10QSB/A 1 quarterjune302007.txt QUARTERLY REPORT JUNE 2007 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-QSB/A Annual Report Under Section 13 OR 15(d)of The Securities Exchange Act of 1934 For the quarterly period ended June 30, 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 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 [ ] Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the exchange Act). Yes [ ] No [X] 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 [ ] 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] NATCO INTERNATIONAL INC. FORM 10-QSB Quarter Ended December 31, 2006 Table of Content PART I - FINANCIAL INFORMATION ITEM I. Financial Statements 2 ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 9 ITEM 3. Controls and Procedures 11 PART II - OTHER INFORMATION ITEM 1. Legal Proceedings 12 ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds 12 ITEM 3. Defaults Upon Senior Securities 12 ITEM 4. Submission of Matters to a vote of Security Holders 12 ITEM 5. Other Information 12 ITEM 6. Exhibits 12 Signatures 13 Part 1 - FINANCIAL INFORMATION ITEM 1. Restated - August 20, 2008 NATCO INTERNATIONAL INC. DEVELOPMENT STAGE COMPANY INTERIM FINANCIAL STATEMENTS June 30, 2007 (Expressed in US Dollars) Unaudited Natco International Inc. Development Stage Company Interim Balance Sheets As at June 30, 2007 (Expressed in U.S. Dollars) Restated at June 30th, at March 31, 2007 2007 ASSETS CURRENT ASSETS Cash $ - $ - Accounts Receivable - - Tax Receivable - - Inventory - - Prepaid Assets 7,617 15,646 Assets held in discontinued operations 2,997 2,765 *- ---------------------------------- Total Current Assets 10,614 18,411 LONG TERM ASSETS Loan to PVT $ 955,000 $ - Interest Receivable on Loan to PVT 13,086 Product Rights 1 1 *- ---------------------------------- TOTAL ASSETS $ 978,701 $ 18,412 *- ---------------- --------------- LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Bank Indebtedness $ 18,766 $ 19,132 Accounts Payable 78,988 80,460 Loan Payable 735,000 - Accrued Liabilities 25,482 12,214 Due to related Parties 1,081,052 753,273 *- ---------------------------------- Total Current Liabilities 1,939,288 865,079 *- ---------------------------------- Total Liabilities 1,939,288 865,079 *- ---------------- --------------- STOCKHOLDERS' EQUITY Authorised: 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 15,047 Additional Paid-in Capital 1,022,737 1,072,687 Share Subscriptions 70,853 70,853 Other Comprehensive Income (298,637) (239,731) Deficit Accumulated during Development Stage (1,770,587) (1,765,523) *- ---------------- --------------- Total Stockholders' Equity (960,587) (846,667) *- ---------------- --------------- Total Liabilities and Stockholders' Equity $ 978,701 $ 18,412 *- ---------------- --------------- See accompanying notes Natco International Inc Development Stage Company Interim Statements of Operations For the Three Months Ended June 30 (Expressed in U.S. Dollars) Restated

Three Months Three Months Since Inception Ended June 30[th] Ended June 30[th] to June 30[th] 2007 2006 2007 Unaudited Unaudited Unaudited Restated INCOME Sales $ - $ - $ 392,635 - Cost of Sales - - 239,602 - Gross Profit $ - $ - $ 153,033 OPERATING EXPENSES Advertising and Promotion 4,683 - 72,836 Amortisation 768 46,985 Automotive 37,035 Bad Debts 8,474 Bank Charges 149 1,359 14,802 Commissions 3,509 Consulting Fees 17,980 Insurance 17,481 Legal and Accounting 25,060 277 343,590 Office and other 133 624 53,622 Rent 3,824 3,758 205,728 Research and Development 105,537 Salaries and benefits 17,044 66,679 634,083 Telephone and Utilities 1,888 808 54,521 Travel and trade shows 6,644 44,737 Currency Exchange Loss (Gain) - 962 - Total Expenses 52,781 80,917 1,661,882 - Net Loss from Operations (52,781) (80,917) (1,508,849) OTHER ITEMS Interest on PVT Loan 12,693 12,693 Other Income 188 25,389 Cancellation of Options 49,500 Interest Expense (14,476) (11,661) (269,957) $ 47,717 $ 11,473) $ 231,875) Loss from Continued operations (5,064) (92,390) (1,740,724) Net Income (loss) from discontinued operations - 1,051 (29,863) - Net Loss (5,064) (91,339) (1,770,587) - Other comprehensive income (58,906) (50,706) (298,637) - 0 Net Loss and Comprehensive loss $ 63,970) $ 142,045) $ 2,069,224) Basic and Diluted (Loss) per Share $ 0.00) $ 0.02) $ 0.14) Weighted Average Number of Shares 15,047,614 9,377,364 15,047,614

See accompanying notes Natco International Inc. Development Stage Company Interim Statements of Cash Flows For the Three Months Ended June 30, 2007 Expressed in U.S. Dollars Restated

Three Months Three Months (Inception) Ended Jun 30 Ended Jun 30 June 30th 2007 2006 2007 Unaudited Unaudited Unaudited Restated OPERATING ACTIVITIES Net (Loss) $ (5,064) $(91,339) $(1,770,587) Adjustments to reconcile Net (Loss) Common Stock issued for Services - - Depreciation - 768 46,985 Bad Debt 1,672 Write off of assets fom discontinued operations Interest due to related parties 14,233 10,131 81,872 Wages accrued to director 17,044 16,729 483,545 Cancelled stock based compensation (49,950) 49,950 - Changes in Operating Assets and Liabilities (Increase)/Decrease in Accounts Receivable - Interest receivable (13,086) - (13,086) Inventory - (2,155) - Prepaid expense 8,029 (13,596) (7,617) Increase/(Decrease) in Accounts Payable (1,472) 9,624 78,988 Increase/(Decrease) in Accrued Liabilities 13,268 (3,460) 25,482 Net Cash Provided by Operating Activities (16,998) (23,348) (1,072,746) Net cash provided by (used in ) (232) (6,885) 10,987 Discontinued operations (17,230) (30,233) (1,061,759) INVESTMENT ACTIVITIES Purchase of Equipment - - (62,642) Loan to PVC (955,000) - (955,000) Net Cash (Used) by Investment Activities (955,000) - (1,017,642) FINANCING ACTIVITIES Bank Indebtedness (366) 230 18,766 Due to Related party 296,502 34,152 515,635 Loans Payable 735,000 735,000 Proceeds from Subscriptions Receivable - 50,000 70,853 Proceeds from sale of Common Stock - - 1,037,784 Net Cash Provided by Financing Activities 1,031,136 84,382 2,378,038 Foreign Exchange (58,906) (54,149) (298,637) Change in cash and cash equivalents - - - Cash, Beginning of Period - - - Cash, End of Period $ - $ - $ - SUPPLEMENTAL INFORMATION: Interest Paid $ 243 $ 1,529 $ 135,588 Income Taxes Paid $ - $ - $ -

See accompanying notes. Natco International Inc. Development Stage Company Notes to Interim Financial Statements June 30, 2007 (Expressed in US Dollars) Restated ============================================================================= 1. CONDENSED FINANCIAL STATEMENTS The accompanying financial statements have been prepared by the Company without audit. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations and cash flows at June 30, 2007 and for all periods presented 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. It is suggested that these condensed financial statements be read in conjunction with the financial statements and notes thereto included in the Company's March 31, 2007 audited financial statements. The results of operations for the period ended June 30, 2007 are not necessarily indicative of the operating results for the full years. 2. GOING CONCERN The Company's financial statements are prepared using accounting principles generally accepted in the United States of America applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has not yet established an ongoing source of revenues sufficient to cover its operating costs and allow it to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, it could be forced to cease operations. In order to continue as a going concern, the Company will need, among other things, additional capital resources. Management's plans to obtain such resources for the Company include (1) obtaining capital from management and significant shareholders sufficient to meet its minimal operating expenses, and (2) completing the proposed merger with Photo Violation Technologies Corp. However, management cannot provide any assurances that the Company will be successful in accomplishing any of its plans. The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually secure other sources of financing and attain profitable operations. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. Natco International Inc. Development Stage Company Notes to Interim Financial Statements June 30, 2007 (Expressed in US Dollars) Restated ============================================================================= 3. SIGNIFICANT EVENTS i) On March 19, 2007 Company signed a binding Letter of agreement with Photo Violation Technologies Corp, a Canadian company that manufactures Parking Meters. ii) On July 15, 2007 Natco and Photo violation Technologies extended the letter of Agreement from July 16, 2007 to October 31, 2007 iii) All issued options were cancelled on June 20, 2007. No new options will be issued until the reverse merger with Photo Violation Technologies Corp is completed. iv) As of September 1, 2007 the company has leased offices at #204, 13569 - 76[th] Avenue, Surrey, BC, Canada. Total space is 750 square feet for total rent of $900.00 per month. This lease will expire on August 31, 2012. v) The company appointed Capital Group Communications as the Investor Relations firm. The Company will pay them with restricted stock, in the amount of 1.5 Million Common Shares the Company. vi) These statements are being restated because the original manufacturing business was closed and written off in preparation for new business. The statements should have been done to reflect the development stage of the company, and that was not done. The mistake is being corrected. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS 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 made 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. Our deficit as of June 30, 2007 was $(1,770,587). 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 had sales in both the jewellery cleaner and tire sealants product lines since 1998 to 2005, but sales did not contributed a significant amount to offset expenses. In the three months ended June 30, 2007 compared to the three months ended June 30, 2007, we had net loss of $(63,970) and $(142,045) 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 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. On July 15, 2007 the Letter of Agreement was extended to October 31, 2007. A definitive agreement is expected to be signed by he end of August 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, Niagara Falls, New York, 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 Three month period ended June 30, 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. In the current period company brought in $985,000 in debit financing of which $955,000 was lent to our RTO partner Photo Violation Technologies (PVT) as per our Letter of Agreement dated March 16, 2007 and extended on July 15, 2007. The company also cancelled all issued and outstanding Options owned by Its four directors. The Agreement with PVT stipulated that all Options be either cancelled or exercised. All directors chose to cancel their Options. 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 three months ended June 30, 2007: Natco used $16,988(2006 -$23,348) 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 debit financing activities was $1,031,136(2005 - $84,382), from unrelated Parties $735,000 loan, from related parties $296,502. The company loaned $955,000 to PVT as per our Letter of Agreement. The company owes $1,081,052 to related parties, the breakdown of which is listed in the financial statements, Note 8. 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 $1,939,288 as of June 30, 2007 by converting most of our debt to equity and paying the balance of approximately $300,0000 with additional financing. PVT will pay off all the money being lent to them after the RTO is completed. 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 to meet our obligation to complete the RTO Post RTO entity will need additional capital. Our estimated fixed costs at this time are approximately $5400 per month, which includes $900 for lease payments, $500 for utilities, $3,000 for loan interest and principle payments, and $1,000 for miscellaneous expenses. We will have to raise approximately $5400 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 31,2007 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. ITEM 3. 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. PART II - OTHER INFORMATION ITEM 1. 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 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS The Company issued no unregistered securities in the three Months ended on June 30, 2007. However there are subscriptions of approximately $70,000 on the company books that will have to be issued in the next quarter. ITEM 3. DEFAULTS UPON SENIOR SECURITIES Not Applicable ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS Not Applicable ITEM 5. OTHER INFORMATION Not Applicable ITEM 6. EXHIBITS 31.1 Certificate of Chief Executive Officer and Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 31.2 Certificate of CFO Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 32.1 Certificate of Chief Executive Officer and Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 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 Registrant and in the capacities and on the dates indicated. /s/Raj-Mohinder S. Gurm ------------------------------------------------------------- Director, Chief Executive Officer and Chief Financial Officer August 20, 2008