Dear Shareholder: (posted by Khris)
All known shareholders received, in a prior Email, a consent form for your consideration. For the company to survive each and every item is crucial and demands your attention. The elements of this Majority Consent are intended to work with a tax incentive program, providing funding, a change in the board of directors, and a change in the stock structure and number of board seats to facilitate a future partnership. Every aspect of the consent form is necessary to the success of EREX and its shareholders. The impact for E-Rex, if these items succeed, should be very positive for all of the stockholders.
In June of 2003 E-Rex filed for Qualified High Tech Business (QHTB) status in Hawaii. Replies from the Hawaii taxation board state that EREX qualifies for at least two of the three tax incentives. The QHTB is able to “sell” its operating losses, up to $500,000/ per year for the prior two years. The QHTB is entitled to an ITC (investment tax credit) of 100% of investment. It is structured as a “100% return on cash investments” and is done over five years. The credit is limited to $2,000,000. In addition it is also possible E-Rex may be entitled to an R & D credit. This is a 20% refundable credit on top of any Federal credits allowable. If you are interested in the state programs, please view the state web page, Department of Tax at www.hawaii.gov/tax. For reference, the law firm, of which EREX has no connection, Chun, Kerr, Dodd has performed a nice analysis of the HRS. That site is www.ckdbw.com/taxincentive.asp.
It is important to note that for this Majority Consent to pass, a majority of the outstanding stockholders must sign and return the form. This is not just a matter of the majority of people who vote, it requires a majority of ALL the stock. It is a daunting proposition. For a shareholder group to even be able to reach enough of the stockholders to consider this is a major problem. If you know other shareholders, please share this message with them. I expect the vote to be close and every vote really counts. Please, if you do agree with this proposal, fax your consent in no later December 10th. (Dec 8th for mail)
Any and all questions should be directed to EREXmcg@yahoo.com , please, if possible provide a phone number.
Sincerely,
Joe Pacheco
As Shareholder
Fax 818-224-2895
Mail to: FMS
22713 ½ Ventura Blvd., Ste A
Woodland Hills, CA 91364
