Cang Bao Tian Xia International Art Trade Center, Inc. - Quarter Report: 2009 September (Form 10-Q)

U.S. SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2009

¨ 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. employer
	incorporation or organization)		identification number)

	224 Tianmushan Road,
	Zhongrong Chengshi Huayuan 5-1-602,
	Zhangzhou, P.R. China		310007
	(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)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Date File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files. Yes ¨ No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non accelerated filer, or smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer ¨ Accelerated Filer ¨ Non accelerated filer ¨ Smaller reporting company x

Indicate by check mark 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

Indicate the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date: 27,613,019 shares of common stock, par value $.001 per share, outstanding as of November 11, 2009.

EQUICAP, INC.

- INDEX -

		Page
PART I – FINANCIAL INFORMATION:

Item 1.	Financial Statements	2

	Consolidated Balance Sheet as of September 30, 2009 (unaudited)	2

	Consolidated Statements of Operations and Comprehensive Income (Loss) for the Three Months Ended September 30, 2009 and 2008 (unaudited)	3

	Consolidated Statements of Cash Flows for the Three Months Ended September 30, 2009 and 2008 (unaudited)	4

	Notes to Consolidated Financial Statements, September 30, 2009 and 2008	5

Item 2.	Management’s Discussion and Analysis of Financial Condition and
	Results of Operations	11

Item 3	Quantitative and Qualitative Disclosures about Market Risk	19

Item 4T Controls and Procedures		19

PART II – OTHER INFORMATION:

Item 1.	Legal Proceedings	19

Item 1A. Risk Factors		19

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	19

Item 3.	Defaults Upon Senior Securities	19

Item 4.	Submission of Matters to a Vote of Security Holders	19

Item 5.	Other Information	19

Item 6.	Exhibits	20

Signatures		21

FORWARD-LOOKING STATEMENTS

Statements made in this Form 10-Q (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 products and customers, the focus of the business on the gear, gearbox and diesel engine markets in Peoples Republic of China, the need to develop new products and create demand for them, the effect of the global recession and availability of credit, pricing pressures on our products and margins, product quality, customer satisfaction and the ability to sustain and grow sales and expand the customer base, warranty obligations and claims, operating a business primarily 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.

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements.

EQUICAP, INC.

Consolidated Balance Sheets

	September 30,			June 30,
	2009			2009
	(Unaudited)
Assets
Current assets:
Cash and cash equivalents	$	1,160,252		$	3,990,767
Restricted cash		414,061			315,151
Accounts receivable, net of allowance for doubtful accounts of $10,520
and $7,732 at September 30, 2009 and June 30, 2009, respectively		1,693,133			1,540,402
Inventory		1,578,808			1,568,445
Notes receivable		50,000			57,500
Trade notes receivable		521,069			391,155
Other receivables, net		69,041			76,491
Advance payments		5,362,956			2,988,235
Prepaid expenses		35,321			38,775

Total current assets		10,884,641			10,966,921

Property and equipment, net		2,722,328			2,662,924

Goodwill		3,411,913			3,407,262

Other assets:
Intangible assets, net		1,255			1,522
Deferred compensation		36,408			63,606
Deferred expenses		247			447
Total other assets		37,910			65,575

Total assets	$	17,056,792		$	17,102,682

Liabilities
Current liabilities:
Short term bank loans	$	1,422,990		$	2,197,500
Accounts payable and accrued expenses		1,873,246			1,562,217
Trade notes payable		414,061			315,151
Taxes payable		57,876			54,292
Other current liabilities		629,284			635,408
Total current liabilities		4,397,457			4,764,568

Total liabilities		4,397,457			4,764,568

Commitments and contingencies

Equity
Stockholders’ equity:
Common stock, $.001 par value, 500,000,000 shares authorized,
27,613,019 shares issued and outstanding at September 30, 2009
and June 30, 2009, respectively		27,613			27,613
Stock subscription receivable		(33,120	)		(33,120	)
Additional paid-in capital		16,484,097			16,484,097
Statutory reserves		124,460			124,460
Retained earnings (deficit)		(8,468,610	)		(8,440,255	)
Accumulated other comprehensive income		1,432,336			1,415,474
Total stockholders’ equity		9,566,776			9,578,269

Noncontrolling interest		3,092,559			2,759,845

Total equity		12,659,335			12,338,114

Total liabilities and equity	$	17,056,792		$	17,102,682

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

EQUICAP, INC.

Consolidated Statements of Operations and Comprehensive Income (Loss)

(Unaudited)

	For the Three Months Ended
	September 30,
	2009			2008

Revenue	$	1,948,406		$	1,186,570

Cost of sales		1,543,174			852,087

Gross profit		405,232			334,483

Operating expenses
Selling, general and administrative		344,240			468,688

Income (loss) from operations		60,992			(134,205	)

Other income (expenses):
Interest income, net		(18,767	)		2,713
Other income		4,240			31,439
Total other income (expenses)		(14,527	)		34,152

Income (loss) before provision for income taxes		46,465			(100,053	)

Provision for income taxes		35,505			788

Net income (loss) before noncontrolling interest		10,960			(100,841	)

Noncontrolling interest		39,315			29,697

Net loss		(28,355	)		(130,538	)

Other comprehensive income
Foreign currency translation adjustment		16,862			25,656

Comprehensive loss	$	(11,493	)	$	(104,882	)

Loss per common share:
Basic	$	(0.00	)	$	(0.00	)
Diluted	$	(0.00	)	$	(0.00	)

Weighted average number of common shares outstanding:
Basic		27,613,019			28,169,013
Diluted		27,613,019			28,169,013

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

EQUICAP, INC.

Consolidated Statements of Cash Flows

(Unaudited)

	For the Three Months Ended
	September 30,
	2009			2008
Cash flows from operating activities:
Net loss	$	(28,355	)	$	(130,538	)
Adjustments to reconcile net loss to net cash
provided by (used in) operating activities:
Noncontrolling interest		39,315			29,697
Depreciation and amortization		72,159			42,184
Provision for bad debts		2,776			(15,262	)
Share-based payments		27,198			27,197
Non-cash payments of rent		-			1,240
Changes in assets and liabilities:
Accounts receivable		(153,312	)		(31,607	)
Inventory		(8,217	)		(207,293	)
Trade notes receivable		(129,301	)		116,041
Other receivables		7,550			97,125
Advance payments		(2,369,187	)		4,257
Prepaid expenses		3,457			125,184
Deferred expenses		200			2,506
Accounts payable and accrued expenses		308,956			(97,928	)
Trade notes payable		98,419			-
Taxes payable		3,507			10,017
Advances from customers		4,153			-
Other current liabilities		(10,926	)		23,841
Total adjustments		(2,103,253	)		127,199

Net cash used in operating activities		(2,131,608	)		(3,339	)

Cash flows from investing activities:
Additions to property and equipment		(127,626	)		(137,815	)
Proceeds from notes receivable		7,500			-

Net cash used in investing activities		(120,126	)		(137,815	)

Cash flows from financing activities:
Repayment for short term bank loans		(777,033	)		-
Contribution from minority shareholders		293,220			-

Net cash used in financing activities		(483,813	)		-

Effect of foreign currency translation on cash		3,942			974

Net decrease in cash and cash equivalents and restricted cash		(2,731,605	)		(140,180	)

Cash and cash equivalents and restricted cash – beginning		4,305,918			956,973

Cash and cash equivalents and restricted cash – ending	$	1,574,313		$	816,793

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

EQUICAP, INC.

Notes to Consolidated Financial Statements

September 30, 2009 and 2008

(Unaudited)

Note 1 – Organization and Nature of Business

Equicap, Inc. (“Equicap” or “the Company”), a Nevada corporation, is a manufacturer and distributor of gears and gearboxes, which are marketed and sold to customers in China.

On July 6, 2007, the Board of Directors of Zhejiang Zhongchai Machinery Co., Ltd. (“Zhongchai”), the China based and 75% owned subsidiary of the Company, approved and finalized a Share Purchase Agreement (“Share Purchase Agreement”) with Xinchang Keyi Machinery Co., Ltd., (“Keyi”) a corporation incorporated in the People’s Republic of China. Pursuant to the Share Purchase Agreement, Zhongchai purchased all the outstanding equity of Zhejiang Shengte Transmission Co., Ltd. (“Shengte”) from Keyi, the sole owner of Shengte for approximately $3.7 million.

On March 7, 2007, the Company and Usunco Automotive, Ltd. (“Usunco”), a British Virgin Islands company, 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 the Company’s common stock.

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 was 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.

On June 15, 2009, IBC was sold to certain of the management persons of IBC in exchange for the following: (i) the cancellation of an aggregate of 555,994 shares of common stock of the Company which those individuals owned, and (ii) the payment of $60,000 in installments pursuant to the terms of an unsecured promissory note, the final payment of which will be November 15, 2010. As part of the transaction, the Company cancelled $428,261 through the closing date, of inter-company debt which funds had been used in the business of IBC prior to the transaction.

On September 22, 2009, Xinchang Xian Lisheng Machinery Co., Ltd. (“Lisheng”) was incorporated by Zhongchai and two individual investors. Total registered capital of Lisheng is RMB 5 million, of which Zhongchai accounts for 60%. The Company plans to start production of die casting products in 2010 for use in gearboxes, diesel engines and other machinery products.

Note 2 – Summary of Significant Accounting Policies

Basis of Presentation

The Company’s consolidated financial statements include the accounts of Equicap, Inc. and its wholly and majority owned subsidiaries. All intercompany balances and transactions are eliminated in consolidation. The accompanying unaudited financial statements have been prepared in accordance with generally accepted accounting principles (“GAAP”) applicable to interim financial information and the requirements of Form 10-Q and Rule 10-01 of Regulation S-X 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.

Interim Financial Statements

These interim financial statements should be read in conjunction with the Company’s audited financial statements for the years ended June 30, 2009 and 2008, as not all disclosures required by GAAP 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 years ended June 30, 2009 and 2008.

Recent Accounting Pronouncements

On July 1, 2009, the Financial Accounting Standards Board (“FASB”) officially launched the FASB Accounting Standards Codification (“ASC”), which has become the single official source of authoritative nongovernmental U.S. GAAP, in addition to guidance issued by the Securities and Exchange Commission. The ASC is designed to simplify U.S. GAAP into a single, topically ordered structure. All guidance contained in the ASC carries an equal level of authority. The ASC is effective for all interim and annual periods ending after September 15, 2009. The Company’s implementation of this guidance effective July 1, 2009 did not have a material effect on the Company’s condensed consolidated financial statements.

Goodwill and Other Intangible Assets

Goodwill represents costs in excess of fair values assigned to the underlying net assets of acquired businesses. Goodwill and intangible assets deemed to have indefinite lives are not amortized. All other intangible assets are amortized over their estimated useful lives. Goodwill and intangible assets with indefinite lives are subject to annual impairment test using the guidance and criteria described in Statement of Financial Accounting Standard No. 142, (ASC 350) “Goodwill and Other Intangible Assets”. This test compares carrying values to fair values and, when appropriate, the carrying value of these assets is reduced to fair value.

Note 3 – Restricted Cash

As of September 30, 2009 and June 30, 2009, the Company had restricted cash of $414,061 and $315,151, respectively. These restricted cash balances are reserved for settlement of trade notes payable in connection with inventory purchases. The cash held in custody by bank issuing the trade notes payable is restricted as to withdrawal or use, and is currently earning interest.

Note 4 – Inventory

Inventory at September 30, 2009 and June 30, 2009 consists of the following:

	September 30,		June 30,
	2009		2009

Gears products	$	1,000,441	$	885,559
Gearbox products		575,178		680,317
Other		3,189		2,569
Total	$	1,578,808	$	1,568,445

Note 5 – Advance Payments

Advance payments amounted to approximately $5.4 million as of September 30, 2009, of which approximately $4.6 million represented an advance payment made by the Zhongchai JV to Zhejiang Xinchai Holdings Co., Ltd. ("Xinchai Holdings"), a corporation in China, for the purchase of land use rights and building for Zhongchai JV’s future expansion of its production capabilities. Zhongchai JV is currently leasing a portion of the land and building to be purchased. The total land area to be purchased is approximately 250,000 square feet. The total contract price for the land use rights, building and fixtures is approximately $4.6 million. The Company is currently in the process of registering and transferring title.

Note 6 – Property and Equipment

Property and equipment at September 30, 2009 and June 30, 2009 consists of the following:

	September 30,		June 30,
	2009		2009

Manufacturing equipment	$	3,055,115	$	2,923,420
Office equipment and furniture		56,673		56,597
Vehicles		62,124		62,039
Subtotal		3,173,912		3,042,056
Less: Accumulated depreciation		451,584		379,132
Total	$	2,722,328	$	2,662,924

Depreciation expense for the three months ended September 30, 2009 and 2008 was $71,890 and $41,916, respectively.

Note 7 – Accounts Payable and Accrued Expenses

Accounts payable and accrued expenses consist of the following:

	September 30,		June 30,
	2009		2009

Accounts payable	$	1,668,268	$	1,400,162
Accrued expenses		204,978		162,055

Total	$	1,873,246	$	1,562,217

The carrying value of accounts payable and accrued expenses approximates their fair value due to the short-term nature of these obligations.

Note 8 – Short Term Bank Loans

Short-term bank loans consist of the following:

	September 30,		June 30,
	2009		2009

On May 25th, 2009, the Company obtained a loan from Agricultural Bank of
China, which was re-paid in full on August 26th, 2009. The annual interest was
at the fixed interest rate of 4.374% and paid monthly.
The loan was secured by a third party.	$	-	$	776,450

On June 15th, 2009, the Company obtained a loan from Agricultural Bank
of China, which is due on June 16th, 2010. The interest is
calculated using an annual fixed interest rate of 5.31% and paid monthly.
The loan is secured by a third party.		1,422,990		1,421,050

Total short-term bank loans	$	1,422,990	$	2,197,500

Note 9 – Rental Expense

The Company’s Chinese operations are located in Zhejiang, China, and the rental expense for the three months ended September 30, 2009 and 2008 was $10,870 and $14,603, respectively.

Note 10 – Major Customers and Suppliers

Two customers, Zhejiang Xinchai Co., Ltd. and Lonking (Shanghai) Forklift Co., Ltd. accounted for 47% and 29%, respectively, of the Company’s net revenue for the three months ended September 30, 2009. Five major suppliers, Zhejiang Yuyang Machinery Co., Ltd., Changzhou No. 2 Gears Co., Ltd., Xinchang Zhicheng Machinery Fittings Factory, Changzhou Wujin Hengli Machinery Fittings Co., Ltd., and Chongqing Shenjian Auto Transmission Parts Co., Ltd. accounted for approximately 28%, 7%, 6%, 6% and 6% respectively, of the Company’s total purchases for the three months ended September 30, 2009.

Note 11 – Deferred Compensation

As described in Note 14 (“Share-Based Payments”), the Company granted options to employees and warrants to the private placement agent. Following SFAS No. 123R (ASC 718), the Company recognizes expenses based on the fair value of the options and warrants. Deferred compensation represents share based payments that will be expensed in future periods based on the vesting time of such options and warrants.

Note 12 – Supplemental Disclosure of Cash Flow Information

	For the Three Months Ended September 30,
	2009		2008

Cash paid for interest	$	24,774	$	-
Cash paid for income taxes	$	42,642	$	788

Note 13 – Earnings (Loss) Per Share

The Company presents earnings (loss) per share on a basic and diluted basis. Basic earnings (loss) per share have been computed by dividing net earnings by the weighted average number of shares outstanding. Diluted earnings (loss) per share has been computed by dividing net earnings by the weighted average number of shares outstanding including the dilutive effect of equity securities. All share and per share data have been adjusted to reflect the recapitalization of the Company after the share exchange agreement with Usunco. The weighted average number of shares calculated for Diluted EPS excludes the potential common stock that would be exercised under the options granted to employees and warrants granted to agents because the inclusion of the potential shares from these options and warrants would cause an antidilutive effect by reducing the net loss per share.

	September 30, 2009			September 30, 2008

Net loss	$	(28,355	)	$	(130,538	)

Weighted average common shares		27,613,019			28,169,013
(denominator for basic loss per share)

Effect of dilutive securities:		-			-

Weighted average common shares
(denominator for diluted loss per share)		27,613,019			28,169,013

Basic net loss per share	$	(0.00	)	$	(0.00	)
Diluted net loss per share	$	(0.00	)	$	(0.00	)

Note 14 – Share-Based Payments

As of September 30, 2009, there were 366,550 outstanding options to employees (“Employee Options”) and 422,535 outstanding warrants to the private placement agent (“Agent Warrants”). Both the Employee Options and Agent Warrants vest over three years and have a life of five years. For the three months ended September 30, 2009, the Company recorded approximately $27,198 of stock-based compensation based on the fair value method of SFAS. No. 123R (ASC 718) 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 and warrants.

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 15 – 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 represented approximately 30% of the 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 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 stockholders the opportunity to sell the shares of restricted stock that they hold. This obligation ends if the shares can be sold pursuant to Rule 144.

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 the portion of a 30-day period of a Registration Default.

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 16 – Employee Welfare Plan

The Company has established an employee welfare plan in accordance with Chinese laws and regulations. Full-time employees of the Company in the PRC participate in a government-mandated multi-employer defined contribution plan pursuant to which certain pension benefits, medical care, unemployment insurance, employee housing fund and other welfare benefits are provided to employees. PRC labor regulations require the Company to accrue for these benefits based on a certain percentage of the employees’ salaries.

Note 17 – Legal Proceedings

On November 6, 2008, a group of the investors filed a law suit in federal court in New York against the Company, Usunco Automotive Ltd., Mr. Peter Wang and vFinance Investment, Inc. based on alleged violations of the Securities Exchange Act of 1934 and Rule 10b-5, fraud, fraudulent inducement, professional malpractice and negligent misrepresentation arising out of the private placement closed on March 7, 2007. The action was settled by an agreement dated July 31, 2009, which provided (i) for a third party, Ruihua International Limited ("Ruihua"), to purchase all the shares of common stock of the Company owned and held by the plaintiffs, (ii) upon the purchase of the shares, for the Company and Mr. Wang and each of the plaintiffs to exchange general mutual releases as to all matters arising concerning the plaintiffs' purchase and holding of the common shares of the Company, and (iii) for a stipulation to dismiss the action. The action was discontinued with prejudice by stipulation among all the parties which was ordered by the court on August 4, 2009.

In connection with the purchase by Ruihua of the shares sold to it as part of the settlement of the above described action, Ruihua also bought shares from another shareholder who was not a party to the action. As a result of the two share acquisitions, Ruihua acquired a total of 17,431,104 shares, currently representing 61.88% of the issued and outstanding shares of common stock of the Company. Ruihua does not have any registration rights with respect to the shares or other provisions related to control of the Company, such as the right to have specific representation on the board of directors or nominate potential directors for election, other than their rights as a shareholder under the certificate of incorporation and by laws of the Company and under the provisions of Nevada law and the United States securities laws.

NOTE 18 – Subsequent Events

None.

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

Equicap, Inc. (“Equicap”), a Nevada corporation, does business through its subsidiary, Usunco Automotive Limited (“Usunco”), a British Virgin Islands company, which in turn operates 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”), and Zhejiang Shengte Transmission Co., Ltd. (“Shengte”) a company established under the laws of the PRC and wholly owned by ZhongChai JV. Through its operating subsidiaries, Equicap is currently engaged in the manufacturing and sale of gears and gearboxes in China.

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 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.

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.

For advice in connection with the Share Exchange, vFinance Investments, Inc., was issued 161,633 shares of restricted common stock as compensation.

Since the former shareholders of Usunco at the time of the reverse merger owned approximately 65% of the shares of common stock of Equicap, the former shareholders of Usunco had control over Equicap immediately after the Share Exchange. As a result, Usunco was deemed to have been the acquiring company in the Share Exchange for accounting purposes, and the Share Exchange transaction was treated as a reverse acquisition with Usunco as the acquirer and Equicap as the acquired party. Equicap changed its fiscal year to end June 30.

Conversion of Convertible Note of Equicap

Equicap and Fountainhead Capital Partners Limited entered into a convertible note on December 31, 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.

2007 Private Placement Offering

As a condition to the Share Exchange, Equicap conducted a private placement of its common stock to 11 accredited, institutional investors in which Equicap raised gross proceeds of $12 million (“Offering”) under an exemption from registration under Section 4(2) of the Securities Act of 1933. 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.

vFinance Investment, Inc. was the exclusive placement agent for the Offering. For their services as placement agent, Equicap paid vFinance a fee of 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, vFinance 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. In addition, if certain make good shares were distributed to the investors, Equicap was obligated to register these shares in addition. If any of the registrable 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 of the common shares was filed within the 45 day time limit of the registration rights agreement. Equicap had to have the registration statement effective within 150 days of the closing date of the Offering. If these actions were not achieved by the specified dates, then Equicap had to pay each of, and only, the investors an amount equal to 1% of the share purchase price actually paid by such investor for each month thereafter that the shares could not be sold under the registration statement. Similar penalties for the failure to file or have declared effective a registration statement within the stated time periods and maintain its effectiveness 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 registration statements required for the investors and vFinance under the registration rights agreement had to be kept effective until all the shares of these parties are sold or may be sold without limitation under Rule 144. Equicap did not meet the effectiveness deadline for the initial registration statement and paid $32,000 to the investors under the liquidated damages provision.

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 the then 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. Currently, Equicap believes that the shares may be sold under Rule 144, being the effective equivalent of Rule 144k or the obligation is no longer applicable because the shares have been sold.

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 and other corporate purposes. 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 September 30, 2009 Compared to Three Months Ended September 30, 2008

Revenue

Revenue increased by $761,836 or 64% to $1,948,406 for the three months ended September 30, 2009 compared with $1,186,570 for the three months ended September 30, 2008. Sales revenue for the three months ended September 30, 2009 consisted solely of sales of gears and gearboxes in China, as a result of the Company’s sale of IBC, the North America / Auto Parts segment in June 2009. Revenue for the three months ended September 30, 2008, consisted of sales of automotive parts in North America and sales of gears and gearboxes in China, for $339,563 and $847,007, respectively. The sales revenue of gears and gearboxes for the first fiscal quarter of 2010 grew by approximately 130% compared to the sales of the same products in China for same period in the prior fiscal year. The increase in gears and gearboxes sales was attributable to the Company’s expansion in production capacity and its continued marketing efforts to develop its customer base. Revenues during the period were also beneficially affected by the recovery of domestic market in China for gear and gearbox products as a result of Chinese government’s economic stimulus plan.

Cost of Sales and Gross Margin

Cost of sales was $1,543,174 for the three months ended September 30, 2009, increasing by $691,087 or 81%, from $852,087 for the three months ended September 30, 2008. The gross margin was approximately 21% for the three months ended September 30, 2009, compared to approximately 29% (excluding auto parts business) for the three months ended September 30, 2008. The decrease in gross margin in this quarter as compared to the same period in prior fiscal year was attributable mainly to a general decrease in gear prices and the launch of new gearbox products, the margin of which is lower than for gears. The shift in product mix and development of new products has been implemented by the Company as a strategy to quickly penetrate the market for its products and build sales.

Selling, General and Administrative Expenses

Selling, general and administrative (“SG&A”) expenses consisted primarily of labor costs and 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 SFAS 123R (ASC 718).

SG&A expenses decreased by $124,448 to $344,240 in the three months ended September 30, 2009, from $468,688 in three months ended September 30, 2008. SG&A decreased for the current period compared with the same period in the prior fiscal year, and the decrease primarily was attributable to the exclusion of the expenses associated with IBC, reduction in rental expense, and reduction in some professional and consulting service expenses.

Net Loss

Net loss was $28,355 in three months ended September 30, 2009, compared with net loss of $130,538 in the three months ended September 30, 2008. The net loss was mainly attributable to R&D expenses for new products, the costs related to being a public company including professional services related to auditing, legal and other services, and non-cash expenses recognized for stock based compensation related to stock options and warrants granted in the period pursuant to SFAS 123R (ASC 718).

Liquidity and Capital Resources

As of September 30, 2009, Equicap had current assets equal to $10,884,641, which primarily were comprised of cash and cash equivalents of $1,160,252, restricted cash of $414,061, inventory of $1,578,808 and net trade related receivables and other receivables of $2,283,243, and advance payments of $5,362,956. Approximately $4.6 million of the advance payments represented an advance payment made by the Zhongchai JV to Zhejiang Xinchai Holdings Co., Ltd. ("Xinchai Holdings"), for the purchase of land use rights and building, including fixtures thereto, for Zhongchai JV’s future expansion of production capabilities. Equicap’s current liabilities as of September 30, 2009 were $4,397,457, which primarily were comprised of short term bank loan, trade accounts payable and accrued expenses, notes payable, and other payable. At September 30, 2009, Equicap had working capital of $6,487,184. Equicap believes that it has sufficient operating capital for its current operations.

Through the fiscal year ended June 30, 2009, Equicap has funded its operations from income generated by its IBC subsidiary (which was sold by the Company in June 2009) and, to a greater extent, by the income generated by its PRC subsidiaries and from the sale of equity securities. The principal equity funding for the Company was a private placement in March 2007, in which Equicap sold 8,450,704 shares at an aggregate offering price of $12,000,000. After related expenses, Equicap had net proceeds of approximately $10,000,000. The net proceeds of the private placement are being used by Equicap and its various subsidiaries principally for manufacturing, market expansion, product development, product acquisition and working capital and general corporate purposes.

Equicap used $8,000,000 of the proceeds from the March 2007 offering to fund the capital of ZhongChai JV. These funds are available as working capital of the joint venture. The joint venture partner contributed $2,600,000 of working capital simultaneously with the contribution by Equicap.

During the first quarter of fiscal year 2008, Equicap used approximately $3,700,000 of its cash assets to acquire Shengte as a wholly-owned subsidiary of ZhongChai JV. The cash assets used for this acquisition were those forming a part of the working capital contributed to ZhongChai JV. Shengte is a manufacturer and distributor of gears mainly used in engines and gearboxes, and gearboxes (transmissions) which are primarily used in industrial equipment such as forklift trucks. We expect that future cash flows generated from the operation of gear and gearbox business will be sufficient to cover the Company’s working capital requirements.

During the first quarter of fiscal year 2008, Equicap paid a liquidated damages amount of $32,000 because it did not have a registration statement for certain shares declared effective by a date determined under a registration rights agreement entered into in connection with the March 2007 offering.

On June 8, 2009, the Company, with its wholly owned subsidiary Usunco, entered into an agreement to sell IBC, the wholly owned subsidiary of Usunco. The transaction was closed on June 15, 2009. The sale agreement provided for the sale of all the share equity of IBC owned by Usunco to certain of the management persons of IBC, Mr. Philip Widmann and Ms. Ruth Kirshner, in exchange for the following: (i) the cancellation of an aggregate of 555,994 shares of common stock of Company which those individuals owned, and (ii) the payment of $60,000 in installments pursuant to the terms of an unsecured promissory note, the final payment of which will be November 15, 2010. As part of the transaction, the Company cancelled $428,261.49 through the closing date, of inter-company debt which funds had been used in the business of IBC prior to the transaction.

As Equicap expands its operations and considers additional acquisitions of private companies, divisions or product lines, it may require additional capital for its business development and operations. Equicap does not have any specific sources of capital at this time, therefore, it would need to find additional funding for its capitalization needs. Such capital may be in the form of either debt or equity or a combination. To the extent that financing is in the form of debt, it is anticipated that the terms will include various restrictive covenants, affirmative covenants and credit enhancements such as guarantees or security interests. The terms of any proposed financing may not be acceptable to Equicap. There is no assurance that funding will be identified or accepted by Equicap or, that if offered, it will be concluded.

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 accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United Stated of America. The consolidated financial statements include the accounts of Equicap, Inc. and its wholly and majority owned subsidiaries. All inter-company transactions and balances 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 and Bad Debt Reserves

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 the end of the period will be deemed uncollectible based on the age of the receivables. The Company reserves 0.5% of accounts receivable balances that have been outstanding below three months, 5% of accounts receivable balances that have been outstanding between three months and six months, 20% of receivable balances that have been outstanding within one year, 50% of receivable balances that have been outstanding for between one year and two years, and 100% of receivable balances that have been outstanding more than two years.

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. The Company evaluates the net realizable value of its 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. The Company did not record any provision for slow-moving and obsolete inventory as of September 30, 2009 and 2008.

Property and Equipment

Property and equipment is recorded at cost. Depreciation is provided on the straight-line method over the estimated useful lives of the assets. Repairs and maintenance expenditures, which do not extend the useful lives of the related assets, are expensed as incurred.

Under SFAS No. 144 "Accounting for the Impairment or Disposal of Long-Lived Assets" (ASC 360-10), the Company's long-lived assets are evaluated for impairment when events or changes in business circumstances indicate that the carrying amount of the assets may not be fully recoverable. The Company also assesses these assets for impairment based on their estimated future cash flows. The Company has not incurred any losses in connection with the adoption of this statement.

Goodwill and Other Intangible Assets

Goodwill represents costs in excess of fair values assigned to the underlying net assets of acquired businesses. Goodwill and intangible assets deemed to have indefinite lives are not amortized. All other intangible assets are amortized over their estimated useful lives. Goodwill and indefinite-lived intangible assets are subject to annual impairment testing using the guidance and criteria described in Statement of Financial Accounting Standard No. 142 “Goodwill and Other Intangible Assets” (ASC 350). This testing compares carrying values to fair values and, when appropriate, the carrying value of these assets is reduced to fair value.

Revenue Recognition

Revenue consists of sales of gears and gearboxes. In accordance with the provisions of Staff Accounting Bulletin No. 103, revenue is recognized when merchandise is shipped, title and risk of loss pass to the customer and collectibility is reasonably assured. Revenue is recorded as the sales price of goods and services, net of rebates and discounts and is reported on a gross basis. The gross basis is used mainly due to the fact that the Company acts as principal in each transaction and is responsible for fulfillment and acceptability of the products purchased, the Company takes title to its products before the products are ordered by its customers, the Company has risk of inventory loss as title of the products is transferred to the Company, the Company is responsible for collection of sales and delivery of products, and the Company does not act as an agent or broker and is not compensated on a commission or fee basis.

Sales Return and Warranties

Generally the Company does not accept the return of products once sold to customers. The Company generally 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, and is responsible for the costs and expenses thus incurred.

Advertising Costs

The Company expenses the cost of advertising as incurred. Advertising costs for the quarters ended September 30, 2009 and 2008 were insignificant.

Research and Development Costs

Research and development ("R&D) costs are classified as general and administrative expenses and are expensed as incurred.

Comprehensive Income (Loss)

The Company adopted SFAS No. 130, Reporting Comprehensive Income, which establishes rules for the reporting and display of comprehensive income, its components and accumulated balances. SFAS No. 130 (ASC220) defines comprehensive income (loss) to include all changes in equity, including adjustments to minimum pension liabilities, accumulated foreign currency translation, and unrealized gains or losses on available-for-sale marketable securities, except those resulting from investments by owners and distributions to owners.

Foreign Currency Translation

A significant portion of the Company's operations are conducted in China and the financial statements are translated from Chinese RMB, the functional currency, into U.S. Dollars in accordance with SFAS No. 52 "Foreign Currency Translation" (ASC 830-20). Accordingly, all foreign currency assets and liabilities are translated at the period-end exchange rate and all revenues and expenses are translated at the average exchange rate for the period. The effects of translating the financial statements of foreign subsidiaries into U.S. Dollars are reported as a cumulative translation adjustment, a separate component of comprehensive income in stockholder's equity.

Recent Accounting Pronouncements

On July 1, 2009, the Financial Accounting Standards Board (“FASB”) officially launched the FASB Accounting Standards Codification (“ASC”), which has become the single official source of authoritative nongovernmental U.S. GAAP, in addition to guidance issued by the Securities and Exchange Commission. The ASC is designed to simplify U.S. GAAP into a single, topically ordered structure. All guidance contained in the ASC carries an equal level of authority. The ASC is effective for all interim and annual periods ending after September 15, 2009. Accordingly, the Company refers to Codification in respect to the appropriate accounting standards throughout this document as “ASC”. Implementation of the Codification did not have any impact on the Company’s consolidated financial statements.

In May 2009, the FASB issued SFAS 165 “Subsequent Events” (ASC 855), which establishes the general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued. ASC 855 is effective for interim and fiscal years ending after June 15, 2009, which is the Company’s fourth quarter of fiscal 2009. The adoption of ASC 855 did not have a material impact on the Company’s consolidated financial statements.

In April 2009, FSP 157-4, Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly, was issued to provide additional guidance for estimating fair value in accordance with SFAS No. 157 (ASC 820), Fair Value Measurements, when the volume and level of activity for the asset or liability have significantly decreased.

This FSP also provides guidance on identifying circumstances which indicate that a transaction is not orderly. FSP 157-4 is effective for interim and annual reporting periods ending after June 15, 2009, and shall be applied prospectively. Adoption of this guidance is not expected to have a material impact on our consolidated financial statements.

In April 2009, the FASB issued FSP FAS 107-1, APB 28-1, Interim Disclosures about Fair Value of Financial Instruments, (“FSP 107-1, 28-1”). FSP 107-1, 28-1 requires disclosure about fair value of financial instruments in interim financial statements in order to provide more timely information about the effects of current market conditions on financial instruments. FSP 107-1, 28-1 is effective beginning the Company’s first interim period of fiscal 2010. The adoption of this FSP is not expected to have a material impact on the Company’s consolidated financial statements.

In December 2007, the FASB released SFAS 141(R) “Business Combinations” (ASC 805). This standard applies prospectively to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008, and as such, will be effective beginning in the Company’s fiscal year 2010. This standard establishes principles and requirements for how an acquirer recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed, any noncontrolling interest and the goodwill acquired. Additionally, transaction costs that are currently capitalized under current accounting guidance will be required to be expensed as incurred under SFAS No. 141(R) (ASC 805). This standard also establishes disclosure requirements which will enable users to evaluate the nature and financial effects of the business combination.

In December 2007, the FASB issued SFAS No. 160 “Noncontrolling Interests in Consolidated Financial Statements — an amendment of ARB No. 51” (ASC 810-10). This standard is will change the accounting and reporting for minority interests, which will now be termed “non-controlling interests.” This standard requires non-controlling interests to be presented as a separate component of equity and requires the amount of net income attributable to the parent and to the non-controlling interest to be separately identified on the consolidated statement of operations. SFAS 160(ASC 810-10) is effective for fiscal years beginning on or after December 15, 2008, and as such, will be effective beginning in the Company’s fiscal year 2010. The Company does not expect the adoption of SFAS No. 160(ASC 810-10) to have a material impact on its consolidated financial statements

In February 2007, the FASB issued SFAS No. 159 “The Fair Value Option for Financial Assets and Financial Liabilities” (ASC 825-10). This standard permits entities to measure many financial instruments and certain other items at fair value. The purpose is to improve financial reporting by providing entities with the opportunity to mitigate volatility. SFAS No. 159 (ASC 810-10) provides companies with an option to report selected financial assets and liabilities at fair value. The objective of this standard is to reduce both complexity in accounting for financial instruments and the volatility in earnings caused by measuring related assets and liabilities differently. This standard also establishes presentation and disclosure requirements designed to facilitate comparisons between companies and choose different measurement attributes for similar types of assets and liabilities. This standard is effective for the Company on July 1, 2008. It is not expected that the adoption of SFAS No. 159 (ASC 810-10) will have a material impact on the Company’s financial condition or results of operations.

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.

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. No differences were noted between the book and tax bases of the Company’s assets and liabilities, respectively. Therefore, there are no deferred tax assets or liabilities for the three months ended September 30, 2009. For the operating subsidiaries, the ZhongChai JV and its subsidiaries are located in the PRC, and are therefore subject to central government and provincial and local income taxes within the PRC at the applicable tax rate on the taxable income as reported in the PRC statutory financial statements in accordance with relevant income tax laws. The standard corporate income tax rate is 25% from January 1, 2008, when China’s new tax law became effective, decreased from 33%.

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. Quantitative and Qualitative Disclosures about Market Risk

The information is not required for smaller reporting companies.

Item 4T. 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.

PART II — OTHER INFORMATION

Item 1. Legal Proceedings.

None

Item 1A. Risk Factors.

Not applicable to smaller reporting companies.

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

None.

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-Q for the quarter ended September 30, 2009.

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-Q for the quarter ended September 30, 2009.

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.

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: November 11, 2009	EQUICAP, INC.

	By:	/s/ Peter Wang
	Name:	Peter Wang
	Title:	President

	By:	/s/ David Ming He
	Name:	David Ming He
	Title:	Chief Financial Officer