ARISE Technologies Reports Fourth-Quarter and Year-End 2009 Results

WATERLOO - ARISE Technologies Corporation, reported its financial results for the fourth quarter and 12-months ended December 31, 2009. Financial results conform to Canadian generally accepted accounting principles ("GAAP") and all currency amounts are in Canadian dollars unless otherwise noted.

2009 Highlights:

- Total revenue of $31.7 million, compared with $35.7 million in 2008
- Shipped 15.7MW of PV Cells, an increase of 40% from 11.2MW in 2008
- Announced creation of ARISE Technology Centre
- Ranked 15th on the Deloitte Technology Fast 50(TM) list of Canadian
companies
- Produced first PV cells using ARISE 7N+ silicon
- Secured access to committed equity facility

Q4 2009 Highlights:

- Total revenue of $11.3 million, compared with $18.9 million in Q4
2008
- Net loss decreased to $7.5 million, compared with $22.3 million in Q4
2008
- Shipped 7.0MW of PV cells, an increase of 13% from 6.2MW in Q4 2008
- Completed $2.0 million non-brokered offering

Subsequent to Year End Highlights:

- Shipped approximately 10MW to date in 2010
- Signed Letter of Engagement with syndicate led by Sandfire Securities
for $10 million financing
- Subject to satisfaction of certain Conditions Precedent, agreed with
Commerzbank AG to extend credit facilities

"2009 was a challenging year for ARISE, as the impacts of the global financial crisis took a toll on both our company and the solar industry as a whole," said Vern Heinrichs, ARISE's President and Chief Executive Officer. "However, market conditions improved towards the end of year as we saw a significant increase in demand in the German marketplace. Our PV cell shipments during the fourth quarter of 2009 were 7.0MW, nearly equal to our total shipments for the first nine months of the year. By the end of 2009, Line 1 at our German PV cell plant was running at close to 100% capacity. We expect to activate Line 2 to meet customer demand during the first half of 2010."

"In Ontario, we are very optimistic about the prospects offered by the Ontario Green Energy Act's Feed-in Tariff ("FIT") program and expect it to be the source of significant growth for our Systems Division," continued Mr. Heinrichs. "We are seeing strong interest from across Ontario and, to date in 2010, we have more than $5 million worth of projects planned."

Financial Overview

Sales for the year ended December 31, 2009 amounted to $31.7 million, compared with $35.7 million in 2008. PV cells accounted for 97.9% of 2009 sales with the balance being generated by the Company's Systems Division.

Gross loss for the year ended December 31, 2009 was $25.0 million, compared with a loss of $15.8 million in 2008.

Operating expenses for the year ended December 31, 2009 were $20.4 million, compared with $21.1 million the previous year.

R&D expenses increased by 11% during the year ended December 31, 2009 to $7.1 million from $6.4 million (net of Government Funding) in 2008.

General and administrative ("G&A") expenses declined to $10.0 million in 2009, from $11.6 million for the year ended December 31, 2008.

Selling and marketing expenses for the year ended December 31, 2009 were $1.6 million, compared with $2.0 million in 2008.

Net interest expense for the year ended December 31, 2009 was $2.4 million, compared with $1.3 million the prior year.

Other income and expenses for the year ended December 31, 2009, included a foreign exchange gain of $5.6 million, compared with a foreign exchange loss of $3.9 million in 2008.

Fourth Quarter of 2009

Sales for the fourth quarter ended December 31, 2009 were $11.3 million, compared with $18.9 million in the fourth quarter of 2008. Gross loss for the three months ended December 31, 2009 was $4.7 million compared with $11.9 million in the fourth quarter of 2008. Operating expenses were $5.1 million in the fourth quarter of 2009, virtually unchanged from $5.1 million in the prior year period. ARISE recorded a net loss for the fourth quarter 2009 of $7.5 million (a loss of $0.05 per basic and diluted share), compared with a net loss $22.3 million (a loss of $0.19 per basic and diluted share) in the 2008 quarter.

Liquidity and Capital Resources

As at December 31, 2009, the Company had a working capital deficiency of $43.8 million consisting of current assets of $24.4 million less current liabilities of $68.2 million. This compares with negative working capital at September 30, 2009 of $38.9 million consisting of current assets of $25.3 million less current liabilities of $64.2 million.

Cash and cash equivalents and restricted cash at December 31, 2009 totaled $651,985, an increase of $191,065 since September 30, 2009.