ARISE TECHNOLOGIES CORPORATION

Attention Business/Financial Editors

ARISE Technologies Reports 2008 Year-End Results

<<

- Excellent progress in executing strategies in 2008, but financial

results reflect demand slowdown and declining pricing that began late

in the year as the severe economic recession started to affect

customers

- PV cell shipments total 11.2MW for the year generating $34.8 million

of sales

- Net loss of $42.3 million includes $9 million of write-downs and

foreign exchange loss of $4 million, as well as significant scrap

costs

- Company is deferring capital investments and reducing costs to manage

capital through the current economic environment

- Adopts Shareholder Rights Plan

- Conference call and webcast to be held Tuesday, March 10, 8:30am

(Eastern)

>>

WATERLOO, ON, March 9 /CNW/ - ARISE Technologies Corporation (TSX: APV

and Frankfurt: A3T), which is dedicated to becoming a leader in

high-performance, cost-effective solar technology, today reported its

financial results for the 2008 year-end and fourth quarter ended December 31,

2008. Financial results conform to Canadian generally accepted accounting

principles (GAAP) and all currency amounts are in Canadian dollars.

"ARISE Technologies made excellent progress through 2008 in executing our

strategies to become a leader in the rapidly growing solar industry.

Unfortunately, our accomplishments during the past year now are overshadowed

by the fact that commencing in late 2008 our industry and our company began to

feel the consequences of the severe recession gripping global economies," said

Vern Heinrichs, who has been serving as ARISE's interim President and Chief

Executive Officer since January 28, 2009.

"As we advised in our February 3, 2009 news release, these consequences

include a slackening in demand for solar products and systems that has caused

our customers to defer purchases of PV (photovoltaic) cells from ARISE. With

this drop in demand there has been a marked decline in the pricing for both

silicon wafers and for PV cells. In addition, the lack of liquidity in global

capital markets is affecting our industry, including ARISE.

"These developments," Mr. Heinrichs continued, "significantly adversely

impacted our 2008 fourth-quarter and year-end financial results and have

required that we closely examine all of our costs and planned capital

investments for 2009. We have taken measures to significantly reduce our

monthly operating expenses and to defer capital investments where possible.

"We intend to deploy our funds where we expect they can be the most

productive in the short and medium term. Our objective, as for many companies,

is to make our way through these difficult times with our core capabilities,

operations, and strategies in place to where we can capitalize on these to

meet our long-term goals for growth, profitability, and sustainable value

creation for our shareholders," he continued.

"One promising area that we are pursuing are new opportunities that

appear to be developing as the result of the Government of Ontario's recent

announcement of Green Energy Act (GEA) legislation. We believe that ARISE's

Systems Division is well positioned to participate in the programs that the

GEA is expected to create," said Mr. Heinrichs.

<<

Operating Highlights

- In the 2008 fourth quarter, the new Bischofswerda, Germany plant

continued to ramp up its production of PV cells on its first

production line. The company shipped 6.1MW of PV cells, a 22%

increase from the 5MW shipped in the third quarter. Total 2008

shipments amounted to 11.2MW and the company could have shipped more,

however, in December, customers began to defer purchasing as their

requirements declined with softening business.

Key performance drivers of the PV Cell Division include achieving

targeted cell efficiency, scrap rate, and throughput levels. Since PV

cell production began in April 2008 at the Bischofswerda plant,

average PV cell efficiency has increased as production has ramped up.

The company is continuing to strive for further increases.

Since PV cell production began, scrap rates have continued to trend

significantly downward, resulting in greater throughput, but they

remained above target levels in the 2008 fourth quarter and have

resulted in higher than anticipated scrap costs. In the fourth

quarter of 2008, the company succeeded in reducing the scrap rate by

approximately 20% compared with the prior quarter. ARISE has further

significantly reduced the scrap rate in early 2009 and is committed

to additional improvements as its manufacturing operations mature and

it gains more production experience. The company is approaching its

mature scrap rate for line 1.

- The company was able to get the installation of line 2 at the

Bischofswerda plant back on track for commissioning in the 2009

second quarter. ARISE previously warned of a potential four-to-eight

week delay related to the timing of delivery of a key piece of

equipment from its manufacturer. Line 2 is designed to produce

annually PV cells with an electricity generating capacity of 45MW.

The company expects to produce PV cells on line 2 using a proprietary

process technology with a targeted efficiency of up to 18% when the

line is fully optimized. The pace at which ARISE will ramp up

commercial production of PV cells on line 2 will be subject to the

level of demand from the company's customers.

"While we expect to commission line 2 in the second quarter, we have

not determined when it will begin producing commercially or how much

it will ship this year as we continue discussing with our customers

their requirements and pricing issues," Mr. Heinrichs noted.

- On October 7, 2008 ARISE announced that it signed a 10-year lease,

with options for two additional five-year terms, for a 67,000-square-

foot building in Kitchener, Ontario to house its new pilot plant for

the production of 7N+ solar-grade polysilicon. As previously

announced, ARISE's PV Silicon Division has planned to establish

production capacity of 50 tonnes per year of its 7N+ silicon in 2009

and to increase the production level to a target capacity of 400

tonnes per year in 2010. ARISE expects to use the initial 7N+ silicon

that it produces to manufacture PV cells at its manufacturing plant

in Bischofswerda.

Initial preparation of the building began following the lease

signing. However, in view of current capital market conditions, as

well as the company's own cash liquidity, completion of the 50-tonnes

pilot plant is dependant on ARISE securing additional financing or a

partner that will contribute to funding the project.

- In October, the company announced the appointment of Peter Currie to

the Board. Mr. Currie was the second new director added within weeks,

the other being Gary West. Both bring strong financial backgrounds to

the Board. In January, ARISE announced that Bart Tichelman had

resigned as a Director and as President and CEO. The Board appointed

its Chairman, Vern Heinrichs, to serve as interim President and CEO.

ARISE is working with an executive search firm in seeking a new

President and CEO.

ARISE announced in November that company founder Ian MacLellan was

appointed President of its PV Systems Division. He relinquished his

role as ARISE's Chief Technology Officer, while continuing as the

company's Vice-Chairman.

- In November, ARISE confirmed with SOLON AG the volume and pricing of

PV cells that it will ship to SOLON in 2009 under a five-year

agreement signed in early 2008 to supply 212MW of PV cells.

- In December, ARISE announced that its wholly owned subsidiary, ARISE

Germany, has signed a four-year contract to supply PV cells to Asola

Advanced and Automotive Solar Systems GmbH. Under the terms of the

contract, ARISE will supply approximately 80MW of PV cells to Asola.

The value of the contract is approximately $200 million.

- Also in December, ARISE announced that it had met the fourth major

milestone for its Silicon Feedstock Pilot Plant project. This

included the initial construction phase of the pilot plant and

successful completion and operation of a pilot plant-scale furnace.

The silicon feedstock development project is being partially funded

by Sustainable Development Technology Canada. The project is

developing a new approach for refining high-purity silicon, which is

needed for high-efficiency PV cells. The proprietary process is

intended to produce 7N+ high-purity (99.99999%) silicon for PV

applications using a simplified chemical vapor deposition process.

- On December 18, ARISE announced that it agreed with Commerzbank AG to

extend the maturity of a $15.3 million inventory credit facility to

June 15, 2009. The secured bank credit facility, which the company

entered into with Commerzbank on March 17, 2008, has been used for

the purchase of silicon wafers.

>>

Year-End and Fourth-Quarter Financial Highlights

ARISE's year-end and fourth-quarter financial results reflect the

manufacturing start-up and commencement of commercial shipments of PV cells to

its customers in June 2008.

Sales for 2008 were $35.7 million, compared with $1.2 million in 2007, an

increase of 2,975%. Virtually all of the sales in 2008 ($34.8 million) were

generated by shipments of PV cells; the balance consisted of PV systems sales.

In 2007, PV systems accounted for all sales.

In the 2008 fourth quarter, sales totaled $18.9 million, compared with

$314,629 in the 2007 period. The increase is entirely attributable to PV cell

production. During the fourth quarter of 2008, 99% of sales were PV cell

sales; there were no PV cell sales in the comparative quarter of 2007.

Gross profit for 2008 was a negative $15.8 million, compared with $75,047

in 2007. The negative gross profit for 2008 largely is attributable to the

start up of PV Cell manufacturing. The PV Cell Division recorded a negative

gross profit of $15.9 million (gross profit for the PV Systems Division was

$0.2 million) largely as the result of a $3.9 million write-down of inventory,

a $5.1 million write-down of silicon wafer prepayments, and significant scrap

costs related to the start-up of production,. Scrap includes breakage as well

as all off-spec production, which includes cells with an efficiency of less

than 14%.

Management estimates that cost of sales for the year includes start-up

costs of approximately $4.4 million. Start-up costs are scrap costs in excess

of the mature rate of scrap. The inventory write-down reduced certain

inventory to its net realizable value which was largely necessitated by the

global decline in the pricing of PV cells and silicon. The silicon wafer

prepayment write-down was necessitated by the unexpected significant decrease

in silicon wafer prices as economies slumped around the world.

Gross profit for the 2008 fourth quarter was a negative $11.9 million,

compared with a negative of $1,254 in the same quarter of 2007. The negative

gross profit is attributable to start-up costs incurred for PV cell production

as well as the impairment charges recognized in the fourth quarter of 2008 on

inventory-related assets.

Operating expenses for 2008 were $21.5 million, compared with $11.5

million in 2007. For the 2008 quarter, operating expenses were $5.1 million

compared with $3.7 million in the 2007 period.

R&D increased to $6.4 million in 2008 ($1.9 million in the fourth

quarter) from $3.9 million in 2007 ($0.8 million in the fourth quarter). In

2008, R&D expenses were net of government funding of $2.7 million; in 2007

expenditures were net of $1.0 million of government funding. ARISE's R&D

initiatives comprise its PV silicon and PV cell programs. R&D expenses in 2008

rose as the result of higher payroll expenses for those programs together with

increased partner development expenses for the PV silicon program.

Increased general and administrative (G&A) expenses were the most

significant factor accounting for the company's higher operating expenses in

2008. G&A in 2008 was $11.6 million ($2.6 million in the fourth quarter),

compared with $6.7 million in 2007 ($2.6 million in the fourth quarter). The

increase in G&A in 2008 compared with 2007 is the result of higher payroll

expenses and stock-based compensation costs. The payroll cost increase is

largely due to increased employment in Canada and Germany. The stock-based

compensation expense (non cash) in 2008 was $4.9 million, compared with $2.2

million in 2007. As a percentage of sales, G&A expenses decreased

significantly to 33% in 2008 compared with 581% in 2007.

Selling and marketing expenses for 2008 were $2.0 million, compared with

$0.8 million in 2007. In the 2008 fourth quarter, selling and marketing

expenses increased $423,339 compared with the same three months of 2007. The

year over year increase in selling and marketing expenses is due to increased

payroll expenses and feasibility costs for in-process solar farm projects.

Depreciation of capital assets (exclusive of depreciation included in

cost of goods sold) and amortization of intangible assets rose significantly

in 2008 to $1.1 million, compared with $25,374 in 2007 ($270,096 in the 2008

fourth quarter, compared with $6,518 in the 2007 period). The increase in 2008

was largely attributable to newly acquired R&D equipment.

Interest expense (net) for 2008 was $1.4 million, compared with interest

income of $76,532 in 2007. Fourth quarter 2008 interest expense was $0.6

million, compared with interest expense of $0.2 million in the 2007 quarter.

The increase in interest expense is the result of higher borrowing from

Commerzbank AG in Germany. At December 31, 2008, the company had bank loans

and long-term debt totaling $36.7 million ($1.1 million at December 31, 2007).

Interest expense decreased 16% during the fourth quarter of 2008 compared with

the third quarter of 2008 due to lower interest rates. All third-party debt of

ARISE is subject to floating interest rates and is denominated in Euros.

Other income and expenses for 2008 included a foreign exchange loss of

$4.0 million, compared with a foreign exchange loss of $0.2 million in 2007.

The company realized a foreign exchange loss of $4.7 million in the fourth

quarter of 2008, which was partially offset by foreign exchange gains in the

second and third quarters of 2008. The significant loss in the fourth quarter

was due to the strengthening Euro compared to the Canadian dollar. During the

fourth quarter, the Euro strengthened by more than 14%. The largest component

of the foreign exchange loss has resulted from the translation into Canadian

dollars of financial liabilities of ARISE Germany which are denominated in

Euros.

ARISE recorded a net loss for 2008 of $42.3 million (a loss of $0.36 per

basic and diluted share), compared with a net loss $11.6 million (a loss of

$0.18 per basic and diluted share) in 2007. For the fourth quarter of 2008,

ARISE's net loss was $22.1 million ($0.18 per basic and diluted share),

compared with a loss of $4.1 million ($0.04 per basic and diluted share) in

the 2007 period.

Liquidity and Capital Resources

As at December 31, 2008, ARISE had positive working capital of $2.2

million consisting of current assets of $59.3 million less current liabilities

of $57.1 million. This compares with positive working capital at the end of

the 2008 third quarter of $23.7 million (current assets of $69.5 million and

current liabilities of $45.8 million). The decline in working capital reflects

the write-downs taken in the 2008 fourth quarter and increased liabilities.

Cash and cash equivalents and restricted cash at the 2008 year-end totaled

$22.6 million, a decrease of $15.3 million since the 2007 year-end. Restricted

cash comprises funds held in escrow for the completion of leasehold

improvements for the Silicon Feedstock Pilot Plant. Current liabilities

include deferred revenue of $8.2 million, which represents customer deposits

($47,263 at December 31, 2007).

The decrease in cash and cash equivalents during 2008 is primarily the

result of funding the operating loss, prepayments for the supply of silicon

wafers, and capital expenditures related to the Silicon Feedstock Pilot Plant

and PV cell production line 2.

As of March 6, 2009, the company had cash and cash equivalents of

approximately $7.6 million. The decrease in cash and cash equivalents since

the 2008 year-end primarily is due to the purchase of silicon wafers and

capital expenditures related to the silicon pilot plant and PV cell line 2.

The payments for production line 2 will be funded from the investment credit

facility once required documentation is filed.

In view of the continuing profound global economic slump and its affect

on demand in all industries, including for solar products and systems, as well

as the ongoing turmoil in capital markets, ARISE has undertaken a review of

all of its planned capital expenditures and expansion plans, as well as of all

its staffing requirements and manageable costs. The company intends to deploy

its funds where it expects them to be the most productive in the short and

medium term.

"We naturally are concerned about the softening in customer demand that

began in late 2008 and has continued in early 2009, as well as the weakening

in pricing for PV cells that has taken place. It is uncertain whether or for

how long these trends will continue," said Dave Chornaby, ARISE's Chief

Financial Officer.

"Based on our current assessment of customer demand and market pricing,

expenses according to the company's revised budgets and cost-reduction

measures, we believe that ARISE has sufficient funds to finance our operations

into at least the latter part of 2009. We are exploring financing options and

potential partnerships, and are having further discussions with our current

and potential lenders regarding our financing agreements and future operating

and capital requirements." Mr. Chornaby said.

"As we advised in our February, 3, 2009, ARISE does not believe that it

is prudent for us to provide guidance at this time regarding our financial or

operating expectations for 2009. This caution is appropriate given the

continuing economic volatility and its effect on our industry and on our

customers and suppliers. We are in discussions with all of our customers and

our suppliers to determine whether adjustments in our agreements with them may

be warranted given the major reset that is taking place in our industry. These

discussions may result in changes to our sales and previously agreed-on

pricing from customers as well as the purchasing levels and pricing with

suppliers." said Mr. Chornaby.

Shareholder Rights Plan

ARISE's Board of Directors has approved the adoption of a Shareholder

Rights Plan (the plan).

"Our Shareholder Rights Plan is intended to encourage that ARISE's

shareholders receive fair treatment should any unsolicited take-over bids be

made for the outstanding shares of the company," said Mr. Heinrichs.

"The Shareholders Rights Plan should provide the company's Board of

Directors with additional time to assess any offers and to seek out

alternative proposals if the directors believe that would be in the best

interests of the shareholders. This is consistent with our objective to

maximize value for ARISE's shareholders. Our Board is concerned that the

current price of ARISE's shares does not adequately reflect the value of the

company in view of the progress we have made, the relationships that we have

established with our customers and suppliers, the technologies and processes

that we have been developing, and the team of skilled and experienced people

that we have attracted," Mr. Heinrichs said.

ARISE has not adopted the plan in response to any specific proposal to

acquire control of its outstanding shares. The plan is similar to those

adopted by other Canadian companies and ratified by their shareholders. The

plan does not apply to take-over bids that meet certain requirements (a

"Permitted Bid"), including that the bid be made by way of a take-over bid

circular and be left open for at least 60 days so as to ensure that

shareholders have an adequate opportunity to assess the merits of the bid.

The Toronto Stock Exchange has conditionally accepted the plan, subject

to shareholder approval. ARISE will be seeking shareholder ratification of the

Rights Plan at its upcoming Annual and Special Meeting. If ratified, the plan

will have an initial term that expires at the annual meeting of shareholders

of ARISE in 2012, and may be extended for a second term lasting until the

annual meeting of shareholders to be held in 2015. A copy of the plan is

available for viewing on SEDAR at www.sedar.com, and can also be obtained from

ARISE upon written request.

Outlook - Company Will Continue to Execute Growth Strategies

"Few, if any, would question the importance of solar technology for the

future. At ARISE, we remain confident of our technical capabilities to

capitalize on the enormous opportunities that lie ahead," said Mr. Heinrichs.

"At the same time, we must deal with the significant issues posed by the rapid

deterioration in demand and pricing that has taken place in recent months in

our industry together with the tightness of the global capital markets.

"It is admittedly frustrating not to be able to continue moving ahead as

we were and as we planned, but we must slow down our expansion plans, reduce

our costs, and secure additional capital either through financing or

partnerships if we are to meet our longer-term objectives. We are seeing

similar measures throughout our industry, as is true in most and perhaps all

other sectors as well," he continued.

"We are working in close consultation with our current customers and

suppliers, while also continuing to seek additional sales opportunities in

Europe as well as in North America. These discussions could result in changes

to our expectations for sales and purchasing volumes in 2009 as well as in

pricing. Our core strengths and strategies, in silicon technology and PV

cells, as well as in systems, remain intact and we will continue to focus on

developing these," Mr. Heinrichs said.

ARISE will hold a conference call for analysts and investors at 8:30 a.m.

(Eastern) on March 10. The company will file its financial statements, and

Management Discussion and Analysis with SEDAR and these documents will be

available on ARISE's website prior to the conference call. Vern Heinrichs,

interim President and Chief Executive Officer, and Dave Chornaby, Chief

Financial Officer, will be available to answer questions during the call.

To participate in the call, please dial 416-644-3414 or 1-800-733-7560

(Canada and the U.S. only) at least five minutes prior to the start of the

call.

A live audio webcast of the conference call will be available at

www.newswire.ca and www.arisetech.com.

An archived recording of the call will be available at 416-640-1917 or

1-877-289-8525 (Canada and the U.S. only) (Passcode 21295523 followed by the

number sign) from 10:30 a.m. on March10 to 11:59 p.m. on March 18.

About ARISE Technologies

ARISE Technologies Corporation, based in Waterloo, Ontario, is dedicated

to becoming a leader in high-performance, cost-effective solar technology. The

company operates through three divisions. The PV Cell Division manufactures PV

(photovoltaic) cells at its first manufacturing plant opened in April 2008 in

Bischofswerda, Germany. The division is developing proprietary technology with

a target of achieving a step-by-step progression to a high-efficiency level of

greater than 20%. The PV Silicon Division is using a proprietary method to

produce silicon at 7N+ high-purity (99.99999% purity) for PV cell

applications, based on a simplified chemical vapor deposition process. The

division is focusing on scaling up its process to provide ARISE with control

over its supply, costs, and quality. The PV Systems Division provides complete

turnkey PV solutions for solar farms and rooftop installations under the

Ontario standard offer program.

The company's shares are listed on the Toronto Stock Exchange under the

symbol APV and on the Frankfurt Open Market Exchange under the symbol A3T.

Additional information is available at www.arisetech.com and www.sedar.com.

Forward-Looking Statements and Risk Factors

Certain statements in this news release may be considered to be

forward-looking. Such statements are based on management's current

expectations, estimations, and assumptions based on experience, trends, and

other factors that are subject to the significant risks and uncertainties

described in our regulatory filings. Please refer to these. Such risks and

uncertainties may include, but are not limited to, the effects of general

economic conditions, changing foreign exchange rates, actions by government

authorities, the requirement for additional capital, risks associated with

manufacturing, industry supply levels, competitive pricing pressures and

misjudgements in the course of preparing forward-looking statements.

Risk factors relating to ARISE are discussed in the Risk Factors section

of ARISE's Annual Information Form and under the headings Liquidity and

Capital Resources and Risk and Uncertainties in ARISE's year-end Management's

Discussion and Analysis which are or will be available at www.sedar.com. These

factors should be considered carefully, and readers should not place undue

reliance on ARISE's forward-looking statements.

ARISE assumes no obligation to update any forward-looking statements or

to update the reasons why actual results could differ from those reflected in

the forward-looking statements.

<<

ARISE Technologies Corporation

Consolidated Balance Sheets

As at December 31,

2008 2007

-------------- --------------

Assets

Current assets

Cash and cash equivalents $ 21,119,152 $ 37,908,430

Restricted cash 1,508,671 -

Accounts receivable 7,591,738 254,025

Inventories 13,344,927 855,588

Government assistance receivable 10,189,721 6,096,333

Other receivables 529,333 1,477,584

Prepaid expenses 5,013,496 412,271

------------------------------------...

59,297,038 47,004,231

Capital assets, net 40,914,106 14,402,403

Long term deposits 32,951,968 5,181,347

Intangible assets, net 168,382 53,086

------------------------------------...

$133,331,494 $ 66,641,067

------------------------------------...

------------------------------------...

Liabilities

Current liabilities

Bank loans $ 22,618,283 $ 1,087,835

Accounts payable and accrued liabilities 21,311,303 8,980,796

Deferred revenue 8,223,066 47,263

Unearned government assistance 632,325 2,713,078

Current portion of long term debt 4,278,546 -

------------------------------------...

57,063,523 12,828,972

------------------------------------...

Long term deferred revenue 4,727,912 -

Long term debt 9,822,298 -

------------------------------------...

14,550,210 -

------------------------------------...

Shareholders' Equity

Capital stock 119,127,644 72,857,557

Contributed surplus 8,085,301 4,140,849

Deficit (65,495,184) (23,186,311)

------------------------------------...

61,717,761 53,812,095

------------------------------------...

$133,331,494 $ 66,641,067

------------------------------------...

Approved by the board

(signed) Vern Heinrichs.............Director

(signed) Harold H. Alexander........Director

ARISE Technologies Corporation

Consolidated Statements of Loss and Comprehensive Loss

Year ended December 31,

2008 2007

-------------- --------------

Sales $ 35,730,734 $ 1,162,055

Cost of goods sold 42,536,545 1,087,008

Valuation write-down of inventory

related assets 8,978,726 -

------------------------------------...

Gross (loss) profit (15,784,537) 75,047

------------------------------------...

Expenses

Research and development 6,401,587 3,897,278

General and administrative 11,643,599 6,748,323

Selling and marketing 2,031,686 821,053

Depreciation and amortization 1,072,959 25,374

------------------------------------...

21,149,831 11,492,028

------------------------------------...

Operating loss (36,934,368) (11,416,981)

------------------------------------...

Other expenses (income)

Interest expense (income), net 1,339,194 (76,532)

Foreign exchange loss 3,954,898 199,588

Other expense 80,413 67,000

------------------------------------...

5,374,505 190,056

------------------------------------...

Net loss (42,308,873) (11,607,037)

Other comprehensive loss - -

------------------------------------...

Comprehensive loss (42,308,873) (11,607,037)

Deficit, beginning of year (23,186,311) (11,579,274)

------------------------------------...

Deficit, end of year $(65,495,184) $(23,186,311)

------------------------------------...

------------------------------------...

Loss per share - basic and diluted $ (0.36) $ (0.18)

------------------------------------...

ARISE Technologies Corporation

Consolidated Statements of Cash Flows

Year ended December 31,

2008 2007

-----------------------------

Cash flows from operating activities

Net loss for the year $(42,308,873) $(11,607,037)

Items which do not involve cash:

Valuation write-down of inventory

related assets 8,978,726 -

Depreciation and amortization 2,458,352 34,667

Issuance of capital stock for services - 214,488

Employee stock option compensation 4,552,531 2,078,289

Non-employee stock option compensation 276,091 152,361

------------------------------------...

(26,043,173) (9,127,232)

Changes in working capital items

from operations

Increase in accounts receivable (7,337,713) (74,098)

Increase in inventories (16,372,428) (481,326)

Decrease in other receivables 948,251 -

Increase in prepaid expenses (8,977,057) (1,853,207)

Increase in accounts payable and

accrued liabilities 12,330,507 8,094,988

Increase (decrease) in deferred revenue 12,903,715 (18,765)

------------------------------------...

(32,547,898) (3,459,640)

------------------------------------...

Cash flows from financing activities

Issuance of capital stock for cash 45,280,904 63,088,696

Share issance costs (2,520,608) (4,435,432)

Exercise of warrants and options 2,625,622 4,386,424

Proceeds from bank loans 21,530,447 1,087,835

Issuance of long term debt 14,100,844 -

------------------------------------...

81,017,209 64,127,523

------------------------------------...

Cash flows from investing activities

Increase in restricted cash (1,508,671) -

Purchase of capital assets (45,954,392) (26,708,880)

Purchase of intangible assets (135,412) (49,137)

Change in long term deposits (28,490,426) (5,181,347)

Government assistance 10,830,312 8,981,689

------------------------------------...

(65,258,589) (22,957,675)

------------------------------------...

Net cash flow (16,789,278) 37,710,208

Cash and cash equivalents, beginning of year 37,908,430 198,222

------------------------------------...

Cash and cash equivalents, end of year $ 21,119,152 $ 37,908,430

------------------------------------...

------------------------------------...

Supplemental disclosures of cash flows:

Interest and stand-by fees paid $ 1,624,966 $ 27,147

------------------------------------...

Income taxes paid $ - $ -

------------------------------------...

------------------------------------...

>>

-30-

/For further information: ARISE Technologies Corporation, 65 Northland

Road, Waterloo, Ontario, Canada, N2V 1Y8, Dave Chornaby, Chief Financial

Officer, (519) 772-5732, Dave.Chornaby@arisetech.com, www.arisetech.com/