This was posted on the net over the weekend. Much like the message on the Natcore weppage but a few new, KEY points are explored.

Dear Investor,

I'd like to bring all our shareholders and interested investors up to date on the exciting successes we've enjoyed this past year - these successes have combined to significantly expand our technology, our research and development capabilities, and our ultimate potential.

Of course, our most recent news, the signing of a joint-venture agreement with a consortium in China, has been our most talked-about achievement to date. (I'll give you a full update on this agreement in a moment.)

But first, let me stress that it has been the integration of the business and scientific experience found on our Natcore team which has been a prime factor behind our successes. For example, early in the year we signed a research agreement with Rice University and The Barron Research Group to begin development of our super-efficient, tandem solar cell application.

This is our approach toward achieving the "Holy Grail" of solar energy - making this cheap, clean and abundant source of energy economically competitive with conventional energy production.

As you may know, tandem cells are essentially two or more solar cells, each very efficient in a different segment of the solar spectrum, stacked atop each other. In this way, a much greater percentage of the solar energy is converted into electricity.

So why aren't tandem cells being used today?

Until now, tandem solar cells have been producible only under highly-controlled lab conditions at very high costs. They simply aren't mass-producible using current technology.

Natcore's Liquid Phase Deposition (LPD) process, however, has the potential to enable mass production of tandem cells at lower costs per watt than anything available today. Our scientists are working toward the manufacturing of tandem cells consisting of up to three cells, arranged one on top of the other, starting with an ordinary silicon solar cell. A cell interconnect comes next, then a second cell made of silicon quantum dots and engineered to absorb light from the middle of the spectrum. A second cell interconnect follows, then a third cell, which is another silicon quantum dot device engineered to absorb the blue end of the spectrum. We anticipate the combination, operating in tandem, will produce well over 30% efficiency, or about double the power output of current technology.

Shortly after our tandem cell research agreement with Rice University was signed and funded, Natcore acquired another company, NewCyte, Inc., and all its intellectual property - including technology related to liquid phase growth of silicon dioxide on a class of materials called fullerenes.

NewCyte also had technology, resulting from an Air Force research contract, with specific application to our tandem solar cell project. We had identified this exciting technology, and felt it would be complementary to Natcore's photovoltaic goals.

Specifically, the NewCyte technology incorporated quantum dots in the basal region of a tandem cell to improve both the beginning-of-life and end-of-life performance of the gallium arsenide middle cell used in space solar applications. NewCyte was able to determine the proper number of layers of quantum dots, their most desirable size and the best location of the aggregate of layers within the cell.

Although the application and materials are somewhat different when used with satellites, this technology and its success remains important to Natcore, because tandem solar cell development is similar whether used in space or on earth. We feel the integration of this successful technology has allowed us to take a giant step forward in developing a super-efficient solar cell for mass production.

In addition to our research at Rice, we've also employed two scientists, both PhDs, to advance our anti-reflective (AR) film technology in laboratory facilities at Ohio State University. The purpose of this project is to produce the necessary testing data and process-flow steps to take Natcore's AR film growth technology out of the laboratory and into the production line of a solar cell manufacturer. For the first time, we grew the antireflective coating on silicon wafers ourselves, at a variety of thicknesses and with consistent uniformity and reflectance capabilities. Testing results confirmed that our application met or exceeded industry norms, and at dramatically lower costs.

Our success at the Ohio State laboratories has allowed us to create samples suitable for presentation to solar cell manufacturers as potential customers, and samples have already been presented to four such companies.

Which brings me to our exciting announcement of a joint venture agreement with a technology consortium in China.

On February 22, we announced an agreement with a consortium in China to form a joint venture company to develop and manufacture film-growth equipment and materials using our proprietary LPD technology.

Specifically, this agreement addresses the development of the equipment - the tubs, wafer-handling mechanisms and solution control systems - necessary to deposit the crucial anti-reflective (AR) coating on solar cells.

This AR film is absolutely crucial to the functioning of any solar cell. And our advantage is that the LPD process allows the film to be grown in a very mild, low-cost and non-polluting environment. Not only will the process be less expensive to introduce and use, but the mild conditions would also allow manufacturers to use silicon wafers one-third as thick as currently being employed. So the savings in silicon usage would be significant as well.

Our joint venture in China entails the creation of a local Chinese company that would be 55% owned by Natcore, and funded with a US$3 million capital investment. Two local Chinese companies, in conjunction with the Zhuzhou Hi-Tech Industrial Development Zone, would contribute US$2.5 million (83%), while Natcore would contribute US$500,000 (17%).

We think this is a great opportunity and it will fully fund our remaining research, development and production costs for the AR film equipment. It also immediately plugs us into a network of end users in a country that is the largest and fastest-growing producer of solar cells.

And this brings me to the topic that everyone asks about: Revenue - when will we start selling products and realizing recurring revenue?

I can tell you that our current development flow sheets, prepared in close cooperation with our Chinese associates as well as our scientific staff, envision a time-line of 10 months from the signing of a definitive agreement to the production of "shrink-wrapped" AR equipment ready for sale.

That's not long at all; a similar product development process would undoubtedly take much more time, and money, just about anywhere else in the world.

But one of the more exciting aspects of this joint venture is the fact that we may be able to advance this timeline by selling a more-basic version of our equipment.

You see, our fully-finished product would encompass a self-contained, self-replenishing system that will recycle the chemicals and water used in our LPD process. But our anticipated Chinese partners (who will likely be among our first customers) are envisioning the incorporation of our technology into existing manufacturing lines through manual replenishment of the chemical bath. This would allow us to serve customers, install our process into manufacturing lines and generate revenue, before the complete system is available for sale throughout the world.

In summary, we have made exciting progress on many fronts, but remain focused on delivering products to the marketplace as soon as possible. Although we understand the great importance of our research, our primary goal is the conversion of that research into bottom-line revenue.

We firmly believe that the future is very bright for Natcore Technology, for our shareholders and supporters, and for a world that desperately needs clean, abundant energy.

Sincerely,

Chuck Provini, President & CEO