U.S.
      SECURITIES AND EXCHANGE COMMISSION


Washington,
      D.C. 20549





FORM
      10-QSB/A




Amendment
      Number 1




x
      QUARTERLY REPORT
      PURSUANT SECTION 13 OR 15(d) OF THE


SECURITIES
      EXCHANGE ACT OF 1934





For
      the
      quarterly period ended March 31, 2007





o
      TRANSITION REPORT
      PURSUANT TO SECTION 13 OR 15(d) OF THE


SECURITIES
      EXCHANGE ACT OF 1934





For
      the
      transition period from ____ to _____





Commission
      file number: 000-31091




Equicap,
      Inc.


(Exact
      name of small business issuer as specified in its charter)





Nevada
              33-0652593(State
                  or other jurisdiction of
              (I.R.S.
                  employerincorporation
                  or organization)
              identification
                  number)
 
 10510
                  Hillsboro RoadSanta
                  Ana, California
              92705(Address
                  of principal executive offices)
              (Zip
                  Code)





Issuer’s
      telephone number: (904) 507-4937





Not
      Applicable


(Former
      name, former address and former


fiscal
      year, if changed since last report)





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
      whether the issuer is a shell company (as defined in Rule 12b-2 of the Exchange
      Act).  Yes
      ___  No
x










APPLICABLE
      ONLY TO CORPORATE ISSUERS





State
      the
      number of shares outstanding of each of the issuer’s classes of common equity,
      as of the latest practicable date: 28,169,013 shares of common stock, par value
      $.001 per share, outstanding as of May 8, 2007.





Transitional
      Small Business Disclosure Format (Check one):  YES o  NO
x







**EQUICAP,
      INC.**




**-
      INDEX -**


Page**PART
                  I - FINANCIAL INFORMATION**:Item
                  1.
              Financial
                  Statements
              1Consolidated
                  Balance Sheet as of March 31, 2007 (unaudited)
              2Consolidated
                  Statements of Operations and Comprehensive Loss for the Three and
                  Nine Months Ended March 31, 2007 and 2006 (unaudited)
              3Consolidated
                  Statements of Cash Flows for the Nine Months Ended March 31, 2007
                  and 2006
                  (unaudited)
              4Notes
                  to Consolidated Financial Statements, March 31, 2007
              5Item
                  2.
              Management’s
                  Discussion and Analysis of Financial Condition and Results of
                  Operations
              11Item
                  3.
              Controls
                  and Procedures
              19**PART
                  II - OTHER INFORMATION**:Item
                  1.
              Legal
                  Proceedings
              20Item
                  2.
              Unregistered
                  Sales of Equity Securities and Use of Proceeds
              20Item
                  3.
              Defaults
                  Upon Senior Securities
              20Item
                  4.
              Submission
                  of Matters to a Vote of Security Holders
              20Item
                  5.
              Other
                  Information
              20Item
                  6.
              Exhibits
              20Signatures
              21










**PART
      I - FINANCIAL INFORMATION**





**Item
      1. Financial Statements.**





Statements
      made in this Form 10-QSB, as amended (the “Quarterly Report”), that are not
      historical or current facts are “forward-looking statements” made pursuant to
      the safe harbor provisions of Section 27A of the Securities Act of 1933, as
      amended (the “Act”), and Section 21E of the Securities Exchange Act of 1934, as
      amended (the “Exchange Act”). These statements often can be identified by the
      use of terms such as “may”, “will”, “expect”, “believe”, “anticipate”,
“estimate”, “approximate”, or “continue”, or the negative thereof. Equicap, Inc.
      (the “Company”) intends that such forward-looking statements be subject to the
      safe harbors for such statements. The Company wishes to caution readers not
      to
      place undue reliance on any such forward-looking statements, which speak only
      as
      of the date made. Any forward-looking statements represent management’s best
      judgment as to what may occur in the future. However, forward-looking statements
      are subject to risks, uncertainties and important factors beyond the control
      of
      the Company that could cause actual results and events to differ materially
      from
      historical results of operations and events and those presently anticipated
      or
      projected. These factors include our current dependence on a limited number
      of
      sources of products and customers, demand for our products, pricing pressures
      on
      our products caused by demand and competition, delivery deadlines, customer
      satisfaction, our ability to generate sales and expand our customer base,
      warranty obligations and claims, operating a portion of our business in the
      Peoples Republic of China, currency controls and exchange rate exposure, and
      the
      other risk factors discussed in our reports filed with the Securities and
      Exchange Commission. The Company disclaims any obligation to revise any
      forward-looking statements to reflect events or circumstances after the date
      of
      such statement or to reflect the occurrence of anticipated or unanticipated
      events. The Company does not undertake any obligation to update forward looking
      statements.





1


**EQUICAP,
        INC.**
 
 **(FORMERLY
        USUNCO AUTOMOTIVE LIMITED AND SUBSIDIARY)**
 
 **CONSOLIDATED
        BALANCE SHEET**
 
 **AS
        OF MARCH 31, 2007**
 
 **(UNAUDITED)**
 
 **ASSETS**
  **(Restated)****CURRENT
                  ASSETS**Cash
                  and cash equivalents
              
              $
              12,871,855Accounts
                  receivable, net of allowance of $5,551
              
              
              236,534Inventory
              
              
              61,327**Total
                  Current Assets**
              
              
              **13,169,716****OTHER
                  ASSET**Deferred
                  compensation
              
              
              308,381**Total
                  Assets**
              
              **$**
              **13,478,097****LIABILITIES
                  AND STOCKHOLDERS’ EQUITY****LIABILITIES**Accounts
                  payable and accrued expenses
              
              $
              639,836Taxes
                  payable
              
              
              39,866Other
                  payables
              
              
              17,910**Total
                  Liabilities**
              
              
              **697,612****MINORITY
                  INTEREST**
              
              
              **2,600,000****STOCKHOLDERS’
                  EQUITY**Preferred
                  stock, $.001 par value, 10,000,000 sharesauthorized,
                  -0- shares issued and outstanding
              
              
              -Common
                  stock, $.001 par value, 100,000,000 sharesauthorized,
                  28,169,013 shares issued and outstanding
              
              
              28,169Stock
                  subscriptions receivable - IBC
              
              
              (5,330
              )Stock
                  subscriptions receivable - Usunco
              
              
              (33,120
              )Additional
                  paid-in capital
              
              
              11,117,636Accumulated
                  other comprehensive income
              
              
              17,697Accumulated
                  deficit
              
              
              (944,567
              )**Total
                  Stockholders’ Equity**
              
              
              **10,180,485****Total
                  Liabilities and Stockholders' Equity**
              
              **$**
              **13,478,097**
  The
        accompanying notes are an integral part of these consolidated financial
        statements.
  2
  **EQUICAP,
        INC.**
 
 **(FORMERLY
        USUNCO AUTOMOTIVE LIMITED AND SUBSIDIARY)**
 
 **CONSOLIDATED
        STATEMENTS OF OPERATIONS**
 **AND
        COMPREHENSIVE LOSS**
 
 **(UNAUDITED)**
 
 **Three
                  Months Ended**
              
              **Nine
                  Months Ended****March
                  31,**
              
              **March
                  31,****2007**
              
              **2006**
              
              **2007**
              
              **2006****(Restated)**
              
              **(Restated)**
              
              **(Restated)**
              
              **(Restated)****REVENUE**
              
              **$**
              **491,981**
              
              **$**
              **186,699**
              
              **$**
              **1,206,077**
              
              **$**
              **315,789****COST
                  OF SALES**
              
              
              **436,637**
              
              
              **166,126**
              
              
              **1,100,715**
              
              
              **282,603****GROSS
                  PROFIT**
              
              
              **55,344**
              
              
              **20,573**
              
              
              **105,362**
              
              
              **33,186****EXPENSES**Selling,
                  general and administrative
              
              
              990,236
              
              
              20,503
              
              
              1,108,588
              
              
              42,690**(LOSS)
                  INCOME FROM OPERATIONS**
              
              
              **(934,892**
              **)**
              
              **70**
              
              
              **(1,003,226**
              **)**
              
              **(9,504**
              **)****OTHER
                  EXPENSES**
              
              
              **1,073**
              
              
              **2,923**
              
              
              **1,073**
              
              
              **2,923****(LOSS)
                  INCOME BEFORE PROVISION****FOR
                  INCOME TAXES**
              
              
              **(935,965**
              **)**
              
              **(2,853**
              **)**
              
              **(1,004,299**
              **)**
              
              **(12,427**
              **)****PROVISION
                  FOR INCOME TAXES**
              
              
              **825**
              
              
              **800**
              
              
              **825**
              
              
              **800****NET
                  LOSS**
              
              
              **(936,790**
              **)**
              
              **(3,653**
              **)**
              
              **(1,005,124**
              **)**
              
              **(13,227**
              **)****OTHER
                  COMPREHENSIVE INCOME**Foreign
                  currency translation adjustment
              
              
              17,697
              
              
              -
              
              
              17,697
              
              
              -**COMPREHENSIVE
                  LOSS**
              
              
              **($919,093**
              **)**
              
              **($
                  3,653**
              **)**
              
              **($
                  987,427**
              **)**
              
              **($
                  13,227**
              **)****LOSS
                  PER COMMON SHARE**Basic
              
              
              ($
                  .04
              )
              
              ($
                  -
              )
              
              ($
                  .05
              )
              
              ($
                  -
              )Diluted
              
              
              ($
                  .04
              )
              
              ($
                  -
              )
              
              ($
                  .05
              )
              
              ($
                  -
              )**WEIGHTED
                  AVERAGE SHARES OF****COMMON
                  STOCK**Basic
              
              
              20,839,906
              
              
              18,323,944
              
              
              19,568,101
              
              
              18,323,944Diluted
              
              
              20,839,906
              
              
              18,323,944
              
              
              19,568,101
              
              
              18,323,944
  The
        accompanying notes are an integral part of these consolidated financial
        statements.
  3
  **EQUICAP,
        INC.**
 
 **(FORMERLY
        USUNCO AUTOMOTIVE LIMITED AND SUBSIDIARY)**
 
 **CONSOLIDATED
        STATEMENTS OF CASH FLOWS**
 
 **(UNAUDITED)**
  **Nine
                  Months Ended**
                **March
                  31,****2007**
              
              **2006****(Restated)**
              
              **(Restated)****CASH
                  FLOWS FROM OPERATING ACTIVITIES****Net
                  (Loss) Income**
              
              
              **($
                  1,005,124**
              **)**
              
              **($
                  13,227**
              **)**Adjustments
                  to reconcile net income to net cashprovided
                  by operating activities:Non
                  cash note conversion cost
              
              
              897,131
              
              
              -Share-based
                  compensation
              
              
              17,987
              
              
              -Allowance
                  for bad debts
              
              
              (5,246
              )
              
              -Non-cash
                  payments of rent
              
              
              3,150
              
              
              3,150Changes
                  in assets and liabilities:Accounts
                  receivable
              
              
              121,518
              
              
              (41,114
              )Inventory
              
              
              59,395
              
              
              (265,797
              )Accounts
                  payable and accrued expenses
              
              
              143,431
              
              
              318,342Other
                  payables
              
              
              15,812
              
              
              6,000**Total
                  Adjustments**
              
              
              **1,253,178**
              
              
              **20,581****NET
                  CASH PROVIDED BY****OPERATING
                  ACTIVITIES**
              
              
              **248,054**
              
              
              **7,354****CASH
                  FLOWS FROM FINANCING ACTIVITIES**Proceeds
                  from sale of stock
              
              
              -
              
              
              1,789Net
                  proceeds from private placement
              
              
              9,876,306
              
              
              -Proceeds
                  from minority investment
              
              
              2,600,000
              
              
              -**NET
                  CASH PROVIDED BY FINANCING ACTIVITIES**
              
              
              **12,476,306**
              
              
              **1,789****EFFECT
                  OF FOREIGN CURRENCY TRANSLATION****ON
                  CASH**
              
              
              **17,697**
              
              
              **-****NET
                  INCREASE IN CASH AND CASH EQUIVALENTS**
              
              
              **12,742,057**
              
              
              **9,143****CASH
                  AND CASH EQUIVALENTS AT****BEGINNING
                  OF PERIOD**
              
              
              **129,798**
              
              
              **-****CASH
                  AND CASH EQUIVALENTS AT END OF PERIOD**
              
              **$**
              **12,871,855**
              
              **$**
              **9,143****CASH
                  PAID FOR INCOME TAXES**
              
              
              -
              
              
              -**CASH
                  PAID FOR INTEREST**
              
              
              -
              
              
              -
 
 The
        accompanying notes are an integral part of these consolidated financial
        statements.
  4
  **EQUICAP,
        INC.**
 
 **(FORMERLY
        USUNCO AUTOMOTIVE LIMITED AND SUBSIDIARY)**
 
 **NOTES
        TO CONSOLIDATED FINANCIAL STATEMENTS**
 
 **MARCH
        31, 2007 AND 2006**
 
 **(UNAUDITED)**
  **NOTE
        1 - ORGANIZATION AND NATURE OF BUSINESS**
 
 Equicap,
        Inc. (“the Company”), a Nevada corporation, is a developer and distributor of
        diesel engine products and automotive parts sourced from China and sold to
        customers primarily located in China and North America.
 
 On
        March
        7, 2007, the Company and Usunco Automotive, Ltd. (“Usunco”) entered into a Share
        Exchange Agreement (“Exchange Agreement”) which was consummated on March 9,
        2007. Under the terms of the Exchange Agreement, the Company acquired all
        of the
        outstanding equity securities of Usunco in exchange for 18,323,944 shares
        of
        common stock of Equicap, Inc.
 
 For
        accounting purposes, because the Company had been a public shell company
        prior
        to the share exchange, the share exchange was treated as a recapitalization
        of
        the Company. As such, the historical financial information prior to the share
        exchange is that of Usunco and its subsidiaries. Historical share amounts
        have
        been restated to reflect the effect of the share exchange.
 
 On
        June
        18, 2006, Usunco acquired 100% of IBC Automotive Products Inc (“IBC”), a
        California Corporation as of May 14, 2004 (date of inception), through a
        Share
        Exchange Agreement of 28% of Usunco’s shares. IBC is considered a “predecessor”
business to Usunco as its operations constituted the business activities
        of
        Usunco formed to consummate the acquisition of IBC. The consolidated financial
        statements reflect all predecessor statements of income and cash flow activities
        from the inception of IBC in May 2004.
  **NOTE
        2 - INTERIM FINANCIAL STATEMENTS**
 
 These
        interim financial statements should be read in conjunction with Usunco’s audited
        financial statements for the year ended June 30, 2006, as not all disclosures
        required by generally accepted accounting principles for annual financial
        statements are presented. The interim financial statements follow the same
        accounting policies and methods of computations as the audited financial
        statements for the year ended June 30, 2006.
 
 **NOTE
        3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**
 
 The
        accompanying unaudited financial statements have been prepared in accordance
        with generally accepted accounting principals (GAAP) applicable to interim
        financial information and with the requirements of Form 10-QSB and Item 310
        of
        Regulation S-B of the Securities and Exchange Commission. Accordingly, they
        do
        not include all of the information and footnotes required by accounting
        principles generally accepted in the United States of America for complete
        financial statements. Interim results are not necessarily indicative of results
        for a full year. In the opinion of management, all adjustments considered
        necessary for a fair presentation of the financial position and the results
        of
        operations and cash flows for the interim periods have been
        included.
 
 **NOTE
        4 - RESTATEMENT OF CONSOLIDATED FINANCIAL STATEMENTS**
 
 The
        consolidated balance sheet as of March 31, 2007, and the consolidated statements
        of operations and comprehensive loss, and cash flows for the three and nine
        months ended March 31, 2007 and 2006 have been restated to correct the
        conversion of the convertible note during March 2007, rental expenses and
        allowances for bad debts.
  5
  **EQUICAP,
        INC.**
 
 **(FORMERLY
        USUNCO AUTOMOTIVE LIMITED AND SUBSIDIARY)**
 
 **NOTES
        TO CONSOLIDATED FINANCIAL STATEMENTS**
 
 **MARCH
        31, 2007 AND 2006**
 
 **(UNAUDITED)**
  **NOTE
        4 - RESTATEMENT OF CONSOLIDATED FINANCIAL STATEMENTS** (continued)
 
 The
        following is a reconciliation of the balance sheet captions at March 31,
        2007
        from previously reported to restated:
 
 **Previously****Reported**
              
              **Adjustments**
              
              **Restated**Accounts
                  receivable, net
              
              $
              242,085
              
              
              ($
                  5,551
              )
              $
              236,534Due
                  to shareholder
              
              $
              10,565
              
              
              ($
                  10,565
              )
              
              -Other
                  payables
              
              $
              7,345
              
              $
              10,565
              
              $
              17,910Additional
                  paid-in capital
              
              $
              10,220,505
              
              $
              897,131
              
              $
              11,117,636Stock
                  subscriptionsreceivable
                  -IBC
              
              
              ($
                  12,680
              )
              $
              7,350
              
              
              ($
                  5,330
              )Accumulated
                  deficit
              
              
              ($
                  34,535
              )
              
              ($
                  910,032
              )
              
              ($
                  944,567
              )
  The
        following is a reconciliation of the previously reported and restated statements
        of operations and comprehensive loss for the three and nine months ended
        March
        31, 2007:
 
 **Three
                  Months**
              
              **Nine
                  Months****Ended**
              
              **Ended****March
                  31, 2007**Net
                  loss previously reported
              
              
              ($
                  43,855
              )
              
              ($
                  110,089
              )Selling,
                  general and administrative expenses
              
              
              (892,935
              )
              
              (895,035
              )Net
                  loss, as restated
              
              
              ($936,790
              )
              
              ($1,005,124
              )Comprehensive
                  loss previously reported
              
              
              ($
                  26,158
              )
              
              ($
                  92,392
              )Selling,
                  general and administrative expenses
              
              
              (892,935
              )
              
              (895,035
              )Comprehensive
                  loss, as restated
              
              
              ($919,093
              )
              
              ($
                  987,427
              )Loss
                  per share previously reportedBasic
              
              
              ($
                  -
              )
              
              ($
                  .01
              )Diluted
              
              
              ($
                  -
              )
              
              ($
                  .01
              )Increase
                  (decrease)Basic
              
              
              ($
                  .04
              )
              
              ($
                  .04
              )Diluted
              
              
              ($
                  .04
              )
              
              ($
                  .04
              )Loss
                  per share, as restatedBasic
              
              
              ($
                  .04
              )
              
              ($
                  .05
              )Diluted
              
              
              ($
                  .04
              )
              
              ($
                  .05
              )
  6
 
 **EQUICAP,
        INC.**
 
 **(FORMERLY
        USUNCO AUTOMOTIVE LIMITED AND SUBSIDIARY)**
 
 **NOTES
        TO CONSOLIDATED FINANCIAL STATEMENTS**
 
 **MARCH
        31, 2007 AND 2006**
 
 **(UNAUDITED)**
 
 **NOTE
        4 - RESTATEMENT OF CONSOLIDATED FINANCIAL STATEMENTS** (continued)
 
 The
        following is a reconciliation of the previously reported and restated statements
        of operations and comprehensive loss for the three and nine months ended
        March
        31, 2006:
 
 **Three
                  Months**
              
              **Nine
                  Months****Ended**
              
              **Ended****March
                  31, 2006**Net
                  loss previously reported
              
              
              ($
                  2,603
              )
              
              ($
                  10,077
              )Selling,
                  general and administrative expenses
              
              
              (1,050
              )
              
              (3,150
              )Net
                  loss, as restated
              
              
              ($3,653
              )
              
              ($13,227
              )Comprehensive
                  loss previously reported
              
              
              ($
                  2,603
              )
              
              ($
                  10,077
              )Selling,
                  general and administrative expenses
              
              
              (1,050
              )
              
              (3,150
              )Comprehensive
                  loss, as restated
              
              
              ($3,653
              )
              
              ($13,227
              )Loss
                  per share previously reportedBasic
              
              
              ($
                  -
              )
              
              ($
                  -
              )Diluted
              
              
              ($
                  -
              )
              
              ($
                  -
              )Increase
                  (decrease)Basic
              
              
              ($
                  -
              )
              
              ($
                  -
              )Diluted
              
              
              ($
                  -
              )
              
              ($
                  -
              )Loss
                  per share, as restatedBasic
              
              
              ($
                  -
              )
              
              ($
                  -
              )Diluted
              
              
              ($
                  -
              )
              
              ($
                  -
              )
   7
  **EQUICAP,
        INC.**
 
 **(FORMERLY
        USUNCO AUTOMOTIVE LIMITED AND SUBSIDIARY)**
 
 **NOTES
        TO CONSOLIDATED FINANCIAL STATEMENTS**
 
 **MARCH
        31, 2007 AND 2006**
 
 **(UNAUDITED)**
 
 
 **NOTE
        4 - RESTATEMENT OF CONSOLIDATED FINANCIAL STATEMENTS** (continued)
  The
          following is a reconciliation of the previously reported to restated statement
          of cash flows for the nine months ended March 31, 2007:
 **Previously****Reported**
              
              **Adjustments**
              
              **Restated**Cash
                  flows from operating activities:Net
                  Loss
              
              
              ($110,089
              )
              
              ($895,035
              )
              
              ($1,005,124
              )Deferred
                  compensation
              
              
              ($326,368
              )
              $
              326,368
              
              $
              -Other
                  payables
              
              $
              7,346
              
              $
              8,466
              
              $
              15,812Convertible
                  note conversion cost
              
              $
              -
              
              $
              897,131
              
              $
              897,131Share-based
                  compensation
              
              $
              -
              
              $
              17,987
              
              $
              17,987Allowance
                  for bad debts
              
              $
              -
              
              
              ($
                  5,246
              )
              
              ($
                  5,246
              )Non-cash
                  payments of rent
              
              $
              -
              
              $
              3,150
              
              $
              3,150Cash
                  flows from financing activities:Net
                  proceeds from private placement
              
              $
              10,202,674
              
              
              ($326,368
              )
              $
              9,876,306Due
                  to shareholder
              
              $
              8,466
              
              
              ($
                  8,466
              )
              $
              -
 
 The
        following is a reconciliation of the previously reported to restated statement
        of cash flows for the nine months ended March 31, 2006:
 
 **Previously****Reported**
              
              **Adjustments**
              
              **Restated**Cash
                  flows from operating activities:Net
                  Loss
              
              
              ($10,077
              )
              
              ($3,150
              )
              
              ($13,227
              )Non-cash
                  payments of rent
              
              $
              -
              
              $
              3,150
              
              $
              3,150Other
                  payables
              
              $
              -
              
              $
              6,000
              
              $
              6,000Cash
                  flows from financing activities:Due
                  to shareholder
              
              $
              6,000
              
              
              ($
                  6,000
              )
              $
              -
  **NOTE
        5 - INVENTORY**
 
 Inventory
        at March 31, 2007 and 2006 consisted of starters, alternators and
        parts.
 
 8
  **EQUICAP,
        INC.**
 
 **(FORMERLY
        USUNCO AUTOMOTIVE LIMITED AND SUBSIDIARY)**
 
 **NOTES
        TO CONSOLIDATED FINANCIAL STATEMENTS**
 
 **MARCH
        31, 2007 AND 2006**
 
 **(UNAUDITED)**
  **NOTE
        6 - DEFERRED COMPENSATION**
 
 As
        described in Note 8 (“Stock based compensation), the Company granted options to
        employees and warrants to the private placement agent. Following SFAS No.
        123R,
        the Company recognizes expenses on the fair value of the options and warrants.
        Deferred compensation represents stock based compensation that will be expensed
        in the future periods based on the vesting time of such options and warrants.
 
 **NOTE
        7 - STOCK AUTHORIZATION AND ISSUANCE**
 
 On
        March
        9, 2007, the Company completed the sale of an aggregate of 8,450,704 shares
        of
        its common stock to a limited number of institutional investors in a private
        placement transaction pursuant to offering exemptions under the Securities
        Act
        of 1933. The shares, which represent approximately 30% of our outstanding
        common
        stock on an after-issued basis, were sold at a price of $1.42 per share,
        for net
        proceeds of approximately $10 million. The net proceeds from this transaction
        will be used for general working capital purposes.
 
 The
        Company has a registration payment arrangement with regard to the common
        stock
        issued in the private offering. The Company was required to file a registration
        statement within 45 days of closing and cause the registration statement
        to
        become effective on or prior to 150 days after the closing date. The
        registration statement was filed within the 45 day limit thus fulfilling
        part of
        this obligation. In addition, the Company is required to use reasonable
        commercial efforts to maintain the registration statement’s effectiveness and
        file additional registration statements in the future, to continue to provide
        to
        the registered sellers the opportunity to sell the shares of restricted stock
        that they hold. In the event the Company does not satisfy the registration
        obligations of the registration rights agreement, (“Registration Default”), the
        Company shall pay the investors an amount in cash equal to 1% of the aggregate
        investment amount for each 30-day period of a Registration Default. The maximum
        penalty that the Company may incur under this registration payment arrangement
        is 10% of the aggregate investment amount, or $1,200,000. Any payments made
        are
        to be prorated for any portion of a 30-day period of a Registration Default.
        The
        Company does not believe that payment under the registration payment arrangement
        is probable, and therefore no related liability has been recorded in the
        accompanying financial statements.
 
 Although
        the Company has the obligation to register shares of common stock for other
        persons under the above described registration rights agreement, the Company
        is
        not obligated to pay liquidated damages in the event that their shares are
        not
        registered or the registration statement is not available for their
        sale.
 
 **NOTE
        8 - STOCK BASED COMPENSATION**
 
 As
        of
        March 31, 2007, there are outstanding 366,550 options to employees (“Employee
        Options”) and 422,535 warrants (“Agent Warrants”) to the private placement
        agent. Both the Employee Options and Agent Warrants vest over three years
        and
        have a life of five years. In the three month period ended March 31, 2007,
        the
        Company recorded approximately $18,000 of stock based compensation based
        on the
        fair value method of SFAS. N0. 123R using the following assumptions: Volatility
        of  34.94% , risk
        free interest rate of 4.63%, dividend yield of 0%, and expected life of 5
        years.
        No estimate of forfeitures was made as the Company has a short history of
        granting options.
 
 The
        fair
        value of the options and warrants was determined based on the number of shares
        granted and the quoted price of the Company’s common stock on the date of grant.
        The fair value of stock based compensation was determined using the
        Black-Scholes model.
  9
  **EQUICAP,
        INC.**
 
 **(FORMERLY
        USUNCO AUTOMOTIVE LIMITED AND SUBSIDIARY)**
 
 **NOTES
        TO CONSOLIDATED FINANCIAL STATEMENTS**
 
 **MARCH
        31, 2007 AND 2006**
 
 **(UNAUDITED)**
 
 **NOTE
        9 - CONVERSION OF CONVERTIBLE NOTE OF EQUICAP**
 
 Equicap
        and Fountainhead Capital Partners Limited entered into a convertible note
        on
        September 30, 2006, the principal of which was for working capital and discharge
        of accrued payables of Equicap. As part of the Share Exchange, Fountainhead
        agreed to convert the outstanding principal and accrued interest of
        approximately $100,000 into 702,132 shares of common stock, contingent on
        the
        closing of the Share Exchange. Upon the conversion, the note was cancelled.
        The
        shares were issued on the basis that Fountainhead is an accredited investor,
        under Section 4(2) of the Securities Act. As such the shares being received
        on
        conversion are restricted stock. Equicap has agreed to register the shares
        issued in the conversion. Equicap will also take such action to make Rule
        144
        available for the sale of the shares issued on conversion, the extent permitted
        by the securities laws. Upon conversion, a charge of approximately $900,000
        was
        made to general and administrative expenses with a respective increase to
        additional paid-in capital. The convertible note was relieved from the balance
        sheet while increasing common stock by approximately $700 and additional
        paid-in
        capital by approximately $99,200.
 
 **NOTE
        10 - MAKE GOOD ESCROW AGREEMENT**
 
 In
        connection with the Offering, for the benefit of the investors, eight of
        the
        former shareholders of Usunco, some of whom are the officers and directors
        of
        Equicap, have agreed to place into escrow an aggregate of 10,140,846 shares
        of
        common stock issued in the Share Exchange. If the consolidated financial
        statements of Equicap for the fiscal year ending June 30, 2007, prepared
        in
        accordance with United States generally accepted accounting principles,
        consistently applied, reflect either (i) less than $2,320,000 of after-tax
        net
        income or (ii) earnings before income tax provision and before minority interest
        of less than $3,200,000, then 3,042,254 shares of common stock in escrow
        will be
        distributed to the investors on a pro rata basis for no additional
        consideration.
 
 If
        either
        (i) the earnings per share reported in the Annual Report on Form 10-KSB of
        Equicap for the fiscal year ending June 30, 2008 is less than $0.343 on a
        fully
        diluted basis (as equitably adjusted for any stock splits, stock combinations,
        stock dividends or similar transactions), (ii) the earnings per share before
        income tax provision and before minority interest of the company for the
        fiscal
        year ending June 30, 2008, is less than $0.446 on a fully diluted basis (as
        equitably adjusted for any stock splits, stock combinations, stock dividends
        or
        similar transactions), (iii) the after tax net income reported in the Annual
        Report on Form 10-KSB of the company for the fiscal year ending June 30,
        2008,
        is less than $10,000,000, or (iv) the earnings before income tax provision
        and
        before minority interest reported in the Annual Report on Form 10-KSB of
        the
        company for the fiscal year ending June 30, 2008, is less than $13,020,000,
        then
        7,098,592 shares of common stock in escrow will be distributed to the investors
        on a pro rata basis for no additional consideration. Any shares not distributed
        to the investors will be returned to the persons who placed them in escrow.
        Any
        make good shares issued to the investors will be subject to the registration
        rights under the Registration Rights Agreement.
 
 According
        to SAB 79, if these shares are released to either the investors or the former
        shareholders of Usunco, they will be treated as an expense for the amount
        of the
        market value of the shares as of the date of release. This recognition of
        expense will not occur if the shares are forfeited or cancelled and are not
        released to either the investors or the former shareholders of
        Usunco.
 
 **NOTE
        11 - SUBSEQUENT EVENTS**
 
 None.


10




**Item
      2.**  **Management’s
      Discussion and Analysis of Financial Condition and Results of Operations or
      Plan
      of Operations.**




The
        following is management’s discussion and analysis of certain significant factors
        that have affected our financial position and operating results during the
        periods included in the accompanying consolidated financial statements, as
        well
        as information relating to the plans of our current management. The following
        discussion and analysis should be read in conjunction with our consolidated
        financial statements and the related notes thereto and other financial
        information contained elsewhere in this Form 10-QSB/Amendment No.1.
  **OVERVIEW**
  Equicap,
        Inc. (“Equicap”) does business through its subsidiary, Usunco Automotive Limited
        (“Usunco”) which in turn operates through IBC Automotive Products, Inc. (“IBC”),
        its wholly-owned subsidiary established under the laws of the State of
        California, and through Zhejiang ZhongChai Machinery Co., Ltd. (the “ZhongChai
        JV”), a 75%-owned joint venture established under the laws of the People’s
        Republic of China (the “PRC” or “China”). Through its two operating
        subsidiaries, the company is engaged in the development and distribution
        of
        automotive parts, diesel engines and related products in industrial and
        agricultural sectors, sourced from China and sold to customers located primarily
        in China and North America.
  Equicap
        was a public “shell” company with nominal assets until March 9, 2007, when it
        conducted a share exchange with the equity owners of Usunco (“Share Exchange”)
        and sold common stock in a private placement to eleven accredited and
        institutional investors for gross proceeds of $12,000,000. Prior to the Share
        Exchange, its sole business had been to identify, evaluate and investigate
        various companies with the intent that, if such investigation warranted,
        a
        reverse merger transaction be negotiated and completed pursuant to which
        Equicap
        would acquire a target company with an operating business with the intent
        of
        continuing the acquired company’s business as a publicly held
        entity.
  *Share
        Exchange*
  Equicap
        and Usunco entered a Share Exchange Agreement on March 7, 2007 which was
        consummated on March 9, 2007. Under the terms of the Exchange Agreement,
        Equicap
        acquired all the outstanding equity securities of Usunco in exchange for
        18,323,944 shares of common stock of Equicap, and thereby Equicap acquired
        Usunco as a wholly-owned subsidiary. It is contemplated that Equicap will
        hold a
        stockholders meeting to change the name of the company at some point in the
        future to reflect the acquisition of Usunco.
  Prior
        to
        the Share Exchange, Equicap is a reporting company under Section 12(g) of
        the
        Securities Exchange Act of 1934, as amended and is current in its reporting
        under the Exchange Act.
  Upon
        execution of the Exchange Agreement, Mr. Peter Wang was appointed a director
        and
        the president of Equicap. Mr. Thomas W. Colligan, the sole officer and director
        of Equicap before the Share Exchange, submitted his resignation letter resigning
        from all executive offices, effective on March 9, 2007 and with respect to
        his
        position as a director, effective on March 29, 2007. On March 29, 2007,
        additional persons were appointed to the board of directors and as management
        persons.
  11
  In
        connection with the Share Exchange, Equicap engaged Fountainhead Capital
        Partners Limited, to act as a financial advisor. At the closing of the Share
        Exchange, Fountainhead was paid an advisory fee of $450,000 by Equicap.
  In
        connection with the Share Exchange, vFinance Investments, Inc., for advice
        in
        connection with the transaction, was issued 161,633 shares of common stock
        as
        compensation. The shares were issued as restricted stock on the basis that
        vFinance is an accredited investor under Section 4(2) of the Securities Act.
        These shares have registration rights.
  Since
        the
        former shareholders of Usunco own approximately 65% of the shares of common
        stock of Equicap, the former shareholders of Usunco have control over Equicap.
        As a result, Usunco is deemed to have been the acquiring company in the Share
        Exchange for accounting purposes, and the Share Exchange transaction is treated
        as a reverse acquisition with Usunco as the acquirer and Equicap as the acquired
        party.
  *Conversion
        of Convertible Note of Equicap*
  Equicap
        and Fountainhead Capital Partners Limited entered into a convertible note
        on
        September 30, 2006, the principal of which was for working capital and discharge
        of accrued payables of Equicap. As part of the Share Exchange, Fountainhead
        agreed to convert the outstanding principal and accrued interest of
        approximately $100,000 into 702,132 shares of common stock, contingent on
        the
        closing of the Share Exchange. Upon the conversion, the note was cancelled.
        The
        shares were issued as restricted stock on the basis that Fountainhead is
        an
        accredited investor, under Section 4(2) of the Securities Act. Equicap has
        agreed to register the shares issued in the conversion.
  *Private
        Placement Offering*
  As
        a
        condition to the Share Exchange, Equicap and Usunco conducted a private
        placement offering of its common stock to accredited, institutional investors
        in
        which Equicap raised gross proceeds of $12 million (“Offering”) from 11
        investors under an exemption from registration under Section 4(2) of the
        Securities Act. The Offering was a condition to the Share Exchange, and the
        Share Exchange was contingent on the Offering.
  Equicap
        sold common stock for gross proceeds of $12,000,000 in the Offering. After
        commissions and expenses related to the Offering and the $450,000 advisory
        fee
        payable to Fountainhead, Equicap received net proceeds of approximately
        $10,000,000 in the Offering. The investors were issued an aggregate of 8,450,704
        shares of common stock, representing approximately 30% of the issued and
        outstanding common stock of Equicap. The price per share of common stock
        was
        $1.42.
  12
  vFinance
        Investment, Inc. was the exclusive placement agent for the Offering. For
        their
        services as placement agent, Equicap paid vFinance a fee equal to approximately
        $983,000. Equicap also reimbursed vFinance its expenses of approximately
        $120,000. In addition, Equicap issued to vFinance a five-year warrant to
        purchase an aggregate of 422,535 shares of common stock at an exercise price
        of
        $2.13 per share (“Agent Warrant”). The warrant vests over a three-year period
        and terminates March 6, 2012.
  In
        connection with the Offering, Equicap granted registration rights to the
        investors and the holders of the Agent Warrant, and provided for registration
        rights for certain former principal shareholders of Equicap through piggy-back
        rights for their respective shares of common stock. Equicap entered into
        one
        registration rights agreement with the aforementioned persons. Equicap agreed
        to
        register the sale of the 8,450,704 shares of common stock issued to investors
        in
        the Offering, the 161,633 shares of common stock issued to vFinance, the
        422,535
        shares of common stock underlying the Agent Warrant and the 1,161,632 shares
        held by the former principal shareholders of Equicap. In addition, if certain
        make good shares are distributed to the investors, Equicap will be obligated
        to
        register these shares in addition. If any of the above shares are not eligible
        for registration because of the rules and regulations of the Securities and
        Exchange Commission, when they are eligible for registration, Equicap will
        be
        obligated to take such action to have them registered for sale by the holder
        by
        filing successive registration statements. The initial registration statement
        for sale the common shares was filed within the time limits of the registration
        rights agreement, and Equicap must achieve its effectiveness within 150 days
        of
        the closing date of the Offering, and if these actions are not achieved by
        those
        dates then Equicap must pay each of, and only, the investors 1% of the share
        purchase price paid by such investor for each month thereafter that the
        investors cannot publicly sell the shares of common stock covered by that
        registration statement The same penalties for the failure to file or have
        declared effective a registration statement within the stated time periods
        and
        maintain its effectiveness also apply to the subsequent required registration
        statements. The maximum penalties under the liquidated damages provision
        payable
        to the investors is 10% of the share purchase price paid by the investors
        in the
        Offering. The above timing and number of shares are subject to various
        conditions, and the registration statements are subject to the rules and
        regulations of the SEC and the staff interpretations thereof. The registration
        statements required for the investors and vFinance under the registration
        rights
        agreement must be kept effective until all the shares of these parties are
        sold
        or may be sold without limitation under Rule 144k.
  The
        former principal shareholders of Equicap who have piggy-back rights also
        have a
        demand registration right after all the shares of the investors and vFinance
        have either been sold or may be sold without limitation under Rule 144k.
        The
        company is obliged to keep this registration statement effective until all
        the
        shares have been sold or are eligible for sale under Rule 144k.
  Equicap
        completed the capitalization of its PRC joint venture shortly after the above
        described private placement. Pursuant to PRC law, foreign joint ventures
        have to
        be capitalized pursuant to the terms of their approval. Equicap, through
        Usunco
        contributed $8,000,000 and its joint venture partner contributed $2,600,000,
        all
        of which will be used as working capital. Future capital contributions between
        the parties are to be on a 75% - 25% basis, with Usunco being the majority
        party.
  13
  **CRITICAL
        ACCOUNTING POLICIES AND ESTIMATES**
  Below
        is
        a description of accounting policies that we consider critical to the
        preparation and understanding of our financial statements. In addition, certain
        amounts included in or affecting our financial statements and related disclosure
        must be estimated, which requires us to make assumptions with respect to
        values
        or conditions which cannot be known with certainty at the time the financial
        statements are prepared. Actual results may differ from these estimates under
        different assumptions or conditions. The selection of critical accounting
        policies, the judgments and other uncertainties affecting the application
        of
        those policies and the sensitivity of reported results to changes in conditions
        and assumptions are factors to be considered when reviewing our consolidated
        financial statements.
  We
        believe that the critical accounting policies set forth below involve the
        most
        significant judgments and estimates used in the preparation of our consolidated
        financial statements. We regularly evaluate these policies, in light of
        historical results and experience, consultation with experts, trends and
        other
        methods we consider reasonable in the particular circumstances, as well as
        our
        forecasts as to how these might change in the future.
  *Principles
        of Consolidation*
  The
        consolidated financial statements include the accounts of the parent company
        and
        the subsidiaries. Significant intercompany accounts and transactions have
        been
        eliminated in consolidation.
  *Cash
        and Cash Equivalents*
  In
        accordance with Statement of Financial Accounting Standards No. 95, “Statement
        of Cash Flows,” the company considers all highly liquid instruments with
        original maturities of three months or less to be cash and cash
        equivalents.
  *Accounts
        Receivable*
  Trade
        accounts receivable are stated at the amount management expects to collect
        from
        balances outstanding at the end of the period. Based on its assessment of
        the
        credit history with customers having outstanding balances and current
        relationships with them, management makes conclusions whether any realization
        of
        losses on balances outstanding at period end will be deemed uncollectible
        based
        on the age of the receivables. We reserve 5% of accounts receivable balances
        that have been outstanding for greater than 90 days.
  *Inventory*
  Inventories
        are stated at the lower of cost or net realizable value. Cost is calculated
        on
        the weighted-average basis and includes all costs to acquire and other costs
        incurred in bringing the inventories to their present location and condition.
        We
        evaluate the net realizable value of our inventories on a regular basis and
        record a provision for loss to reduce the computed weighted-average cost
        if it
        exceeds the net realizable value.
  14
  *Revenue
        Recognition*
  In
        accordance with the provisions of Staff Accounting Bulletin No. 103, revenue
        is
        recognized when merchandise is shipped, and title and risk of loss pass to
        the
        customer and collectibility is reasonably assured. The goods are shipped
        directly from the factories to the customers. Revenue is recorded as the
        sales
        price of goods and services, net of rebates and discounts.
  *Sales
        Return and Warranties*
  Generally
        the company does not accept return of products once sold to customers.
 Instead, the company provides a one-year limited warranty covering
        manufacturing defects and/or product functional failures. After evaluation
        and
        confirmation of customer complaints, the company either replaces the defective
        products or accepts returns by crediting the customer's account. Such
        replacements or returns as well as handling costs therefrom are passed through
        to the suppliers.
  *Advertising
        Costs*
  The
        company expenses the cost of advertising as incurred. Advertising costs for
        the
        quarter ended March 31, 2007 were insignificant.
  *Income
        Taxes*
  Deferred
        income taxes are computed using the asset and liability method, such that
        deferred tax assets and liabilities are recognized for the expected future
        tax
        consequences of temporary differences between financial reporting amounts
        and
        the tax basis of existing assets and liabilities based on currently enacted
        tax
        laws and tax rates in effect in the United States of America for the periods
        in
        which the differences are expected to reverse. Income tax expense is the
        tax
        payable for the period plus the change during the period in deferred income
        taxes. A valuation allowance is provided when it is more likely than not
        that
        some portion or all of the deferred tax assets will not be
        realized.
  *Fair
        Value of Financial Instruments*
  The
        company considers the carrying amounts reported in the consolidated balance
        sheet for current assets and current liabilities qualifying as financial
        instruments and approximating fair value.
  *Use
        of Estimates*
  The
        preparation of financial statements in conformity with GAAP requires management
        to make estimates and assumptions that affect the reported amounts of assets,
        liabilities, revenues, expenses, and related disclosures at the date of the
        financial statements and during the reporting period. Actual results could
        differ from those estimates.
  15
  **Operating
        Results**
  ***Three
        Months Ended March 31, 2007 Compared to Three Months Ended March 31,
        2006***
  *Revenue*
  Revenue
        increased by $ 305,282
        or 163.5% to $491,981 for the three months ended March 31, 2007 compared
        to
        $186,699 for the three months ended March 31, 2006. All sales revenue for
        the
        three months ended March 31, 2007 and 2006 were generated by the IBC subsidiary
        from distribution of starters and alternators.
  *Cost
        of Sales and Gross Margin*
  Cost
        of
        sales increased by $ 270,511
        or 162.8% to $436,637 for the three months ended March 31, 2007 compared
        to
        $166,126 for the three months ended March 31, 2006, in line with the increase
        in
        sales revenue. The Company has maintained its gross margin at approximately
        11%
        in the two periods.
  *Selling,
        General and Administrative Expenses*
  Selling,
        general and administrative (“SG&A”) expenses consisted primarily of labor
        cost and related overhead costs for sales, marketing, finance, legal, human
        resources and general management. Such costs also include the expenses
        recognized for stock-based compensation pursuant to FAS 123(R).
  SG&A
        expenses increased by $969,733 to $990,236 in the three months ended March
        31,
        2007 from $20,503 in the three months ended March 31, 2006. The increase
        was
        mainly attributed to the recognition of expense of $897,131 as a result of
        the
        conversion of outstanding convertible notes in aggregate principal and accrued
        interest of approximately $100,000 into 702,132 shares of common stock, which
        was at a discount
        to the sale price of the shares in the March 2007 private placement offering.
        Increase in SG&A was also attributed to the increase
        in costs related to being a public company, including professional services
        related to auditing, legal and other services, costs associated with the
        new
        recruitments and operating expenses in China, and non-cash expenses amounting
        to
        $17,987 recognized for stock based compensation related to stock options
        and
        warrants granted in the period pursuant to SFAS 123(R).
  *Net
        Loss*
  Net
        loss
        increased by
        $933,137 to $936,790 in the three months ended March 31, 2007 from $3,653
        in the
        three months ended March 31, 2006. The increase was mainly attributed to
        the
        increase in general and administrative expenses, comprised of the expenses
        recognized for conversion of convertible notes, costs related to being a
        public
        company including professional services related to auditing, legal and other
        services, costs associated with the new recruitments and operating expenses
        in
        China, and non-cash expenses recognized for stock based compensation related
        to
        stock options and warrants granted in the period pursuant to SFAS 123(R),
        partially offset by increased sales revenue and gross profit for the period,
        and
        the interest income amounting to $11,746 from the deposit of unused portion
        of
        the proceeds from the private placement consummated in March 2007.
  16
  ***Nine
        Months Ended March 31, 2007 Compared to Nine Months Ended March 31,
        2006***
  *Revenue*
  Revenue
        increased by $ 890,288
        or 281.9% to $1,206,077 for the nine months ended March 31, 2007 compared
        to
        $315,789 for the nine months ended March 31, 2006. All sales revenue for
        the
        nine months ended March 31, 2007 and 2006 were generated by the IBC subsidiary
        from distribution of starters and alternators.
  *Cost
        of Sales and Gross Margin*
  Cost
        of
        sales increased by $ 818,112
        or 289.5% to $1,100,715 for the nine months ended March 31, 2007 compared
        to
        $282,603 for the nine months ended March 31, 2006. This increase in cost
        of
        sales was primarily due to increased prices of materials such as copper during
        the first six months ended December 31, 2006. The Company gradually has managed
        to increase sales prices in the latter part of 2006, and the overall gross
        margin for the nine months ended March 31, 2007 was approximately 8.7%, compared
        to 10.5% during the same period last year.
  *Selling,
        General and Administrative Expenses*
  Selling,
        general and administrative (“SG&A”) expenses consisted primarily of labor
        cost and related overhead costs for sales, marketing, finance, legal, human
        resources and general management. Such costs also include the expenses
        recognized for stock-based compensation pursuant to FAS 123(R).
  SG&A
        expenses increased by $1,065,898 to $1,108,588 in the nine months ended March
        31, 2007 from $42,690 in the nine months ended March 31, 2006. The increase
        was
        mainly attributed to the recognition of expense of $897,131 as a result of
        the
        conversion of the outstanding convertible notes in aggregate principal amount
        and accrued interest of approximately $100,000 into 702,132 shares of common
        stock, at a discount
        to the sale price of the shares in the private placement offering. Increase
        in
        SG&A was also attributed to the increase
        in costs related to being a public company including professional services
        related to auditing, legal and other services, costs associated with the
        new
        recruitments and operating expenses in China, and non-cash expenses amounting
        to
        $17,987 recognized for stock based compensation related to stock options
        and
        warrants granted in the period pursuant to SFAS 123(R).
  *Net
        Loss*
  Net
        loss
        increased by
        $991,897 to $1,005,124 in the nine months ended March 31, 2007 from $13,227
        in
        the nine months ended March 31, 2006. The increase was mainly attributed
        to the
        increase in general and administrative expenses, comprised of expenses
        recognized for conversion of convertible notes, costs related to being a
        public
        company including professional services such as auditing, legal and other
        services, costs associated with the new recruitments and operating expenses
        in
        China, and non-cash expenses recognized for stock based compensation related
        to
        stock options and warrants granted in the period pursuant to SFAS 123(R),
        partially offset by increased sales revenue and gross profit for the period,
        and
        the interest income amounting to $11,746 from the deposit of unused portion
        of
        the proceeds from the private placement consummated in March 2007.
  17
  **Liquidity
        and Capital Resources**
  As
        of
        March 31, 2007, the Company had assets equal to $13,478,097, which primarily
        were comprised of cash amounting to $12,871,855, as well as other current
        assets
        such as accounts receivable and inventory, and deferred compensation cost
        as a
        result of the stock options and warrants granted but unvested as of March
        31,
        2007. The Company’s current liabilities as of March 31, 2007 were $697,612,
        which primarily were comprised of trade accounts payable and accrued expenses.
        At March 31, 2007, the company had working capital of $12,472,104.
  The
        cash
        balance increased by $12,742,057 to $12,871,855 at March 31, 2007, as compared
        to $129,798 at the beginning of the period. The increase was mainly attributable
        to cash flow from financing activities in the nine months ended March 31,
        2007
        which amounted to $12,476,306, as well as cash generated from operating
        activities which amounted to $248,054. The remaining $17,697 was the effect
        of
        exchange rate changes on cash items.
  Cash
        flow
        generated from operations was $248,054 for the nine months ended March 31,
        2007, primarily
        as a result of changes in working capital needs resulting in an aggregate
        increase of cash inflows. Accounts
        receivable and inventory decreased by $121,518 and $59,395 respectively,
        while
        accounts payable and other current liabilities increased by $159,243. Net
        loss
        of $1,005,124 was largely attributed to non-cash expenses, including a $897,131
        charge for conversion of notes into common stock at a discount to market
        price,
        $17,987 of share-based compensation expense for stock options and warrants
        vested during the period, and $3,150 non-cash expense for rental contributed
        by
        officers and shareholders in lieu of capital contribution to the IBC
        subsidiary.
 
 During
        the nine months ended March 31, 2007, the Company incurred no cash changes
        in
        investing activities. Equicap and Fountainhead entered into a convertible
        note on September 30, 2006, the principal of which was for working capital
        and
        discharge of accrued payables of Equicap. As part of the Share Exchange,
        Fountainhead agreed to convert the outstanding principal and accrued interest
        of
        approximately $100,000 into 702,132 shares of common stock. The note was
        converted on March 9, 2007 and was cancelled.
 
 Cash
        flows generated from financing activities was $12,476,306, including $9,876,306
        of net proceeds from the $12 million private placement net of placement
        commissions, advisory fees, legal expenses and other directly related costs,
        and
        $2,600,000 of proceeds from minority investment in subsidiary. On
        March
        9, 2007, the Company completed a private placement of 8,450,704 shares of
        its
        common stock to accredited investors for a total amount of $12,000,000. The
        per
        share price of the offered shares was $1.42. The offering represented 30%
        of the
        outstanding shares of common stock after the consummation of the
        placement. Equicap
        used $8,000,000 of the proceeds to capitalize its joint venture, ZhongChai
        JV.
        The joint venture partner contributed $2,600,000 at the same time.
  18
  The
        net
        proceeds of the private placement, after payment of the other related expenses,
        held by Equicap and its joint venture will be primarily used for market
        expansion, product development and working capital and general corporate
        purposes. There also will be costs related to being a public company including
        professional services such as auditing, legal and investor relations services.
        The company does not have a specific plan to raise additional funds. However,
        in
        the event the company seeks to make an acquisition, make additional investment
        or expand its business operating scale, it may need additional
        capital.
  **Off-Balance
        Sheet Arrangements**
  The
        company does not have off-balance sheet arrangements, financings, or other
        relationships with unconsolidated entities or other persons, also known as
        “special purpose entities” (SPEs).


**Item
      3.**  **Controls
      and Procedures.**




As
      of the
      end of the period covered by this report, the Company conducted an evaluation,
      under the supervision and with the participation of the Chief Executive Officer
      and Chief Financial Officer, of the Company’s disclosure controls and procedures
      (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act. Based
      on
      this evaluation, the Chief Executive Officer and Chief Financial Officer
      concluded that the Company’s disclosure controls and procedures are effective to
      ensure that information required to be disclosed by the Company in reports
      that
      it files or submits under the Exchange Act is recorded, processed, summarized
      and reported within the time periods specified in Securities and Exchange
      Commission rules and forms. There was no change in the Company’s internal
      control over financial reporting during the Company’s most recently completed
      fiscal quarter that has materially affected, or is reasonably likely to
      materially affect, the Company’s internal control over financial
      reporting.




19




**PART
      II — OTHER INFORMATION**




**Item
      1.**  **Legal
      Proceedings.** ****




None




**Item
      2.**  **Unregistered
      Sales of Equity Securities and Use of Proceeds.**




None.
      (The Company disclosed the sale of shares of common stock on March 9, 2007
      in a
      Current Report filed on March 9, 2007.)




**Item
      3.**  **Defaults
      Upon Senior Securities.** ****




None.




**Item
      4.**  **Submission
      of Matters to a Vote of Security Holders.** ****




None.




**Item
      5.**  **Other
      Information.**




None.




**Item
      6.**  **Exhibits.**


**Exhibit**
              **Description**31.1
              Certification
                  of the Company’s Principal Executive Officer pursuant to Section 302 of
                  the Sarbanes-Oxley Act of 2002, with respect to the registrant’s Quarterly
                  Report on Form 10-QSB, as amended, for the quarter ended March 31,
                  2007.31.2
              Certification
                  of the Company’s Principal Financial Officer pursuant to Section 302 of
                  the Sarbanes-Oxley Act of 2002, with respect to the registrant’s Quarterly
                  Report on Form 10-QSB, as amended, for the quarter ended March 31,
                  2007.32.1
              Certification
                  of the Company’s Principal Executive Officer and Principal Financial
                  Officers pursuant to 18 U.S.C. Section 1350, as adopted pursuant
                  to
                  Section 906 of the Sarbanes Oxley Act of
                  2002.




20




**SIGNATURES**





Pursuant
      to the requirements of the Securities Exchange Act of 1934, as amended, the
      Registrant has duly caused this amended Report to be signed on its behalf
      by the undersigned thereunto duly authorized.




Date:
              June 13, 2007
            EQUICAP,
              INC.By:
            /s/ Peter
              WangName: Peter
              WangTitle:Chairman
              and PresidentBy:
            /s/ David Ming HeName: David
              Ming
              HeTitle:Chief
              Financial Officer




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