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**UNITED STATES
  SECURITIES AND EXCHANGE COMMISSION**
  Washington, D.C. 20549

FORM 20-FAMENDMENT NO. 2

 ̈ REGISTRATION STATEMENT
  PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934 
  ORx ANNUAL REPORT PURSUANT TO SECTION
  13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 - For the fiscal year ended
  April 30, 2005 
  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)

British Columbia,
Canada(Jurisdiction of incorporation or organization)

1103-11871 Horseshoe WayRichmond, British
Columbia V7A 5H5, Canada(Address of principal executive offices)

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

Securities for which there is a reporting obligation pursuant to
Section 15(d) of the Act: None Indicate the number of outstanding shares of each
of the issuer's class of capital or common stock as of the close of the period
covered by the annual report.

|Title of Each Class               | Outstanding at April 30, 2005
|--------------------------------- | -----------------------------
|Common Shares, no par value       | 22,620,392                   
|Preferred Shares, $1.00 par value | none                         
|Class A, no par value             | none                         

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 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 which financial statement the registrant
  has elected to follow.
  Item 17. x Item 18.  ̈

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TABLE OF CONTENTS

|PART I    |                                                                                     | 4 
|--------- | ----------------------------------------------------------------------------------- | --
|ITEM 1.   | IDENTITY OF DIRECTORS, SENIOR
      MANAGEMENT AND ADVISORS                         | 4 
|ITEM 2.   | OFFER AND STATISTICS AND EXPECTED TIMETABLE                                         | 4 
|ITEM 3.   | KEY INFORMATION                                                                     | 4 
|A.        | SELECTED FINANCIAL DATA                                                             | 4 
|B.        | CAPITALIZATION AND INDEBTEDNESS                                                     | 6 
|C.        | REASON FOR THE OFFER AND USE OF PROCEEDS                                            | 6 
|D.        | RISK FACTORS                                                                        | 6 
|ITEM 4.   | INFORMATION ON THE COMPANY                                                          | 9 
|A.        | HISTORY AND DEVELOPMENT                                                             | 9 
|B.        | BUSINESS OVERVIEW                                                                   | 12
|C.        | ORGANIZATIONAL STRUCTURE                                                            | 19
|D.        | PROPERTY, PLANT AND EQUIPMENT                                                       | 19
|ITEM 5.   | OPERATING AND FINANCIAL
      REVIEW AND PROSPECTS                                  | 19
|A.        | OPERATING RESULTS                                                                   | 19
|B.        | LIQUIDITY AND CAPITAL RESOURCES                                                     | 21
|C.        | RESEARCH AND DEVELOPMENT, PATENTS AND LICENSES,
      ETC                           | 22
|D.        | TREND INFORMATION                                                                   | 23
|ITEM 6.   | DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES                                          | 24
|A.        | DIRECTORS, SENIOR MANAGEMENT
      AND EMPLOYEES                                    | 24
|B.        | COMPENSATION                                                                        | 25
|C.        | BOARD PRACTICES                                                                     | 26
|D.        | EMPLOYEES                                                                           | 27
|E.        | SHARE OWNERSHIP                                                                     | 27
|ITEM 7.   | MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS                                   | 28
|A.        | MAJOR SHAREHOLDERS                                                                  | 28
|B.        | RELATED PARTY TRANSACTIONS                                                          | 28
|C.        | INTERESTS OF EXPERTS AND
      COUNSEL.                                             | 28
|ITEM 8.   | FINANCIAL INFORMATION                                                               | 28
|A.        | CONSOLIDATED STATEMENTS
      AND OTHER FINANCIAL INFORMATION                       | 28
|B.        | SIGNIFICANT CHANGES                                                                 | 29
|ITEM 9.   | THE OFFER AND LISTING                                                               | 29
|ITEM 10.  | ADDITIONAL INFORMATION                                                              | 30
|A.        | SHARE CAPITAL                                                                       | 30
|B.        | MEMORANDUM AND ARTICLES OF ASSOCIATION                                              | 30
|C.        | MATERIAL CONTRACTS                                                                  | 30
|D.        | EXCHANGE CONTROLS                                                                   | 31
|E.        | TAXATION                                                                            | 32
|F.        | DIVIDENDS AND PAYING AGENTS                                                         | 32
|G.        | STATEMENT BY EXPERTS                                                                | 32
|H.        | DOCUMENTS ON DISPLAY                                                                | 32
|I.        | SUBSIDIARY INFORMATION                                                              | 33
|ITEM 11.  | QUANTITATIVE AND QUALITATIVE DISCLOSURES
      ABOUT MARKET RISK                    | 33
|ITEM 12.  | DESCRIPTION OF SECURITIES
      OTHER THAN EQUITY SECURITIES                        | 33
|PART II   |                                                                                     | 33
|ITEM 13.  | DEFAULTS, DIVIDEND ARREARAGES
      AND DELIQUENCIES                                | 33
|ITEM 14.  | MATERIAL MODIFICATIONS TO THE RIGHTS OF
      SECURITY HOLDERS AND USE OF PROCEEDS. | 33
|A.        | MATERIAL MODIFICATIONS TO
      THE RIGHTS OF SECURITY HOLDERS                      | 33
|B.        | USE OF PROCEEDS.                                                                    | 33
|ITEM 15.  | CONTROLS AND PROCEDURES                                                             | 34
|ITEM 16.  | [RESERVED]                                                                          | 34
|ITEM 16A. | AUDIT COMMITTEE FINANCIAL
      EXPERT                                              | 34
|ITEM 16B. | CODE OF ETHICS                                                                      | 34

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|ITEM 16C. | PRINCIPAL ACCOUNTANT FEES
      AND SERVICES                                 | 34
|--------- | ---------------------------------------------------------------------------- | --
|ITEM 16D. | EXEMPTIONS FROM THE LISTING STANDARDS FOR
      AUDIT COMMITTEES             | 35
|ITEM 16E. | PURCHASES OF EQUITY SECURITIES
      BY THE ISSUER AND AFFILIATED PURCHASERS | 35
|PART III  |                                                                              | 35
|ITEM 17.  | FINANCIAL STATEMENTS                                                         | 35
|ITEM 18.  | FINANCIAL STATEMENTS                                                         | 35
|ITEM 19.  | EXHIBITS                                                                     | 35

SIGNATURE      PAGE
  39

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Foreign Private Issuer Status

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.

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.

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, 2005 and 2004, 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, 2005 and 2004 have been audited by Manning
Elliott. The Consolidated Financial Statements are prepared in accordance with
Canadian GAAP. See Note 11 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 29, 2005, US$1.00 was equal to
approximately C$1.2568. 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 the
United States and expressed in Canadian dollars:

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Fiscal Years Ended April 30

2005
    2004
    2003
    2002
    2001Net sales or operating revenues
    -
    -
    -
    -
    -Income (loss) from operations
    397,692)
    (59,924)
    (63,869)
    165,989
    (1,631,759)Income (loss) from continuing 
        operations
    (397,692)
    (59,924)
    (63,869)
    165,989
    (1,631,759)Net income (loss)
    (397,692)
    (59,924)
    (63,869)
    165,989
    (1,631,759)Net income (loss) from 
        operations per share
    (0.02)
    -
    -
    (0.01)
    (0.10)Income (loss) from continuing 
        operations per
      share
    (0.02)
    -
    -
    (0.01)
    (0.10)Total assets
    191,587
    210,882
    210,477
    253,364
    262,443Net assets
    (108,185)
    (57,331)
    (583,285)
    (838,674)
    (1,085,587)Capital stock (excluding long 
        term debt and
      redeemable preferred stock)
    11,038,596
    11,011,046
    10,467,921
    10,467,921
    10,392,920Number of shares as adjusted to 
        reflect
      changes in capital
    22,252,970
    22,101,470
    17,078,371
    17,078,371
    16,578,371Dividends per share
    -
    -
    -
    -
    -Diluted net income per share
    -
    -
    -
    -
    -


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$ 1.2568 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, 2005. 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 August 18, 2005, the Noon Buying Rate was CDN$ 1.2178 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$) | Low
      (CAD$)
|------ | ---- | ----------------- | ----------------
|May    | 2005 | 1.2703            | 1.2373          
|June   | 2005 | 1.2578            | 1.2256          
|July   | 2005 | 1.2437            | 1.2048          
|August | 2005 | 1.2185            | 1.1888          

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.

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Year
    Average
    Low/High
    April 302005
    1.2702
    1.1775/ 1.397
    1.25682004
    1.344
    1.269/1.4221
    1.37112003
    1.5388
    1.4336/1.5963
    1.46632002
    1.5671
    1.5102/1.6128
    1.56812001
    1.5113
    1.4639/1.5790
    1.5360


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, 2005, we had an accumulated deficit of ($11,285,742) in accordance
with U.S. 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 from the 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.

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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.

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,

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the loss of services of one or more of whom could adversely affect our business. In particular, we depend on the abilities and continued participation of Pat Badgley and other key personnel who have been instrumental in bringing the Rand Cam engine
to its present state of development. 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.

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.

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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
- 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

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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, 22,620,392shares
were issued and outstanding as of April 30, 2005 and 22,705,735are outstanding
as at September 9, 2005. 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.

Our head office is located at #1103 -11871 Horseshoe Way,
Richmond, B.C., V7A 5H5, 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 ourself, 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 ourself, 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

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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 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 15.0% 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 50,000,000 common shares. As of April 30, 2005, a
total of 23,764,475 were issued of which 3,700,976 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,
2005 Rand Energy Group Inc. owes Reg Technologies $2,803,664 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 ourself (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 60% of the voting
shares of REGI US, Inc.

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

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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 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 three license agreements with Advanced Ceramics
for 10 H.P. or less for remote piloted vehicles, a license agreement with Radian
MILPARTS for greater than 10 H.P. for military applications and to Rotary Power
International for Generator applications. The agreement with Advanced Ceramics
has terminated due to Phase II funding not being completed. A previous agreement
with Trans Air to test an air conditioning Rand Cam compressor is still
pending. Rotary Power agreement has been terminated due to non payment of
$100,000.

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PRODUCTS AND PROJECTS

Rand Cam Technology Rand Cam Cold Turbine Engine

On May 7, 2003 we announced that Rotary Power International has
been granted a license agreement for the power generator applications. On June
9, 2003 we announced that the license had been extended to December 31, 2003.
The agreement has now lapsed due to non payment of the $100,000.

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.

In May 2004 the Company completed an amended Rand Cam UAV
engine license agreement with Radian, Inc. Radian, Inc. agrees to furnish REGI
U.S., Inc. with a second generation, application specific Rand Cam 42 H.P.
diesel engine at the conclusion of their Phase II study program. The Radian,
Inc. UAV product development program commenced early in 2004. The Phase I/ Study
Rand Cam 42 H.P. diesel engine demonstrated that the engine generates
sufficient pressure and temperature to proceed with the second generation diesel
engine.

On November 3, 2004 we announced that the Canadian Patent was
issued for the Rand Cam Rotary Engine effective October 5, 2004. The term of
the patent is twenty years from the date of the filing on December 11, 1992.

On November 29, 2004, we announced that a world wide license
agreement, excluding the rights for the United States of America that are held
by REGI U.S. for the Rand Cam technology has been successfully completed with
Rand Energy Group Inc. Reg Technologies, Inc., our parent company, has agreed to
pay a 5% net profit interest and make annual payments of $50,000. Reg
Technologies, Inc. will be responsible for 50% of the costs for development and
production of the Rand Cam technology.

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

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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.

Hydrogen Separator

We purchased the rights to the H2O Hydrogen Separator
Technology consisting of a hydrogen separator based, which is a unique system
for extracting hydrogen from water.

In consideration for a 50% interest for the rights to the
Hydrogen Separator Technology Reg Technologies, Inc. (Reg) agrees that we
shall apply for a patent in the U.S. for the Hydrogen Separator Technology at
Regs expense; and Reg agrees to build a prototype of the Hydrogen Separator
Technology as designed by GHM, Inc. We declined the option to purchase an
additional 50% interest. To date, neither patent confirmation nor approval has
been received by Reg.

Ceramic Rand CamTMEngine

In July 2003, the RadMax TM Engine was announced at the AUVSI
Conference Association for Unmanned Vehicle Systems. (AUV) by our licensee
Radian MILPARTS. The announcement stated that plans are in place to start
calibration testing at the Naval Air Systems Command (NAVAIR) Patuxent River, MD
late in the summer. Procedures are written and in place to determine and
document the RadMax  Engines horsepower, its vibration and noise metrics, and
so forth. Following completion of the testing, to be conducted by engineers,
first production units will generally be available by the fall, followed by a
full production run next year.

The announcement further stated that the RadMax  Engine, a
heavy fuel engine that is comprised of only 13 moving parts, is completely
balanced and on all speeds, loads and orientation angles. Without piston valves,
a crankshaft or camshaft it is inherently quiet at 60 dB at 1,500 feet.

We have entered into an agreement with Radian which grants an
exclusive license for the manufacture of the Rand Cam Diesel Engines within the
United States, for applications in Unmanned Autonomous Vehicles (UAV'S) over 10
horsepower, including non-exclusive rights to the worldwide sales for this
application.

In February, 2004 we announced that a REGI U.S. licencee 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
  licencee 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.

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Rand Cam Generator and Fuel Cell Technology

In September 2004 testing had commenced for the Rand Cam
generator application for hybrid electric cars, portable generator application,
and for back up power for family homes. Brian Cherry, our Vice President of the
Rand Cam engine projects and co-inventor of the Rand Cam technology, is
overseeing the development and testing in conjunction with two rotary engine
mechanics with over 10 years experience with the Mazda rotary engine.

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

On June 29, 2005, REGI U.S., Inc. entered into an exclusive
distributor agreement relating to fuel cell technology (the Technology) with
Anuvu Incorporated (Anuvu). Reg Technologies, Inc., agrees to pay $200,000.00
as payment in full for the exclusive Canadian Distributorship for the
Technology. REGI U.S. has an option to pay $300,000 for the exclusive European
rights for the Technology, of which $150,000.00 is to be paid within 90 days
from the date of the Agreement and the final payment of $150,000.00 is to be
paid on or before November 30, 2005 REGI U.S. agrees to issue 200,000 treasury
shares of REGI U.S., Inc. to Anuvu upon confirmation of acceptance of the
European fuel cell technology patents. Anuvu will submit a patent application
for Canada and Europe based on the current fuel cell technology claims set forth
in claims of the U.S. Patents Pending held by Anuvu before the deadline date by
the Patent Office. Patents will be owned by Anuvu and used exclusively in Europe
by REGI during the term of the Agreement. REGI agrees to pay for the patent
application costs and associated legal fees for Europe.

Reg Technologies, Inc. and REGI agree to pay a 5% royalty of
the adjusted gross sales relating to the Technology.

REGI and Reg Technologies, Inc. will receive up to 1,000,000
warrants of Anuvu, based on 2 warrants issued for every $1.00 paid for the
Distribution rights. The warrants enable REGI and Reg Technologies, Inc. the
right to purchase up to 1,000,000 shares of Anuvu for a total of $10,000 for a
period of one year.

Anuvu agrees as follows:

- to give REGI a right of first refusal to purchase Anuvu shares, in the event
    additional shares are to be issued or purchased, for a period of six months;
- to build a working fuel cell model prototype for a vehicle for demonstration
    purposes in Canada and Europe on behalf of Reg Technologies, Inc. and REGI
- to work on the Rand Cam projects as required by Reg Technologies,
    Inc. and REGI, under a contract basis;
- to grant to REGI and Reg Technologies a right of first refusal to exclusively
    use, manufacture, develop, sell, market and distribute products based on new
    patents and applications for patents, improvements, technology, products,
    devices, know-how, inventions, ideas, methods, processes and concepts, which
    are owned or developed by Anuvu and are not included in the Distributorship
    Patents in consideration for 100,000 treasury shares of REGI.

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We believe the companies have a common objective of developing
  a clean burning new source of power for vehicles, which are currently using
  gasoline driven piston engines. We are in the final phase of developing a light
  weight rotary engine that will run on any fuel, including cleaner burning fuels,
  such as hydrogen, propane and natural gas.

Anuvu Fuel Cell Advantages:

- Anuvu recently commenced building 1,100 fuel cell engines for an
  automotive customer.
- The Anuvu fuel cell is Integration-Ready, complete fuel cell systems have
  been integrated into on-road vehicles, boats, off-road vehicles and
  extensively used in driving simulators.
- Anuvu fuel cells exceed goals for DOE weight and volume for mobile
  applications
- Improved stack efficiency and life by liquid cooling each cell for uniform
  temperature control.
- Improved water management technology which allows operation over a broad
  range of gas and humidity conditions, greatly reducing the complexity and cost
  of gas humidification subsystems
- Smaller, lighter, more robust and vibration tolerant
- Carbon-based to reduce catalyst poisoning, increasing cell life
- Lower cost with no precious metals, except a trace amount of platinum
- Designed for high volume manufacturing and consistency of performance

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.

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.

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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 Radian, Inc. and Trans Air Manufacturing. 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 diesel 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 us. However, there is no assurance that the
tests will be successful or that we will ever receive any such royalties.

The following marketing activities are all currently
underway:

AIR CONDITIONING COMPRESSOR - An agreement with Trans Air
Manufacturers has been completed to use the Rand Cam(TM) compressor in air
conditioning units in bus applications. We have delivered a compressor prototype
for testing. We are awaiting test results from Trans Air. Currently, Brian
Cherry, our Vice President of Research and Development, is overseeing the
testing of the air conditioning compressor.

AIR PUMP  A prototype air pump for a Fuel Cell Application has
been completed and will be delivered to the Fuel Cell manufacturer and others.
We plan to build several additional air pumps for demonstration purposes for
other fuel cell uses.

DIESEL ENGINE  We have signed a license agreement with Radian
MILPARTS to further develop our Rand Cam Technology for a 42 horsepower engine.
Our license agreement with Radian calls for a 6% royalty to us and one working
model 42 horsepower diesel engine for our own use for demonstration purposes for
the other commercial applications. The second generation prototype is currently
being completed by Radian.

Dependence on Certain Commercial Agreements

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

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

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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, Reg Tech and 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.

No royalties are to be paid to Alliant or Adiabatics, Inc.

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.

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.

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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.

Material effects of Government

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.

C. ORGANIZATIONAL STRUCTURE

For a list of our significant subsidiaries, see Item 10 
Additional Information  Subsidiary Information.

D. PROPERTY, PLANT AND EQUIPMENT

We own no properties. We currently utilizes office space which
we lease in a commercial business park building located in Richmond, British
Columbia, Canada, a suburb of Vancouver. The monthly rent for our portion of
this office space is $500.00. 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 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 10 to the consolidated financial statements for a
reconciliation to U.S. GAAP. The following discussion is derived from the U.S.
GAAP reconciliation.

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

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undergone mounting losses to date totaling $11,285,742 and
further losses are expected until we complete a licensing agreement with a
manufacturer and reseller. Our working capital deficit is $108,186. 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.

Continuing Operations

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 $398,000 ($0.01 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 $426,000 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 $321,00 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.

Fiscal Year Ended April 30, 2004 compared to Fiscal year
Ended April 30, 2003

Results of Operations

Results of operations resulted in a net loss of $60,000 ($0.00
per share) for 2004 as compared to net loss of $64,000 ($0.00 per share) for
2003.

No revenues from the sale or licensing of any technology were
realized in 2004 or 2003. License agreements with Advanced Ceramics Research,
Inc. and Rotary Power Generation Incorporated were entered into in 2002.

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 gained disposition of 10.5% of its
ownership in this subsidiary.

General and administrative expenses increased by $400,000 to
$897,000 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.

- 20 -

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The Company issued 1,250,000 common shares for $175,000 cash
during the year and issued 3,956,810 common shares to settle related party debt
of $395,682.

Fiscal Year Ended April 30, 2003 compared to Fiscal year
Ended April 30, 2002

Results of Operations

Results of operations resulted in a net loss of $60,000 ($0.01
per share) for 2003 as compared to net income of $166,000 ($0.01 per share) for
2002.

No revenues from the sale or licensing of any technology were
realized in 2003 or 2002. We entered into license agreements with Advanced
Ceramics Research, Inc. and Rotary Power Generation Incorporated in 2002.

In 2003, the Company recognized a loss of $216,000 as a result
of its subsidiary issuing shares outside the consolidated group for cash
proceeds of $476,000 which resulted in a deemed disposition of 16% of its
ownership in the subsidiary. In 2002 there was a gain of $217,000 on proceeds of
$423,000. In 2002 a loss of $30,000 was recognized due to the write-down of the
AVFS rights and development costs as compared to nil in 2003. Administrative
expenses increased by $91,000 to $441,000 in 2003 from $350,000 in 2002. This
increase is a result of services donated to REGI U.S., Inc by directors of the
subsidiary; professional fees decreased by $13,000 to $42,000 in 2003 from
$55,000 in 2002; travel and promotion decreased by $6,000 to $1,000 in 2003 from
$7,000 in 2002.

Research and development expenses increased by $77,000 to
$47,000 spent in 2003 compared to a $30,000 recover in 2002. Technical
consulting continued to consist of Patrick Badgley and Paul LaMarche, resulting
in a decrease of $26,000 to $71,000 in 2003 from $97,000 in 2002. Prototype
development costs of $54,000 were recovered in 2003 compared to $97,000 spent in
2002. Accounts payable of $259,000 were written off during 2002. The majority of
prototype developments are now being borne by the licensees and
manufacturers.

The Company did not issue any common shares during the
year.

B. LIQUIDITY AND CAPITAL RESOURCES

LIQUIDITY AND CAPITAL RESOURCES

In the past, the Company has derived most of its 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. directly
owns 3,320,000 shares of REGI U.S., Inc. with a value of $1.99 million (US) and
Rand Energy Group Inc. owns 3,582,136 shares of REGI U.S. with a value of $2.14
million (US). REGI U.S., Inc. is currently completing a private placement at
US$0.60 for a maximum of 2,000,000 units to raise up to US$1,200,000.

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.

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.

- 21 -

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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. 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.

Fiscal Year Ended April 30, 2004 compared to Fiscal year
Ended April 30, 2003

During the fiscal year ended April 30, 2004, we derived most of
our development and operating capital primarily from the $328,000 in proceeds
received from related companies ($141,000 in 2003).

During the 2004 year, we raised no monies from subscriptions.
Operating capital was derived from the sale of 175,000 shares, as well as the
issuance of our subsidiarys shares totaling $142,000. Funds raised do not
provide enough working capital to fund ongoing operations for the next twelve
months. We may also raise additional funds through the exercise of stock
options, if exercised. Options with respect to 1,325,000 shares at $0.10 per
share may be exercised to net $132,500, if exercised.

Fiscal Year Ended April 30, 2003 compared to Fiscal year
Ended April 30, 2002

During the fiscal year ended April 30, 2003, we derived most of
our development and operating capital primarily from the $141,000 in proceeds
received from related companies ($365,000 in 2002).

During the year, we raised a further $42,000 in subscriptions
received pursuant to private placements in both the Company and its subsidiary,
REGI U.S., Inc. These funds raised do not provide enough working capital to fund
ongoing operations for the next twelve months. We may also raise additional
funds through the exercise of stock options, if exercised. Options with respect
to 1,325,000 shares at $0.10 per share may be exercised to net $132,500, if
exercised.

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 $264,500 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.

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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, 2004.

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)
    2004
    $ -
    -(1)
    2005
    $ -
    -(1)
    2006
    $ -
    -


G. Safe Harbor

This annual report includes "forward-looking statements" within
the meaning of the Private Securities Litigation Reform Act of 1995. Such
forward-looking statements may include conclusions of prefeasibility and
feasibility studies, estimates of future production, capital and operating
costs, prices of silver and gold and other known and unknown risks. These and
other factors and uncertainties may cause material differences from future
results as expressed or implied by these forward looking statements. These
risks, uncertainties and other factors include but are not limited to the risks
involved in the exploration, development and mining business.

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 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 risks and uncertainties include, among others,
the success of our exploration and development activities, environmental and
other regulatory requirements, foreign exchange issues, mineral deposit
estimates and mineral prices, competition by other mining companies, financing
risks, mineral title issues, insider conflicts of interest, political stability
issues, and other risks and uncertainties detailed in this report and from time
to time in our other Securities and Exchange Commission (SEC) filings.

- 23 -

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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, SENIOR MANAGEMENT AND EMPLOYEES

As of April 30, 2005, 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, 2005.

Name
    Position with Registrant
    Term of Office
    Office Held SinceJohn G. Robertson
    President, Secretary and Director
    Annual Shareholders Meeting for
      fiscal 2005
    1982Jennifer Lorette
    Director
    Annual Shareholders Meeting for
      fiscal 2005
    2001James Vandeberg
    Chief Financial Officer and
      Director
    Annual Shareholders meeting for
      fiscal 2005
    2003Susanne Robertson
    Director
    Annual Shareholders meeting for
      fiscal 2005
    1984


Susanne Robertson, a director, is the wife of John Robertson,
our President and a director.

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 G old 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
Communications, Inc. since its formation in December 1994, a U.S. 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

- 24 -

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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 Communications, 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, WA Mr. Vandeberg has been
a director of the Company 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 currently
inactive. He is also a director of IAS Communications, 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. Mr. Vandeberg is also a director of Linux Gold Corp., a British Columbia
company traded on the OTC bulletin board. Mr. Vandeberg is also a director of
Cyber Merchants Exchange, Inc. since May 2001. 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.

B. COMPENSATION

During the year ended April 30, 2005, the aggregate cash
compensation (including salaries, fees, directors' fees, commissions, bonuses
paid for services rendered, and any compensation other than bonuses earned
during the fiscal year, the payment of which was deferred) paid to such
executive officers as a group by us and our subsidiaries for services rendered
was $119,696. Related company advances were $164,267. Total compensation paid to
all employees was $138,478.

Under a three-year Management Agreement entered into on May 1,
1996 between us and SMR Investments Ltd. (SMR), and approved by the TSX
Venture Exchange, SMR, a company owned by Susanne M. Robertson, a director of
the Company and wife of John G. Robertson, receives $2,500 per month for
management services provided to us. This contract is renewable annually after
the initial term ended May 1, 1999.

$12,000 was paid to John G. Robertson, President of the
Company, as a director's fee during the past fiscal year.

During fiscal 2005, $30,000 US was paid to Access Information
  Systems, Inc., 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, for project management services.

- 25 -

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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, 2005 to provide pension, retirement or similar benefits for
our officers or directors.

During the fiscal year ended April 30, 2005, we did not grant
any long-term incentive plans awards to any of our executive officers, directors
or employees.

Additional detailed information regarding compensation shall be
included in the Information Circular for our 2005 annual general meeting, which
was held on October 24, 2005.

During the fiscal year ended April 30, 2005 no new stock
options were granted, 62,500 stock options were exercised and no stock options
expired pursuant to stock option plans.

Total options currently exercisable at the date of this 20-F
are 1,187,500. Of the total amount:

- 750,000 are exercisable at $0.10 per share expiring October 11, 2005;
- 162,500 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.

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

NAME OF
      OPTIONEE
    NUMBER OF OPTIONS
    EXERCISE PRICE
    EXPIRY DATEJohn G. Robertson
    750,000
    $0.10
    October 11, 2005Jennifer Lorette
    50,000
    $0.30
    September 18, 200825,000
    $0.14
    April 8, 2009Susanne Robertson
    250,000
    $0.19
    March 4, 2009James Vandeberg
    50,000
    $0.30
    September 18, 2008TOTAL HELD AS A
      GROUP:
    1,125,000


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
    37,500
    $0.30
    September 18, 2008Monique Van Oord
    25,000
    $0.30
    September 18, 2008TOTAL:
    62,500


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

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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 employees, and
that our future success depends in part on our continued ability to hire,
assimilate and retain qualified personnel.

Our employees do not belong to any labor unions. We have not
been subject to any strikes or other labor disturbances that have interfered
with our operations.

As of April 30, 2005, five part-time employees/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 September 16, 2005:

Shareholder
    Number of
      shares issued and outstanding
    Percentage ownership (1)John G. Robertson (2)
    2,500,199
    11.0%Jennifer Lorette (3)
    83,400
    *Susanne Robertson (4)
    4,888,728
    21.5%James Vandeberg (5)
    50,000
    *


| | (1) | As at September 9, 2005, there were 22,705,735 issued and
      outstanding common shares.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | (2) | Includes 1,118,530 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 750,000 stock options
      which are currently exercisable and in-the-money.
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | (3) | Includes 75,000 stock options which are currently
      in-the-money.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | (4) | SMR Investments Ltd., a company wholly-owned by Susanne
      Robertson, is the beneficial owner of 3,356,807 common shares representing
      15.1% of our outstanding common shares. This amount also includes 250,000
      stock options which are currently exercisable and in-the-money, and
      641,956 share purchase warrants.                                                                                                                                                                                                                                                                                                                             
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | (5) | Includes 50,000 stock options which are currently
      exercisable but not 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.

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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 or foreign government.

As of September 16, 2005, 22,705,735 Common Shares were
outstanding. At such date, and to the knowledge of our directors and senior
officers, no person beneficially owned shares carrying more than 10% of the
voting rights attached to all our shares, other than those persons set out
above.

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

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 2005, 2004 and 2003.

A director's fee of $12,000 was paid to John G. Robertson, our
President, during each of fiscal years 2005, 2004 and 2003.

We had related party advances outstanding of $164,267 at the
April 2005 year-end, compared to $122,148 at the end of our previous fiscal
year. These were unsecured, non-interest bearing and with no fixed terms of
repayment.

During the fiscal year ended April 30, 2005 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, 2005 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.

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.

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B. SIGNIFICANT CHANGES

None.

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*20031stQuarter
      ended July 31/02
    0.13
    0.04
    0.085
    0.072ndQuarter
      ended October 31/02
    0.13
    0.07
    0.09
    0.053rdQuarter
      ended January 31/03
    0.12
    0.06
    0.075
    0.054thQuarter
      ended April 30/03
    0.08
    0.05
    0.065
    0.0420041stQuarter
      ended July 31/03
    0.17
    0.04
    0.165
    0.032ndQuarter
      ended October 31/03
    0.40
    0.15
    0.27
    0.073rdQuarter
      ended January 31/04
    0.27
    0.17
    0.18
    0.124thQuarter
      ended April 30/04
    0.22
    0.14
    0.14
    0.1120051stQuarter
      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
    0.26


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________
  *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.)

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*MonthMarch
    0.68
    0.41
    0.525
    0.33April
    0.435
    0.34
    0.335
    0.26May
    0.43
    0.355
    0.33
    0.26June
    0.405
    0.355
    0.32
    0.265July
    0.50
    0.37
    0.401
    0.28August
    0.49
    0.375
    0.361
    0.30


* 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.)

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.

C. MATERIAL CONTRACTS

On June 29, 2005, our subsidiary, REGI U.S., Inc. entered into
  an exclusive distributor agreement relating to fuel cell technology (the Technology)
  with Anuvu Incorporated (Anuvu). Reg Technologies, Inc., agrees
  to pay $200,000.00 as payment in full for the exclusive Canadian Distributorship
  for the Technology. REGI U.S. has an option to pay $300,000 for the exclusive
  European rights for the Technology, of which $150,000.00 is to be paid within
  90 days from the date of the Agreement and the final payment of $150,000.00
  is to be paid on or before November 30, 2005 REGI U.S. agrees to issue 200,000
  of its treasury shares to Anuvu upon confirmation of acceptance of the European
  fuel cell technology patents. Anuvu will submit a patent application for Canada
  and Europe based on the current fuel cell technology claims set forth in claims
  of the U.S. Patents Pending held by Anuvu before the deadline date by the Patent
  Office. Patents will be owned by Anuvu and used exclusively in Europe by REGI
  U.S. during the term of the Agreement. REGI U.S. agrees to pay for the patent
  application costs and associated legal fees for Europe.

- 30 -

---

Reg Technologies, Inc. and REGI agree to pay a 5% royalty of
  the adjusted gross sales relating to the Technology.

REGI and Reg Technologies, Inc. will receive up to 1,000,000
warrants of Anuvu, based on 2 warrants issued for every $1.00 paid for the
Distribution rights. The warrants enable REGI and Reg Technologies, Inc. the
right to purchase up to 1,000,000 shares of Anuvu for a total of $10,000 for a
period of one year.

Anuvu agrees as follows:

- to give REGI a right of first refusal to purchase Anuvu shares, in the
  event additional shares are to be issued or purchased, for a period of six
  months;
- to build a working fuel cell model prototype for a vehicle for
  demonstration purposes in Canada and Europe on behalf of Reg Technologies,
  Inc. and REGI
- to work on the Rand Cam projects as required by Reg Technologies, Inc.
  and REGI, under a contract basis;
- to grant to REGI and Reg Technologies a right of first refusal to
  exclusively use, manufacture, develop, sell, market and distribute products
  based on new patents and applications for patents, improvements, technology,
  products, devices, know-how, inventions, ideas, methods, processes and
  concepts, which are owned or developed by Anuvu and are not included in the
  Distributorship Patents in consideration for 100,000 treasury shares of REGI.

We believe the companies have a common objective of developing
a clean burning new source of power for vehicles, which are currently using
gasoline driven piston engines. We are in the final phase of developing a light
weight rotary engine that will run on any fuel, including cleaner burning fuels,
such as hydrogen, propane and natural gas.

Anuvu Fuel Cell Advantages:

- Anuvu recently commenced building 1,100 fuel cell engines for an
  automotive customer.
- The Anuvu fuel cell is Integration-Ready, complete fuel cell systems have
  been integrated into on-road vehicles, boats, off-road vehicles and
  extensively used in driving simulators.
- Anuvu fuel cells exceed goals for DOE weight and volume for mobile
  applications
- Improved stack efficiency and life by liquid cooling each cell for uniform
  temperature control.
- Improved water management technology which allows operation over a broad
  range of gas and humidity conditions, greatly reducing the complexity and cost
  of gas humidification subsystems
- Smaller, lighter, more robust and vibration tolerant
- Carbon-based to reduce catalyst poisoning, increasing cell life
- Lower cost with no precious metals, except a trace amount of platinum
- Designed for high volume manufacturing and consistency of performance

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-

- 31 -

---

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.

Withholding

Generally, cash dividends paid by Canadian corporations to
nonresident shareholders are subject to a withholding tax of 25 percent.
However, pursuant to Article X[2] of the Canada-United States tax treaty,
dividends paid to a resident if a company of the United States are only subject
to a 15 percent withholding tax. Further, if the United States resident owns 10
percent or more of the voting shares of the Canadian company paying the
dividends, the withholding tax is reduced to 10 percent. In addition to dividend
withholding, interest paid to United States residents is subject to a 15 percent
withholding tax pursuant to Article XI[2] of the Canada-United States tax
treaty.

Capital Gains

A nonresident purchaser who holds our shares as capital
property will not be subject to tax on capital gains realized on the disposition
of such shares unless such shares are "taxable Canadian property" within the
meaning of the Income Tax Act (Canada) and no relief is afforded under any
applicable tax treaty. Our shares would be taxable Canadian property of a
nonresident purchaser if the nonresident purchaser used the shares in carrying
on a business in Canada or if at any time during the five-year period
immediately preceding the disposition not less than 25 percent of the issued
shares of any class of the Company belonged to the particular purchaser, persons
with whom the purchaser did not deal at arm's length or any combination
thereof.

Holders of our Common Shares should seek independent advice
from their own professional tax advisors with respect to the Canadian Income Tax
consequences arising from the holding of our Common Shares.

F. DIVIDENDS AND PAYING AGENTS

Not applicable.

G. STATEMENT BY EXPERTS.

Not applicable.

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 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.

You may inspect and copy our registration statements, including
their exhibits and schedules, and the reports and other information we file with
the Securities and Exchange Commission in accordance with the Exchange Act at
the public reference facilities maintained by the Securities and Exchange
Commission at Judiciary Plaza, 450 Fifth Street, Room 1024, N.W., Washington,
D.C. 20549 and at the regional offices of the Securities and Exchange Commission
located at Citicorp Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois

- 32 -

---

60661. You may also inspect the registration statements,
including their exhibits and schedules, at the office of the New York Stock
Exchange, Wall Street, New York, New York 10005. Copies of such material may
also be obtained from the Public Reference Section of the Securities and
Exchange Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, at
prescribed rates. You may obtain information regarding the Washington D.C.
Public Reference Room by calling the Securities and Exchange Commission at
1-800-SEC-0330 or by contacting the Securities and Exchange Commission over the
Internet at its website at http://www.sec.gov.

I. SUBSIDIARY INFORMATION.

REGI U.S., Inc. ("REGI U.S.") is a 15.0% 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.

ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK

In May 2003, the FASB issued SFAS No. 150, Accounting for
Certain Financial Instruments with Characteristics of both Liabilities and
Equity. SFAS No. 150 establishes standards for how an issuer classifies and
measures certain financial instruments with characteristics of both liabilities
and equity. It requires that an issuer classify a financial instrument that is
within its scope as a liability (or an asset in some circumstances). The
requirements of SFAS No. 150 apply to issuers classification and measurement of
freestanding financial instruments, including those that comprise more than one
option or forward contract. SFAS No. 150 does not apply to features that are
embedded in a financial instrument that is not a derivative in its entirety.
SFAS No. 150 is effective for financial instruments entered into or modified
after May 31, 2003, and otherwise is effective at the beginning of the first
interim period beginning after June 15, 2003, except for mandatorily redeemable
financial instruments of nonpublic entities. It is to be implemented by
reporting the cumulative effect of a change in an accounting principle for
financial instruments created before the issuance date of SFAS No. 150 and still
existing at the beginning of the interim period of adoption. Restatement is not
permitted. The adoption of this standard did not have a material effect on the
Company s results of operations or financial position.

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

- 33 -

---

ITEM 15. CONTROLS AND PROCEDURES

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 to ensure that material information relating to the Registrant was
made known to others within the company particularly during the period in which
this annual report and accounts were being prepared, and such controls and
procedures were effective to ensure that information required to be disclosed by
the Registrant in the reports that it files or submits under regulatory rules
and securities laws is recorded, processed, summarized and reported, within the
time periods specified. Management of the Registrant recognizes that any
controls and procedures can only provide reasonable assurance, and not absolute
assurance, of achieving the desired control objectives, and management
necessarily was required to apply its judgement in evaluating the cost-benefit
relationship of possible controls and procedures.

Changes in Internal Controls over Financial Reporting.

There were no changes in the Registrant's internal controls
over financial reporting that occurred during the period covered by the annual
report that has materially affected, or is reasonably likely to materially
affect our internal control over financial reporting.

ITEM 16. [RESERVED]

ITEM 16A. AUDIT COMMITTEE FINANCIAL EXPERT

At the time of filing this report, we have determined that John
Robertson serves as the audit committee financial expert.

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 2005.

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:

Type of Services Rendered
      2005 Fiscal Year
        
        (CAD$)
      2004 Fiscal Year
        
        (CAD$)(a) Audit Fees
      19,720
      18,650(b) Audit-Related Fees
      -
      -(c) Tax Fees
      2,000
      2,000(d)
         All Other Fees
      -
      -


- 34 -

---

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 11 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 Manning, Elliott, 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)


- 35 -

---

|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)
|--------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---
|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)
|
|
|

- 36 -

---

|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)
|--------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---
|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 Parent and Subsidiaries of
      the Company                                                                                                                                                  | (9)
|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)                             | (9)
|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)                              | (9)
|
|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)                             | (9)
|13.2      | Certification pursuant
      to Title 18, United States Code, Section 1350 as adopted pursuant to Section
      906 of the Sarbanes-Oxley Act of (James Vandeberg)                                    | (9)

|(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                                          

- 37 -

---

|(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
|(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) | Exhibits filed herewith.                                                                                                 

- 38 -

---

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 transitional report on its behalf.

REG TECHNOLOGIES INC.REGISTRANT

|Dated: June
      30, 2006 | By: | /s/
      John G. Robertson 
|-------------------------- | --- | ----------------------------
|                           |     | John G. Robertson           
|                           |     | President/Secretary/Director

- 39 -

---





Reg Technologies Inc.

Consolidated Financial Statements

For the Years Ended

April 30, 2005 and 2004



---



Auditors Report

To the Shareholders of 
  Reg Technologies Inc.

We have audited the consolidated balance sheets of Reg Technologies
  Inc. as at April 30, 2005 and 2004, and the consolidated statements of loss
  and deficit and cash flows for the years ended April 30, 2005, 2004 and 2003.
  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 generally accepted
  auditing standards used in Canada. 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, 2005 and 2004, and the results of its operations and the changes in
  its cash flows for the years ended April 30, 2005, 2004 and 2003, in accordance
  with generally accepted accounting principles used in Canada.

/s/ Manning Elliott LLP

CHARTERED ACCOUNTANTS

Vancouver, British Columbia

August 19, 2005 except as to Note 12 which is as of February
  28, 2006

Comments by Auditors forU.S. Readers on Canada - U.S. Reporting Conflict

We also conducted our audit in accordance with the Standards
  of the Public Company Accounting Oversight Board (United States). 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. We believe that our audits provide
  a reasonable basis for our opinion.

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
  referred to in Note 1 to the financial statements. Our report to the shareholders
  dated August 19, 2005 is expressed in accordance with Canadian reporting standards,
  which do not permit a reference to such uncertainties in the auditors' report
  when the uncertainties are adequately disclosed in the financial statements.

/s/ Manning Elliott LLP

CHARTERED ACCOUNTANTS

Vancouver, British Columbia

August 19, 2005 except as to Note 12 which is as of February
  28, 2006

---

Reg Technologies Inc. 
  Consolidated Balance Sheets 
  As at April 30, 2005 and 2004 
  (Expressed in Canadian dollars)

|                                                  | 2005        |   | 2004       |  
|------------------------------------------------- | ----------- | - | ---------- | -
|                                                  | $           |   | $          |  
|                                                  |             |   |            |  
|Assets                                            |             |   |            |  
|                                                  |             |   |            |  
|Current Assets                                    |             |   |            |  
|                                                  |             |   |            |  
|Cash                                              | 166,734     |   | 6,589      |  
|Amounts receivable                                | 3,188       |   | 6,469      |  
|Prepaid expenses                                  | 21,664      |   |           |  
|                                                  |             |   |            |  
|                                                  | 191,586     |   | 13,058     |  
|                                                  |             |   |            |  
|Intangible Assets [Note 3]                        | 1           |   | 697,858    |  
|                                                  |             |   |            |  
|Deferred Development Costs                        |            |   | 8,314,164  |  
|                                                  |             |   |            |  
|                                                  | 191,587     |   | 9,025,080  |  
|                                                  |             |   |            |  
|Liabilities                                       |             |   |            |  
|                                                  |             |   |            |  
|Current Liabilities                               |             |   |            |  
|                                                  |             |   |            |  
|Accounts payable and accrued
      liabilities    | 135,505     |   | 146,066    |  
|Due
      to related parties [Note 8]             | 164,267     |   | 122,148    |  
|                                                  | 299,772     |   | 268,214    |  
|                                                  |             |   |            |  
|Non-controlling Interest [Note 6]                 |            |   | 3,140,445  |  
|                                                  |             |   |            |  
|                                                  | 299,772     |   | 3,408,659  |  
|                                                  |             |   |            |  
|Commitments [Note 9]                              |             |   |            |  
|Subsequent Events [Note 10]                       |             |   |            |  
|                                                  |             |   |            |  
|Shareholders Equity (Deficiency)                 |             |   |            |  
|                                                  |             |   |            |  
|Share Capital [Note 4]                            | 11,038,596  |   | 11,011,046 |  
|                                                  |             |   |            |  
|Contributed Surplus                               | 236,977     |   | 45,310     |  
|                                                  |             |   |            |  
|Donated Capital [Note 8[c]]                       | 757,740     |   | 545,410    |  
|                                                  |             |   |            |  
|Deferred Compensation                             | (16,985     | ) | (64,558    | )
|                                                  |             |   |            |  
|Foreign Currency Translation Adjustments [Note 2] | (838,771    | ) | (266,527   | )
|                                                  |             |   |            |  
|Deficit                                           | (11,285,742 | ) | (5,654,260 | )
|                                                  |             |   |            |  
|                                                  | (108,185    | ) | 5,616,421  |  
|                                                  |             |   |            |  
|                                                  | 191,587     |   | 9,025,080  |  

|Approved on behalf of the Board | John G. Robertson         |  | Jennifer Lorette        
|------------------------------- | --------------------------- |  | --------------------------
|                                | John G. Robertson, Director |  | Jennifer Lorette, Director

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

---

Reg Technologies Inc.
  Consolidated Statements of Operations and Deficit 
  For the Years Ended April 30, 2005, 2004 and 2003 
  (Expressed in Canadian dollars)

|                                                                   | 2005        |   | 2004       |   | 2003       |  
|------------------------------------------------------------------ | ----------- | - | ---------- | - | ---------- | -
|                                                                   | $           |   | $          |   | $          |  
|Revenue                                                            |            |   |           |   |           |  
|Operating Expenses                                                 |             |   |            |   |            |  
|Foreign exchange                                                   | 8,229       |   | 5,313      |   | (6,509     | )
|General and administrative(1)                                      | 862,414     |   | 896,848    |   | 497,189    |  
|Impairment loss on development
      costs                         | 8,545,324   |   |           |   |           |  
|Impairment loss on intangible assets (Note
      3)                | 221,830     |   |           |   |           |  
|Mineral property maintenance costs                                 | 18,588      |   | 5,908      |   | 5,908      |  
|                                                                   | 9,656,385   |   | 908,069    |   | 496,588    |  
|Net Loss Before Other Income (Expense)                             | (9,656,385  | ) | (908,069   | ) | (496,588   | )
|Other Income (Expense)                                             |             |   |            |   |            |  
|Gain (loss) on accounts
      payable written-off                  | (41         | ) | 20,694     |   | 1,490      |  
|Gain (loss) on sale of subsidiarys
      shares                   | 345,124     |   | 128,166    |   | (664       | )
|Gain (loss) on issue by
      subsidiary of its own shares outside |             |   |            |   |            |  
|the consolidated
      group [Note 6[a]]                           | 383,130     |   | 472,872    |   | (215,878   | )
|Interest income                                                    | 8,130       |   | 33         |   | 30         |  
|Non-controlling interest [Note 6[b]]                               | 3,288,560   |   | 307,440    |   | 376,743    |  
|Net Income (Loss) for the Year                                     | (5,631,482  | ) | 21,136     |   | (334,867   | )
|Deficit - Beginning of Year                                        | (5,654,260  | ) | (5,675,396 | ) | (5,340,529 | )
|Deficit - End of Year                                              | (11,285,742 | ) | (5,654,260 | ) | (5,675,396 | )
|                                                                   |             |   |            |   |            |  
|                                                                   |             |   |            |   |            |  
|Basic and Diluted Earnings (Loss) Per Share                        | (0.25       | ) |           |   | (0.02      | )
|                                                                   |             |   |            |   |            |  
|Weighted Average Number of Shares Outstanding                      | 22,178,000  |   | 20,317,000 |   | 17,078,000 |  
|                                                                   |             |   |            |   |            |  
|(1)Stock-based compensation is included in the
      following:    |             |   |            |   |            |  
|General
      and administrative                                   | 91,295      |   | 142,530    |   |           |  
|Impairment loss on development
      costs                         | 13,967      |   |           |   |           |  
|                                                                   | 105,262     |   | 142,530    |   |           |  

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

---

Reg Technologies Inc.
  Consolidated Statements of Cash Flows
  For the Years Ended April 30, 2005, 2004 and 2003 
  (Expressed in Canadian dollars)

|                                                           | 2005       |   | 2004     |   | 2003     |  
|---------------------------------------------------------- | ---------- | - | -------- | - | -------- | -
|                                                           | $          |   | $        |   | $        |  
|                                                           |            |   |          |   |          |  
|Operating Activities                                       |            |   |          |   |          |  
|                                                           |            |   |          |   |          |  
|Net income (loss) for
      the year                       | (5,631,482 | ) | 21,136   |   | (334,867 | )
|                                                           |            |   |          |   |          |  
|Items not involving cash                                   |            |   |          |   |          |  
|                                                           |            |   |          |   |          |  
|Amortization
      of deferred compensation and other      | 105,262    |   | 142,530  |   | 25,619   |  
|stock-based compensation                                   |            |   |          |   |          |  
|Non-controlling
      interest                             | (3,288,560 | ) | (307,440 | ) | (376,743 | )
|Loss (gain) on issue
      by subsidiary of its own shares | (383,130   | ) | (472,872 | ) | 215,878  |  
|Loss
      (gain) on accounts payable written off          | 41         |   | (20,694  | ) | (1,490   | )
|Impairment loss on
      intangible assets                 | 221,830    |   |         |   |         |  
|Impairment
      loss on development costs                 | 8,531,357  |   |         |   |         |  
|Donated services                                           | 190,455    |   | 282,114  |   | 288,469  |  
|Loss
      (gain) on sale of subsidiarys shares           | (345,124   | ) | (128,166 | ) | 664      |  
|                                                           |            |   |          |   |          |  
|Changes in non-cash working
      capital items            |            |   |          |   |          |  
|                                                           |            |   |          |   |          |  
|Amounts
      receivable                                   | 3,281      |   | 2,012    |   | 17,445   |  
|Prepaid expenses                                           | (21,664    | ) | (38,185  | ) |         |  
|Accounts payable and accrued liabilities                   | (10,561    | ) | (47,007  | ) | (32,820  | )
|                                                           |            |   |          |   |          |  
|Net Cash Used In Operating Activities                      | (628,295   | ) | (566,572 | ) | (197,845 | )
|                                                           |            |   |          |   |          |  
|Financing Activities                                       |            |   |          |   |          |  
|                                                           |            |   |          |   |          |  
|Shares issued                                              | 73,478     |   | 175,000  |   |         |  
|Subscriptions received                                     |           |   |         |   | 41,723   |  
|Advances from related
      parties                        | 86,442     |   | 328,430  |   | 140,729  |  
|Repayments to related parties                              | (60,041    | ) |         |   |         |  
|Proceeds on sale of marketable
      securities            |           |   |         |   | 3,129    |  
|Proceeds on subsidiarys shares issued                     | 422,269    |   | 142,400  |   |         |  
|Proceeds on sale of subsidiarys shares                    | 450,536    |   |         |   |         |  
|                                                           |            |   |          |   |          |  
|                                                           | 972,684    |   | 645,830  |   | 185,581  |  
|                                                           |            |   |          |   |          |  
|Investing Activities                                       |            |   |          |   |          |  
|                                                           |            |   |          |   |          |  
|Development costs                                          | (139,723   | ) | (149,274 | ) | (64,284  | )
|Patent protection costs                                    | (29,008    | ) | (3,501   | ) | (2,475   | )
|                                                           |            |   |          |   |          |  
|                                                           | (168,731   | ) | (152,775 | ) | (66,759  | )
|                                                           |            |   |          |   |          |  
|Effect of Exchange Rate Changes on Cash                    | (15,513    | ) | 86,224   |   | 84,322   |  
|                                                           |            |   |          |   |          |  
|Increase in Cash and Cash Equivalents                      | 160,145    |   | 12,707   |   | 5,299    |  
|                                                           |            |   |          |   |          |  
|Cash and Cash Equivalents
      - Beginning of Year        | 6,589      |   | (6,118   | ) | (11,417  | )
|                                                           |            |   |          |   |          |  
|Cash and Cash Equivalents
      - End of Year              | 166,734    |   | 6,589    |   | (6,118   | )
|                                                           |            |   |          |   |          |  
|Non-cash Investing and Financing Activities                |            |   |          |   |          |  
|                                                           |            |   |          |   |          |  
|Shares issued to settle debt                               |           |   | 395,682  |   | 442,615  |  
|Shares of subsidiary issued
      for services             | 31,618     |   | 123,593  |   | 25,619   |  
|Shares of subsidiary issued for convertible debenture      |           |   |         |   | 7,475    |  
|                                                           |            |   |          |   |          |  
|Supplemental Disclosures                                   |            |   |          |   |          |  
|                                                           |            |   |          |   |          |  
|Interest paid                                              |           |   |         |   |         |  
|Income tax paid                                            |           |   |         |   |         |  

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

---

Reg Technologies Inc.
  Notes to the Consolidated Financial Statements 
  For the Years Ended April 30, 2005 and 2004 
  (Expressed in Canadian dollars)

|1. | Nature of Operations and Continuance of
        Business                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | 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 over 6.9 million shares of REGI U.S.,
        Inc. (a U.S. public company). REGI U.S., Inc. owns the U.S. marketing
        and intellectual rights. Rand Energy Group Inc. and REGI U.S., Inc. have
        a project cost sharing agreement whereby these companies each fund 50%
        of the development of the Technology. In November 2004, the Company acquired
        from Rand Energy Group Inc. the 100% interest in the rights, title and
        interest in and to the Technology, including all pending and future patent
        applications in respect of the Technology for all countries except the
        United States of America, for consideration of $50,000 per year or 5%
        of net profit, whichever is greater, with payment commencing on November
        22, 2005 until the patents expire on the Technology. As at April 30, 2005,
        Rand Energy Group Inc. owes Reg Technologies $2,809,664 which will be
        fully repaid prior to royalty obligations due and prior to dividends being
        paid to the owners of Rand Energy Group Inc.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | 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s direct investment in
        REGI U.S., Inc., together with its ownership in Rand Energy Group Inc.,
        gives it control over 6,902,000 shares of REGI U.S., Inc., which shares
        had a value of approximately US$4,348,000 as of August 18, 2005. The Company
        can sell, through a registered broker, up to 224,000 shares of REGI U.S.,
        Inc., being 1% of the issued shares, during any 90-day period.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|2. | Significant Accounting Policies                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | [a]                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | [b]                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      

---

Reg Technologies Inc.
  Notes to the Consolidated Financial Statements 
  For the Years Ended April 30, 2005 and 2004 
  (Expressed in Canadian dollars)

|2. | Significant Accounting Policies (continued)
|-- | -------------------------------------------
|   |                                            
|   | [c]                                        
|   |                                            
|   |                                            
|   |                                            
|   | [d]                                        
|   |                                            
|   |                                            
|   |                                            
|   | [e]                                        
|   |                                            
|   |                                            
|   |                                            
|   | [f]                                        
|   |                                            
|   |                                            
|   |                                            
|   | [g]                                        
|   |                                            
|   |                                            
|   |                                            
|   |                                            
|   |                                            
|   |                                            
|   |                                            
|   |                                            
|   |                                            
|   |                                            

---

Reg Technologies Inc.
  Notes to the Consolidated Financial Statements 
  For the Years Ended April 30, 2005 and 2004 
  (Expressed in Canadian dollars)

|2. | Significant Accounting Policies (continued)
|-- | -------------------------------------------
|   |                                            
|   | [h]                                        
|   |                                            
|   |                                            
|   |                                            
|   |                                            
|   |                                            
|   |                                            
|   |                                            
|   |                                            
|   |                                            
|   | [i]                                        
|   |                                            
|   |                                            
|   |                                            
|   | [j]                                        
|   |                                            
|   |                                            
|   |                                            
|   | [k]                                        
|   |                                            
|   |                                            
|   |                                            
|   | [l]                                        
|   |                                            
|   |                                            
|   |                                            
|   | [m]                                        
|   |                                            
|   |                                            

---

Reg Technologies Inc.
  Notes to the Consolidated Financial Statements 
  For the Years Ended April 30, 2005 and 2004 
  (Expressed in Canadian dollars)

|3. | Intangible Assets
|-- | -----------------

| |                                        |      |  |              |  | April 30, |  | April 30, | 
| | -------------------------------------- | ---- |  | ------------ |  | --------- |  | --------- | 
| |                                        |      |  |              |  | 2005      |  | 2004      | 
| |                                        |      |  | Accumulated  |  | Carrying  |  | Carrying  | 
| |                                        | Cost |  | Amortization |  | Value     |  | Value     | 
| |                                        | $    |  | $            |  | $         |  | $         | 
| |                                        |      |  |              |  |           |  |           | 
| | Goodwill                               |     |  |             |  |          |  | 285,313   | 
| | Mineral resource properties            | 1    |  |             |  | 1         |  | 1         | 
| | Technology and patent protection costs |     |  |             |  |          |  | 412,544   | 
| |                                        |      |  |              |  |           |  |           | 
| |                                        |     |  |             |  | 1         |  | 697,858   | 

|   | During the year, the Company recorded an
        impairment loss for the goodwill and the technology and patent protection
        costs of $221,830 due to the uncertainty about cash flows from the patented
        technology.
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                   
|4. | Share Capital                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                   
|   | Authorized:                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                   
|   | 50,000,000                                                                                                                                                                                                                        
|   | 10,000,000                                                                                                                                                                                                                        
|   | 5,000,000                                                                                                                                                                                                                         

| |                                                          |            |   | Value      |  
| | -------------------------------------------------------- | ---------- | - | ---------- | -
| | Common shares issued:                                    | #          |   | $          |  
| | Issued and outstanding as at April 30, 2003              | 17,078,371 |   | 10,467,921 |  
| | Issued during the year                                   |            |   |            |  
| | To settle related party debt                             | 3,956,810  |   | 395,682    |  
| | For cash pursuant to a private placement                 | 1,000,000  |   | 150,000    |  
| | For cash pursuant to the exercise of stock options       | 250,000    |   | 25,000     |  
| | April 30, 2004                                           | 22,285,181 |   | 11,038,603 |  
| | Less treasury stock owned                                | (183,711   | ) | (27,557    | )
| | Issued and outstanding as at April 30, 2004              | 22,101,470 |   | 11,011,046 |  
| | For cash pursuant to the exercise of stock
      options | 62,500     |   | 9,750      |  
| | For cash pursuant
      to the exercise of warrants      | 272,711    |   | 63,728     |  
| | April 30, 2005                                           | 22,436,681 |   | 11,084,524 |  
| | Less treasury stock
      owned                          | (183,711   | ) | (45,928    | )
| | Issued and outstanding as at April 30, 2005              | 22,252,970 |   | 11,038,596 |  

|   | [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]                       | Debt settlement                                                                                                                                                       
|   |                           |                                                                                                                                                                       
|   |                           | On June 4, 2003, the Company issued 3,956,810 common
        shares at a fair value of $0.10 per share to settle related party debt
        in the amount of $395,682.
|   |                           |                                                                                                                                                                       
|4. | Share Capital (continued)
|   |                           |                                                                                                                                                                       
|   | [c]                       | Private placement                                                                                                                                                     

---

Reg Technologies Inc.
  Notes to the Consolidated Financial Statements 
  For the Years Ended April 30, 2005 and 2004 
  (Expressed in Canadian dollars)

| |     | The Company issued 1,000,000 units at $0.15 per unit
        and raised $150,000 in October, 2003. Each unit contained one common share
        and one warrant to acquire one additional share at $0.20 for a one year
        period expiring September 22, 2004 and $0.25 during the second year expiring
        September 22, 2005.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | [d] | Treasury shares                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |     | The Companys subsidiary, Rand Energy Group
        Inc. (Rand), purchased 183,711 units of the private placement
        discussed in [c] above for $27,557. In addition, Rand exercised its warrants
        and received 183,711 shares for $45,927 in December, 2004. At April 30,
        2005 a total of 367,422 treasury shares were owned by Rand.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | [e] | Stock options                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |     | 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 Directors 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 one-quarter
        of the options vesting in any three-month period.
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |     | The following table summarizes activity under the
        Plan for the years April 30, 2005 and 2004:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  

| |                                             |           |   | Weighted | 
| | ------------------------------------------- | --------- | - | -------- | 
| |                                             |           |   | average  | 
| |                                             |           |   | exercise | 
| |                                             | Number    |   | price    | 
| |                                             | of shares |   | $        | 
| |                                             |           |   |          | 
| | Outstanding, April 30, 2003                 | 1,325,000 |   | 0.10     | 
| | Granted                                     | 775,000   |   | 0.22     | 
| | Exercised                                   | (250,000  | ) | 0.10     | 
| | Expired                                     | (600,000  | ) | 0.15     | 
| |                                             |           |   |          | 
| | Outstanding, April 30, 2004                 | 1,250,000 |   | 0.15     | 
| | Exercised                                   | (62,500   | ) | 0.16     | 
| |                                             |           |   |          | 
| | Outstanding and exercisable, April 30, 2005 | 1,187,500 |   | 0.15     | 

---

Reg Technologies Inc.
  Notes to the Consolidated Financial Statements 
  For the Years Ended April 30, 2005 and 2004 
  (Expressed in Canadian dollars)

|4. | Share Capital (continued)
|-- | -------------------------
|   |                          
|   | [e]                      
|   |                          
|   |                          

| |                | Outstanding | Exercisable 
| | -------------- | ----------- | ------------
| |                |             | Weighted    
| |                |             | average     
| |                |             | remaining   
| | Exercise price | Number of   | contractual 
| | $              | shares      | life (years)
| |                |             |             
| | 0.10           | 750,000     | 0.5         
| | 0.30           | 162,500     | 3.4         
| | 0.19           | 250,000     | 3.8         
| | 0.14           | 25,000      | 3.9         
| |                |             |             
| |                | 1,187,500   | 1.6         

In 2004, 775,000 stock options were
  granted with fair values ranging from $0.01 to $0.13 per option and $18,938
  was recorded as stock-based compensation, with $26,372 recorded as deferred
  compensation and expensed in 2005. The fair value of each option granted was
  estimated on the grant date using the Black-Scholes option pricing model with
  the following assumptions:

| | Interest rate            | 3.12%-4.02%
| | ------------------------ | -----------
| | Expected life (in years) | 5          
| | Expected volatility .    | 35%        
| | Expected dividend yield  | 0%         

| | [f] | Share purchase warrants                                                         
| | --- | --------------------------------------------------------------------------------
| |     |                                                                                 
| |     | The following table summarizes the continuity of
        the Companys warrants:

| |                                                 |           |   | Weighted | 
| | ----------------------------------------------- | --------- | - | -------- | 
| |                                                 |           |   | average  | 
| |                                                 |           |   | exercise | 
| |                                                 | Number    |   | price    | 
| |                                                 | of shares |   | $        | 
| |                                                 |           |   |          | 
| | Outstanding, April 30, 2003                     |          |   |         | 
| | Issued with private
      placement (Note 4(c)) | 1,000,000 |   | 0.20     | 
| |                                                 |           |   |          | 
| | Outstanding, April 30, 2004                     | 1,000,000 |   | 0.20     | 
| | Exercised                                       | (272,711  | ) | 0.23     | 
| |                                                 |           |   |          | 
| | Outstanding, April 30, 2005                     | 727,289   |   | 0.25     | 

The 727,289 warrants outstanding at
  April 30, 2005 entitle the holder to purchase one common share each at $0.25
  per share expiring September 22, 2005.

Subsequent to year-end, 85,343 warrants
  were exercised, see Note 10[d].

---

Reg Technologies Inc.
  Notes to the Consolidated Financial Statements 
  For the Years Ended April 30, 2005 and 2004 
  (Expressed in Canadian dollars)

|5. | Share Capital Activity of REGI U.S., Inc.
|-- | -----------------------------------------

| |                                               |            |  | Value     | 
| | --------------------------------------------- | ---------- |  | --------- | 
| | Common shares issued:                         | #          |  | US$       | 
| |                                               |            |  |           | 
| | April 30, 2003                                | 17,687,935 |  | 5,102,299 | 
| |                                               |            |  |           | 
| | Stock issued for cash-private
      placement | 173,120    |  | 25,968    | 
| | Stock issued for services                     | 400,000    |  | 92,000    | 
| | Stock issued to settle
      debt             | 3,320,000  |  | 166,000   | 
| | Stock issued for cash pursuant to:            |            |  |           | 
| | Options
      exercised                       | 100,000    |  | 20,000    | 
| | Warrants exercised                            | 550,000    |  | 86,000    | 
| |                                               |            |  |           | 
| | April 30, 2004                                | 22,231,055 |  | 5,492,267 | 
| |                                               |            |  |           | 
| | Stock issued for services                     | 150,000    |  | 24,000    | 
| | Stock issued for cash pursuant
      to:      |            |  |           | 
| | Options exercised                             | 133,750    |  | 29,750    | 
| | Warrants
      exercised                      | 173,120    |  | 34,624    | 
| | Warrants exercised                            | 1,032,800  |  | 258,200   | 
| |                                               |            |  |           | 
| | April 30, 2005                                | 23,720,725 |  | 5,838,841 | 

| | [a] | 3,320,000 shares, having an approximate undiscounted
        fair market value as at August 18, 2005 of US$2,091,600, were owned by
        the Company as at April 30, 2005.                                                                                                                                                                                                                                                                                                      
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | [b] | Approximately 3,500,000 shares, having an approximate
        undiscounted fair market value as at August 18, 2005 of US$2,205,000,
        were owned by Rand Energy Group Inc. as at April 30, 2005. The Company
        owns 51% of Rand Energy Group Inc.                                                                                                                                                                                                                      
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | [c] | A total of 1,612,750 shares are reserved for the
        exercise of stock options, exercisable at a weighted average price of
        US$0.26 per share with a weighted average remaining life of 2.25 years.                                                                                                                                                                                                                                                                     
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | [d] | Private Placement                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |     | On December 24, 2004, REGI U.S., Inc. closed a private
        placement offering for 1,032,800 units at a purchase price of US$0.25
        per unit for total cash proceeds of US$258,200. Each unit consisted of
        one common share of REGI U.S., Inc. and one-half non-transferable share
        purchase warrant. Each two one-half warrants may be exercised within one
        year of the date of issuance to the purchaser at a price of US$0.35 per
        share.
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | [e] | As at April 30, 2005, 516,400 share purchase warrants
        were outstanding. Each two one-half warrants may be exercised at a price
        of US$0.35 per share, expiring on December 24, 2005.                                                                                                                                                                                                                                                                                

---

Reg Technologies Inc.
  Notes to the Consolidated Financial Statements 
  For the Years Ended April 30, 2005 and 2004 
  (Expressed in Canadian dollars)

|6. | Non-Monetary Transactions
|-- | -------------------------
|   |                          
|   | [a]                      
|   |                          
|   |                          

| |                                                   | 2005    |   | 2004     |  
| | ------------------------------------------------- | ------- | - | -------- | -
| |                                                   | $       |   | $        |  
| |                                                   |         |   |          |  
| | Value received on issuance of shares              | 426,351 |   | 670,377  |  
| | Less net book value
      of interest deemed sold | (43,221 | ) | (197,505 | )
| |                                                   |         |   |          |  
| | Monetary Gain (Loss)                              | 383,130 |   | 472,872  |  

| | [b] | Non-controlling interest
| | --- | ------------------------

| |                                                                                   | 2005       |   | 2004      |  
| | --------------------------------------------------------------------------------- | ---------- | - | --------- | -
| |                                                                                   | $          |   | $         |  
| | Non-controlling interest - beginning of year                                      | 3,140,445  |   | 3,020,985 |  
| | Non-controlling interest
      - end of year                                      |           |   | 3,140,445 |  
| | Increase (decrease) in non-controlling interest                                   | (3,140,445 | ) | 119,460   |  
| | Components of the increase (decrease) in non-controlling interest:                |            |   |           |  
| | [i]     non-controlling
      interest in subsidiaries net results of operations | (3,288,560 | ) | (307,440  | )
| | [ii]    net book value of REGI U.S., Inc. deemed
      sold [Note 6[a]]           | 43,221     |   | 197,505   |  
| | [iii]   net book value of REGI U.S., Inc. shares
      sold                       | 104,894    |   | 229,395   |  
| |                                                                                   | (3,140,445 | ) | 119,460   |  

|7. | 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, 2005, the Company has non-capital losses carried forward
        totalling US$5,433,000 for U.S. tax purposes and $1,543,000 for Canadian
        tax purposes, which expire starting in 2013 and 2006, 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 year ended April
        30, 2005 and 2004 is as follows:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 

| |                                     | Canada | United States
| | ----------------------------------- | ------ | -------------
| | Statutory federal income tax rate   | 36%    | 35%          
| | Effect of valuation
      allowance | (36%)  | (35%)        
| | Effective income tax rate           |       |             

---

Reg Technologies Inc.
  Notes to the Consolidated Financial Statements 
  For the Years Ended April 30, 2005 and 2004 
  (Expressed in Canadian dollars)

|7. | Income Taxes (continued)                                                                                                                                                                                     
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                              
|   | 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:

| |                                      |   | 2005       |   |   | 2004       |  
| | ------------------------------------ | - | ---------- | - | - | ---------- | -
| | Future income tax assets             |   |            |   |   |            |  
| | Intangible assets                    | $ | 155,000    |   | $ | 155,000    |  
| | Property
      and equipment         |   | 69,000     |   |   | 70,000     |  
| | Non-capital loss carry forwards      |   | 2,948,000  |   |   | 3,107,000  |  
| | Total gross future income tax assets |   | 3,172,000  |   |   | 3,332,000  |  
| | Valuation allowance                  |   | (3,172,000 | ) |   | (3,332,000 | )
| | Net future income tax asset          | $ |           |   | $ |           |  

The Company and Rand Energy Group Inc.
  have combined Canadian income tax losses of approximately $1,543,000, which
  are available to reduce Canadian taxable income of future years. The losses
  expire as follows:

$
      
      
      $2006
      268,000
      
      2010
      190,0002007
      229,000
      
      2014
      145,0002008
      361,000
      
      2015
      212,0002009
      138,000


The Companys U.S. subsidiary, REGI
  U.S., Inc., has U.S. income tax losses of US$5,433,000, which are available
  to reduce U.S. taxable income of future years. The losses expire as follows:

US$
      
      
      US$2013
      23,000
      
      2020
      429,0002014
      393,000
      
      2021
      518,0002015
      1,007,000
      
      2022
      153,0002016
      792,000
      
      2023
      17,0002017
      521,000
      
      2024
      258,0002018
      605,000
      
      2025
      300,0002019
      417,000


In assessing the realizability of future
  tax assets, management considers whether it is more likely than not that some
  portion of 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 asset considered realizable could change materially in the near
  term based on future taxable income during the carry forward period.

---

Reg Technologies Inc.
  Notes to the Consolidated Financial Statements 
  For the Years Ended April 30, 2005 and 2004 
  (Expressed in Canadian dollars)

|8.  | Related Party Transactions                                                                                                                                                                                           
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                      
|    | [a]                                                                                                                                                                                                                  
|    |                                                                                                                                                                                                                      
|    | [b]                                                                                                                                                                                                                  
|    |                                                                                                                                                                                                                      
|    | [c]                                                                                                                                                                                                                  
|    |                                                                                                                                                                                                                      
|    | [d]                                                                                                                                                                                                                  
|    |                                                                                                                                                                                                                      
|    | [e]                                                                                                                                                                                                                  
|    |                                                                                                                                                                                                                      
|    | 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.
|    |                                                                                                                                                                                                                      
|9.  | Commitments                                                                                                                                                                                                          
|    |                                                                                                                                                                                                                      
|    | [a]                                                                                                                                                                                                                  
|    |                                                                                                                                                                                                                      
|    |                                                                                                                                                                                                                      
|    |                                                                                                                                                                                                                      
|    |                                                                                                                                                                                                                      
|    |                                                                                                                                                                                                                      
|    |                                                                                                                                                                                                                      
|    |                                                                                                                                                                                                                      
|    | [b]                                                                                                                                                                                                                  
|    |                                                                                                                                                                                                                      
|    | [c]                                                                                                                                                                                                                  
|    |                                                                                                                                                                                                                      
|10. | Subsequent Events                                                                                                                                                                                                    
|    |                                                                                                                                                                                                                      
|    | [a]                                                                                                                                                                                                                  
|    |                                                                                                                                                                                                                      
|    | [b]                                                                                                                                                                                                                  

---

Reg Technologies Inc.
  Notes to the Consolidated Financial Statements 
  For the Years Ended April 30, 2005 and 2004 
  (Expressed in Canadian dollars)

|10. | Subsequent Events (continued)                                                                                                        
|--- | -------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                      
|    | [c]                                                                                                                                  
|    |                                                                                                                                      
|    |                                                                                                                                      
|    |                                                                                                                                      
|    | [d]                                                                                                                                  
|    |                                                                                                                                      
|    | [e]                                                                                                                                  
|    |                                                                                                                                      
|    | [f]                                                                                                                                  
|    |                                                                                                                                      
|11. | Reconciliation of United States and Canadian
        Generally Accepted Accounting Principles (US GAAP and Canadian
        GAAP)
|    |                                                                                                                                      
|    | The material differences between Canadian
        GAAP and US GAAP are as follows:                                                   
|    |                                                                                                                                      
|    | [a]                                                                                                                                  
|    |                                                                                                                                      
|    |                                                                                                                                      
|    |                                                                                                                                      
|    |                                                                                                                                      
|    |                                                                                                                                      
|    | [b]                                                                                                                                  
|    |                                                                                                                                      
|    |                                                                                                                                      
|    |                                                                                                                                      
|    | [c]                                                                                                                                  
|    |                                                                                                                                      
|    |                                                                                                                                      
|    |                                                                                                                                      
|    | [d]                                                                                                                                  
|    |                                                                                                                                      
|    |                                                                                                                                      

---

Reg Technologies Inc. 
  Notes to the Consolidated Financial Statements 
  For the Years Ended April 30, 2005 and 2004 
  (Expressed in Canadian dollars)

|11. | Reconciliation of United States and Canadian
        Generally Accepted Accounting Principles (US GAAP and
|--- | ------------------------------------------------------------------------------------------------------------
|    |                                                                                                             
|    | [e]                                                                                                         

| |                                            |  | (Restated  |   |  | (Restated  |   |  | (Restated  |  
| | ------------------------------------------ |  | ----------- | - |  | ----------- | - |  | ----------- | -
| |                                            |  | Note 12)    |   |  | Note 12)    |   |  | Note 12)    |  
| |                                            |  | 2005        |   |  | 2004        |   |  | 2003        |  
| |                                            |  | $           |   |  | $           |   |  | $           |  
| | Net income (loss), as determined under     |  |             |   |  |             |   |  |             |  
| | Canadian GAAP                              |  | (5,631,482  | ) |  | 21,136      |   |  | (334,867    | )
| | Stock-based compensation                   |  |            |   |  | (3,500      | ) |  |            |  
| | Foreign exchange translation               |  | (82,913     | ) |  | (165,111    | ) |  | 55,500      |  
| | Non-controlling interest                   |  | (3,288,560  | ) |  | (307,440    | ) |  | (376,743    | )
| | Gain on sale of subsidiarys
      shares  |  | 104,894     |   |  | 229,395     |   |  | 3,793       |  
| | Gain on issue of subsidiarys shares       |  | 43,221      |   |  | 197,505     |   |  | 691,587     |  
| | Impairment loss on development
      costs |  | 8,545,323   |   |  |            |   |  |            |  
| | Impairment loss on intangible assets       |  | 20,449      |   |  |            |   |  |            |  
| | Development costs written-off              |  | (151,939    | ) |  | (197,020    | ) |  | (47,639     | )
| | Net income (loss), as determined under US  |  |             |   |  |             |   |  |             |  
| | GAAP                                       |  | (441,007    | ) |  | (225,035    | ) |  | (8,369      | )
| | Deficit accumulated during the development |  |             |   |  |             |   |  |             |  
| | stage, as determined under
      US GAAP   |  |             |   |  |             |   |  |             |  
| | - Beginning of year                        |  | (11,598,039 | ) |  | (11,373,004 | ) |  | (11,364,635 | )
| | - End of year                              |  | (12,039,046 | ) |  | (11,598,039 | ) |  | (11,373,004 | )
| | Loss per share, weighted average basis     |  |             |   |  |             |   |  |             |  
| | (excluding escrowed shares)                |  | (0.02       | ) |  | (0.01       | ) |  | (0.01       | )

| | [f] | Material effects of the different generally accepted
        accounting principles on the Company's balance sheet as at April 30, 2005
        and 2004 are as follows:
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |                                                                  |  | 2005       |   |  | 2004       |  
| | ---------------------------------------------------------------- |  | ---------- | - |  | ---------- | -
| |                                                                  |  | $          |   |  | $          |  
| | Deferred development costs, as determined in
      Canada        |  |           |   |  | 8,314,164  |  
| | Deferred development
      costs, as determined in the U.S.      |  |           |   |  |           |  
| | Increase to deficit as determined in the U.S.                    |  |           |   |  | 8,314,164  |  
| | Intangible assets and mineral resource properties, as determined |  |            |   |  |            |  
| | in Canada                                                        |  | 1          |   |  | 697,858    |  
| | Intangible assets and mineral resource properties, as determined |  |            |   |  |            |  
| | in
      the U.S.                                                |  | 1          |   |  | 197,825    |  
| | Increase to deficit
      as determined in the U.S.              |  |           |   |  | 500,033    |  
| | Non-controlling interest, as determined in
      Canada          |  |           |   |  | (3,140,445 | )
| | Non-controlling interest,
      as determined in the U.S.        |  |           |   |  |           |  
| | Decrease to deficit as determined in the U.S.                    |  |           |   |  | (3,140,445 | )
| | Stock based compensation, as determined in Canada                |  | 219,597    |   |  | 45,310     |  
| | Stock based compensation, as determined in the U.S.              |  | (219,597   | ) |  | (48,810    | )
| | Increase (decrease)
      to deficit as determined in the U.S.   |  |           |   |  | 3,500      |  
| | Deficit, as determined in Canada                                 |  | 11,285,742 |   |  | 5,654,260  |  
| | Deficit, as determined
      in the U.S.                         |  | 12,039,046 |   |  | 11,598,039 |  
| | Net increase to deficit as determined in the U.S.                |  | 753,304    |   |  | 5,943,779  |  

---

Reg Technologies Inc. 
  Notes to the Consolidated Financial Statements 
  For the Years Ended April 30, 2005 and 2004 
  (Expressed in Canadian dollars)

|12. | Restatement                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|    | The Company has restated Note 11[e] of its financial
        statements for the years ended April 30, 2005, 2004 and 2003. The net
        loss as determined under US GAAP was revised for each of those years due
        to certain reconciling items being corrected to get to US GAAP net loss
        from Canadian GAAP net loss. The errors in each reconciling item was due
        to the fact that an incorrect version of supporting reconciling information
        was inadvertently used to complete the table. Each line item and its affect
        on US GAAP net loss as previously reported is as follows:

| |                                                   |  | 2005       |   |  | 2004     |   |  | 2003    |  
| | ------------------------------------------------- |  | ---------- | - |  | -------- | - |  | ------- | -
| |                                                   |  | $          |   |  | $        |   |  | $       |  
| | Net loss for the year as determined under US GAAP |  |            |   |  |          |   |  |         |  
| | as previously reported                            |  | (397,692   | ) |  | (59,924  | ) |  | (63,869 | )
| | Correction affecting net loss:                    |  |            |   |  |          |   |  |         |  
| | Foreign exchange translation                      |  | (82,913    | ) |  | (165,111 | ) |  | 55,500  |  
| | Impairment loss on intangible assets              |  | 20,449     |   |  |         |   |  |        |  
| | Non-controlling interest adjustment               |  | 1,230,637  |   |  |         |   |  |        |  
| | Impairment loss on development costs              |  | (1,251,084 | ) |  |         |   |  |        |  
| | Development costs written-off                     |  | 39,596     |   |  |         |   |  |        |  
| | Net loss for the year as determined under US GAAP |  |            |   |  |          |   |  |         |  
| | restated                                          |  | (441,007   | ) |  | (225,035 | ) |  | (8,369  | )

There was no change to the net loss per
  share for the years ended April 30, 2005 and 2003. The net loss per share for
  the year ended April 30, 2004 increased by $0.01 per share from nil to $0.01
  per share.

---