10QSB/A 1 natcoquarter2september2007re.txt RESTATED QUARTERLY REPORT SEPTEMBER 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 September 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 September 30, 2007: 19,197,614 DOCUMENTS INCORPORATED BY REFERENCE None Transitional Small Business Disclosure Format (check one): Yes [ ] No [X] NATCO INTERNATIONAL INC. FORM 10-QSB Quarter Ended September 30, 2007 Table of Content PART I - FINANCIAL INFORMATION ITEM I. Financial Statements 3 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 September 30, 2007 (Expressed in US Dollars) Unaudited Statement 1 Natco International Inc. Development Stage Company Interim Balance Sheets As at September 30,2007 (Expressed in U.S. Dollars) Restated Sep-30 Mar-31 2007 2007 (Unaudited) (Audited) ASSETS CURRENT ASSETS Cash $ - $ - Accounts Receivable - - Tax Receivable - - Prepaid Assets 9,171 15,646 Assets held in discontinued operations 2,765 ----------------------------------- Total Current Assets 9,171 18,411 LONG TERM ASSETS Loan to PVT $ 1,300,000 $ - Interest Receivable on Loan to PVT 44,100 Product Rights 1 1 ----------------------------------- Total Assets $ 1,353,272 $ 18,412 ----------------- --------------- STOCKHOLDER LIABILITIES CURRENT LIABILITIES Bank Indebtedness $ 23,109 $ 19,132 Accounts Payable 108,403 80,460 Accrued Liabilities 51,973 12,214 Loan Payable 1,050,000 - Due to related Parties 1,176,043 753,273 ----------------------------------- Total Current Liabilities 2,409,528 865,079 ----------------------------------- Total Liabilities 2,409,528 865,079 ----------------- --------------- 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 - 19,197,614 (2007 - 15,097,614) respectively Paid in Capital 19,197 15,047 Additional Paid-in Capital 1,092,740 1,072,687 Share Subscriptions - 70,853 Other Comprehensive Income (361,470) (239,731) Deficit Accumulated during Development Stage (1,806,723) (1,765,523) ----------------- --------------- Total Stockholders' Equity (1,056,256) (846,667) ----------------- --------------- Total Liabilities and Stockholders' Equity $ 1,353,272 $ 18,412 ----------------- --------------- See accompanying notes Statement 2 Natco International Inc Development Stage Company Interim Statements of Operations For the Six Months Ended September 30 (Expressed in U.S. Dollars) Restated

Three Months Three Months Six Months Six Months Since Inception Ending Sept Ending Sept Ending Sept Ending Sept to September 30 30 30 30 30 2007 2006 2007 2006 2007 Unaudited Unaudited Unaudited Unaudited Unaudited Restated Restated Restated INCOME Sales $ - $ - $ - $ - $ 392,635 $ - Cost of Sales - - - - 239,602 $ - Gross Profit $ - $ - $ - $ - $ 153,033 OPERATING EXPENSES Advertising and Promotion 9,254 - 13,937 - 82,090 Amortisation 831 1,599 46,985 Automotive 37,035 Bad Debts 8,474 Bank Charges 273 574 422 1,933 15,075 Commissions 3,509 Consulting Fees 17,980 Insurance 17,481 Legal and Accounting 1,387 29,105 26,447 29,382 344,977 Office and other 2,161 65 2,294 689 55,783 Rent 1,596 3,739 5,420 7,497 207,324 Research and Development 105,537 Salaries and benefits 17,894 16,641 34,938 83,320 651,527 Telephone and Utilities 1,127 615 3,015 1,423 55,648 Travel and trade shows 168 - 6,812 44,737 Currency Exchange Loss (Gain) - - 962 - Total Expenses 33,692 51,738 86,473 132,655 1,695,124 - Net Loss from Operations (33,692) (51,738) (86,473) (132,655) (1,542,091) OTHER ITEMS Interest on PVT Loan 28,247 40,940 40,940 Other Income (1) 187 25,389 Cancellation of Options 450 49,950 - Interest Expense (28,161) (11,824) (42,637) (23,485) (298,118) $ 536 $ (11,825) $ 48,253 $ (23,298) $ (231,789) Loss from Continued Operations (33,156) (63,563) (38,220) (155,953) (1,773,880) Net Income (loss) from discontinued operations (Note (2,980) (239) (2,980) 812 (32,843) 12) - Net Loss (36,136) (63,802) (41,200) (155,141) (1,806,723) - Other comprehensive income (62,833) 1,345 (121,739) (49,361) (361,470) Net Loss and Comprehensive loss $ (98,969) $ (62,457) $ (162,939) $ (204,502) $ (2,168,193) Basic and Diluted (Loss) per Share $ (0.01) $ (0.00) $ (0.01) $ (0.01) $ (0.11) Weighted Average Number of Shares 19,197,614 15,047,614 19,197,614 15,047,614 19,197,614

See accompanying notes Statement 3 Natco International Inc. Development Stage Company Interim Statements of Cash Flows For the Six Months Ended September 30,2007 (Expressed in U.S. Dollars) Restated

Six Months Six Months (Inception) Ending Sept 30 Ending Sept 30 Ending Sept 30 2007 2006 2007 Unaudited Unaudited Unaudited Restated OPERATING ACTIVITIES Net (Loss) $ (41,200) $ (155,141) $ (1,806,723) Adjustments to reconcile Net (Loss) Common Stock issued for Services - - Depreciation - 1,599 46,985 Write off of assets from discontinued operations 1,672 Interest due to related parties 23,812 20,293 91,451 Wages accrued to director 34,938 33,370 501,439 Cancelled stock based compensation (49,950) 49,950 Changes in Operating Assets and Liabilities (Increase)/Decrease in Accounts Receivable - - Interest receivable (44,100) - (44,100) Inventory - (2,141) - Prepaid expense 6,475 (28) (9,171) Increase/(Decrease) in Accounts Payable 27,943 (14,070) 108,403 Increase/(Decrease) in Accrued Liabilities 39,759 (16,915) 51,973 Net Cash Provided by Operating Activities (2,323) (83,083) (1,058,071) Net cash provided by (used in ) 2,765 (5,271) 13,984 Discontinued operations 442 (88,354) (1,044,087) INVESTMENT ACTIVITIES Purchase of Equipment - - (62,642) Loan to PVC (1,300,000) - (1,300,000) Net Cash (Used) by Investment Activities (1,300,000) - (1,362,642) FINANCING ACTIVITIES Bank Indebtedness 3,977 2,799 23,109 Due to Related party 364,020 88,339 583,153 Loans Payable 1,050,000 1,050,000 Proceeds from Subscriptions Receivable (70,853) 50,000 - Proceeds from sale of Common Stock 74,153 - 1,111,937 Net Cash Provided by Financing Activities 1,421,297 141,138 2,768,199 Foreign Exchange (121,739) (52,784) (361,470) Change in cash and cash equivalents - - - Cash, Beginning of Period - - - Cash, End of Period $ - $ - $ - SUPPLEMENTAL INFORMATION: Interest Paid $ 18,825 $ 3,423 $ 154,363 Income Taxes Paid $ - $ - $ -

See accompanying notes Natco International Inc. Development Stage Company Notes to Interim Financial Statements September 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 September 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 September 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. Page 7 Natco International Inc. Development Stage Company Notes to Interim Financial Statements September 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) During the current period, the company issued 850,000 common shares for subscriptions from prior years to three non-affiliate individuals. vii) The company also hired Barry Davis and his group to do some Investor Relation work. They were issued 1,800,000 restricted common shares to seven different individuals. viii) On October 31, 2007 Natco and Photo Violation Technologies extended the letter of agreement from October 31, 2007 to December 31, 2007. ix) 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 September 30, 2007 was $(1,806,723). 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 Six months ended September 30, 2007 compared to the Six months ended September 30, 2006, we had net loss of $(155,141) and $(41,200) 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. On October 31, 2007 The Letter of agreement was further extended to December 31, 2007. A definitive agreement is expected to be signed by the end of November 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 Six month period ended September 30, 2007 The company is in the process of completing the RTO agreement. It is expected that the RTO will be done in January 2008. 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 $1,414,020 in debit financing of which $1,300,000 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, and further extended to December 31, 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 six months ended September 30, 2007: Natco used $3,422(2006 -$83,083) 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 $3,977(2006 - $88,339), from unrelated Parties $1,050,000 loan, from related parties $364,020. The company loaned $1,300,000 to PVT as per our Letter of Agreement. The company owes $1,176,043 to related parties, the breakdown of which is listed in the financial statements, 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 $2,409,528 as of September 30, 2007 by converting most of our debt to equity and paying the balance of approximately $300,000 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 the following unregistered securities in the six Months ended on September 30, 2007. Arsenio Buenaventure (1) 150,000 Shares Douglas Page (1) 50,000 Shares Sohan Bains (1) 150,000 Shares Barry Davis Roth IRA (2) 735,000 Shares Barry Davis (2) 765,000 Shares Thomas Sweeney (2) 180,000 Shares Steve Nelson (2) 30,000 Shares Irwin Kaufman (2) 30,000 Shares Jack Stewert (2) 30,000 Shares Doug Newman (2) 30,000 Shares CG Communications (3) 1,500,000 Shares (1) These shares were issued to non-affiliate investors. The shares were issued in reliance upon the exemption from registration provided by Section 4(2) under the Securities Act of 1933 for transactions not involving a public offering. for $0.10 per share. (2) These shares were issued to Barry Davis group for investor relation work for $100.00. The shares were issued in reliance upon the exemption from registration provided by Section 4(2) under the Securities Act of 1933 for transactions not involving a public offering. (3) These shares were issued to CG communications for investor relation work for $1500.00. The shares were issued in reliance upon the exemption from registration provided by Section 4(2) under the Securities Act of 1933 for transactions not involving a public offering. 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, CEO and CFO August 22, 2008