I want to take this opportunity to provide an update on the many positive developments that have occurred with the company. In order to put things in proper perspective, it is helpful to look back at the challenges that confronted us when I first joined the company, review the objectives established at that time, the progress made to date, and then look forward to the future opportunities before us.

In my initial letter to you, I summarized our immediate challenges as cash, debt, and orders. We were in the unenviable position of having little cash or working capital, a large amount of debt, and no order backlog, or significantly viable sales prospects. Those challenges, while large, did not seem insurmountable, because my predecessors and colleagues had developed a superior product, the LeepCore Structural Insulated Panel, and had accumulated a significant inventory available for sale.

Many LEEP, Inc. shareholders responded to the need for capital, and increased their investment in the company, and I thank them for their insight and faith. Without them, we could not have accomplished what we have. Following are some of the highlights of progress to date:

- We have passed critical product reviews, and developed a LeepCore Design Manual for architects and engineers that outlines structural capabilities, load and span tables, and other critical test-related data that will enable them to better understand the capabilities of our product, and specify it for current and future projects. This manual was developed and prepared by a PhD in Structural Engineering.

- We have retained the service of an engineering firm to pursue the necessary approvals from the International Code Council (ICC) for inclusion in the International Building Code. While LeepCore has completed numerous tests, ICC approval is a necessary step for significantly expanding global markets.

- We completed the audit process for the fiscal years 2005, 2006, 2007, and are currently working on completing the balance through 2010. I anticipate we will soon be up to date with the remaining audit information, and ready to prepare and submit a current 10-k to the SEC. We have reached debt settlement agreements with all of our major creditors and are in the process of completing funding for those agreements. Our creditors have been largely supportive of our plan for rehabilitation and growth for the company, and I am grateful to them for their cooperation and support.

- We solicited and bid on work to provide structures for the United State Government, to screen mail for bio-terroristic agents, such as anthrax and explosives, prior to the mail being delivered inside government buildings abroad. That resulted in the U.S. Department of State issuing a sole source agreement to us for custom units, and multiple orders from general contractors working on independent government contracts. We were recently awarded a contract from Germany through the year 2014 to provide these units. The value of that award approximates $6 million if completely fulfilled, and we are currently shipping the second phase of that agreement. We have now built and shipped units to more than thirty (30) foreign countries. We see an expanded market opportunity in the private sector for these units, and related structures.

- We have actively pursued, and continue to pursue, commercial development opportunities in the health care, hospitality, and education markets, and have several outstanding proposals in place at this time. I feel these vertical markets offer the opportunity for long term growth and repeat business. The worldwide recession has slowed our efforts in these areas, principally due to the overly tight credit markets, but we continue to make progress.

- We executed a Joint Marketing Agreement with the Bradbury Company to market our products here and abroad. Bradbury Co. is one of the largest manufactures of roll-forming equipment in the world, and manufactured the equipment in our Pennsylvania plant. They have plants in China and New Zealand, among others, and represent a natural synergy with LEEP, Inc. We believe this association can lead to greater exposure and marketing opportunities for both companies, and potentially licensing agreements.

- We have been unanimously selected by the board of directors of a U.S. based charitable organization to use the LeepCore panel to rebuild an orphanage in Haiti that was damaged/destroyed in the recent earthquake there. In addition, they will use our product to build several (3-4) transition homes housing approximately twenty-four girls each. They anticipate receiving funding from a sister charity to commence the engineering construction process. This project represents an opportunity for great visibility on the international stage.

- We have relocated the administrative headquarters of the company to Kentucky, and have a second manufacturing, fabrication, and assembly plant where we build finished structures with our panels. We anticipate this operation to grow and expand in the future. We were gratified to receive a visit from U.S. Representative Harold Rogers, who was extremely complementary of our products and operation. Congressman Rogers sits on various important committees in Washington, and has introduced us to several people that could benefit our growth.

As we have worked on various fronts to accomplish our initial objectives, confidentiality has been important to the process. I am pleased that we have made significant strides toward the goal of being debt free, and having a sustainable flow of orders. There is still work to do, including completing the last of the accounting work, and bringing our SEC reporting status current, but those objectives are now within reach. I am encouraged that the groundwork laid in the sales and marketing area will provide new opportunities in the short run, and sustainable revenue growth in the intermediate and long run. LEEP, Inc. is pursuing sales and partnership opportunities on many fronts. Nonetheless, as I pledged, LEEP, Inc. will not publicly discuss prospects, but instead will issue press releases only after contracts are signed. I thank you for your patience through this process, and continued faith in LEEP, Inc.

John H. Nordstrom, CEO