MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

SPECIAL NOTE OF CAUTION REGARDING FORWARD-LOOKING STATEMENTS

CERTAIN STATEMENTS IN THIS REPORT, INCLUDING STATEMENTS IN THE FOLLOWING DISCUSSION, ARE WHAT ARE KNOWN AS "FORWARD LOOKING STATEMENTS", WHICH ARE BASICALLY STATEMENTS ABOUT THE FUTURE. FOR THAT REASON, THESE STATEMENTS INVOLVE RISK AND UNCERTAINTY SINCE NO ONE CAN ACCURATELY PREDICT THE FUTURE. WORDS SUCH AS "PLANS," "INTENDS," "WILL," "HOPES," "SEEKS," "ANTICIPATES," "EXPECTS "AND THE LIKE OFTEN IDENTIFY SUCH FORWARD LOOKING STATEMENTS, BUT ARE NOT THE ONLY INDICATION THAT A STATEMENT IS A FORWARD LOOKING STATEMENT. SUCH FORWARD LOOKING STATEMENTS INCLUDE STATEMENTS CONCERNING OUR PLANS AND OBJECTIVES WITH RESPECT TO THE PRESENT AND FUTURE OPERATIONS OF THE COMPANY, AND STATEMENTS WHICH EXPRESS OR IMPLY THAT SUCH PRESENT AND FUTURE OPERATIONS WILL OR MAY PRODUCE REVENUES, INCOME OR PROFITS. NUMEROUS FACTORS AND FUTURE EVENTS COULD CAUSE THE COMPANY TO CHANGE SUCH PLANS AND OBJECTIVES OR FAIL TO SUCCESSFULLY IMPLEMENT SUCH PLANS OR ACHIEVE SUCH OBJECTIVES, OR CAUSE SUCH PRESENT AND FUTURE OPERATIONS TO FAIL TO PRODUCE REVENUES, INCOME OR PROFITS. THEREFORE, THE READER IS ADVISED THAT THE FOLLOWING DISCUSSION SHOULD BE CONSIDERED IN LIGHT OF THE DISCUSSION OF RISKS AND OTHER FACTORS CONTAINED IN THIS REPORT ON FORM 10-Q AND IN THE COMPANY'S OTHER FILINGS WITH THE SECURITIES AND EXCHANGE COMMISSION. NO STATEMENTS CONTAINED IN THE FOLLOWING DISCUSSION SHOULD BE CONSTRUED AS A GUARANTEE OR ASSURANCE OF FUTURE PERFORMANCE OR FUTURE RESULTS.

Background and Overview

The following summary should be read in conjunction with the financial statements and accompanying notes to them included elsewhere in this report.

Natco International, Inc. (the "Company") has been in existence as a company (including our predecessor British Columbia Corporation) since 1990. However, we began to concentrate on our Chemical Manufacturing business activities in 1997; prior to that time we had few shareholders and were primarily dormant. We never made a profit on Chemical Manufacturing operations.

As of September 30, 2008, we had incurred a deficit of $(1,920,509) and $(1,901,168) as of March 31, 2008, which has continued to increase; this deficit includes losses incurred by our predecessor over the several years of our development. Most of our losses have been recent and incurred in the development of our chemical product lines. As an example, our deficit as of October 31, 1998 was approximately $(130,000). We had sales in both the jewelry cleaner and tire sealants product lines since 1998 to 2005, but sales did not contribute a significant amount to offset expense. In the 6 months ended September 30, 2008 compared to the 6 months ended September 30, 2007, we had net loss of $(19,341) and $(41,200) respectively. Consequently, we discontinued all manufacturing activities and signed a reverse merger agreement with photo Violation Technologies Corp (PVT) of Vancouver, British Columbia, Canada on March 16, 2007.

The merger agreement with PVT fell through and we have signed a binding definitive agreement with Lassen Energy, Inc. of California to do a reverse merger by way of share exchange.

Results of Operations

Six month period ended September 30, 2008

The company is in the process of doing a reverse merger with Lassen Energy, Inc and the assets consist of Loan to PVT in the amount of $1,485,000 plus interest and the share exchange agreement with Lassen Energy and stored equipment and inventory from previous business.

Consequently we had no sales in the six month period ended September 30, 2008. Therefore, it is not meaningful to compare our results of operations to our prior year since our prior year's operations have been discontinued.

The company cancelled all issued and outstanding Options owned by its four directors. The Agreement with PVT stipulated that all Options be either cancelled or exercised. All directors chose to cancel their Options. No new options have been issued.

Liquidity and Capital Resources

Natco has financed its operations through equity investment from investors, shareholder loans, and credit facilities from Canadian chartered banks and increases in payables and share subscriptions. Most of the financing has been debt financing from related and un-related parties.

As of September 30, 2008, the Company has a debt of $1,430,078. Most of the debt is to parties related to current management of Natco. By the time the merger between Lassen and Natco is completed, the current management will pay out all debts to non-related parties. As a result all debts will be owed to current management group. The amount of debt will be roughly same as the money owed to Natco by PVT. If Natco is successful in recovering this money from PVT, the debts will be paid out but if unsuccessful all debts will be written off. Current management will indemnify the post merger company and its management.
Post Merger Company will raise 10 to 20 million dollars to execute their business plan. None of this money will be used to retire current debt.

Our estimated fixed costs at this time are approximately $5400 per month; not including the legal expense of law suit against PVT, but does includes $900 for lease payments, $500 for utilities, $3,000 for loan interest and principle payments, and $1,000 for miscellaneous expenses. We will have to raise approximately $5400 per month until additional funding is in place.

We are currently suing PVT for the money it owes us ($1,485,000) plus Interest and damages. If this money is paid back we will not need any financing. All debts could be paid and we will have enough working capital to sustain us for the next 12 months.

If we are unable to finance the company by debt or equity financing, or combination of the two, we will have to look for other sources of funding to meet our requirements. That source has not been identified as yet but most likely will be debt financing using the management's trading shares as collateral. However there is no guarantee that we will be successful in raising any additional capital.

Our financial statements have been prepared on the going concern basis under which an entity is considered to be able to realize its assets and satisfy its liabilities in the ordinary course of business. Operations to date have been primarily financed by long-term debt and equity transactions as well as increases in payables and related party loans. Our future operations are dependent upon the identification and successful completion of additional long-term or permanent equity financing, the continued support of creditors and shareholders, and, ultimately, the achievement of profitable operations. There can be no assurance that we will be successful. If we are not, we will be required to reduce operations or liquidate assets. We will continue to evaluate our

projected expenditures relative to our available cash and to seek additional means of financing in order to satisfy working capital and other cash requirements. Our auditors' report on the March 31, 2008 financial statements includes an explanatory paragraph that states that as we have suffered recurring losses from operations, substantial doubt exists about our ability to continue as a going concern. The consolidated financial statements do not include any adjustments relating to the recoverability of assets and classification of assets and liabilities that might be necessary should we be unable to continue as a going concern.

Subsequent Event

The Company and Lassen Energy, Inc. are in the process of negotiating the terms of their business relationship. As a result of the negotiations, the business transaction between the Company and Lassen Energy, Inc. may not be in the form of a reverse merger transaction.

Off Balance Sheet Arrangements

The Company does not have any off-balance sheet arrangements.

ITEM 3.