Hoku, which has 20 employees, is the type of company Hawai'i business leaders view as integral in moving the state away from its dependency on tourism. The company develops the membrane, or engine, that drives fuel cells.

A fuel cell operates like a battery, but does not run down or require recharging. It produces energy in the form of electricity and heat as long as fuel is supplied.

Hoku, Hawaiian for "star" plans to use proceeds from the sale to build an office and manufacturing facility, fund research and development efforts, and provide working capital for at least a year of operations. Other details, including the number of shares offered, pricing and the sale date, were not disclosed yesterday.

If successful, Hoku, a fuel-cell technology developer formed in 2001, would join a small cadre of local public high-tech companies such as Cyanotech Corp., Ceatech USA Inc. and Mera Pharmaceuticals Inc., which to date have delivered less than stellar growth and shareholder returns.

That history of lackluster financial performance may be changing, said David Watumull, president and chief executive of Hawaii Biotech, which is considered another promising high-tech company. Hoku's proposed stock sale follows an announced sale of Blue Lava Wireless, a Honolulu-based developer of games for wireless phones, to Jamdat Mobile Inc. for $137 million.

"I think we're entering into a new class of companies that have real global applications," Watumull said. Hawai'i's other public high-tech companies are "much smaller sized and had much less compelling technology," he added.

Just how well Hoku's stock sale will be received by the market remains unclear. During the tech bubble, investors flocked to companies with rapidly growing sales. Now companies that deliver profit growth remain in favor. Hoku lost $728,000 on $2.9 million in sales in the fiscal year ended March 31 and had $10.8 million in assets, according to its filing.

Since its inception, Hoku, which proposes to trade under the "HOKU" symbol, has an accumulated deficit of $6.5 million.

Dustin Shindo, Hoku co-founder and president, said he could not comment on the company's initial public offering, citing a so-called "quiet period" imposed by federal regulators. In past interviews, Shindo has said Hoku hopes its fuel-cell membrane earns a status similar to the central processor in a personal computer, which computer makers buy rather than produce themselves.

Hoku's products are geared toward markets such as energy production for homes and autos, and its customers include Sanyo Electric Co., Nissan Motor Co. and the U.S. Navy. The market for fuel cells is projected to grow from $318 million this year to $3.9 billion by by 2009, according to Hoku's filing.

Potential Hoku competitors include other startups as well large chemical companies.

Hoku's investors include Advantage Capital, Lava Ventures, Garage Technology Ventures and Hawaiian Electric, among others. Much of that money was made available via Act 221 technology investment tax incentives.