10QSB/A 1 natcoquarter3december2007.txt RESTATED QUARTERLY REPORT DECEMBER 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 December 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 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 December 30, 2007: 20,447,614 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, 2007 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 8 ITEM 3. Controls and Procedures 10 PART II - OTHER INFORMATION ITEM 1. Legal Proceedings 10 ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds 11 ITEM 3. Defaults Upon Senior Securities 11 ITEM 4. Submission of Matters to a vote of Security Holders 11 ITEM 5. Other Information 11 ITEM 6. Exhibits 11 Signatures 11 Part 1 - FINANCIAL INFORMATION ITEM 1. NATCO INTERNATIONAL INC. (formerly Spectrum International Inc.) Development Stage Company INTERIM FINANCIAL STATEMENTS December 31, 2007 (Expressed in US Dollars) Unaudited Statement 1 Natco International Inc. (formerly Spectrum International Inc.) Development Stage Company Interim Balance Sheets As at December 31,2007 Expressed in U.S. Dollars December 31 March 31 Assets 2007 2007 (unaudited) - - --------------------------------------------------------------------------- Current Accounts receivable $ - $ - Inventory - - Prepaid expenses 8,639 15,646 Assets held in discontinued operations - 2,765 ---------------------- ----- 8,639 18,411 Long Term Loan to PVT 1,485,000 - Interest Receivable on PVT Loan 70,687 - Product rights 1 1 -------------------------------- $ 1,564,327 $ 18,412 ============================================================================== Liabilities - ----------------------------------------------------------------------------- Current Bank indebtedness $ 23,268 19,132 Accounts payable 99,866 80,460 Loan Payable 1,751,981 - Accrued liabilities 82,294 12,214 Due to related parties 822,803 753,273 -------------------------------- 2,780,212 865,079 -------------------------------- 2,780,212 865,079 -------------------------------- Stockholders' Deficiency - - ---------------------------------------------------------------------------- Capital Stock Authorized: 50,000,000 common shares, with a par value of $0.001 5,000,000 preferred shares, with a par value of $0.001 Issued: 20,447,614 (2007 - 15,097,614) common shares $ 20,447 15,047 Additional paid-in capital 1,092,740 1,072,687 Share subscriptions - 70,853 Other comprehensive loss (458,643) (239,731) Deficit (1,870,430) (1,765,523) -------------------------------- (1,215,885) (846,667) -------------------------------- $ 1,564,327 $ 18,412 On behalf of the Board Raj Gurm, Director Gerry Podersky-Cannon, Director ============================================================================ See accompanying notes Statement 2 Natco International Inc (formerly Spectrum International Inc.) Development Stage Company Interim Statements of Operations For the Nine Months Ended December 31 Expressed in U.S. Dollars Unaudited

Nine Months Nine Months Three Months Three Months Ended Ended Ended Ended December 31 December 31 December 31 December 31 Since 2007 2006 2007 2006 Inception ---------------------------------------------------------------------------------------------------------------------- (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) Sales $ - $ - $ - $ - $ 392,635 Cost of sales - - - - 239,602 ------------ ------------ ------------ ------------ ------------ Gross profit - - - - 153,033 ------------ ------------ ------------ ------------ ------------ Expenses Advertising and promotion 17,614 - 3,677 - 85,767 Amortization - 2,419 - 820 46,985 Automotive - - - - 37,035 Bad debts - - - - 8,474 Bank charges 618 2,206 196 273 15,271 Commissions - - - - 3,509 Consulting fees - - - - 17,980 Insurance - - - - 17,481 Legal and accounting 49,468 41,333 23,021 11,951 367,998 Office and other 8,582 1,105 6,288 416 61,418 Rent 7,316 11,188 1,896 3,691 209,220 Research and development - - - - 105,537 Salaries and benefits 53,263 99,754 18,325 16,434 719,802 Telephone and utilities 4,110 1,907 1,095 484 56,743 Travel and trade shows 1,615 6,778 1,615 (34) 46,352 ------------ ------------ ------------ ------------ ----------- 142,586 166,690 56,113 34,035 1,801,187 ------------ ------------ ------------ ------------ ----------- Net loss before other items (142,586) (166,690) (56,113) (34,035) (1,648,154) ------------ ------------ ------------ ------------ ----------- Other items Interest on PVT Loan 66,457 - 25,517 - 66,457 Other income - 186 - (1) 25,389 Cancellation of Options 49,950 - - - Interest expense (75,748) (26,670) (33,111) (3,185) (331,229) ------------ ------------ ------------ ------------ ----------- 40,209 (26,484) (7,594) (3,186) (189,883) ------------ ------------ ------------ ------------ ----------- Loss from Cont'd operation (101,927) (193,174) (63,707) (37,221) (1,838,037) Net Income (Loss) from Discontinued operations (2,980) 808 - (4) (32,843) Net loss and comprehensive loss $ (104,907) $ (192,366) $ (63,707) $ (37,225) $ (1,870,880) ============ ============ ============ ============ =========== Weighted average number of shares outstanding 20,447,614 14,847,614 20,447,614 20,447,614 $ 20,447,614 ============ ============ ============ ============ =========== Basic and diluted loss per share $ 0.01 $ 0.01 $ 0.01 $ 0.01 $ 0.01 ============ ============ ============ ============ =========== Comprehensive Loss Net loss for the period $ 104,907) $ (192,366) (63,707) (37,225) (1,870,880) Foreign currency translation adjustment (218,912) (1,876) (97,173) 47,485 (458,643) Total comprehensive loss for the period $(323,819) $ (194,242) (160,880) 10,260 (2,329,523) ============= ============== ============= ============ ============ ================================================================================================================================

See accompanying notes Statement 3 Natco International Inc. (formerly Spectrum International Inc.) Development Stage Company Interim Statements of Cash Flows For the Nine Months Ended December 31,2007 Expressed in U.S. Dollars Unaudited

Since Cash Flows Provided By (Used In) 2007 2006 Inception --------------------------------------------------------------------------------------------------- (Unaudited) (Unaudited) (Unaudited) Operating Activities Net loss from continuing operations $ (104,907) $ (193,308) (1,870,430) Adjustments to determine cash flows: Depreciation - 1,599 54,063 Write off of assets form disc 0per 8,579 Interest due to related parties 56,351 20,293 128,150 Wages accrued to director 53,263 49,800 539,396 Cancelled Stock based compensation (49,950) 49,950 Change in non-cash working capital: Accounts receivable 2,765 - Interest receivable (70,687) - (70,687) Bad debt 2,980 Inventory - (1,699) Prepaid expenses 7,007 ( 1) (8,639) Accounts payable 19,406 (14,070) 99,867 Accrued liabilities 70,080 (17,431) 82,294 -------------------------------------------------------- Net cash used in continued operations (13,692) (94,795) (1,037,407) Net cash provided by (used in) discontinued operations (2,980) (5,613) -------------------------------------------------------- (16,672) (100,408) (1,037,407 -------------------------------------------------------- Purchases if fixed assets (62,642) Investing activities Loan to PVT (1,485,000) - (1,485,000) -------------------------------------------------------- 1,485,000) - (1,547,642) ------------------------------------------------------- Financing Activities Bank indebtedness 4,136 4,717 23,268 Due to related parties (40,084) (487,010) 155,255 Loans Payable 1,751,981 - 1,751,981 Issuance of Capital stock 75,404 547,025 1,113,168 Share subscriptions ( 70,853) 50,000 ----------------------------------------------------------- 1,720,584 105,298 3,043,692 ----------------------------------------------------------- Foreign exchange (218,912) (4,890) 458,643 Cash position - Beginning of Year - - - ---------------------------------------------------------- Cash position - End of Year $ - $ - $ - ===================================================================================================== Supplementary cash flows information: Related to operating activities Interest paid $ 19,397 $ 4,246 $140,003 Income Tax Paid $ - $ - $ -

See accompanying notes Natco International Inc. (formerly Spectrum International Inc.) Development Stage Company Notes to Interim Financial Statements December 31, 2007 Expressed in US Dollars =============================================================================== 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 December 31, 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 December 31, 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) seeking out and completing a merger with an existing operating company. 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. (formerly Spectrum International Inc.) Development Stage Company Notes to Interim Financial Statements December 31, 2007 Expressed in US Dollars =============================================================================== 3. SIGNIFICANT EVENTS i) The Company issued 1,250,000 to DC Consulting for some IR work and financing. ii) On March 19, 2007 Company signed a binding Letter of agreement with Photo Violation Technologies Corp, a Canadian company that manufactures Parking Meters. On July 15, 2007 Natco and Photo violation Technologies extended the letter of Agreement from July 16, 2007 to October 31, 2007 On October 31, 2007 Natco and Photo Violation Technologies extended the letter of agreement from October 31, 2007 to December 31, 2007. On December 4, 2007, PVT gave the company 7 day cancellation notice and on December 12, 2007, the Company sued PVT for induced breach, damages, and other claims. 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 December 31, 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 jewelry cleaner and tire sealants product lines since 1998 to 2005, but sales did not contributed a significant amount to offset expense. In the 9 months ended Dec 31, 2007 compared to the 9 months ended December 31, 2006, we had net loss of $(104,907) and $(192,366) respectively. Consequently, we discontinued all manufacturing activities and signed a reverse merger agreement with photo Violation Technologies Corp (PVT) of Vancouver, British Columbia, Canada The merger agreement with PVT fell through and we are looking for new target company to do a merger. Results of Operations Nine month period ended December 31, 2007 The company has no business at this time and the only asset it has is Loan to PVT in the amount of $1,485,000. Consequently we had no sales in the nine months ended December 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. The company 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 related and un related parties. 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 $2,780,212 as of December 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 a new merger can take place. We believe this sum, less the payments we have indicated, would provide us with sufficient working capital to meet our obligations. 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. We are currently suing PVT for the money it owes us plus damages. If this money is paid back we will not need any financing. All debits could be paid and we will have enough working capital to sustain us for the next 12 months. 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. On December 12, 2007, the Company commenced legal proceedings in British Columbia Supreme Court against Photo Violation Technologies Corp. ("PVT") and its president, Fred Mitschele (aka Fred Marlatt), claiming punitive, exemplary and consequential damages and other remedies arising from breach of contract and wrongful conduct on the part of Mitschele. In the Action, the Company claimed PVT has breached the agreement among the Company, PVT and Mitschele entered into on or about March 16, 2007, which provided for completion reverse merger between the Company and PVT. The Company also claimed in Court documents that Mitschele engaged in a number of wrongful acts, including inducing breach of contract, attempting to divert prospective investors from Company to PVT, failing to provide financial statements and other necessary documents. The Company took a number of significant steps towards completion of the Agreement including, advancing approximately $1.5 million to PVT. In this Action, the Company is seeking to recover these funds, plus obtain additional damage and other relief against PVT and Mistchele arising from their conduct. ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS The Company issued the following unregistered securities in the three Months ended on December 31, 2007. DC Consulting (1) 1,250,000 Shares (1) These shares were issued to DC Consulting for consulting work for $0.001 per share. 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 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