| FuelCellStocks.Com Fuel Cell News September 14, 2005 Hoku success spotlights tech growth "It validates Hawaii's ability to produce entrepreneurs who can build world class companies," said Bill Spencer, president of the Hawaii Venture Capital Association. Hoku Scientific (Nasdaq: HOKU), which has lately been trading around $6 a share, raised funds for a membrane electrode assembly line in Kapolei. "Our IPO is an important financing that enables us to continue to build our value for our shareholders by pursuing opportunities in the fuel cell industry," said founder and CEO Dustin Shindo. The Hoku Scientific membrane makes a hydrogen fuel cell work. Hydrogen atoms have one proton and one electron. The membrane lets the proton pass but diverts the electron to another route. The process produces heat, energy and water. Although hydrogen fuel cells are usually discussed as motive power for future automobiles, they can also power heating systems, telecommunications outposts and other applications. "This is the kind of win-win situation that Act 221 is designed to stimulate, ultimately leading to a more diversified economy for Hawaii," said Spencer, who has invited Shindo to address the monthly meeting of HVCA on Sept. 22. Enterprise Honolulu estimates that high tech industries in Hawaii now produce annual revenue of $3.15 billion a year. By comparison, visitor industry revenues total $10.7 billion and the military sector $4.48 billion. Act 221 and its successor Act 215 have often been controversial, with criticism focusing on perceived abuse of tax credits. Spencer thinks lawmakers and other officials are beginning to notice that legitimate high-tech companies have used the credits to produce jobs. "Before Act 221 it was very difficult for promising companies to get startup funding here in Hawaii. Nothing contributes more to the failure of a startup than lack of capital," Spencer said. "Before Act 221, companies often had to turn to mainland sources for their startup funding, causing many of them to relocate closer to their investors on the mainland. Act 221 and now its successor Act 215 have successfully turned this situation around, allowing local startups to get off the ground." Spencer said later-stage funding, when the bulk of high-paying jobs are created, remains lacking, but the proposed State Private Investment Fund hopes to stimulate that needed investment. "Many of our local tech entrepreneurs are committed to building their companies in Hawaii and giving back to the community they love," Spencer said.
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