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**UNITED STATESSECURITIES AND EXCHANGE COMMISSION** Washington, D.C. 20549

FORM 20-F

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

OR

**x******ANNUAL
  REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended**April 30, 2004**

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, 2004******
|---------------------------------- | -------------------------------------
|Common Shares, no par value        | 22,101,470                           
|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         |                                                                                     | 3 
|-------------- | ----------------------------------------------------------------------------------- | --
|ITEM 1.        | IDENTITY OF DIRECTORS, SENIOR MANAGEMENT
      AND ADVISORS                         | 3 
|ITEM 2.        | OFFER AND STATISTICS AND EXPECTED TIMETABLE                                         | 3 
|ITEM 3.        | KEY INFORMATION                                                                     | 3 
|A.             | SELECTED FINANCIAL DATA                                                             | 3 
|B.             | CAPITALIZATION AND INDEBTEDNESS                                                     | 5 
|C.             | REASON FOR THE OFFER AND USE OF PROCEEDS                                            | 5 
|D.             | RISK FACTORS                                                                        | 5 
|ITEM 4.        | INFORMATION ON THE COMPANY                                                          | 8 
|A.             | HISTORY AND DEVELOPMENT                                                             | 8 
|B.             | BUSINESS OVERVIEW                                                                   | 10
|C.             | ORGANIZATIONAL STRUCTURE                                                            | 16
|D.             | PROPERTY, PLANT AND EQUIPMENT                                                       | 16
|ITEM 5.        | OPERATING AND FINANCIAL REVIEW AND PROSPECTS                                        | 16
|A.             | OPERATING RESULTS                                                                   | 16
|B.             | LIQUIDITY AND CAPITAL RESOURCES                                                     | 17
|C.             | RESEARCH AND DEVELOPMENT, PATENTS AND LICENSES,
      ETC.                          | 17
|D.             | TREND INFORMATION                                                                   | 18
|ITEM 6.        | DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES                                          | 19
|A.             | DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES                                          | 19
|B.             | COMPENSATION                                                                        | 20
|C.             | BOARD PRACTICES                                                                     | 21
|D.             | EMPLOYEES                                                                           | 22
|E.             | SHARE OWNERSHIP                                                                     | 22
|ITEM 7.        | MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS                                   | 22
|A.             | MAJOR SHAREHOLDERS                                                                  | 22
|B.             | RELATED PARTY TRANSACTIONS                                                          | 23
|C.             | INTERESTS OF EXPERTS AND COUNSEL                                                    | 23
|ITEM 8.        | FINANCIAL INFORMATION                                                               | 23
|A.             | CONSOLIDATED STATEMENTS AND OTHER FINANCIAL
      INFORMATION                       | 23
|B.             | SIGNIFICANT CHANGES                                                                 | 23
|ITEM 9.        | THE OFFER AND LISTING                                                               | 23
|ITEM 10.       | ADDITIONAL INFORMATION                                                              | 24
|A.             | SHARE CAPITAL                                                                       | 24
|B.             | MEMORANDUM AND ARTICLES OF ASSOCIATION                                              | 24
|C.             | MATERIAL CONTRACTS                                                                  | 24
|D.             | EXCHANGE CONTROLS                                                                   | 25
|E.             | TAXATION                                                                            | 25
|F.             | DIVIDENDS AND PAYING AGENTS                                                         | 25
|G.             | STATEMENT BY EXPERTS                                                                | 25
|H.             | DOCUMENTS ON DISPLAY                                                                | 25
|I.             | SUBSIDIARY INFORMATION                                                              | 26
|ITEM 11.       | QUANTITATIVE AND QUALITATIVE DISCLOSURES
      ABOUT MARKET RISK                    | 26
|ITEM 12.       | DESCRIPTION OF SECURITIES OTHER THAN EQUITY
      SECURITIES                        | 26
|PART II        |                                                                                     | 27
|ITEM 13.       | DEFAULTS, DIVIDEND ARREARAGES AND DELIQUENCIES                                      | 27
|ITEM 14.       | MATERIAL MODIFICATIONS TO THE RIGHTS OF
      SECURITY HOLDERS AND USE OF PROCEEDS. | 27
|A.             | MATERIAL MODIFICATIONS TO THE RIGHTS OF
      SECURITY HOLDERS                      | 27
|B.             | USE OF PROCEEDS                                                                     | 27
|ITEM 15.       | CONTROLS AND PROCEDURES                                                             | 27
|ITEM 16A.      | AUDIT COMMITTEE FINANCIAL EXPERT                                                    | 27
|ITEM 16B.      | AUDIT CODE OF ETHICS                                                                | 28
|ITEM 16C.      | PRINCIPAL ACCOUNTANT FEES AND SERVICES                                              | 28
|PART III       |                                                                                     | 28
|ITEM
      17. | FINANCIAL STATEMENTS                                                                | 28
|ITEM 18.       | FINANCIAL STATEMENTS                                                                | 28
|ITEM 19.       | EXHIBITS                                                                            | 28
|SIGNATURE PAGE | 32                                                                                 

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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, 2004 and 2003, 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, 2004 and 2003 have been audited by Manning Elliott. The
  Consolidated Financial Statements are prepared in accordance with Canadian GAAP.
  See Note 10 of the Notes to Consolidated Financial Statements for a reconciliation
  to U.S. GAAP.

The selected financial data set forth in the following table
  is expressed in Canadian dollars. Since June 1, 1970, the Government of Canada
  has permitted a floating exchange rate to determine the value of the Canadian
  dollar as compared to the United States dollar. At April 30, 2004, US$1.00 was
  equal to approximately C$1.3711 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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|                                                                              | 2004       | 2003       | 2002       | 2001        | 2000      
|----------------------------------------------------------------------------- | ---------- | ---------- | ---------- | ----------- | ----------
|Net sales or operating revenues                                               | -          | -          | -          | -           | -         
|Income (loss) from operations                                                 | (225,035)  | (8,369)    | 165,989    | (1,631,759) | 148,090   
|Income (loss) from continuing operations                                      | (225,035)  | (8,369)    | 165,989    | (1,631,759) | 148,090   
|Net income (loss)                                                             | (225,035)  | (8,369)    | 165,989    | (1,631,759) | 148,090   
|Net income (loss) from operations per share                                   | (0.01)     | (0.01)     | (0.01)     | (0.10)      | 0.01      
|Income (loss) from continuing operations per
      share                      | (0.01)     | (0.01)     | (0.01)     | (0.10)      | 0.01      
|Total assets                                                                  | 210,882    | 210,477    | 253,364    | 262,443     | 910,337   
|Net assets                                                                    | (57,331)   | (583,285)  | (838,674)  | (1,085,587) | 266,873   
|Capital stock (excluding long term debt and redeemable
      preferred stock) | 11,011,046 | 10,467,921 | 10,467,921 | 10,392,920  | 10,142,920
|Number of shares as adjusted to reflect changes
      in capital              | 22,101,470 | 17,078,371 | 17,078,371 | 16,578,371  | 16,078,371
|Dividends 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.



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$ 1.3711 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, 2004. 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 September 10, 2004, the Noon Buying Rate was CDN$ 1.2880 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$) | Low (CAD$)
|-------- | ---- | ----------- | ----------
|February | 2004 | 1.3442      | 1.3108    
|March    | 2004 | 1.348       | 1.308     
|April    | 2004 | 1.3711      | 1.3095    
|May      | 2004 | 1. 397      | 1. 358    
|June     | 2004 | 1.3772      | 1.3407    
|July     | 2004 | 1.3353      | 1.3082    
|August   | 2004 | 1.3323      | 1.2964    

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 30
|---- | ------- | ------------- | --------
|2004 | 1.344   | 1.269/1.4221  | 1.3711  
|2003 | 1.5388  | 1.4336/1.5963 | 1.4663  
|2002 | 1.5671  | 1.5102/1.6128 | 1.5681  
|2001 | 1.5113  | 1.4639/1.5790 | 1.5360  
|2000 | 1.4634  | 1.4977/1.4475 | 1.4789  

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, 2004, we had an accumulated deficit of ($11,598,039) 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 fromthe
  sales of engines or the licensing of our technology or pursuant to a joint venture,
  we have received minimal revenues in preparation for licensing or joint venture
  activities, and there are no assurances that significant revenues will be derived
  from this activity in the future. We have received no revenues from sales of
  any of the products under development. There can be no assurance as to when
  or if we will be able to develop significant sources of revenue or whether our
  operations will become profitable, even if we are able to commercialize any
  product. See "Operating and Financial Review and Prospects," and Notes to Financial
  Statements.

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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.

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Our Dependence on Skilled Personnel. We are dependent
  on certain members of our management and engineering staff, the loss of services
  of one or more of whom could adversely affect our business. 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.

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:

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- 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



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 45,000,000 shares consisting
  of 30,000,000 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 30,000,000 common shares without par value, 22,101,470 shares
  were issued and outstanding as of April 30, 2004 and 22,285,181 are outstanding
  as at the date of this 20-F. 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

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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 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 instalments 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

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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.") is 18.3% 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,
  2004, a total of 22,231,055 were issued of which 4,079,036 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, 2004 Rand
  Energy Group Inc. owes Reg Technologies $2,830,375 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.

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

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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.

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



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,

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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 this year and the UAV prototype fabrication
  is underway, with application specific testing scheduled to start on or before
  third quarter 2004. Receipt by REGI U.S., Inc. of the product development-application
  specific engine is scheduled to occur during 4th quarter 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.



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 2001The prototype was returned
  to REGI U.S., Inc. for additional tests, which are currently being completed
  for a generator application.

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

On January 8, 2004, by way of a news release, the Company
  announced that testing for the air conditioning compressor for buses application
  has 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.

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.

On February 2, 2004, by way of a news release, the Company
  announced that a REGI licencee for unmanned vehicle system engines has 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 demonstrate that the first generation prototype engine generates 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.

Currently the second prototype is being completed for production
  purposes by Radian. REGI will also receive that prototype model for their own
  use.

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On August 5, 2003, by way of a news release, the Company announced
  the following announcement on the RadMax TM Engine- The RadMax TM Engine was
  announced July 15th, 2003 at the AUVSI Conference Association for Unmanned Vehicle
  Systems. (AUV) by our licensee Radian MILPARTS.

The July 15th, announcement by Radian MILPARTS states 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 states, 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. And best of all, without
  piston valves, a crankshaft or camshaft it's inherently quiet at 60 dB at 1,500
  feet.

REGI U.S. has 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.

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.

Marketing Strategy


We intend to pursue the development of the RC/DC Engine and
  the air pump, compressor and other products

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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 Licenses Patents


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

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

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

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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.

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.

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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.



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



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.



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

As a development stage company, we devote most of our activities
  to establishing our business. Planned principal activities have not yet produced
  significant revenues and we have a working capital deficit. We have undergone
  mounting losses to date totaling $11,598,039 and further losses are expected
  until we complete a licensing agreement with a manufacturer and reseller. Our
  working capital deficit is $255,155. Our major assets are our tangible and intangible
  assets, being patents and intellectual property rights, totaling $197,824 which
  represents 94% of total assets. 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.

Fiscal 2004 compared to 2003

Results of operations was a net loss of $225,000 ($0.01 per
  share) for 2004 as compared to net loss of $8,000 ($0.01 per share) for 2003.

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

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In 2004, the Company recognized a gain of $670,000 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.

In 2003, the Company recognized a gain of $476,000 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. 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.

Research and development expenses increased by $58,000 to
  $161,000 spent in 2004 compared to $103,000 incurred in 2003. Technical consulting
  increased by $10,000 to $81,000 in 2004 from $71,000 in 2003. Prototype development
  costs of $4,200 were incurred in 2004 compared to $54,000 recovered in 2003.
  Accounts payable of $246,000 were written off during 2004. The majority of prototype
  developments are now being borne by the licesencees 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, we have derived most of our development and operating
  capital primarily from the issuance of our capital stock and our subsidiary
  REGI U.S., Inc. We have also caused our subsidiary, Rand Energy Group Inc. to
  sell shares it owned in REGI U.S., Inc. Reg Technologies, Inc. also directly
  owns 3,320,000 shares of REGI U.S., Inc. with a value of 1.2 million (US). REGI
  U.S., Inc. is currently completing a private placement @ US$0.25 for a maximum
  of 4,000,000 units to raise up to US$1,000,000.

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.

Fiscal 2004 compared to 2003


During the fiscal year ended April 30, 2004, we derived most
  of our development and operating capital primarily from the $328,500 in proceeds
  received from related companies ($141,000 in 2003).

During the 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.

Our investment in research and development activities excluding
  foreign exchange adjustment totaled $161,000 during the 2004 fiscal year, down
  56% from the $103,000 spent during the 2003 fiscal year.

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

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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 foegin 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.

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

- 18 -

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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.

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, 2004, 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, 2004.

|Name              | Position with Registrant              | Term of Office                                     | Office Held Since
|----------------- | ------------------------------------- | -------------------------------------------------- | -----------------
|John G. Robertson | President, Secretary and  Director    | Annual Shareholders  Meeting for
      fiscal 2004 | 1982             
|Jennifer Lorette  | Director                              | Annual Shareholders  Meeting for
      fiscal 2004 | 2001             
|James Vandeberg   | Chief Financial Officer  and Director | Annual Shareholders 
      meeting for fiscal 2004 | 2003             
|Susanne Robertson | Director                              | Annual Shareholders 
      meeting for fiscal 2004 | 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.

- 19 -

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Jennifer Lorette, Richmond, B.C. - Since April 1994,
  Ms. Lorette has been Vice President of Administration for Reg Technologies,
  Inc., and became a director in 2000. Ms. Lorette is a director of Linux Gold
  Corp., a British Columbia company traded on the OTC BB, and has held several
  positions with it since June 1994, most recently as its Vice President and Secretary.
  Also since June 1994 Ms. Lorette, has been Vice President of REGI U.S., Inc.,
  an Oregon corporation traded on the OTC bulletin board. REGI U.S. is ultimately
  controlled by Reg Technologies Inc. Since June 1997 Ms. Lorette has been Secretary/Treasurer,
  and a Director of Information Highway.com, Inc., a Florida corporation traded
  which is inactive. Ms. Lorette is a founder, and has been Secretary/Treasurer
  of IAS 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

For the fiscal year ended April 30, 2004 we and our subsidiary
  paid $123,91 in compensation to directors and 3 officers or their companies
  as a group. Related company advances were $122,148. Total compensation paid
  to all employees was $187,968

During the year ended April 30, 2003, 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 $123,913.

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. During fiscal 2003 SMR was paid an additional $1,500
  per month for secretarial services.

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

During fiscal 2003,US$30,000 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.

- 20 -

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US$82,236 was paid during the year by REGI U.S. Inc., our
  US subsidiary, to Patrick Badgley for research and development services related
  to the Rand Cam Engine.

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, 2004 to provide pension, retirement or similar benefits
  for our officers or directors.

During the fiscal year ended April 30, 2004, 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 2004 annual general meeting,
  which is anticipated to be held on October 24, 2004.

During the fiscal year ended April 30, 2004 775,000 stock
  options were granted, 250,000 stock options were exercised and 600,000 stock
  options expired pursuant to stock option plans.

Total options currently exercisable at the date of this 20-F
  are 1,250,000. Of the total amount:

- 750,000 are exercisable at $0.10 per share expiring October 11, 2005;
- 25,000 are exercisable at $0.10 per share expiring September 23, 2007;
- 175,000 are exercisable at $0.30 per share expiring September 18, 2008;
- 250,000 are exercisable at $0.19 per share expiring March 4, 2009; and
- 50,000 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 DATE       
|---------------------- | ----------------- | -------------- | ------------------
|John G. Robertson      | 750,000           | $0.10          | October 11, 2005  
|Jennifer Lorette       | 50,000            | $0.30          | September 18, 2008
|                       | 50,000            | $0.14          | April 8, 2009     
|Susanne Robertson      | 250,000           | $0.19          | March 4, 2009     
|James Vandeberg        | 50,000            | $0.30          | September 18, 2008
|TOTAL HELD AS A GROUP: | 1,150,000         |                |                   

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 DATE       
|---------------- | ----------------- | -------------- | ------------------
|Arnie Winrob     | 50,000            | $0.30          | September 18, 2008
|Monique Van Oord | 25,000            | $0.30          | September 18, 2008
|Monique Van Oord | 25,000            | $0.10          | September 23, 2007
|TOTAL:           | 100,000           |                |                   




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

- 21 -

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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, 2004, we employed three part-time employees/contractors.
  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 August 31 2004:,

|Shareholder           | Number of shares issued and outstanding | Percentage ownership (1)
|--------------------- | --------------------------------------- | ------------------------
|John G. Robertson (2) | 2,584,199                               | 11.6%                   
|Jennifer Lorette (3)  | 108,400                                 | *                       
|Susanne Robertson (4) | 4,846,228                               | 21.7%                   
|James Vandeberg (5)   | 50,000                                  | *                       
|                      |                                         |                         

| | (1) | as at August 31, 2004, there were 22,285,181issued
        and outstanding common shares.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (2) | Includes 1,188,030 shares and 14,000 warrants 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. This amount also includes
        641,946 warrants.
| | (3) | Includes 50,000 stock options which are currently
        in-the-money.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | (4) | SMR Investments Ltd., a company wholly-owned by
        Susanne Robertson, is the beneficial owner of 3,366,807 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.                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | (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".

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 August 31, 2004, 22,285,181 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.

- 22 -

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



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 company owned by Susanne M. Robertson, one of our directors
  and wife of John G. Robertson, receives $2,5OO 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 2004, 2003 and 2002, and rent of $6,000in each
  of fiscal years 2004, 2003 and 2002 . SMR is a private company owned by Susanne
  M. Robertson, one of our directors and the wife of John G. Robertson.

We paid a director's fee of $12,000 to John G. Robertson,
  our President, during each of fiscal years 2004, 2003 and 2002.

We had related party advances outstanding of $122,148 at the
  April 2004 year-end, compared to $552,848 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, 2004 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, 2004 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.

B.            
  SIGNIFICANT CHANGES

None.

ITEM 9.            
  THE OFFER AND LISTING



- 23 -

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Our shares have traded on the Vancouver Stock Exchange (the
  "VSE") its successor, the Canadian Venture Exchange, and its successor the TSX
  Venture Exchange (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 VSE/CDNX/TSX and OTC BB for the
  periods indicated are as follows:

|                                                                         |                                     | TSX Venture | OTC BB
|------------------------------------------------------------------------ | ----------------------------------- | ----------- | ------
|                                                                         |                                     | High        | Low   
|                                                                         |                                     | Cdn. $      | Cdn. $
|                                                                         |                                     |             |       
|2003                                                                     |                                     |             |       
|                                                                         | 1st Quarter ended 
      July 31/02 | 0.13        | 0.04  
|                                                                         | 2nd Quarter ended  October 31/02    | 0.13        | 0.07  
|                                                                         | 3rd Quarter ended  January 31/03    | 0.12        | 0.06  
|                                                                         | 4th Quarter ended  April 30/03      | 0.08        | 0.05  
|2004                                                                     |                                     |             |       
|                                                                         | 1st Quarter ended   July 31/03      | 0.17        | 0.04  
|                                                                         | 2nd Quarter ended   October 31/03   | 0.40        | 0.15  
|                                                                         | 3rd Quarter ended   January 31/04   | 0.27        | 0.17  
|                                                                         | 4th Quarter ended   April 30/04     | 0.22        | 0.14  
|                                                                         |                                     |             |       
|High and low closing prices for each of the most
      recent six months |                                     |             |       
|                                                                         | March                               | 0.21        | 0.15  
|                                                                         | April                               | 0.15        | 0.14  
|                                                                         | May                                 | 0.18        | 0.13  
|                                                                         | June                                | 0.15        | 0.13  
|                                                                         | July                                | 0.265       | 0.13  
|                                                                         | August                              | 0.295       | 0.20  

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.



- 24 -

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We did not enter into any material contracts which were not
  made in the ordinary course of business.



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

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

E.            
    TAXATION. 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

- 25 -

---

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
  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.



REGI U.S., Inc. ("REGI U.S.") is a 18.3% 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

- 26 -

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PART II

ITEM 13.            
  DEFAULTS, DIVIDEND ARREARAGES AND DELIQUENCIES

None.

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

A.            
  MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS

None.

B.            
  USE OF PROCEEDS.

Not applicable

ITEM 15.            
  CONTROLS AND PROCEDURES

In compliance with Section 302 of the United States Sarbanes-Oxley
  Act of 2002 and the United States Securities Exchange Act of 1934, the Company
  evaluated the effectiveness of the design and operation of the Company's disclosure
  controls and procedures as of February 29, 2004, in order to ensure that all
  material information, both financial and non-financial, required to be disclosed
  in the Linux Annual Report on Form 20-F for the year ended February 29, 2004
  was identified, recorded, processed, summarized and reported to the Company's
  senior management within the required timeframe. This evaluation was undertaken
  under the supervision and with the participation of the Company's senior management,
  including the Company's Chief Executive Officer and Chief Financial Officer.
  Based on that evaluation, it was concluded that the Company's disclosure controls
  and procedures were effective as of February 29, 2004, and that subsequently
  there have been no significant changes in the Company's internal controls or
  in other factors that could affect those controls.

The Company will review and evaluate the design and effectiveness
  of disclosure controls and procedures on an on-going basis and continue to improve
  controls and procedures over time and correct any deficiencies that may be discovered
  in the future. The Company's objective is to ensure that its senior management
  has timely access to all material financial and non-financial information concerning
  the business. Whilst the Company believes that the present design of the disclosure
  controls and procedures is effective to achieve this objective, future events
  affecting the business may cause the Company to significantly modify the disclosure
  controls and procedures. Further, in designing and evaluating the disclosure
  controls and procedures, the Company recognized that any controls and procedures,
  no matter how well designed and operated, can provide only reasonable assurance
  of achieving the desired controls objectives, and management necessarily was
  required to apply its judgment in evaluating the cost-benefit relationship of
  possible controls and procedures.

ITEM 16.            
  [Reserved]

ITEM 16A.            
  AUDIT COMMITTEE FINANCIAL EXPERT

We do not currently have a financial expert in our audit committee
  due to our relatively small size. In 2004, we had only no employees and we relied
  upon the services of a chartered accountant in Vancouver, BC, Canada, to prepare
  our interim unaudited quarterly consolidated financial statements. Also, we
  retained the audit services of Manning Elliott chartered accountants to perform
  the audit on our year-end consolidated financial statements, and the review
  engagements to our unaudited quarterly interim statements.

Moreover, the audit committee is comprised of seasoned business
  professionals, whereby one member has over 25 years of experience in the investment
  business and is a board member of several corporations.

- 27 -

---

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

ITEM 16B.            
  AUDIT CODE OF ETHICS

We have not adopted a formal written code of ethics given
  our relatively small size, whereby we had no employees in 2003.

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

ITEM 16C.            
  PRINCIPAL ACCOUNTANT FEES AND SERVICES

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

(Stated in terms of Canadian dollars)

|                          | 2004        | 2003       
|------------------------- | ----------- | -----------
|Type of Services Rendered | Fiscal Year | Fiscal Year
|                          | (CAD$)      | (CAD$)     

|                                                                |        |       
|--------------------------------------------------------------- | ------ | ------
|(a) Audit Fees                                                  | 19,000 | 25,910
|                                                                |        |       
|(b) Audit-Related Fees          (eg.
      review of Form 20-F) | 1,200  | 1,200 
|                                                                |        |       
|(c) Tax Fees                                                    | 2,000  | 2,000 
|                                                                |        |       
|(d) All Other Fees                                              | -      | -     

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 10 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.




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



(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:

- 28 -

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Independent Auditors' ReportConsolidated Balance SheetsConsolidated Statements of Loss and DeficitConsolidated Statements of Cash FlowsNotes to the Consolidated Financial Statements

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

|Number   | Description                                                                                                                                                                                                                                                |    
|-------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---
|         |                                                                                                                                                                                                                                                            |    
|1.1      | Articles of Incorporation with Bylaws dated October
      6, 1982                                                                                                                                                                                          | (1)
|1.2      | Certificate of Name Change and Special Resolution
      dated February 23, 1993                                                                                                                                                                            | (1)
|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)

- 29 -

---

|4 (a) 11 | Joint Venture Agreement dated July 28, 1998 between
      REGI U.S., Inc and Trans Air Manufacturing Corporation regarding development
      and manufacturing of a prototype Bus Compressor                                                                                                                                 | (4)
|-------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---
|4 (a) 12 | Agreement dated August 5, 1998 between the Company
      and T.W. Blasingame Company, Inc. (Blasingame) regarding the licensing of
      certain Rand Cam/Direct Charge Engine manufacturing rights to Blasingame
      and licensing of certain rights to the "Vane Restraint Mechanism" by Blasingame
      to the Company | (5)
|4 (a) 13 | Cooperative and Licensing Agreement dated December
      14, 1998 between the Company, REGI U.S., Inc. Rand Energy Group, Inc. USA
      and Global Aircraft Corporation regarding the NASA SBIR Phase I Contract
      for development of the Rand-Cam Diesel Aircraft Engine                                               | (5)
|4 (a) 14 | Agreement made as of October 27, 2000 with GHM
      Inc. regarding 50% interest in the rights to the hydrogen separator technology                                                                                                                                                                                          | (7)
|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 (b) 1  | Management Agreement between the Company and
      SMR Investments Ltd., dated April 2, 1993                                                                                                                                                                                                                                 | (1)
|4 (b) 2  | Agreement between Brian Cherry, Sky Technologies,
      Inc. and Rand Energy Group Inc., regarding U.S. rights to the Rand Cam/Direct
      Charge Engine dated August 20, 1993                                                                                                                                              | (1)
|4 (b) 3  | Employment Agreement between Sky Technologies,
      Inc. and Patrick Badgley dated February 9, 1994                                                                                                                                                                                                                         | (1)
|4 (b) 4  | Management Agreement between Sky Technologies,
      Inc. and Access Information Services, Inc., dated April 1, 1994                                                                                                                                                                                                         | (1)
|4 (b) 5  | Agreement between the Company and Rand Energy
      Group Inc. granting the Company rights to negotiate and sell licenses and
      marketing rights for the Rand Cam Engine, dated February 27, 1992                                                                                                                        | (1)
|4 (b) 6  | Management Agreement dated May 1, 1996 between
      the Company and SMR Investments Ltd.                                                                                                                                                                                                                                    | (3)
|8.1      | List of Parents and Subsidiaries
      of the Company                                                                                                                                                                                                                                                                        | (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 2002 (James Vandeberg)                                                                                                                                                      | (9)

- 30 -

---

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

- 31 -

---

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: September16, 2004
|                        
|                        

- 32 -

---

Reg Technologies Inc.

Consolidated Financial Statements

For the Years Ended

April 30, 2004 and 2003



F-1

---



Auditors Report

To the Shareholders of 
  Reg Technologies Inc.

We have audited the consolidated balance sheets of Reg Technologies
  Inc. as at April 30, 2004 and 2003, and the consolidated statements of loss
  and deficit and cash flows for the years then ended. These financial statements
  are the responsibility of the Companys management. Our responsibility
  is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with 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, 2004 and 2003, and the results of its operations and the changes in
  its cash flows for the years then ended, in accordance with generally accepted
  accounting principles used in Canada. As required by The British Columbia Company
  Act we report that, in our opinion, these principles have been applied on a
  basis consistent with that of the preceding year.

/s/ Manning Elliott

CHARTERED ACCOUNTANTS

Vancouver, B.C.

August 23, 2004

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 significant uncertainties and contingencies
  such as those referred to in Note 1 to these financial statements. Our report
  to the shareholders dated August 23, 2004 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

CHARTERED ACCOUNTANTS

Vancouver, B.C.

August 23, 2004

F-2

---

Reg Technologies Inc. 
  Consolidated Balance Sheets 
  As at April 30, 2004 and 2003

|                                                   | 2004       |   | 2003       |  
|-------------------------------------------------- | ---------- | - | ---------- | -
|                                                   | $          |   | $          |  
|                                                   |            |   |            |  
|Assets                                             |            |   |            |  
|                                                   |            |   |            |  
|Current Assets                                     |            |   |            |  
|Cash                                               | 6,589      |   |           |  
|Amounts
      receivable                           | 6,469      |   | 8,481      |  
|                                                   | 13,058     |   | 8,481      |  
|Intangible Assets [Note 3]                         | 697,858    |   | 710,171    |  
|Deferred Development
      Costs [Schedule]        | 8,314,164  |   | 8,335,425  |  
|                                                   | 9,025,080  |   | 9,054,077  |  
|Liabilities                                        |            |   |            |  
|                                                   |            |   |            |  
|Current Liabilities                                |            |   |            |  
|Cheques issued in
      excess of funds on deposit |           |   | 6,118      |  
|Accounts payable
      and accruals                | 146,066    |   | 193,073    |  
|Due
      to related companies [Note 9]            | 122,148    |   | 552,848    |  
|                                                   | 268,214    |   | 752,039    |  
|Non-controlling Interest [Note 7]                  | 3,140,445  |   | 3,020,985  |  
|Subscriptions
      for Shares of Subsidiary       |           |   | 41,723     |  
|                                                   | 3,408,659  |   | 3,814,747  |  
|Shareholders Equity                               |            |   |            |  
|Capital Stock [Note 5]                             | 11,011,046 |   | 10,467,921 |  
|Donated Capital [Note 9[c]]                        | 545,410    |   | 268,763    |  
|Contributed Surplus                                | 45,310     |   |           |  
|Deferred Compensation                              | (64,558    | ) |           |  
|Accumulated Foreign Exchange Gain (Loss) [Note 2]  | (266,527   | ) | 178,042    |  
|Deficit                                            | (5,654,260 | ) | (5,675,396 | )
|                                                   | 5,616,421  |   | 5,239,330  |  
|                                                   | 9,025,080  |   | 9,054,077  |  

Contingency [Note 1] 
  Subsequent Events [Note 11]

|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 the financial
  statements)

F-3

---

Reg Technologies Inc. 
  Consolidated Statements of Operations and Deficit 
  For the Years Ended April 30, 2004 and 2003

|                                                                           | 2004       |   | 2003       |  
|-------------------------------------------------------------------------- | ---------- | - | ---------- | -
|                                                                           | $          |   | $          |  
|                                                                           |            |   |            |  
|Administrative Expenses                                                    |            |   |            |  
|                                                                           |            |   |            |  
|Bad debts                                                                  | 3,750      |   |           |  
|Bank charges and
      interest                                            | 5,758      |   | 5,400      |  
|Foreign exchange                                                           | 5,313      |   | (6,509     | )
|Investor relations
      - advertising                                     | 15,552     |   | 35,450     |  
|Investor relations
      - consulting                                      | 380,853    |   | 288,469    |  
|Management and directors
      fees (Note 8)                              | 276,315    |   | 42,000     |  
|Mineral property
      maintenance expenses                                | 5,908      |   | 5,908      |  
|Office, printing
      and couriers                                        | 15,632     |   | 6,750      |  
|Professional fees                                                          | 93,398     |   | 41,855     |  
|Regulatory fees                                                            | 30,463     |   | 21,814     |  
|Rent                                                                       | 9,341      |   | 24,630     |  
|Secretarial wages
      and benefits                                       | 14,550     |   | 25,960     |  
|Stock-based compensation                                                   | 18,937     |   |           |  
|Telephone                                                                  | 7,846      |   | 4,592      |  
|Travel and promotion                                                       | 24,453     |   | 269        |  
|Less
      interest income                                                 | (33        | ) | (30        | )
|                                                                           |            |   |            |  
|Net Loss Before Other Items                                                | (908,036   | ) | (496,558   | )
|                                                                           |            |   |            |  
|Other Items                                                                |            |   |            |  
|                                                                           |            |   |            |  
|Gain on accounts
      payable written-off                                 | 20,694     |   | 1,490      |  
|Gain (loss) on sale
      of subsidiarys shares                           | 128,166    |   | (664       | )
|Gain (loss) on issue
      by subsidiary of its own shares outside the     |            |   |            |  
|consolidated
      group [Note 6[a]]                                       | 472,872    |   | (215,878   | )
|Non-controlling
      interest [Note 6[b]]                                 | 307,440    |   | 376,743    |  
|                                                                           |            |   |            |  
|Net Income (Loss) for the Year                                             | 21,136     |   | (334,867   | )
|                                                                           |            |   |            |  
|Deficit - Beginning
      of Year                                          | (5,675,396 | ) | (5,340,529 | )
|                                                                           |            |   |            |  
|Deficit - End
      of Year                                                | (5,654,260 | ) | (5,675,396 | )
|                                                                           |            |   |            |  
|Basic and Diluted
      Earnings (Loss) per Share - weighted average basis |           |   | (0.02      | )
|                                                                           |            |   |            |  
|Weighted average
      number of shares outstanding                        | 20,317,000 |   | 17,078,000 |  

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

F-4

---

Reg Technologies Inc. 
  Consolidated Statements of Cash Flows 
  For the Years Ended April 30, 2004 and 2003

|                                                           | 2004     |   | 2003     |  
|---------------------------------------------------------- | -------- | - | -------- | -
|                                                           | $        |   | $        |  
|Operating Activities                                       |          |   |          |  
|Net income (loss)
      for the year                       | 21,136   |   | (334,867 | )
|Items not involving
      cash                             |          |   |          |  
|Services
      paid by issuing shares of subsidiary        | 123,593  |   | 25,619   |  
|Stock-based
      compensation                             | 18,937   |   |         |  
|Non-controlling
      interest                             | (307,440 | ) | (376,743 | )
|Loss
      (gain) on issue by subsidiary of its own shares | (472,872 | ) | 215,878  |  
|Gain
      on accounts payable written-off                 | (20,694  | ) | (1,490   | )
|Donated
      services                                     | 282,114  |   | 288,469  |  
|Loss
      (gain) on sale of subsidiarys shares           | (128,166 | ) | 664      |  
|                                                           | (483,392 | ) | (182,470 | )
|Change in non-cash
      working capital items             |          |   |          |  
|Accounts
      receivable                                  | 2,012    |   | 17,445   |  
|Accounts
      payable and accruals                        | (47,007  | ) | (32,820  | )
|Prepaid
      expenses                                     | (38,185  | ) |         |  
|Cash to Operating
      Activities                         | (566,572 | ) | (197,845 | )
|Financing Activities                                       |          |   |          |  
|Shares issued for
      cash                               | 175,000  |   |         |  
|Repayment of loans
      from related companies            | 328,430  |   | 140,729  |  
|Proceeds on subsidiarys
      shares issued               | 142,400  |   |         |  
|Proceeds on sale
      of marketable securities            |         |   | 3,129    |  
|Subscriptions
      received                               |         |   | 41,723   |  
|                                                           | 645,830  |   | 185,581  |  
|Investing Activities                                       |          |   |          |  
|Development costs                                          | (149,274 | ) | (64,284  | )
|Patent
      protection costs                              | (3,501   | ) | (2,475   | )
|                                                           | (152,775 | ) | (66,759  | )
|Translation
      Adjustments                              | 86,224   |   | 84,322   |  
|Increase in Cash During the Year                           | 12,707   |   | 5,299    |  
|Cash (Deficiency)
      - Beginning of Year                | (6,118   | ) | (11,417  | )
|Cash (Deficiency)
      - End of Year                      | 6,589    |   | (6,118   | )
|Non-Cash Financing Activities                              |          |   |          |  
|Subsidiarys
      shares issued for convertible debenture |         |   | 7,475    |  
|Shares issued for
      consulting services                |         |   | 25,619   |  
|Shares
      issued to settle debt                         | 395,682  |   | 442,615  |  
|                                                           | 395,682  |   | 475,709  |  

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

F-5

---

Reg Technologies Inc. 
  Consolidated Schedule of Deferred Development Costs 
  To April 30, 2004

Included in deferred development costs is a non-cash adjustment
  for the decrease in foreign exchange in translating the Companys US subsidiarys
  balances into Canadian dollars at the year-end rate. Cash expenditures incurred
  during the year, not including amortization and accounts payable written-off,
  amounted to $149,274.

|                                                  | April 30,  |   | Incurred   |   | Foreign    |   | April 30,  |  
|------------------------------------------------- | ---------- | - | ---------- | - | ---------- | - | ---------- | -
|                                                  | 2003       |   | during the |   | Exchange   |   | 2004       |  
|                                                  | Cumulative |   | year       |   | Adjustment |   | Cumulative |  
|                                                  | $          |   | $          |   | $          |   | $          |  
|Amortization of patents and intellectual property | 491,065    |   | 18,025     |   | (14,524    | ) | 494,566    |  
|Consulting                                        | 1,201,528  |   | 80,604     |   | (29,526    | ) | 1,252,606  |  
|Management                                        | 541,352    |   | 40,302     |   | (16,303    | ) | 565,351    |  
|Market development                                | 372,438    |   | 953        |   | (5,678     | ) | 367,713    |  
|Overhead                                          | 359,927    |   |           |   | (12,970    | ) | 346,957    |  
|Professional fees                                 | 226,473    |   |           |   | (4,530     | ) | 221,943    |  
|Prototype design and construction                 | 4,354,722  |   | 4,211      |   | (81,183    | ) | 4,277,750  |  
|Reports                                           | 78,102     |   | 6,295      |   | (1,359     | ) | 83,038     |  
|Salaries                                          | 601,286    |   |           |   | (11,823    | ) | 589,463    |  
|Travel and promotion                              | 476,236    |   | 16,909     |   | (10,045    | ) | 483,100    |  
|                                                  | 8,703,129  |   | 167,299    |   | (187,941   | ) | 8,682,487  |  
|Less: Government assistance                       | (121,430   | ) |           |   |           |   | (121,430   | )
|Accounts
      payable written-off                | (246,274   | ) | (6,272     | ) | 5,653      |   | (246,893   | )
|                                                  | 8,335,425  |   | 161,027    |   | (182,288   | ) | 8,314,164  |  

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

F-6

---

Reg Technologies Inc. 
  Notes to the Consolidated Financial Statements 
  For the Years Ended April 30, 2004 and 2003

|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 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, 2004
        Rand Energy Group Inc. owes Reg Technologies $2,830,375 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.
      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 7,320,000 shares of REGI U.S. Inc., which shares had a value of approximately
        US$2,400,000 as of August 23, 2004. The Company can sell, through a registered
        broker, up to 220,000 shares of REGI US, Inc., being 1% of the issued
        shares, during any 90 day period.
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|2. | Significant Accounting Policies                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   | [a]                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   | [b]                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   | [c]                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         

F-7

---

Reg Technologies Inc. 
  Notes to the Consolidated Financial Statements 
  For the Years Ended April 30, 2004 and 2003

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

F-8

---

Reg Technologies Inc. 
  Notes to the Consolidated Financial Statements 
  For the Years Ended April 30, 2004 and 2003

|2. | Significant Accounting Policies
        (continued)                                                
|-- | ---------------------------------------------------------------------------------------------------
|   |                                                                                                    
|   | [j]                                                                                                
|   |                                                                                                    
|3. | Intangible Assets
      Intangible assets are stated at cost less accumulated
        amortization.

| |                                        |           |              | April 30, | April 30,
| | -------------------------------------- | --------- | ------------ | --------- | ---------
| |                                        |           |              | 2004      | 2003     
| |                                        |           | Accumulated  | Carrying  | Carrying 
| |                                        | Cost      | Amortization | Value     | Value    
| |                                        | $         | $            | $         | $        
| | Goodwill                               | 503,494   | 218,181      | 285,313   | 285,313  
| | Technology and patent protection costs | 762,417   | 349,873      | 412,544   | 424,857  
| | Mineral
      resource properties      | 1         |             | 1         | 1        
| |                                        |           |              |           |          
| |                                        | 1,265,912 | 568,054      | 697,858   | 710,171  

|4. | Capital Stock Authorized:
      30,000,000   Common shares without par value 
        10,000,000   Preferred shares with a $1 par value, redeemable
        for common shares on the basis of 1 common share for 2 preferred shares
        
          5,000,000   Class A non-voting shares without par
        value. Special rights and restrictions apply.
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |                                                          |            |   | Value      |  
| | -------------------------------------------------------- | ---------- | - | ---------- | -
| | Common shares issued:                                    | #          |   | $          |  
| |                                                          |            |   |            |  
| | April 30, 2002, and 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 |  

| | [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.

F-9

---

Reg Technologies Inc. 
  Notes to the Consolidated Financial Statements 
  For the Years Ended April 30, 2004 and 2003

|4. | Capital Stock
        (continued)
|-- | ---------------------------------
|   |                                  
|   | [c]                              
|   |                                  
|   |                                  
|   |                                  
|   | [d]                              
|   |                                  
|   |                                  
|   |                                  
|   | [e]                              
|   |                                  
|   |                                  

| |                                   |           |   | Weighted | 
| | --------------------------------- | --------- | - | -------- | 
| |                                   |           |   | average  | 
| |                                   |           |   | exercise | 
| |                                   | Number    |   | price    | 
| |                                   | of shares |   | $        | 
| | Outstanding, April 30, 2002       | 1,300,000 |   | 0.10     | 
| | Granted                           | 25,000    |   | 0.10     | 
| | 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     | 
| | Exercisable
      at end of year  | 893,750   |   | 0.12     | 

| |  | Additional information regarding options outstanding at April 30, 2004
      is as follows:
| |  | -------------------------------------------------------------------------------------------

| |  |                |  | Outstanding |  | Exercisable 
| |  | -------------- |  | ----------- |  | ------------
| |  |                |  |             |  | Weighted    
| |  |                |  |             |  | average     
| |  |                |  |             |  | remaining   
| |  | Exercise price |  | Number of   |  | contractual 
| |  | $              |  | shares      |  | life (years)
| |  | 0.10           |  | 750,000     |  | 1.5         
| |  | 0.10           |  | 25,000      |  | 3.4         
| |  | 0.30           |  | 175,000     |  | 4.4         
| |  | 0.19           |  | 250,000     |  | 4.8         
| |  | 0.14           |  | 50,000      |  | 4.9         
| |  |                |  | 1,250,000   |  | 2.7         

| |  | The fair value for stock options granted was estimated
        using the Black-Scholes option pricing model assuming no expected dividends
        and the following weighted average assumptions:
| |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |                          | 2004        |  | 2003  | 
| |  | ------------------------ | ----------- |  | ----- | 
| |  |                          |             |  |       | 
| |  | Interest rate            | 3.12%-4.02% |  | 4.08% | 
| |  | Expected life (in years) | 5           |  | 5     | 
| |  | Expected volatility      | 35%         |  | 40%   | 

F-10

---

Reg Technologies Inc. 
  Notes to the Consolidated Financial Statements 
  For the Years Ended April 30, 2004 and 2003

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

| |  |                                    | 2003     |  
| |  | ---------------------------------- | -------- | -
| |  | Earnings (loss) for the year ended |          |  
| |  | As reported                        | (334,867 | )
| |  | Pro
      forma                    | (335,545 | )
| |  | Basic and diluted loss per shares  |          |  
| |  | As
      reported                  | (0.02    | )
| |  | Pro forma                          | (0.02    | )

|   | [f]                                     | Share purchase warrants
      The 1,000,000 warrants outstanding at year-end entitle
        the holder to purchase one common share each for two years. They are exercisable
        at $0.20 per share the first year expiring September 22, 2004; or $0.25
        per share the second year expiring September 22, 2005.
|-- | --------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                         |                                                                                                                                                                                                                                                                                                                             
|5. | Capital Stock Activity of REGI US, Inc.

| |                                                               |            |  | Value     | 
| | ------------------------------------------------------------- | ---------- |  | --------- | 
| | Common shares issued:                                         | #          |  | US$       | 
| |                                                               |            |  |           | 
| | April 30, 2002                                                | 11,287,935 |  | 4,815,799 | 
| | Stock issued to
      settle related party debt               | 6,100,000  |  | 305,000   | 
| | Stock
      issued for investor and public relations services | 250,000    |  | 16,500    | 
| | Stock
      issued for convertible debenture                  | 50,000     |  | 5,000     | 
| |                                                               |            |  |           | 
| | April 30, 2003                                                | 17,687,935 |  | 5,142,299 | 
| |                                                               |            |  |           | 
| | Value of stock options
      granted to consultants           |           |  | 78,184    | 
| | 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  option exercised                | 100,000    |  | 20,000    | 
| | Stock
      issued for cash  exercise of warrants            | 550,000    |  | 86,000    | 
| |                                                               |            |  |           | 
| | April
      30, 2004                                          | 22,231,055 |  | 5,610,451 | 

| | [a] | 3,320,000 shares, having an approximate undiscounted
        fair market value as at August 23, 2004 of US$1,095,600, were owned by
        the Company as at April 30, 2004.                                                                                
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                              
| | [b] | Approximately 4,000,000 shares, having an approximate
        undiscounted fair market value as at August 23, 2004 of US$1,320,000,
        were owned by Rand Energy Group Inc. as at April 30, 2004. The Company
        owns 51% of Rand Energy Group Inc.
| |     |                                                                                                                                                                                                                                                              
| | [c] | A total of 1,900,000 shares are reserved for the
        exercise of stock options, exercisable at a weighted average price of
        US$0.21 per share with a weighted average remaining life of 19 months.                                                

F-11

---

Reg Technologies Inc. 
  Notes to the Consolidated Financial Statements 
  For the Years Ended April 30, 2004 and 2003

|5. | Capital Stock Activity of
        REGI US, Inc. (continued)
|-- | -----------------------------------------------------------
|   |                                                            
|   | [d]                                                        
|   |                                                            
|   |                                                            
|   |                                                            
|   |                                                            
|   |                                                            
|6. | Non-Monetary Transactions                                  
|   |                                                            
|   | [a]                                                        

| |  |                                                   | 2004     |   | 2003     |  
| |  | ------------------------------------------------- | -------- | - | -------- | -
| |  |                                                   | $        |   | $        |  
| |  | Value received on issuance of shares              | 670,377  |   | 475,709  |  
| |  | Less net book
      value of interest deemed sold | (197,505 | ) | (691,587 | )
| |  | Monetary
      Gain (Loss)                        | 472,872  |   | (215,878 | )

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

| |  |                                                               |                                                                           | 2004     |           | 2003     |  
| |  | ------------------------------------------------------------- | ------------------------------------------------------------------------- | -------- | --------- | -------- | -
| |  |                                                               |                                                                           | $        |           | $        |  
| |  | Non-controlling interest - beginning of year                  | 3,020,985                                                                 |          | 2,702,347 |         
| |  | Non-controlling
      interest - end of year                  | 3,140,445                                                                 |          | 3,020,985 |         
| |  | Increase
      in non-controlling interest                    | 119,460                                                                   |          | 318,638   |         
| |  |                                                               |                                                                           |          |           |          |  
| |  | Components of the increase in non-controlling
      interest: |                                                                           |          |           |         
| |  |                                                               |                                                                           |          |           |          |  
| |  | [i]                                                           | non-controlling interest in subsidiaries net results
      of operations | (307,440 | )         | (376,743 | )
| |  | [ii]                                                          | net book value of REGI US, Inc. deemed sold [Note 6[a]]                   | 197,505  |           | 691,587  |  
| |  | [iii]                                                         | net
      book value of REGI US, Inc. shares sold                         | 229,395  |           | 3,794    |  
| |  |                                                               |                                                                           | 119,460  |           | 318,638  |  

F-12

---

Reg Technologies Inc. 
  Notes to the Consolidated Financial Statements 
  For the Years Ended April 30, 2004 and 2003

|7. | Losses and Deductions for Tax Purposes
      The Company and Rand Energy Group Inc. have combined
        Canadian income tax losses of approximately $1,782,000 which are available
        to reduce Canadian taxable income of future years. The losses expire as
        follows:
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|     | $       |      | $      
|---- | ------- | ---- | -------
|2005 | 390,000 | 2009 | 138,000
|2006 | 329,000 | 2010 | 190,000
|2007 | 229,000 | 2011 | 145,000
|2008 | 361,000 |      |        

| | The Companys US subsidiary, REGI US, Inc.,
        has U.S. income tax losses of US$5,133,000 which are available to reduce
        U.S. taxable income of future years. The losses expire as follows:
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|     | US$       |      | US$    
|---- | --------- | ---- | -------
|2008 | 23,000    | 2014 | 417,000
|2009 | 393,000   | 2015 | 429,000
|2010 | 1,007,000 | 2016 | 518,000
|2011 | 792,000   | 2017 | 153,000
|2012 | 521,000   | 2018 | 17,000 
|2013 | 605,000   | 2019 | 258,000

|   | The potential benefits of
        income tax losses have not been recognized in the accounts as realization
        is not likely.
|-- | ----------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                   
|8. | Related Party Balances and
        Transactions                                                                                   
|   |                                                                                                                                   
|   | [a]                                                                                                                               
|   |                                                                                                                                   
|   | [b]                                                                                                                               
|   |                                                                                                                                   
|   | [c]                                                                                                                               
|   |                                                                                                                                   
|   | [d]                                                                                                                               
|   |                                                                                                                                   
|   | [e]                                                                                                                               
|   |                                                                                                                                   
|9. | Commitments                                                                                                                       
|   |                                                                                                                                   
|   | [a]                                                                                                                               
|   |                                                                                                                                   
|   |                                                                                                                                   
|   |                                                                                                                                   
|   |                                                                                                                                   

F-13

---

Reg Technologies Inc. 
  Notes to the Consolidated Financial Statements 
  For the Years Ended April 30, 2004 and 2003

|9.  | Commitments (continued)                                                                                                                                                                                                                      
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                              
|    |                                                                                                                                                                                                                                              
|    |                                                                                                                                                                                                                                              
|    | [b]                                                                                                                                                                                                                                          
|    |                                                                                                                                                                                                                                              
|10. | Differences Between Generally
        Accepted Accounting Principles in Canada and Those in the United States
      The material differences between Canadian and U.S. accounting
        principles is the treatment of the following items:
|    |                                                                                                                                                                                                                                              
|    | [a]                                                                                                                                                                                                                                          
|    |                                                                                                                                                                                                                                              
|    | [b]                                                                                                                                                                                                                                          
|    |                                                                                                                                                                                                                                              
|    | [c]                                                                                                                                                                                                                                          
|    |                                                                                                                                                                                                                                              
|    | [d]                                                                                                                                                                                                                                          

F-14

---

Reg Technologies Inc. 
  Notes to the Consolidated Financial Statements 
  For the Years Ended April 30, 2004 and 2003

|10. | Differences Between Generally Accepted Accounting
        Principles in Canada and Those in the United States (continued)
|--- | -------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                          
|    | [e]                                                                                                                      
|    |                                                                                                                          
|    | [f]                                                                                                                      

| |  |                                                    | 2004        |   | 2003        |  
| |  | -------------------------------------------------- | ----------- | - | ----------- | -
| |  |                                                    | $           |   | $           |  
| |  | Assets                                             |             |   |             |  
| |  | Current Asset                                      |             |   |             |  
| |  | Cash                                               | 6,589       |   |            |  
| |  | Amounts
      receivable                           | 6,469       |   | 8,481       |  
| |  |                                                    | 13,058      |   | 8,481       |  
| |  | Intangible Assets                                  | 197,824     |   | 201,996     |  
| |  |                                                    | 210,882     |   | 210,477     |  
| |  | Liabilities                                        |             |   |             |  
| |  | Current Liabilities                                |             |   |             |  
| |  | Cheques issued in
      excess of funds on deposit |            |   | 6,118       |  
| |  | Accounts
      payable and accruals                | 146,065     |   | 193,073     |  
| |  | Due
      to related companies                     | 122,148     |   | 552,848     |  
| |  |                                                    | 268,213     |   | 752,039     |  
| |  | Subscriptions
      For Shares                     |            |   | 41,723      |  
| |  |                                                    | 268,213     |   | 793,762     |  
| |  | Shareholders Equity (Deficit)                     |             |   |             |  
| |  | Capital Stock                                      | 11,011,046  |   | 10,467,921  |  
| |  | Donated Capital                                    | 545,410     |   | 268,763     |  
| |  | Stock Based Compensation                           | 48,810      |   | 53,035      |  
| |  | Less: Deferred Compensation                        | (64,558     | ) |            |  
| |  | Deficit
      (refer to reconciliation following)  | (11,598,039 | ) | (11,373,004 | )
| |  |                                                    | (57,331     | ) | (583,285    | )
| |  |                                                    | 210,882     |   | 210,477     |  

F-15

---

Reg Technologies Inc. 
  Notes to the Consolidated Financial Statements 
  For the Years Ended April 30, 2004 and 2003

|10. | Differences Between Generally Accepted Accounting
      Principles in Canada and Those in the United States (continued)
|--- | -----------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                        
|    | [g]                                                                                                                    

| |  |                                                                       | 2004        |   | 2003        |  
| |  | --------------------------------------------------------------------- | ----------- | - | ----------- | -
| |  |                                                                       | $           |   | $           |  
| |  | Net income (loss), as determined under                                |             |   |             |  
| |  | Canadian generally
      accepted accounting principles               | 21,136      |   | (334,867    | )
| |  | Stock
      based compensation                                        | (3,500      | ) |            |  
| |  | Foreign exchange
      translation                                    | (165,111    | ) | 55,500      |  
| |  | Non-controlling
      interest                                        | (307,440    | ) | (376,743    | )
| |  | Gain on sale of
      subsidiaries shares                            | 229,395     |   | 3,793       |  
| |  | Gain
      on issue of subsidiaries shares                           | 197,505     |   | 691,587     |  
| |  | Development
      costs written-off                                   | (197,020    | ) | (47,639     | )
| |  | Net income (loss), as determined under U.S. generally
      accepted  | (225,035    | ) | (8,369      | )
| |  | accounting principles                                                 |             |   |             |  
| |  | Deficit accumulated during the development stage, as
      determined |             |   |             |  
| |  | under U.S. generally
      accepted accounting principles             |             |   |             |  
| |  | -
      Beginning of year                                             | (11,373,004 | ) | (11,364,635 | )
| |  | -
      End of year                                                   | (11,598,039 | ) | (11,373,004 | )
| |  | Loss per share, weighted average basis (excluding escrowed            |             |   |             |  
| |  | shares)                                                               | (0.01       | ) | (0.01       | )

F-16

---

Reg Technologies Inc. 
  Notes to the Consolidated Financial Statements 
  For the Years Ended April 30, 2004 and 2003

|10. | Differences Between Generally
        Accepted Accounting Principles in Canada and Those in the United States
        (continued)
|--- | ---------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                  
|    | [h]                                                                                                                              

| |  |                                                                    | 2004       |   | 2003       |  
| |  | ------------------------------------------------------------------ | ---------- | - | ---------- | -
| |  |                                                                    | $          |   | $          |  
| |  |                                                                    |            |   |            |  
| |  | Deferred development costs, as determined in Canada                | 8,314,164  |   | 8,335,425  |  
| |  | Deferred development
      costs, as determined in the U.S.        |           |   |           |  
| |  | Increase
      to deficit as determined in the U.S.                | 8,314,164  |   | 8,335,425  |  
| |  | Intangible assets and mineral resource properties, as determined   |            |   |            |  
| |  | in Canada                                                          | 697,858    |   | 710,171    |  
| |  | Intangible assets and mineral resource properties, as determined   |            |   |            |  
| |  | in
      the U.S.                                                  | 197,825    |   | 201,996    |  
| |  | Increase to
      deficit as determined in the U.S.                | 500,033    |   | 508,175    |  
| |  | Non-controlling interest, as determined in Canada                  | (3,140,445 | ) | (3,020,985 | )
| |  | Non-controlling
      interest, as determined in the U.S.          |           |   |           |  
| |  | Decrease
      to deficit as determined in the U.S.                | (3,140,445 | ) | (3,020,985 | )
| |  | Accumulated foreign exchange gain (loss), as determined in         |            |   |            |  
| |  | Canada                                                             | (266,527   | ) | 178,042    |  
| |  | Accumulated
      foreign exchange gain, as determined in the U.S. |           |   |           |  
| |  | Increase
      (decrease) to deficit as determined in the U.S.     | 266,527    |   | (178,042   | )
| |  | Stock based compensation, as determined in Canada                  | 45,310     |   |           |  
| |  | Stock
      based compensation, as determined in the U.S.          | (48,810    | ) | 53,035     |  
| |  | Increase (decrease)
      to deficit as determined in the U.S.     | 3,500      |   | 53,035     |  
| |  | Deficit, as determined in Canada                                   | 5,654,260  |   | 5,675,396  |  
| |  | Deficit, as
      determined in the U.S.                           | 11,598,039 |   | 11,373,004 |  
| |  | Net
      increase to deficit as determined in the U.S.            | 5,943,779  |   | 5,697,608  |  

|11. | Subsequent Event
      On June 8, 2004, REGI US Inc. signed an agreement with
        Brian Cherry to develop the generator and other applications for a period
        of two years in consideration of 150,000 common shares of REGI US Inc.
        (issued June 10, 2004).
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F-17

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