Borealis Exploration : Annual Report for the Fiscal Year ended 30 September 2021

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Borealis Exploration Limited

2021 Annual Report

DocuSign Envelope ID: EBECD221-5691-40D6-8E28-D5EBCE74A4A5

Forward Looking Statement

The discussion of the Company'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 the Company's business and operations in the future. All technical, scientific, and commercial statements regarding technologies and their impacts are based on the educated judgement of the Company'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 the Company's business and operations will not be affected in any substantial manner by other factors not currently foreseeable by management or beyond the Company's control.

All forward-looking statements involve risks and uncertainty. The Company 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 the Company's public pronouncements, including those contained in all future reports.

Contents

Chairman's letter to members	3
Corporate information	5
Directors' report	6
Auditor's report	13
Financial statements	16
Notes to the financial statements	20

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Chairman's Letter to Members

1/26/2022

………………………….

To Our Friends and Members of the Borealis Family:

On 1 October 2019, after the end of fiscal year 2019, we transferred 100% of our right, title and interest in, to and under our subsidiaries to Borealis Holdings Limited, an Isle of Man limited company (the "Transaction"), for consideration of $50m. This includes the shareholdings that ultimately control WheelTug plc, Chorus Motors plc, and other associated companies.

In an attempt to protect shareholder value, every share of Borealis Exploration Limited ("BOREF shares") may be exchanged for one share in Borealis Holdings Limited. ("BHL"). BHL is structured to ensure there is no dilution: the only allowed share issuances are for one-to-one exchanges for BOREF shares. Accordingly, the total number of shares of BHL will be 5,000,000 in a single class. Any BOREF shares that are not exchanged before 27 September 2029, may also be redeemed for ten US dollars (US$10) per share plus interest from 1 October 2019 at the rate of 2% per annum.

In the meantime, BOREF expects to remain quoted on the OTC Markets.

Information on the Transaction, the rules and procedures for participating in share exchanges for Borealis Holdings, and the options open to them now and in the future are available to BOREF shareholders upon request. To learn more, email Borealis Exploration at [e-mail] your contact details.

On 20 October 2020, our former subsidiaries - Borealis Technical Limited, Chorus Motors plc, WheelTug plc and WheelTug Sales Limited were re-domiciled from Gibraltar to the Isle of Man.

As the success of the company relates to the success of the developing technologies developed by the former subsidairies, this report provides shareholders with an overview of the activities and operations of these entities, but those interested can find more information about the operations of each of the company on their websites.

BHL continues to develop WheelTug plc to bring WheelTug® to market. Please go to https://www.youtube.com/user/WheelTugPLC/videosto see its latest developments. BHL is completing the work necessary to bring to market WheelTug, its revolutionary application of our proprietary Chorus Motors technology. WheelTug makes possible a goal that has eluded the aerospace industry for over 100 years - enabling airplanes to drive themselves on the ground without turning on their engines or using a tow tug. BHL has resolved all the technical hurdles that are known and is finishing all the final engineering and licensing work preparatory to building and installing actual FAA-certified devices for Boeing 737NG Aircraft.

Proving to electric motor engineers that two small motors embedded in an airplane wheel can generate the tremendous torque needed to move an 180,000-pound airplane has also encouraged requests for our technology in other, easier, applications for the Chorus Motor. As the unprecedented capabilities of Chorus Motors become evident with WheelTug, we expect that engineers will imagine further uses for this wonderful technology, and that Chorus Motors will start to produce revenues and income from additional applications of its technology. BHL continues to look for additional "killer applications" and when it finds them, given the maturity of WheelTug, it will carefully examine these other opportunities. If any exist that meet the Borealis family of companies' very high return on investment criteria, BHL will start additional development programs as seem appropriate.

BHL is also making progress with the technology called AMPCC: Avto Metals, Power Chips, and Cool Chips, three related technologies based on a new discovery in quantum mechanics (described briefly later in this report). For about five years, we and now BHL have been working with nanoelectronic and nanophysics experts at major university laboratories to learn how to optimise the performance of and efficiently build these devices, and BHL is making good progress, but progress is still very slow. BHL has built structures that are now being tested at two major university labs, but have yet to settle all the scientific issues.

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Chairman's Letter to Members (Continued)

BHL is driving for demonstrable working Power Chips. At that point, BHL could begin to show potential licensees and customers in multiple industries how they might use Power Chips to transform many products and services - from transistors and electronic equipment to power generation in fossil or nuclear power stations. BHL has not finished this work, and there can be no guarantee that its work will prove successful in producing working, high efficiency Power Chips.

It should be noted that significant resources have been spent worldwide trying to achieve what may be finally within BHL's grasp. BHL has seen the necessary effect again and again, where if we can understand what is actually happening and harness the output, energy production for the world will slowly be put on the road to a very low-cost basis. BHL hopes to benefit economically as the cost curve is relentlessly driven down, while BHL captures ever-increasing percentages of the world's power production with its devices. Again, there can be no guarantees that BHL will be successful in this endeavour.

None of BHL's technologies has yet to generate revenue or profits in the decades we and now BHL have been working to create reality out of our technological aspirations. But WheelTug, Chorus, and AMPCC all have the potential to become multi-billion-dollar businesses, and BHL is working hard to make that happen. We thank all our shareholders for their support and help, assistance, and counsel through the decades. It is our shareholders' willingness to support our continued quest for game changing technologies that drives us to aim for long-term benefits for society and wealth for our shareholders on many fronts.

We thank you all for your support through the decades, and we hope to reward our shareholders accordingly.

With warmest personal regards,

Borealis Exploration Limited

__________________________

Rodney T. Cox, PhD

Chairman, Chief Executive Officer, and

Chief Financial Officer

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BOREALIS EXPLORATION LIMITED

Corporate Information

Gibraltar Registered Number 66632

Registered Office

Suite 1

43 Main Street

GX11 1AA

Gibraltar

Auditors

Moore Stephens

Suite 5, Watergardens 4

Waterport Wharf

GX11 1AA

Gibraltar

Company Secretary

Mark Radom

Suite 2

Nachal Maor 1

Ramat Bet Shemesh

Israel 99623

Stock Trading Information

Borealis shares are quoted in the United States over-the-counter market on the OTC Markets Group 'Pink' market at www.otcmarkets.comunder the symbol BOREF.

Registrar and Transfer Agent

Transfer Online, Inc.

512 SE Salmon St., 2nd Floor

Portland, OR 97214, USA

Tel: [phone]

Fax: [phone]

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