------------- Totals 9,400 24,929 ============================= Audit Fees. These fees consist of fees billed for professional services rendered for the audit of the Company's financial statements and review of the interim financial statements included in the Company's periodic reports, statutory and regulatory filings or engagements. Audit-Related Fees. These fees consist of fees billed for assurance and related services that are reasonably related to the performance of the audit or review of the Company's financial statements and are not reported under "Audit Fees." There were no Audit-Related services provided in fiscal 2007 or 2006. Tax Fees. These fees consist of fees billed for professional services for tax compliance, tax advice and tax planning in fiscal 2007 or 2006. All Other Fees. These fees consist of fees for products and services other than the services reported above. There were no management consulting services provided in fiscal years 2006 or 2005. Pre-Approval Policies and Procedures. The Company currently does not have a designated Audit Committee, and accordingly, the Company's Board of Directors' policy is to pre-approve all audit and permissible non- audit services provided by the independent auditors. These services may include audit services, audit-related services, and tax services and other services. Pre-approval is generally provided for up to one year and any pre-approval is detailed as to the particular service or category of services and is generally subject to a specific budget. The independent auditors and management are required to periodically report to the Company's Board of Directors regarding the extent of services provided by the independent auditors in accordance with this pre- approval, and the fees for the services performed to date. The Board of Directors may also pre-approve particular services on a case-by-case basis. Page 33 SIGNATURES In accordance with Section 13 of the exchange act, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Natco International, Inc. By: /s/ Raj-Mohinder S. Gurm ------------------------------ Name: Raj-Mohinder S. Gurm Date: August 22, 2008 Title Chief Executive Officer & CFO Pursuant to the Securities Act of 1934, this report has been signed below by the following persons on behalf of the Company and in the capacities and on the dates indicated. /s/Raj-Mohinder S. Gurm ------------------------------------------------------------- Director, CEO and CFO Aug. 22, 2008 /s/Gerry Podersky-Cannon ------------------------- Director Aug. 22, 2008 Page 34