U.S.
      SECURITIES AND EXCHANGE COMMISSION


Washington,
      D.C. 20549





FORM
      10-QSB





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 for the Three and Nine Months Ended March
                  31,
                  2007 and 2006 (unaudited), and for the Period from Inception (May
                  14,
                  2004) through March 31, 2007 (unaudited)
              3Consolidated
                  Statements of Cash Flows for the Nine Months Ended March 31, 2007
                  and 2006
                  (unaudited), and for the Period from Inception (May 14, 2004) through
                  March 31, 2007 (unaudited)
              4Notes
                  to Consolidated Financial Statements, March 31, 2007
              5Item
                  2.
              Management’s
                  Discussion and Analysis of Financial Condition and Results of
                  Operations
              10Item
                  3.
              Controls
                  and Procedures
              11**PART
                  II - OTHER INFORMATION**:Item
                  1.
              Legal
                  Proceedings
              11Item
                  2.
              Unregistered
                  Sales of Equity Securities and Use of Proceeds
              11Item
                  3.
              Defaults
                  Upon Senior Securities
              11Item
                  4.
              Submission
                  of Matters to a Vote of Security Holders
              11Item
                  5.
              Other
                  Information
              11Item
                  6.
              Exhibits
              11Signatures
              
              12










**PART
      I - FINANCIAL INFORMATION**





**Item
      1. Financial Statements.**





Statements
      made in this Form 10-QSB (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.





1


**EQUICAP,
      INC.**





**(A
      DEVELOPMENT STAGE COMPANY)**





**CONSOLIDATED
      BALANCE SHEET**





**AS
      OF MARCH 31, 2007**





**(UNAUDITED)**





**ASSETS**


**CURRENT
                ASSETS**Cash
                and cash equivalents
            
            $
            12,871,855Accounts
                receivable
            
            
            242,085Inventory
            
            
            61,327**Total
                Current Assets**
            
            
            **13,175,267****OTHER
                ASSET**Deferred
                compensation cost
            
            
            308,381**Total
                Assets**
            
            **$**
            **13,483,648****LIABILITIES
                AND STOCKHOLDERS’ EQUITY****LIABILITIES**Accounts
                payable and accrued expenses
            
            $
            639,836Taxes
                payable
            
            
            39,866Due
                to shareholder
            
            
            10,565Other
                payables
            
            
            7,345**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
            
            
            (12,680
            )Stock
                subscriptions receivable - Usunco
            
            
            (33,120
            )Additional
                paid-in capital
            
            
            10,220,505Accumulated
                other comprehensive income
            
            
            17,697Accumulated
                deficit
            
            
            (34,535
            )**Total
                Stockholders’ Equity**
            
            
            **10,186,036****Total
                Liabilities and Stockholders’ Equity**
            
            **$**
            **13,483,648**




The
      accompanying notes are an integral part of these consolidated financial
      statements.





2


**EQUICAP,
      INC.**





**(A
      DEVELOPMENT STAGE COMPANY)**





**CONSOLIDATED
      STATEMENTS OF OPERATIONS**


**AND
      COMPREHENSIVE LOSS**





**(UNAUDITED)**




**Three
                  Months Ended****March
                31,**
            
            **Nine
                  Months Ended****March
                31**,
            
            **For
                          the**
                        **Period
                          from May 14, 2004 (Date of Inception)**
                        **to
                          March 31,****2007**
            
            **2006**
            
            **2007**
            
            **2006**
            
            **2007****REVENUE**
            
            **$**
            **491,981**
            
            **$**
            **186,699**
            
            **$**
            **1,206,077**
            
            **$**
            **315,789**
            
            **$**
            **2,167,709****COST
                OF SALES**
            
            
            **436,637**
            
            
            **166,126**
            
            
            **1,100,715**
            
            
            **282,603**
            
            
            **1,859,482****GROSS
                PROFIT**
            
            
            **55,344**
            
            
            **20,573**
            
            
            **105,362**
            
            
            **33,186**
            
            
            **308,227****EXPENSES**Selling,
                general and administrative
            
            
            97,301
            
            
            19,453
            
            
            213,553
            
            
            39,540
            
            
            268,949**(LOSS)
                INCOME FROM OPERATIONS**
            
            
            **(41,957**
            **)**
            
            **1,120**
            
            
            **(108,191**
            **)**
            
            **(6,354**
            **)**
            
            **39,278****OTHER
                EXPENSES**
            
            
            **1,073**
            
            
            **2,923**
            
            
            **1,073**
            
            
            **2,923**
            
            
            **31,522****(LOSS)
                INCOME BEFORE PROVISION****FOR
                INCOME TAXES**
            
            
            **(43,030**
            **)**
            
            **(1,803**
            **)**
            
            **(109,264**
            **)**
            
            **(9,277**
            **)**
            
            **7,756****PROVISION
                FOR INCOME TAXES**
            
            
            **825**
            
            
            **800**
            
            
            **825**
            
            
            **800**
            
            
            **42,291****NET
                LOSS**
            
            
            **(43,855**
            **)**
            
            **(2,603**
            **)**
            
            **(110,089**
            **)**
            
            **(10,077**
            **)**
            
            **(34,535**
            **)****OTHER
                COMPREHENSIVE INCOME**Foreign
                currency translation adjustment
            
            
            17,697
            
            
            -
            
            
            17,697
            
            
            -
            
            
            17,697**COMPREHENSIVE
                LOSS**
            
            
            **($
                26,158**
            **)**
            
            **($
                2,603**
            **)**
            
            **($
                92,392**
            **)**
            
            **($
                10,077**
            **)**
            
            **($
                16,838**
            **)****LOSS
                PER COMMON SHARE**Basic
            
            
            **($
                -**
            **)**
            
            **($
                -**
            **)**
            
            **($
                .01**
            **)**
            
            **($
                -**
            **)**
            
            **($
                -**
            **)**Diluted
            
            
            **($
                -**
            **)**
            
            **($
                -**
            **)**
            
            **($
                .01**
            **)**
            
            **($
                -**
            **)**
            
            **($
                -**
            **)****WEIGHTED
                AVERAGE SHARES OF****COMMON
                STOCK**Basic
            
            
            **20,839,906**
            
            
            **18,323,944**
            
            
            **19,568,101**
            
            
            **18,323,944**
            
            
            **18,546,377**Diluted
            
            
            **20,839,906**
            
            
            **18,323,944**
            
            
            **19,568,101**
            
            
            **18,323,944**
            
            
            **18,546,377**




The
      accompanying notes are an integral part of these consolidated financial
      statements.





3


**EQUICAP,
      INC.**





**(A
      DEVELOPMENT STAGE COMPANY)**





**CONSOLIDATED
      STATEMENTS OF CASH FLOWS**





**(UNAUDITED)**




**Nine
                Months Ended**
              **March
                31,**
            
            **For
                          the Period**
                        **from
                          May 14, 2004 (Date of Inception) to March
                          31,****2007**
            
            **2006**
            
            **2007****CASH
                FLOWS FROM OPERATING ACTIVITIES****Net
                (Loss) Income**
            
            
            **($
                110,089**
            **)**
            
            **($
                10,077**
            **)**
            
            **($
                34,535**
            **)**Adjustments
                to reconcile net income to net cashprovided
                by operating activities:Changes
                in assets and liabilities:Accounts
                receivable
            
            
            121,518
            
            
            (41,114
            )
            
            (242,086
            )Inventory
            
            
            59,395
            
            
            (265,797
            )
            
            (61,326
            )Deferred
                compensation cost
            
            
            (308,381
            )
            
            -
            
            
            (308,381
            )Accounts
                payable and accrued expenses
            
            
            143,431
            
            
            318,342
            
            
            679,701Other
                payables
            
            
            7,346
            
            
            -
            
            
            7,346**Total
                Adjustments**
            
            
            **23,309**
            
            
            **11,431**
            
            
            **75,254****NET
                CASH (USED) PROVIDED BY****OPERATING
                ACTIVITIES**
            
            
            **(86,780**
            **)**
            
            **1,354**
            
            
            **40,719****CASH
                FLOWS FROM FINANCING ACTIVITIES**Proceeds
                from sale of stock
            
            
            -
            
            
            1,789
            
            
            200Net
                proceeds from private placement
            
            
            10,202,674
            
            
            -
            
            
            10,202,674Proceeds
                from minority investment
            
            
            2,600,000
            
            
            -
            
            
            2,600,000Due
                to shareholder
            
            
            8,466
            
            
            6,000
            
            
            10,565**NET
                CASH PROVIDED BY FINANCING ACTIVITIES**
            
            
            **12,811,140**
            
            
            **7,789**
            
            
            **12,813,439****EFFECT
                OF FOREIGN CURRENCY TRANSLATION****ON
                CASH**
            
            
            **17,697**
            
            
            **-**
            
            
            **17,697****NET
                INCREASE IN CASH AND CASH EQUIVALENTS**
            
            
            **12,742,057**
            
            
            **9,143**
            
            
            **12,871,855****CASH
                AND CASH EQUIVALENTS AT****BEGINNING
                OF PERIOD**
            
            
            **129,798**
            
            
            **-**
            
            
            **-****CASH
                AND CASH EQUIVALENTS AT END OF PERIOD**
            
            **$**
            **12,871,855**
            
            **$**
            **9,143**
            
            **$**
            **12,871,855****CASH
                PAID FOR INCOME TAXES**
            
            
            -
            
            
            -
            
            
            -**CASH
                PAID FOR INTEREST**
            
            
            -
            
            
            -
            
            
            -





The
      accompanying notes are an integral part of these consolidated financial
      statements.





4


**EQUICAP,
      INC.**





**(A
      DEVELOPMENT STAGE COMPANY)**





**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.







**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 - INVENTORY**





Inventory
      at March 31, 2007 and 2006 consisted of starters, alternators and
      parts.





**NOTE
      5 - DUE TO SHAREHOLDER**





Amounts
      due to shareholder consist of advances from the Company’s majority shareholders
      to fund the Company’s operations. The amounts are unsecured, non-interest
      bearing and due upon demand.





5





**EQUICAP,
      INC. AND SUBSIDIARIES**





**(A
      DEVELOPMENT STAGE COMPANY)**





**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**





**MARCH
      31, 2007 AND 2006**





**(UNAUDITED)**





**NOTE
      6 - 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
      resale.





**NOTE
      7 - 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.





**NOTE
      8 - SUBSEQUENT EVENTS**





None




6




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




Equicap,
      Inc. (“Equicap”) is a development stage company. It 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 and diesel engine products sourced from China
      and sold to customers located primarily in China and North America.




**Company
      Background**




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 with 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 the
      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.




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.




7




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.




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.




8




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 resale 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 resale
      by the holder by filing successive registration statements. The initial
      registration statement for resale 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.




**Results
      of Operations**






***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. The Company is still in
      the
      development stage. Substantially all sales revenue for the three months ended
      March 31, 2007 and 2006 were generated by its subsidiary IBC from distribution
      of starters and alternators.




9


*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 gross margin at approximately 11%
      in
      the 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
      $77,848 to $97,301 in the three months ended March 31, 2007 from $19,453 in
      the
      three months ended March 31, 2006. The increase was mainly 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
      $41,252 to $43,855 in the three months ended March 31, 2007 from $2,603 in
      the
      three months ended March 31, 2006. The increase was mainly attributed to the
      increase in general and administrative expenses, comprised of 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.




***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. The Company is still in
      the
      development stage. Substantially all sales revenue for the nine months ended
      March 31, 2007 and 2006 were generated by its subsidiary IBC from distribution
      of starters and alternators.




10




*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. Gross margin decreased in
      the
      six months from July 2006 through December 2006 due to increased costs of sales
      as a result of soared material prices such as copper, which the Company was
      not
      able to immediately pass onto customers given the competitive market
      environment. The Company gradually increased sales prices since last months
      in
      2006, and the gross margin was resumed to approximately 11% in the quarter
      being
      reported.




*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
      $174,013 to $213,553 in the nine months ended March 31, 2007 from $39,540 in
      the
      nine months ended March 31, 2006. The increase was mainly 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
      $100,012 to $110,089 in the nine months ended March 31, 2007 from $10,077 in
      the
      nine months ended March 31, 2006. The increase was mainly attributed to the
      increase in general and administrative expenses, comprised of 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.





**Liquidity
      and Capital Resources**




As
      of
      March 31, 2007, the Company had assets equal to $13,483,648, 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.




11




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, from
      which it received net proceeds of approximately $10 million. 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. vFinance
      Investment, Inc., the exclusive placement agent for the offering, was paid
      a fee
      equal to approximately $983,000 and was reimbursed approximately $120,000 for
      its expenses. Equicap also 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, which warrant vests over a three-year period and terminates March 6,
      2012.




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. Equicap
      also
      paid from the proceeds the sum of $450,000 to Fountainhead pursuant to the
      terms
      of an advisory agreement. 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 related to 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.




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.




In
      connection with the Share Exchange, vFinance Investments, Inc., for advice
      in
      connection with the Share Exchange, was issued 161,633 shares of common stock
      as
      compensation. The shares had a value of approximately $202,041.




**Plan
      of Operations**




The
      company focuses on development, marketing and distribution of diesel engine
      products and other auto parts and products. Our growth potential will be largely
      driven by the successful implementation of (i) our plan to distribute diesel
      engine products for forklift segment in China; (ii) our strategies to penetrate
      the growing agricultural equipment market in China, (iii) development or
      acquisition of new engine and related products that will have promising future
      demand both in China and abroad, (iv) exports to markets abroad, and (v) the
      synergic acquisition of complementary businesses and operations. The company
      plans to recruit additional employees, particularly sales and marketing staff
      in
      the following months to support its business expansion into respective new
      markets.




We
      anticipate hiring 20 additional employees over the next six months at an
      approximate annual cost of $600,000 and a further 10 employees for the twelve
      months following at an approximate annual cost of $300,000. We anticipate that
      26 of these employees will be located in China and the balance will be located
      in the United States. We also plan to expend $100,000 in associated recruitment
      costs and training fees for these hires.




12




Forklift
      market in China is forecasted to continue to grow in the coming years based
      on
      expectation of China’s continuous economic growth, increasing market demand for
      consumer goods and light manufacturing, which could potentially benefit the
      forklift sales. The company plans to maintain and strengthen the relationships
      with Chinese forklift OEMs, to expand domestic sales along with foreseen growth
      of forklift sales, and to grasp additional market share through establishing
      relationships with those foreign invested forklift integrators in China who
      sell
      to both local and international market. The company plans to expend over $1
      million in marketing costs to further penetrate this growing market over the
      next eighteen months. These costs will be related to hiring experienced sales
      representatives in this field, attending major agricultural trade shows in
      China
      and abroad, and establishing new relationships with other OEMs in the
      agricultural sector.




The
      company will focus its efforts in innovating and upgrading current diesel
      engine products to meet U.S. EPA requirements and expand into power assembly
      including transmission system. It is believed that associated costs will be
      for
      the hiring of technical staff, and advisors amounting to about $500,000 over
      the
      next eighteen months. The expenditures for research and development, not
      including salaries, are expected to be around $2.5 million over the next
      eighteen months. The company will also form partnerships with international
      technology partners who specialize in clean fuel engine solutions and research
      and development for compressed natural gas and liquefied petroleum gas engines
      that represent the future industrial trend. Successful improvement of current
      product series and development of new types of environment friendly engines
      will
      enable the company to excel in the competition both in Chinese and international
      market. The company plans to carry other diesel engine related products in
      the
      near future, such as gearboxes and transmission systems that can
      be sold to the same customers that currently purchase the diesel engines.
      It also plans to expand its auto parts product line that currently focuses
      on
      starters and alternators.




Internationally,
      the company will focus on emerging markets. At this point, through strengthening
      the relationship with OEM customers in China, the company intends to increase
      the sales to the Chinese exported agricultural machinery and equipment to the
      global markets. On the U.S. front, the company views the broad use of mid-size
      power generators in the residential and small construction sites as a potential
      market. Leveraging on IBC, the fully owned U.S. distribution vehicle for
      automotive components, the company aims to become the one-stop shop for diesel
      engine equipment and accessory OEMs in North America.




A
      component of the growth strategy is to invest in, or establish strategic
      alliance such as joint ventures with, or acquire other companies. The company
      intends to seek target companies who provide smaller or larger size diesel
      engines complementary to its current product offerings, which would potentially
      create synergies in future operations such as in procurement, production, sales
      and marketing and management, thereby improving its revenue generation and
      profitability.




13




The
      company will maintain offices in the United States and China. It is expected
      that general overhead expenses, which will include office rent, office expenses
      and administrative expenses will be approximate $2.7 million for the next
      eighteen months. Moreover the expense of being a public company, including
      accounting, legal and SOX compliance and pursuing listing applications for
      the
      common stock on an exchange will require the expenditure of approximately
      $930,000 during the next eighteen months.




*2007
      - 2008 Outlook*




During
      the remainder of fiscal year ended June 30, 2007 and the fiscal year of 2008,
      the company’s goal is to launch the sales and distribution business in the
      forklift diesel market in China, and to increase sales of its products to
      agricultural equipment market, and at the same time to introduce new products
      into the marketplace. The
      company will also seek opportunities to expand its businesses into additional
      product lines, including gearboxes and transmission systems.The company
      hopes to accelerate penetration into international markets with improved,
      innovated, or newly developed products. During this period, the company will
      also actively seek synergic merger and acquisition opportunities to accelerate
      its business expansion.




The
        company anticipates that its financial results will be affected by the change
        in
        corporate taxation within the PRC, promulgated on March 16, 2007. It is expected
        that the company’s subsidiary in China will be taxed at higher rates than in the
        past, and its calculation of tax will change as deductions are altered. In
        addition, the economy is experiencing inflationary pressures and price increases
        for various raw materials as a result of a number of factors, including demand
        and a revaluing of the currency. As a result, the company expects its profit
        margins to be affected, and for some products it may decline.




**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).




**Critical
      Accounting Policies and Estimates**




*Principles
      of Consolidation*




The
      consolidated financial statements include the accounts of the parent company
      and
      the subsidiaries. Significant inter-company 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 year-end. Based on its assessment of the credit history
      with customers having outstanding balances and current relationships with them,
      management makes conclusions whether any realization losses on balances
      outstanding at period end will be material.




14




*Inventory*




Inventory
      is stated at weighted average cost, which takes into account historical prices
      on a continuing basis.




*Revenue
      Recognition*




The
      company derives its revenues primarily from sales of diesel engines and
      automotive electrical parts. Revenues are recognized at point of
      sale.




*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.




**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.




15




**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 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 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.




16




**SIGNATURES**





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




Date:
              May 11, 2007
            EQUICAP,
              INC.By:
            /s/ Peter
              WangName: Peter
              WangTitle:Chairman
              and PresidentBy:
            /s/ David Ming HeName: David
              Ming
              HeTitle:Chief
              Financial Officer




17