Borealis Announces Third Quarter and Nine Month Results.

CARSON CITY, Nev.--(BUSINESS WIRE)--Oct. 20, 1998--Borealis Technology Corporation reported operating results for the third quarter and for the nine months ending Sept. 30, 1998.

Revenues for the third quarter of 1998 were $217,206 compared to revenues of $520,927 recorded for the previous quarter ending Sept. 30, 1997. Net loss for the third quarter of 1998 was $(2,408,024) or $(0.37) per share on 6,533,638 weighted average shares outstanding, compared to a net loss of $(1,448,537) or $(0.34) per share on 4,346,577 weighted average shares outstanding for the previous quarter ending Sept. 30, 1997.

Revenues for the nine months ending Sept. 30, 1998 were $476,437 compared to revenues of $728,281 recorded for the corresponding period in 1997. Net loss for the nine months ending Sept. 30, 1998 was $(6,759,138) or $(0.98) per share on 6,891,957 weighted average shares outstanding, compared to a net loss of $(5,848,189) or $(1.64) per share on 3,576,211 weighted average shares outstanding for the comparable period of 1997.

Borealis Technology Corporation is headquartered in Carson City, Nevada. To contact Borealis for more information, visit www.borealiscorp.com or call 888/427-7362.

Note to Editors: Borealis is a trademark of Borealis Technology Corporation. -0-

                    BOREALIS TECHNOLOGY CORPORATION
                       CONDENSED BALANCE SHEETS

                                            Sept. 30,   Dec. 31,
                                              1998         1997
ASSETS                                     (Unaudited)

Current assets:

 Cash and cash equivalents            $ 1,656,481     $ 2,080,095
 Accounts receivable                      187,920         353,580
 Certificate of deposit                      --           650,000
 Other current assets                     499,003         290,667

    Total current assets                2,343,404       3,374,342

 Property and equipment, net              706,050         819,417
 Note receivable from an employee         277,474         156,988
 Other assets                              57,600          52,511

    Total assets                      $ 3,384,528     $ 4,403,258


LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
 Accounts payable                     $   521,438     $    80,887
 Accrued employee compensation            413,364         596,450
 Promissory note                             --           900,000
 Other accrued liabilities                122,801         110,350
 Deferred revenue                         134,646         113,448
 Current portion of capital
  lease obligations                        40,687          67,336

    Total current liabilities           1,232,936       1,868,471

 Capital lease obligations                 34,986          35,597

    Total liabilities                   1,267,922       1,904,068

 Stockholders' equity:
  Preferred stock, $.001 par value:

   Authorized shares - 5,000,000
   Issued and outstanding - 2,350               2

  Common stock, $.001 par value:
   Authorized shares - 30,000,000;
   Issued and outstanding shares:
    5,245,428 at Dec. 31, 1997,
    and 8,734,621 at Sept. 30, 1998         8,735           5,245
  Additional paid-in capital           23,019,725      16,739,788
 Note receivable from stockholder           --            (93,124)
  Accumulated deficit                 (20,911,856)    (14,152,719)

  Total stockholders' equity            2,116,606       2,499,190

  Total liabilities and
   stockholders' equity               $l3,384,528     $ 4,403,258



                    BOREALIS TECHNOLOGY CORPORATION
                  CONDENSED STATEMENTS OF OPERATIONS
                              (Unaudited)

                        Three Months Ended        Nine Months Ended
                             Sept. 30,                 Sept. 30,
                        1998         1997         1998          1997

Total revenues    $   217,206  $   520,927  $   476,437   $   728,281

Cost of revenues       12,645        1,061       49,515        37,329

Gross profit          204,561      519,866      426,922       690,952

  Total operating
   expenses         2,601,199    2,015,659    7,165,638     6,561,016

Loss from
 operations        (2,396,638)  (1,495,793)  (6,738,716)   (5,870,064)

Interest income
 (expense)            (11,386)       7,256      (20,422)       21,875

Net loss          $(2,408,024) $(1,488,537) $(6,759,138)  $(5,848,189)

Basic and
 diluted net
 loss per
 common share     $    (0.37)  $     (0.34) $     (0.98)  $     (1.64)

Shares used
 in computing
 basic and
 diluted net loss
 per common share  6,533,638     4,346,577    6,891,957     3,576,211