Good Read
The solar energy is expected to become a major source of energy in the future. According to EIA, solar power could become the world's largest source of electricity by 2050, as the capacity of the industry should grow to approximately 4,600 GW, from 154 GW in 2014. Although the estimates were made back in 2014, before the huge decline of oil and natural gas prices, the long-term prospects of the solar energy industry shouldn't be affected. Moreover, Natcore's technologies have the potential to decrease costs to a level, where solar energy will be competitive with other energy sources. Natcore seems to be at the right place at the right moment, the management just needs to prove its ability to turn the scientific success into a commercial one.
On the other hand, there are several risks associated with this company. Natcore has no revenues yet. It had only $550,000 as of December 31, 2014. The company needs money to continue its research activities and most of the money must be raised by issuing new shares. In January, Natcore raised $500,000 via a private placement. Another C$1.118 million ($888,000) was raised in April and $984,000 was raised in late July/early August. On August 6, Natcore announced that it had entered into an investment agreement with Dutchess Opportunity Fund II. Over a 36-month period, the fund will be required to purchase up to $10 million of Natcore common stock. Natcore will control the timing, amount of shares sold and the minimum price per share.
The share dilution will continue until Natcore starts to generate revenues. And it is yet unknown, when the revenues will start to pour. Natcore has been developing partnerships with companies in the solar business for a couple of years. But the successful partnerships are only research focused. There has been no production of solar cells or other form of partnership resulting in a direct revenue stream yet. Although management of the company claims that it is in advanced stage negotiations with several partners, there is no guarantee that they will be finished anytime soon. Given that Natcore Technology has a market capitalisation of slightly more than $20 million, any definitive deal will represent a major milestone for the company with the potential to push the share price higher by hundreds of percent. On the other hand, the current low market capitalisation means that Natcore may become an easy victim of market manipulations and that it may get acquired very cheaply.
Conclusion
Natcore Technology is an exciting company. It has developed a couple of technologies that may revolutionize the solar industry. Natcore's technologies have the potential to increase the efficiency of solar cells while decreasing their production costs. Natcore is worth only slightly more than $20 million, as the company hasn't been able to commercialise its technologies yet. Although investment in Natcore Technologies is risky, the opportunities far outweigh potential risks. If Natcore successfully develops and commercialises its technologies, the company may be worth billions of dollars in a couple of years.
Disclosure: I am/we are long NTCXF.
