10-Q 1 natcoform10q9302008final.htm UNITED STATES



UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549


FORM 10-Q


[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2008


[] 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: 333-91190


NATCO INTERNATIONAL INC.

 (Exact name of registrant as specified in its charter)



Delaware

 

98-0234680

(State or other jurisdiction of incorporation)

 

(IRS Employer Identification Number)

 

Unit 204, 13569 – 76 Avenue

Surrey, British Columbia, Canada, V3W 2W3

(Address of principal executive offices)

(604) 592-0047

Registrant’s telephone number, including area code:


Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for 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.  [ X ] Yes   [ ] No


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


Large accelerated filer [ ]

Accelerated filer [ ]

Non-accelerated filer [ ]  (Do not check if a smaller reporting company)

Smaller reporting company [ X ]


Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).     [  ] Yes   [ X ] No


As of September 30, 2008 the Issuer had 26,747,614shares of common stock issued and outstanding.




1





PART I-FINANCIAL INFORMATION


ITEM 1.

FINANCIAL STATEMENTS.


The financial statements of Natco International, Inc. (the "Company"), a Delaware corporation, included herein were prepared, without audit, pursuant to rules and regulations of the Securities and Exchange Commission.  Because certain information and notes normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America were condensed or omitted pursuant to such rules and regulations, these financial statements should be read in conjunction with the financial statements and notes thereto included in the audited financial statements of the Company in the Company's Form 10-KSBfor the fiscal year ended March 31, 2008.


NATCO INTERNATIONAL, INC.

(A DEVELOPMENT STAGE COMPANY)

FINANCIAL STATEMENTS

PERIOD ENDED SEPTEMBER 30, 2008



INDEX TO FINANCIAL STATEMENTS:

Page

 

 

Balance Sheet

3- 4

 

 

Statements of Operations

5-6

 

 

Statements of Cash Flows

7-8

 

 

Notes to Unaudited Financial Statements   

9-10





2





 NATCO INTERNATIONAL INC.

DEVELOPMENT STAGE COMPANY

INTERIM BALANCE SHEETS

AS AT SEPTEMBER 30, 2008

(EXPRESSED IN U.S. DOLLARS)

CONDENSED AND CONSOLIDATED


 

 

 

September 30

 

March 31

 

 

 

2008

 

2008

 

 

 

(Unaudited)

 

(Audited)

ASSETS

 

 

 

 

Current Assets

 

 

 

 

 

Cash

 

$                  -

 

$                  -

 

Accounts Receivable

 

                   -

 

                   -

 

Inventory

 

                   -

 

                   -

 

Prepaid Assets

 

           5,474

 

            4,234

 

Assets held in discontinued operations

 

                   -

 

                   -

 

Total Current Assets

 

           5,474

 

            4,234

 

 

 

 

 

 

 Long Term Assets

 

 

 

 

 

Loan to PVT

 

$    1,485,000

 

$    1,485,000

 

Interest Receivable on Loan to PVT

 

       139,961

 

          95,099

 

Product Rights

 

                  1

 

                    1

 

 

 

 

 

 

Total Assets

 

$    1,630,436

 

$    1,584,334

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

 

Current Liabilities

 

 

 

 

 

Bank Indebtedness

 

$         15,542

 

$         20,171

 

Accounts Payable

 

         67,900

 

          93,210

 

Accrued Liabilities

 

         80,497

 

          92,344

 

Loan Payable

 

       466,596

 

       403,490

 

Due to related Parties

 

       799,543

 

       811,288

 

 

 

 

 

 

 

Total Current Liabilities

 

    1,430,078

 

    1,420,503

 

 

 

 

 

 

 

Total Liabilities

 

    1,430,078

 

    1,420,503

 

 

 

 

 

 

 

Continued Operations

 

 

 

 

 

Discontinued Operations

 

 

 

 

 

Subsequent events

 

 

 

 

 

 

 

 

 

 

Stockholders' Equity

 

 

 

 




3







 

Authorized:

 

 

 

 

 

 50,000,000 Common Shares,

 

 

 

 

 

with a par value $0.001,

 

 

 

 

 

5,000,000 preferred shares

 

 

 

 

 

with a par value $0.001,

 

 

 

 

 

Issued:

 

 

 

 

 

Common shares - 26,747,614

 

 

 

 

 

(2007 - 20,447,614) respectively

 

 

 

 

 

Paid in Capital -Statement 3

 

         26,747

 

          20,447

 

 

 

 

 

 

 

Additional Paid-in Capital -Statement 3

 

    2,411,440

 

    1,092,740

 

 

 

 

 

 

 

Share Subscriptions

 

                   -

 

    1,384,277

 

 

 

 

 

 

 

Other Comprehensive Income - Statement 3

 

    (317,320)

 

      (432,465)

 

 

 

 

 

 

 

Deficit Accumulated during Development Stage

 

 (1,920,509)

 

   (1,901,168)

 

 

 

 

 

 

 

Total Stockholders' Equity

 

       200,358

 

       163,831

 

 

 

 

 

 

Total Liabilities and Stockholders' Equity

 

$    1,630,436

 

$    1,584,334

 

 

 

 

 

 

 

 

 

$                  -

 

 



See accompanying notes




4





NATCO INTERNATIONAL INC

DEVELOPMENT STAGE COMPANY

INTERIM STATEMENTS OF OPERATIONS

FOR THE SIX MONTHS ENDED SEPTEMBER 30

(EXPRESSED IN U.S. DOLLARS)

CONDENSED AND CONSOLIDATED


 

 

 

Three Months Ended

September 30,

2008

 

Three Months Ended

September 30,

2007

 

Six Months Ending

September 30,

2008

 

Six Months Ending

September 30,

2007

 

Since Inception

to September

 30, 2008

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income

 

 

 

 

 

 

 

 

 

 

 

Sales

 

 $                 -   

 

 $                   -

 

 $                 -   

 

 $               -   

 

 $        392,635

 

 

 

 

 

 

 

 

 

 

 

$                   -

 

Cost of Sales

 

                       -

 

                       -

 

                     -

 

                  -   

 

         239,602

 

 

 

 

 

 

 

 

 

 

 

 $                  -  

 

Gross Profit

 

 $                 -   

 

 $                 -   

 

 $                 -   

 

 $               -   

 

$         153,033

 

 

 

 

 

 

 

 

 

 

 

 

Operating Expenses

 

 

 

 

 

 

 

 

 

 

 

Advertising and Promotion

 

                   550

 

               9,254

 

              2,207

 

            13,937

 

            89,203

 

Amortization

 

 

 

 

 

 

 

 

 

            46,985

 

Automotive

 

 

 

 

 

 

 

 

 

            37,035

 

Bad Debts

 

 

 

 

 

 

 

 

 

              8,474

 

Bank Charges

 

                   778

 

                  273

 

              1,500

 

                 422

 

            17,269

 

Commissions

 

 

 

 

 

 

 

 

 

              3,509

 

Consulting Fees

 

 

 

 

 

 

 

 

 

            17,980

 

Insurance

 

 

 

 

 

 

 

 

 

            17,481

 

Legal and Accounting

 

                5,355

 

               1,387

 

            10,969

 

            26,447

 

         397,398

 

Office and other

 

                   552

 

               2,161

 

              1,333

 

              2,294

 

            64,322

 

Rent

 

                2,696

 

              1,596

 

              5,382

 

              5,420

 

         217,530

 

Research and Development

 

 

 

 

 

 

 

 

 

         105,537

 

Salaries and benefits

 

              17,591

 

             17,894

 

            35,181

 

            34,938

 

         756,118

 

Telephone and Utilities

 

                   320

 

               1,127

 

              1,624

 

              3,015

 

            59,122

 

Travel and trade shows

 

 

 

 

 

                      -

 

                     -

 

            46,386

 

Currency Exchange Loss (Gain)

 

                       -

 

                       -

 

                     -  

 

                     -

 

                 554

 

 

 

 

 

 

 

 

 

 

 

                     -  

 

Total Expenses

 

              27,842

 

             33,692

 

            58,196

 

            86,473

 

      1,884,903

 

 

 

 

 

 

 

 

 

 

 

                     -  

Net Loss from Operations

 

           (27,842)

 

           (33,692)

 

         (58,196)

 

         (86,473)

 

     (1,731,870)

 

 

 

 

 

 

 

 

 

 

 

 

Other Items

 

 

 

 

 

 

 

 

 

 

 

Interest on PVT Loan

 

              23,722

 

             28,247

 

            48,231

 

            40,940

 

         142,786

 

Other Income

 

 

 

 

 

 

 

 

 

            25,389




5








 

Cancellation of Options

 

 

 

                  450

 

 

 

            49,950

 

            49,950

 

Interest Expense

 

             (2,390)

 

           (28,161)

 

           (9,376)

 

         (42,637)

 

        (373,921)

 

 

 

 $           21,332

 

 $               536

 

 $          38,855

 

 $         48,253

 

 $     (155,796)

 

 

 

 

 

 

 

 

 

 

 

 

Loss from Continued operations

 

             (6,510)

 

           (33,156)

 

         (19,341)

 

         (38,220)

 

     (1,887,666)

 

 

 

 

 

 

 

 

 

 

 

 

Net Income (loss) from

 

 

 

 

 

 

 

 

 

 

discontinued operations

 

 

 

             (2,980)

 

 

 

           (2,980)

 

          (32,843)

 

 

 

 

 

 

 

 

 

 

 

                     -  

Net  Loss

 

             (6,510)

 

           (36,136)

 

         (19,341)

 

         (41,200)

 

     (1,920,509)

 

 

 

 

 

 

 

 

 

 

 

                     -  

 

Other comprehensive income

 

            107,342

 

           (62,833)

 

         115,145

 

       (121,739)

 

        (317,320)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Loss and Comprehensive loss

 

 $         100,832

 

 $        (98,969)

 

 $          95,804

 

 $    (162,939)

 

 $  (2,237,829)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and Diluted

 

 

 

 

 

 

 

 

 

 

 

(Loss) per Share

 

 $               0.00

 

 $            (0.01)

 

 $              0.00

 

 $          (0.01)

 

 $           (0.08)

 

 

 

 

 

 

 

 

 

 

 

 

Weighted Average

 

 

 

 

 

 

 

 

 

 

   Number of Shares

 

       26,747,614

 

      19,197,614

 

     26,747,614

 

     19,197,614

 

    26,747,614


See accompanying notes





6





NATCO INTERNATIONAL INC.

DEVELOPMENT STAGE COMPANY

INTERIM STATEMENTS OF CASH FLOWS

FOR THE SIX MONTHS ENDED SEPTEMBER 30, 2008

(EXPRESSED IN U.S. DOLLARS)

CONDENSED AND CONSOLIDATED


 

 

 

Six Months Ended

September 30,

2008

 

Six Months Ended

September 30,

2007

 

(Inception)

September 30,

2008

 

 

 

 

 

 

 

 

 

 

Operating Activities

 

 

 

 

 

 

 

Net (Loss)

 

 $             (19,341)

 

 $             (41,200)

 

 $ (1,920,509)

 

Adjustments to reconcile Net (Loss)

 

 

 

 

 

 

 

   Common Stock issued for Services

 

                  -   

 

                      -   

 

 

 

   Depreciation

 

                  -   

 

                      -   

 

            46,985

 

Write off of assets from discontinued operations

 

 

 

 

 

            32,843

 

Interest due to related parties

 

           8,756

 

             23,812

 

         123,625

 

Wages accrued to director

 

         35,181

 

             34,938

 

         552,424

 

Cancelled stock based compensation

 

                  -   

 

            (49,950)

 

 

 

Changes in Operating Assets and Liabilities

 

 

 

 

 

 

 

   (Increase)/Decrease in Accounts Receivable

 

 

 

 

 

                     -   

 

Interest receivable

 

       (44,862)

 

            (44,100)

 

       (139,961)

 

Inventory

 

                  -   

 

                      -   

 

                     -   

 

Prepaid expense

 

         (1,240)

 

                6,475

 

           (5,474)

 

   Increase/(Decrease) in Accounts Payable

 

       (25,310)

 

             27,943

 

            67,900

 

   Increase/(Decrease) in Accrued Liabilities

 

       (11,847)

 

             39,759

 

            80,497

 

 

 

 

 

 

 

 

 

Net Cash Provided by Operating Activities

 

       (58,663)

 

              (2,323)

 

    (1,161,670)

 

 

 

 

 

 

 

 

 

Net cash provided by (used in )
Discontinued operations

 

                  -   

 

                2,765

 

         (31,984)

 

 

 

 

 

 

 

 

 

 

 

       (58,663)

 

                   442

 

    (1,193,654)

 

 

 

 

 

 

 

 

Investment Activities

 

 

 

 

 

 

 

Purchase of Equipment

 

                  -   

 

                      -   

 

         (62,642)

 

Loan to PVC

 

                  -   

 

      (1,300,000)

 

    (1,485,000)

 

 

 

 

 

 

 

 

 

Net Cash (Used) by Investment Activities

 

                  -   

 

      (1,300,000)

 

    (1,547,642)

 

 

 

 

 

 

 

 

Financing Activities

 

 

 

 

 

 

 

Bank Indebtedness

 

         (4,629)

 

                3,977

 

            15,542




7







 

Due to Related party

 

       (55,682)

 

           364,020

 

         138,291

 

Loans Payable

 

         63,106

 

        1,050,000

 

         466,596

 

Proceeds from Subscriptions Receivable

 

  (1,384,277)

 

            (70,853)

 

                     -   

 

Proceeds from sale of Common Stock

 

   1,325,000

 

             74,153

 

      2,438,187

 

 

 

 

 

 

 

 

 

Net Cash Provided by Financing Activities

 

       (56,482)

 

        1,421,297

 

      3,058,616

 

 

 

 

 

 

 

 

 

Foreign Exchange

 

      115,145

 

          (121,739)

 

       (317,320)

 

 

 

 

 

 

 

 

Change in cash and cash equivalents

 

                  -   

 

                      -   

 

                     -   

 

 

 

 

 

 

 

 

Cash, Beginning of Period

 

                  -   

 

                      -   

 

                     -   

 

 

 

 

 

 

 

 

Cash, End of Period

 

 $                       -   

 

 $                      -   

 

$                 -   

 

 

 

 

 

 

 

 

Supplemental Information:

 

 

 

 

 

 

 

Interest Paid

 

 $                  620

 

 $            18,825

 

 $      140,623

 

Income Taxes Paid

 

 $                      -   

 

 $                     -   

 

$                 -   


See accompanying notes




8





NATCO INTERNATIONAL INC.

DEVELOPMENT STAGE COMPANY

NOTES TO INTERIM FINANCIAL STATEMENTS

SEPTEMBER 30, 2008

(EXPRESSED IN US DOLLARS)

=====================================================================

1.

CONDENSED FINANCIAL STATEMENTS


The accompanying financial statements have been prepared by the Company without audit.  In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations and cash flows at September 30, 2008 and for all periods presented have been made.


Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. It is suggested that these condensed financial statements be read in conjunction with the financial statements and notes thereto included in the Company's March 31, 2008 audited financial statements.  The results of operations for the period ended September 30, 2008 are not necessarily indicative of the operating results for the full years.


2.

GOING CONCERN


The Company's financial statements are prepared using accounting principles generally accepted in the United States of America applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has not yet established an ongoing source of revenues sufficient to cover its operating costs and allow it to continue as a going concern.  The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable.  If the Company is unable to obtain adequate capital, it could be forced to cease operations.


In order to continue as a going concern, the Company will need, among other things, additional capital resources.  Management's plans to obtain such resources for the Company include (1) obtaining capital from management and significant shareholders sufficient to meet its minimal operating expenses, and (2) completing the proposed merger with Lassen Energy Inc. However, management cannot provide any assurances that the Company will be successful in accomplishing any of its plans.


The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually secure other sources of financing and attain profitable operations. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.




9





3.

SIGNIFICANT EVENTS


i)  On Feb 19, 2008 Company signed a binding Letter of agreement with Lassen Energy, Inc. (LEI), a US company that manufactures Solar Panels.


ii) On April 18, 2008 Natco and LEI entered into a binding definitive agreement to merge by way of share exchange.


iii) On August 11, 2008 Natco and LEI extended the agreement by 90 days and are currently in the process of working out details of closing.


iv) On September 3, 2008, the company issued 6.3 million common shares to six following companies for debt conversion:


 

Angel International Acquisitions S.A.        

1,115,000 Shares

 

Beta Industries S.A.                           

915,000 Shares

 

Micro-tech Industries Ltd.

1,010,000 Shares

 

Cavern Holdings Ltd.                           

715,000 Shares

 

Whonon Trading S.A.                           

1,520,000 Shares

 

Gibraltar Management Foundation Inc

1,025,000 Shares

 

These shares were issued to non-affiliate Companies for debt conversion. The shares were issued in reliance upon the exemption from registration provided by Section 4(2) under the Securities Act of 1933 for transactions not involving a public offering for $0.21 per.





10





ITEM 2.

 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




11






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




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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.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.


Not Applicable.


ITEM 4T.

CONTROLS AND PROCEDURES.


Disclosure Controls and Procedures


The Securities and Exchange Commission defines the term “disclosure controls and procedures” to mean a company's controls and other procedures of an issuer that are designed to ensure that information required to be disclosed in the reports that it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Securities Exchange Act of 1934 is accumulated and communicated to the issuer’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.  The Company maintains such a system of controls and procedures in an effort to ensure that all information which it is required to disclose in the reports it files under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified under the SEC's rules and forms and that information required to be disclosed is accumulated and communicated to principal executive and principal financial officers to allow timely decisions regarding disclosure.


As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of our chief executive officer and chief financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures.  Based on this evaluation, our chief executive officer and chief financial officer concluded that our disclosure controls and procedures are designed to provide reasonable assurance of achieving the objectives of timely alerting them to material information required to be included in our periodic SEC reports and of ensuring that such information is recorded, processed, summarized and reported within the time periods specified.  Our chief executive officer and chief financial officer also concluded that our disclosure controls and procedures were effective as of the end of the period covered by this report to provide reasonable assurance of the achievement of these objectives.  




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Changes in Internal Control over Financial Reporting


There was no change in the Company's internal control over financial reporting during the period ended September 30, 2008, 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.


In May 2007 the company took a local brokerage house to court on behalf of itself and its shareholders.  This action was taken because the Company and some shareholders had a reason to believe that this particular Brokerage house was lending the shares to another broker Dealer for the purpose of shorting.  When the shareholders demanded that their shares be converted to share certificates, the brokerage house did not produce the certificates in a reasonable time period.  The Company went to Supreme Court of British Columbia to force them to a) deliver the share certificates to shareholders, b) to stop lending out our shares, c) to stop shorting of the Company's shares.  The Company managed to accomplish all three because the judge agreed with the Company and an order was issued to deliver the shares to shareholders immediately.  


On December 12, 2007, the Company commenced legal proceedings in British  Columbia Supreme Court against Photo Violation Technologies Corp. ("PVT") and its president, Fred Mitschele (aka Fred Marlatt), claiming punitive, exemplary and consequential damages and other remedies arising from breach of contract and wrongful conduct on the part of Mitschele.  In the Action, the Company claimed PVT has breached the agreement among the Company, PVT and Mitschele entered into on or about March 16, 2007, which provided for the completion of a reverse merger between the Company and PVT.   The Company also claimed in Court documents that Mitschele engaged in a number of wrongful acts, including inducing breach of contract, attempting to divert prospective investors from Company to PVT, failing to provide financial statements and other necessary documents. In February 2008, the company extended the law suit to include, the other two directors and one employee. In March PVT countersued Natco, One director of the company and two associates of the company, claiming breach of contract.


ITEM 1A.

 RISK FACTORS.


Not Applicable.


ITEM 2.

UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.


The Company issued the following unregistered securities in the six months ended on September 30, 2008:


·

Angel International Acquisitions S.A. (1)           1,115,000 Shares

·

Beta Industries S.A. (1)        

                   915,000 Shares

·

Micro-tech Industries Ltd.  (1)                  

   1,010,000 Shares

·

Cavern Holdings Ltd. (1)                           

     715,000 Shares

·

Whonon Trading S.A.(1)                                   1,520,000 Shares

·

Gibraltar Management Foundation Inc. (1)        1,025,000 Shares






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(1)

These shares were issued to non-affiliate Companies for debt conversion. The shares were issued in reliance upon the exemption from registration provided by Section 4(2) under the Securities Act of 1933 for transactions not involving a public offering for $0.21 per share.


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.


(a)

The following exhibits are filed herewith:


31.1

Certifications pursuant to Rule 13a-14(a) or 15d-14(a) under the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.


31.2

Certifications pursuant to Rule 13a-14(a) or 15d-14(a) under the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.


32.1

Certifications pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.


32.2

Certifications pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.


SIGNATURES


In accordance with Section 13 of the exchange act, the registrant has duly Caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


                                      

 Natco International, Inc.

                                   

 By: /s/ Raj-Mohinder S. Gurm

                                      

 -----------------------------------

                                     

 Name: Raj-Mohinder S. Gurm

 Date: November 19, 2008                

 Title: Chief Executive Officer & CFO



Pursuant to the Securities Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.


/s/Raj-Mohinder S. Gurm

-------------------------------------------------------------

Director, CEO and CFO             November 19, 2008




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