Borealis Exploration Limited Interim Management Statement for the Three Month Period Ended 30 June 2

Significant changes to key financial information

The significant changes to the Group’s consolidated financial data and operating results during or subsequent to the period covered by the audited Consolidated Financial Statements are:

For the three months ended 30 June 2015

Borealis spent US$896,477 on its operations for the three months ended 30 June 2015 and US$657,299 for the same period in 2014. This amounts approximately to a US$239,178 increase in operating expenditure in the three months ended 30 June 2015 versus the same period in 2014.

For the three months ended 30 June 2015, Borealis incurred administrative expenses of US$781,106, US$4,700 in corporate fees, US$30,339 in legal fees, US$55,500 in rent and US$24,832 in travel compared to administrative expenses of US$527,759, US$10,026 in corporate fees, US$28,028 in legal fees, US$47,700 in rent and US$43,786 in travel in the same period in 2014. The increase in administrative expenses is primarily attributable to additional consultancy work in respect of patent registration, and development of the Chorus/WheelTug project. The decrease in corporate fees is attributable to a new corporate secretary that is charging considerably less than the previous secretary. The marginal increase in legal fees indicates a similiar level of legal activity.

In the three months ended 30 June 2015, Borealis spent US$443,176 on compensation to directors and officers versus US$447,025 in the same period in 2014.

In the three months ended 30 June 2015, Borealis incurred and capitalised development expenses amounting to US$371,784 relating to the Chorus Motors/WheelTug technology compared to US$324,776 in the same period in 2014. The increase in development expenses in the three months ended 30 June verses the same period in 2014 is mainly attributable to the increased amount of work carried out as compared to the same period in 2014.

At 30 June 2015, the accumulated loss carried forward for Borealis was US$26,430,011 compared to US$27,425,714 at 31 March 2015.

In the three months ended 30 June 2015, the Borealis family of companies realized US$6,404 for the sale of marketable securities of the Borealis family of companies versus US$47,806 in the same period in 2014. The three-months on three-months decrease in 2015 versus 2014 in the amount realized from the disposal of marketable securities is due to the cease trade order placed on Advanced Explorations Inc. (a company in which the Borealis family of companies has a large share position) by the Toronto Venture Exchange and the resultant inability of Borealis to trade its shares.

At 30 June 2015, intangible assets increased to US$12,812,775 from US$12,446,151 at 31 March 2015 Intangible assets consist of (i) patents and (ii) the capitalization of Chorus Motors and WheelTug research and development expenses. The increase in intangible assets is attributable to more capital development work on the Chorus Motors/WheelTug project, and registration of additional patents.

Expected Future Development of Borealis’s Business and Economic Results

Borealis intends to continue an 80% focus of its management time and 90% focus of its financial resources on commercializing the Chorus Motors and WheelTug technologies with the balance of its time and financial resources focused primarily on its other technology companies, including Avto Metals plc, Power Chips plc, Cool Chips plc, and, to a lesser extent, on certain of its other companies. Each of these technologies has successfully undergone tests and, subject to receipt of additional funds, will undergo further testing and development the last quarter of calendar 2015 with a view toward commercialization in fiscal 2017.

Segment Reporting

The projects of the Borealis family of companies are all in development stage and, as such, no segment, division, subsidiary or other component has earned any revenue whatsoever.

Related Party Transactions

For the period ended 30 June 2015, there were no related party transactions that substantially influenced the economic results of Borealis or the Borealis family of companies. Nor were there any changes in related party transactions, which were mentioned in the consolidated annual report of Borealis for the year ended 31 March 2015, that could significantly affect the economic results of Borealis and its consolidated group in the three months ended 30 June 2015.

Financial Position

Borealis did not have sufficient financing and facilities available for the foreseeable future as at 30 June 2015 and there have been no material changes in financial arrangements since the end of fiscal 2015 (i.e., 31 March 2015).

As at the date of this interim management statement, there have been no material events, transactions or changes regarding the financial position of Borealis other than those outlined in this interim management statement. Furthermore, the Board of Directors is not aware of any material events, transactions or changes regarding the financial position of Borealis, which have occurred since 1 April 2015 up to and including 18 September 2015, which is the date of publication of this report.

Change of Year End

On 8 September 2015, Borealis changed its fiscal year-end from 31 March to 30 September and extended its current accounting period six months to end on 30 September 2016 so that the next audit of the Company’s financial statements will be performed in respect of the 18-month period ending on 30 September 2016.

Forward-Looking Statement

The discussion of Borealis's business and operations in this report includes in several instances forward-looking statements, which are based upon management's good faith assumptions relating to the financial, market, operating and other relevant environments that will exist and affect Borealis's business and operations in the future. All technical, scientific, and commercial statements regarding technologies and their impacts are based on the educated judgment of Borealis's technical and scientific staff. No assurance can be made that the assumptions upon which management based its forward-looking statements will prove to be correct, or that Borealis's business and operations will not be affected in any substantial manner by other factors not currently foreseeable by management or beyond Borealis's control.

All forward-looking statements involve risks and uncertainty. Borealis undertakes no obligation to publicly release the result of any revisions to these forward-looking statements that might be made to reflect the events or circumstances after the date hereof, or to reflect the occurrence of unanticipated events; including those described in this report, and such statements shall be deemed in the future to be modified in their entirety by Borealis's public pronouncements, including those contained in all future reports and other documents filed by Borealis with the Prague Stock Exchange, Czech National Bank and other relevant Securities Commissions.