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UNITED STATESSECURITIES
AND EXCHANGE COMMISSIONWashington, D.C. 20549

FORM 20-F

[   ] REGISTRATION STATEMENT PURSUANT TO SECTION 12(b)
OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934

OR

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 -

For the fiscal year ended April 30, 2007

OR

[   ] TRANSITION REPORT PURSUANT TO SECTION 13 OR
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number 0-24342

REG TECHNOLOGIES INC.(Exact name of registrant as specified in its charter)

**Not applicable**(Translation of
Registrants name into English)

British Columbia, Canada(Jurisdiction
of incorporation or organization)

240-11780 Hammersmith WayRichmond, British
Columbia V7A 5E9, Canada(Address of principal executive
offices)

Securities registered pursuant to Section 12(b) of the Act:
None

Securities registered pursuant to Section 12(g) of the Act:
Common Stock, no par value(Title of Class)

Securities for which there is reporting obligation pursuant to
Section 15(d) of the Act: Common Stock, no par value

Indicate the number of outstanding shares of each of the
issuers classes of capital or common stock as of the close of the period
covered by the annual report. 23,942,759

Indicate by check mark if the registrant is a well-known
seasoned issuer, as defined in Rule 405 of the Securities Act. Yes [ 
 ]   No [X]

If this report is an annual or transition report, indicate by
check mark if the registrant is not required to file reports pursuant to
Section 13 or 15(d) of the Securities Exchange Act of 1934. Yes [ 
 ]   No [X]

Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter period
that the registrant

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was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes [X]   No
[   ]

Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, or a non-accelerated filer. See
definition of accelerated filer and large accelerated filer in Rule 12b-2 of
the Exchange Act. (Check one):

Large accelerated filer [ 
 ]        Accelerated filer [ 
 ]        Non-accelerated filer [X]

Indicate by check mark which financial statement item the
registrant has elected to follow: Item 17 [X]   Item 18
[   ]

If this is an annual report, indicate by check mark whether the
registrant is a shell company (as defined in Rule 12b-2 of the Exchange
Act.): Yes [   ]   No [X]

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TABLE OF CONTENTS

PART I
      
      5ITEM 1.
      IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISORS
      5ITEM 2.
      OFFER AND STATISTICS AND EXPECTED TIMETABLE
      6ITEM 3.
      KEY INFORMATION
      6A.
      SELECTED FINANCIAL DATA
      6B.
      CAPITALIZATION AND INDEBTEDNESS
      8C.
      REASON FOR THE OFFER AND USE OF PROCEEDS
      8D.
      RISK FACTORS
      8ITEM 4.
      INFORMATION ON THE COMPANY
      11A.
      HISTORY AND DEVELOPMENT
      11B.
      BUSINESS OVERVIEW
      13C.
      ORGANIZATIONAL STRUCTURE
      21D.
      PROPERTY, PLANT AND EQUIPMENT
      21ITEM 4A.
      UNRESOLVED STAFF COMMENTS
      21ITEM 5.
      OPERATING AND FINANCIAL REVIEW AND PROSPECTS
      21A.
      OPERATING RESULTS
      21B.
      LIQUIDITY AND CAPITAL RESOURCES
      23C.
      RESEARCH AND DEVELOPMENT, PATENTS AND LICENSES, ETC
      27D.
      TREND INFORMATION
      27E.
      OFF-BALANCE SHEET ARRANGEMENTS
      27F.
      TABULAR DISCLOSURE OF CONTRACTUAL OBLIGATIONS
      27G.
      Safe Harbor
      27ITEM 6.
      DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES
      28A.
      DIRECTORS AND SENIOR MANAGEMENT
      28B.
      COMPENSATION
      30C.
      BOARD PRACTICES
      33D.
      EMPLOYEES
      33E.
      SHARE OWNERSHIP
      33ITEM 7.
      MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS
      34A.
      MAJOR SHAREHOLDERS
      34B.
      RELATED PARTY TRANSACTIONS.
      35C.
      INTERESTS OF EXPERTS AND COUNSEL.
      35ITEM 8.
      FINANCIAL INFORMATION
      35A.
      CONSOLIDATED STATEMENTS AND OTHER FINANCIAL INFORMATION
      35B.
      SIGNIFICANT CHANGES
      35ITEM 9.
      THE OFFER AND LISTING
      36ITEM 10.
      ADDITIONAL INFORMATION
      38A.
      SHARE CAPITAL
      38B.
      MEMORANDUM AND ARTICLES OF ASSOCIATION
      38C.
      MATERIAL CONTRACTS
      38D.
      EXCHANGE CONTROLS
      39E
      TAXATION
      39F.
      DIVIDENDS AND PAYING AGENTS
      40G.
      STATEMENT BY EXPERTS.
      40H.
      DOCUMENTS ON DISPLAY.
      40I.
      SUBSIDIARY INFORMATION
      41ITEM 11.
      QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
      41ITEM 12.
      DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES
      42PART II
      
      42ITEM 13.
      DEFAULTS, DIVIDEND ARREARAGES AND DELIQUENCIES
      42ITEM 14.
      MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS
        AND USE OF PROCEEDS.
      42A.
      MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS
      42B.
      USE OF PROCEEDS.
      42


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|ITEM 15.                 | CONTROLS AND PROCEDURES                                                      | 42
|------------------------ | ---------------------------------------------------------------------------- | --
|ITEM 15T.                | CONTROLS AND PROCEDURES                                                      | 44
|ITEM 16.                 | [RESERVED]                                                                   | 44
|ITEM 16A.                | AUDIT COMMITTEE FINANCIAL EXPERT                                             | 44
|ITEM 16B.                | CODE OF ETHICS                                                               | 44
|ITEM 16C.                | PRINCIPAL ACCOUNTANT FEES AND SERVICES                                       | 44
|ITEM 16D.                | EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES                   | 45
|ITEM 16E.                | PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED
      PURCHASERS | 45
|PART
      III           |                                                                              | 45
|ITEM 17.                 | FINANCIAL STATEMENTS                                                         | 45
|ITEM 18.                 | FINANCIAL STATEMENTS                                                         | 45
|ITEM 19.                 | EXHIBITS                                                                     | 45
|                         |                                                                              |   
|**SIGNATURE
      PAGE** | 50                                                                          

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BUSINESS OF REG TECHNOLOGIES.

The Company is in the business of developing and commercially
exploiting an improved axial vane type rotary engine known as the Rand
Cam/Direct Charge Engine and other RandCam applications, such as compressors
and pumps (the Technology). Our ongoing operation is dependent upon cash flow
from successful operations and equity financing. The Company has incurred a loss
of $519,698 in the year ended April 30, 2007 (2006 - $1,033,398 ; 2005
-$5,441,027). These consolidated financial statements do not include adjustments
that would be necessary should it be determined that we may be unable to
continue as a going concern.

FINANCIAL AND OTHER INFORMATION

In this Annual Report, unless otherwise specified, all dollar
amounts are expressed in Canadian Dollars (CDN$ or $). The Government of
Canada permits a floating exchange rate to determine the value of the Canadian
Dollar against the U.S. Dollar (US$).

FOREIGN PRIVATE ISSUER STATUS

Reg Technologies, Inc., (hereinafter referred to as the
"Company, or we, it, our or such other context as may be applicable), is
a Canadian corporation incorporated under the laws of the Province of British
Columbia. Less than 50% of our common stock is held by United States citizens
and residents, our business is administered principally outside the United
States; and more than 50% of our assets are located outside the United States.
As a result, we believe that we qualify as a "foreign private issuer" for
continuing to report regarding the registration of our common stock using this
Form 20-F annual report format.

FORWARD-LOOKING STATEMENTS

Certain statements in this document constitute forward-looking
statements. Some, but not all, forward-looking statements can be identified by
the use of words such as anticipate, believe, plan, estimate, expect,
and intend, statements that an action or event may, might, could,
should, or will be taken or occur, or other similar expressions. Although we
have attempted to identify important factors that could cause actual results to
differ materially from expected results, such forward-looking statements involve
known and unknown risks, uncertainties and other factors which may cause our
actual results, performance or achievements, or other future events, to be
materially different from any future results, performance or achievements
expressed or implied by such forward-looking statements. Such factors include,
among others, the following risks: the risks associated with outstanding
litigation, if any, risks associated with project development; the need for
additional financing; operational risks associated with mining and mineral
processing; fluctuations in metal prices; title matters; uncertainties and risks
related to carrying on business in foreign countries; environmental liability
claims and insurance; reliance on key personnel; the potential for conflicts of
interest among certain officers, directors or promoters with certain other
projects; the absence of dividends; currency fluctuations; competition;
dilution; the volatility of our common share price and volume; and tax
consequences to U.S. Shareholders. We are obligated to keep our information
current and revise any forward-looking statements because of new information,
future events or otherwise.

PART I

ITEM 1.        IDENTITY OF
DIRECTORS, SENIOR MANAGEMENT AND ADVISORS

This Form 20-F is being filed as an annual report under the
Exchange Act, and accordingly, the information called for in Item 1 is not
required. Please see Item 6  Directors, Senior Management and Employees 
Directors and Senior Management.

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ITEM 2.        OFFER
AND STATISTICS AND EXPECTED TIMETABLE

This Form 20-F is being filed as an annual report under the
Exchange Act, and accordingly, the information called for in Item 2 is not
required.

ITEM 3.        KEY
INFORMATION

A.        SELECTED
FINANCIAL DATA

The summary consolidated financial information set forth below
should be read in conjunction with, and is qualified in its entirety by
reference to, the Consolidated Financial Statements, as of and for the years
ended April 30, 2007 and 2006, together with the notes thereto, which appear
elsewhere in this annual report. The Consolidated Financial Statements as of and
for the years ended April 30, 2007 and 2006 have been audited by Smythe
Ratcliffe. The Consolidated Financial Statements are prepared in accordance with
Canadian GAAP. See Note 13 of the Notes to Consolidated Financial Statements for
a reconciliation to U.S. GAAP.

The selected financial data set forth in the following table is
expressed in Canadian dollars. Since June 1, 1970, the Government of Canada has
permitted a floating exchange rate to determine the value of the Canadian dollar
as compared to the United States dollar. At April 30, 2007, US$1.00 was equal to
approximately C$1.1068. The exchange rates for the past five fiscal years ended
April 30, are presented below.

The following represents our selected financial data for each
of the past five fiscal years, ending on April 30. The data presented is
prepared in accordance with generally accepted accounting principles in Canada
and reconciliation of the data to U.S. GAAP and expressed in Canadian dollars:

Fiscal Years Ended April 30

2007
    2006
    2005 (Restated)
    2004 (Restated)
    2003CANADIAN GAAPNet Revenues
    -
    -
    -
    -
    -Income (loss) from continuing operations
    (1,868,901)
    (1,835,048)
    (9,465,971)
    (610,728)
    (63,869)Net income (loss)
    (519,698)
    (1,033,398)
    (5,441,027)
    297,783
    (63,869)Income (loss) from discontinued operations
    -
    -
    -
    -
    -Income (loss) from continuing operations per
      share
    (0.02)
    (0.04)
    (0.25)
    -
    -Income (loss) from discontinued operations
      per share
    -
    -
    -
    -
    -Total assets
    424,876
    500,056
    191,586
    210,882
    210,477Net assets
    340,924
    375,207
    (95,686)
    (57,331)
    (583,285)Working Capital (deficit)
    328,193
    375,207
    (108,186)
    (57,331)
    (541,562)Shareholders Equity (deficit)
    -
    -
    -
    -
    -Capital stock (excluding long term debt and
      redeemable preferred stock)
    11,356,689
    11,343,564
    11,051,096
    11,011,046
    10,467,921Number of shares as adjusted to reflect
      changes in capital
    23,942,759
    23,899,009
    22,252,970
    22,101,470
    17,078,371Cash Dividends per common share
    -
    -
    -
    -
    -


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U.S GAAP (2)Net Loss (1)
    (690,398)
    (1,211,478)
    (441,007)
    (225,035)
    (63,869)Loss Per Share
    (0.03)
    (0.05)
    (0.02)
    (0.01)
    -Shareholders Equity (Deficit)
    (13,940,922)
    (13,250,524)
    (12,039,046)
    (11,598,039)
    (11,428,504)Total Assets
    424,876
    500,056
    191,586
    210,882
    210,477Long-Term Debt
    -
    -
    -
    -
    -Capital Stock
    11,356,689
    11,343,564
    11,051,096
    11,011,046
    10,467,921


(1) Cumulative Net Loss since incorporation through April 30,
2007 under US GAAP was $14,000,000 approximately.

(2) Under US GAAP, options granted to non-employees as
compensation for services provided are fair valued and an expense recorded.

Reference is made to "Item 4. Information on the Company" and
"Item 5. Operating and Financial Review and Prospects for a description of the
initiation and progression of our activities since incorporation.

Currencies and Exchange Rates:

We publish our financial statements in Canadian dollars. Unless
otherwise indicated, monetary amounts referred to in this annual report are in
Canadian dollars. Unless otherwise indicated, all translations from Canadian
dollars to US dollars have been made at a rate of CDN$ 1.1068 to US$ 1.00, the
noon buying rate as certified for customs purposes by the Federal Reserve Bank
of New York (the "Noon Buying Rate") on April 30, 2007. We do not represent that
Canadian dollar or US dollar amounts could be converted into US dollars or
Canadian dollars, as the case may be, at any particular rate, the rates below or
at all. On October 15, 2007, the Noon Buying Rate was CDN$ 1.058 to US$ 1.00.
The following table sets forth noon buying rate for US dollars in New York City
for cable transfers in Canadian dollars as certified for customs purposes by the
Federal Reserve Bank of New York for the periods indicated:

The following table reflects the monthly high and low exchange
rates for U.S.$1.00 to the Canadian dollar for the following periods.

Month
    Year
    High (CAD$)
    Low (CAD$)April
    2007
    1.1583
    1.1068May
    2007
    1.1136
    1.0701June
    2007
    1.0727
    1.0579July
    2007
    1.0689
    1.0372August
    2007
    1.0868
    1.0462September
    2007
    1.0546
    0.9959


The following table lists the average exchange rate for US$1.00
to the Canadian dollar for the last five years based on the average month-end
exchange rates.

Year
    Average
    Low/High
    April 302007
    1.1375
    1.0989/1.1852
    1.10682006
    1.1863
    1.1203 / 1.2703
    1.12032005
    1.2702
    1.1775/1.397
    1.25682004
    1.344
    1.269/1.4221
    1.37112003
    1.5388
    1.4336/1.5963
    1.4663


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B.        CAPITALIZATION
AND INDEBTEDNESS

This Form 20-F is being filed as an annual report under the
Exchange Act, and accordingly, the information called for in this Item 3.B is
not required

C.        REASON FOR
THE OFFER AND USE OF PROCEEDS

This Form 20-F is being filed as an annual report under the
Exchange Act, and accordingly, the information called for in Item 3.C is not
required.

D.        RISK FACTORS

The occurrence of any of the following risks could hurt our
business, financial condition or results of operations. In such case, the
trading price of our shares could decline and you could lose all or part of your
investment. You should carefully consider the following risks and the other
information in this Report and our other filings with the SEC before you decide
to invest in us or to maintain or increase your investment. The risks and
uncertainties described below are not the only ones facing us. Additional risks
and uncertainties not now known to us or that we think are immaterial may also
adversely impact and impair our business. If any of the following risks actually
occur, our business, results of operations, or financial condition would likely
suffer. In such case, the trading price of our common stock could decline, and
you may lose all or part of your investment.

Development Stage Enterprise. We are a development stage
enterprise and is subject to all of the attendant business risks associated with
a development stage enterprise, including constraints on financial and personnel
resources, lack of established credit facilities, and uncertainties regarding
product development and future revenues. We will continue to be subject to all
the risks attendant to a development stage enterprise for the foreseeable
future, including competition, complications and setbacks in the development
program, and the need for additional capital.

We have reported losses in each year since its inception. At
April 30, 2007, we had an accumulated deficit of ($12,081,099) in accordance
with Canadian. GAAP. Our history consists almost entirely of development of its
products funded entirely from the sale of our Common Stock in the absence of
revenues. We anticipate that it will continue to incur substantial additional
operating losses for at least the next 12 months and expects cumulative losses
to increase as our development efforts expand.

Although we anticipate receiving future revenues fromthe sales of engines or the licensing of our technology or pursuant to a
joint venture, we have received minimal revenues in preparation for licensing or
joint venture activities, and there are no assurances that significant revenues
will be derived from this activity in the future. We have received no revenues
from sales of any of the products under development. There can be no assurance
as to when or if we will be able to develop significant sources of revenue or
whether our operations will become profitable, even if we are able to
commercialize any product. See "Operating and Financial Review and Prospects,"
and Notes to Financial Statements.

Ability to develop product. We have no assurance at this
time that a commercially feasible design will ever be perfected, or if it is,
that it will become profitable. Our profitability and survival will depend upon
our ability to develop a technically and commercially feasible product which
will be accepted by end users. The RC/DC Engine which we are developing must be
technologically superior or at least equal to other engines that competitors
offer and must have a competitive price/performance ratio to adequately
penetrate its potential markets. If we are not able to achieve this condition or
if we do not remain technologically competitive, we may be unprofitable and our
investors could lose their entire investment. There can be no assurance that we
or potential licensees will be able to achieve and maintain end user acceptance
of our engine.

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Additional Financing will be Required. Our expectations
as to the amount of funds needed for development and the timing of the need for
these funds is based on our current operating plan, which can change as a result
of many factors, and we could require additional funding sooner than
anticipated. Our cash needs may vary materially from those now planned because
of results of development or changes in the focus and direction of our
development program, competitive and technological advances, results of
laboratory and field testing, requirements of regulatory agencies and other
factors.

We have no credit facility or other committed sources of
capital. To the extent capital resources are insufficient to meet future capital
requirements, we will have to raise additional funds to continue our development
and operations. There can be no assurance that such funds will be available on
favorable terms, or at all. To the extent that additional capital is raised
through the sale of equity or convertible debt securities, the issuance of such
securities could result in dilution to our shareholders. If adequate funds are
not available, we may be required to curtail operations significantly or to
obtain funds on unattractive terms. Our inability to raise capital would have a
material adverse effect on us.

Significant Losses for the Foreseeable Future.We expect
to incur significant losses for the foreseeable future and cannot be certain
when or if we will achieve profitability. Failure to become and remain
profitable will adversely affect the value of our Common Shares and our ability
to raise capital and continue operations.

Product/Market Acceptance. Our profitability and
survival will depend upon our ability to develop a technically and commercially
feasible product which will be accepted by end users. The RC/DC Engine and the
AVFCS which we are developing must be technologically superior or at least equal
to other engines which our competitors offer and must have a competitive
price/performance ratio to adequately penetrate our potential markets.A
number of rotary engines have been designed over the past 70 years but only one,
the Wankel, has been able to achieve mechanical practicality and any significant
market acceptance. If we are not able to achieve this condition or if we do not
remain technologically competitive, we may be unprofitable and our investors
could lose their entire investment. There can be no assurance that we or our
potential licensees will be able to achieve and maintain end user acceptance of
our engine or the AFVCS.

No Formal Market Survey. We have not conducted a formal
market survey but statistics available on the aircraft, marine and industrial
markets alone indicate an annual market potential of more than one hundred
million dollars.

Lack of Experience to Manufacture or Market Product.
Assuming we are successful in developing the Rand Cam products, we presently
have no proven ability either to manufacture or market the engine. There is no
assurance that we will be able to profitably manufacture and market engines.

Going Concern Disclosure in Independent Auditor's
Report. The report of our independent auditors with respect to our financial
statements included in this Form 20-F includes a "going concern" qualification,
indicating that our losses and deficits in working capital and shareholders'
equity raise substantial doubt about our ability to continue as a going concern.
See " Operating and Financial Review and Prospects and Notes to Financial
Statements.

Our Dependence on Skilled Personnel. We are dependent on
certain members of our management and engineering staff, the loss of services of
one or more of whom could adversely affect our business. The loss of any of
these key individuals could hamper the successful development of the engine. Our
present officers and directors have other full-time positions or part-time
employment unrelated to our business. Some officers and directors will be
available to participate in management decisions on a part-time or as-needed
basis only. Our management may devote time to other companies or projects which
may compete directly or indirectly with us. We do not have "key man" life
insurance on such officers and currently have no plans to obtain such insurance.
See "Management". Our success also depends on our ability to attract and retain
additional skilled employees.

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Dependence on Consultants and Outside Manufacturing
Facilities. Since our present plans do not provide for a significant
technical staff or the establishment of manufacturing facilities, we will be
primarily dependent on others to perform these functions and to provide the
requisite expertise and quality control. There is no assurance that such persons
or institutions will be available when needed at affordable prices. It will
likely cost more to have independent companies do research and manufacturing
than for us to handle these resources.

Protection of Intellectual Property. Our business
depends on the protection of our intellectual property and may suffer if we are
unable to adequately protect our intellectual property. The success of our
business depends on our ability to patent our engine. Currently, we have been
granted several U.S. Patents. We cannot provide assurance that our patents will
not be invalidated, circumvented or challenged, that the rights granted under
the patents will give us competitive advantages or that our patent applications
will be granted.

Product Errors. Engines such as the ones proposed by us
and our related planned applications may contain errors or defects, especially
when first introduced, or when new versions are released. Our products may not
be free from errors after commercial release has occurred. Any errors that are
discovered after such commercial release could result in loss of revenue or
delay in market acceptance, diversion of development resources, damage to our
reputation, increased service and warranty costs and liability claims. Any
defects in these products could adversely affect the operation of and market for
our products, reduce revenue, increase costs and damage our reputation.

Competition. While not a highly competitive business in
terms of numbers of competitors, the business of developing engines of a new
design and attempting to either license or produce them is nonetheless difficult
because most existing engine producers are large, well financed companies which
are very concerned about maintaining their market position. These companies
possess greater technical resources and market recognition than us, and have
management, financial and other resources not yet available to us. Existing
engines are likely to be perceived by many customers as superior or more
reliable than any new product until it has been in the marketplace for a period
of time. There is no assurance that we will be able to compete effectively with
these companies.

Market prices for our products may decline in the future.We anticipate that market prices for our main products may decline in the
future due to increased competition. We expect significant competition among
local and international companies, including from new entrants, may continue to
drive equipment prices lower. We also expect that there may be increases in
promotional spending by companies in our industry which would also contribute to
increasing movement of customers between competitors. Such increased competition
and the resulting decline of market prices for our products would have a
material adverse effect on our business, financial condition and results of
operations.

Rapid technological change.New technology or refinement
of existing technology could render our Rand Cam products less attractive or
obsolete. Our success depends in part upon its ability to anticipate changes in
technology and industry standards and to successfully develop and introduce new
and improved engines on a timely basis. There is no assurance that we will be
able to do so.

Timing of new product introductions and lack of market
acceptance for our new products.Our future success may be dependent on the
success of our products and services. The success of our business depends on a
variety of factors, including:

- the quality and reliability of our products and services;
- our ability to develop new products and services superior to that of our
  competitors;
- our ability to establish licensing relationships and other strategic
  alliances;
- our pricing policies and the pricing policies of our competitors;
- our ability to introduce new products and services before our competitors;
- our ability to successfully advertise our products and services; and

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- general economic trends.

Volatility of The Over-the-Counter Bulletin Board (OTC BB)
or the TSX Venture Exchange may adversely affect the price of the Common Stock.Certain stocks listed on the OTC BB and/or the TSX Venture Exchange have
recently experienced significant price and volume fluctuations and decreases
which have adversely affected the market price of our and other stocks listed on
the OTC BB and/or the TSX Venture Exchange without any regard to the underlying
fundamentals of such stocks. These broad market fluctuations, which may occur in
the future, as well as issues more specifically related to our business
activities or prospects, our financial performance, intellectual property, may
continue to adversely affect the market price of the Common Stock.

Product liability.Product liability claims asserted against
  us in the future could hurt our business. If a customer suffers damage from
  our products, the customer could sue us on product liability or related grounds,
  claim damages for data loss or make other claims. We currently do not carry
  product liability insurance. While we have not been sued on product liability
  grounds to date, a successful product liability or related claim brought against
  us could harm our business.

We do not expect to pay cash dividends.We intend to
retain any future earnings to finance our business and operations and any future
growth. Therefore, we do not anticipate paying any cash dividends in the
foreseeable future.

Potential lack of attractive investment targets.Continued volatility of stock prices on the OTC BB and the TSX Venture
Exchange may have a material adverse effect on our ability to raise capital on
the OTC BB or the TSX Venture Exchange or by private investment, and the price
of our common stock could fluctuate substantially.

Other Factors. Our areas of business may be affected
from time to time by such matters as changes in general economic conditions,
changes in laws and regulations, taxes, tax laws, prices and costs, and other
factors of a general nature which may have an adverse effect on our business.

Conflict of Interest. Some of our current officers and
directors have other unrelated full-time positions or part-time employment. Some
officers and directors will be available to participate in management decisions
on a part-time or as-needed basis only. Our management may devote its time to
other companies or projects which may compete directly or indirectly with us.

ITEM
4.        INFORMATION ON THE COMPANY

A.        HISTORY AND
DEVELOPMENT

We were originally incorporated on October 6, 1982 as Reg
Resources Corp. under a perpetual charter pursuant to the British Columbia
Company Act by registration of our Memorandum and Articles. On February 23, 1993
we changed our name to Reg Technologies Inc. in order to better reflect our main
area of business development. We did not consolidate our shares at the time our
name was changed.

Our authorized capital consists of 65,000,000 shares consisting
of 50,000,000 common shares without par value, 10,000,000 preferred shares with
a par value of $1.00 per share and 5,000,000 class "A" non-voting shares without
par value. Of the 50,000,000 common shares without par value, 23,942,759 shares
were issued and outstanding as of April 30, 2007 and 24,160,181 are outstanding
as at October 12, 2007. There are no Preferred or Class "A" Shares currently
outstanding. All the Issuer's outstanding shares are Common Shares. They are not
subject to any future call or assessment and they all have equal voting rights.
There are no special rights or restrictions of any nature attached to any of the
shares and they all rank equally, as to all benefits that might accrue to the
holder thereof.

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Our head office is located at #240 -11780 Hammersmith Way,
Richmond, B.C., V7A 5E9, Canada. Our telephone number is 604-278-5996 and our
fax number is 604-278-3409.

We made our initial public offering of 500,000 Common Shares in
July 1983 at a price of $0.50 per share to residents of British Columbia.
Following the completion of that offering, our shares were listed on the
Vancouver Stock Exchange (which is now the TSX Venture Exchange, previously the
Canadian Venture Exchange).

We were initially involved in the mineral development and oil
and gas business. The mineral development business produced no revenues from
operations and the oil and gas business produced only limited revenues.

On May 23, 1986 we entered an agreement which was amended
October 20, 1986 ("Initial Agreements") among ourselves, Rand Cam-Engine Corp (a
private company owned by James L. McCann, the inventor of the Rand Cam Engine)
and James L. McCann. Under this agreement we acquired a 40% interest in a
company to be formed, by paying $50,000 and agreeing to expend $200,000 on
research and development pertaining to the Rand Cam Engine, which utilizes a new
type of design for a rotary internal combustion engine.

The company to be formed referred to above was incorporated in
November 1989, by registration of its Memorandum and Articles pursuant to the
British Columbia Company Act as Rand Energy Group Inc. (REGI), which company
would hold all the rights, agreements and patents to the Rand Cam Engine. We
acquired 1,200,000 of the issued and outstanding shares of REGI while Rand
Cam-Engine Corp. acquired 1,800,000 of the issued and outstanding shares.

The Initial Agreements were superseded by an "Energy Group
Acquisition Agreement" dated March 28, 1990 and a "Share Purchase Agreement"
dated March 28, 1990 whereby James L. McCann and Rand Cam- Engine Corp. agreed
to transfer all rights, title and interest in and to the Rand Cam Engine to REGI
for 1,800,000 common shares of REGI in consideration for certain covenants and
warranties along with the $250,000 expended in accordance with the Initial
Agreements. We were allotted 1,200,000 common shares of REGI.

These agreements resulted in us owning 40% of the issued and
outstanding shares of Rand Technologies Inc., with the balance of 60% being
owned by Rand Cam-Engine Corp. Pursuant to an amalgamation agreement between the
shareholders of Rand Technologies Inc. and REGI, the two companies were
amalgamated effective July 31, 1993. The amalgamated company is called Rand
Energy Group Inc. and retains the same ownership structure.

Under an agreement dated April 27, 1993, between ourselves,
REGI, Rand Cam-Engine Corporation and James L. McCann (the "Agreement"), Rand
Cam-Engine Corporation agreed to sell to us 330,000 shares of REGI, representing
a further 11% interest in REGI. In consideration for a controlling interest in
REGI, we agreed to pay Rand Cam-Engine Corporation $50,000, issue 600,000 shares
of our Common Stock (the "Purchase Price") and grant a participating royalty to
a maximum amount of $10,000,000, ("Participating Royalty"). The Participating
Royalty is to be paid in minimum annual installments of $50,000 per year
beginning on the date the first revenues are derived from the license or sale of
the patented technology and after shares are issued per above. As part of the
minimum payment, the Company is to pay 5% of all net profits from sales,
licenses, royalties or income derived from the patented technology.

Under the terms of the Agreement, if any of the 600,000 shares
to be issued above remain unissued after ten years from the date of the
Agreement, these shares will not be issued and we shall be relieved of any
further obligations in respect to the issuance of these shares. Accordingly, the
requirement to issue these shares has expired.

Pursuant to an agreement with Brian Cherry ("Cherry Agreement")
dated July 30, 1992 , REGI was assigned all rights, title and interest in the
Direct Charge Rotary Engine for all countries excluding the United States of
America. Also under the Cherry Agreement, we were assigned from Brian Cherry all
right, title and interest

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in and to the Rand Cam/Direct Charge Rotary Engine for the
United States. Pursuant to a letter of understanding between the Company, REGI
US and REGI (collectively called the grantors) and West Virginia University
Research Corporation (WVURC), the grantors have agreed that WVURC shall own 5%
of all patented technology and will receive 5% of all net profits from sales,
licenses, royalties or income derived from the patented technology. A 1% net
profit royalty will be payable to Brian Cherry on all U.S. based sales.

REGI U.S., INC.

REGI U.S., Inc. ("REGI U.S.") is 12% owned U.S. subsidiary of
Rand Energy Group Inc. which is in turn controlled through 51% ownership by us.
REGI U.S. was organized under the laws of the State of Oregon on July 27, 1992
as Sky Technologies, Inc. with its name changed on August 1, 1994. It has a
total authorized capital of 100,000,000 common shares. As of April 30, 2007, a
total of 26,919,208 were issued of which 2,849,416 are owned by Rand Energy
Group Inc. In 1993 Sky completed an offering of 500,000 units consisting of one
share of the Common Stock with no par value and one Warrant to purchase one
share of Sky. Each Warrant entitled the holder to purchase one share of Sky at
$1.25 until August 24, 1994 and then at a price of $1.50 during the following 12
month period, or extension thereof.

The Company is in the business of developing and commercially
exploiting an improved axial vane type rotary engine known as the Rand
Cam/Direct Charge Engine and other RandCam applications, such as compressors
and pumps (the Technology). The world-wide marketing and intellectual rights,
other than the U.S., are held by Rand Energy Group Inc. (a Canadian subsidiary
51% owned by the Company) which controls REGI US, Inc. (a U.S. public company).
REGI US, Inc. owns the U.S. marketing and intellectual rights. Rand Energy Group
Inc. and REGI US, Inc. have a project cost sharing agreement whereby these
companies each fund 50% of the development of the Technology. As at April 30,
2007 Rand Energy Group Inc. owes Reg Technologies $1,961,533 which will be fully
repaid prior to royalty obligations due as discussed in Note 9(a) and prior to
dividends being paid to the owners of Rand Energy Group Inc.

Pursuant to an agreement dated July 30, 1992 and amendments
thereto between Brian Cherry, Sky and ourselves (the "Cherry Agreement"), we
acquired and then assigned to Sky the U.S. technology rights to the Rand
Cam/Direct Charge Rotary Engine (the "Rand Cam/Direct Charge Rotary Engine")
from Brian Cherry. REGI will retain a 5% interest in the net profits from the
United States rights. In consideration, Mr. Cherry received, subject to
regulatory approval, 100,000 shares of the Company, and a 1% net profits
interest in REGI U.S. Brian Cherry purchased 300,000 shares of Sky/REGI at US
$0.01.

REGI is controlled through irrevocable voting trusts with other
affiliated companies giving the Company the ability to control 50% of the voting
shares of REGI US, Inc.

Our stock currently trades on the OTC BB under the symbol
REGRF.OB and on the TSX Venture Exchange as RRE.V.

B.        BUSINESS OVERVIEW

Nature of the Companys Operations

We are engaged in the business of developing and building an
improved axial vane-type rotary engine known as the Rand CamTM Direct
Charge (RC/DC) Engine, which is a variation of the Original Engine. The
Original Engine is an axial vane rotary engine, the worldwide marketing rights
to which are held by RAND. A United States patent was issued for the RC/DC
Engine on July 4, 1995, and assigned to us. Since no marketable product has yet
been developed, we have not received any revenues from operations.

The RC/DC Engine is based upon the Original Engine patented in
1983. Brian Cherry, a former officer and director of the Company, has done
additional development work on the Original Engine that resulted in

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significant changes and improvements for which the U.S. patent
has been issued and assigned to us. We believe the RC/DC Engine offers important
simplification from the basic Original Engine, which will make it easier to
manufacture and will also allow it to operate more efficiently.

Based upon testing work performed by independent organizations
on prototype models, we believe that the RC/DC Engine holds significant
potential in a number of other applications ranging from small stationary
equipment to automobiles and aircraft. In additional to its potential use as an
internal combustion engine, the RC/DC Engine design is being employed in the
development of several types of compressors, pumps, expanders and other
applications.

To date, several prototypes of the RC/DC Engine have been
tested and additional development and testing work is continuing. We believe
that such development and testing will continue until a commercially feasible
design is perfected. There is no assurance at this time, however, that such a
commercially feasible design will ever be perfected, or if it is, that it will
become profitable. If a commercially feasible design is perfected, we do,
however, expect to derive revenues from licensing the Technology relating to the
RC/DC Engine regardless of whether actual commercial production is ever
achieved. There is no assurance at this time, however, that revenues will ever
be received from licensing the Technology even if it does prove to be
commercially feasible.

We believe that a large market would exist for a practical
rotary engine which could be produced at a competitive price and which could
provide a good combination of fuel efficiency, power density and exhaust
emissions.

Based on the market potential, we believe the RC\DC Engine is
well suited for application to internal combustion engines, pumps, compressors
and expansion engines. The mechanism can be scaled to match virtually any size
requirement. This flexibility opens the door to large markets being
developed.

We have built prototypes for these products including air pumps
for fuel cell applications and air conditioning compressors. Our strategy is to
develop engines and compressors for low to medium horsepower applications, then
apply the Technology to larger applications. We plan to license the Technology
or enter into joint venture arrangements for other specific applications. The
licensee or joint venture partners will then provide funding for research and
development of the specific applications. To date, we have, through our
subsidiary REGI US, completed several license agreements.

PRODUCTS AND PROJECTS

Rand Cam Technology

Gasoline and Diesel Engine

Two prototype engines were built in 1993 and 1994 by the WVURC
to run on gasoline. Testing on these prototypes suggested that the concept is
fundamentally sound and that with a program of engine review, design, testing
and development, a technically successful range of engines can be developed. The
current prototype design for the diesel engine was designed by a consortium made
up of Alliant Techsystems (formerly Hercules Aerospace Company) ("Alliant"),
WVURC and us. Alliant was involved in the design and development including
drawings for the RC/DC diesel engine. In addition Alliant performed extensive
analysis on the diesel engine including bearings, cooling, leakage, rotor,
vanes, housing, vane tip heating, geometry and combustion. This engine was
designed as a general purpose power plant for military and commercial
applications. A prototype of the diesel engine has been assembled and
tested.

On January 24, 2006 we announced the completion of several
continuous successful combustion tests at 245 RPM on the new version of the Rand
Cam engine. Several spin tests were conducted initially up to 800 RPM on the
new modified version of the Rand Cam engine. An insignificant amount of wear on
the engine

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was confirmed during the months of December 2005, and January
2006.

The world wide patents cover Canada and several countries in
Europe, namely, Germany, France, Great Britain, and Italy. Reg Technologies,
Inc., together with REGI U.S., Inc., is in the process of testing a Rand Cam
diesel engine for a generator application for hybrid electric cars.
Additionally, our licensee for the 42 H.P. production model diesel Rand Cam is
currently completing the engine for unmanned aerial applications for the U.S.
military.

Compressor

We contracted Coltec, Inc., a Columbus, Indiana engineering
firm, to fabricate the Rand Cam (TM) air conditioning compressor for buses. The
testing is to be conducted by Trans/Air Manufacturing Corporation, one of the
largest manufacturers of air conditioning units for buses, which has agreed to
jointly develop and manufacture the working model compressor. The prototype
compressor was delivered to Trans/Air in January 2001.

A special 3.2 SCFM air compressor has been designed and built
for a large fuel cell customer. The customer has reviewed the design and his
comments including type of drive motor, inlet and outlet piping arrangements and
mounting considerations were incorporated and final drawings were prepared.

In January, 2004, testing for the air conditioning compressor
for buses application had commenced by Trans Air Manufacturing. The new manifold
has been installed on the working prototype compressor and pressure testing has
commenced. Trans Air Manufacturing will first perform bench testing to baseline
speed, performance, and power consumption data before designing to install on a
vehicle for real world testing.

Based on the successful completion of the Joint Venture, being
the development and successful testing of a working prototype of the Bus
Compressor, Trans Air shall have the exclusive right and shall use its
reasonable efforts to market, merchandise, sell and exploit the Bus Compressor
within the markets or geographical areas in which Trans Air, in its sole option
and discretion, believes such efforts would be appropriate. Currently Brian
Cherry, our Vice President of Research and Development, is overseeing the
testing of the air conditioning compressor.

In August 2004, we completed compressor tests which displayed
encouraging results of up to 25 P.S.I. with only 800 R.P.M. The testing for the
compressor was completed on behalf of Trans Air Manufacturing for
air-conditioning in bus applications, and exceeded our expectations. We are
currently negotiating a license agreement for compressor applications, to be
announced when the terms and conditions are finalized.

Ceramic Rand CamTMEngine

In February, 2004 we announced that a REGI licensee for
unmanned vehicle system engines had completed testing of the prototype 42 H.P.
engine. Tests occurred at Adiabatics in Columbus, IN and at the U.S. Navy's test
facility at Patuxent River, MD. The initial test results demonstrated that the
first generation prototype engine generated pressure and temperature. The
licensee has started design of a second generation prototype. The documentation
and one of the completed 42 H.P. Rand Cam(tm) engines have been delivered to
REGI U.S., Inc. as part of the license agreement.

On February 14, 2006 the 125 H.P. RadMax engine was received
by REGI from Radian Milparts and will be tested by the Companys rotary engine
specialist. The 125 H.P. RadMax engine is the improved version of the 42 H.P.
RadMax engine, which focused on eliminating leak paths and was designed for
maintainability.

In March 2006 we announced that final modifications, which were
successfully implemented on the 42 H.P Rand Cam, were being completed by Ebco
Industries, for the 125 H.P. version of the RadMax engine.

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The modifications will be completed during 2006 and an
extensive testing program will commence. The 125 H.P. RadMax engine has been
thoroughly designed with advanced sealing methods by Radian Milparts, which will
be the production model for presentation to several major companies interested
in licensing the technology from REGI U.S., Inc. The testing will consist of
endurance to determine wear and tear, and maintenance factors /hydrocarbons
/calculations and fuel efficiency using a state-of-the-art computerized fuel
injection system.

On June 20, 2006, the final modifications for the 125 H.P.
version of the RadMax engine were completed by Ebco Industries. The assembling
of the 125 H.P. engine has commenced and testing is planned for mid September.
The testing will consist of endurance to determine wear and tear, and
maintenance factors /hydrocarbons /calculations and fuel efficiency using a
state-of-the-art computerized fuel injection system. Biodiesel and ethanol
blended fuels will also be utilized in a series of tests.

In October, 2006 a preliminary series of tests had been
successfully completed on the 125 H.P. RadMax engine. The main objectives of
these tests were to eliminate oil leaks from entering the combustion chamber,
and to reduce compression losses. Based on several important modifications and
tests over the last 90 days on the 125 H.P. RadMax engine, the RadMax is ready
for the next advanced stage of completing the activities required for an
operating engine.

On January 3, 2007, we announced that we had successfully
completed a statement of work agreement with an engineering, prototyping, and
manufacturing services company to complete a working model RadMax pump.

The Phase I program is to design, demonstrate, and deliver a
prototype RadMax pump within 16 weeks. The goal for the work program is to
complete a pump suitable for supporting demonstration to potential customers and
to prove that the RadMax pump is a positive displacement device, capable of
processing approximately twice its internal volume every revolution, which means
that a production unit could be half the size and weight of any competitive
unit.

The Phase II program will be to design and demonstrate a
working model RadMax compressor to prove the same efficiency as the RadMax
pump, which will be half the size and weight of any competitive centrifugal
compressor.

On January 30, 2007 we announced the following RadMax product
development status:

- RadMax 125 hp engine design is currently being evaluated through computer
  modeling to determine mechanical, rotational and thermal stress; analysis
  contact forces; and engine resonant frequencies.
- 42 horsepower RadMax engine and compressor prototypes designed and concept
  tested.
- RadMax125 hp engine and pump prototypes designed and concept currently in
  testing stage.
- RadMax 125 hp engine design is currently being scaled to produce other
  sizes of the engine.

Next testing steps include:

|• | Construction of demonstration prototypes of RadMax pump
      and compressor configurations.             
|- | ----------------------------------------------------------------------------------------------------------
|  |                                                                                                           
|• | Computer tests using advanced software for tests of
      RadMax 125 hp engine to determine and document:
|  |                                                                                                           
|  | o                                                                                                         
|  |                                                                                                           
|  | o                                                                                                         
|  |                                                                                                           
|  | o                                                                                                         
|  |                                                                                                           
|  | o                                                                                                         

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- After completion of computer analysis, build working model prototype of
    RadMax engines for end users and potential licensees.

On March 14, 2007, we announced RadMax
product development status:

- RadMax®125 hp prototype pump fabrication complete.
  Assembly and testing underway.
- RadMax®125 hp prototype radial shaft seals have been
  integrated to eliminate leakage between rotors and
  cams.
- RadMax® engine design is currently being scaled to
  produce other sizes of the engine, including smaller, air-cooled versions up to 10 horsepower for UAV
  applications.

Our next testing steps include:

- Performance measurements of prototypes of RadMax
  pump
- Validation of radial shaft seals performance for pump
  and compressor
- Pump durability and performance benchmarking

In July we completed the pump testing and announced the
following product development:

- Performance measurements of prototype of RadMax® pump completed.
- Axial Vane Positive Displacement Pump efficiency validated greater than
  80%.
- Proprietary RadMax® radial shaft seals have been qualified for all low
  temperature applications (pumps, compressors).
- Validated ability to run dry, self-prime, and re-acquire prime.
- Measured suction to exceed 20 feet, lift (head) more than 80 feet.
- RadMax® 10-inch diameter prototype compressor fabrication is underway.
- Proprietary material will coat internal surfaces to facilitate safe run-dry
  operation.
- RadMax® Compressor includes many components common to RadMax® Pump, which
  reduces production unit cost.
- RadMax® Compressor designed for any gaseous use (air, refrigerant, carbon
  dioxide, etc.)

Planned testing steps include:

- Performance measurements of prototype RadMax® compressor
- Validation of seals performance for compressor environment
- Compressor durability and performance benchmarking including volume per
  revolution, compression ratio, and temperature increase due to compression.

Our RadMax® technology compressors are one of the most
efficient designed and are an important part of our business model. Validation
of prototype design specifications, during this test period, will allow us to
quickly move forward to negotiate potential revenue opportunities related to
global refrigeration, air conditioning, industrial processes, and portable
compressor applications.

Rand Cam Generator and Fuel Cell Technology

In April, 2005 we completed several successful, continuous
combustion tests for the Rand Cam engine using gasoline fuel. The series of
tests took place at SNKs facilities, in Richmond, BC, on April 14, 2005, with
starter speed of up to 490 RPM, utilizing a unique vane design that does not
require vane tip seals. Eliminating the need for vane tip seals will reduce the
manufacturing and maintenance costs significantly,

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therefore, resulting in a breakthrough with the technology. The
Rand Cam engine design will be further tested for generator and hybrid car
applications.

The Company entered into a Distributors Agreement dated June
29, 2005, with ANUVU Incorporated. REGI U.S. has an option to acquire exclusive
rights to distribute the ANUVU Fuel Cell technology for Canada and Europe. We
paid $200,000 to exercise a portion of the option agreement and acquire the
Canadian rights on behalf of REGI U.S. During the year ended April 30, 2006,
REGI assigned the distribution rights to us and recovered $200,000 of research
and development expenses.

Description of the Markets in Which the Company Competes

We currently face and will continue to face competition in the
future from established companies engaged in the business of developing,
manufacturing and marketing engines and other products. While not a highly
competitive business in terms of numbers of competitors, the business of
developing engines of a new design and attempting to either license or produce
them is nonetheless difficult because most existing engine producers are large,
well financed companies which are very concerned about maintaining their market
position. Such competitors are already well established in the market and have
substantially greater resources than us. Internal combustion engines are
produced by automobile manufacturers, marine engine manufacturers, heavy
equipment manufacturers and specialty aircraft and industrial engine
manufacturers. We expect that our engine would be used mainly in industrial and
marine applications.

Except for the Wankel rotary engine built by Mazda of Japan, no
competitor, that we are aware of, presently produces in a commercial quantity
any rotary engine similar to the engines we are developing. The Wankel rotary
engine is similar only in that it is a rotary engine rather than a reciprocating
piston engine. Without substantially greater financial resources than is
currently available to us, however, it is very possible that it may not be able
to adequately compete in the engine business. One competitor, Rotary Power
International, is presently producing the first production SCORE rotary (Wankel
type) engines. Our RC\DC Engine is more fuel efficient, smaller, quieter, costs
less to produce and will have fewer exhaust emissions.

We believe that if and when our engine is completely developed,
in order to be successful in meeting or overcoming competition which currently
exists or may develop in the future, our engine will need to offer superior
performance and/or cost advantages over existing engines used in various
applications.

Competition and Alternative Technologies

We believe strong competition can be expected in the engine
market with new patents being taken out on a continuous basis and that we may
have a time advantage over some of the competitive products as far as niche
markets which we may enter, however there is no way to accurately determine or
predict whether this situation is or will continue to be true.

The conventional piston type internal combustion engine is the
prime competitor of the Rand Cam Engine. Due to the substantial infrastructure
built up to support the standard combustion engine, substantial barriers to
entry exist into this market.

A number of the new engine designs over the last decade have
offered advantages on the thermodynamics front (e.g. more efficient use of
energy through better combustion, better heat transfer, etc.). In the case of
the Rand Cam Engine, its strong point it believed to be in its mechanism, not in
its thermodynamics. Whether or not the engine's mechanism alone will provide the
competitive edge necessary to result in a marketable and successful product is
unknown at this time.

Since we do not have management experience in manufacturing
engines, it hopes to be able to follow the same strategy as that of other
companies such as Orbital and Wankel, where it would be licensing its technology
and would therefore not be directly engaged in manufacturing.

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An extensive manufacturing study has not been performed to date
and it could turn out that the costs to manufacture are prohibitive for one or
more reasons. However, the computer modeling done can be utilized to generate
manufacturing drawings which could be used to obtain preliminary costing
estimates.

The development of our business and its ability to maintain its
competitive and technical position has depended and will depend, in part, upon
its ability to attract and retain qualified scientific, engineering, managerial
and manufacturing personnel.

Significant competition exists from engine manufacturers and
engineering firms specializing in the development of internal combustion engines
technology for the automotive, marine, motorcycle and small engine industry.
Such competition also exists in the pump and compressor markets which may
utilize the Rand Cam technology in their products. Many of these companies have
substantially greater resources for research, development and manufacturing than
us. It is possible that our competitors may succeed in developing technologies
and products that are more effective or commercially acceptable. We believe,
based on its testing of the Rand Cam engine that the engine is a superior
overall engine package to the reciprocating piston engine. This assessment is
made on the basis of the Rand Cam engine's potential for reduced engine weight
and packaging volume, improved performance, and possibly lower manufacturing
costs.

Technology development is taking place on many fronts and
competitors may have, unknown to us, a product or products under development
which may be technologically superior to ours which may be more acceptable to
the market. Competition with engines employing Rand Cam technology may also
include other lean burn engines, electric motors, gas turbine engines, solar
power and hybrid vehicles, and may include concepts not yet known to us.

Seasonality

We believe that there is no seasonality which affects the sales
of our products.

Availability of Raw Materials

Since we are not in production and there are no plans at this
time for us to enter the actual engine manufacturing business, raw materials are
not of present concern. At this time, however, there does not appear to be any
foreseeable problem with obtaining any materials or components, which may be
required in the manufacture of its potential products.

Marketing Strategy

We intend to pursue the development of the RC/DC Engine and the
air pump, compressor and other products by entering into licensing and/or joint
venture arrangements with other larger companies, which have the financial
resources to maximize the potential of the technology. We have signed license
agreements with Advanced Ceramics Research, Inc., Radian, Inc. and Rotary Power
Generation, Incorporated. We have no current plans to become actively involved
in either manufacturing or marketing any engine or other product which it may
ultimately develop to the point of becoming a commercial product.

Our current objective is to complete and test the various
compressor, pump and engine prototypes. Based on the successful testing, the
prototypes will be used for presentation purposes to potential license and joint
venture partners.

We expect revenue from license agreements with the potential
end users based on the success of the design from the compressor, pump, and
diesel engine prototypes. Based on of successful testing of the Rand Cam
prototypes, we expect to have joint venture or license agreements finalized,
which would result in royalties to

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us. However, there is no assurance that the tests will be
successful or that we will ever receive any such royalties.

Dependence on Certain Commercial Agreements

We do not have any material agreements upon which we are
dependent. Patents and Licenses Patents

We have patents on the Rand Cam Engine for Canada, Mexico and
the United States to protect certain aspects of the Rand Cam engine. U.S. patent
5,429,084 was granted on July 4, 1995, to James McCann, Brian Cherry, Patrick
Badgley and four other individuals for various improvements incorporated in the
RC/DC Engine, This patent has been assigned to us. The patent to the original
Rand Cam engine, U.S. Patent 4,401,070, was issued on August 30, 1983 to James
McCann and the marketing rights are held by Rand Energy.

The RC/DC Engine is composed basically of a disk shaped rotor
with drive shaft, which turns, and the housing or stator, which remains
stationary. The rotor has two or more vanes that are mounted perpendicular to
the direction of rotation and slide back and forth through it. As the rotor
turns, the ends of the vanes ride along the insides of the stator housing which
have wave-like depressions, causing the vanes to slide back and forth. In the
process of turning and sliding, combustion chambers are formed between the
rotor, stator walls and vanes where the fuel/air mixture is injected,
compressed, burned and exhausted.

Two additional patents have been issued for improvements to the
engine including: U.S. Patents 5,509,793 Rotary Device with Slidable Vane
Supports) issued April 24, 1996 and 5,551,853 Axial Vane Rotary Device and
Sealing System Therefor) issued September 3, 1996.

Royalty Payments

The August 1992 Agreement calls for us to pay RAND
semi-annually a royalty of 5% of any net profits to be derived by us from
revenues received as a result of its license of the Original Engine. The August
1992 Agreement also calls for us to pay Brian Cherry a royalty of 1%
semi-annually any net profits derived by us from revenue received as a result of
our licensing the Original Engine.

Other provisions of the April 1993 Agreement call for is (a) to
pay to RAND a continuing royalty of 5% of the net profits derived from the
Technology by us and (b) to pay to Brian Cherry a continuing royalty of 1% of
the net profits derived by us from the Technology.

Pursuant to the letter of understanding dated December 13,
1993, among us, RAND, REGI U.S. and West Virginia University Research
Corporation (WVURC), WVURC will receive 5% of all net profits from sales,
licenses, royalties or income derived from the patented technology relating to
the Original Engine and the RC/DC Engine.

Material Effects of Government Regulation

Our engine products including the spark ignited engine, Diesel
engine and Cold Turbine engine will be subject to various exhaust emissions
standards depending upon the application and the country in which it is produced
and/or sold. As each product becomes ready for sale, it will be necessary to
have the engine certified according to the standards in effort at that time.

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C.        ORGANIZATIONAL
STRUCTURE

REGI U.S., Inc. ("REGI U.S.") is a 12.0% owned U.S. subsidiary
of Rand Energy Group Inc. which is in turn controlled through 51% ownership by
us. REGI trades its shares on the OTC BB under the symbol RGUS. Refer to Exhibit
3 outlining our subsidiary structure.

D.        PROPERTY,
PLANT AND EQUIPMENT

We own no properties. We currently utilize office space which
we lease in a commercial business park building located in Richmond, British
Columbia, Canada, a suburb of Vancouver. On June 15, 2006, the Company entered
into a lease agreement to lease office premises for a period of three years and
the option to renew the lease for one additional term of three years, in
consideration for $16,994 per year. The monthly rent for our portion of this
office space is $1,500.00, as we sublease to several related companies. The
present facilities are believed to be adequate for meeting our needs for the
immediate future. However we expect that we will likely acquire separate space
when the level of business activity requires us to do so. We do not anticipate
that we will have any difficulty in obtaining such additional space at favorable
rates. There are no current plans to purchase or lease any properties in the
near future.

ITEM 4A.      UNRESOLVED STAFF
COMMENTS

This section is not applicable as we are not an accelerated
filer or a large accelerated filer, as defined in Rule 12b-2 of the Exchange
Act, or a well-known seasoned issuer as defined in Rule 405 of the Securities
Act.

ITEM
5.        OPERATING AND FINANCIAL REVIEW
AND PROSPECTS

The following discussion should be read in conjunction with the
  Consolidated Financial Statements and Notes thereto included elsewhere herein.
  The Consolidated Financial Statements have been prepared in accordance with
  Canadian GAAP. See Note 13 to the consolidated financial statements for a reconciliation
  to U.S. GAAP.

A.        OPERATING RESULTS

We are a development stage company engaged in the business of
developing and commercially exploiting an improved axial vane type rotary engine
known as the Rand Cam/Direct Charge Engine (the "RC/DC Engine").

As a development stage company, we devote most of our
activities to establishing our business. Planned principal activities have not
yet produced significant revenues and we have a working capital deficit. We have
undergone mounting losses to date totaling $12,081,099 and further losses are
expected until we complete a licensing agreement with a manufacturer and
reseller. We have working capital of $328,193. These factors raise substantial
doubt about our ability to continue as a going concern. Our ability to emerge
from the development stage with respect to our planned principal business
activity is dependent upon our successful efforts to raise additional equity
financing, receive funding from affiliates and controlling shareholders, and
develop a market for our products.

- 21 -

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Continuing Operations

Fiscal Year Ended April 30, 2007 compared to Fiscal year
Ended April 30, 2006

Results of Operations

Results of operations was a net loss of $519,698 ($0.02 per
share) for 2007 as compared to net loss of $1,033,398 ($0.04 per share) for
2006.

No revenues from the sale or licensing of any technology were
realized in 2007 or 2006.

In 2007, the Company recognized a gain of $147,000 as a result
of its subsidiary issuing shares outside the consolidated group for cash
proceeds of $620,000 which resulted in a disposition of 0.99% of its ownership
in this subsidiary. General and administrative expenses increased by $310,000 to
$1,884,000 in 2007 from $1,574,000 in 2006. This increase is mainly a result of
increases in wages of $110,000 as well as increases in professional fees of
$141,000 to $251,000 in 2007 from $118,000 in 2006. Advertising increased by
$71,000 to $124,000 in 2007 as compared to $53,000 in 2006. In 2006, the Company
recorded an impairment loss for the costs of distribution rights for the Anuvu
fuel cell technology of $245,356.

In 2006, the Company recognized a gain of $331,949 as a result
of its subsidiary issuing shares outside the consolidated group for cash
proceeds of $1,278,000, which resulted in a deemed disposition of 2.3% of its
ownership in the subsidiary.

The Company issued 43,750 common shares for $13,125 cash during
the year.

Fiscal Year Ended April 30, 2006 compared to Fiscal year
Ended April 30, 2005

Results of Operations

Results of operations was a net loss of $1,033,000 ($0.04 per
share) for 2006 as compared to net loss of $5,441,000 ($0.25 per share) for
2005.

No revenues from the sale or licensing of any technology were
realized in 2006 or 2005.

In 2006, the Company recognized a gain of $332,000 as a result
of its subsidiary issuing shares outside the consolidated group for cash
proceeds of $1,278,000 which resulted in a disposition of 2.3% of its ownership
in this subsidiary. General and administrative expenses increased by $902,000 to
$1,574,000 in 2006 from $672,000 in 2005. This increase is a result of increases
in investor relations/consulting and management and directors fees of $329,000
as well as increases in office, rent, automobile, professional fees, stock based
compensation, transfer agent fees, travel and wages of $282,000 to $603,000 in
2006 from $321,000 in 2005. During 2006, the Company expensed $144,000 of
research and development expenses as they were incurred to general and
administrative expense compared to $Nil in 2005. In 2006, the Company recorded
an impairment loss for the costs of distribution rights for the Anuvu fuel cell
technology of $245,356. In 2005, the Company wrote off prototype research and
development costs of $8,545,324 and patent costs of $221,830 in accordance with
current generally accepted accounting principles, due to the uncertainty about
future cash flows from the technology.

In 2005, the Company recognized a gain of $383,000 as a result
of its subsidiary issuing shares outside the consolidated group for cash
proceeds of $426,000, which resulted in a deemed disposition of 9.4% of its
ownership in the subsidiary.

The Company issued 1,496,039 common shares for $262,468 cash
during the year.

- 22 -

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Fiscal Year Ended April 30, 2005 compared to Fiscal year
Ended April 30, 2004

Results of Operations

Results of operations was a net loss of $5,441,000 ($0.25 per
share) for 2005 as compared to net loss of $60,000 ($0.01 per share) for 2004.

No revenues from the sale or licensing of any technology were
realized in 2005 or 2004.

In 2005, the Company recognized a gain of $383,000 as a result
of its subsidiary issuing shares outside the consolidated group for cash
proceeds of $4422,000 which resulted in a gained disposition of 9.4% of its
ownership in this subsidiary. General and administrative expenses decreased by
$25,000 to $862,000 in 2005 from $897,000 in 2004. This decrease is a result of
decreases in investor relations/consulting and management and directors fees of
$137,000 which was primarily offset by increases in office, rent, professional
fees, stock based compensation, transfer agent fees, travel and wages of
$107,000 to $321,000 in 2005 from $207,000 in 2004. In 2005, the Company wrote
off prototype research and development costs of $8,545,324 and patent costs of
$221,830 in accordance with current generally accepted accounting principles,
due to the uncertainty about future cash flows from the technology.

In 2004, the Company recognized a gain of $473,000 as a result
of its subsidiary issuing shares outside the consolidated group for cash
proceeds of $ 670,000, which resulted in a deemed disposition of 10.5% of its
ownership in the subsidiary. Administrative expenses increased by $411,000 to
$908,000 in 2004 from $497,000 in 2003. This increase is a result of increases
in investor relations/consulting and management and directors fees;
professional fees increased by $51,400 to $93,400 in 2004 from $42,000 in 2003;
travel and promotion increased by $24,200 to $24,500 in 2004 from $300 in 2003.

The Company issued 335,211 common shares for $73,478 cash
during the year.

B.        LIQUIDITY AND
CAPITAL RESOURCES

LIQUIDITY AND CAPITAL RESOURCES

Our authorized capital consists of 65,000,000 shares consisting
of 50,000,000 common shares without par value, 10,000,000 preferred shares with
a par value of $1.00 per share and 5,000,000 class "A" non-voting shares without
par value. Of the 50,000,000 common shares without par value, 23,942,759 shares
were issued and outstanding as of April 30, 2007 and 24,160,181are outstanding
as at October 12, 2007. There are no Preferred or Class "A" Shares currently
outstanding. All the Issuer's outstanding shares are Common Shares. They are not
subject to any future call or assessment and they all have equal voting rights.
There are no special rights or restrictions of any nature attached to any of the
shares and they all rank equally, as to all benefits that might accrue to the
holder thereof.

The directors of the Company adopted the Reg Technologies Inc.
2002 Stock Option Plan (the Plan or the 2002 Plan), and received shareholder
approval of same on January 6, 2003. The Company has adopted a type of plan
under which options may be granted for a number of shares up to 10% of the
issued and outstanding shares of the Company from time to time. As the number of
shares reserved for issuance under the Plan increases with the issue of
additional shares by the Company, the Plan is considered to be a rolling stock
option plan. This rolling plan requires Shareholder approval annually.

In the past, we have derived most of our development and
operating capital primarily from the issuance of our capital stock and our
subsidiary REGI U.S., Inc. We have also caused our subsidiary, Rand Energy Group
Inc. to sell shares it owned in REGI U.S., Inc. Reg Technologies, Inc. also
directly owns 3,320,000 shares of REGI U.S., Inc. with a value of US $3,286,800
at October 12, 2007. During the fiscal year ended April 30, 2007 REGI U.S., Inc.
raised US$120,000 pursuant to a private placement of 120,000 units. The Units
were

- 23 -

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issued at a purchase price of US$1 per Unit for cash proceeds
of US$116,496, net of issue costs of US$3,504. Each Unit consisted of one share
common stock of the Company and one warrant. Each warrant may be exercised to
enable the investor to purchase one additional share of Common Stock at US$1.50
within five years of the date of issuance to the purchaser.

During 2007, we financed our operations mainly through proceeds
of $13,125 from the exercise of 43,750 stock options.

During the year ended April 30, 2007, 43,750 stock options were
exercised, no stock options expired or were cancelled and no stock options were
granted. As at April 30, 2007 we had 1,125,000 stock options outstanding at
exercise prices ranging from $0.14 per share to $0.30 per share with expiry
dates ranging September 18, 2008 to October 20, 2010. If exercised, the
1,125,000 stock options would increase our available cash by $306,000. The
number of shares exercisable as at the date of this 20-F, pursuant to the
vesting schedule of the Companys stock option plan, is 300,000 shares which
could increase our available cash by $81,125. Please refer to Note 4(c) of our
financial statements.

Contributed surplus was $850,733 as at April 30, 2007 (2006 -
$553,067). The increase of $297,666 represents stock-based compensation and
amortization of deferred compensation recorded by REGI in the fiscal year ended
April 30, 2007. The fair value of the outstanding options, compensation options
and brokers warrants granted was calculated using the Black-Scholes method of
valuation. We do not have any long-term debt or other obligations.

As at April 30, 2006 we had 1,168,750 stock options outstanding
ranging from an exercise price $0.14 per share to $0.30 per share with expiry
dates ranging September 18, 2008 to October 20, 2010.

During fiscal 2006, 768,750 stock options were exercised for
proceeds of $80,625, and 727,289 warrants were exercised for proceeds of
$181,843 We do not have any long-term debt or other obligations.

We have been successful in the past in acquiring capital
through the issuance of shares of our Common Stock, and through advances from
related parties. Although we intend to continue utilizing these sources, there
has been no assurance in the past that these sources and methods would continue
to be available in the future. We anticipate that our cash requirements for the
fiscal year ending April 30, 2008 will remain consistent with those for the
fiscal year ended April 30, 2007.

The audited financial statements have been prepared assuming
that the Company will continue as a going-concern. As discussed in note 1 to the
financial statements, the Company has no revenues and limited capital, which
together raise substantial doubt about its ability to continue as a
going-concern. Management plans in regard to these matters are also described in
note 1. The financial statements do not include any adjustments that might
result from the outcome of this uncertainty.

In the event that no other sources of capital were available to
us in the future, on a reasonable financial basis, we would face the same
obstacles as many small, undercapitalized companies do, and, in the worst case,
we could be forced to reorganize or liquidate, either of which consequence would
likely have an adverse financial effect upon our shareholders.

Fiscal Year Ended April 30, 2007 compared to Fiscal year
Ended April 30, 2006

During the fiscal year ended April 30, 2007, we financed our
operations and received $720,000 by:

| | (i)   | net repayment of financial support to companies
      affiliated with the President of the Company in the amount of $122,000.
      These amounts are unsecured, non-interest bearing and due on
  demand;
| | ----- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (ii)  | issuing capital stock for $553,000;                                                                                                                                                                       
| | (iii) | receiving subscriptions for
$289,000;                                                                                                                                                                     

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During the fiscal ended April 30, 2007, we used cash in the
amount of $1,468,000 on operating activities as compared to $1,544,000 for the
same period last year through:

| | (i)    | payment of consulting services for $153,000;                          
| | ------ | ----------------------------------------------------------------------
| | (ii)   | payment of advertising expenses for $472.000;                         
| | (iii)  | payment for research and development for
  $207,000;                  
| | (iv)   | payment of management and directors fees for
    $41,000;             
| | (v)    | payment of professional fees for $259,000;                            
| | (vi)   | payment of transfer agent and filing fees for
    $34,000;            
| | (vii)  | payment of travel and promotion for $118,000;                         
| | (viii) | payment of wages and benefits for $134,000;                           
| | (ix)   | payment of other general and administrative expenses for
      $50,000

During the fiscal year ended April 30, 2007, we received
$607,000 cash from investing activities by:

| | (i)  | receiving proceeds from sale of subsidiarys shares for
      $621,000:
| | ---- | -----------------------------------------------------------------------
| | (ii) | Purchasing office equipment for
$14,000.                               

Our cash position has decreased to $294,463.

Fiscal Year Ended April 30, 2006 compared to Fiscal year
Ended April 30, 2005

During the fiscal year ended April 30, 2006, we financed our
operations and received $1,430,000 by:

| | (i)   | net repayment of financial support to companies
      affiliated with the President of the Company in the amount of $114,626.
      These amounts are unsecured, non-interest bearing and due on
  demand;
| | ----- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (ii)  | issuing capital stock for $262,468;                                                                                                                                                                       
| | (iii) | receiving subscriptions for $4,452;                                                                                                                                                                       
| | (iv)  | receiving proceeds from issuing of subsidiarys capital
      stock for $1,278,188;                                                                                                                       

During the fiscal ended April 30, 2006, we used cash in the
amount of $1,544,000 on operating activities as compared to $628,000 for the
same period last year through:

| | (i)   | payment of consulting services and investor relations for
      $936,000;
| | ----- | -------------------------------------------------------------------------
| | (ii)  | payment of management and directors fees for
    $44,000;                
| | (iii) | payment of professional fees for $118,000;                               
| | (iv)  | payment of transfer agent and filing fees for
    $21,000;               
| | (v)   | payment of travel and promotion for $80,000;                             
| | (vi)  | payment of wages and benefits for $18,000;                               
| | (vii) | payment of other general and administrative expenses for
      $327,000  

During the fiscal year ended April 30, 2006, we received
$391,000 cash from investing activities by:

| | (iii) | receiving proceeds from sale of subsidiarys shares for
      $391,000.
| | ----- | -----------------------------------------------------------------------

Our cash position has increased to $427,777

Fiscal Year Ended April 30, 2005 compared to Fiscal year
Ended April 30, 2004

During the fiscal year ended April 30, 2005, we derived
development and operating capital from the $86,442 amounts received from related
companies ($328,500 in 2004).

During the 2005 year, no funds were raised from subscriptions.
Operating capital was derived from the sale of 335,211 common shares for
$73,478, as well as the issuance of our subsidiarys shares totaling $422,269.
Funds raised do not provide enough working capital to fund ongoing operations
for the next twelve months.

- 25 -

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We may also raise additional funds through stock options, if
exercised. Options with respect to 1,187,500 shares at between $0.10 and $0.30
per share may be exercised to net $127,725, if exercised.

In the 2005 fiscal year, the Company wrote off prototype
research and development costs of $8,545,324 and patent costs of $221,830 in
accordance with generally accepted accounting principles, due to the uncertainty
about future cash flows from the technology. Continuing research and development
costs will be expensed during each fiscal period.

Financings

We have financed our operations through funds raised in loans,
private placements of equity securities, shares issued for property, shares
issued in debt settlements, and shares issued upon exercise of stock options and
share purchase warrants.

AmountFiscal Year
    Nature of Share Issuance
    
    Number of Shares
    (Cdn $)Fiscal 2007
    Stock option exercised
    A
    43,750
    13,125


Fiscal 2006 N/A

A. The following is a summary of the options exercised
during fiscal 2007:

- On February 20, 2007 an option holder exercised 6,250 options ($0.30).
- On November 16, 2006 an option holder exercised 12,500 options ( $0.30)
- On October 24, 2006 an option holder exercised 6,250 options ($0.30)
- On July 18, 2006 an option holder exercised 6,250 options ($0.30).
- On June 21, 2006 an option holder exercised 12,500 options ($0.30)

Capital Expenditures

Fiscal YearFiscal 2006
    $Nil (1)Fiscal 2007
    $14,144(1)


(1) This expenditure related to the purchase of property and
equipment

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US GAAP Reconciliation

Under Canadian GAAP, future income taxes are calculated based
on enacted or substantially enacted tax rates applicable to future years. Under
U.S. GAAP, only enacted rates are used in the calculation of future income
taxes. This GAAP difference did not result in a difference in our financial
position, results of operations or cash flows for the years ended April 30,
2007, 2006 and 2005.

We have adopted the fair value based approach to Stock-Based
Compensation under the provisions of CICA 3870 and SFAS No. 123R. The method of
adoption applied by us is permissible under both Canadian and US standards.

C.        RESEARCH AND
DEVELOPMENT, PATENTS AND LICENSES, ETC.

The basic research and development work on the RC/DC Engine and
other products is being coordinated and funded by Reg Tech and funded as to 50%.

We plan to contract with outside individuals, institutions and
companies to perform most of the additional research and development work which
we may require to benefit from our rights to the RC/DC Engine and other
products.

During the last two fiscal years, excluding foreign exchange
adjustment, we spent $349,000 on research and development. During the last year,
the majority of the costs were paid directly toward the building of the 42
horsepower prototypes by Radian Milparts and by Advanced Ceramics for the 10
horsepower ceramic engine for unmanned aerial applied uses.

D.        TREND
INFORMATION

See Item 4. - Information on the Company, - Part B., Business
Overview

E.        OFF-BALANCE
SHEET ARRANGEMENTS

There are no known significant off-balance sheet arrangements
other than those disclosed in this Form 20-F and in our audited consolidated
financial statements for the year ended April 30, 2007.

F.        TABULAR
DISCLOSURE OF CONTRACTUAL OBLIGATIONS

The following table summarizes all of the outstanding
obligations of the Companys continuing operations by the year that they become
due. We expect to fund these obligations from operating income and equity
financing:

Contractual Obligations
    Year
    Expenditure Commitment
    Number of Shares(1)
    2005
    $ -
    -(1)
    2006
    $ -
    -(1)Rental lease
    2007
    $14,869.79
    -


(1) Refer to note 10 to the financial statements

G.        Safe Harbor

All statements, other than statements of historical facts,
included in this annual report that address activities, events or developments
which we expect or anticipate will or may occur in the future are
forward-looking statements. The words "believe", "intend", "expect",
"anticipate", "project", "estimate", "predict" and similar

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expressions are also intended to identify forward-looking
statements.

Our estimated or anticipated future results or other
non-historical facts are forward-looking and reflect our current perspective of
existing trends and information. These statements involve risks and
uncertainties that cannot be predicted or quantified, and consequently actual
results may differ materially from those expressed or implied by such
forward-looking statements. Such factors include, among others, the following
risks: the risks associated with outstanding litigation, if any, risks
associated with project development; the need for additional financing;
operational risks associated with developing and testing an engine; reliance on
key personnel; the potential for conflicts of interest among certain officers,
directors or promoters with certain other projects; the absence of dividends;
currency fluctuations; competition; dilution; the volatility of our common share
price and volume; and tax consequences to U.S. Shareholders, and other risks and
uncertainties detailed in this report and from time to time in our other
Securities and Exchange Commission (SEC) filings.

Consequently, all of the forward-looking statements made in
this annual report are qualified by these cautionary statements. We cannot
assure you that the actual results or developments anticipated by us will be
realized or, even if substantially realized, that they will have the expected
effect on us or our business or operations.

Forward-looking statements are subject to a variety of risks
and uncertainties in addition to the risks referred to in Risk Factors under
Item 3.D above.

ITEM
6.        DIRECTORS, SENIOR MANAGEMENT
AND EMPLOYEES

A.        DIRECTORS AND
SENIOR MANAGEMENT

As of April 30, 2007, our Board of Directors consisted of four
Directors, two of whom are independent (or outside) non-executive Directors.
The following table provides certain information about the members of our Board
of Directors as of April 30, 2007.

Name
    Position with Registrant
    Term of Office
    Office Held SinceJohn G. Robertson
    President, Secretary and Director
    Annual Shareholders Meeting for fiscal 2007
    1982Jennifer Lorette *
    Director
    Annual Shareholders Meeting for fiscal 2007
    2001James Vandeberg *
    Chief Financial Officer and Director
    Annual Shareholders meeting for fiscal 2007
    2003Susanne Robertson *
    Director
    Annual Shareholders meeting for fiscal 2007
    1984


* Indicates member of the Issuer's audit committee.

The present and principal occupations of our directors and
executive officers during the last five years are set forth below:

John G. Robertson, Richmond, B.C. Since October 1984,
Mr. Robertson has been President and a Director of our Company. He is also the
Chairman of the Board, founder and a director of Linux Gold Corp. since its
inception. Mr. Robertson has been the Chairman, President and Chief Executive
Officer of REGI U.S., Inc., an Oregon corporation traded on the OTC bulletin
board, since July 1992, a U.S. public company engaged in the development of a
rotary engine/compressor (Rand Cam Engine) and hydrogen separator technology.
REGI U.S. is ultimately controlled by Reg Technologies Inc. Mr. Robertson has
been the President and Principal Executive Officer and a Director of IAS Energy,
Inc. since its formation in December 1994, a U.S.

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public company which is developing and marketing proprietary
antenna technology. Since June 1997 Mr. Robertson has been President, Principal
Executive Officer and a Director of Information Highway.com, Inc., a Florida
corporation which is inactive. Mr. Robertson is also the President and founder
of Teryl Resources Corp., a British Columbia company trading on the TSX Venture
Exchange involved in mineral exploration. Since May 1977 Mr. Robertson has been
President and a member of the Board of Directors of SMR Investments Ltd., a
private British Columbia corporation engaged in management of public companies.
Mr. Robertson is also the President and Director of the following private
companies: JGR Petroleum, Inc., BlueCrow Internet Co. Ltd., 394754 B.C. Ltd.,
dba SOVO Computer Centre, Pavlik Travel Services Ltd., World Tel-Internet
(Toronto) Ltd., International Diamond Syndicate Ltd., Argon Investment
Corporation, and Airstream Communications, Inc. Mr. Robertson is a citizen and
resident of Canada.

Jennifer Lorette, Richmond, B.C. - Since April 1994, Ms.
Lorette has been Vice President of Administration for Reg Technologies, Inc.,
and became a director in 2000. Ms. Lorette is a director of Linux Gold Corp., a
British Columbia company traded on the OTC BB, and has held several positions
with it since June 1994, most recently as its Vice President and Secretary. Also
since June 1994 Ms. Lorette, has been Vice President of REGI U.S., Inc., an
Oregon corporation traded on the OTC bulletin board. REGI U.S. is ultimately
controlled by Reg Technologies Inc. Since June 1997 Ms. Lorette has been
Secretary/Treasurer, and a Director of Information Highway.com, Inc., a Florida
corporation traded which is inactive. Ms. Lorette is a founder, and has been
Secretary/Treasurer of IAS Energy, Inc. since February 1995. Since November 1997
Ms. Lorette has been Vice President of Teryl Resources Corp., a public company
trading on the TSX Venture Exchange involved in gold, diamond, and oil and gas
exploration. She also became a director in February 2001. Ms. Lorette is a
citizen and resident of Canada.

Susanne M. Robertson, Richmond, B.C.Mrs. Robertson has
been a director of the Company since 1984 and is also the wife of John
Robertson, its president. She has been active in the management of the Company
since its incorporation. She is also a director of Linux Gold Corp. and Teryl
Resources Corp., and is the principal shareholder of SMR Investments Ltd. Mrs.
Robertson is a citizen and resident of Canada.

James L. Vandeberg, Sammamish, WAMr. Vandeberg has been
a director of the Company and its Chief Financial Officer since March 2004. Mr.
Vandeberg is an attorney in Seattle, Washington. Mr. Vandeberg's practice
focuses on the corporate finance area, with an emphasis on securities and
acquisitions. Mr. Vandeberg was previously general counsel and secretary of two
NYSE companies and is a director of Information-Highway.com, Inc., a Florida
corporation which is traded on the Pink Sheets. He is also a director of IAS
Energy, Inc. an Oregon corporation traded on the OTC bulletin board since
November 1998. He is also a director of REGI U.S., Inc. an Oregon corporation
traded on the OTC bulletin board. He is a member and former director of the
American Society of Corporate Secretaries. He became a member of the Washington
Bar Association in 1969 and of the California Bar Association in 1973. Mr.
Vandeberg graduated cum laude from the University of Washington with a Bachelor
of Arts degree in accounting in 1966, and from New York University School of Law
in 1969, where he was a Root-Tilden Scholar.

The Directors have served in their respective capacities since
their election and/or appointment and will serve until the next Annual General
Meeting or until a successor is duly elected, unless the office is vacated in
accordance with our Articles.

The Board of Directors appoints Senior Management who serves
  at the discretion of the Board of Directors.

No Director and/or Senior Management had been the subject of
  any order, judgement, or decree of any governmental agency or administrator
  or of any court or competent jurisdiction, revoking or suspending for cause
  any license, permit or other authority of such person or of any corporation
  of which he is a Director and/or Senior Management, to engage in the securities
  business or in the sale of a particular security or temporarily or permanently
  restraining or enjoining any such person or any corporation of which he is an
  officer or director from engaging in or continuing any conduct/practice/employment
  in connection with the purchase or sale of securities, or convicting such person
  of any felony or misdemeanour involving a security or any aspect of the securities
  business or of theft or of any felony.

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There is a family relationship between two of the Directors or
Senior Management. John Robertson and Susanne Robertson are husband and wife.

There are no arrangements or understandings with major
shareholders, customers, suppliers or others, pursuant to which any person
referred to above was selected as a Director or member of senior management.

B.        COMPENSATION

The following table sets out the compensation information for
the fiscal years April 30, 2007, April 30, 2006 and April 30, 2005 for our
directors and members of our administrative, supervisory or management bodies.

Name and 
        Principal 
        Position
      Year
      Annual Compensation
      Long-Term CompensationSalary 
        ($)
      Bonus 
        ($)
      Other Annual Compensation 
                   ($)
      Awards
      PayoutsSecurities
        
        Granted under (1)
        Options/SARS 
        Granted 
                  #
      Restricted
        
        Shares or 
        Restricted 
        Share 
        Units 
                  ($)
      LTIP
        (2)
        Payouts 
                  ($)
      All
        Other 
        Compensation 
                  ($)John G. Robertson, President
      2007 2006 2005
      6,000 (4) 12,000 (4) 12,000 (4)
      Nil Nil Nil
      30,000 (3) 30,000 (3) 30,000 (3)
      Nil Nil Nil
      Nil Nil Nil
      Nil Nil Nil
      Nil Nil NilJames Vandeberg, CFO
      2007 2006 2005
      Nil Nil Nil
      Nil Nil Nil
      Nil Nil Nil
      Nil Nil Nil
      Nil Nil Nil
      Nil Nil Nil
      Nil Nil NilJennifer Lorette Director
      2007 2006 2005
      12,000 12,000 12,000
      Nil Nil Nil
      Nil Nil Nil
      Nil Nil Nil
      Nil Nil Nil
      Nil Nil Nil
      Nil Nil Nil


| | (1) | "SARS"or "stock appreciation right"means
      a right granted by the Company, as compensation for services rendered, to
      receive a payment of cash or an issue or transfer of securities based
      wholly or in part on changes in the trading price of publicly traded
      securities of the Company.                                        
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (2) | "LTIP"or "long term incentive plan"means
      any plan which provides compensation intended to serve as incentive for
      performance to occur over a period longer than one financial year, but
      does not include option or stock appreciation right plans or plans for
      compensation through restricted shares or restricted share
units.
| | (3) | John Robertson is a director and Susanne Robertson is the
      sole shareholder of SMR Investments Ltd., which accrued $2,500 per month
      from the Company for management services provided to the
Company.                                                                                                                                        
| | (4) | A director's fee of $6,000 was paid to John G. Robertson,
      our President, during fiscal 2007. Mr. Robertson was paid $12,000 in each
      of fiscal 2006 and 2005.                                                                                                                                                                                

- 30 -

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Option/SAR Grants

Name
      Number 
        of Options
      Granted
      % of Total 
        Options
      Granted as of April 30, 2007
      Exercise or 
        Base Price
      ($/Security) (1)
      Date of 
        Grant
      Mkt. Value of 
        Securities
      Underlying Options on Date of Grant ($)
      Expiry 
        DateDirectors who are not Named
      Executive Officers
    Nil
    nil% (1)
    $n/a(1)
    N/a
    $n/a
    N/a


(1) During the fiscal year ended April 30, 2007 no stock
options were granted.

Compensation of Executive Officers and Directors

The aggregate cash compensation (including salaries, fees,
directors fees, commissions, bonuses) paid for services rendered during the
fiscal year ended April 30, 2007, and any compensation other than bonuses earned
during the fiscal year ended April 30, 2007 (the payment of which was deferred)
paid to our executive officers and directors by the Company and its subsidiaries
for services rendered during the fiscal year ended April 30, 2007 was $48,000.
Other than as herein set forth, the Company did not pay any additional
compensation to our executive officers and directors (including personal
benefits and securities or properties paid or distributed which compensation was
not offered on the same terms to all full time employees). There was no other
cash compensation paid to directors by the Company for services rendered in
their capacities as directors for the year ended April 30, 2007.

Under a three-year Management Agreement entered into on May 1,
1996 between us and SMR Investments Ltd., and approved by the TSX Venture
Exchange, SMR, a private company owned by Susanne M. Robertson, one of our
directors and wife of John G. Robertson, receives $2,500 per month for
management services provided to us. This contract has been renewable annually
after the initial term ended May 1, 1999. Accordingly, SMR incurred management
fees of $30,000 in each of fiscal years 2007, 2006 and 2005.

A director's fee of $6,000 was paid to John G. Robertson, our
  President, during fiscal 2007, and $12,000 in each of fiscal 2006 and 2005.

Except as noted elsewhere herein, we did not pay any additional
compensation to our executive officers (including personal benefits and
securities or properties paid or distributed), which compensation was not
offered on the same terms to all full time employees.

No monies were set aside or accrued by us during the fiscal
year ended April 30, 2007 to provide pension, retirement or similar benefits for
our officers or directors.

During the fiscal year ended April 30, 2007, we did not grant
any long-term incentive plans awards to any of our executive officers, directors
or employees.

Additional detailed information regarding compensation was
included in the Information Circular for our 2007 annual general meeting, which
is scheduled to be held on October 11, 2007.

During the fiscal year ended April 30, 2007, no new stock
options were granted, no stock options were exercised and no stock options
expired pursuant to stock option plans.

- 31 -

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Total options currently exercisable at the date of this 20-F
are 1,125,000. Of the total amount:

- 100,000 are exercisable at $0.30 per share expiring September 18, 2008;
- 250,000 are exercisable at $0.19 per share expiring March 4, 2009; and
- 25,000 are exercisable at $0.14 per share expiring April 8, 2009
- 750,000 are exercisable at $0.30 per share expiring October 20, 2010.

Aggregated Stock Options Exercises in Fiscal 2007
Fiscal Year End Unexercised Stock Options Fiscal
Year End Stock Option Values Senior
Management/Directors

Value of Unexercised In-the-Money Options atNumber of
    
    Number of Unexercised
    Fiscal Year-EndShares Acquired
    **Aggregate
      Value**
    Options at Fiscal Year-End
    Exercisable/Name
    on Exercise
    Realized
    Exercisable/Unexercisable
    Unexercisable (*)John G. Robertson, President
      and Director
    N/A
    N/A
    750,000 / Nil
    $562,500 / N/AJennifer Lorette, Director
    N/A
    N/A
    75,000 / Nil
    $56,250 / N/ASusanne Robertson,
      Director
    N/A
    N/A
    250,000 / Nil
    $187,500 / N/AJames Vandeberg, Director,
      Chief Financial Officer
    N/A
    N/A
    37,500 / Nil
    $28,125 / $N/A


* The closing price of the Companys shares on the TSX Venture
Exchange on April 30, 2007 was $0.75.

Options to Purchase Registrant's Common Shares Held by
Officers and Directors of Registrant

NAME OF OPTIONEE
      NUMBER OF OPTIONS
    EXERCISE PRICE
    EXPIRY DATEJohn Robertson
    750,000
    $0.30
    October 20, 2010Jennifer Lorette
    50,000
    $0.30
    September 18, 200825,000
    $0.14
    April 8, 2009Susanne Robertson
    250,000
    $0.19
    March 4, 2009James Vandeberg
    37,500
    $0.30
    September 18, 2008TOTAL HELD AS A GROUP:
    1,112,500


Options to Purchase Registrants Common Shares Held by
Persons Other than Officers and Directors of the Registrant

NAME OF OPTIONEE
    NUMBER OF OPTIONS
    EXERCISE PRICE
    EXPIRY DATEArnie Winrob
    12,500
      $0.30  September 18, 2008TOTAL:
    12,500


- 32 -

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INDEBTEDNESS OF DIRECTORS AND OFFICERS

None of the directors and senior officers of the Company,
proposed nominees for election or associates of such persons is or has been
indebted to the Company or its subsidiaries, other than routine indebtedness, at
any time since the beginning of the last completed financial year of the
Company.

C.        BOARD PRACTICES

Under section 224 of the Business Corporations Act,S.B.C. 2002, c. 57, the directors of a company must, at their first meeting
on or after each annual reference date, elect an audit committee, to hold office
until the next annual reference date. The audit committee must be composed of at
least 3 directors, and a majority of the members of the committee must not be
officers or employees of the company or of an affiliate of the company. The
members must elect a chair from among their number and determine their own
procedures. The auditor of a company must be given reasonable notice of, and has
the right to appear before and to be heard at each meeting of the companys
audit committee and must appear before the audit committee when request to do so
by the committee and after being given reasonable notice to do so. Our Board of
Directors established an Audit Committee which members consisting of James
Vandeberg, Susanne Robertson and Jennifer Lorette.

The Directors are elected by the shareholders to hold office
for a term of one year or until re-elected at the next annual general
meeting.

D.        EMPLOYEES

Competition for technical personnel in our industry is intense.
We believe that we have been successful in recruiting qualified personnel, and
that our future success depends in part on our continued ability to hire,
assimilate and retain qualified personnel.

As of April 30, 2007, we did not have any employees; five
part-time contractors were employed. Many of our legal, accounting, marketing
and administrative functions are contracted out to consultants.

E.        SHARE OWNERSHIP

The following table sets forth the ownership of our common
shares by our Directors and Officers as at October 15, 2007:

Shareholder
    Number of shares issued and outstanding
    Percentage ownership (1)John G. Robertson (2)
    2,697,699
    11.16%Jennifer Lorette (3)
    33,400
    *Susanne Robertson (4)
    4,728,228
    19.57%James Vandeberg (5)
    25,000
    *


| | (1) | As at October 15, 2007 there were 24,160,181issued and
      outstanding common shares.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (2) | Includes 1,188,530 shares registered in the name of and
      beneficially owned by Access Information Services, Inc., a Washington
      corporation which is owned and controlled by the Robertson Family Trust,
      the beneficiary of which is Kelly Robertson, daughter of John G.
      Robertson. Mr. Robertson is one of three trustees of the Robertson Family
      Trust, which acts by the majority vote of the three trustees. Mr.
      Robertson disclaims beneficial ownership of the shares owned or controlled
      by the Robertson Family Trust. It also includes 187,500 stock options
      which represents the exercisable portion of the 750,000 stock options
      currently outstanding and in-the-money.
| | (3) | Includes 25,000 stock options which represents the
      exercisable portion of the 75,000 stock options currently outstanding and
      in-the-money.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | (4) | SMR Investments Ltd., a company wholly-owned by Susanne
      Robertson, is the beneficial owner of 4,069,753                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           

- 33 -

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| |     | common shares representing 16.8% of our outstanding
      common shares. This amount also includes 62,500 stock options which
      represents the exercisable portion of the 250,000 stock options currently
      outstanding and in-the-money.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (5) | Includes 12,500 stock options which represents the
      exercisable portion of the 37,500 stock options currently outstanding and
      in-the-money.                                                                                           

* Beneficially owns less than one percent of our common shares.

For information regarding the ownership of stock options to
acquire our common shares which are held by our Directors and Officers, and also
by our employees, please refer to   Stock Options Granted to Employees,
Directors and Senior Managers.

ITEM 7.        MAJOR
SHAREHOLDERS AND RELATED PARTY TRANSACTIONS

A.        MAJOR
SHAREHOLDERS.

To the best of our knowledge, we are not indirectly owned or
  controlled by any other corporation, foreign government or by any other natural
  or legal person, except as set out below.

At April 30, 2007, we are aware of two shareholders who own 5%
or greater of the voting shares of the Company.

Susanne Robertson, our director, owns or controls 4,665,728 of
our issued and outstanding common shares. Of these, 595,975 common shares are
held directly and the balance of 4,069,753 common shares are held by SMR
Investments Ltd., a private company wholly-owned by Susanne M. Robertson. Mrs.
Robertson does not have any different voting rights.

John Robertson, our President and a director, owns or controls
2,510,199 of our issued and outstanding common shares. Of these 1,321,669 are
held directly; and 1,188,530 shares registered in the name of and beneficially
owned by Access Information Services, Inc., a Washington corporation which is
owned and controlled by the Robertson Family Trust, the beneficiary of which is
Kelly Robertson, daughter of John G. Robertson. Mr. Robertson is one of three
trustees of the Robertson Family Trust, which acts by the majority vote of the
three trustees. Mr. Robertson disclaims beneficial ownership of the shares owned
or controlled by the Robertson Family Trust.

Over the past three years, there has not been a significant
change in the percentage ownership held by any major shareholder.

Canadian Share Ownership.

On September 28, 2007, our shareholders list showed 24, 160,184
common shares outstanding with 477 registered shareholders. The direct and
indirect holding by depository institutions and other financial institutions is
estimated as 59 holders of record resident in Canada, holding an aggregate of
12,326,505 common shares; 415 holders of record resident in the United States,
holding an aggregate of 11,825,376 common shares; and 3 holders of record
resident elsewhere holding an aggregate of 8,300 common shares.

Control of the Company

We are a publicly owned Canadian corporation, with shareholders
in Canada, the United States and other foreign jurisdictions. We are not
controlled by any foreign government or other person.

We do not know of any arrangements which could result in a
change in control of the Company.

- 34 -

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B.        RELATED PARTY
TRANSACTIONS.

Under a three-year Management Agreement entered into on May 1,
1996 between us and SMR Investments Ltd., and approved by the TSX Venture
Exchange, SMR, a private company owned by Susanne M. Robertson, one of our
directors and wife of John G. Robertson, receives $2,500 per month for
management services provided to us. This contract has been renewable annually
after the initial term ended May 1, 1999. Accordingly, SMR incurred management
fees of $30,000 in each of fiscal years 2007, 2006 and 2005.

A director's fee of $6,000 was paid to John G. Robertson, our
  President, during fiscal 2007, and $12,000 in each of fiscal 2006 and 2005.

We had related party advances outstanding of $nil at the April
2007 year-end, compared to $46,681 at the end of our previous fiscal year, and
we also had related party advances owed to the Company of $58,420 at the end of
April 2007 year end, compared to $nil at the end of the previous fiscal year.
These were unsecured, non-interest bearing and with no fixed terms of
repayment.

We believe that the terms of these transactions were incurred
in the normal course of operations and are equivalent or more favorable than
terms we would be able to negotiate in arms-length transactions with
unaffiliated parties.

During the fiscal year ended April 30, 2007 there was no
material direct or indirect interest by our directors and officers, any
shareholder who beneficially owns more than 10% of our common shares, or any
known associate or affiliate of these persons in any transactions or proposed
transaction which has or would materially affect us.

At no time during the fiscal year ended April 30, 2007 has any
director, senior officer, proposed nominee for election, nor any associate of
such persons been indebted to us or our subsidiaries, other than routine
indebtedness. Refer to Note 9 of the financial statements for the years ended
April 30, 2007 and 2006.

C.        INTERESTS OF
EXPERTS AND COUNSEL.

Not applicable.

ITEM 8.        FINANCIAL
INFORMATION

A.        CONSOLIDATED
STATEMENTS AND OTHER FINANCIAL INFORMATION

See page F-1 to F-13 following Item 19.

Legal Proceedings

We are not a party to any material legal proceedings.

Dividend Distribution Policy

We have not paid any cash dividends to date and we do not
intend to pay cash dividends in the foreseeable future.

B.        SIGNIFICANT
CHANGES

None.

- 35 -

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ITEM 9.        THE OFFER AND
LISTING

Not applicable, except for Item 9.A.4 and Item 9.C.

Our shares have traded on the Vancouver Stock Exchange (the
"VSE") its successor, the Canadian Venture Exchange, and its successor the TSX
Venture Exchange (TSX) (the principal non-United States trading market) since
August, 1983. In addition, there has been a U.S. market in our shares on the NQB
"Pink Sheets" for the past several years and more recently, on the OTC Bulletin
Board. We are not specifically aware of prices and other trading details for any
shares which have or may have traded on the "Pink Sheets". The ranges of the low
and high sales prices for our shares traded on the TSX and OTC BB for the
periods indicated are as follows:

TSX Venture
      OTC BB*High
      Low
      High
      LowCdn. $
      Cdn. $
      U.S. $
      U.S. $High-Bid*
      Low-Bid*20051stQuarter ended July 31/04
      0.265
      0.13
      0.14
      0.062ndQuarter ended October 31/04
      0.295
      0.185
      0.19
      0.123rdQuarter ended January 31/05
      1.01
      0.185
      1.06
      0.154thQuarter ended April 30/05
      0.80
      0.34
      0.60
      0.2620061stQuarter ended July 31/05
      0.50
      0.355
      0.401
      0.262ndQuarter ended October 31/05
      0.49
      0.33
      0.361
      0.293rdQuarter ended January 31/06
      0.43
      0.25
      0.36
      0.204thQuarter ended April 30/06
      0.86
      0.245
      0.75
      0.2020071stQuarter ended July 31/06
      0.90
      0.52
      0.79
      0.252ndQuarter ended October 31/06
      0.80
      0.38
      0.671
      0.313rdQuarter ended January 31/07
      0.71
      0.50
      0.56
      0.404thQuarter ended April 30/07
      0.75
      0.42
      0.66
      0.30


*Prices for the OTC BB are in US$

(Information provided by The Over The Counter Bulletin Board.
The quotations reflect inter-dealer prices, without retail mark-up, markdown, or
commission and may not represent actual transactions.)

- 36 -

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The following table shows the high and low closing prices of
our stock traded on the TSX and the OTC Bulletin Board during the most recent
six months, for each month as follows:

TSX Venture
      OTC BB*High
      Low
      High
      LowCdn. $
      Cdn. $
      U.S. $
      U.S. $High-Bid*
      Low-Bid*Month (2007)April
      0.75
      0.455
      0.66
      0.36May
      0.76
      0.62
      0.66
      0.37June
      0.68
      0.50
      0.60
      0.37July
      0.63
      0.50
      0.58
      0.45August
      0.59
      0.43
      0.50
      0.40September
      0.27
      0.135
      0.51
      0.40


* prices on the OTC BB are in U.S. dollars.

(Information provided by The Over The Counter Bulletin Board.
The quotations reflect inter-dealer prices, without retail mark-up, markdown, or
commission and may not represent actual transactions.)

As a foreign private issuer, our officers, directors and ten
percent beneficial owners we will not be subject to the reporting obligations of
the proxy rules of the Section 14 of the Securities Exchange Act of 1934
or the insider short-swing profit rules of Section 16 of the Securities
Exchange Act of 1934.

Common Share Description

Our authorized capital consists of 65,000,000 shares consisting
of 50,000,000 common shares without par value, 10,000,000 preferred shares with
a par value of $1.00 per share and 5,000,000 class "A" non-voting shares without
par value. Of the 50,000,000 common shares without par value, 23,942,759 shares
were issued and outstanding as of April 30, 2007 and 24,160,181are outstanding
as at October 12, 2007. There are no Preferred or Class "A" Shares currently
outstanding. All the Issuer's outstanding shares are Common Shares. They are not
subject to any future call or assessment and they all have equal voting rights.
There are no special rights or restrictions of any nature attached to any of the
shares and they all rank equally, as to all benefits that might accrue to the
holder thereof.

Holders of common shares are entitled to one vote for each share
  held of record on all matters to be acted upon by the shareholders. Holders
  of common shares are entitled to receive such dividends as may be declared from
  time to time by the Board of Directors, in its discretion, out of funds legally
  available therefore.

Upon our liquidation, dissolution or winding up, holders of common
  shares are entitled to receive pro rata our assets, if any, remaining
  after payments of all debts and liabilities.

No shares have been issued subject to call or assessment. There
  are no pre-emptive or conversion rights and no provisions for redemption or
  purchase for cancellation, surrender, or sinking or purchase funds.

Provisions as to the modification, amendment or variation of
  such shareholder rights or provisions are contained in the Business Corporations
  Act (British Columbia). Unless the Act or our Articles otherwise provide,
  any action to be taken by a resolution of the shareholders may be taken by an
  ordinary resolution, being approved by a vote of a majority of the votes cast
  in respect of the matter at the shareholders meeting.

There are no restrictions on the repurchase or redemption of
  our common shares while there is any arrearage in the payment of dividends or
  sinking fund installments.

- 37 -

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ITEM 10.        ADDITIONAL
INFORMATION

A.        SHARE CAPITAL

Not applicable.

B.        MEMORANDUM AND
ARTICLES OF ASSOCIATION

Our Memorandum and Articles are incorporated by reference to
the information in our registration statement on Form 20-F filed with the
Securities and Exchange Commission, in Washington, D.C. on June 15, 1994, to
which our Articles of Incorporation and Memorandum were filed as exhibits.

On March 29, 2004, the new British Columbia Business
Corporations Act (the "BCA") came into force in British Columbia and replaced
the former Company Act (Former Act) , which is the statute under which we were
previously governed. Under the BCA, we have two years within which to transition
("Transition") under the new statute. In accordance with the BCA, we cannot
amend our Articles or Notice of Articles until the Transition to the BCA is
completed. We filed a transition application with the Registrar of Companies
British Columbia and completed the Transition on September 13, 2004.

Concurrent with the completion of the Transition, we were
required in accordance with the BCA to incorporate certain provisions known as
the "Pre-Existing Company Provisions" (the "Pre-Existing Company Provisions")
into our Notice of Articles, which replaced the existing Memorandum . The
Company is a pre-existing company under the BCA (that is, a company in
existence at the time the BCA came into force). The Pre-Existing Company
Provisions provide our company with certain default provisions in case certain
provisions which are required to be included in the Articles under the BCA are
not included in our Articles.

We filed our Notice of Articles with the Registrar of Companies
which contains basic information relating to the Company, including our name,
the particulars of the directors and the authorized capital. This was a
mandatory requirement for transition to the BCA.

On October 27, 2004, at the Annual General Meeting of
shareholders, our shareholders passed a special resolution that the Notice of
Articles, once filed, be altered to remove the Pre-existing Company Provisions
set forth in Part 16 of the Regulations to the Business Corporations Act(British Columbia); and delete and replace our Articles in their entirety
and no longer apply to Linux Gold Corp.

The New Articles, among other things, incorporate and amend
certain of the information required by the Pre-Existing Company Provisions.

Our Incorporation Number is BC0255438. Our Articles do not
restrict the nature of the business that may be carried on by the Company.

C.        MATERIAL CONTRACTS

The Company entered into a Distributors Agreement dated June
29, 2005, with ANUVU Incorporated with an option to acquire exclusive rights to
distribute the ANUVU Fuel Cell technology for Canada and Europe. We paid
$200,000 to exercise a portion of the option agreement and acquire the Canadian
rights on behalf of the Company. During the year ended April 30, 2006, REGI
U.S., Inc. assigned the distribution rights to us and recovered $200,000 of
research and development expenses.

- 38 -

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D.        EXCHANGE CONTROLS.

There are no governmental laws, decrees or regulations in
Canada relating to restrictions on the export of capital affecting the
remittance of interest, dividends or other payments to nonresident holders of
the Registrant's shares. Any such remittances, however, are subject to
withholding tax. See Item 7, "Taxation".

There are no limitations under the laws of Canada, the Province
of British Columbia or in the charter or any other constituent documents of the
Company on the right of foreigners to hold or vote our shares. However, under
the provisions of the Investment Canada Act, when control of a Canadian business
is acquired by a non- Canadian, the transaction may be reviewable in certain
circumstances by Investment Canada, an agency of the federal government of
Canada. Reviewable transactions are those in which a non-Canadian acquires the
assets of a Canadian business or the voting shares of a Canadian corporation the
value of which assets or shares exceeds $5 million (Canadian). Also, certain
transactions are specifically exempted from review.

E.        TAXATION.

Certain Canadian Federal Income Tax Consequences

The discussion under this heading summarizes the principal
Canadian federal income tax consequences of acquiring, holding and disposing of
shares of our common stock for a shareholder of ours who is not a resident of
Canada but is a resident of the U.S. and who will acquire and hold our common
shares as capital property for the purposes of the Income Tax Act
(Canada) (the Canadian Tax Act). This summary does not apply to a
shareholder who carries on business in Canada through a permanent
establishment situated in Canada or performs independent personal services
in Canada through a fixed base in Canada if the shareholders holding in Reg
Technologies Inc. is effectively connected with such permanent establishment or
fixed base. This summary is based on the provisions of the Canadian Tax Act and
the regulations thereunder and on an understanding of the administrative
practices of Canada Customs & Revenue Agency, and takes into account all
specific proposals to amend the Canadian Tax Act or regulations made by the
Minister of Finance of Canada as of the date hereof. It has been assumed that
there will be no other relevant amendment of any governing law although no
assurance can be given in this respect. This discussion is general only and is
not, nor is it intended to provide a detailed analysis of the income tax
implications of any particular shareholders interest. Investors are advised to
obtain independent advice from a shareholders own Canadian and U.S. tax
advisors with respect to income tax implications pertinent to their particular
circumstances.

The provisions of the Canadian Tax Act are subject to income
tax treaties to which Canada is a party, including the Canada-United States
Income Tax Convention(1980), as amended (the Convention).

Dividends on Common Shares and Other
Income

Under the Canadian Tax Act, a non-resident of Canada is
generally subject to Canadian withholding tax at the rate of 25 percent on
dividends paid or deemed to have been paid to him or her by a corporation
resident in Canada. We are responsible for withholding of tax at the source. The
Convention limits the rate to 15 percent if the shareholder is a resident of the
U.S. and the dividends are beneficially owned by and paid to such shareholder,
and to 5 percent if the shareholder is also a corporation that beneficially owns
at least 10 percent of the voting stock of the payor corporation.

The amount of a stock dividend (for tax purposes) would
generally be equal to the amount by which the paid up or our stated capital had
increased by reason of the payment of such dividend. We will furnish additional
tax information to our shareholders in the event of such a dividend. Interest
paid or deemed to be paid on our debt securities held by non-Canadian residents
may also be subject to Canadian withholding tax, depending upon the terms and
provisions of such securities and any applicable tax treaty.

The Convention generally exempts from Canadian income tax
dividends paid to a religious, scientific, literary, educational or charitable
organization or to an organization constituted and operated exclusively to

- 39 -

---

administer a pension, retirement or employee benefit fund or
plan, if the organization is a resident of the U.S. and is exempt from income
tax under the laws of the U.S.

Dispositions of Common Shares

Under the Canadian Tax Act, a taxpayers capital gain or
capital loss from a disposition of a share of our common stock is the amount, if
any, by which his or her proceeds of disposition exceed (or are exceeded by,
respectively) the aggregate of his or her adjusted cost base of the share and
reasonable expenses of disposition. The capital gain or loss must be computed in
Canadian currency using a weighted average adjusted cost base for identical
properties. The capital gains net of losses included in income are as follows.
For gains net of losses realized before February 28, 2000, as to 75%. For gains
net of losses realized after February 27, 2000 and before October 18, 2000, as
to 66 2/3%. For gains net of losses realized after October 17, 2000, as to 50%.
There are special transitional rules to apply capital losses against capital
gains that arose in different periods. The amount by which a shareholders
capital loss exceeds the capital gain in a year may be deducted from a capital
gain realized by the shareholder in the three previous years or any subsequent
year, subject to certain restrictions in the case of a corporate
shareholder.

Under the Canadian Tax Act, a non-resident of Canada is subject
to Canadian tax on taxable capital gains, and may deduct allowable capital
losses, realized on a disposition of taxable Canadian property. Shares of our
common stock will constitute taxable Canadian property of a shareholder at a
particular time if the shareholder used the shares in carrying on business in
Canada, or if at any time in the five years immediately preceding the
disposition 25% or more of the issued shares of any class or series in our
capital stock belonged to one or more persons in a group comprising the
shareholder and persons with whom the shareholder and persons with whom the
shareholder did not deal at arms length and in certain other circumstances.

The Convention relieves U.S. residents from liability for
Canadian tax on capital gains derived on a disposition of shares unless:

(a) the value of the shares is derived principally from
real property in Canada, including the right to explore for or exploit
natural resources and rights to amounts computed by reference to production;

(b) the shareholder was resident in Canada for 120 months
during any period of 20 consecutive years preceding, and at any time during the
10 years immediately preceding, the disposition and the shares were owned by him
when he or she ceased to be resident in Canada; or

(c) the shares formed part of the business property of a
permanent establishment that the holder has or had in Canada within the
12 months preceding the disposition.

F.        DIVIDENDS AND
PAYING AGENTS

Not applicable.

G.        STATEMENT BY
EXPERTS.

Our financial statements included in this Annual Report for the
years ended April 30, 2007, 2006, and 2005 were audited by Smythe Ratcliffe LLP,
Chartered Accountant as stated in their reports appearing herein (which reports
express an unqualified opinion), and are included in reliance upon the reports
of such firm given upon their authority as experts in accounting and auditing.

H.        DOCUMENTS ON
DISPLAY.

We filed a registration statement on Form 20-F filed the
Securities and Exchange Commission in Washington, D.C. (Registration No.
000-30084) on June 15, 1994, which became effective August 15, 1994. The
Registration Statement contains exhibits and schedules. Any statement in this
annual report about any of our

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contracts or other documents is not necessarily complete. If
the contract or document is filed as an exhibit to the Registration Statement,
the contract or document is deemed to modify the description contained in this
annual report. You must review the exhibits themselves for a complete
description of the contract or documents.

The Company files annual reports and furnishes other
information with the SEC. You may read and copy any document that we file at the
SEC's Public Reference Room at 450 Fifth Street, N.W., Room 1024, Washington,
D.C. 20549 or by accessing the Commissions website (http://www.sec.gov). The
Company also files its annual reports and other information with the Canadian
Securities Administrators via SEDAR (www.sedar.com).

I.        SUBSIDIARY
INFORMATION.

REGI U.S., Inc. ("REGI U.S.") is a 12.0% owned U.S. subsidiary
of Rand Energy Group Inc. which is in turn controlled through 51% ownership by
us. REGI trades its shares on the OTC BB under the symbol RGUS. Refer to Exhibit
8.1 outlining our subsidiary structure.

ITEM 11.        QUANTITATIVE
AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

In September 2006, the FASB issued SFAS No. 158, Employers
Accounting for Defined Benefit Pension and Other Postretirement Plans  an
amendment of FASB Statements No. 87, 88, 106, and 132(R). This statement
requires employers to recognize the overfunded or underfunded status of a
defined benefit postretirement plan (other than a multiemployer plan) as an
asset or liability in its statement of financial position and to recognize
changes in that funded status in the year in which the changes occur through
comprehensive income of a business entity or changes in unrestricted net assets
of a not-for-profit organization. This statement also requires an employer to
measure the funded status of a plan as of the date of its year-end statement of
financial position, with limited exceptions. The provisions of SFAS No. 158 are
effective for employers with publicly traded equity securities as of the end of
the fiscal year ending after December 15, 2006. The adoption of this statement
did not have a material effect on the Company's future reported financial
position or results of operations.

In September 2006, the FASB issued SFAS No. 157, Fair Value
Measurements. The objective of SFAS 157 is to increase consistency and
comparability in fair value measurements and to expand disclosures about fair
value measurements. SFAS 157 defines fair value, establishes a framework for
measuring fair value in generally accepted accounting principles, and expands
disclosures about fair value measurements. SFAS 157 applies under other
accounting pronouncements that require or permit fair value measurements and
does not require any new fair value measurements. The provisions of SFAS No. 157
are effective for fair value measurements made in fiscal years beginning after
November 15, 2007. The adoption of this statement is not expected to have a
material effect on the Company's future reported financial position or results
of operations. In June 2006, the Financial Accounting Standards Board (FASB)
issued FASB Interpretation No. 48,

Accounting for Uncertainty in Income Taxes, an
interpretation of FASB Statements No. 109. FIN 48 clarifies the accounting
for uncertainty in income taxes by prescribing a two-step method of first
evaluating whether a tax position has met a more likely than not recognition
threshold and second, measuring that tax position to determine the amount of
benefit to be recognized in the financial statements. FIN 48 provides guidance
on the presentation of such positions within a classified statement of financial
position as well as on de-recognition, interest and penalties, accounting in
interim periods, disclosure, and transition. FIN 48 is effective for fiscal
years beginning after December 15, 2006. The adoption of this statement is not
expected to have a material effect on the Company's future reported financial
position or results of operations.

In March 2006, the FASB issued SFAS No. 156, "Accounting for
Servicing of Financial Assets, an amendment of FASB Statement No. 140,
Accounting for Transfers and Servicing of Financial Assets and Extinguishments
of Liabilities". This statement requires all separately recognized servicing
assets and servicing liabilities be initially measured at fair value, if
practicable, and permits for subsequent measurement using either fair value
measurement with changes in fair value reflected in earnings or the amortization
and

- 41 -

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impairment requirements of Statement No. 140. The subsequent
measurement of separately recognized servicing assets and servicing liabilities
at fair value eliminates the necessity for entities that manage the risks
inherent in servicing assets and servicing liabilities with derivatives to
qualify for hedge accounting treatment and eliminates the characterization of
declines in fair value as impairments or direct write-downs. SFAS No. 156 is
effective for an entity's first fiscal year beginning after September 15, 2006.
The adoption of this statement is not expected to have a material effect on the
Company's future reported financial position or results of operations.

In February 2006, the FASB issued SFAS No. 155, "Accounting
for Certain Hybrid Financial Instruments-an amendment of FASB Statements No. 133
and 140", to simplify and make more consistent the accounting for certain
financial instruments. SFAS No. 155 amends SFAS No. 133, "Accounting for
Derivative Instruments and Hedging Activities", to permit fair value
re-measurement for any hybrid financial instrument with an embedded derivative
that otherwise would require bifurcation, provided that the whole instrument is
accounted for on a fair value basis. SFAS No. 155 amends SFAS No. 140,
"Accounting for the Impairment or Disposal of Long-Lived Assets", to
allow a qualifying special-purpose entity to hold a derivative financial
instrument that pertains to a beneficial interest other than another derivative
financial instrument. SFAS No. 155 applies to all financial instruments acquired
or issued after the beginning of an entity's first fiscal year that begins after
September 15, 2006, with earlier application allowed. The adoption of this
statement is not expected to have a material effect on the Company's future
reported financial position or results of operations. We are a small business
issuer as defined in Rule 405 of the Securities Act of 1933, and Rule
12b-2 of the Securities Exchange Act of 1934, as amended, and therefore
need not provide the information requested by this item.

ITEM 12.        DESCRIPTION
OF SECURITIES OTHER THAN EQUITY SECURITIES

Not applicable.

PART II

ITEM 13.        DEFAULTS,
DIVIDEND ARREARAGES AND DELIQUENCIES

None.

ITEM 14.        MATERIAL
MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS.

A.        MATERIAL
MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS

None.

B.        USE OF PROCEEDS.

Not applicable

ITEM 15.        CONTROLS AND
PROCEDURES

We carried out an evaluation, under the supervision and with
the participation of our management, including the President, and the Chief
Financial Officer, of the effectiveness of the design and operation of our
disclosure controls and procedures [as defined in the Exchange Act Rule
13a-15(e)] as of the end of the period covered by this report. Based upon the
evaluation of the effectiveness of the disclosure controls and procedures as of
the end of the period covered by this annual report, our Chief Executive Officer
and Chief Financial Officer have concluded that, as of such date, the disclosure
controls and procedures were effective at the reasonable assurance level with
respect to such disclosure controls and procedures being designed to

- 42 -

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ensure that information relating to the Registrant required to
be disclosed by the Company in reports that we file or submit under the Exchange
Act is recorded, processed, summarized and reported within the time periods
specified in the rules and forms of the SEC.

There are inherent limitations to the effectiveness of any
system of disclosure controls and procedures, including the possibility of human
error and the circumvention or overriding of the controls and procedures.
Accordingly, even effective disclosure controls and procedures can only provide
reasonable and not absolute assurance, of achieving the desired control
objectives, and management necessarily was required to apply its judgment in
evaluating the cost-benefit relationship of possible controls and procedures.

There was no significant change in our internal control over
financial reporting that occurred during our most recently completed fiscal year
ended April 30, 2007 that has materially affected, or is reasonably likely to
materially affect, our internal control over financial reporting. Nor were there
any significant deficiencies or material weaknesses in our internal controls
requiring corrective actions.

Extension of Compliance Date for Managements Report on
Internal Control Over Financial Reporting

The Company is a non-accelerated filer as defined in Rule 12b-2
of the Act. On September 21, 2005, the Securities and Exchange Commission
extended the compliance dates for non-accelerated filers concerning the
provisions of Exchange Act Rule 13a-15(d) or 15d-15(d), whichever applies,
requiring an evaluation of changes to internal control over financial reporting
requirements with respect to the companys first periodic report due after the
first annual report that must include managements report on internal control
over financial reporting. A company that is a non-accelerated filer must begin
to comply with these requirements for its first fiscal year ending on or after
July 15, 2007. In addition, the compliance period was extended to the amended
portion of the introductory language in paragraph 4 of the certification
required by Exchange Act Rules 13a-14(a) and 15d-14(a) that refers to the
certifying officers responsibility for establishing and maintaining internal
control over financial reporting for the company, as well as paragraph 4(b). The
amended language must be provided in the first annual report required to contain
managements internal control report and in all periodic reports filed
thereafter. The extended compliance dates also apply to the amendments of
Exchange Act Rules 13a-15(a) and 15d-15(a) relating to the maintenance of
internal control over financial reporting.

Under the internal control reporting provisions of the Act,
Management will be responsible for establishing and maintaining adequate
internal control over financial reporting as defined in Rule 13a-15(f) under the
Exchange Act. Internal control over financial reporting is a process designed to
provide reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes in accordance
with accounting principles generally accepted in the United States of
America.

The Companys internal control over financial reporting
includes those policies and procedures that (i) pertain to the maintenance of
records that, in reasonable detail, accurately and fairly reflect the
transactions and dispositions of the assets of the Company; (ii) provide
reasonable assurance that transactions are recorded as necessary to permit
preparation of financial statements in accordance with generally accepted
accounting principles, and that receipts and expenditures of the Company are
being made only in accordance with authorizations of management and directors of
the Company; and (iii) provide reasonable assurance regarding prevention or
timely detection of unauthorized acquisition, use, or disposition of the
Companys assets that could have a material effect on the financial
statements.

Because of its inherent limitations, internal control over
financial reporting may not prevent or detect misstatements. Also, projections
of any evaluation of effectiveness to future periods are subject to the risk
that controls may become inadequate because of changes in conditions, or that
the degree of compliance with the policies or procedures may deteriorate.

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ITEM 15T.      CONTROLS AND
PROCEDURES

Not applicable.

ITEM 16.       
[RESERVED]

ITEM 16A.      AUDIT COMMITTEE
FINANCIAL EXPERT

We do not currently have a financial expert in our audit
committee due to our relatively small size. In 2007, we had no employees and we
relied upon the services of a chartered accounting firm in Vancouver, BC,
Canada, to prepare our interim unaudited quarterly consolidated financial
statements. Also, we retained the audit services of Smythe Ratcliffe LLP,
Chartered Accountants to perform the audit on our year-end consolidated
financial statements.

Moreover, the audit committee is comprised of seasoned business
professionals, whereby the members have over 60 years of experience in the
investment business and are board members of several corporations.

On these bases, we believe that the audit committee has
adequate resources available to it when financial expertise and advice are
necessary.

ITEM 16B.      CODE OF ETHICS

We have not adopted a formal written code of ethics given our
relatively small size, whereby we had no employees in 2007.

Directors are subject to the laws of the Province of British
Columbia, Canada, whereby they are required to act honestly, in good faith and
in the best interests of the Company.

ITEM 16C.      PRINCIPAL
ACCOUNTANT FEES AND SERVICES

The following table discloses accounting fees and services of
the Registrant:

(Stated in terms of Canadian dollars)

|                          | 2007        | 2006       
|------------------------- | ----------- | -----------
|Type of Services Rendered | Fiscal Year | Fiscal Year
|                          | (CAD$)      | (CAD$)     

(a) Audit Fees
    27,500
    13,375(b) Audit-Related Fees
    -
    -(c) Tax Fees
    
    -(d) All Other Fees
    -
    -


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ITEM 16D.      EXEMPTIONS FROM
THE LISTING STANDARDS FOR AUDIT COMMITTEES

No disclosure required.

ITEM 16E.      PURCHASES OF
EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS

No disclosure required.

PART III

ITEM 17.        FINANCIAL
STATEMENTS

We have elected to provide financial statements pursuant to
Item 17.

Reference is made to Item 19 for a list of all financial
statements filed as part of this annual report.

Our consolidated financial statements are stated in Canadian
Dollars (CDN$) and are prepared in accordance with Canadian Generally Accepted
Accounting Principles (GAAP). See Note 13 to the consolidated financial
statements for a reconciliation to U.S. GAAP. The consolidated financial
statements as required under Item 17 are included immediately following the text
of this Report.

ITEM 18.        FINANCIAL
STATEMENTS

We have elected to provide financial statements pursuant to
Item 17.

ITEM 19.        EXHIBITS

(a) The following consolidated financial statements, together
with the report of Smythe Ratcliffe for fiscal 2007 and 2006, and Manning,
Elliott for fiscal 2005, on the annual financial statements referred to below,
are filed as part of this annual report, and are included immediately following
the text of this 20-F:

|Index to Consolidated Financial Statements    
|----------------------------------------------
|Independent Auditors Report                  
|Consolidated Balance Sheets                   
|Consolidated Statements of Loss and Deficit   
|Consolidated Statements of Cash Flows         
|Notes to the Consolidated Financial Statements

(b) Documents filed as exhibits to this annual report:

Number
    Description1.1
    Articles of Incorporation with
      Bylaws dated October 6, 1982
    (1)1.2
    Certificate of Name Change and
      Special Resolution dated February 23, 1993
    (1)1.3
    Memorandum and articles of
      incorporation amended effective April 5, 2005
    (9)2.1
    Special rights and restrictions attaching to the Common
      Shares without par value and the Class A non-voting shares without par
      value. Special resolution dated November 25, 1985
    (1)


- 45 -

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4. (a) 1
    Contract among the Company, Rand
      Technologies Corp. and Rand Energy Group Inc. regarding formation of Rand
      Energy Group Inc. and arrangement of various inter- related matters, dated
      March 28, 1990
    (1)4. (a) 2
    Energy Group Acquisition
      Agreement among the Company, Rand Cam- Engine Corporation, James L. McCann
      and Rand Energy Group Inc. regarding acquisition of technology, and rights
      to the Rand Cam-Engine, dated March 28, 1990
    (1)4. (a) 3
    Contract among the Company, Rand
      Cam-Engine Corporation Rand Energy Group Inc. and James L. McCann
      regarding arrangement of various inter- related matters concerning
      issuance of shares, payments, royalties, etc., dated July 30, 1992
    (1)4. (a) 4
    Agreement with Center for
      Industrial Research Applications (CIRA) regarding Year 2: Engine
      Refinement and Testing on the Rand-Cam Engine
    (1)4. (a) 5
    Research & Development
      Agreement Between Members of the Consortium of Reg Technologies Inc., Rand
      Energy Group Inc., Hercules Incorporated and The West Virginia University
      Research Corporation, dated May 10, 1994
    (1)4. (a) 6
    Agreement dated October 31, 1995
      between the Company and REGI U.S., Inc. regarding assignment of Machine
      Vision Technology agreement with Integral Vision Systems, Inc.
    (2)4. (a) 7
    Cooperative Agreement between the
      Company and Global Aircraft Corporation regarding NASA General Aviation
      Propulsion Program
    (3)4. (a) 8
    Agreement dated June 22, 1997
      between John Weston and the Company regarding the acquisition of rights to
      Air/Vapour Flow Systems by the Company from Weston
    (4)4. (a) 9
    Agreement dated September 23,
      1997 between the Company, REGI U.S., Inc. and SMR Investments Ltd.
      regarding the assignment of the above agreement by the Company to REGI and
      SMR pending regulatory approval of the original agreement
    (4)4. (a) 10
    Agreement dated December 31, 1997
      between the Company REGI U.S., Inc. and SMR Investments Ltd. regarding the
      Canadian rights to the AVFS and repayment of advances to Weston by SMR
    (4)4. (a) 11
    Joint Venture Agreement dated
      July 28, 1998 between REGI U.S., Inc and Trans Air Manufacturing
      Corporation regarding development and manufacturing of a prototype Bus
      Compressor
    (4)4. (a) 12
    Agreement dated August 5, 1998
      between the Company and T.W. Blasingame Company, Inc. (Blasingame)
      regarding the licensing of certain Rand Cam/Direct Charge Engine
      manufacturing rights to Blasingame and licensing of certain rights to the
      "Vane Restraint Mechanism" by Blasingame to the Company
    (5)4. (a) 13
    Cooperative and Licensing
      Agreement dated December 14, 1998 between the Company, REGI U.S., Inc.
      Rand Energy Group, Inc. USA and Global Aircraft Corporation regarding the
      NASA SBIR Phase I Contract for development of the Rand-Cam Diesel Aircraft
      Engine
    (5)4. (a) 14
    Agreement made as of October 27,
      2000 with GHM Inc. regarding 50% interest in the rights to the hydrogen
      separator technology
    (7)


- 46 -

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4. (a) 15
      Agreement between Radian, Inc., Reg Technologies
        Inc., REGI U.S., Inc. and Rand Energy Group Inc. made as of April 24,
        2002
      (8)4. (a) 16
      Agreement between REGI and Advanced Ceramics
        Research dated March 20, 2002
      (8)4. (a) 17
      Agreement between REGI U.S, Inc. and Reg Technologies
        Inc. and Anuvu Incorporation dated June 29, 2005
      (9)4. (b) 1
      Management Agreement between the Company and
        SMR Investments Ltd., dated April 2, 1993
      (1)4. (b) 2
      Agreement between Brian Cherry, Sky Technologies,
        Inc. and Rand Energy Group Inc., regarding U.S. rights to the Rand Cam/Direct
        Charge Engine dated August 20, 1993
      (1)4. (b) 3
      Employment Agreement between Sky Technologies,
        Inc. and Patrick Badgley dated February 9, 1994
      (1)4. (b) 4
      Management Agreement between Sky Technologies,
        Inc. and Access Information Services, Inc., dated April 1, 1994
      (1)4. (b) 5
      Agreement between the Company and Rand Energy
        Group Inc. granting the Company rights to negotiate and sell licenses
        and marketing rights for the Rand Cam Engine, dated February 27, 1992
      (1)4. (b) 6
      Management Agreement dated May 1, 1996 between
        the Company and SMR Investments Ltd.
      (3)8.1
      List of Parents and
        Subsidiaries of the Company
      (10)12.1
      Certification pursuant
        to Title 18, United States Code, Section 1350 as adopted pursuant to Section
        302 of the Sarbanes-Oxley Act of 2002 (John G. Robertson)
      (10)12.2
      Certification pursuant
        to Title 18, United States Code, Section 1350 as adopted pursuant to Section
        302 of the Sarbanes-Oxley Act of 2002 (James Vandeberg)
      (10)13.1
      Certification pursuant
        to Title 18, United States Code, Section 1350 as adopted pursuant to Section
        906 of the Sarbanes-Oxley Act of 2002 (John G. Robertson)
      (10)13.2
      Certification pursuant
        to Title 18, United States Code, Section 1350 as adopted pursuant to Section
        906 of the Sarbanes-Oxley Act of 2002 (James Vandeberg)
      (10)


|(1) | incorporated by reference to the Registrants
      Registration Statement on Form 20-F filed on June 15, 1994 with the US
      Securities and Exchange Commission
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(2) | incorporated by reference to the Registrants Annual
      Report on Form 20-F for the fiscal year ended April 30, 1996                                            
|(3) | incorporated by reference to the Registrants Annual
      Report on Form 20-F for the fiscal year ended April 30, 1997                                            
|(4) | incorporated by reference to the Registrants Annual
      Report on Form 20-F for the fiscal year ended April 30, 1998                                            
|(5) | incorporated by reference to the Registrants Annual
      Report on Form 20-F for the fiscal year ended April 30,
  1999                                          

- 47 -

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|(6)  | incorporated by reference to the Registrants Annual
      Report on Form 20-F for the fiscal year ended April 30, 2000
|---- | -----------------------------------------------------------------------------------------------------------------------
|(7)  | incorporated by reference to the Registrants Annual
      Report on Form 20-F for the fiscal year ended April 30, 2001
|(8)  | incorporated by reference to the Registrants Annual
      Report on Form 20-F for the fiscal year ended April 30, 2002
|(9)  | incorporated by reference to the Registrants Annual
      Report on Form 20-F for the fiscal year ended April 30, 2006
|(10) | Exhibits filed herewith.                                                                                               

- 48 -

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|Reg Technologies Inc.            
|---------------------------------
|(A Development Stage Company)    
|                                 
|Consolidated Financial Statements
|                                 
|April 30, 2007 and 2006          

- 49 -

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TO THE DIRECTORS OF REG TECHNOLOGIES INC. 
  (A Development Stage Company)

We have audited the consolidated balance sheets of Reg Technologies
  Inc. (A Development Stage Company) as at April 30, 2007 and 2006 and the consolidated
  statements of operations and deficit and cash flows for the years then ended.
  These financial statements are the responsibility of the Company's management.
  Our responsibility is to express an opinion on these financial statements based
  on our audits.

We conducted our audits in accordance with Canadian generally
  accepted auditing standards and the standards of the Public Company Accounting
  Oversight Board (PCAOB) in the United States of America. Those standards require
  that we plan and perform an audit to obtain reasonable assurance whether the
  financial statements are free of material misstatement. An audit includes examining,
  on a test basis, evidence supporting the amounts and disclosures in the financial
  statements. An audit also includes assessing the accounting principles used
  and significant estimates made by management, as well as evaluating the overall
  financial statement presentation.

In our opinion, these consolidated financial statements present
  fairly, in all material respects, the financial position of the Company as at
  April 30, 2007 and 2006 and the results of its operations and its cash flows
  for the years then ended in conformity with Canadian generally accepted accounting
  principles.

Smythe Ratcliffe LLP (signed)

Chartered Accountants

Vancouver, British Columbia 
  August 17, 2007

Comments by Auditor for U.S Readers on Canada  U.S.
  Reporting Difference

In the United States, reporting standards for auditors require
  the addition of an explanatory paragraph (following the opinion paragraph) when
  the financial statements are affected by conditions and events that cast substantial
  doubt on the Companys ability to continue as a going-concern, such as
  those described in Note 1 to the financial statements. Our report to the shareholders
  dated August 17, 2007 is expressed in accordance with Canadian reporting standards
  which do not permit a reference to such events and conditions in the auditors
  report when these are adequately disclosed in the financial statements.

Smythe Ratcliffe LLP (signed)

Chartered Accountants

Vancouver, British Columbia
  August 17, 2007

---

|7thFloor, Marine Building         | Fax:       | 604.688.4675        | 
|--------------------------------- | ---------- | ------------------- | 
|355 Burrard Street, Vancouver, BC | Telephone: | 604.687.1231       
|Canada V6C 2G8                    | Web:       | SmytheRatcliffe.com

F-1

---

|Reg Technologies Inc.               
|------------------------------------
|(A Development Stage Company)       
|Consolidated Balance Sheets [Note 1]
|As at April 30, 2007 and 2006       
|(Expressed in Canadian dollars)     

|                                         |  | 2007        |   |  | 2006        |  
|---------------------------------------- |  | ----------- | - |  | ----------- | -
|                                         |  | $           |   |  | $           |  
|ASSETS                                   |  |             |   |  |             |  
|Current Assets                           |  |             |   |  |             |  
|Cash and cash equivalents                |  | 294,463     |   |  | 427,777     |  
|GST and interest receivable              |  | 11,329      |   |  | 5,074       |  
|Prepaid expenses                         |  | 47,933      |   |  | 67,205      |  
|Due
      from related parties [Note 9]  |  | 58,420      |   |  |            |  
|Total Current Assets                     |  | 412,145     |   |  | 500,056     |  
|Intangible Assets [Note 3]               |  |            |   |  |            |  
|Property and Equipment [Note 7]          |  | 12,731      |   |  |            |  
|Total Assets                             |  | 424,876     |   |  | 500,056     |  
|                                         |  |             |   |  |             |  
|LIABILITIES AND SHAREHOLDERS EQUITY     |  |             |   |  |             |  
|Current Liabilities                      |  |             |   |  |             |  
|Accounts payable and accrued liabilities |  | 83,952      |   |  | 78,168      |  
|Due to related parties [Note 9]          |  |            |   |  | 46,681      |  
|Total Liabilities                        |  | 83,952      |   |  | 124,849     |  
|                                         |  |             |   |  |             |  
|Shareholders Equity                     |  |             |   |  |             |  
|Share Capital [Note 4]                   |  | 11,356,689  |   |  | 11,343,564  |  
|Subscriptions received                   |  | 289,307     |   |  |            |  
|Contributed Surplus                      |  | 850,733     |   |  | 553,067     |  
|Foreign Currency Translation Adjustments |  | (74,706     | ) |  | 39,977      |  
|Deficit                                  |  | (12,081,099 | ) |  | (11,561,401 | )
|                                         |  | 340,924     |   |  | 375,207     |  
|                                         |  | 424,876     |   |  | 500,056     |  

Commitments [Notes 10 and 11] 
  Subsequent Events [Note 12]

Approved on behalf of the Board

"John Robertson" (signed)John G. Robertson, Director

"Jennifer Lorette" (signed)Jennifer Lorette, Director

(The accompanying notes are an integral part of these consolidated
  financial statements)

F-2

---

|Reg Technologies Inc.                            
|-------------------------------------------------
|(A Development Stage Company)                    
|Consolidated Statements of Operations and Deficit
|For the Years Ended April 30, 2007 and 2006      
|(Expressed in Canadian dollars)                  

|                                                    |  | 2007        |   |  | 2006        |   |  | 2005        |  
|--------------------------------------------------- |  | ----------- | - |  | ----------- | - |  | ----------- | -
|                                                    |  | $           |   |  | $           |   |  | $           |  
|                                                    |  |             |   |  |             |   |  | (Restated)  |  
|Operating Expenses                                  |  |             |   |  |             |   |  |             |  
|Foreign exchange                                    |  | (23,130     | ) |  | 15,609      |   |  | 8,229       |  
|General and administrative                          |  | 1,884,471   |   |  | 1,574,083   |   |  | 672,000     |  
|Impairment loss on development
      costs          |  |            |   |  |            |   |  | 8,545,324   |  
|Impairment loss on intangible assets [Note
      3] |  |            |   |  | 245,356     |   |  | 221,830     |  
|Mineral property maintenance costs                  |  | 7,560       |   |  |            |   |  | 18,588      |  
|Operating Loss                                      |  | (1,868,901  | ) |  | (1,835,048  | ) |  | (9,465,971  | )
|Other Income                                        |  |             |   |  |             |   |  |             |  
|Gain on sale of subsidiarys shares                 |  | 616,974     |   |  | 385,853     |   |  | 345,124     |  
|Gain on issue by subsidiary
      of its own shares |  |             |   |  |             |   |  |             |  
|outside
      the consolidated group [Note 6)       |  | 147,414     |   |  | 331,949     |   |  | 383,130     |  
|Interest                                            |  | 14,414      |   |  | 428         |   |  | 8,130       |  
|Non-controlling
      interest                      |  | 570,401     |   |  | 83,420      |   |  | 3,288,560   |  
|Net Loss for the Year                               |  | (519,698    | ) |  | (1,033,398  | ) |  | (5,441,027  | )
|Deficit - Beginning
      of Year                   |  | (11,561,401 | ) |  | (10,528,003 | ) |  | (5,086,976  | )
|Deficit - End of Year                               |  | (12,081,099 | ) |  | (11,561,401 | ) |  | (10,528,003 | )
|                                                    |  |             |   |  |             |   |  |             |  
|Basic Loss Per Share                                |  | (0.02       | ) |  | (0.04       | ) |  | (0.25       | )
|                                                    |  |             |   |  |             |   |  |             |  
|Weighted Average Number of Common Shares            |  |             |   |  |             |   |  |             |  
|Outstanding                                         |  | 23,831,000  |   |  | 23,404,000  |   |  | 22,178,000  |  

(The accompanying notes are an integral part of these consolidated
  financial statements)

F-3

---

|Reg Technologies Inc.                      
|-------------------------------------------
|(A Development Stage Company)              
|Consolidated Statements of Cash Flows      
|For the Years Ended April 30, 2007 and 2006
|(Expressed in Canadian dollars)            

|                                                    |  | 2007       |   |  | 2006       |   |  | 2005       |  
|--------------------------------------------------- |  | ---------- | - |  | ---------- | - |  | ---------- | -
|                                                    |  | $          |   |  | $          |   |  | $          |  
|                                                    |  |            |   |  |            |   |  | (Restated) |  
|Operating Activities                                |  |            |   |  |            |   |  |            |  
|Net loss                                            |  | (519,698   | ) |  | (1,033,398 | ) |  | (5,441,027 | )
|Items not involving cash                            |  |            |   |  |            |   |  |            |  
|Accounts
      payable written-off                  |  |           |   |  | (87,209    | ) |  | 41         |  
|Stock-based compensation                            |  | 296,528    |   |  | 129,830    |   |  | 105,262    |  
|Non-controlling
      interest                      |  | (570,401   | ) |  | (83,420    | ) |  | (3,288,560 | )
|Gain on issue by subsidiary
      of its own shares |  | (147,414   | ) |  | (331,949   | ) |  | (383,130   | )
|Shares
      issued for services                    |  | 54,055     |   |  |           |   |  |           |  
|Amortization of deferred
      compensation         |  | 1,138      |   |  | 14,246     |   |  |           |  
|Impairment
      loss on intangible assets          |  |           |   |  | 245,356    |   |  | 221,830    |  
|Impairment loss on
      development costs          |  |           |   |  |           |   |  | 8,531,357  |  
|Amortization                                        |  | 1,413      |   |  |           |   |  |           |  
|Gain on sale of subsidiarys
      shares           |  | (616,974   | ) |  | (385,853   | ) |  | (345,124   | )
|Changes in non-cash working
      capital items     |  |            |   |  |            |   |  |            |  
|Amounts receivable                                  |  | (6,256     | ) |  | (1,883     | ) |  | 3,281      |  
|Prepaid
      expenses                              |  | 33,852     |   |  | (50,961    | ) |  | (21,664    | )
|Accounts payable and accrued liabilities            |  | 6,000      |   |  | 41,636     |   |  | (10,561    | )
|Net Cash Used In Operating Activities               |  | (1,467,757 | ) |  | (1,543,605 | ) |  | (628,295   | )
|                                                    |  |            |   |  |            |   |  |            |  
|Financing Activities                                |  |            |   |  |            |   |  |            |  
|Shares issued                                       |  | 13,125     |   |  | 262,468    |   |  | 73,478     |  
|Shares issued by subsidiary                         |  | 539,810    |   |  |           |   |  |           |  
|Repayments to related parties                       |  | (122,112   | ) |  | (114,626   | ) |  | 26,401     |  
|Proceeds from subsidiarys
      shares issued      |  |           |   |  | 1,278,188  |   |  | 422,269    |  
|Subscriptions received                              |  | 289,307    |   |  |           |   |  |           |  
|Subscriptions received by subsidiary                |  |           |   |  | 4,452      |   |  |           |  
|                                                    |  |            |   |  |            |   |  |            |  
|Net Cash Provided by Financing Activities           |  | 720,130    |   |  | 1,430,482  |   |  | 522,148    |  
|                                                    |  |            |   |  |            |   |  |            |  
|Investing Activities                                |  |            |   |  |            |   |  |            |  
|                                                    |  |            |   |  |            |   |  |            |  
|Proceeds on sale of subsidiarys
      shares       |  | 621,526    |   |  | 390,653    |   |  | 450,536    |  
|Development costs                                   |  |           |   |  |           |   |  | (139,723   | )
|Patent protection costs                             |  |           |   |  |           |   |  | (29,008    | )
|Purchase
      of property and equipment            |  | (14,144    | ) |  |           |   |  |           |  
|Net Cash Provided by Investing Activities           |  | 607,382    |   |  | 390,653    |   |  | 281,805    |  
|                                                    |  |            |   |  |            |   |  |            |  
|Effect of Exchange Rate Changes on Cash             |  | 6,931      |   |  | (16,487    | ) |  | (15,513    | )
|                                                    |  |            |   |  |            |   |  |            |  
|Increase (Decrease) in Cash and Cash Equivalents    |  | (133,314   | ) |  | 261,043    |   |  | 160,145    |  
|                                                    |  |            |   |  |            |   |  |            |  
|Cash and Cash Equivalents - Beginning of Year       |  | 427,777    |   |  | 166,734    |   |  | 6,589      |  
|Cash and Cash Equivalents
      - End of Year       |  | 294,463    |   |  | 427,777    |   |  | 166,734    |  
|                                                    |  |            |   |  |            |   |  |            |  
|Non-Cash Investing and Financing Activities         |  |            |   |  |            |   |  |            |  
|Shares of subsidiary issued
      for services      |  |           |   |  |           |   |  | 31,618     |  
|Supplemental Disclosures                            |  |            |   |  |            |   |  |            |  
|                                                    |  |            |   |  |            |   |  |            |  
|Interest paid                                       |  |           |   |  |           |   |  |           |  
|Income tax paid                                     |  |           |   |  |           |   |  |           |  

(The accompanying notes are an integral part of these consolidated
  financial statements)

F-4

---

|Reg Technologies Inc.                         
|----------------------------------------------
|(A Development Stage Company)                 
|Notes to the Consolidated Financial Statements
|For the Years Ended April 30, 2007 and 2006   
|(Expressed in Canadian dollars)               

|1. | NATURE OF OPERATIONS AND CONTINUANCE OF
        BUSINESS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | Reg Technologies Inc. (the Company)
        is in the business of developing and commercially exploiting an improved
        axial vane type rotary engine known as the Rand Cam/Direct Charge
        Engine and other RandCam applications, such as compressors and pumps
        (the Technology). The worldwide marketing and intellectual
        rights, other than the U.S., are held by the Company, which owns approximately
        6.3 million shares of REGI U.S., Inc. (REGI) (a U.S. public
        company). REGI owns the U. S. marketing and intellectual rights. The Company
        and REGI have a project cost sharing agreement whereby these companies
        each fund 50% of the development of the Technology.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | The Company is still in the development stage.
        These financial statements have been prepared on the basis of a going-concern,
        which contemplates the realization of assets and the satisfaction of liabilities
        in the normal course of business. The Company has not generated any revenues
        from the sale or licensing of the Technology or related applications or
        achieved operational profitability since inception. The Companys
        activities are in the development stage and additional costs for the further
        advancement and application diversification of the Technology must be
        incurred. There is substantial doubt as to the Companys ability
        to generate revenues and to continue as a going-concern. The continuation
        of the Company as a going-concern is dependent on its ability to obtain
        financing and/or the attainment of revenues and profitable operations.
        The Company plans to raise additional capital through debt and/or equity
        financings mainly through the Companys subsidiary, REGI, which has
        an equity line of credit whereby the investor agreed to purchase up to
        $10,000,000 of REGIs common stock. (See Note 5 (f)).
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|2. | SIGNIFICANT ACCOUNTING POLICIES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | [a]                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | [b]                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     

F-5

---

|Reg Technologies Inc.                         
|----------------------------------------------
|(A Development Stage Company)                 
|Notes to the Consolidated Financial Statements
|For the Years Ended April 30, 2007 and 2006   
|(Expressed in Canadian dollars)               

|2. | SIGNIFICANT ACCOUNTING POLICIES(Continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | [c]                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | The Company has adopted Accounting
        Guideline 15, Consolidation of Variable Interest Entities,
        issued by the Canadian Institute of Chartered Accountant (CICA)
        for annual and interim periods beginning on or after November 1, 2004.
        This guideline addresses the application of consolidation principles to
        entities that are subject to control on a basis other than ownership of
        voting interests. The adoption of this guideline did not have any impact
        on the Companys financial statements.                                                                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | [d]                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | The Company considers
        all highly liquid instruments with maturity of three months or less at
        the time of issuance to be cash equivalents.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | [e]                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | The Company accounts for goodwill
        and intangible assets in accordance with CICA 3062, Goodwill
        and Other Intangible Assets. Intangible assets with indefinite
        useful lives are not amortized, but instead tested for impairment at least
        annually by comparing the carrying value to the respective fair value.
        Intangible assets with estimated useful lives are amortized over their
        respective estimated useful lives to their estimated residual values,
        and reviewed for impairment by assessing the recoverability of the carrying
        values. The estimated useful life of the technology and patent protection
        costs is 20 years.                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | [f]                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | Property and equipment
        consists of office furniture and computer hardware recorded at cost and
        amortized on a straight-line basis over a five-year and three-year period,
        respectively.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | [g]                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | The Company accounts for development
        costs in accordance with CICA 3450, Research and Development
        Costs.Amortization of development costs deferred to future
        periods would commence with commercial production or use of the product
        and charged as an expense on a systematic and rational basis by reference
        to the sale or use of the products. Deferred development costs are reviewed
        annually to ensure the criteria, which previously justified the deferral
        of costs, is still being met. When the criteria for deferment continue
        to be met but the amount of deferred development costs that can reasonably
        regarded as assured for recovery through related future revenues, less
        relevant costs, is exceeded by the unamortized balance of such costs,
        the excess is written off as a charge to income of the period.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | [h]                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | The Company monitors the recoverability
        of long-lived assets, based on factors such as current market value, future
        asset utilization, business climate and future undiscounted cash flows
        expected to result from the use of the related assets. The Company's policy
        is to record an impairment loss in the period when it is determined that
        the carrying amount of the assets may not be recoverable. The impairment
        loss is calculated as the amount by which the carrying amount of the assets
        exceeds the undiscounted estimate of future cash flows from the asset.                                                                                                                                                                                                                                                                                        

F-6

---

|Reg Technologies Inc.                         
|----------------------------------------------
|(A Development Stage Company)                 
|Notes to the Consolidated Financial Statements
|For the Years Ended April 30, 2007 and 2006   
|(Expressed in Canadian dollars)               

|2. | SIGNIFICANT ACCOUNTING POLICIES(Continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | [i]                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | [j]                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | [k]                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | The Company follows the asset
        and liability method of accounting for income taxes. Under this method
        of tax allocation, future income tax assets and liabilities are determined
        based on differences between the financial statement carrying values and
        their respective income tax basis (temporary differences). Future income
        tax assets and liabilities are measured using the tax rates expected to
        be in effect when temporary differences are likely to reverse. The effect
        of future income tax assets and liabilities of a change in tax rates is
        included in operations in the period in which the change is enacted or
        substantially assured. The amount of future income tax assets recognized
        is limited to the amount of the benefit that is likely to be realized.                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | [l]                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | Costs of issuing shares are offset against the
      related share proceeds.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | [m]                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | The Company follows the recommendations
        of the CICA Handbook Section 3870, Stock-Based Compensation
        and Other Stock-Based Payments,for accounting for stock-based
        compensation expense. All stock-based payments to directors, employees
        and non-employees, including awards that are direct awards of stock, call
        for settlement in cash or other assets, or stock appreciation rights that
        call for settlement by the issuance of equity instruments, granted on
        or after January 2004 are accounted for using the fair value based method,
        and are recorded as an expense over the vesting period, and a corresponding
        increase in contributed surplus. When stock options are exercised, the
        corresponding fair value previously recorded is transferred from contributed
        surplus to share capital.

F-7

---

|Reg Technologies Inc.                         
|----------------------------------------------
|(A Development Stage Company)                 
|Notes to the Consolidated Financial Statements
|For the Years Ended April 30, 2007 and 2006   
|(Expressed in Canadian dollars)               

|2. | SIGNIFICANT ACCOUNTING POLICIES(Continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | [n]                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | Loss per share is calculated using the weighted
      average number of common shares issued and outstanding during the year,
      taking into account escrowed shares. The Company uses the treasury method
      for calculating diluted earning per share. Stock options and warrants are
      dilutive when average market price of the common shares during the period
      exceeds the exercise price of the options and warrants. However, diluted
      loss per share has not been presented as the effects of potential issuance
      of shares under options and warrants would be anti-dilutive and, therefore,
      basic and diluted loss per share, are the same.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|3. | INTANGIBLE ASSETS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | During the year ended April 30, 2006, the Company
      recorded an impairment loss for the costs of distribution rights for the
      Anuvu fuel cell technology of $245,356.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|4. | SHARE CAPITAL                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | Authorized:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          

|50,000,000 |  | Common shares without par value                                                          
|---------- |  | -----------------------------------------------------------------------------------------
|10,000,000 |  | Preferred shares with a $1 par value, redeemable for common
      shares on the basis of 
|           |  | 1 common share for 2 preferred shares                                                    
|5,000,000  |  | Class A non-voting shares without par value. Special rights
      and restrictions apply.

| |                                                      |  | Number
      of |   |  |            |  
| | ---------------------------------------------------- |  | --------------- | - |  | ---------- | -
| | Common shares issued:                                |  | Shares          |   |  | Amount     |  
| | Balance issued, April 30, 2005                       |  | 22,620,392      |   |  | 11,124,581 |  
| | Issued during the year:                              |  |                 |   |  |            |  
| | Pursuant to the exercise of stock options            |  | 768,750         |   |  | 80,625     |  
| | Pursuant
      to the exercise of warrants           |  | 727,289         |   |  | 181,843    |  
| | Balance, April 30, 2006                              |  | 24,116,431      |   |  | 11,387,049 |  
| | Less: treasury stock
      owned                     |  | (217,422        | ) |  | (43,485    | )
| | Balance issued and
      outstanding, April 30, 2006 |  | 23,899,009      |   |  | 11,343,564 |  
| |                                                      |  |                 |   |  |            |  
| |                                                      |  | Number of       |   |  |            |  
| | Common shares issued:                                |  | Shares          |   |  | Amount     |  
| | Balance issued, April 30, 2006                       |  | 24,116,431      |   |  | 11,387,049 |  
| | Issued during the year:                              |  |                 |   |  |            |  
| | Pursuant
      to the exercise of stock options      |  | 43,750          |   |  | 13,125     |  
| | Balance, April 30, 2007                              |  | 24,160,181      |   |  | 11,400,174 |  
| | Less: treasury stock
      owned                     |  | (217,422        | ) |  | (43,485    | )
| | Balance issued and
      outstanding, April 30, 2007 |  | 23,942,759      |   |  | 11,356,689 |  

| | [a]                                                                                                                                     | Escrowed shares
| | --------------------------------------------------------------------------------------------------------------------------------------- | ---------------
| |                                                                                                                                         |                
| | 93,750 shares are held in escrow, the release
        of which is subject to the direction and determination of regulatory authorities.
| |                                                                                                                                         |                
| | [b]                                                                                                                                     | Treasury shares
| |                                                                                                                                         |                
| | At April 30, 2007, Rand owns 217,422 (2006
         217,422) shares of the Company.                                                   

F-8

---

|Reg Technologies Inc.                         
|----------------------------------------------
|(A Development Stage Company)                 
|Notes to the Consolidated Financial Statements
|For the Years Ended April 30, 2007 and 2006   
|(Expressed in Canadian dollars)               

|4. | SHARE CAPITAL(Continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | [c]                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | The Company has implemented a stock option
        plan (the "Plan") to be administered by the Board of Directors. Pursuant
        to the Plan, the Board of Directors has discretion to grant options for
        up to a maximum of 10% of the issued and outstanding common shares of
        the Company at the date the options are granted. The option price under
        each option shall be not less than the discounted market price on the
        grant date. The expiry date of an option shall be set by the Board of
        Directors at the time the option is awarded, and shall not be more than
        five years after the grant date. No more than 25% of an option may be
        exercised during any 90-day period during the term of the option; and
        each optionee is restricted from selling more than 25% of the shares that
        may be acquired upon exercise of an option during any 90-day period. Options
        granted to consultants engaged in investor relations activities will vest
        in stages over a minimum period of 12 months with no more than 25% of
        the options vesting in any three-month period.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | On October 20, 2005, the Company granted 750,000
        stock options to an officer exercisable at $0.30 per share, up to October
        20, 2010. During the year ended April 30, 2007, the Company charged stock-based
        compensation of $Nil (2006 - $61,173) to operations for the vested fair
        value of these stock options. These options have the following vesting
        schedule:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | [i]                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | [ii]                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | [iii]                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | [iv]                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | The following table summarizes activity under
        the Plan for the years ended April 30, 2006 and 2007:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    

| |                                   |  |           |   |  | Weighted       | 
| | --------------------------------- |  | --------- | - |  | -------------- | 
| |                                   |  |           |   |  | average        | 
| |                                   |  | Number    |   |  | exercise price | 
| |                                   |  | of shares |   |  | $              | 
| | Outstanding, April 30, 2005       |  | 1,187,500 |   |  | 0.15           | 
| | Granted                           |  | 750,000   |   |  | 0.30           | 
| | Exercised                         |  | (768,750  | ) |  | 0.10           | 
| | Outstanding, April 30, 2006       |  | 1,168,750 |   |  | 0.27           | 
| | Exercised                         |  | (43,750   | ) |  | 0.30           | 
| | Outstanding, April
      30, 2007 |  | 1,125,000 |   |  | 0.27           | 

F-9

---

|Reg Technologies Inc.                         
|----------------------------------------------
|(A Development Stage Company)                 
|Notes to the Consolidated Financial Statements
|For the Years Ended April 30, 2007 and 2006   
|(Expressed in Canadian dollars)               

|4. | SHARE CAPITAL(Continued)                                                                              
|-- | ------------------------------------------------------------------------------------------------------
|   |                                                                                                       
|   | [c]                                                                                                   
|   |                                                                                                       
|   | Additional information regarding options outstanding
        at April 30, 2007 and 2006 is as follows:

| |                                                      |  | Exercise |  |   |           |  |   |           | 
| | ---------------------------------------------------- |  | -------- |  | - | --------- |  | - | --------- | 
| |                                                      |  | Price    |  |   |           |  |   |           | 
| | Expiry Date                                          |  | $        |  |   | 2007      |  |   | 2006      | 
| |                                                      |  |          |  |   |           |  |   |           | 
| | September 18, 2008                                   |  | 0.30     |  |   | 100,000   |  |   | 143,750   | 
| | March 4, 2009                                        |  | 0.19     |  |   | 250,000   |  |   | 250,000   | 
| | April 8, 2009                                        |  | 0.14     |  |   | 25,000    |  |   | 25,000    | 
| | October 20, 2010                                     |  | 0.30     |  |   | 750,000   |  |   | 750,000   | 
| |                                                      |  |          |  |   |           |  |   |           | 
| | Options outstanding                                  |  |          |  |   | 1,125,000 |  |   | 1,168,750 | 
| |                                                      |  |          |  |   |           |  |   |           | 
| | Options exercisable                                  |  |          |  |   | 300,000   |  |   | 606,250   | 
| |                                                      |  |          |  |   |           |  |   |           | 
| | Weighted average price
      for options exercisable |  |          |  | $ | 0.27      |  | $ | 0.25      | 

The fair value of each option granted
  was estimated on the grant date using the Black-Scholes option pricing model
  and the weighted average fair value of stock options granted during the year
  ended April 30, 2007 was $Nil (2006 - $0.326) .

The assumptions used in the option pricing
  model were as follows:

| |                                       |  | Year Ended |  |  | Year Ended | 
| | ------------------------------------- |  | ---------- |  |  | ---------- | 
| |                                       |  | April 30,  |  |  | April 30,  | 
| |                                       |  | 2007       |  |  | 2006       | 
| |                                       |  |            |  |  |            | 
| | Expected dividend yield               |  | N/A        |  |  | 0%         | 
| | Risk-free interest rate               |  | N/A        |  |  | 4.21%      | 
| | Expected volatility                   |  | N/A        |  |  | 231%       | 
| | Expected option life
      (in years) |  | N/A        |  |  | 3.0        | 

|5. | SHARE CAPITAL ACTIVITY OF REGI U.S., INC.                                                                               
|-- | ------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                         
|   | The following table summarizes the share capital activities
        of REGI for the years ended April 30, 2006 and 2007:

| |                                                 |  | Number
      of |  |  | Amount     |  
| | ----------------------------------------------- |  | --------------- |  |  | ---------- | -
| | Common shares issued:                           |  | shares          |  |  | US$        |  
| |                                                 |  |                 |  |  |            |  
| | Balance, April 30, 2005                         |  | 23,720,725      |  |  | 5,838,841  |  
| | Stock issued for cash pursuant to:              |  |                 |  |  |            |  
| | Options
      exercised                         |  | 212,000         |  |  | 53,313     |  
| | Warrants exercised                              |  | 406,400         |  |  | 142,240    |  
| | Private placement                               |  | 1,500,000       |  |  | 881,088    |  
| |                                                 |  |                 |  |  |            |  
| | Balance, April 30, 2006                         |  | 25,839,125      |  |  | 6,915,482  |  
| | Shares issued for services                      |  | 29,000          |  |  | 60,000     |  
| | Stock issued for cash pursuant
      to:        |  |                 |  |  |            |  
| | Options exercised                               |  | 662,250         |  |  | 143,938    |  
| | Warrants
      exercised                        |  | 268,833         |  |  | 217,666    |  
| | Private placement                               |  | 120,000         |  |  | 116,496    |  
| | Warrants issued
      for financing (cash-less) |  |                |  |  | (1,561,406 | )
| | Balance, April 30,
      2007                   |  | 26,919,208      |  |  | 5,892,176  |  

F-10

---

|Reg Technologies Inc.                         
|----------------------------------------------
|(A Development Stage Company)                 
|Notes to the Consolidated Financial Statements
|For the Years Ended April 30, 2007 and 2006   
|(Expressed in Canadian dollars)               

|5. | SHARE CAPITAL ACTIVITY OF REGI U.S., INC.(Continued)                                                                                                                                                                                    
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                         
|   | [a]                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                         
|   | [b]                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                         
|   | [c]                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                         
|   | [d]                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                         
|   | [e]                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                         
|   | [f]                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                         
|6. | GAIN ON SHARES ISSUED BY SUBSIDIARY                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                         
|   | During 2007 and 2006, REGI issued shares outside
        the consolidated group. These issuances effectively reduced Rands
        interest in REGI, which resulted in a deemed gain on sale of subsidiarys
        shares as follows:

| |                                                                             |  | 2007    |  |  | 2006    | 
| | --------------------------------------------------------------------------- |  | ------- |  |  | ------- | 
| |                                                                             |  | $       |  |  | $       | 
| | Gain due to ownership of new assets resulting from REGI
      shares issued |  | 147,414 |  |  | 331,949 | 

F-11

---

|Reg Technologies Inc.                         
|----------------------------------------------
|(A Development Stage Company)                 
|Notes to the Consolidated Financial Statements
|For the Years Ended April 30, 2007 and 2006   
|(Expressed in Canadian dollars)               

|7. | PROPERTY AND EQUIPMENT
|-- | ----------------------

| |                                      |  |        |  |  |              |  |  | 2007     |  |  | 2006     | 
| | ------------------------------------ |  | ------ |  |  | ------------ |  |  | -------- |  |  | -------- | 
| |                                      |  |        |  |  | Accumulated  |  |  | Net Book |  |  | Net Book | 
| |                                      |  | Cost   |  |  | Amortization |  |  | Value    |  |  | Value    | 
| |                                      |  | $      |  |  | $            |  |  | $        |  |  | $        | 
| |                                      |  |        |  |  |              |  |  |          |  |  |          | 
| | Computer hardware                    |  | 5,295  |  |  | 677          |  |  | 4,618    |  |  |         | 
| | Office furniture and
      equipment |  | 8,849  |  |  | 736          |  |  | 8,113    |  |  |         | 
| |                                      |  | 14,144 |  |  | 1,413        |  |  | 12,731   |  |  |         | 

|8. | INCOME TAXES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   | The potential benefits of income tax losses are not
        recognized in the accounts until realization is more likely than not.
        As at April 30, 2007, the Company has non-capital losses carried forward
        totalling US$7,745,000 for U.S. tax purposes and $1,881,000 for Canadian
        tax purposes, which expire starting in 2013 and 2007, respectively. The
        Company is required to compute tax asset benefits for net operating losses
        carried forward. The potential benefits of net operating losses have not
        been recognized in these financial statements because the Company cannot
        be assured it is more likely than not it will utilize the net operating
        losses carried forward in future years.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   | A reconciliation of the statutory federal income tax
        rate to the Companys effective tax rate for the years ended April
        30, 2007 and 2006 is as follows:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                

| |                                     |  | Canada  |   |  | United States |  
| | ----------------------------------- |  | ------- | - |  | ------------- | -
| | Statutory federal income tax rate   |  | 34.12%  |   |  | 35%           |  
| | Effect of valuation
      allowance |  | (34.12% | ) |  | (35%          | )
| | Effective income tax rate           |  |        |   |  |              |  

The tax effect (computed by applying
  the federal statutory rates as stated above) of the significant temporary differences,
  which comprise future tax assets and liabilities, are as follows:

| |                                             |   | 2007       |   |   | 2006       |  
| | ------------------------------------------- | - | ---------- | - | - | ---------- | -
| | Future income tax assets (Canadian Dollars) |   |            |   |   |            |  
| | Intangible
      assets                     | $ | 144,000    |   | $ | 148,000    |  
| | Property and equipment                      |   | 70,000     |   |   | 66,000     |  
| | Non-capital loss
      carry forwards       |   | 642,000    |   |   | 692,000    |  
| | Total gross future income tax assets        |   | 856,000    |   |   | 906,000    |  
| | Valuation allowance                         |   | (856,000   | ) |   | (906,000   | )
| | Net future income
      tax asset           | $ |           |   | $ |           |  
| | Future income tax assets (U.S. Dollars)     |   |            |   |   |            |  
| | Non-capital loss carry forwards             | $ | 2,711,000  |   | $ | 2,357,000  |  
| | Total gross future income tax assets        |   | 2,711,000  |   |   | 2,357,000  |  
| | Valuation allowance                         |   | (2,711,000 | ) |   | (2,357,000 | )
| | Net future income tax asset                 | $ |           |   | $ |           |  

F-12

---

|Reg Technologies Inc.                         
|----------------------------------------------
|(A Development Stage Company)                 
|Notes to the Consolidated Financial Statements
|For the Years Ended April 30, 2007 and 2006   
|(Expressed in Canadian dollars)               

|8. | INCOME TAXES(Continued)                                                                                                                                                                                        
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                
|   | The Company and Rand have combined Canadian income tax
        losses of approximately $1,881,000, which are available to reduce Canadian
        taxable income of future years. The losses expire as follows:

2007
      $
      49,0002008
      
      182,0002009
      
      138,0002010
      
      190,0002014
      
      145,0002015
      
      212,0002026
      
      648,0002027
      
      317,000$
      1,881,000


The Companys U.S. subsidiary, REGI,
  has U.S. income tax losses of US$7,745,000, which are available to reduce U.S.
  taxable income of future years. The losses expire as follows:

US$
      
      US$2013
      24,000
      2021
      519,0002014
      394,000
      2022
      182,0002015
      1,008,000
      2023
      72,0002016
      793,000
      2024
      297,0002017
      522,000
      2025
      705,0002018
      606,000
      2026
      775,0002019
      417,000
      2027
      1,002,0002020
      429,000


|   | In assessing the realizability of future tax
        assets, management considers whether it is more likely than not that some
        portion or all of the future tax assets will not be realized. The ultimate
        realization of future tax assets is dependent upon the generation of future
        taxable income during the periods in which those temporary differences
        become deductible. Management considers the scheduled reversal of future
        tax liabilities, projected future taxable income, and tax planning strategies
        in making this assessment. The amount of future tax assets considered
        realizable could change materially in the near term based on future taxable
        income during the carry-forward period.
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|9. | RELATED PARTY TRANSACTIONS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | [a]                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | [b]                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | [c]                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | [d]                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          

F-13

---

|Reg Technologies Inc.                         
|----------------------------------------------
|(A Development Stage Company)                 
|Notes to the Consolidated Financial Statements
|For the Years Ended April 30, 2007 and 2006   
|(Expressed in Canadian dollars)               

|9.  | RELATED PARTY TRANSACTIONS(Continued)                                                                                                                                                                                
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                      
|    | [e]                                                                                                                                                                                                                  
|    |                                                                                                                                                                                                                      
|    | [f]                                                                                                                                                                                                                  
|    |                                                                                                                                                                                                                      
|    | [g]                                                                                                                                                                                                                  
|    |                                                                                                                                                                                                                      
|    | [h]                                                                                                                                                                                                                  
|    |                                                                                                                                                                                                                      
|    | [i]                                                                                                                                                                                                                  
|    |                                                                                                                                                                                                                      
|    | [j]                                                                                                                                                                                                                  
|    |                                                                                                                                                                                                                      
|    | [k]                                                                                                                                                                                                                  
|    |                                                                                                                                                                                                                      
|    | The above noted transactions have been
        in the normal course of operations and, in managements opinion,
        undertaken with the same terms and conditions as transactions with unrelated
        parties.
|10. | COMMITMENTS                                                                                                                                                                                                          
|    |                                                                                                                                                                                                                      
|    | [a]                                                                                                                                                                                                                  
|    |                                                                                                                                                                                                                      
|    |                                                                                                                                                                                                                      
|    |                                                                                                                                                                                                                      
|    |                                                                                                                                                                                                                      
|    |                                                                                                                                                                                                                      
|    |                                                                                                                                                                                                                      
|    | [b]                                                                                                                                                                                                                  
|11. | COMMITMENTS OF REGI US, INC.(IN
        US DOLLARS)                                                                                                                                                                  
|    |                                                                                                                                                                                                                      
|    | [a]                                                                                                                                                                                                                  
|    |                                                                                                                                                                                                                      
|    | [b]                                                                                                                                                                                                                  

F-14

---

|Reg Technologies Inc.                         
|----------------------------------------------
|(A Development Stage Company)                 
|Notes to the Consolidated Financial Statements
|For the Years Ended April 30, 2007 and 2006   
|(Expressed in Canadian dollars)               

|11. | COMMITMENTS OF REGI US, INC.(Continued)                                                                                              
|--- | -------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                      
|    | [c]                                                                                                                                  
|12. | SUBSEQUENT EVENTS                                                                                                                    
|    |                                                                                                                                      
|    | Subsequent to April 30, 2007, REGI US, Inc.
        had the following transactions in U.S. dollars:                                  
|    |                                                                                                                                      
|    | [a]                                                                                                                                  
|    |                                                                                                                                      
|    | [b]                                                                                                                                  
|    |                                                                                                                                      
|    | [c]                                                                                                                                  
|    |                                                                                                                                      
|    | [d]                                                                                                                                  
|    |                                                                                                                                      
|    | [e]                                                                                                                                  
|    |                                                                                                                                      
|    | [f]                                                                                                                                  
|13. | RECONCILIATION OF UNITED STATES AND CANADIAN
        GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (US GAAP AND CANADIAN
        GAAP)
|    |                                                                                                                                      
|    | [a]                                                                                                                                  
|    |                                                                                                                                      
|    |                                                                                                                                      
|    |                                                                                                                                      
|    | [b]                                                                                                                                  
|    |                                                                                                                                      
|    |                                                                                                                                      
|    |                                                                                                                                      
|    | [c]                                                                                                                                  
|    |                                                                                                                                      
|    |                                                                                                                                      
|    |                                                                                                                                      
|    | [d]                                                                                                                                  
|    |                                                                                                                                      
|    |                                                                                                                                      

F-15

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|Reg Technologies Inc.                         
|----------------------------------------------
|(A Development Stage Company)                 
|Notes to the Consolidated Financial Statements
|For the Years Ended April 30, 2007 and 2006   
|(Expressed in Canadian dollars)               

|13. | **RECONCILIATION OF UNITED STATES AND CANADIAN
      GENERALLY ACCEPTED** **ACCOUNTING PRINCIPLES (US GAAP
      AND CANADIAN GAAP)**(Continued)
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                     
|    |                                                                                                                                                     
|    | [e]                                                                                                                                                 
|    |                                                                                                                                                     
|    |                                                                                                                                                     
|    |                                                                                                                                                     
|    | [f]                                                                                                                                                 

| |                                             |  | 2007        |   |  | 2006        |   |  | 2005        |  
| | ------------------------------------------- |  | ----------- | - |  | ----------- | - |  | ----------- | -
| |                                             |  | $           |   |  | $           |   |  | $           |  
| |                                             |  |             |   |  |             |   |  | (Restated)  |  
| | Net income (loss), as determined under      |  |             |   |  |             |   |  |             |  
| | Canadian GAAP                               |  | (519,698    | ) |  | (1,033,398  | ) |  | (5,441,027  | )
| | Stock-based compensation                    |  |            |   |  |            |   |  |            |  
| | Foreign exchange translation                |  |            |   |  |            |   |  | (82,913     | )
| | Donated SERVICES                            |  | (170,700    | ) |  | (178,080    | ) |  | (190,455    | )
| | Non-controlling interest                    |  |            |   |  |            |   |  | (3,288,560  | )
| | Gain on sale of subsidiaries shares        |  |            |   |  |            |   |  | 104,894     |  
| | Gain on issue of subsidiaries
      shares |  |            |   |  |            |   |  | 43,221      |  
| | Impairment loss on development costs        |  |            |   |  |            |   |  | 8,545,324   |  
| | Impairment loss on intangible
      assets  |  |            |   |  |            |   |  | 20,448      |  
| | Development
      costs written-off         |  |            |   |  |            |   |  | (151,939    | )
| |                                             |  |             |   |  |             |   |  |             |  
| | Net loss, as determined under U.S. GAAP     |  | (690,398    | ) |  | (1,211,478  | ) |  | (441,007    | )
| |                                             |  |             |   |  |             |   |  |             |  
| | Deficit accumulated during the development  |  |             |   |  |             |   |  |             |  
| | stage, as determined under
      U.S. GAAP  |  |             |   |  |             |   |  |             |  
| | - Beginning of year                         |  | (13,250,524 | ) |  | (12,039,046 | ) |  | (11,598,039 | )
| | - End of year                               |  | (13,940,922 | ) |  | (13,250,524 | ) |  | (12,039,046 | )
| |                                             |  |             |   |  |             |   |  |             |  
| | Loss per share, weighted average basis      |  |             |   |  |             |   |  |             |  
| | (excluding
      escrowed shares)           |  | (0.03       | ) |  | (0.05       | ) |  | (0.02       | )

| | [g] | Material effects of the different generally accepted
        accounting principles on the Company's balance sheet as at April 30, 2007
        and 2006 are as follows:
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |                                                          |  | 2007       |  |  | 2006       | 
| | -------------------------------------------------------- |  | ---------- |  |  | ---------- | 
| |                                                          |  | $          |  |  | $          | 
| |                                                          |  |            |  |  |            | 
| | Donated capital, as determined in Canada                 |  |           |  |  |           | 
| | Donated services                                         |  | 1,106,520  |  |  | 935,820    | 
| | Increase to donated capital, as determined in the U.S.   |  | 1,106,520  |  |  | 935,820    | 
| | Deficit, ending balance, as determined in Canada         |  | 12,081,099 |  |  | 11,561,401 | 
| | Deficit, as determined in the U.S.                       |  | 13,940,922 |  |  | 13,250,524 | 
| | Net increase to deficit,
      as determined in the U.S. |  | 1,859,823  |  |  | 1,689,123  | 

F-16

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SIGNATURE PAGE

The Registrant hereby certifies that it meets all of the
requirements for filing on Form 20-F and that it has duly caused and
authorized the undersigned to sign this annual report on its behalf.

REG TECHNOLOGIES INC. REGISTRANT

|Dated: October 29, 2007 | By: | /s/
      John G. Robertson 
|----------------------- | --- | ----------------------------
|                        |     | John G. Robertson           
|                        |     | President/Secretary/Director

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