10.08.07

10.8.2007: Meldung: ARISE announces Q2 2007 results

ARISE Technologies Corporation 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
subsidiary

- 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.

Revenues

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.

Expenses

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 Cells.

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 www.arisetech.com and www.sedar.com. 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
Unaudited

June 30, December 31,
2007 2006
------------- -------------
Assets
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
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24,114,227 2,667,659
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Capital assets, net 7,180,215 83,841
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Other assets, net 32,350 13,241
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$ 31,326,792 $ 2,764,741
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Liabilities
Current liabilities
Accounts payable and accrued liabilities $ 6,425,804 $ 885,808
Deferred revenue 52,728 66,028
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6,478,532 951,836
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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)
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24,848,260 1,812,905
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$ 31,326,792 $ 2,764,741
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Approved by the Board:

(Signed) Ian MacLellan Director
-------------------------

(Signed) Harold Alexander Director
-------------------------



ARISE Technologies Corporation
Consolidated Statements of Loss and Deficit
Unaudited

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
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Gross profit 30,360 78,616 46,809 79,844
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Expenses
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
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Operating loss (3,577,755) (415,789) (4,888,738) (1,083,040)
-------------------------------------------------------------------------

Other expenses
(income)
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
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(161,730) 19,626 (157,012) 113,036
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Net loss for the
period (3,416,025) (582,469) (4,731,726) (1,343,130)
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-------------------------------------------------------------------------


Deficit, beginning
of period (12,894,975) (9,442,994) (11,579,274) (8,682,333)
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Deficit, end of
period $(16,311,000) $(10,025,463) $(16,311,000) $(10,025,463)
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-------------------------------------------------------------------------
Loss per share -
basic and diluted
(Note 6) $ (0.06) $ (0.02) $ (0.10) $ (0.06)



ARISE Technologies Corporation
Consolidated Statements of Cash Flows
Unaudited

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

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

Cash flows from
financing
activities
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
Share
subscription
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
investing
activities
Proceeds
disposal
(purchase)
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
equivalents,
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
-------------------------------------------------------------------------
-------------------------------------------------------------------------

Supplemental
disclosures
of cash
flows:

Interest paid $ 555 $ 129,086 $ 5,273 $ 205,388
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-------------------------------------------------------------------------
Income taxes paid $ - $ - $ - $ -
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-------------------------------------------------------------------------


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