Natcore Technology Inc (NTCXF)

[JB3729]

Natcore sent this email to shareholders on 9/9/11

Extolling The Attributes Of Natcore Technology

Dear Jim,

As I’m sure you are aware, Natcore has made significant progress over the past several months. Along the way we have developed a following of individuals interested in our technology and our goal to make solar energy competitive with traditional sources of energy.

We came across an update and summary written and posted by one of these individuals. He obviously put a lot of thought and effort into this. It’s a good summary and I thought it would be of interest to everyone.

If you have any questions or comments, don’t hesitate to contact either Chuck or myself. Thanks for your continued interest in Natcore.

Best,

Tom Scarpa


Extolling The Attributes Of Natcore Technology

While viewing your website, I noticed that you are focused on identifying disruptive ideas and new chemistries for renewable energy generation. I think that you will find this information to be very interesting. (See below for breaking news regarding ultra-low cost flexible photovoltaic cells)

I am an individual investor that focuses on solar pv. I strongly believe that I have uncovered a small, relatively unknown technology company that will have a game changing impact in the solar pv space due to their disruptive technology. This little gem also has tremendous upside potential from many applications outside of the solar arena.

The Company I'm referring to is Natcore Technology. The following introduction is from Natcore's website - http://www.natcoresolar.com

WE HAVE TECHNOLOGY THAT WILL CHANGE THE WORLD

That's a bold claim. But consider this: Natcore Technology controls a new thin-film growth process that promises to allow mass manufacturing of tandem solar cells with twice the efficiency of the best solar cells available today.

This would mean that solar energy would finally be cost-competitive with conventional power. And that we can significantly diminish our dependence on fossil fuels.

Moreover, our technology allows for solar cell production that eradicates the need for toxic silane; eliminates the need for intensive energy used to apply the antireflective coating; and significantly lowers silicon usage. But our world-changing technology also promises to have a dramatic impact on semiconductor devices; optical components; eyewear; aerospace exploration; and architectural coatings, among other uses.


I have conversed with the combination of Chuck Provini (CEO), Brien Lundin (Chairman), Dr. Dennis Flood (CTO), and Tom Scarpa (IR) many times. They are very accessible and I have found their passion to be contagious, and their integrity to be at the highest level. The following is a brief description taken from Natcore's website.

Chuck Provini (CEO) graduated from, and has been a leadership instructor at the U.S. Naval Academy and Chairman of the U.S. Naval Academy's Honor Board.

Brien Lundin (Chairman) is a co-founder of Natcore. He is an executive, marketer and investor with experience in financing and advising early-stage technology and natural resource enterprises.

Dennis Flood, PhD, (CTO) is a Natcore founder. He has more than 30 years of experience in developing solar cell and array technology for both space and terrestrial applications. At the NASA Glenn Research Center in Cleveland, he served for 15 years as Chief of the Photovoltaic and Space Environments Branch and led programs in advanced photovoltaic systems development.

Professor Andrew Barron is a co-founder of, and technical consultant to Natcore. Currently, the Charles W. Duncan Jr. - Welch Chair of Chemistry and Professor of Materials Science at Rice University.


Natcore does not plan to manufacture solar cells. Instead, they plan to sell materials, deposition systems and licenses, based on their technology, to companies that do so. In my opinion, this business model has very low capital expenditures built in. It should also result in a very high net income percentage.


PRESIDENT'S MESSAGE dated 7/11/11
Now there is one. There could soon be five.

I'm talking about AR-Box™. That's Natcore's intelligent processing system, our new machine that will allow us to refine and deliver a self-contained, cost-effective, anti-reflective (AR) coating process to solar fabrication facilities.

We first told you about AR-Box just four months ago, when we began producing it at MicroTech Systems in Fremont, CA. Now we are in the machine's final testing phase. We are also working on integrating our black silicon application to this tool, which will make AR-Box the only machine able to grow an AR coating on black silicon.

AR-Box will allow us to refine and deliver a cost-effective AR coating process to solar fabrication facilities. Moreover, our black silicon application could increase efficiency of solar cells by two to three percent, and could increase total daily power output by a much greater degree. (We're breaking entirely new ground here, and there's no way to accurately determine the power advantages of a black silicon solar cell until we actually create one and test it.)

We are having AR-Box #1 installed in our new laboratory facility at the Eastman Business Park in Rochester, NY, where we plan to consolidate our R&D efforts. This facility exceeds our advanced equipment, clean room and testing requirements and, along with a joint development agreement that we have signed with Kodak, will enable us to tap into the rich talent pool in Rochester - including many highly credentialed casualties of their downsizing. This will greatly increase our scientific and intellectual depth, and allow us to proceed at a much faster rate on our other technologies and applications.

The thrust of our efforts with Kodak will be to utilize their equipment and experience in high-speed, roll-to-roll manufacturing of thin films as we develop a flexible solar cell. Kodak's cutting-edge facilities, as well as their leading expertise, are at our disposal for relatively small cash outflows. This roll-to-roll technology could reduce the cost to manufacture solar cells by as much as 60 percent.
(Please note that we will continue to utilize Professor Andrew Barron's group at Rice University, through joint research agreements, to develop our tandem solar cell and to explore additional applications for our technology.)

AR-Box #2 will go to Hunan TLNZ Solar Technology Co. Ltd. of Xiangtan, China, with whom we have signed a letter of understanding. After extensive testing and adjustments in Fremont, if necessary, the device will be shipped to TLNZ. The sale closing is contingent upon a successful test by TLNZ.

AR-Box #3 will be sent to Natcore Technology (Zhuzhou) Ltd., our joint venture formed with the Zhuzhou Hi-Tech Industrial Development Zone. (I've been asked why we didn't build AR-Box 1 at our joint venture. The answer is simple: We wanted our first machine to be perfect. Our strategy has paid off: We have two very important, patented improvements that were conceived and implemented after construction began. Simply put, these options had not been thought of before and do not exist currently in China or anywhere else. American technology is still the best in the world.)

We have confidence that AR-Box #4 will be sold to another large Chinese solar company. This company, with a 500-megawatt production facility (this is equal to the entire U.S. solar cell production capacity), will be sending a delegation including their CEO and CTO to visit our Rice and Rochester labs in mid-August. They want to discuss how our process can be integrated into their fabrication lines. We also plan to discuss potential joint venture opportunities with them.

We hope to build AR-Box #5 for an Italian solar company that will be visiting us early in August to evaluate our equipment and investigate joint venture opportunities here in the United States. This company, too, will send their CEO and CTO to meet with us. We have already met with them in Red Bank, at their New Jersey facility, and in Milan.

As you can see, we are focused on identifying and partnering with world-class companies with extensive manufacturing experience. By partnering with the very best manufacturers to integrate our equipment and technology seamlessly into fabrication lines, we know we will be able to meet any company's needs in the future.

We could have built AR-Box 1 more quickly, and perhaps sold one sooner into a Chinese production line. We chose not to go this route, however, because our goal is to make Natcore's products the gold standard in the industry.

We are not trying to make a quick trade; we are trying to build a business. We are not in this for an exit strategy - we want to deliver revolutionary products that transform entire industries and richly reward our shareholders.

And, along the way, we plan to change the world for the better.

Charles Provini, President, CEO, & Director

The large Chinese solar company is Phono Solar. They plan to double their 500-megawatt production capacity to 1-gigawatt. Their parent company is a conglomerate with $15 billion in sales. They will arrive in the U.S. on 9/25. Natcore is confident of an AR-Box sale to them.

The Italian solar company is MX Solar. They were in the U.S. in early August. Natcore is traveling to Italy to meet with them in early September. Natcore is confident of an AR-Box sale to them.

Natcore plans to ship thousands of the LPD process AR-coated, passivated black silicon wafer samples to silicon pv solar manufacturers real soon. They also expect that an AR-Box will be part of a pv panel manufacturer's wafer processing line by the end of the year.

LIQUID PHASE DEPOSITION: This is what Natcore is rolling out this year. From Natcore's website.
http://www.natcoresolar.com/index.php?option=com_content&view=article&id=47&Itemid=81&pid=53


In early 2009, Natcore projected revenue of $5.00 per 150 watt panel for their AR-coating. Natcore believes that their revenue projections are still valid. Since then Natcore has added passivation and the ability to etch typical flat wafers in order to produce black silicon. Using the $5.00 of revenue for each 150 watts of pv panels manufactured, Natcore will realize $33 million of revenue per gigawatt of pv panels manufactured using Natcore's AR-Boxes and LPD process.

1 gigawatt (1,000,000,000 watts) divided by 150 watts = 6,666,000 X $5.00 = $33,330,000

More on the AR-Box.
http://www.natcoresolar.com/index.php?option=com_content&view=article&id=130&Itemid=75

Statement from Natcore: The final production system will measure about 20' X 8' X 6' high. It will be a self-contained modular system capable of recycling its own effluents and of producing 3,000 AR-coated wafers/hour.

Suntech's website shows that their 240 watt panels have 60 wafers. It seems that figuring 4 watts per wafer is accurate.

MAXIMUM watt output of AR-coated wafers for one AR-Box:

3,000 wafers per hour X 4 watts each = 12,000 watts per hour

12,000 watts per hour X 24 hours = 288,000 watts per day

288,000 watts per day X 365 days = 105,120,000 watts per year

105,000,000 watts per year = 105 MW of AR-coated wafers per year (MAXIMUM)

From the first calculation above: 1 gigawatt of AR-coated wafers @ $5 per each 150 watts = $33,330,000

105 MW = .105 gigawatt X $33,330,000 = $3,500,000 in revenue from each AR-Box (MAXIMUM)

Realistically, I don't think that anyone will run the AR-Box 24/7, 365 days a year. However, I think that the advantages of Natcore's black silicon offering will result in revenue that is higher than the $5 for each 150 watts worth of AR-coated wafers. Plus, in time, I'm hoping that Natcore receives extra revenue due to a reduction in the thickness of the silicon wafers used by the panel fabricators. This reduction is made possible by the LPD process.

For now I'm using 1/2 of the maximum revenue for each AR-Box = $1,750,000.

I think that the $3,500,000 in revenue from 2 AR-Boxes will result in Natcore being slightly profitable.

One more item regarding AR-Boxes:
http://www.bloomberg.com/news/2011-03-21/natcore-to-deliver-anti-reflective-coating-system-to-chinese-solar-maker.html


FLEXIBLE SOLAR CELLS: "Once ready for sale, Natcore's thin film solar cell array technology will cause a paradigm shift in the market by exceeding the DOE-established price levels needed to achieve grid parity for the price of solar generated electricity. A roll of thin film cells will reduce the cost of making a solar panel and the time required to install a commercial solar array by at least 60%."
http://www.natcoresolar.com/index.php?option=com_content&view=article&id=101&Itemid=103&pid=53

Natcore is projecting that the near term module efficiency using this technology will be equivalent to commercial silicon modules of 15% to 16%, and the longer term improvements will raise the efficiency to 20% or more.

Global Solar's new flexible roll system has an efficiency of 11-12%. This is the highest I have found. They are targeting 14%:
http://www.renewableenergyworld.com/rea/video/intersolar11globalsolar?cmpid=WNL-Friday-July22-2011

BREAKING REVOLUTIONARY NEWS!!!

PRESS RELEASE SYMBOL: NXT.V; NTCXF.PK

Natcore and Kodak:

Natcore Scientists Prove Feasibility of All-Quantum-Dot Tandem Solar Cell
Could Double Power Output, Dramatically Reduce Costs

Red Bank, NJ — (September 7, 2011) — A research team working under Natcore Technology Inc. (TSX-V: NXT; NTCXF.PK) co-founder Prof. Andrew Barron has fabricated two families of multilayer quantum dot films, one with silicon quantum dots and the other with germanium quantum dots, both of which have demonstrated the ability to produce a photo-generated current.

Achieved under the Natcore joint research agreement with Rice University, this advance has significant consequences for the thin-film solar cells that Natcore is developing in its Research & Development Center at Kodak’s Eastman Business Park in Rochester, NY. It could eliminate the need for a silicon wafer sub cell, also accelerating Natcore’s drive toward a low cost tandem solar cell.

Each film is comprised of layers of silicon or germanium quantum dots embedded in a silica matrix. The silica matrix is produced using the patented Liquid Phase Deposition (LPD) silica growth technology that Natcore has exclusively licensed from Rice University. Unlike preceding attempts to make such layers using chemical vapor deposition (CVD) technology, Natcore's approach decouples quantum dot formation from the silica layer growth and allows for completely independent selection of quantum dot type, size and spacing in the silica layer.

The photo-generated current measurements are the first of their kind for this sort of structure and showed unequivocally that both film types (i.e., with Si quantum dots or Ge quantum dots) were photoactive in different spectral regions. The larger Ge quantum dots were responsive to an infrared-rich light source and the Si quantum dots were responsive to a UV-rich light source, consistent with expectations. Smaller quantum dots (the Si quantum dot diameters were between 1 nm and 2 nm) will respond more readily to shorter wavelengths of light, while larger quantum dots (the Ge quantum dot diameters were between 5 nm and 6 nm) will respond more readily to longer light wavelengths, precisely as observed.

"This accomplishment by Professor Barron and his group is an outstanding achievement and confirms that making, and ultimately commercially producing, an all-quantum dot tandem solar cell using Natcore's LPD film growth technology is on target," said Dr. Dennis Flood, Natcore's Chief Technology Officer. "Our goal to show that multiple layers of quantum dots can be assembled using a low-cost, complete wet chemistry approach has been validated. The fact that we have demonstrated photocurrent generation in both Si and Ge quantum dot multilayer devices means that the entire solar cell could potentially be fabricated without the use of expensive silicon wafers for the bottom sub cell of a two- or three-cell tandem device. We could do so by substituting a Ge quantum dot device for the silicon solar cell and achieve the same overall solar absorption as would have been achieved with the latter. This achievement could make it possible to use low-cost, roll-to-roll manufacturing techniques to achieve a truly low-cost solar module that would have twice the power output of the average solar module on the market today. "

http://tmx.quotemedia.com/article.php?newsid=41777039&qm_symbol=NXT:CA

To my knowledge, Natcore has not made public a revenue projection for roll to roll products.

TANDEM SOLAR CELLS: "Natcore's scientists have discovered that its LPD process could allow, for the first time, mass manufacturing of super-efficient (30%+) tandem solar cells. For comparison purposes, these cells could achieve twice the power output of today's most efficient solar cells."
http://www.natcoresolar.com/index.php?option=com_content&view=article&id=100&Itemid=102&pid=53

Natcore Leaps Forward In Quest For High-Efficiency Tandem Cell:
http://www.natcoresolar.com/index.php?option=com_content&view=article&id=96&Itemid=75

Natcore's shareholders are eagerly awaiting the next tandem cell update. Natcore has projected that they will receive $100 of revenue, from the panel manufacturers, for each 300 watt tandem cell panel produced, or $333 million per gigawatt of tandem cell panels produced. This is a very high revenue number for a company that has small expenditures. Can it be justified? Yes, in my opinion, here's why. Doubling the efficiency of solar panels will only add the $100 that goes to Natcore while halving the cost of panel components, packaging, and shipping. The amount of land needed and the cost for land, for utility scale projects, should be halved. The installation costs and panel maintenance costs should be reduced by nearly 50%. Future recycling costs should be halved. If used on roofs, the weight and space needed will be halved. Additionally, Natcore's LPD process allows for silicon wafer thickness to be drastically reduced. All while providing a greener panel production process.

I believe that the tandem cell will cause the end market for solar pv to absolutely explode. Rewarding Natcore with unfathomable revenue and profits.

Concentrated Solar Power (CSP) may be a victim of the tandem cell. CSP is already coming under pressure:
http://www.renewableenergyworld.com/rea/news/article/2011/08/500-mw-of-california-solar-shifts-from-csp-to-pv?cmpid=WNL-Friday-August19-2011

OTHER APPLICATIONS: Very exciting non-solar applications with huge end markets.
http://www.natcoresolar.com/index.php?option=com_content&view=article&id=49&Itemid=54

Share Structure as of 6/14/2011

TSX Venture Exchange Symbol: NXT.V
OTC/Pink Sheet Symbol: NTCXF.PK
Shares Outstanding: 33,861,276
Warrants Outstanding: 6,986,568
Options Outstanding: 3,065,000
Shares Outstanding Fully Diluted: 43,912,844
Shares in Escrow: 2,905,452
Originally: 9,684,835

Of the 6,986,568 warrants shown, 2,700,000 warrants, with a stock price of $.75, expired on 8/29/11. With the overall market weakness and the precipitous solar sector decline, Natcore's shares have fallen to bargain levels. I can't imagine that too many of these warrants were exercised. The non-exercise of these warrants will lower the fully diluted outstanding share count.

I attended Natcore's Annual General Meeting on 6/6/11. Here are my notes:

Notes from Natcore's AGM
Natcore was represented by Chuck Provini(CEO), Brien Lundin(Chairman), and Tom Scarpa(IR). We were shown a new slide show and there was a lengthy q&a session. Brien was very active in the discussions. I came away feeling that he is a hands on chairman, board member, and founder.

Natcore has 11 patents and 17 patents pending. Most of the patents pending are duplicate patents filed in China. Natcore/China met with the head of the Chinese patent office and was assured that all patents will be honored, provided they are filed by Chinese companies. Natcore/China qualifies as a Chinese company. Provini stated that Natcore will have to have a Chinese partner for their Chinese thin film roll to roll business in order to have patent protection in China. A US based thin film roll to roll partner is preferred for Natcore's worldwide thin film roll to roll business. At the present time, Natcore has no plans to manufacture the thin film roll to roll or tandem cell panels themselves. Brien Lundin stated that Natcore prefers to have manufacturing experts handle the manufacturing.

Funding ...
Grants from US, state, and local governments are still a possibility. Natcore will not accept low interest loans, as they have no interest in taking on debt.

Seed money from Malaysia has already been offered. Chuck and Brien didn't elaborate on this. This may not be a preferred option.

Phono Solar has offered to fund all of Natcore's needs. A ballpark offer of $15 - $30 million offered was mentioned. Phono Solar currently has a silicon solar capacity of 500 MW. They plan to double that capacity. Phono Solar is a division of Sumec Group, which is a division of Sinomach, the largest Chinese overseas power plant contractor with sales of $15 billion last year.

The Kodak situation is still unclear. Chuck and Brien wouldn't speculate. However, they do feel that Natcore and Kodak share a very good relationship.

Chuck deferred my future private placement question to Brien. Brien stated that while a future pp cannot be entirely ruled out, it's his belief that we have seen the last one. He said if the right investor came along, and the price was right, it would have to be considered.

Natcore has the cash from the recent pp, the May warrant conversions, and will receive more cash from the upcoming September warrant conversions. Money from Natcore's Chinese partners will start flowing in shortly. Provini estimates Natcore's cash burn rate at $125,000 per month including the new lab. Chuck stated that the Kodak agreement saved Natcore millions of dollars in equipment purchases necessary to develop the thin film roll to roll technology.

Technology Update ...
Black silicon passivation and AR coating coming soon. Test results should be in hand in 2-3 months with sales after that. Natcore plans to distribute 1000's of samples to solar manufacturers. Natcore expects solar manufacturers to switch from conventional flat wafers to the textured black silicon wafers. Natcore expects output from the black silicon panels to be 20-30% greater than fixed in place conventional panels. The output gains come from greater sunlight absorption, from different sunlight angles, due to the textured surface. Currently there are 3 potential buyers for the Intelligent LPD Process machines. No elaboration beyond TLNZ Solar. Natcore expects more buyers after the coated black silicon samples go out. It sounded like Natcore thinks they have a big winner here with the passivation and AR coating of black silicon.

Natcore's scientists believe that the nanostructure flexible thin film can have a tandem coating eventually. They say this will halve the cost and double the output. Natcore and Kodak are scheduled to start development of the thin film roll to roll in late July. Chuck stated that Natcore receives 4-5 calls a week from current and former Kodak engineers that are familiar with Natcore's potential. Some are looking for work, others with ideas regarding applications for Natcore's technology. Natcore is looking to hire a few downsized Kodak employees for their lab.

Things should start moving more quickly now with the tandem cell technology. Due to monetary and lab restrictions, only one graduate student at Rice U, under the direction of Dr. Barron, has been actively involved (per Dr. Flood last week). Chuck stated that we should see a proof of concept tandem device in a matter of months. Brien talked about tandem cell commercialization in 20-40 months. Last week, Dr. Flood estimated 24-30 months. Phono Solar and TLNZ Solar are chomping at the bit for tandem cells.

Natcore is monitoring the sample Nanoshades in CT. With all else going on, it sounded like NanoShades has been shelved for the time being. Chuck stated that it will be a great product due to its ability to cool (shade) and generate electricity at the same time.

Natcore met with MicroTech last week in NJ. Brien stated that the talks were very exciting. MicroTech stated to Brien and Chuck that even they may not know what they have regarding the potential of the LPD process and the Intelligent LPD Processing machine. One of the slides presented showed the machine. It looked pretty impressive. The machine incorporates devices and procedures that only MicroTech can provide. It has an exclusive laser device for measuring the thickness of the coating while the wafers are submerged. It has an exclusive powder drying component (the silicon industry currently uses air drying which steaks the surface). The machine can also determine if particles are growing on each other away from the wafers. When particle growth away from the intended growth on wafers occurs at a predetermined magnitude, it is time to change out the chemical solution. Brien stated that it was decided that MicoTech is going to hold on to the machine for a couple of weeks in order to show it to their clients. MicroTech believes the machines will be a huge seller. Also, Brien stated that MicroTech wants to work as closely with Natcore as Natcore will allow.

Closing remarks ...
The management team stated that they know of no competing technology when I asked them to assess risks. They said that a new, supposedly exciting, technology comes out of universities every week, but none of them are commercially viable. They feel the number one risk to the business is giving away too much in return for backing. They stated that they are working with 800 pound gorillas. The other risk they pointed out was losing focus and drifting into too many projects too soon. Brien stated that eventually there will be so many developed applications and businesses that it will be difficult to manage properly. To avoid this, Natcore plans to spin off businesses to its shareholders as things progress.

The name of the Intelligent LPD Processing machine has been changed to AR-Box.

In early 2009, Natcore predicted that solar panels would become a commodity, bingo! They also forecast that solar panel manufacturers would be forced to adopt Natcore's disruptive technology in order to stay competitive. It looks like this adoption will begin before year's end.

Regards,

Thomas J. Scarpa
Senior Vice President

Natcore Technology, Inc.
87 Maple Avenue, Red Bank, NJ 07701
732-576-8800, fax [phone]
email: [e-mail]
http://www.natcoresolar.com/
Symbol: NXT.V, Toronto Venture Exchange: NTCXF.PK, OTC/Pink Sheet