ARISE Technologies Corporation announces second quarter fiscal 2007 results

    WATERLOO, ON, Aug. 9 /CNW/ - ARISE Technologies Corporation (TSX-V: APV)
(ADAX: A3T) announced today financial results for the second quarter ended
June 30, 2007.

    Second Quarter Highlights

    -   Revenues increased 63.2% versus first quarter 2007

    -   Net loss was $3,416,025 compared to $582,469 for the same period in
        2006 as a result of increased investments in PV Technology, Silicon
        Feedstock R&D, increased management staffing and stock compensation
        expense along with start-up costs related to the Company's German

    -   Completed $25,300,000 Common Share offering

    -   Proceeds of $1,530,038 from the exercise of warrants and options

    -   Reported positive working capital of $17,635,695

    "We are very pleased with our second quarter results and continue to
track our plan," said Ian MacLellan, President and Chief Executive Officer.
"Second quarter highlights included; signing the wafer supply contract with
Deutsche Solar AG, being awarded the WISE contract for solar installations in
Toronto and completing our $25.3 million equity financing. In addition our
expenses are in line with plan and we continue to be on schedule in Germany
for initial production in second quarter 2008"

    Financial Results

    The net loss for the three months ended June 30, 2007 was $3,416,025
compared to $582,469 for the same period in 2006. The increased loss was due
to higher research & development and administrative expenses as the Company
continued it's funding of the PV Research and Solar Grade Silicon Development
programs. In addition stock based compensation costs (non cash) increased
administrative expenses significantly.


    Sales for the three months ended June 30, 2007 were $305,014 compared to
$302,975 in the same period in 2006. Sales in the first six months of fiscal
2007 were $491,815, an increase of 30.7% over the same period of 2006.
    The WISE program, announced on June 19, 2007 will contribute to sales in
the third quarter of 2007.

    Gross Profit

    Gross profit for the quarter ended June 30, 2007 was $30,360 compared to
$78,616 in the same period in 2006. Gross margin (gross profit divided by
sales) decreased in the quarter ended June 30, 2007 compared to the same
period in 2006 from 25.97% to 9.9%. The decrease is due to the lack of sales
from the TEAM project in 2007 that helped increase gross margin in 2006. The
Company expects to increase gross margin levels in the current fiscal year due
to increased sales volume and its ability to buy inventory in larger
quantities and obtain better pricing from suppliers for such inventory.


    Operating expenses in the three months ended June 30, 2007 were
$3,577,755 compared to $415,789 in the same period in 2006. The Company's
focus in 2007 continues to be its commitment to the U of T PV Research
Program, the implementation of the German PV production plant and the Solar
Grade Silicon Development Program.
    Research and development expenses increased to $1,585,532 in the quarter
ended June 30, 2007 from $95,141 in the same period in 2006. Expenses in the
current quarter are primarily for the funding of the Solar Grade Silicon
Development Program including increased expense with consortium partners. The
Company has also hired additional resources to advance both the U of T PV
Research Program and the Solar Grade Silicon Development Program resulting in
an increase in expenditures in the period.
    General and administrative expenses for the quarter ended June 30, 2007
were $1,907,525 compared to $491,549 in the same period in 2006. The increase
of 288.1% was the result of higher payroll, audit and legal expenses together
with significantly higher stock based compensation costs. The stock based
compensation costs (non cash expense) in the current period was $842,814
compared to $167,113 in the same period in 2006. In addition, administrative
expenses for the quarter ended June 30, 2007 included $192,029 incurred by
ARISE Technologies Deutschland GmbH ("ARISE Germany") for travel, legal and
payroll expenses. ARISE Germany was established March 21, 2007.
    Selling and marketing expenses in the quarter ended June 30, 2007 were
$110,906 compared to $54,118 in the same period in 2006. The increase is due
to higher payroll and consultant/contractor costs in the current period.

    Other Income and Expenses

    Interest income for the quarter ended June 30, 2007 was $120,876 compared
to interest expense of 21,476 in the same period in 2006. The change in
interest income is the result of interest earned on short-term deposits of
cash raised in second quarter financing activities. Other Income in the three
months ended June 30, 2007 included a foreign exchange gain of $40,854
resulting from the translation of the financial statements of ARISE Germany to
Canadian funds.

    Liquidity and Capital Resources

    As at June 30, 2007, the Company had positive working capital of
$17,635,695 consisting of current assets of $24,114,227 and current
liabilities of $6,478,532. The current liabilities and current assets include
$5,175,360 owing to Deutsche Solar for prepayment of silicon wafer supply per
terms of the agreement announced on May 10, 2007. Cash and cash equivalents at
June 30, 2007 totaled $17,910,680, an increase of $16,194,857 since December
31, 2006. The Company does not currently maintain a bank line of credit.
    The increase in cash and cash equivalents is the result of financing
activity in the six months ended June 30, 2007. Net proceeds of equity raises
in the six month period totaled $26,418,759 (including over-allotment) plus
$2,003,547 cash from the exercise of warrants and options. Total net proceeds
in the six months ended June 30, 2007 were $28,422,306
    On January 8, 2007 the Company signed a non-binding Letter of Intent with
Commerzbank AG (Germany's second largest commercial bank) for a bank credit
facility. The proposed credit facility is planned to include term equipment
loans and bridge financing for the PV plant construction project. The debt
funding together with the above described German incentives is anticipated to
provide up to 75% of the funds required for the (euro)50Million PV cell
manufacturing facility project. Finalization of credit facility documents and
the subsequent availability of the credit facility loans are subject to a
number of conditions that are typical for such transactions. The Company
anticipates completing the credit process in third quarter 2007.
    On January 18, 2007, the Company completed an offering of $3,000,000 in
Special Warrants, as well as an additional $450,000 of Special Warrants issued
pursuant to an over-allotment option in a brokered private placement. In
addition, the Company completed a concurrent offering of $150,000 of Special
Warrants in a non-brokered private placement. The special warrants were issued
at a price of $0.40 per special warrant. On May 18, 2007 each special warrant
was automatically exercised into one ARISE common share and one half of a
share purchase warrant. Each whole share purchase warrant was exercisable on
or prior to 5:00pm on July 3, 2007 to acquire one ARISE common share at an
exercise price of $0.55 per share. Of the share purchase warrants exercisable
on or prior to July 3, 2007, 2,736,251 were exercised prior to June 30, 2007
for total proceeds of $1,504,938. The balance of 1,763,749 share purchase
warrants were exercised between July 1, 2007 and July 3, 2007 for cash
proceeds of $970,062.
    On April 24, 2007 the Company completed a short form prospectus offering
of 22,000,000 common shares for aggregate gross proceeds of $22,000,000. On
May 2, 2007 the Company completed the sale of 3,300,000 common shares, related
to the over-allotment of the April 24th offering, for gross proceeds of
$3,300,000. Net of share issuance costs, the Company received $23,147,609 in
cash from the prospectus offering and the over-allotment. The Company intends
to use the funds to build PV cell production and to continue its research and
development investments in Solar Grade Silicon and high-efficiency PV Solar
    Accounts receivable of $177,095 at June 30, 2007 consisted primarily of
systems sales in the period. Prepaid expenses of $5,387,656 represent an
increase from December 31, 2006 due to recognition of the liability to pay
Deutsche Solar AG a $5,175,360 prepayment for silicon wafer supply.
    Capital assets, net of depreciation, increased by $7,096,374 from
December 31, 2006 largely due to milestone payments for construction
work-in-process assets related to the planned ARISE Germany PV plant.

    Subsequent Events

    On August 9, 2007 the Company announced it's wholly owned subsidiary
ARISE Technologies Deutschland GmbH, entered into an agreement to purchase a
13 hectare site from the City of Bischofswerda, German. The Company expects
the transaction to close and complete in September. The subsidiary has the
necessary preliminary approvals to begin construction in advance of completing
the transaction.
    On August 9, 2007 the Company also announced ARISE Technologies
Deutschland GmbH entered into an agreement with HOCHTIEF Construction AG to
construct the company's first solar cell manufacturing plant in Bischofswerda.
Site preparation has begun and the manufacturing plant is expected to be ready
for initial production in the second quarter of 2008.
    In August the Company made milestone payments to building and equipment
suppliers, under previously announced agreements, totaling $3,833,116. These
payments will be reported as capital assets in the third quarter of 2007. In
addition the Company paid Deutsche Solar AG $1,709,673 as prepayment for
silicon wafers per terms of the agreement announced May 10, 2007.
    As of August 7, 2007, the Company had cash and cash equivalents of
approximately $12,214,236. ARISE Corporation has made the required equity
injection into ARISE Germany as per agreements with the SAB (Saechsische
Aufbaubank GmbH) and Commerzbank. The equity injection together with planned
SAB grants and the proposed Commerzbank credit facilities are expected to meet
the capital requirements for the construction of the planned PV facility
including costs for land, building and production equipment for PV cell lines
1 and 2. The equity injection in ARISE Germany will be utilized prior to
drawing on the SAB grants and/or the Commerzbank credit facilities. Management
is currently evaluating ways to accelerate the business plan and expects to
raise additional funds for silicon wafer prepayments and accelerated R&D
expenditures for both the PV Research Program and the Solar Grade Silicon
Development Project as well as to provide contingency funds.

    Outstanding Share Data

    As of August 7, 2007 the Company had 71,988,155 Common Shares issued and
outstanding, including the 4,500,000 shares issued as the result of the share
purchase warrants exercised on or prior to July 3, 2007. There were also stock
options to acquire 6,943,048 Common Shares (with exercise prices between $0.25
and $1.25 and with an average exercise price of $0.70) to its directors,
officers, employees, advisors and consultants of which, 3,675,341 were
exercisable. In addition, the Company had outstanding share purchase warrants
for 9,315,427 Common Shares with a weighted average exercise price of $0.47
per Common Share.
    Financial statements are attached to this media release and full
statements, notes and management's discussion and analysis is on SEDAR.

    About ARISE

    ARISE Technologies is dedicated to accelerating the use of solar energy
in mainstream North American markets. The Company has three operations:
Photovoltaic (PV) Technology, Silicon Feedstock and Systems. ARISE Common
shares are listed on the TSX Venture Exchange under the trading symbol APV and
on the Frankfurt Stock Exchange Open Market under the symbol A3T. Additional
information is available at and Certain
statements contained in this press release may be considered as
forward-looking. Such forward-looking statements are subject to risks and
uncertainties that could cause actual results to differ materially from
estimated or implied results. The TSX Venture Exchange has neither approved
nor disapproved the contents of this news release.

                       ARISE Technologies Corporation
                         Consolidated Balance Sheets

                                                       June 30,  December 31,
                                                          2007          2006
                                                  ------------- -------------
    Current assets
      Cash and cash equivalents                   $ 17,910,680  $    198,222
      Accounts receivable                              177,095       179,927
      Share subscription receivable                          -     1,878,600

      Inventory                                        638,796       374,262
      Prepaid expenses                               5,387,656        36,648
                                                    24,114,227     2,667,659

    Capital assets, net                              7,180,215        83,841

    Other assets, net                                   32,350        13,241

                                                  $ 31,326,792  $  2,764,741

    Current liabilities
      Accounts payable and accrued liabilities    $  6,425,804  $    885,808
      Deferred revenue                                  52,728        66,028
                                                     6,478,532       951,836
    Commitments and contingencies (Notes 7 and 11)

                      Shareholders' Equity (Deficiency)

    Capital stock (Note 5a)                         37,224,679    11,433,506
    Contributed surplus (Note 5b)                    3,934,581     1,958,673
    Deficit                                        (16,311,000)  (11,579,274)
                                                    24,848,260     1,812,905

                                                  $ 31,326,792  $  2,764,741

    Approved by the Board:

    (Signed) Ian MacLellan    Director

    (Signed) Harold Alexander Director

                       ARISE Technologies Corporation
                 Consolidated Statements of Loss and Deficit

                          3 months ended June 30,     6 months ended June 30,
                              2007          2006          2007          2006
                      ------------- ------------- ------------- -------------

    Sales             $    305,014  $    302,975  $    491,815  $    376,011
    Cost of goods
     sold                  274,654       224,359       445,006       296,167
    Gross profit            30,360        78,616        46,809        79,844

      Research and
       development       1,585,532        95,141     2,028,733       289,528
      General and
       administrative    1,907,525       481,599     2,727,462       882,235
      Selling and
       marketing           110,906        54,118       174,334       136,872
      Depreciation of
       capital assets        4,152           651         5,018         1,303
                         3,608,115       494,405     4,935,547     1,162,884

    Operating loss      (3,577,755)     (415,789)   (4,888,738)   (1,083,040)

    Other expenses
      Interest expense
       (income), net      (120,876)       21,476      (116,158)       60,860
      Foreign exchange
       (gain) loss         (40,854)                    (40,854)
      Deferred finance
       costs, net                         (1,850)                     52,176
                          (161,730)       19,626      (157,012)      113,036

    Net loss for the
     period             (3,416,025)     (582,469)   (4,731,726)   (1,343,130)

    Deficit, beginning
     of period         (12,894,975)   (9,442,994)  (11,579,274)   (8,682,333)

    Deficit, end of
     period           $(16,311,000) $(10,025,463) $(16,311,000) $(10,025,463)
    Loss per share -
     basic and diluted
     (Note 6)         $      (0.06) $      (0.02) $      (0.10) $      (0.06)

                       ARISE Technologies Corporation
                    Consolidated Statements of Cash Flows

                          3 months ended June 30,     6 months ended June 30,
                              2007          2006          2007          2006
                      ------------- ------------- ------------- -------------
    Cash flows from
      Net loss for
       the period     $ (3,416,025) $   (582,469) $ (4,731,726) $ (1,343,130)
      Items which do
       not involve
         of capital
         assets              4,152           651         5,018         1,303
         of other
         assets              1,759         2,842         3,547         5,683
         with warrants
         and secured
         debentures              -        (1,849)            -        52,177
        Issuance of
         capital stock
         for services            -       239,272       214,488       239,272
         compensation      842,814       167,113     1,008,887       187,172
                        (2,567,300)     (174,440)   (3,499,786)     (857,523)

      Decrease (increase)
         receivable        (24,365)      (68,565)        2,832       (44,803)
        Inventory         (282,655)     (222,713)     (264,534)     (217,086)
         expenses       (5,266,477)      (61,881)   (5,351,008)      (76,450)
         -ities          5,752,322    (1,372,325)    5,539,996    (1,439,729)
         revenue            (1,470)      (73,369)      (13,300)      (58,891)
                        (2,389,945)   (1,973,203)   (3,585,800)   (2,695,482)

    Cash flows from
      Issuance of
       capital stock
       for cash, net    23,147,609     2,895,404    24,540,159     3,736,952
      Exercise of
       warrants          1,530,038       355,300     2,003,547       365,300
       receivable                -             -     1,878,600             -
      Repayment of
       notes payable             -       (85,357)            -      (160,357)
                        24,677,647     3,165,347    28,422,306     3,941,895

    Cash flows from
       of capital
       assets           (6,785,291)            -    (7,101,392)            -
      Change in other
       assets              (16,734)         (312)      (22,656)       (6,128)
                        (6,802,025)         (312)   (7,124,048)       (6,128)

    Net cash flow       15,485,677     1,191,832    17,712,458     1,240,285
    Cash and cash
     beginning of
     period              2,425,003        50,975       198,222         2,522

    Cash and cash
     equivalents, end
     of period        $ 17,910,680  $  1,242,807  $ 17,910,680  $  1,242,807

       of cash

    Interest paid     $        555  $    129,086  $      5,273  $    205,388
    Income taxes paid $          -  $          -  $          -  $          -
    %SEDAR: 00017494E

For further information:

For further information: ARISE Technologies Corporation, 65 Northland
Road Waterloo, Ontario, Canada, N2V 1Y8, Tel. (519) 725-2244, Fax: (519)
725-8907,; Ian MacLellan, President & CEO, (519) 772-5707,, TSX Venture Exchange Symbol: APV

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