Hoku Scientific Reports Second Quarter Fiscal Year 2010 Results

4:15 pm EDT, Thursday October 22, 2009

HONOLULU, HI–(Marketwire – 10/22/09) – Hoku Scientific, Inc. (HOKU), a materials science company focused on clean energy technologies, today announced its financial results for the second quarter ended September 30, 2009 and provided a general update on its business.

Financial Results

Revenue for the quarters ended September 30, 2009 and 2008 was $1.5 million and $1.9 million, respectively, derived primarily from photovoltaic, or PV, system installation and related service contracts. As of September 30, 2009 and March 31, 2009 deferred revenue of $12,000 and $784,000, respectively, was attributable to PV system installations and related service contracts.

Net loss, computed in accordance with U.S. generally accepted accounting principles, or GAAP, for the quarter ended September 30, 2009 was $1.2 million, or $0.06 per diluted share, compared to $1.4 million, or $0.07 per diluted share, for the same period in fiscal 2009.

Non-GAAP net loss, which excludes the effect of stock-based compensation, for the quarter ended September 30, 2009 was $959,000, or $0.05 per diluted share, compared to $1.1 million, or $0.05 per diluted share, for the same period in fiscal 2009. Non-GAAP net loss for the quarters ended September 30, 2009 and 2008 excludes non-cash stock-based compensation of $272,000 and $260,000, respectively. The accompanying schedules provide a reconciliation of net loss per share computed on a GAAP basis to net loss per share computed on a non-GAAP basis.

Dustin Shindo, chairman, president and chief executive officer of Hoku Scientific, said, “With the recent announcement of our financing agreement with Tianwei, we have successfully identified sufficient funding to complete construction of our polysilicon manufacturing plant in Pocatello, Idaho, to the point where we can commence our first shipments to our customers.”

Describing the Company’s current shipment timeline, Mr. Shindo continued, “We expect to ramp up our construction efforts in this fourth calendar quarter, and are making all preparations to conduct reactor demonstration testing in December. In order to allow sufficient time for our production to reach commercial product specifications, we now expect to make the first commercial deliveries of Hoku-manufactured polysilicon to our current customers in the first quarter of calendar year 2010. From there, we will continue ramping up production until we reach our full, planned capacity of 4,000 metric tons per year, which we expect to occur in the second half of calendar year 2010.”

Global cleantech investment down 22% in 3Q

Research report says 3Q investment in global cleantech fell 22%; recovery forecast in 2010

By Sandy Shore, AP Energy Writer
Friday October 2, 2009, 4:18 pm EDT

DENVER (AP) — New global investment in clean-energy companies fell 22 percent in the third quarter as government financing was offset by tight credit markets, according to new research released Friday.

From July to September, new global investment totaled $25.9 billion, down 22 percent from a year ago and off 9 percent from the second quarter, according to London-based New Energy Finance, a global research firm.

But the sector appears to be heading toward a recovery, with investment nearly double what it was in the first quarter and investors growing more confident.

Many analysts think a turnaround will come in 2010 but caution that much depends on the U.S. economy, the health of the financial sector, natural gas prices and even electricity demand.

Asset financing, a key measure for solar and wind projects, fell 26 percent to $19.2 billion. Venture capital and private equity investment dropped 46 percent to $2.2 billion.

The third-quarter total, however, was nearly double the $13.3 billion recorded in the first quarter, said Ethan Zindler, who heads New Energy’s North American research arm.

“Activity has certainly bounced off of Q1 (the first quarter), which was just when things came to a grinding halt,” he said.

“I think the market has recognized that this industry is getting substantially more support from the federal government and other governments around the world,” he said. “I think that helps bolster confidence as well.”

Hoku and Tianwei Announce Financing Agreement

Company to Resume Accelerated Construction of Polysilicon Plant

Tuesday September 29, 2009, 4:20 pm EDT

HONOLULU, HI and CHENGDU, CHINA–(Marketwire – 09/29/09) – Hoku Scientific, Inc. (HOKU), a diversified, clean energy company with headquarters in Honolulu, and Tianwei New Energy Holdings Co., Ltd., a leading provider of silicon wafers, photovoltaic (PV) cells, modules and systems, today announced the signing of a definitive agreement providing for a majority investment in Hoku by Tianwei and debt financing by Tianwei and China Construction Bank for the construction and development of Hoku’s polysilicon production facility in Pocatello, Idaho.

The transaction will involve the conversion of $50 million of an aggregate of $79 million in secured prepayments previously paid by Tianwei to Hoku under certain polysilicon supply agreements into shares of Hoku’s common stock and related warrants, plus the provision of $50 million in initial debt financing for Hoku, together with a commitment from Tianwei to assist Hoku in obtaining additional financing that may be required by Hoku to construct and operate the Pocatello facility.

The conversion of the $50 million in secured prepayments will be reflected in amendments to Hoku’s existing supply agreements with Tianwei that the parties intend to sign upon the closing of the transaction. Over the term of the two supply agreements, the cancellation of the $50 million in prepayments will reduce the price at which Tianwei purchases polysilicon by approximately 11% per year.

Hoku confirmed that the $50 million in debt, plus prepayments from its existing customers, is expected to be sufficient to complete construction to the point where it could commence shipments to customers, and it intends to delay any additional financing until such time. On the basis of these funding sources, Hoku reported it is preparing to issue orders to resume full scale plant construction at an accelerated pace upon closing of the financing, which is expected to occur in October 2009.

In exchange for the value being provided by Tianwei, Hoku will issue to Tianwei 33,379,287 newly-issued shares of its common stock, which will represent 60% of Hoku’s fully-diluted outstanding shares. Hoku will also grant Tianwei warrants to purchase an additional 10 million shares of Hoku’s common stock at a price per share equal to $2.52.

At closing, Hoku’s current shareholders will continue to own 40% of the voting shares, and Hoku will continue to be traded publicly on Nasdaq. Additionally, Tianwei has agreed to a one year lock-up of 70% of its shares, further affirming its commitment to Hoku’s long-term success.

Hoku says JH Kelly to restart Idaho plant construction

Tue Sep 22, 2009 8:18am EDT

* Says to pre-pay JH Kelly $5 mln of outstanding amount
* Says total outstanding amount $12 mln

Sept 22 (Reuters) – Hoku Scientific Inc (HOKU), a supplier of raw materials to the solar industry, said construction company JH Kelly LLC would resume activity to complete Hoku’s planned 4,000 tons per year polysilicon production plant.

Hoku said it had entered into a change order agreement, under which it would pre-pay $5 million of past amount due to privately held JH Kelly of about $12 million.

Kelly agreed to delay foreclosing on the $12 million lien until after Dec 1, 2009, Hoku said, adding if it made the prepayment by that date, Hoku will have until Jan 14, 2010 to pay the balance.

“Kelly also agreed to waive certain interest and other fees and charges that may be incurred as a result of the past due amounts,” Hoku said in a statement.

The company also said Kelly reaffirmed its commitment to achieve the projects key schedule dates if work resumes in October.

In July, Hoku said it initiated a temporary slowdown of construction and procurement activities at the facility in Pocatello, Idaho to preserve cash.

The company also said it was exploring sale of its assets as it was struggling to raise capital for the plant, estimated to cost $390 million to build.

Hoku said JH Kelly subsequently filed a lien claiming past due accounts payable in the amount of approximately $12 million.

Shares of the company closed at $2.27 Monday on Nasdaq.

Hoku and JH Kelly Agree on Path Forward to Complete Construction of Polysilicon Plant

Tuesday September 22, 2009, 7:15 am EDT

POCATELLO, ID–(Marketwire – 09/22/09) – Hoku Materials, Inc., a wholly owned subsidiary of Hoku Scientific, Inc. (HOKU), established to manufacture and sell polysilicon for the solar market, today announced that it entered into a change order agreement under its cost plus incentive construction contract with JH Kelly, LLC, to confirm the plan for JH Kelly to complete construction of Hoku’s planned 4,000 metric tons per year polysilicon production plant.

In July 2009, Hoku initiated a temporary slowdown of construction and procurement activities to preserve cash while Hoku sought to raise additional capital. JH Kelly subsequently filed a lien claiming past due accounts payable in the amount of approximately $12 million. Under the terms of the change order announced today, JH Kelly agreed that it would resume construction activities upon receipt of notice from Hoku and Hoku’s payment of $5 million of the past due amount. In the meantime, JH Kelly agreed to forbear from foreclosing on its approximately $12 million lien until after December 1, 2009, and if Hoku makes the $5 million prepayment by such date, Hoku will have until January 14, 2010 to pay the balance of the $12 million that is past due. JH Kelly also agreed to waive certain interest and other fees and charges that may be incurred as a result of the past due amounts.

In addition to confirming the financial path forward, JH Kelly reaffirmed its commitment to achieving Hoku’s key project schedule dates if work is resumed in October. This would include completing a reactor demonstration in December 2009, completing construction of 2,500 metric tons of polysilicon production capacity in March 2010, and completing construction of the full 4,000 metric tons of capacity, including on-site trichlorosilane (TCS) production, in December 2010. The other terms of the contract remain unchanged.

“We appreciate JH Kelly’s commitment to seeing this through to completion; they are a one-of-a-kind company, and have more than earned our trust and loyalty,” said Dustin Shindo, chairman and CEO of Hoku Scientific.

“We’ve kept key staff members on-site, and we are poised to initiate an accelerated construction schedule as soon as Hoku gives us the go-ahead and fulfills its payment obligations,” said Mason Evans, president of JH Kelly. “Hoku has kept us informed of their financing strategy, and we appreciate both their transparency and their dedication to making this project a success for all concerned.”

Liens filed against polysilicon plant owner

Thursday, August 27, 2009

Liens filed against polysilicon plant owner

POCATELLO, Idaho (AP) — About $16 million in liens have been filed by a general contractor and some subcontractors against Hoku Scientific Inc. (HOKU), a money-losing supplier of silicon for solar panels with an unfinished plant in eastern Idaho.

JH Kelly, LLC, the Washington-based general contractor overseeing construction, filed the largest lien late last month of just under $13 million against the Hawaiian-based company.

The company wants to manufacture and sell polysilicon for the solar market at its Pocatello plant, but construction nearly came to a standstill earlier this year because the company still needs to come up with more than $100 million of the $390 million cost of the plant.

Scott Paul, chief operating officer for Hoku Scientific, says the company has slowed construction but is still working on getting financing.

Hoku Materials Granted Foreign Trade Zone Status by U.S. Commerce Department

Monday August 17, 2009, 7:00 am EDT

POCATELLO, ID–(Marketwire – 08/17/09) – Hoku Materials, Inc., a wholly owned subsidiary of Hoku Scientific, Inc. (HOKU) established to manufacture and sell polysilicon for the solar market, today announced it had been granted foreign-trade zone (FTZ) subzone status by the United States Department of Commerce for its polysilicon manufacturing plant currently under development in Pocatello, Idaho.

Hoku reported that it expected the subzone status would contribute to the facility’s long-term global competitiveness, explaining that FTZ procedures would exempt the Company from customs duty payments on foreign materials used in export production.

Specifically, the ruling will allow Hoku to import foreign-sourced raw materials in a duty-free status, provided they are destined for export overseas as components of finished polysilicon. Under its existing customer supply agreements, more than 80% of Hoku’s total annual production capacity of polysilicon, and 100% of what has been presold to date, is destined for export to China, meaning that an equivalent percentage of the Company’s raw material inputs would be eligible for import in a duty-free status.

Hoku explained that it had been granted subzone status under the existing Foreign Trade Zone established for Boundary County in Northern Idaho, the only FTZ in the state. Hoku Materials’ facility will be the only designated Foreign Trade Subzone in Idaho.

“We are pleased to have been granted the Foreign Trade Subzone status,” said Dustin Shindo, chairman and chief executive officer of Hoku Scientific. “This ruling helps ensure that our facility will remain globally competitive over time.”

“For many reasons, Hoku is a unique case study in today’s economy,” said Gynii Gilliam, Executive Director of the Bannock Development Corporation. “Hoku’s Pocatello plant will not only be a net exporter to China, but thanks to the Commerce Department’s ruling, it will have the ability to compete internationally on a level playing field. This outcome is not only good for Idaho’s emerging clean energy manufacturing base, but it is good for the U.S. renewable energy industry in general.”

When complete, the Hoku Materials facility is expected to produce up to 4,000 metric tons of polysilicon per year.

Solar company results reflect weak global market

Thu Jul 30, 2009 8:02pm EDT

* First Solar 2nd-qtr profit, revenue top Street

* Stock falls 3 pct after rebate announcement

* Evergreen Solar Q2 loss before items misses Wall St view

* Evergreen shares down 10 pct after hours

* Hoku Scientific, Akeena Solar post quarterly losses

By Nichola Groom and Matt Daily

LOS ANGELES/NEW YORK, July 30 (Reuters) – First Solar Inc (FSLR) reported a quarterly profit on Thursday that handily topped Wall Street estimates, but its shares fell in extended trading after the company said it would start offering rebates to defend its position in Germany.

The solar panel maker’s shares soared more than 10 percent after it announced its results but reversed course and fell 3.2 percent after the rebate program was outlined during a conference call with analysts.

“They say they’re doing it through a rebate program, but it doesn’t matter what you call it, they still have to cut prices,” said Kaufman Bros analyst Theodore O’Neill.

First Solar, based in Tempe, Arizona, has weathered the global recession better than many of its peers because its cadmium telluride panels are cheaper to produce than the silicon-based panels that dominate the market.

That was underscored on Thursday as three smaller U.S. solar companies, Evergreen Solar Inc (ESLR), Hoku Scientific Inc (HOKU) and Akeena Solar Inc(AKNS), said they lost money in the second quarter.

A dearth of financing for renewable energy projects has contributed to a global glut of solar panels that has sent prices falling, hurting panel makers’ margins.

At the same time, prices of silicon-based panels have come closer to those of First Solar’s low-cost panels, chipping away at its competitive edge.

Hoku Scientific Reports First Quarter Fiscal Year 2010 Results

Thursday July 30, 2009, 4:10 pm EDT

HONOLULU, HI–(Marketwire – 07/30/09) – Hoku Scientific, Inc. (HOKU), a materials science company focused on clean energy technologies, today announced its financial results for the first quarter ended June 30, 2009 and provided a general update on its business.

Financial Results

Revenue for the quarters ended June 30, 2009 and 2008 was $74,000 and $2.2 million, respectively, derived primarily from photovoltaic, or PV, system installation and related service contracts. As of June 30 and March 31, 2009 deferred revenue of $1.1 million and $784,000, respectively, was attributable to PV system installation projects and related service contracts.

Net loss, computed in accordance with U.S. generally accepted accounting principles, or GAAP, for the quarter ended June 30, 2009 was $905,000, or $0.04 per diluted share, compared to net income of $178,000, or $0.01 per diluted share, for the same period in fiscal 2009.

Non-GAAP net loss for the quarter ended June 30, 2009 was $741,000, or $0.03 per diluted share, compared to non-GAAP net income of $646,000, or $0.03 per diluted share, for the same period in fiscal 2009. Non-GAAP net loss for the quarter ended June 30, 2009 and non-GAAP net income for the quarter ended June 30, 2009 excludes non-cash stock-based compensation of $164,000 and $468,000, respectively. The accompanying schedules provide a reconciliation of net income / (loss) per share computed on a GAAP basis to net income / (loss) per share computed on a non-GAAP basis.

Dustin Shindo, chairman, president and chief executive officer of Hoku Scientific, said, “We continued to make progress in our solar and polysilicon businesses during the first quarter of fiscal 2010. We advanced our solar integration business in Hawaii and — although we were required to modify our approach — continued to make progress toward the completion of our polysilicon production facility in Pocatello, Idaho.”

Hoku Scientific may sell Hoku Materials unit

Hoku Scientific unit looking for new financing, mulling sale; slows Idaho plant construction

Friday July 10, 2009, 7:37 pm EDT

NEW YORK (AP) — Hoku Scientific Inc. (HOKU) said Friday that its Hoku Materials unit, which makes and sells polysilicon for solar panels, is seeking new debt and equity financing amid a cash crunch linked to the global economic slowdown and is evaluating a possible sale.

Honolulu-based Hoku Scientific has retained Deutsche Bank Securities Inc. as its financial adviser to explore alternatives for Hoku Materials. The news sent Hoku Scientific shares tumbling 28 cents, or 12.3 percent, to $2 in aftermarket trading, having closed earlier up 2 cents at $2.28.

Hoku said that to save cash while looking at its financial options, it will temporarily slow construction and procurement at the polysilicon production plant it is developing in Pocatello, Idaho. Previously, Hoku had said it would just delay building part of the plant.

In spite of the delay, Hoku said it does not intend to lay off any workers.

“We are caught in the same perfect storm that many other companies are facing: The credit crunch, a general economic downturn, pressure on polysilicon and PV pricing, and a global decline in investment capital,” said Hoku Scientific Chief Executive Dustin Shindo.

Also Friday, Hoku Materials and China-based solar module maker Suntech Power Holdings Co. (STP) said they amended a contract to delay deadlines by which Hoku needs to meet three polysilicon plant operation milestones.

The companies said that as part of the amended contract Hoku Materials must make a deal to shift control of the company by the end of next March.

Suntech could have ended the contract if Hoku didn’t complete a polysilicon reactor test demonstration by Sept. 30, ship the first monthly amount of polysilicon or reach a certain plant operation milestone by Dec. 31.

Under the amended contract, the deadlines to reach these marks will be moved to Dec. 31, March 31 and Dec. 31, 2010.

Hoku has agreed to lower Suntech’s total prepayment obligation, and authorized Suntech to replace a cash-collateralized standby letter of credit issued by ABN AMRO NV with one issued by a bank in China. The new letter can be collateralized with non-cash assets, which Suntech said will free up its restricted cash.

Suntech paid Hoku $2 million in prepayments in 2007. The company also invested $20 million in Hoku’s private offering of common shares in February 2008.

CEO Shindo added that the issues affecting Hoku Materials have no effect on its Hoku Solar unit, which focuses on off-the-shelf integration of photovoltaic power systems.

“The companies are both wholly-owned subsidiaries of Hoku Scientific, but each operates completely independently of the other,” said Shindo. “We remain very excited about the opportunity to continue expanding Hoku Solar’s PV installation business and continue to actively install systems in Hawaii.”

Hoku Scientific may sell co on financing woes

Fri Jul 10, 2009 6:59pm EDT

By Antonita Madonna Devotta

BANGALORE, July 10 (Reuters) – Hoku Scientific Inc (HOKU), a supplier of raw materials to the solar industry, said it may explore the sale of the company as it struggles to raise capital for a polysilicon plant in Idaho, sending its shares down 15 percent.

Last month, Hoku had said it may not be able to continue as a going concern over the next 12 months or secure final funding for the plant.

“We have invested about $200 million into the plant already and have contracts for $1.9 billion over the next 10 years. So, it doesn’t make sense not to get the plant complete based on the potential revenue or gains and the amount of effort we have put into it,” CFO Darryl Nakamoto told Reuters.

The priority was for a possible sale of the Hoku Materials Inc unit, but it would even consider the sale of the parent company at the right price, a Hoku spokesman said by phone.

In a statement, Chief Executive Dustin Shindo said, “We are caught in the same perfect storm that many other companies are facing: The credit crunch, a general economic downturn, pressure on polysilicon and (photovoltaic) pricing, and a global decline in investment capital.”

Hoku also said it was in discussions with several investors for debt and equity financing.

The company said it will begin a temporary slowdown of construction and procurement at the polysilicon production facility in Pocatello, Idaho.

Separately, Hoku also said it amended a polysilicon supply contract with Suntech Power Holdings Co Ltd (STP).

Shares of the company were down 15 percent at $1.95 in trading after the bell. They closed at $2.28 Friday on Nasdaq.

Hoku Provides Update to Polysilicon Production Strategy

Friday July 10, 2009, 5:10 pm EDT

Hoku Materials, Inc., a wholly-owned subsidiary of Hoku Scientific, Inc. (HOKU), established to manufacture and sell polysilicon for the solar market, today announced it is in discussions with several strategic and financial investors regarding debt and equity financing. While the Company reported that the various sources of funding look promising, it expects it will need a few months to work through these options. Hoku also reported that, in addition to seeking debt and equity alternatives, it had retained Deutsche Bank Securities, Inc. as its financial advisor to seek a possible sale of the Company.

To preserve cash and value while pursuing these opportunities, Hoku Materials will begin issuing orders for a temporary slowdown of construction and procurement activity at the polysilicon production facility currently under development in Pocatello, Idaho. The Company had previously announced a strategic delay in constructing the TCS portion of the plant, and now plans to extend the slowdown to temporarily include the other areas as well.

“While we would prefer to progress faster in Pocatello, we remain very encouraged by the strong interest in our project among potential financiers, and by the continued commitment of our vendors and customers, as seen in recent amendments,” said Dustin Shindo, chairman and chief executive officer of Hoku Scientific, Inc. “Despite this temporary slowdown, we remain absolutely confident that this plant will be completed and that we can meet our customer commitments. To that end, we have no plans to lay off any of our staff, including the first group of plant operators that we hired in Pocatello in June.”

“We are caught in the same perfect storm that many other companies are facing: The credit crunch, a general economic downturn, pressure on polysilicon and PV pricing, and a global decline in investment capital,” said Mr. Shindo. “Despite these challenges, we’ve made great progress in construction and we remain well-positioned to complete and operate our plant. Further, we have no senior bank debt on the project, which gives us flexibility in structuring our future plant financing.”

“This type of curtailment is fairly common on projects of this scale and complexity,” said Mason Evans, CEO of J.H. Kelly, Hoku Materials’ General Contractor. “They’ve gotten a few tough breaks with the market and general economic conditions, but having worked closely with Hoku Materials since they broke ground in 2007, we remain very confident that they will resolve the financing challenges and get us back to work quickly. We look forward to completing this facility for them. In the meantime, we are maintaining a full time staff at the Pocatello site to ensure our ability to quickly ramp back up.”

Commenting on Hoku Solar, the Company’s Hawaii-based subsidiary focused on turnkey integration of photovoltaic (PV) power systems, Mr. Shindo noted, “The challenges in funding the polysilicon plant and the temporary construction slowdown applies exclusively to Hoku Materials. The companies are both wholly-owned subsidiaries of Hoku Scientific, but each operates completely independently of the other. We remain very excited about the opportunity to continue expanding Hoku Solar’s PV installation business and continue to actively install systems in Hawaii.”

Hoku and Suntech Amend Supply Agreement to Adjust Milestone & Shipping Schedules

Friday July 10, 2009, 5:05 pm EDT

Hoku Materials, Inc., a wholly owned subsidiary of Hoku Scientific, Inc., or the Company (HOKU), established to manufacture and sell polysilicon for the solar market, and Suntech Power Holdings Co., Ltd., or Suntech (STP), the world’s largest manufacturer of crystalline silicon photovoltaic (PV) modules, today announced that they have amended their polysilicon supply contract to delay the deadlines for Hoku to achieve three polysilicon plant operation milestones. The effectiveness of the amendment is contingent on Hoku entering into a definitive agreement that would result in a change of control of Hoku, and the closing of any such transaction by March 31, 2010. The Company confirmed that it has retained Deutsche Bank Securities Inc. as its financial advisor to seek a possible sale of Hoku.

Before the amendment becomes effective, Suntech has the right to terminate the contract if Hoku is unable to successfully complete a polysilicon reactor test demonstration, ship the first monthly quantity of polysilicon, or achieve a trichlorosilane (TCS) plant operation milestone, by September 30, 2009, December 31, 2009, and December 31, 2009, respectively. As amended, Hoku’s deadlines to achieve these milestones may be moved to December 31, 2009, March 31, 2010, and December 31, 2010, respectively.

In exchange for Suntech extending these deadlines, Hoku has agreed in the amendment to reduce Suntech’s aggregate prepayment obligation. The prepayment reduction is effected through the elimination of the TCS plant operation milestone payment. In addition, Hoku has authorized Suntech, prior to the effectiveness of the amendment, to immediately replace its cash-collateralized, stand-by letter of credit that was issued by ABN AMRO NV, with a stand-by letter of credit issued by a bank in China, which may be collateralized with non-cash assets. Suntech expects that this will have the immediate impact of freeing Suntech’s restricted cash.

Suntech has already paid Hoku $2 million in prepayments in 2007, and made an equity investment of $20 million as an investor in Hoku’s private offering of its common stock in February 2008.

“Although our construction progress has remained on-track to achieve the reactor demonstration and shipping milestones by September 30, 2009, and December 31, 2009, respectively, our need to raise additional capital has increased the risk that we might miss these deadlines,” said Dustin Shindo, chairman and chief executive officer of Hoku Scientific, Inc. “As we previously announced our intention to delay the construction of our TCS plant to preserve capital, our ability to achieve a TCS production milestone by December 31, 2009, is now highly unlikely. The TCS milestone payment would likely not be received until the middle of 2010; therefore, this prepayment is not as critical for our near-term capital requirements. Suntech is our largest customer in terms of 10-year polysilicon contract supply volume, and their willingness to move these near-term contract termination dates should help us attract investment capital or a potential buyer for our Company.”

“We have been trying to raise the capital needed to build our plant since 2006,” said Mr. Shindo. “We have succeeded in securing approximately $243 million in customer prepayments, plus an additional $41 million in equity. However, we still have a financing gap of at least $106 million to complete our 4,000 metric tons per year polysilicon plant. Given our current market capitalization, it is unlikely that we will be able to secure the capital we need without selling a majority of our stock or assets. That being the case, we are seeking a strategic buyer for the Company, while simultaneously seeking debt and equity financing alternatives.”

“We believe in Hoku’s ability to overcome its current challenges in raising capital,” said Dr. Zhengrong Shi, Suntech’s chairman and CEO. “They have done an admirable job with the construction of their plant, and we look forward to receiving our first shipment of polysilicon from Hoku.”

Hoku and Tianwei Amend Supply Agreements to Accelerate Prepayments and Adjust Shipping Schedule

Monday July 6, 2009, 4:25 pm EDT

Hoku Materials, Inc., a wholly owned subsidiary of Hoku Scientific, Inc. (HOKU), established to manufacture and sell polysilicon for the solar market, and Tianwei New Energy (Chengdu) Wafer Co., Ltd., a subsidiary of Tianwei New Energy Holdings Co., Ltd. that manufactures silicon wafers, photovoltaic cells, and modules in China, today announced that they have amended their two polysilicon supply contracts to accelerate $5 million of the remaining $7 million in prepayments that Tianwei was obligated to pay to Hoku, eliminate Hoku’s near-term shipping obligation to Tianwei, and adjust the long-term contract price.

Tianwei had already paid Hoku a combined $74 million in prepayments through April 30, 2009. Before the amendments, Tianwei was obligated to pay Hoku an additional $7 million upon Hoku’s first shipment of products in 2010. In exchange for a long-term contract price adjustment, Tianwei agreed to pay $5 million of this remaining $7 million up front, and eliminated the requirement that Hoku ship polysilicon to Tianwei before March 2010. These early shipments would have been additive to the long-term contract amounts, and Hoku’s failure to make these shipments would have resulted in a price penalty.

The remaining $2 million is to be paid when Hoku commences polysilicon shipments to Tianwei in 2010. As of June 30, 2009, Tianwei has paid to Hoku a combined aggregate of $79 million in prepayments for future product deliveries.

Hoku reported that the average prices over the ten-year term of each contract were adjusted downward by eight percent, such that the total amounts payable over the ten-year term of both agreements was reduced from approximately $511 million to approximately $468 million.

“The early payment of $5 million has helped us manage cash flow for our Hoku Materials subsidiary, especially as some of our other customers were requesting extensions of time make their prepayments to us,” said Dustin Shindo, chairman and chief executive officer of Hoku Scientific. “Eliminating the early shipment requirement reduces near-term pressure for us to commence shipments, and allows us to more effectively manage the timing of our capital expenditures as we seek to raise additional financing for continuing construction costs.”

“Tianwei has contributed $79 million out of a combined total of $158 million in prepayments from our polysilicon customers,” said Mr. Shindo, chairman and chief executive officer of Hoku Scientific. “Their strong commitment to our project is reflected not just in the amount of capital committed, but in our mutual willingness to adjust our contractual commitments based on recent market conditions. The agreed upon unit prices remain attractive for Hoku over the ten-year period, while also offering Tianwei the ability to more effectively control its production costs and be competitive. The accelerated payment of $5 million helps us manage our near-term capital requirements.”

“Tianwei views Hoku as one of our key strategic partners,” said Mr. Aihua Guo, Tianwei’s general manager. “These amendments strengthen our long-term commitment to Hoku, and we remain confident in their ability to begin shipping high quality polysilicon to us in the months ahead.”

About Tianwei New Energy (Chengdu) Wafer Co., Ltd.

Tianwei New Energy (Chengdu) Wafer Company is a wholly owned subsidiary of Tianwei New Energy Holdings Co., Ltd (TWNE), with first class silicon wafer facilities in China’s Sichuan Province. It has installed wafer capacity of 300 MW, with plans to expand to 600 MW from 2009. Its parent company, TWNE, is also based in Sichuan, China. TWNE owns wafer, photovoltaic (PV) cell and module facilities. TWNE has 100MW of installed PV cell capacity and 60MW of installed PV module capacity, with plans to increase PV cell and module capacity to 300 MW each in 2009. TWNE is a wholly owned subsidiary of Baoding Tianwei Group Company, Ltd., a leading manufacturer of power transmission equipment and green energy products in China, originally founded in 1958. Baoding Tianwei Group Company, Ltd. has approximately 8,000 employees. For more information visit www.twnesolar.com.

Solars Down Sharply; Prices “In Free Fall”; Beware TSMC

Posted by Eric Savitz
barrons.com

Solar shares, which in recent weeks have staged a ferocious rally, are getting hammered today, as investors take profits amid concerns about pricing and demand in the sector. As I noted last week, even some of the smallest and most speculative solar names had taken off, making the sector look more than a little frothy. But with some smaller solar players running into trouble – Hoku Scientific (HOKU) on Friday said it might run out of cash before it can complete a planned polysilicon factory – the stocks today are losing ground.

In a research report late Friday, FBR Capital analyst Mehdi Hosseini said that product prices in the sector are falling more than expected. He says that while investors are anticipating “a hockey-stick shaped demand uptick in the U.S., China and other emerging countries,” he instead sees a slow roll-out of subsidies, tightened terms from financiers and over-hyped news items, some from untrustworthy sources.

Hosseini writes that declining prices are not stimulating demand as many had expected, and that the take-off of demand growth is being push into the first half 2010. “In this environment of unstable pricing and financing conditions…investors are better off staying on the sidelines and focusing more on poly manufacturers,” he writes, adding that with more than a quarter’s worth of finished goods in inventory, and weak end-market demand due tight finance conditions, Q2 EPS reports could be disappointing.

Hosseini writes that spot poly prices have fallen as low as $60/kg in the Asian market, though most is priced at the $65-$70/kg range, well below the $90-$95 price in early April. He says price for six-inch solar wafers have fallen as low at $3, with most sold in the $3.20-$3.40 range. Cell prices, he says, are in the $1.30 to $1.50/watt range, down from $1.80-$2 in early April.

Here’s a look at some of today’s biggest movers in the solar sector:

* Evergreen Solar (ESLR), a big winner last week, is down 25 cents, or 9.5%, to $2.37.
* GT Solar (SOLR) is down 94 cents, or 13.6%, to $5.95.
* JA Solar (JASO), which was downgraded today by Lazard Capital to Hold from Buy, is down 37 cents, or 6.5%, to $5.30.
* Solarfun (SOLF) is down 70 cents, or 9.1%, to $7.02.
* China Sunergy (CSUN) is down 50 cents, or 8.8%, to $5.19.
* First Solar (FSLR) is down $5.18, or 2.8%, to $178.62.
* DayStar (DSTI) is down 11 cents, or 11.4%, to 87 cents.

Update: One other thing. The New York Times on Saturday reported that Taiwan Semiconductor (TSM), the world’s leading contract chip manfuacturer, wants to get into the solar business, as well as the LED lighting market. The Times notes that TSMC is “one of the most formidable manufacturers on the planet,” and could drive down prices, as it did in the chip business. The piece notes that TSMC last week shifted CEO Rick TsaiMorris Chang, the company’s chairman and founder, to a new job targeted at finding new business opportunities.

Hoku Q4 loss narrows, raises going-concern doubts

Thu Jun 11, 2009 5:17pm EDT

* May not have funds to continue as going concern

* Says may not have funds to complete plant

* Continues to see losses in future

* Q4 loss $0.03 vs $0.12

* Q4 revenue $0.11 mln

June 11 (Reuters) – Hoku Scientific Inc (HOKU) reported narrower fourth-quarter loss, helped by lower expenses, but said it may not be able to continue as a going concern over the next 12 months, sending its shares down nearly 17 percent in after market trading.

The company, which provides raw materials to the solar industry, said it may not be able to secure final funding for its polysilicon facility, which it estimates would cost about $390 million to construct.

“The company may not have sufficient funds to complete the construction of its polysilicon plant, or to continue as a going concern for the next 12 months,” Hoku said in a statement.

The company also said it might need to acquire polysilicon on the spot market and sell to its customers to meet its contractual obligations.

Hoku Scientific forecast costs to increase significantly and said it may continue to incur losses in the foreseeable future.

It, however, added that it will not provide a revenue outlook for fiscal 2010.

For the quarter ended March 31, Hoku’s net loss was $904,000 or 4 cents a share, compared with a net loss of $2.1 million, or 12 cents a share. Excluding items, net loss was 3 cents a share.

Analysts were expecting Hoku to post a loss of 12 cents a share, on revenue of $230,000.

Shares of the company closed at $4.38 Thursday on Nasdaq. They fell nearly 17 percent to $3.65 after market close.

Hoku Scientific, Inc. Reports Results for Fiscal Year 2009 and Fourth Quarter Ended March 31, 2009

Thursday June 11, 2009, 4:10 pm EDT

HONOLULU, HI–(MARKET WIRE)–Jun 11, 2009 — Hoku Scientific, Inc. (HOKU), a materials science company focused on clean energy technologies, today announced its financial results for the fiscal year and fourth quarter ended March 31, 2009. The Company also provided a general update on its business.

Financial Results

Revenue for the fiscal year ended March 31, 2009 was $5.0 million, compared to $3.2 million for fiscal 2008. Revenues for the quarters ended March 31, 2009 and 2008 were $112,000 and $621,000, respectively. All revenue in fiscal 2009 was derived from photovoltaic, or PV, system installation and other related services and the resale of solar inventory. Revenue for fiscal 2008 was primarily derived from PV system installations and fuel cell revenue from contracts with the U.S. Navy. As of March 31, 2009 and March 31, 2008, deferred revenues of $784,000 and $36,000, respectively, were attributable to PV system installation projects and related service contracts.

Net loss, computed in accordance with U.S. generally accepted accounting principles, or GAAP, for the fiscal year ended March 31, 2009 was $3.0 million, or $0.15 per diluted share, compared to $4.3 million, or $0.26 per diluted share for fiscal 2008. GAAP net loss for the quarter ended March 31, 2009 was $904,000, or $0.04 per diluted share, compared to $2.1 million, or $0.12 per diluted share for the same period in fiscal 2008.

Non-GAAP net loss for the fiscal year ended March 31, 2009 was $1.7 million, or $0.09 per diluted share, compared to $3.2 million, or $0.20 per diluted share for fiscal 2008. Non-GAAP net loss for fiscal 2009 and fiscal 2008 excludes non-cash stock-based compensation of $1.2 million and $1.1 million, respectively. Non-GAAP net loss for the quarter ended March 31, 2009 was $634,000, or $0.03 per diluted share, compared to $1.9 million, or $0.11 per diluted share, for the same period in fiscal 2008. Non-GAAP net loss for the quarters ended March 31, 2009 and 2008 excludes non-cash stock-based compensation of $270,000 and $192,000, respectively. The accompanying schedules provide a reconciliation of net loss per share computed on a GAAP basis to net loss per share computed on a non-GAAP basis.

Dustin Shindo, chairman, president, and chief executive officer of Hoku Scientific, said, “We were pleased to have met our revised revenue guidance of $5 million for fiscal 2009. In addition, we received $121 million in customer prepayment deposits against future polysilicon shipments from our production facility currently under development in Pocatello, Idaho. These receipts bring the total amount of prepayment deposits received as of March 31, 2009 to $134 million.”

Mr. Shindo continued, “These results were in keeping with our previous guidance, with losses expected as we continued advancing the development of both our polysilicon manufacturing and PV systems integration businesses. Going forward, we plan to continue expanding our PV integration business in fiscal 2010 and, provided we are able to secure the required financing for the construction of our polysilicon plant, we look forward to generating revenue from the sale of polysilicon in fiscal 2010.”

Hoku Announces Tax Increment Financing and Provides Update on Status of Vendor Agreements

Tuesday June 2, 2009, 7:30 am EDT

POCATELLO, ID–(MARKET WIRE)–Jun 2, 2009 — Hoku Materials, Inc., a wholly owned subsidiary of Hoku Scientific, Inc. (HOKU), established to manufacture and sell polysilicon for the solar market, today announced the signing of an Economic Development Agreement with the City of Pocatello which could provide up to approximately $43 million of tax increment financing to Hoku over time.

According to the terms of the agreement, The Pocatello Development Authority has agreed to provide Hoku with tax increment financing as reimbursement for the Company’s capital costs in building site infrastructure at its polysilicon production facility. This financing would be equal to 95% of the incremental property tax paid by Hoku, up to a maximum of approximately $26 million. In addition, once this initial $26 million cap is reached, Hoku will receive, as an incentive for hiring and maintaining certain numbers of employees, an additional tax reimbursement equal to 50% of the incremental property tax paid by the Company, up to a maximum of approximately $17 million.

Hoku clarified that the total amount of this financing would be reduced by the City of Pocatello’s costs of constructing the public road planned to run along the southern perimeter of Hoku’s project site, connecting Kraft Road to Highway 30 in Pocatello. If the City pays out of pocket, or obtains a bond to cover the cost of building the road, the initial $26 million in tax increment financing will be reduced on an equivalent basis, up to a maximum reduction of $11 million.

“We are pleased to have formalized this agreement with the City of Pocatello,” said Dustin Shindo, chairman and chief executive officer of Hoku Scientific. “While the tax increment financing is very important to us, perhaps more important is the strong support we continue to receive from the City of Pocatello and the State of Idaho. We are thankful and honored to be a part of the greater Pocatello community.”

Pocatello mayor, Roger Chase, added, “The City of Pocatello continues to be impressed by Hoku’s efforts. We believe strongly in sustainable, diversified economic development for our community, and plan to continue our focus on advancing renewable energy initiatives in Pocatello, Chubbuck, and Bannock County.”

In addition, Hoku reported today that it had reached separate agreements with four key vendors: Idaho Power Company, Polymet Alloys, Inc., BHS Acquisitions, LLC, and AEG Power Solutions USA, Inc., formerly known as Saft Power Systems USA, Inc.

Owing to recent revisions to the timing and amount of prepayment deposits expected by Hoku from some of its polysilicon customers, Hoku had previously announced that it had begun adjusting its construction and procurement schedule in order to more closely match its cash outflows with these expected receipts. The Company explained that the vendor contract amendments announced today were reached in order to better align Hoku’s capital expenditures and supply chain purchase obligations to this revised schedule.

In addition, Hoku reported it had reached an agreement with Great Western Malting Company to adjust the timing of its delivery of heated process water to more closely match Hoku’s revised construction and ramp-up schedule.

“We are pleased to announce these developments,” said Dustin Shindo. “In each case, Hoku was able to work collaboratively with our partners to make the necessary, incremental changes to our respective contracts, in order to compensate for revisions in the timing and amount of customer prepayments. In addition to continuing our focused efforts to match cash outflows to inflows, these amendments highlight the strength of Hoku’s relationship with its vendors and partners, and provide further testament to Hoku’s long-term partnership approach. Notwithstanding the schedule changes, and thanks to the ongoing support of these and other partners, we continue to expect to make our first shipments of product to customers in 2009.”

Hoku and Solargiga Move Forward With Amended Supply Agreement

Monday April 13, 2009, 7:30 am EDT

POCATELLO, ID and HONG KONG–(MARKET WIRE)–Apr 13, 2009 — Hoku Materials, Inc., a wholly owned subsidiary of Hoku Scientific, Inc. (HOKU), established to manufacture and sell polysilicon for the solar market, and Wealthy Rise International, Ltd., a wholly owned subsidiary of Solargiga Energy Holdings, Ltd., a manufacturer of monocrystalline ingots and wafers in China, today announced an amendment to the polysilicon supply agreement in effect between the two companies.

According to the amended contract, the total volume of polysilicon to be sold by Hoku to Wealthy Rise will be reduced such that up to approximately $136 million may be payable to Hoku over a ten-year period, subject to product deliveries and other conditions. The amended contract also adjusts the date when Hoku is obligated to commence shipments of polysilicon by three months from March 31, 2010 to June 30, 2010 as well as adjusting the dates for price adjustments and termination rights in the event of a delay in commencing shipment. Wealthy Rise has the right to terminate the amended supply agreement, and recover any prepayments made, if Hoku has not commenced shipments by October 31, 2010, and Hoku has the right to terminate the agreement, and retain all prepayments received, if Wealthy Rise fails to pay any of its future prepayments when due.

Hoku received an initial deposit of $7 million from Wealthy Rise after signing, and the amendment requires that Wealthy Rise make four additional deposits in June, August, October and December 2009, each in the amount of $3.3 million. Wealthy Rise will make a final payment of $200,000 upon receipt of the first shipment of product from Hoku. Under the agreement, Hoku will grant to Wealthy Rise a security interest in its polysilicon assets to secure Hoku’s obligation to repay $20.4 million to Wealthy Rise as a credit against product shipments over time.

“We are pleased to have found a way to move forward in a manner that benefits both Hoku and Solargiga,” said Dustin Shindo, chief executive officer of Hoku Scientific. “As evidenced by this and other recently-announced contract amendments, Hoku is focused on working with its customers and partners to jointly and successfully navigate the current market turbulence. We look forward to a long and mutually-beneficial business relationship with Solargiga.”

“Hoku has shown an uncommon commitment to the long-term partnership between our companies. This long-term polysilicon supply contract is important for Solargiga’s future expansion plans. We are pleased to move forward with Hoku and to have achieved a win-win solution for both parties,” said Wealthy Rise’s CEO, Y.I. Hsu.

Hoku confirmed that all of Hoku’s customers are now current with their prepayments, and that the company is in active discussions with other potential customers for the possible resale of the recaptured polysilicon capacity, which would include additional prepayments for products.

About Solargiga Energy Holdings, Ltd. and Wealthy Rise International, Ltd.

Solargiga Energy Holdings Limited (HKG: 0757) is an investment holding company. The Company, along with its subsidiaries, is engaged in the trading of, manufacturing of and provision of processing services for monocrystalline silicon ingots/wafers. Its subsidiaries include Jinzhou Yangguang Energy Co. Ltd, Jinzhou Rixin Silicon Materials Co., Ltd., and Wealthy Rise International, Ltd. In June 2007, Solargiga acquired Solar Technology Investment (Cayman) Corp. (Solartech), Shanghai Jingji Electron Material Co., Ltd. (Shanghai Jingji) and Jinzhou Youhua New Energy Co., Ltd. (Jinzhou Youhua), which comprised, amongst others, established polysilicon reclaiming and upgrading facilities and monocrystalline silicon ingot manufacturing facilities. Wealthy Rise International was incorporated in Hong Kong on June 21, 2007 and engages in the trading of raw materials, ingots and wafers. www.solargiga.com

Hoku and JH Kelly Confirm Schedule for Polysilicon Plant Construction and Start-Up

Thursday April 2, 2009, 7:30 am EDT

POCATELLO, ID–(MARKET WIRE)–Apr 2, 2009 — Hoku Materials, Inc., a wholly owned subsidiary of Hoku Scientific, Inc. (HOKU), established to manufacture and sell polysilicon for the solar market, today announced that it entered into a change order agreement under its cost plus incentive construction contract with JH Kelly, LLC, to clarify the schedule for completion of Hoku’s planned 4,000 metric tons per year polysilicon production plant.

Under the original contract, as previously amended by earlier change orders in 2008, JH Kelly had the potential to earn up to $5 million in bonus payments upon the achievement of specified schedule, budget, and safety goals. Under the change order, JH Kelly still has the potential to earn up to $5 million in bonus payments, but the weight of the bonus payments has shifted towards meeting Hoku’s schedule goals, including the reactor demonstration in the second quarter of calendar year 2009, partial commercial operation in the second half of calendar year 2009, and full commercial operation in the first half of calendar year 2010. Before the change order, $1.5 million of the $5 million in bonuses was allocated to the schedule goals. The change order increases that amount to $3.5 million of the $5 million, with the remaining $1.5 million in potential bonus payments to be awarded for achieving budget and safety goals. All bonus payments, if earned, would be payable upon final completion of the construction of the plant.

“The revised milestone schedule realigns JH Kelly’s incentives with our current schedule, which is to start-up the plant and commence shipments to our customers in the second half of calendar year 2009, which may be before our TCS plant is operational,” said Dustin Shindo, chairman and CEO of Hoku Scientific. “This is consistent with the recently announced change to our engineering and procurement agreement with Stone & Webster, Inc. As unexpected changes in the timing and amount of payments from our customers have required us to shift our schedule to manage cash, JH Kelly has proven to be a trusted and reliable partner.”

“We are very proud to be working on this polysilicon plant with Hoku,” said Mason Evans, president of JH Kelly. “Our team pushed hard through the winter to stay on schedule. We’re excited to start turning areas over to Hoku to commence operations over the next few months.”

Hoku and Solarfun Amend Supply Agreement to Realign Prepayment and Shipping Schedules

Tuesday March 31, 2009, 7:30 am EDT

POCATELLO, ID and QIDONG, CHINA–(MARKET WIRE)–Mar 31, 2009 — Hoku Materials, Inc., a wholly owned subsidiary of Hoku Scientific, Inc. (HOKU), established to manufacture and sell polysilicon for the solar market, and Solarfun Power Hong Kong Limited, a subsidiary of Solarfun Power Holdings Co., Ltd. (SOLF), an established vertically integrated manufacturer of silicon ingots and wafers, and photovoltaic (PV) cells and modules in China, today announced that they have amended their polysilicon supply contract to modify the timing of when Solarfun is obligated to pay Hoku $23 million in additional prepayments for polysilicon, while adjusting Hoku’s deadlines for commencing shipments to Solarfun. Pricing, volume, and other material terms of the agreement were unchanged.

Solarfun had already paid Hoku $32 million in prepayments through October 2008. Before the amendment, Solarfun was obligated to pay Hoku $18 million by March 31, 2009, and an additional $5 million by March 31, 2010, as a prepayment for polysilicon products. The amendment provides that the $18 million may be paid in installments, including $5 million that was paid on March 30, 2009, $8 million to be paid in July 2009, and $5 million to be paid in increments of $1 million in August and September 2009, and $3 million in October 2009. The $5 million that was payable on March 31, 2010, is now payable in January 2010. In exchange for Hoku’s agreement to adjust the prepayment timing, Solarfun has agreed to extend the date when Hoku is obligated to commence shipments of polysilicon from September 2009 until March 2010. Solarfun has the right to terminate the amended supply agreement if Hoku has not commenced shipments by June 30, 2010, and Hoku has the right to terminate the agreement, and retain all prepayments received, if Solarfun fails to pay any of its future prepayments when due.

“Solarfun is an important relationship,” said Dustin Shindo, chairman and chief executive officer of Hoku Scientific. “We were willing to renegotiate the timing of their near-term prepayments to ensure our mutual long-term success. We still plan to commence customer shipments in the second half of 2009; however, delays in customer payments can impact our plant construction schedule, and we appreciate their flexibility in moving our required delivery dates.”

“We value Hoku’s long-term partnership and appreciate their willingness to renegotiate our existing contract to reflect current prevailing market conditions,” said Solarfun’s chief executive officer, Harold Hoskens.

Hoku and Alex New Energy Sign Ten-Year Polysilicon Supply Agreement

Tuesday March 10, 4:30 pm ET

Hoku Announces Second Amendment to Jinko Contract

POCATELLO, ID–(MARKET WIRE)–Mar 10, 2009 — Hoku Materials, Inc., a wholly owned subsidiary of Hoku Scientific, Inc. (HOKU) established to manufacture and sell polysilicon for the solar market, and Shanghai Alex New Energy Company, Ltd. (Alex), a manufacturer of crystalline silicon solar cells, modules and photovoltaic (PV) products, today announced the signing of a definitive contract for Hoku’s sale and delivery of polysilicon to Alex over a ten-year period beginning in early 2010.

Hoku’s contract with Alex represents the resale of a portion of the polysilicon production capacity recaptured by Hoku after agreeing to amend its original supply agreement with Jiangxi Jinko Solar Company (Jinko). Hoku will make its first shipment of polysilicon to Alex in the first half of 2010, and will ship the remainder over a ten-year period at set prices that will decline throughout the term of the agreement.

Prior to establishing its contract with Hoku, Alex had reached an agreement with Jinko whereby Alex would purchase some of the polysilicon Jinko was to receive from Hoku, in exchange for underwriting a portion of Jinko’s prepayment deposits. At the request of both Jinko and Alex, Hoku formally assigned this additional capacity to Alex under the new agreement.

As a result, Hoku also announced today the signing of a second amendment to Jinko’s polysilicon supply agreement. The amendment reduces the total volume of polysilicon to be sold by Hoku to Jinko and reduces their prepayment obligation to $20 million, including the $15 million previously paid to Hoku, but leaves the other terms of the contract unchanged. As amended, the contract continues to provide for Hoku’s first shipment of polysilicon to Jinko in the second half of 2009, and Hoku’s option to receive discounted wafer manufacturing (tolling) services from Jinko for up to a certain amount of polysilicon each year for the ten years of the agreement.

According to the terms of the new agreements with Alex and Jinko, up to an aggregate combined total of approximately $238 million may be payable to Hoku during the ten-year period, subject to product deliveries and other conditions. The take-or-pay contracts both provide for the delivery of predetermined volumes of polysilicon each year, with combined prepayments for product in an aggregate amount of $40 million, of which $22 million has been paid to date; $15 million from Jinko and $7 million from Alex. Hoku has granted both Jinko and Alex a security interest in its polysilicon assets to secure Hoku’s obligation to repay each company’s prepayments as a credit against product shipments over time. Table 1 below summarizes the key terms of Hoku’s agreements with Jinko and Alex.

Hoku Announces Amendment to Polysilicon Plant Engineering Contract with Stone & Webster

Tuesday February 24, 4:05 pm ET

POCATELLO, Idaho, Feb. 24, 2009 (GLOBE NEWSWIRE) — Hoku Materials, Inc., a wholly owned subsidiary of Hoku Scientific, Inc. (HOKU), established to manufacture and sell polysilicon for the solar market, today announced that it entered into a change order agreement under its engineering, procurement and construction management services contract with Stone & Webster, Inc., to clarify the scope of on-going work for Hoku’s planned 4,000 metric tons per year polysilicon production plant. Stone & Webster is a subsidiary of The Shaw Group Inc.

The change order confirms Hoku’s intent to delay the detailed engineering and construction of a portion of the polysilicon plant, the trichlorosilane (TCS) production plant area, until April 2009 and reassign construction management services to JH Kelly, LLC, Hoku’s general construction contractor. JH Kelly has been primarily responsible for construction management over the past several months because they have controlled the critical path schedule on-site in Pocatello. The revised Stone & Webster scope of work includes the engineering and procurement that is required for Hoku to commercially operate the plant using third party TCS, and the scope to transition operations from third party TCS to on-site TCS production in a closed-loop production process.

“The revised scope of work is consistent with our plan to start-up the plant and commence shipments to our customers in the second half of 2009, which may be before our TCS plant is operational,” said Dustin Shindo, chairman and CEO of Hoku Scientific. “Because the engineering of our TCS plant has been substantially completed by Dynamic Engineering, Inc., Stone & Webster is well positioned to resume the detailed engineering work for our TCS plant when our cash flow supports this investment. Our earlier ordering of long lead-time items, such as fluidized bed reactors and distillation columns, allows us to suspend this work for a few months without disproportionately impacting the final completion schedule.”

The change order also realigns the schedule guarantees in the contract around the revised scope of work, and Stone & Webster’s engineering and procurement deliverable dates.

“As we head into the home stretch, our company remains fully committed to fulfilling Hoku’s engineering and procurement requirements to ensure the successful operation of this polysilicon plant,” said Lou Pucher, president of Shaw’s Energy & Chemical Group.

Hoku Executives Decline Cash Bonuses

Thursday February 12, 8:00 am ET

HONOLULU, HI–(MARKET WIRE)–Feb 12, 2009 — Hoku Scientific, Inc. (HOKU), a materials science company focused on clean energy technologies, today announced its Board of Directors had received a letter signed by all four of its executive officers asking that the Board not pay any cash bonuses to them for the company’s fiscal year ending March 31, 2009.

In March 2008, the independent members of Hoku Scientific’s Board of Directors, or the Independent Directors, approved an executive compensation plan that provides for a combination of stock and cash bonuses that would be awarded, at the Board’s discretion, based on the company’s successful progress in raising capital and in operating the planned polysilicon production facility in Pocatello, Idaho.

In a letter to the Board of Directors, Hoku’s executives wrote, “We feel we have made significant progress towards our objectives in fiscal 2009 by, among other things, securing the receipt of $103 million in cash prepayments from customers fiscal year-to-date; advancing our polysilicon production facility from basic civil construction all the way to initial reactor placement; and increasing the company’s solar photovoltaic installation project portfolio by 600% as compared to fiscal 2008. However, in the current economic climate, we are asking our customers, vendors, suppliers, and employees for continuing support to manage our cash. We are each fully committed to the long term success of Hoku, and we respectfully ask that the Board of Directors forego consideration of cash bonuses to each of us for fiscal year 2009.”

Dean Hirata, Chairman of the Audit Committee of Hoku Scientific’s Board of Directors, and the lead Independent Director, said, “Hoku’s management team should be commended for their leadership. They have demonstrated their commitment to building a long-term sustainable business. Their personal loyalty to each other, and to Hoku, is unmatched in my experience.”

Hoku Scientific, Inc. Reports Third Quarter Fiscal Year 2009 Results

Wednesday January 28, 4:10 pm ET

HONOLULU, HI–(MARKET WIRE)–Jan 28, 2009 — Hoku Scientific, Inc. (HOKU), a materials science company focused on clean energy technologies, today announced its financial results for the third quarter ended December 31, 2008 and provided a general update on its business.

Financial Results

Revenue for the quarters ended December 31, 2008 and 2007 was $767,000 and $1.3 million, respectively, derived primarily from photovoltaic, or PV, system installation contracts. As of December 31, 2008 and March 31, 2008, deferred revenue of $12,000 and $36,000, respectively, was attributable to PV system installation projects and related service contracts.

Net loss, computed in accordance with U.S. generally accepted accounting principles, or GAAP, for the quarter ended December 31, 2008 was $863,000, or $0.04 per diluted share, compared to $538,000, or $0.03 per diluted share, for the same period in fiscal 2008.

Non-GAAP net loss for the quarter ended December 31, 2008 was $646,000, or $0.03 per diluted share, compared to $274,000, or $0.01 per diluted share, for the same period in fiscal 2008. Non-GAAP net loss for the quarters ended December 31, 2008 and 2007 excludes non-cash stock-based compensation of $217,000 and $264,000, respectively. The accompanying schedules provide a reconciliation of net loss per share computed on a GAAP basis to net loss per share computed on a non-GAAP basis.

Dustin Shindo, chairman, president and chief executive officer of Hoku Scientific, said, “Broader economic conditions had some effect on our PV system installation business during the third quarter of fiscal 2009 and are expected to continue to affect our sales in the quarter to come. However, in terms of aggregate capacity, we expect to install more than 1.4 megawatts of PV systems in fiscal 2009, compared to approximately 0.2 megawatts in fiscal 2008.”

Mr. Shindo continued, “Regarding the financing for our power purchase agreements with the State of Hawaii Department of Transportation, we had previously expected to sell our turnkey PV systems directly to a third-party investor, who would have also assumed ownership of the associated power purchase agreements. Instead, we elected to enter into a joint venture with UFA Renewable Fund I, LLC to finance the design and installation of these PV systems. This approach remains consistent with our cash management strategy for the construction of our polysilicon production facility, and allows us to participate in the cash flows from the sale of power to DOT over the twenty-year duration of the PPAs. However, it does not allow us to recognize revenue from the sale of these PV systems. As a result, we now expect to recognize approximately $5 million in revenues in fiscal 2009.”