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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 6 - K
REPORT OF FOREIGN PRIVATE ISSUER
Pursuant to Rule 13a-16 or 15d-16 of the Securities Exchange Act of 1934
For the months of January – May 2010
Commission File No. 0-24342
REG TECHNOLOGIES INC.
Registrant's Name
#240 – 11780 Hammersmith Way, Richmond, BC V7A 5E9
Address of principal executive office
Indicate by check mark whether the registrant files or will file annual reports under the cover Form 20-F or Form 40-F
Form 20-F X
Form 40-F ____________
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): _________
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): _________
Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934
Yes No X____
If "Yes" is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): _______________
Documents Included as Part of this Report
Exhibit No.
Document
99.1
Material Change Report dated January 8, 2010
99.2
Corporate Disclosure Control System dated January 18, 2010
99.3
Nominating and Corporate Governance Committee of the Board of Directors Charter
99.4
Code of Ethics
99.5
Audit and Finance Committee of the Board of Directors Charter
99.6
News Release dated March 31, 2010
99.7
Interim financial statements for nine months ended January 31, 2010
99.8
Management’s Discussion & Analysis for nine months ended January 31, 2010
99.9
Form 50-109F2 - CFO Certification
99.10
Form 50-109F2 - CEO Certification
99.11
Material Change Report dated April 9, 2010
99.12
News Release dated April 20, 2010
-2-
99.13
Material Change Report dated April 29, 2010
99.14
Notice of Change of Auditor dated May 25, 2010
99.15
Letter from former auditor regarding change of auditor dated May 25, 2010
99.16
Letter regarding change of auditor dated May 25, 2010
99.17
News Release dated May 27, 2010
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
REG TECHNOLOGIES INC.
(Registrant)
By
/s/ John Robertson
John Robertson,
President
Date March 16 2011
BC FORM 51-102F3
Material Change Report
Item 1. Name and Address of Company
State the full name and address of your company and the address of its principal office in Canada.
REG TECHNOLOGIES INC.
#240 – 11780 Hammersmith Way
Richmond, BC V7A 5E9
Phone: (604) 278-5996
Item 2.
Date of Material Change
State the date of the material change.
December 18, 2009
Item 3.
News Release
State the date and method(s) of dissemination of the news release issued under section 7.1 of National
Instrument 51-102.
December 18, 2009
The press release relating to this material change was distributed and filed by
Marketwire, Marketnews Publishing, Inc. and Stockwatch on December 18, 2009.
Item 4.
Summary of Material Change
Provide a brief but accurate summary of the nature and substance of the material change.
The Company announced that Path Technologies Inc. of Painesville, Ohio, has
been selected to fabricate the prototype RadMax® Diesel Engine. Path
Technologies was the most competitive fully responsive bidder following a
process of drawing and manufacturing processes evaluation.
Item 5.
Full Description of Material Change
Supplement the summary required under Item 4 with the disclosure that should be sufficient disclosure to
enable a reader to appreciate the significance and impact of the material change without having to refer to
other material. Management is in the best position to determine what facts are significant and must disclose
those facts in a meaningful manner. See also Item 7.
Some examples of significant facts relating to the material change include: dates, parties, terms and
conditions, description of any assets, liabilities or capital affected, purpose, financial or dollar values,
reasons for the change, and a general comment on the probable impact on the issuer or its subsidiaries.
Specific financial forecasts would not normally be required.
Other additional disclosure may be appropriate depending on the particular situation.
For a full description of the material change, see Schedule “A”.
Item 6.
Reliance on subsection 7.1(2) of National Instrument 51-102
If this report is being filed on a confidential basis in reliance on subsection 7.1(2) of National Instrument
51-102, state the reasons for that reliance.
Not applicable.
Instruction:
Refer to subsections 7.1(5) and (7) of National Instrument 51-102 concerning continuing obligations in
respect of reports filed under subsection 7.1(2) of National Instrument 51-102.
Item 7.
Omitted Information
State whether any information has been omitted on the basis that it is confidential information.
In a separate letter to the applicable regulator or securities regulatory authority marked “Confidential”
provide the reasons for your company’s omission of confidential significant facts in the Report in sufficient
detail to permit the applicable regulatory or securities regulatory authority to determine whether to exercise
its discretion to allow the omission of these significant facts.
Not applicable.
Instruction:
In certain circumstances where a material change has occurred and a material change report has been or is
about to be filed but section 85 of the Act will no longer or will not be relied upon, a reporting issuer may
nevertheless believe one or more significant facts otherwise required to be disclosed in the material change
report should remain confidential and not be disclosed or not be disclosed in full detail in the material
change report.
Item 8.
Executive Officer
Give the name and business telephone number of an executive officer of your company who is
knowledgeable about the material change and the Report, or an officer through whom the executive officer
may be contacted.
John G. Robertson
President
(604) 278-5996
Item 9.
Date of Report
DATED at Richmond, British Columbia this 8th day of January , 2010.
REG TECHNOLOGIES INC.
Per:
“John Robertson”
(Authorized Signatory)
John Robertson, President
(Print name and title)
SCHEDULE “A”
REGI U.S., INC.
REG TECHNOLOGIES INC.
#240 – 11780 Hammersmith Way
Richmond, BC V7A 5E9
Phone: 604-278-5996 Fax: 604-278-3409
Toll Free: 800-665-4616
www.regtech.com
N E W S R E L E A S E
REGI U.S., Inc. (“REGI” or “RGUS”)
Reg Technologies Inc. (“Reg” or “RRE.V” or “REGRF”)
REGI U.S., INC. / REG TECHNOLOGIES INC. ANNOUNCE FABRICATOR
SELECTED TO BUILD THE RADMAX DIESEL ENGINE PROTOTYPE
For Immediate Release: December 18, 2009. Vancouver, BC – REGI U.S., Inc. (OTC
BB: RGUS, Frankfurt Stock Exchange: RGJ) and Reg Technologies Inc. (TSX Venture
Exchange: RRE.V, OTC BB: REGRF) are pleased to announce that Path Technologies
Inc. of Painesville, Ohio, has been selected to fabricate the prototype RadMax® Diesel
Engine. Path Technologies was the most competitive fully responsive bidder following a
process of drawing and manufacturing processes evaluation. This process is a crucial
initial step to get the most qualified supplier on board to produce unique RadMax®
Diesel Engine parts.
Path Technologies recently produced RadMax® Pump parts for Reg Technologies Inc.
That prior experience was one of the major considerations in the evaluation and
selection process.
As the next step, Reg Technologies Inc. will issue a purchase order to Path
Technologies. That event will follow completion of the engineering reviews and final
approval by the Fortune 1000 company. Path Technologies will be responsible to
produce RadMax® parts. Reg Technologies Inc. will integrate those parts, along with
other commercial items (fuel injection, for example) to produce the prototype engine.
The timetable for the prototype engine remains the same as stated in the November 13,
2009 press release.
The specific work to be performed includes:
• Fabricate RadMax unique items from drawings and 3D computer models.
• Deliver metrology reports for each fabricated unique item.
• Purchase commercial items for inclusion in the RadMax end-item.
• Deliver copies of all purchase orders and part certifications.
• Perform trial fitment of all components, and rework as needed.
• Purchase test related items in accordance with supplied purchase requisitions.
• Assemble test related items as needed (table, dc motor, motor controller, etc.).
• Provide limited test support (non combustion) at their facility.
Robert Grisar, Vice President of Engineering, states, "I am confident that this version is
very robust. The systems engineering reviews have removed considerable length (and
weight) from the engine.”
This press release replaces the July 7, 2009 press release, which stated that fabrication
of the new diesel engine parts is now underway, and a comprehensive testing program
will follow. The said fabrication was postponed due to a request from the Fortune 1000
Company, which requested more time to complete the analysis of the design.
ABOUT PATH TECHNOLOGIES
Path Technologies, Inc. (www.path-tech.com) is a high quality "value-add" supplier of
Electrical Discharge Machining (EDM) and Computer Numerical Control (CNC)
Machining Services that support critical manufacturing industries around the globe.
ABOUT REGI U.S., INC. AND REG TECHNOLOGIES INC.
Reg Technologies Inc. and REGI U.S., Inc. are developing for commercialization the
RadMax® rotary technology. The lightweight, high efficiency, clean, green machine will
achieve our goal of contributing to an overall reduction in greenhouse gas emissions
and fuel consumption in applications including engines, compressors and pumps. The
RadMax® engine has only two unique moving parts, the vanes (up to 12) and the rotor,
compared to the 40 moving parts in a simple four-cylinder piston engine. This innovative
design makes it possible to produce up to 24 continuous power impulses per one
rotation that is vibration-free and extremely quiet. The RadMax® engine also has multi-
fuel capabilities allowing it to operate on fuels including gasoline, natural gas, hydrogen,
propane and diesel. REGI U.S., Inc. and its parent company, Reg Technologies Inc.,
have completed the final design for the RadMax® diesel engine application for use in
areas including aviation, automotive, industrial and military. For more information,
please visit www.regtech.com .
ON BEHALF OF THE BOARD OF DIRECTORS
REGI U.S., Inc.
Reg Technologies Inc.
“John Robertson”
“John Robertson”
John Robertson
John Robertson
President
President
Contacts: REGI U.S., Inc. and
Reg Technologies Inc.
John Robertson, 1-800-665-4616
READER ADVISORY
Statements in this press release regarding the business of Reg Technologies Inc. and REGI U.S, Inc. (together the “Companies’”) which are
not historical facts are "forward-looking statements" that involve risks and uncertainties, including management's assessment of future plans
and operations, and capital expenditures and the timing thereof, certain of which are beyond the Companies' control. There can be no
assurance that such statements will prove accurate, and actual results and developments are likely to differ, in some case materially, from
those expressed or implied by the forward-looking statements contained in this press release. Readers of this press release are cautioned
not to place undue reliance on any such forward-looking statements.
Forward-looking statements contained in this press release are based on a number of assumptions that may prove to be incorrect, including,
but not limited to: the impact of competitive products and pricing, the Companies' dependence on third parties and licensing/service supply
agreements, and the ability of competitors to license the same technologies as the Companies or develop or license other functionally
equivalent technologies; financing requirements; changes in laws, rules and regulations applicable to the Companies and changes in how
they are interpreted and enforced, delays resulting from or inability to obtain required regulatory approvals and ability to access sufficient
capital from internal and external sources, the impact of general economic conditions in Canada, and the United States, industry conditions,
increased competition, the lack of availability of qualified personnel or management, fluctuations in foreign exchange, stock market volatility
and market valuations of companies with respect to announced transactions. The Companies’ actual results, performance or achievements
could differ materially from those expressed in, or implied by, these forward-looking statements, including those described in Reg
Technologies’ financial statements, management discussion and analysis and material change reports filed with the Canadian Securities
Administrators and available at www.sedar.com, and its Form 20-F filed with the United States Securities and Exchange Commission at
www.sec.gov, and REGI’s Form 10-KSB annual report filed with the United States Securities and Exchange Commission at www.sec.gov.
Accordingly, no assurances can be given that any of the events anticipated by the forward-looking statements will transpire or occur, or if any
of them do so, what benefits, including the amount of proceeds, that the Companies will derive therefrom.
Readers are cautioned that the foregoing list of factors is not exhaustive. All subsequent forward-looking statements, whether written or oral,
attributable to the Companies or persons acting on its behalf are expressly qualified in their entirety by these cautionary statements.
Furthermore, the forward-looking statements contained in this news release are made as at the date of this news release and the Companies
do not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new
information, future events or otherwise, except as may be required by applicable securities laws.
The TSX Venture Exchange has neither approved nor disapproved of the information contained herein.
CORPORATE DISCLOSURE CONTROL SYSTEM
FOR
REG TECHNOLOGIES INC.
Purpose: To ensure that information required to be disclosed by the Company in reports that it files
or submits under the Multilateral Instrument 52-109 is recorded, processed, summarized and reported
within the time periods specified in the applicable rules and forms.
Disclosure Controls
1. All news releases and other such communications to shareholders must be approved in
advance by the Disclosure Committee.
2. The membership of the Disclosure Committee may change from time to time as circumstances
warrant. At present, the members of the Disclosure Committee are the Directors of the
Company.
Disclosure Procedures - Financial
1. The Audit and Finance Committee of the Board will ensure that all financial information relating
to the Company’s operations will be disclosed according to the terms or the Charter.
2. Applicable Canadian securities regulations require that unaudited interim financial statements
be filed within 60 days after the end of each fiscal quarter, and that audited annual financial
statements be filed within 120 days after the end of the fiscal year, together, in each case, with
management’s discussion and analysis (MD&A).
3. All financial statements must be reviewed by the Audit and Financial Committee of the Board
of Directors, in consultation with the Company’s external accountants, and approved by the
audit committee before they are submitted to the Board of Directors for approval.
4. All financial statements must be approved by the Board of Directors before they are released
to the public or filed with the regulatory authorities.
Disclosure Procedures - Non-Financial
The Disclosure Committee will ensure that all new non-financial information relating to the Company’s
operations that is material to those operations or could be material to the Company will be disclosed to
the public, if they deem it appropriate.
APPROVED by the Board of Directors, effective January 18, 2010.
“John Robertson”
“Suzanne Robertson”
JOHN ROBERTSON
SUSANNE ROBERTSON
“Jennifer Lorette”
“James Vandeberg”
JENNIFER LORETTE
JAMES VANDEBERG
_____”Robert Grisar”____________
ROBERT GRISAR
NOMINATING AND CORPORATE GOVERNANCE COMMITTEE OF THE BOARD OF
DIRECTORS CHARTER
Organization
There shall be a committee of the board of directors (the “Board”) of Reg Technologies Inc.
(“Reg”) known as the Nominating and Corporate Governance Committee (the “Committee”). This
charter shall govern the operations of the Committee.
Membership and Qualifications
The membership of the Committee shall be appointed by the Board and shall consist of at least
two directors.
Each member of the Committee shall be, while at all times a member of the Committee, free of
any relationship that, in the opinion of the Board, would interfere with the member’s individual
exercise of independent judgment and shall otherwise meet the independence requirements for
serving on nominating and corporate governance committees.
The Board shall appoint one member of the Committee as chair. The chair shall be responsible
for leadership of the Committee, including preparing the agenda, presiding over the meetings,
making committee assignments, preparing minutes and reporting to the Board. The chair shall
also maintain regular liaison with Reg’s Chief Executive Officer.
Purpose
The primary purpose of the Committee is to:
• identify individuals qualified to become Board members;
• recommend director nominees for each annual meeting of Reg’s stockholders and director
nominees to fill any vacancies that may occur between meetings of stockholders;
• be aware of the best practices in corporate governance and develop and recommend to
the Board a set of corporate governance standards to govern the Board, its committees,
the company and its employees in the conduct of the business and affairs of the company;
and
• develop and oversee the annual Board and Board Committee evaluation process.
Authority
The Committee has the power and authority to engage and determine funding for outside counsel
or other experts or advisors as the Committee deems necessary or appropriate to carry out its
duties and responsibilities. Reg shall provide appropriate funding, as determined by the
Committee, for any advisors employed by the Committee as well as for the payment of ordinary
administrative expenses of the Committee that are necessary or appropriate in carrying out its
duties.
Duties and Responsibilities
The Committee shall have the power and authority of the Board to perform the following duties
and to fulfill the following responsibilities:
• make recommendations to the Board regarding the size and composition of the Board;
• consider and recruit candidates for director nominees based upon recommendations from
current outside directors, members of management, outside consultants or search firms,
and/or stockholders using the following approach:
• the criteria for selecting new directors shall reflect the requirements of the listing standards
of the TSX Venture Exchange (or such other exchange or self-regulatory organization on
which Reg’s shares are then listed for trading) with respect to independence and the
following factors:
i.
the appropriate size of Reg’s board;
ii.
the needs of Reg with respect to the particular talents and experience of its
directors;
iii.
personal and professional integrity of the candidate;
iv.
level of education and/or business experience;
v.
broad-based business acumen;
vi.
the level of understanding of Reg’s business and the industry in which it
operates and other industries relevant to Reg’s business;
vii.
ability and willingness to commit adequate time to Board and committee
matters;
viii.
the fit of the individual’s skills and personality with those of other directors and
potential directors in building a board that is effective, collegial and responsive
to the needs of Reg;
ix.
strategic thinking and a willingness to share ideas; and
x.
diversity of experiences, expertise and background
The committee will use these criteria to evaluate potential nominees and will not evaluate
proposed nominees differently depending upon who has made the recommendation;
• the Committee will consider proposed nominees whose names are submitted to it by
stockholders in accordance with the procedures set forth in Reg’s bylaws;
• recommend on an annual basis a slate of director nominees for approval by the Board of
Directors and the stockholders;
• review the appropriate committee structure of the Board and recommend to the Board for
its approval directors to serve as members of each committee. The Committee shall
review and recommend committee slates annually and shall recommend additional
committee members to fill vacancies as needed;
• review, at least annually, Reg’s corporate governance standards and recommend changes
to the Board as deemed necessary;
• generally advise the Board on emerging corporate governance matters for incorporation
into Reg’s policies and procedures;
• develop, implement and administer an annual Board and Board Committee evaluation
process;
• perform any other activities consistent with this Charter, Reg’s Articles and governing law
as the Committee or the Board deem appropriate;
• undergo an annual review of the performance of the Committee pursuant to the process
established as set forth above;
• where appropriate, retain (without need for further Board approval) and consult with such
independent advisors as the Committee may deem necessary or appropriate in connection
with fulfilling the responsibilities and duties of the Committee;
• meet as often as its members deem necessary to perform the Committee’s duties and
responsibilities;
• report regularly to the Board with regard to action taken by the Committee and any issues
that may arise in the course of the discharge by the Committee of its responsibilities and
duties hereunder;
• prepare and submit the minutes of all meetings of the Committee to, and discuss the
matters discussed at each committee meeting with the Board; and
• review and assess the adequacy of this charter annually and recommend any proposed
changes to the Board for its approval.
Delegation to Subcommittees
The Committee shall have the power and authority to delegate any of its duties and
responsibilities to subcommittees as the Committee may deem appropriate in its sole discretions
Approved by the Reg Technologies Inc. Board of Directors on January 18, 2010
“John Robertson”
“Suzanne Robertson”
JOHN ROBERTSON
SUSANNE ROBERTSON
“Jennifer Lorette”
“James Vandeberg”
JENNIFER LORETTE
JAMES VANDEBERG
_____”Robert Grisar”___________
ROBERT GRISAR
REG TECHNOLOGIES INC. CODE OF ETHICS
Preamble
This Code of Conduct and Ethics (the "Code") sets forth legal and ethical standards of conduct for
employees, officers, directors and consultants that render material activities on behalf of the
Company and its subsidiaries, including the Company's principal executive officer and its senior
financial officers (principal financial officer and controller or principal accounting officer, or persons
performing similar functions). This Code is intended to deter wrongdoing and to promote the
conduct of all Company business in accordance with high standards of integrity and in compliance
with all applicable laws and regulations. This Code applies to the Company and all of its
subsidiaries and other business entities controlled by it worldwide.
If you have any questions regarding this Code or its application to you in any situation, you should
contact the President or any other director of the Company.
Compliance With Laws, Rules And Regulations
The Company requires that all employees, officers, directors and consultants comply with all laws,
rules and regulations applicable to the Company wherever it does business. You are expected to
use good judgment and common sense in seeking to comply with all applicable laws, rules and
regulations and to ask for advice when you are uncertain about them.
If you become aware of the violation of any law, rule or regulation by the Company, whether by its
employees, officers, directors or consultants, it is your responsibility to promptly report the matter
to your supervisor or the President of the Company. While it is the Company's desire to address
matters internally, nothing in this Code should discourage you from reporting any illegal activity,
including any violation of the securities laws, antitrust laws, environmental laws or any other
federal, provincial, state or foreign law, rule or regulation, to the appropriate regulatory authority.
Employees, officers, directors and consultants shall not discharge, demote, suspend, threaten,
harass or in any other manner discriminate against an employee because he or she in good faith
reports any such violation. This Code should not be construed to prohibit you from testifying,
participating or otherwise assisting in any state or federal administrative, judicial or legislative
proceeding or investigation.
Conflicts Of Interest
Directors may perform services as a consultant, employee, officer, director or advisor for a
competitor of the Company, such director must either:
1. acknowledge that a matter giving rise to a conflict of interest exists and refrain from
participating in discussions and decisions relating to such matter; or
2. disclose the nature and extent of such relationship and the particular matter to the Company’s
Board of Directors, together with sufficient facts and circumstances necessary for the
Company’s Board of Directors to determine if there is a conflict of interest.
It is your responsibility to disclose any material transaction or relationship that reasonably
could be expected to give rise to a conflict of interest to the President of the Company, or,
if you are an executive officer or director, to the Board of Directors, who shall be
responsible for determining whether such transaction or relationship constitutes a conflict
of interest.
Insider Trading
Employees, officers, directors and consultants who have material non-public information about the
Company or other companies, including our suppliers and customers, as a result of their
relationship with the Company are prohibited by law and Company policy from trading in
securities of the Company or such other companies, as well as from communicating such
information to others who might trade on the basis of that information. To help ensure that you
do not engage in prohibited insider trading and avoid even the appearance of an improper
transaction, the Company is adopting a specific policy governing trading in securities. This policy
is being distributed to all employees, officers and directors and is otherwise available from the
Assistant Corporate Secretary of the Company.
Confidentiality
Employees, officers, directors and consultants must maintain the confidentiality of information
entrusted to them by the Company or other companies, including our suppliers and customers,
except when disclosure is authorized by a supervisor or legally mandated. Unauthorized
disclosure of any confidential information is prohibited. Additionally, employees should take
appropriate precautions to ensure that confidential or sensitive business information, whether it is
proprietary to the Company or another company, is not communicated within the Company except
to employees who have a need to know such information to perform their responsibilities for the
Company. In the event you have executed a confidentiality agreement with the Company, such
agreement imposes specific obligations and restrictions on you and such obligations shall govern
to the extent they are, in any way, contrary to the terms of this Code.
Third parties may ask you for information concerning the Company. Employees, officers,
directors and consultants (other than the Company's authorized spokespersons) must not discuss
internal Company matters with, or disseminate internal Company information to, anyone outside
the Company, except as required in the performance of their Company duties and after an
appropriate confidentiality agreement is in place. This prohibition applies particularly to inquiries
concerning the Company from the media, market professionals (such as securities analysts,
institutional investors, investment advisers, brokers and dealers) and security holders. All
responses to inquiries on behalf of the Company must be made only by the Company's
authorized spokespersons. If you receive any inquiries of this nature, you must decline to
comment and refer the inquirer to your supervisor or one of the Company's authorized
spokespersons.
You also must abide by any lawful obligations that you have to any former employer. These
obligations may include restrictions on the use and disclosure of confidential information,
restrictions on the solicitation of former colleagues to work at the Company and non-competition
obligations.
Honest And Ethical Conduct And Fair Dealing
Keeping the best interests of the Company in mind, employees, officers, directors and consultants
should endeavor to deal honestly, ethically and fairly with the Company's suppliers, customers,
competitors and employees. Statements regarding the Company's products and services must
not be untrue, misleading, deceptive or fraudulent. You must not take unfair advantage of
anyone through manipulation, concealment, abuse of privileged information, misrepresentation of
material facts or any other unfair-dealing practice.
Protection And Proper Use Of Corporate Assets
Employees, officers and directors should seek to protect the Company's assets. Theft,
carelessness and waste have a direct impact on the Company's financial performance.
Employees, officers and directors must use the Company's assets and services solely for
legitimate business purposes of the Company and not for any personal benefit or the personal
benefit of anyone else.
Employees, officers and directors must advance the Company's legitimate interests when the
opportunity to do so arises. You must not take for yourself opportunities that are discovered
through your position with the Company or the use of property or information of the Company.
Gifts And Gratuities
The use of Company funds or assets for gifts, gratuities or other favors to employees or
government officials is prohibited, except to the extent such gifts are in compliance with applicable
law, nominal in amount, and not given in consideration or expectation of any action by the
recipient.
Employees, officers, directors and consultants must not accept, or permit any member of his or
her immediate family to accept, any gifts, gratuities or other favors from any customer, supplier or
other person doing or seeking to do business with the Company, other than items that do not nor
could reasonably be expected to affect the recipient’s judgment or actions on behalf of the
Company. Any gifts that are not of nominal value should be reported to the recipient’s supervisor
and, if deemed prudent by the supervisor, returned to the donor.
Common sense and moderation should prevail in business entertainment engaged in on behalf of
the Company. Employees, officers, directors and consultants should provide, or accept, business
entertainment to or from anyone doing business with the Company only if the entertainment is
infrequent, modest and intended to serve legitimate business goals.
Bribes and kickbacks are criminal acts, strictly prohibited by law. You must not offer, give, solicit
or receive any form of bribe or kickback anywhere in the world.
Accuracy Of Books And Records And Public Reports
Employees, officers, directors and consultants must honestly and accurately report all business
transactions. You are responsible for the accuracy of your records and reports. Accurate
information is essential to the Company's ability to meet legal and regulatory obligations.
All Company books, records and accounts shall be maintained in accordance with all applicable
regulations and standards and accurately reflect the true nature of the transactions they record.
The financial statements of the Company shall conform to generally accepted accounting
principles and the Company's accounting policies. No undisclosed or unrecorded account or
fund shall be established for any purpose. No false or misleading entries shall be made in the
Company's books or records for any reason, and no disbursement of corporate funds or other
corporate property shall be made without adequate supporting documentation (other than de
minimis amounts).
It is the policy of the Company to provide full, fair, accurate, timely and understandable disclosure
in reports and documents filed with, or submitted to, the Canadian and United States Securities
Commissions and in other public communications.
Concerns Regarding Accounting Or Auditing Matters
Employees with concerns regarding questionable accounting or auditing matters or complaints
regarding accounting, internal accounting controls or auditing matters may confidentially, and
anonymously if they wish, submit such concerns or complaints in writing to either: the President
of the Company or directly to any member of the Audit Committee of the Board of Directors. All
such concerns and complaints of a material nature will be forwarded by the President to the Audit
Committee of the Board of Directors. In any event, a complete record of all complaints will be
provided to the Audit Committee each fiscal quarter.
The Audit Committee will evaluate the merits of any concerns or complaints received by it and
authorize such follow-up actions, if any, as it deems necessary or appropriate to address the
substance of the concern or complaint.
The Company will not discipline, discriminate against or retaliate against any employee who
reports a complaint or concern (unless the employee is found to have knowingly and willfully
made a false report).
Whistle Blower
WHEREAS Multilateral Instrument 52-110 at Section 2.3(7) provides:
An Audit Committee must establish procedures for:
(a) the receipt, retention and treatment of complaints received by the issuer regarding accounting,
internal accounting controls, or auditing matters; and
(b) the confidential, anonymous submission by employees of the issuer of concerns regarding
questionable accounting or auditing matters.
IT WAS RESOLVED THAT:
The Committee establishes the following procedure:
1. The Chairman shall arrange to have an email address (the “email address”) at which address
the Committee shall receive complaints (“Complaints”) regarding accounting, internal
accounting controls or auditing matters and submissions (“Submissions”) of a confidential
nature or otherwise which may be made anonymously or otherwise in respect to questionable
accounting or auditing matters.
2. The Chairman shall cause the email address and its purposes to be set out on the Sedar
website, and in the Company’s information circular together with a description as to the
purpose of such disclosure.
3. Upon receipt of either Complaints or Submissions, the Chairman shall cause the details of the
Complaint or Submission to be placed in the Minutes of the next meeting of the Audit
Committee together with the steps to be undertaken to investigate the Complaint or
Submission, including the designation of a specific member of the Committee who will be
instructed to report back to the Committee the results of his or her investigation.
4. Upon approval of this resolution, all employees of the Company shall receive a copy of this
resolution together with the email address. Upon the employment of any new employee, he
or she will receive a copy of the resolution together with that email address.
5. Following the investigation of a Complaint or Submission, the Committee shall place in the
Minutes of the Audit Committee the steps taken to rectify the matters raised by the Complaints
or Submission.
Waivers Of This Code Of Conduct And Ethics
While some of the policies contained in this Code must be strictly adhered to and no exceptions
can be allowed, in other cases exceptions may be possible. Any employee, officer or consultant
who believes that an exception to any of these policies is appropriate in his or her case should
first contact his or her immediate supervisor. If the supervisor agrees that an exception is
appropriate, the approval of the President of the Company must be obtained. The Corporate
Secretary shall be responsible for maintaining a complete record of all requests for exceptions to
any of these policies and the disposition of such requests.
Any executive officer, senior financial officer or director who seeks an exception to any of these
policies should contact the President of the Company. Any waiver of this Code for executive
officers or directors or any change to this Code that applies to executive officers or directors may
be made only by the Board of Directors of the Company and will be publicly disclosed as required
by law or stock market regulation.
Reporting And Compliance Procedures
Every employee, officer, director and consultant has the responsibility to ask questions, seek
guidance, report suspected violations and express concerns regarding compliance with this Code.
Any employee, officer or director who knows or believes that any other employee or
representative of the Company has engaged or is engaging in Company-related conduct that
violates applicable law or this Code should report such information to his or her supervisor or to
the President of the Company, as described below. You may report such conduct openly or
anonymously without fear of retaliation. The Company will not discipline, discriminate against or
retaliate against any employee who reports such conduct in good faith, whether or not such
information is ultimately proven to be correct, or who cooperates in any investigation or inquiry
regarding such conduct. Any supervisor who receives a report of a violation of this Code must
immediately inform the President of the Company.
The Company shall determine whether violations of this Code have occurred and, if so, shall
determine the disciplinary measures to be taken against any person who has violated this Code.
In the event that the alleged violation involves an executive officer, senior financial officer or a
director, the President and the Board of Directors, respectively, shall determine whether a
violation of this Code has occurred and, if so, shall determine the disciplinary measures to be
taken against such executive officer, senior financial officer or director.
Failure to comply with the standards outlined in this Code will result in disciplinary action
including, but not limited to, reprimands, warnings, probation or suspension without pay,
demotions, reductions in salary, discharge for cause and restitution or termination of the
consultant arrangement. Certain violations of this Code may require the Company to refer the
matter to the appropriate governmental or regulating authorities for investigation or prosecution.
Moreover, any supervisor who directs or approves of any conduct in violation of this Code, or who
has knowledge of such conduct and does not immediately report it, also will be subject to
disciplinary action, up to and including discharge for cause.
Dissemination And Amendment
This Code shall be distributed annually to each employee, officer and director of the Company,
and each employee, officer and director shall certify that he or she has received, read and
understood the Code and has and will comply with its terms. This Code shall also be distributed
to each consultant that the Company engages for any material activities on behalf of the
Company and such consultant shall certify that he or she has received, read and understood the
Code and has and will comply with its terms.
The Company reserves the right to amend, alter or terminate this Code at any time for any
reason.
This document is not an employment contract between the Company and any of its employees,
officers or directors and does not alter the Company's at-will employment policy.
Approved by the Board of Directors of the Company on January 18, 2010.
“John Robertson”
“Jennifer Lorette”
“James Vandeberg”
John Robertson, President
Jennifer Lorette, Director
James Vandeberg, Director
“Robert Grisar”
“Susanne Robertson”
Robert Grisar, Director
Susanne Robertson, Director
CERTIFICATION
I, ______________________________ do hereby certify that: (Print Name Above)
1. I have received and carefully read the Code of Conduct and Ethics of the Company.
2. I have had ample opportunity to ask questions and seek clarification with respect to the Code
of Conduct and Ethics of the Company.
3. I understand the Code of Conduct and Ethics of the Company.
4. I have complied and will continue to comply with the terms of the Code of Conduct and Ethics
of the Company.
Date: ______________________ __________________________________ (Signature)
EACH EMPLOYEE, OFFICER, DIRECTOR AND MATERIAL CONSULTANT IS REQUIRED TO
SIGN, DATE AND RETURN THIS CERTIFICATION TO THE CHIEF FINANCIAL OFFICER
WITHIN 10 DAYS OF ISSUANCE. FAILURE TO DO SO MAY RESULT IN DISCIPLINARY
ACTION.
AUDIT AND FINANCE COMMITTEE OF THE BOARD OF DIRECTORS CHARTER
Organization
There shall be a committee of the board of directors (the “Board”) of Reg Technologies Inc. (“Reg”)
known as the Audit and Finance Committee (the “Committee”). This charter shall govern the
operations of the Committee.
Membership and Qualifications
The membership of the Committee shall be appointed by the Board and shall consist of at least three
directors, the majority of whom will be non-officers (the “Independent Directors”).
Each independent member of the Committee shall be, while at all times a member of the Committee,
free of any relationship that, in the opinion of the Board, would interfere with the member’s individual
exercise of independent judgment.
Each member of the Committee shall be, while at all times a member of the Committee, generally
knowledgeable in financial and auditing matters, specifically possessing the ability to read and
understand fundamental financial statements including Reg’s balance sheet, statement of operations
and statement of cash flows.
The Board shall appoint one member of the Committee as chair. The chair shall be responsible for
leadership of the Committee, including preparing the agenda, presiding over the meetings, making
committee assignments and reporting to the Board. The chair will also maintain regular liaison with
Reg’s Chief Executive Officer, Chief Financial Officer and lead independent audit partner.
Role
The Committee assists the Board in fulfilling its responsibility for oversight of the quality and integrity
of the accounting, auditing, reporting practices, systems of internal accounting and financial controls,
the annual independent audit of Reg’s financial statements, and the legal compliance and ethics
programs of Reg as established by management and the Board shall also perform any other related
duties as directed by the Board. In fulfilling this role, the Committee is expected to maintain free and
open communications with the independent auditor and management of Reg and shall meet at least
once each quarter.
While the Committee has the responsibilities and powers set forth below in this charter under the
headings “Authority” and “Responsibilities and Processes”, it is not the duty of the Committee to
conduct audits or to determine that Reg’s financial statements are fairly presented and are in
accordance with generally accepted accounting principles. Management is responsible for the
preparation of financial statements in accordance with generally accepted accounting principles. It is
the role of the independent auditor to audit the financial statements.
Authority
The Committee is granted the authority to investigate any matter brought to its attention, with full
access to all books, records, facilities and personnel of Reg. The Committee has the power to
engage and determine funding for outside counsel or other experts or advisors as the Committee
deems necessary for these purposes and as otherwise necessary or appropriate to carry out its
duties. Reg shall provide appropriate funding, as determined by the Committee, for payment of
compensation to any registered public accounting firm engaged for the purpose of preparing or issuing
an audit report or performing other audit, review or attest services for Reg and for any advisors
employed by the Committee as well as for the payment of ordinary administrative expenses of the
Committee that are necessary or appropriate in carrying out it duties.
Responsibilities and Processes
The Committee’s primary responsibilities include:
• overseeing Reg’s financial reporting process on behalf of the Board and reporting the results or
findings of its oversight activities to the Board;
• having sole authority to appoint, retain and oversee the work of Reg’s independent auditor and
establishing the compensation to be paid to the independent auditor. Reg’s independent
auditor shall report directly to the Committee;
• establishing procedures for the receipt, retention and treatment of complaints regarding
accounting, internal accounting controls and/or auditing matters for the confidential,
anonymous submission by Reg’s employees of concerns regarding questionable accounting or
auditing matters;
• pre-approving all audit services and permissible non-audit services as may be amended from
time to time; and
• overseeing Reg’s system to monitor and manage risk, and legal and ethical compliance
programs, including the establishment and administration (including the grant of any waiver
from) a written code of ethics applicable to each of Reg’s principal executive officer, principal
financial officer, principal accounting officer or controller or persons performing similar
functions.
The Committee, in carrying out its responsibilities, believes its policies and procedures should remain
flexible in order to react more effectively to changing conditions and circumstances. The Committee
shall take the appropriate actions to set the overall corporate “tone” for quality financial reporting,
sound business risk practices and ethical behaviour.
The following shall be the principal recurring processes of the Committee relating to its oversight
responsibilities. These processes are set forth as a guide, with the understanding that the Committee
may supplement them as appropriate and is not intended be a comprehensive list of all the actions
that the Committee will take in discharging its duties. These processes are:
• discussing with the independent auditor the objectivity and independence of the auditor and
any relationships that may impact the auditor’s objectivity or independence and receiving from
the independent auditor disclosures regarding its independence and written affirmation that the
independent auditor is in fact independent, and taking any action, or recommending that the
Board take appropriate action to oversee the independence of the independent auditor;
• overseeing the independent auditor relationship by discussing with the auditor the nature and
scope of the audit process, receiving and reviewing audit reports, and providing the auditor full
access to the Committee to report on any and all appropriate matters. The Committee has the sole
authority to resolve disagreements, if any, between management and the independent auditor;
• discussing with the independent auditor and Reg’s financial and accounting personnel,
together and in separate sessions, the adequacy and effectiveness of the accounting and
financial controls of Reg and eliciting recommendations for the improvement of such internal
control procedures or particular areas where new or more detailed controls or procedures may
be desirable;
• providing sufficient opportunity for the independent auditor to meet with the members of the
Committee without members of management present. Among the items to be discussed in
these meetings are the independent auditor’s evaluation of Reg’s financial and accounting
personnel and the cooperation that the independent auditor received during the course of the
audit;
• discussing with management their review of the adequacy of Reg’s disclosure controls and
procedures, the effectiveness of such controls and procedures and any findings following such
review;
• reviewing Reg’s system to monitor, assess and manage risk and legal and ethical compliance
program; and
• reviewing and discussing with management and the independent auditor prior to the filing of
Reg’s annual report:
i.
Reg’s annual financial statements and related footnotes and other financial
information, including the information in the “Management’s Discussion and
Analysis;
ii.
the selection, application and effects of Reg’s critical accounting policies, practices
and the reasonableness of significant judgements and estimates made by
management;
iii.
alternative and preferred treatment of financial information under generally
accepted accounting principles;
iv.
all material arrangements, off-balance sheet transactions and relationship with any
unconsolidated entities or any other persons which may have a material, current or
future, effect on the financial condition of Reg;
v.
any material written communications between the independent auditor and
management;
vi.
the independent auditor’s audit of the financial statements and its report thereon;
vii.
any significant finding and recommendations of the independent auditor and
management’s responses thereto;
viii.
any significant changes in the independent auditor’s audit plan;
ix.
any serious difficulties or disputes with management encountered during the course
of the audit;
x.
any related significant findings and recommendations of the independent auditor
together with management’s responses thereto; and
xi.
other matters related to the conduct of the audit, which are to be communicated to
the Committee under generally accepted auditing standards.
• preparing a report to be included in Reg’s Information Circular that states the Committee has:
i.
analyzed and discussed the audited financial statements with management;
ii.
discussed with the independent auditor the auditor’s independence;
iii.
considered the audit and non-audit services provided by the independent auditor,
and the fees paid for such services; and
iv.
the Committee shall review in advance all announcements of interim and annual
financial results, as well as any periodic guidance to be publicly released by Reg
and discuss such announcements with management and the independent auditors.
• reviewing and discussing with management and the independent auditor prior to the filing of
Reg’s Quarterly Report:
i.
CFO’s interim financial statements and related footnotes and other financial
information, including the information in the “Management’s Discussion and
Analysis”;
ii.
the selection, application and effects of Reg’s critical accounting policies, practices
and the reasonableness of significant judgments and estimates made by
management;
iii.
alternative and preferred treatment of financial information under generally
accepted accounting principles; and
iv.
all material arrangements, off-balance sheet transactions and relationship with any
unconsolidated entities or any other persons which may have a material current or
future effect on the financial condition of Reg.
• reviewing and either approving or disapproving all related party transactions;
• submitting the minutes of all meetings of the Committee to, or discussing the matters
discussed at each committee meeting with, the Board;
• reviewing and assessing the adequacy of this charter annually and recommend any proposed
changes to the Board for its approval; and
the Chairman of the Committee, or another Committee member designated by the Chairman, is
authorized to act on behalf of the Committee with respect to required Committee responsibilities which
arise between regularly scheduled Committee meetings, with the independent auditors and
management, as well as the pre-approval of non-audit services provided by the independent auditors,
as necessary, as contemplated by the Committee’s policies. Any such pre-filing discussions and
pre-approvals shall be reported to the Committee at a subsequent meeting.
Approved by the Reg Technologies Inc. Board of Directors on January 18, 2010.
“John Robertson”
“Suzanne Robertson”
JOHN ROBERTSON
SUSANNE ROBERTSON
“Jennifer Lorette”
“James Vandeberg”
JENNIFER LORETTE
JAMES VANDEBERG
_____”Robert Grisar”____________
ROBERT GRISAR
REG TECHNOLOGIES INC.
REGI U.S., INC.
#240 – 11780 Hammersmith Way
Richmond, BC V7A 5E9
Phone: 604-278-5996 Fax: 604-278-3409
Toll Free: 800-665-4616
www.regtech.com
NEWS RELEASE
REGI U.S., Inc. (“REGI” or “RGUS”)
Reg Technologies Inc. (“Reg” or “RRE.V” or “REGRF”)
REGI U.S., INC. / REG TECHNOLOGIES INC. RELEASE
RADMAX™ PROGRESS UPDATE
For Immediate Release: March 31, 2010. Vancouver, BC – REGI U.S., Inc. (OTC BB:
RGUS, Frankfurt Stock Exchange: RGJ) and Reg Technologies Inc. (TSX Venture
Exchange: RRE.V, OTC BB: REGRF) are pleased to release the RadMax™ Diesel
Engine Design progress update.
Phase 1: Conceptual Design, and Phase 2: Preliminary Design are now complete. We
are now executing Phase 3: Detail Design.
As previously described in our November 13, 2009 Press Release, we are nearing the
completion of a significant milestone of the Belcan Engineering review of the prototype
engine design, which was estimated at 6 months.
The actions completed are as follows:
• Retain Belcan as an independent engineering analysis organization to provide
independent validation of all RadMax™ design elements: functions, tolerances,
and material selections
• Verify environmental conditions (temperatures, pressures, centrifugal forces,
etc.)
Actions that are continuing include:
• Identify components that require detail stress analysis
• Perform complete integration of all components and evaluate their performance
and strength under non- operating and operating conditions.
We have conducted a technical engineering interchange meeting with Belcan for the
thermodynamics analysis portion. A final report has been jointly prepared and submitted
to the Fortune 1000 company for review. A mutli-company thermodynamics review is
planned for mid April.
The thermodynamics report includes recommendations for RadMax™ Engine materials,
thicknesses, tolerances, and coatings. One specific recommendation is to fabricate the
cam using lighter weight materials to take advantage of its improved thermal
conductivity.
Near-term program milestones include:
• Completion of Belcan Engineering review of mechanical components, bearings,
and lubrication – approx. 3 additional months
• Review and Approval by the Fortune 1000 Company – approx. 30 days
• Fabrication of the prototype engine – approx. 3 months
• Initial prototype testing – approx. 3 months
Robert Grisar, Vice President of Engineering, reports, “The Belcan review of the
RadMax® design is progressing on schedule as planned. We are extremely pleased with
the expertise that Belcan is contributing to the robustness of the RadMax™ design.
ABOUT BELCAN ENGINEERING SERVICES
Belcan Engineering Services is a global provider of highly technical engineering services
to a wide variety of industries including aerospace and defense, energy and utilities,
manufacturing, and transportation. They specialize in design engineering, engineering
analysis, computer modeling, and advanced manufacturing techniques and have been
providing these services for over 50 years.
ABOUT REGI U.S., INC. AND REG TECHNOLOGIES INC.
Reg Technologies Inc. and REGI U.S., Inc. are developing for commercialization an
improved axial vane type rotary engine known as the Rand Cam™/RadMax™ rotary
technology used in the revolutionary design of lightweight and high efficiency engines,
compressors and pumps. The RadMax™ engine has only two unique moving parts, the
vanes (up to 12) and the rotor, compared to the 40 moving parts in a simple four-cylinder
piston engine. This innovative design makes it possible to produce up to 24 continuous
power impulses per one rotation that is vibration-free and extremely quiet.
The
RadMax™ engine also has multi-fuel capabilities allowing it to operate on fuels including
gasoline, natural gas, hydrogen, propane and diesel. REGI U.S., Inc. and its parent
company, Reg Technologies Inc., are currently designing and testing prototype
RadMax™ diesel engines, compressors and pumps intended for aviation, automotive,
industrial processes and military applications. For more information, please visit
www.regtech.com .
ON BEHALF OF THE BOARD OF DIRECTORS
REGI U.S., Inc.
Reg Technologies Inc.
“John Robertson”
“John Robertson”
John Robertson
John Robertson
President
President
Contacts: REGI U.S., Inc. and
Reg Technologies Inc.
John Robertson, 1-800-665-4616
READER ADVISORY
Statements in this press release regarding the business of Reg Technologies Inc. and REGI U.S, Inc. (together the
“Companies’”) which are not historical facts are "forward-looking statements" that involve risks and uncertainties, including
management's assessment of future plans and operations, and capital expenditures and the timing thereof, certain of
which are beyond the Companies' control. There can be no assurance that such statements will prove accurate, and
actual results and developments are likely to differ, in some case materially, from those expressed or implied by the
forward-looking statements contained in this press release. Readers of this press release are cautioned not to place
undue reliance on any such forward-looking statements.
Forward-looking statements contained in this press release are based on a number of assumptions that may prove to be
incorrect, including, but not limited to: the impact of competitive products and pricing, the Companies' dependence on third
parties and licensing/service supply agreements, and the ability of competitors to license the same technologies as the
Companies or develop or license other functionally equivalent technologies; financing requirements; changes in laws,
rules and regulations applicable to the Companies and changes in how they are interpreted and enforced, delays
resulting from or inability to obtain required regulatory approvals and ability to access sufficient capital from internal and
external sources, the impact of general economic conditions in Canada, and the United States, industry conditions,
increased competition, the lack of availability of qualified personnel or management, fluctuations in foreign exchange,
stock market volatility and market valuations of companies with respect to announced transactions. The Companies’
actual results, performance or achievements could differ materially from those expressed in, or implied by, these forward-
looking statements, including those described in Reg Technologies’ financial statements, management discussion and
analysis and material change reports filed with the Canadian Securities Administrators and available at www.sedar.com,
and its Form 20-F filed with the United States Securities and Exchange Commission at www.sec.gov, and REGI’s Form
10-KSB annual report filed with the United States Securities and Exchange Commission at www.sec.gov. Accordingly, no
assurances can be given that any of the events anticipated by the forward-looking statements will transpire or occur, or if
any of them do so, what benefits, including the amount of proceeds, that the Companies will derive therefrom.
Readers are cautioned that the foregoing list of factors is not exhaustive. All subsequent forward-looking statements,
whether written or oral, attributable to the Companies or persons acting on its behalf are expressly qualified in their
entirety by these cautionary statements. Furthermore, the forward-looking statements contained in this news release are
made as at the date of this news release and the Companies do not undertake any obligation to update publicly or to
revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise,
except as may be required by applicable securities laws.
The TSX Venture Exchange has neither approved nor disapproved of the information contained herein.
Reg Technologies Inc.
(A Development Stage Company)
Interim Consolidated Financial Statements
(Unaudited – Prepared by Management)
(Expressed in Canadian Dollars)
January 31, 2010 and 2009
Reader’s Note:
These unaudited interim consolidated financial statements of Reg Technologies Inc. (“the Company”) for the
nine months ended January 31, 2010 have been prepared by management and have not been reviewed by the
Company’s auditors.
Reg Technologies Inc.
(A Development Stage Company)
Interim Consolidated Balance Sheets
(Expressed in Canadian Dollars)
As at
As at
January 31,
April 30,
2010
2009
$
$
(Unaudited)
Assets
Current
Cash
-
1,107
GST and interest receivable
6,317
9,010
Share subscription receivable (Note 5)
45,000
-
Prepaid expenses
3,091
1,776
Due from related parties (Note 8)
26,820
19,537
Advances to equity accounted investee (Note 7)
529,431
536,438
610,659
567,868
Equipment (Note 6)
3,962
6,897
614,621
574,765
Liabilities
Current
Bank indebtedness
13,878
-
Accounts payable and accrued liabilities
254,533
78,402
Due to related parties
148,139
-
Income taxes payable
32,379
32,379
Financial instrument liability (Note 10)
22,885
167,000
471,814
277,781
Shareholders’ equity
Share Capital (Note 5)
11,847,067
11,800,964
Share subscriptions received (Note 5)
12,000
-
Warrants (Note 5)
264,768
167,540
Contributed Surplus (Note 5)
2,147,555
2,115,568
Deficit
(14,128,583)
(13,787,088)
142,807
296,984
614,621
574,765
Nature and Continuance of Operations (Note 1)
Commitments (Note 9)
On behalf of the Board:
“John Robertson”
Director
“Jennifer Lorette"
Director
John Robertson
Jennifer Lorette
The accompanying notes are an integral part of these consolidated financial statements.
Reg Technologies Inc.
(A Development Stage Company)
Interim Consolidated Statements of Loss and Comprehensive Loss
(Unaudited – Prepared by Management)
(Expressed in Canadian Dollars)
For the three
For the three
For the nine
For the nine
months
months
months
months
ended
ended
ended
ended
January 31
January 31
January 31
January 31
2010
2009
2010
2009
$
$
$
$
Expenses
Amortization
820
1,026
2,935
3,016
Advertising and promotion
4,999
4,914
10,358
96,793
Consulting fees
9,563
5,538
13,965
25,126
Foreign exchange loss (gain)
38,836
(1,047)
40,556
(56,992)
Investor relations and shareholder communication
23,736
9,578
51,844
9,578
Management and director fees
13,050
21,800
39,150
44,700
Miscellaneous office expenses
16,606
9,151
44,051
43,516
Professional fees
13,743
10,557
80,347
131,198
Public relations
4,088
8,175
12,263
27,250
Research and development
19,737
29,849
98,200
99,037
Rent and utilities
11,233
8,631
27,562
24,554
Stock-based compensation
-
-
31,987
31,241
Transfer agent and filing fees
8,727
7,971
15,889
33,133
Travel and promotion
4,541
8,856
13,516
14,573
Wages and benefits
7,342
7,185
21,616
23,030
Mineral property maintenance costs
8,060
8,060
8,060
8,060
Loss before other items
185,081
140,244
512,299
557,813
Other (income) expenses
Gain on sale of investee's shares
-
(7,473)
(26,689)
(99,797)
Gain on issue by investee of its own shares
-
-
-
-
Unrealized loss (gain) on financial instrument
liability
(79,229)
-
(144,115)
-
Write down of accounts payable
-
(10,813)
-
(10,813)
Net and comprehensive loss for the period
105,852
121,958
341,495
447,203
Loss per share - basic and diluted
0.004
0.005
0.013
0.018
Weighted average number of common shares
outstanding - basic and diluted
25,768,959
25,164,000
25,732,271
24,726,000
The accompanying notes are an integral part of these consolidated financial statements.
Reg Technologies Inc.
(A Development Stage Company)
Interim Consolidated Statements of Cash Flows
(Unaudited – Prepared by Management)
(Expressed in Canadian Dollars)
For the Three Months
For the Nine Months
Ended January 31
Ended January 31
2010
2009
2010
2009
$
$
$
$
Cash flows used in operating activities
Net loss for the period
(105,852)
(121,958)
(341,495)
(447,203)
Adjustments to reconcile loss to net cash
used by operating activities:
Amortization
820
1,026
2,935
3,016
Gain on sale of investee's shares
-
(7,473)
(26,689)
(99,797)
Stock-based compensation
-
-
31,987
31,241
Unrealized gain on financial instrument
liability
(79,229)
-
(144,115)
-
Changes in non-cash working capital items:
GST and interest receivable
9,001
1,057
2,693
475
Prepaid expenses
11,858
900
(1,315)
3,600
Accounts payable and accrued liabilities
47,294
(30,383)
176,131
15,550
(116,108)
(156,831)
(299,868)
(493,118)
Cash flows provided by investing activities
(Advances to) repayments from equity
accounted investee
(6,412)
(407,734)
7,007
(697,957)
Proceeds on sale of investee's shares and
warrants
-
7,473
26,689
99,797
Purchase of property and equipment
-
-
-
(740)
(6,412)
(400,261)
33,696
(598,900)
Cash flows provided by financing activities
Bank indebtedness
11,939
-
13,878
-
Advances from (to) related parties
(79)
174,891
140,856
219,361
Proceeds from share issuances, net of
143,331
-
143,331
509,283
issuance costs
Subscription receivable
(45,000)
-
(45,000)
-
Subscription received
12,000
389,586
12,000
384,158
122,191
564,477
265,065
1,112,802
Change in cash
(329)
7,385
(1,107)
20,784
Cash, beginning of period
329
13,657
1,107
258
Cash, end of period
-
21,042
-
21,042
Supplemental Disclosures
Interest paid
-
-
-
-
Income taxes paid
-
-
-
-
The accompanying notes are an integral part of these consolidated financial statements.
Reg Technologies Inc.
(A Development Stage Company)
Interim Consolidated Statements of Shareholders’ Equity
(Unaudited – Prepared by Management)
(Expressed in Canadian Dollars)
Other
Total
Common
Common
Subscription Contributed
Comprehensive
Shareholders’
Shares
Shares
Received
Surplus
Warrants Income (Loss)
Deficit
Equity
#
$
$
$
$
$
$
$
Balance – April 30, 2007
23,942,759 11,356,689
–
849,839
–
639,758 (12,794,669)
51,617
Stock-based compensation
–
–
–
247,059
–
–
–
247,059
Deconsolidation adjustment
–
–
– (886,589)
–
(648,763)
– (1,535,352)
Deconsolidation of subsidiary
–
–
– 1,808,851
–
–
–
1,808,851
Foreign currency translation
–
–
–
5,672
–
9,005
–
14,677
adjustment
Net loss (Restated – Note 12)
–
–
–
–
–
–
(536,329)
(536,329)
Balance – April 30, 2008
23,942,759 11,356,689
– 2,024,832
–
– (13,330,998)
50,523
Shares issued for cash
1,771,168
444,275
–
– 167,540
–
–
611,815
Stock-based compensation
–
–
–
90,736
–
–
–
90,736
Net loss
–
–
–
–
–
–
(456,090)
(456,090)
Balance – April 30, 2009
25,713,927 11,800,964
– 2,115,568 167,540
– (13,787,088)
296,984
Shares issued for cash, net of share
–
issue costs
1,012,596
46,103
–
97,228
–
–
143,330
Subscription received
–
–
12,000
–
–
–
–
12,000
Net loss
–
–
–
–
–
–
(341,495)
(341,495)
Stock based compensation
–
–
–
31,987
–
–
–
31,987
Balance – January 31, 2010
26,726,523 11,847,067
12,000 2,147,555 264,768
– (14,128,583)
142,807
The accompanying notes are an integral part of these consolidated financial statements.
Reg Technologies Inc.
(A Development Stage Company)
Notes to Interim Consolidated Financial Statements
(Expressed in Canadian Dollars)
(Unaudited – Prepared by Management
For the nine months ended January 31, 2010 and 2009
1.
Nature and Continuance of Operations
Reg Technologies Inc. (the “Company”) is a development stage company in the business of developing and
commercially exploiting a new designed axial vane type rotary engine known as the RadMax™ Engine
and other RandCamTM / RadMax™ applications, such as compressors and pumps (the “Technology”). The
worldwide marketing and intellectual rights, other than in the U.S., are held by the Company, which owns
4.5 million (directly or indirectly) shares of REGI U.S, Inc. (“REGI”) (a U.S. public company) representing
a 16% interest in REGI. REGI owns the U.S, marketing and intellectual rights. The Company and REGI
have a project cost sharing agreement whereby these companies each fund 50% of the development of the
Technology.
In a development stage company, management devotes most of its activities to establishing a new business.
Planned principal activities have not yet produced any revenues and the Company has incurred recurring
operating losses as is normal in development stage companies. The Company has accumulated losses of
$14,128,583 since inception. These factors raise substantial doubt about the Company’s ability to continue
as a going-concern. The ability of the Company to emerge from the development stage with respect to its
planned principal business activity is dependent upon its successful efforts to raise additional equity
financing, receive funding from affiliates and controlling shareholders, and develop a market for its
products.
Management is aware that material uncertainties exist, related to current economic conditions, which could
adversely affect the Company’s ability to continue to finance its activities. The Company receives interim
support from affiliated companies and plans to raise additional capital through debt and/or equity
financings. There continues to be insufficient funds to provide adequate working capital to fund ongoing
operations for the next twelve months. The Company may also raise additional funds though the exercise of
warrants and stock options.
There is no certainty that the Company’s efforts to raise additional capital will be successful. These
financial statements do not include any adjustments relating to the recoverability and classification of
recorded asset amounts and classification of liabilities that might be necessary should the Company be
unable to continue in normal operations.
2. Basis of Accounting and Principles of Consolidation
These unaudited interim consolidated financial statements have been prepared in accordance with Canadian
generally accepted accounting principles (“GAAP”) for interim financial information using the same
accounting policies and methods of application as the audited consolidated financial statements of the
Company for the year ended April 30, 2009. These unaudited interim consolidated financial statements do not
include all the information and note disclosures required by GAAP for annual financial statements of the
Company and should be read in conjunction with the audited consolidated financial statements of the
Company as at April 30, 2009.
In the opinion of management, all adjustments considered necessary for fair presentation have been included
in these financial statements. Interim results are not necessarily indicative of the results expected for the fiscal
year.
Reg Technologies Inc.
(A Development Stage Company)
Notes to Interim Consolidated Financial Statements
(Expressed in Canadian Dollars)
(Unaudited – Prepared by Management
For the nine months ended January 31, 2010 and 2009
2.
Basis of Accounting and Principles of Consolidation (Continued)
These financial statements include the accounts of the Company and its 51% owned subsidiary, Rand
Energy Group Inc. (“Rand”), which owns a 4% (2008 – 9%) interest in REGI. The Company also owns a
12% (2008 - 12%) interest in REGI. Prior to April 30, 2008, REGI was considered a controlled subsidiary
for consolidation purposes by way of control through an annually renewable voting trusts agreement, with
other affiliated companies. This trusts agreement gave the Company 50% control of the voting shares of
REGI. The agreement could be cancelled by the President of the 51% owned subsidiary with seven days’
written notice to the affiliated companies. Effective April 30, 2008, the voting trusts agreement was
cancelled and consequently the investment in REGI has been accounted for as an equity investment.
3. Recent Accounting Pronouncements Not Yet Adopted
International Financial Reporting Standards
In 2006, the Canadian Accounting Standards Board (“AcSB”) published a new strategic plan that will
significantly affect financial reporting requirements for Canadian companies. The AcSB strategic plan
outlines the convergence of Canadian GAAP with IFRS over an expected five year transitional period.
In February 2008 the AcSB announced that 2011 is the changeover date for publicly-listed companies to
use IFRS, replacing Canadian GAAP. This date is for interim and annual financial statements relating to
fiscal years beginning on or after January 1, 2011. The Company’s transition date of May 1, 2010 will
require the restatement for comparative purposes of amounts reported by the Company for the year ended
April 30, 2011. In July 2008 AcSB announced that early adoption will be allowed in 2009 subject to
seeking exemptive relief. The Company is currently assessing the financial reporting impact of the
transition to IFRS and the changeover date.
Other accounting pronouncements issued with future effective dates are either not applicable or are not
expected to be significant to the consolidated financial statements of the Company.
4.
Management of Financial Risk
Interest rate and credit risk
The Company has minimal cash balances and no interest-bearing debt. The Company has no significant
concentrations of credit risk arising from operations. The Company's current policy is to invest any
significant excess cash in investment-grade short-term deposit certificates issued by reputable financial
institutions with which it keeps its bank accounts and management believes the risk of loss to be
remote. The Company periodically monitors the investments it makes and is satisfied with the credit
ratings of its banks.
Receivables consist of goods and services tax due from the Federal Government. Management believes
that the credit risk concentration with respect to receivables is remote.
Reg Technologies Inc.
(A Development Stage Company)
Notes to Interim Consolidated Financial Statements
(Expressed in Canadian Dollars)
(Unaudited – Prepared by Management
For the nine months ended January 31, 2010 and 2009
4. Management of Financial Risk (Continued)
Foreign exchange risk
The Company is primarily exposed to currency fluctuations relative to the Canadian dollar through
expenditures that are denominated in US dollars. Also, the Company is exposed to the impact of
currency fluctuations on its monetary assets and liabilities.
The operating results and the financial position of the Company are reported in Canadian dollars.
Fluctuations in exchange rates will, consequently, have an impact upon the reported operations of the
Company and may affect the value of the Company’s assets and liabilities.
The Company currently does not enter into financial instruments to manage foreign exchange risk.
The Company is exposed to foreign currency risk through the following financial assets and liabilities
that are denominated in United States dollars:
Related Party
Accounts
January 31, 2010
Bank Debt
Receivables
payable
$
4,925
$
13,919
$
11,827
At January 31, 2010 with other variables unchanged, a +/-10% change in exchange rates would
increase/decrease pre-tax loss by approximately +/- $702.
Liquidity Risk
Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall
due. The Company manages liquidity risk through the management of its capital structure and financial
leverage as outlined in Note 11.
5.
Shareholders’ Equity
Authorized
50,000,000 Common shares without par value
10,000,000 Preferred shares with a $1 par value, redeemable for common shares on the basis of 1
common share for 2 preferred shares
5,000,000 Class A non-voting shares without par value. Special rights and restrictions apply.
Treasury Shares
At January 31, 2010, Rand owns 217,422 (2009 – 217,422) shares of the Company valued at $43,485
that have been deducted from the total shares issued and outstanding. The value of these shares has
been deducted from share capital.
Reg Technologies Inc.
(A Development Stage Company)
Notes to Interim Consolidated Financial Statements
(Expressed in Canadian Dollars)
(Unaudited – Prepared by Management
For the nine months ended January 31, 2010 and 2009
5. Shareholders’ Equity (Continued)
Private placements
During the year ended April 30, 2009, the Company completed a private placement, whereby it issued
1,315,168 units at $0.40 per unit for proceeds of $526,067. Each unit consisted of one common share and
one non-transferable share purchase warrant, entitling the holder to acquire one additional common share
for a period of one year at $0.50 per share and at $0.60 per share in the second year. The fair value of the
warrants included in the units was estimated to be $0.115 per warrant using the Black-Scholes option
pricing model using the following assumptions: risk free interest rate of 3.10%, expected volatility of
107%, an expected life of 1 year and no expected dividends. Finders’ fees of $22,212 were paid in
connection with the private placement, which are included in share issuance costs.
During the year ended April 30, 2009, the Company completed a private placement, whereby it issued
456,000 units at $0.25 per unit for proceeds of $114,000. Each unit consisted of one common share and
one-half non-transferable share purchase warrant. Two one-half warrants entitle the holder to purchase one
additional share of common stock at a price of $0.35 per share for one year. The fair value of the warrants
included in the units was estimated to be $0.07 using the Black-Scholes option pricing model using the
following assumptions: risk free interest rate of 1.10%, expected volatility of 115%, an expected life of 1
year and no expected dividends. Finders’ fees of $6,040 were paid in connection with the private
placement, which are included in share issuance costs.
During the nine months ended January 31, 2010, the Company completed a private placement, whereby it
issued 1,012,596 units at $0.15 per unit for proceeds of $151,889, of which $45,000 was received on
February 3, 2010 from the shareholder’s RRSP trust account. Each private placement unit consisted of one
common share and share purchase warrant. Each warrant entitles the holder to purchase one additional
share of common stock at a price of $0.20 per share for one year. The fair value of the warrants included in
the units was estimated to be $0.10 using the Black-Scholes option pricing model using the following
assumptions: risk free interest rate of 1.17%, expected volatility of 153%, an expected life of 1 year and no
expected dividends. Finders’ fees of $7,050 were paid in connection with the private placement, which are
included in share issuance costs.
During the nine months ended January 31, 2010, the Company received $12,000 for subscriptions for shares
issued in March, 2010.
Stock Options
The Company has implemented a stock option plan (the “Plan”) to be administered by the Board of
Directors. Pursuant to the Plan, the Board of Directors has discretion to grant options for up to a maximum
of 10% of the issued and outstanding common shares of the Company at the date the options are granted.
The option price under each option shall be not less than the discounted market price on the grant date. The
expiry date of an option shall be set by the Board of Directors at the time the option is awarded, and shall
not be more than five years after the grant date.
Reg Technologies Inc.
(A Development Stage Company)
Notes to Interim Consolidated Financial Statements
(Expressed in Canadian Dollars)
(Unaudited – Prepared by Management
For the nine months ended January 31, 2010 and 2009
5.
Shareholders’ Equity (Continued)
Stock Options (Continued)
These options have the following vesting schedule:
i)
Up to 25% of the option may be exercised at any time during the term of the option; such initial
exercise is referred to as the “First Exercise”.
ii)
The second 25% of the option may be exercised at any time after 90 days from the date of First
Exercise; such second exercise is referred to as the “Second Exercise”.
iii)
The third 25% of the option may be exercised at any time after 90 days from the date of Second
Exercise; such third exercise is referred to as the “Third Exercise”.
iv)
The fourth and final 25% of the option may be exercised at any time after 90 days from the date
of the Third Exercise.
v)
The options expire 60 months from the date of grant.
Options granted to consultants engaged in investor relations activities will vest in stages over a minimum of
12 months with no more than 25% of the options vesting in any three-month period.
During the nine months ended January 31, 2010, the Company recorded stock-based compensation of
$31,987 (2009 - $31,240) as a general and administrative expense and addition to contributed surplus.
During the year ended April 31, 2009, the Company granted 375,000 stock options from the Plan to two
directors and a consultant exercisable at $0.21 per share, up to April 22, 2014. The fair value of options
was estimated using the Black-Scholes option pricing model using the following weighted average
assumptions: risk free interest rate of 3.19%, expected volatility of 106%, an expected option life of 1 - 5
years and no expected dividends. The weighted average fair value of options granted was $0.18 per option.
During the year ended April 31, 2009, the Company granted 400,000 stock options from the Plan to
employees, directors and consultants exercisable at $0.40 per share, up to August 1, 2013. The fair value of
options was estimated using the Black-Scholes option pricing model using the following weighted average
assumptions: risk free interest rate of 1.69%, expected volatility of 134%, an expected option life of 1 - 5
years and no expected dividends. The weighted average fair value of options granted was $0.31 per option.
Reg Technologies Inc.
(A Development Stage Company)
Notes to Interim Consolidated Financial Statements
(Expressed in Canadian Dollars)
(Unaudited – Prepared by Management
For the nine months ended January 31, 2010 and 2009
5.
Shareholders’ Equity (Continued)
Stock Options (Continued)
A summary of the Company’s stock options is as follows:
Weighted
average
Number of
exercise
options
price
$
Outstanding at April 30, 2008
1,125,000
0.27
Granted
775,000
0.31
Expired
(375,000)
0.22
Outstanding at April 30, 2009 and January 31, 2010
1,525,000
0.30
As at January 31, 2010, the following stock options are outstanding:
Expiry Date
Exercise
Number
Remaining
price
of options
contractual life
(years)
$
October 20, 2010
0.30
750,000
0.72
August 1, 2013
0.40
400,000
3.50
April 22, 2014
0.21
375,000
4.23
Options Outstanding
1,525,000
Options Exercisable
381,250
Reg Technologies Inc.
(A Development Stage Company)
Notes to Interim Consolidated Financial Statements
(Expressed in Canadian Dollars)
(Unaudited – Prepared by Management
For the nine months ended January 31, 2010 and 2009
5.
Shareholders’ Equity (Continued)
Share Purchase Warrants
A summary of the Company’s share purchase warrants is as follows:
Weighted
average
Number of
exercise
warrants
price
$
Outstanding at April 30, 2008
-
-
Issued
1,543,168
0.56
Outstanding at April 30, 2009 and January 31, 2010
1,543,168
0.56
As at January 31, 2010, the following share purchase warrants were outstanding:
Expiry Date
Exercise
Number
price
of warrants
$
July 31, 2010
0.60
1,315,168
April 1, 2010
0.35
228,000
Warrants Outstanding
1,543,168
6.
Equipment
Accumulated
January 31, 2010
Cost
Amortization
Net Book Value
Computer hardware
$
7,372
$
6,656
$
716
Office furniture and equipment
8,849
5,603
3,246
Total
$
16,221
$
12,259
$
3,962
Accumulated
April 30, 2009
Cost
Amortization
Net Book Value
Computer hardware
$
7,372
$
5,049
$
2,323
Office furniture and equipment
8,849
4,275
4,574
Total
$
16,221
$
9,324
$
6,897
Reg Technologies Inc.
(A Development Stage Company)
Notes to Interim Consolidated Financial Statements
(Expressed in Canadian Dollars)
(Unaudited – Prepared by Management
For the nine months ended January 31, 2010 and 2009
7. Equity Accounted Investee
The Company’s investment in REGI has been reduced to $nil as the Company’s share of past losses
exceeded the carrying value of the investment in REGI.
At January 31, 2010, the Company is owed an aggregate of $529,431 (April 30, 2009 - $536,428) by REGI.
The amounts owed are unsecured, non-interest bearing and due on demand.
During the nine months ended January 31, 2010, the Company recognized a gain of $26,689 (2009 -
$99,797) relating to the sale of 84,500 of its shares of REGI.
8.
Related Party Transactions
At January 31, 2010, the Company is owed an aggregate of $26,820 (April 30, 2009 - $19,537) by related
parties. The amounts owed are unsecured, non-interest bearing and due on demand. These parties are
companies that the President of the Company controls or significantly influences.
During the nine months ended January 31, 2010, rent of $11,379 (2009 - $10,890) was paid to a company
having common officers and directors.
During the nine months ended January 31, 2010, management fees of $22,500 (2009 - $22,500) were paid
to a company having common officers and directors.
During the nine months ended January 31, 2010, research and development costs of $32,366 (2009 - $Nil)
were paid to a company having common officers and directors.
During the nine months ended January 31, 2010, administrative and management fees, included in
miscellaneous office expenses, of $20,250 (2009 - $21,048) and directors’ fees of $9,000 (2009 - $6,500)
were paid to officers, directors and companies controlled by officers and directors for services rendered.
These related party transactions are carried out in the normal course of operations and are measured at the
exchange amount of consideration established and agreed to by all the related parties. Amounts due from
related parties are unsecured, non-interest bearing and due on demand.
Reg Technologies Inc.
(A Development Stage Company)
Notes to Interim Consolidated Financial Statements
(Expressed in Canadian Dollars)
(Unaudited – Prepared by Management
For the nine months ended January 31, 2010 and 2009
9.
Commitments
a) In connection with the acquisition of Rand, the Company has the following royalty obligations:
i)
A participating royalty is to be paid based on 5% of all net profits from sales, licenses, royalties
or income derived from the Rand Cam Technology patented technology, to a maximum amount
of $10,000,000. 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.
ii)
Pursuant to a letter of understanding dated December 13, 1993, between the Company and REGI
(collectively called the grantors) and West Virginia University Research Corporation
(“WVURC”), the grantors have agreed that WVURC shall own 5% of the Rand Cam patented
technology and will receive 5% of all net profits from sales, licenses, royalties or income derived
from the patented technology.
iii)
A 1% net profit royalty will be payable to a director on all U.S. – based sales.
b) The Company is committed to fund 50% of the further development of the RadMax™ Engine
Technology.
c) The Company’s current agreement to lease office premise expired on June 30, 2009. On June 11, 2009,
the Company entered into a new lease agreement for one additional year for a total of $13,185.
10. Financial Instrument Liability
During the year ended April 30, 2009, Rand sold 1,304,933 units (2008 – 80,000 units) consisting of one
common share of REGI and one share purchase warrant entitling the holder to purchase one additional
share of REGI at a specified exercise price. The details of the share purchase warrants are as follows:
Closing date of sale
# of warrants
Exercise price
Expiry date
March 27, 2008
80,000
$
1.50
March 27, 2013
May 6, 2008
40,000
$
1.50
May 6, 2013
March 12, 2009
1,264,933
$
0.35
March 12, 2010
The warrants are a derivative, and the proceeds on the sale of the units were bifurcated between the fair
value of the common shares and the share purchase warrants. The proceeds allocated to the warrants were
$125,632 (2008 - $30,798). The fair value of the warrants at the closing date was determined using the
Black-Scholes option pricing model.
Reg Technologies Inc.
(A Development Stage Company)
Notes to Interim Consolidated Financial Statements
(Expressed in Canadian Dollars)
(Unaudited – Prepared by Management
For the nine months ended January 31, 2010 and 2009
10. Financial Instrument Liability (Continued)
During the nine month period ended January 31, 2010, the Company received share subscriptions in the
amount of $144,418 whereby the Company will sell 418,000 units consisting of one common share of
REGI and one share purchase warrant entitling the holder to purchase one additional share of REGI at a
specified exercise price. As at January 31, 2010, these subscriptions are included in accounts payable.
The fair value of the warrants as follows:
Fair value at
Fair value at
Expiry date
January 31, 2010
April 30, 2009
March 27, 2013
$
10,071
$
11,474
May 6, 2013
5,166
5,873
March 12, 2010
7,648
149,653
Total
$
22,885
$
167,000
Black-Scholes Option-Pricing Model Assumptions
The fair value of each warrant issued was calculated using the Black-Scholes option-pricing model with
the following assumptions:
January 31, 2010
April 30, 2009
Expected dividend yield
0.00%
0.00%
Expected stock price volatility
110% - 146%
108% - 118%
Risk-free interest rate
0.02% - 1.38%
0.43% - 0.64%
Expected life of warrants (years)
0.11 – 3.15
0.87 – 4.01
Subsequent to January 31, 2010, 1,264,933 warrants expired on March 12, 2010, of which 894,333 were
extended for one year, expiring on March 12, 2011.
Reg Technologies Inc.
(A Development Stage Company)
Notes to Interim Consolidated Financial Statements
(Expressed in Canadian Dollars)
(Unaudited – Prepared by Management
For the nine months ended January 31, 2010 and 2009
11. Capital Management
The Company’s objectives when managing capital are to safeguard the Company’s ability to continue
as a going concern in order to pursue the development of its technologies and to maintain a flexible
capital structure for its projects for the benefit of its stakeholders. As the Company is in the
development stage, its principal source of funds is from the issuance of common shares.
In the management of capital, the Company includes the share capital as well as cash, receivables,
related party receivables and advances to equity accounted investee.
The Company manages the capital structure and makes adjustments to it in light of changes in
economic conditions and the risk characteristics of the underlying assets. To maintain or adjust the
capital structure, the Company may attempt to issue new shares, acquire or dispose of assets or adjust
the amount of cash and short-term investments.
The Company expects its capital resources, which include a share offering and the sale of investee
shares and warrants, will be sufficient to carry its research and development plans and operations
through its current operating period.
The Company is not subject to externally imposed capital requirements and there were changes in its
approach to capital management during the nine months ended January 31, 2010.
12. Subsequent Events
On March 24, 2010 the Company the Company completed a private placement, whereby it issued
1,643,333 units at $0.15 per unit for gross proceeds of $246,500. Each unit consisted of one common
share and share purchase warrant. Each warrant entitles the holder to purchase one additional share of
common stock at a price of $0.20 per share for one year. Finder’s fees of $12,068 were paid in
connection with the private placement.
During the years ended 2008 and 2009 Rand sold 1,304,933 warrants entitling the holder to purchase
shares of REGI from Rand. On March 12, 2010, 1,264,933 of these warrants expired, of which 894,333
warrants were extended for one additional year, expiring March 12, 2011.
FORM 51-102 MANAGEMENT`S DISCUSSION AND ANALYSIS OF OPERATING RESULTS AND
FINANCIAL CONDITION OF REG TECHNOLOGIES INC. FOR THE SIX MONTH PERIOD ENDED
JANUARY 31, 2010
Management’s Responsibility for Financial Statements
The preparation of the financial statements, conforming with GAAP, requires the Company's management to make
estimates and assumptions in order to make a determination of the future values for certain assets or liabilities.
Management believes such estimates have been based on careful judgments and have been properly reflected in the
accompanying financial statements. Actual results may differ from those estimates.
Management maintains a system of internal controls to provide reasonable assurance that the Company’s assets are
safeguarded and to facilitate the preparation of relevant and timely information.
Dated as of March 30, 2010
The following discussion of the results of operations of the Company for the nine months ended January 31, 2010,
and in comparison to the same period of the prior year, should be read in conjunction with the Company’s Interim
Consolidated Financial Statements and accompanying notes for the nine months ended January 31, 2010 and 2009.
Overall Performance
Reg Technologies Inc. (“Reg” or the “Company”) is a development stage company engaged in the business of
developing and building an improved axial vane-type rotary engine known as the RadMax™ rotary technology (the
"Technology" or the “RadMax™ Engine”), used in the design of lightweight and high efficiency engines,
compressors and pumps. Since no marketable product has yet been developed, we have not received any revenues
from operations.
Period Highlights
On May 22, 2009 drawings were released to start fabrication of a RadMax™ Engine test rig. The test rig is
designed to test multiple versions of the RadMax™ vane actuation systems. A cam device, driven by a variable
speed motor, will propel the vane through its full range of axial motion prior to the implementation of a full scale
RadMax™ prototype. The purpose of the test rig is to verify the vane actuation system design and make any
modifications indicated by the tests prior to the implementation of a full scale prototype. Flexibility in design will
allow testing of an alternate vane actuation system, currently under development with the evaluation company.
When testing commences, the test rig shall provide validation of vane motion, measurement position tracking,
induced vibration, required forces, and other parameters. Potential future capabilities under consideration include
adding high speed video to “capture” instantaneous changes in motion, balance and vibration, harmonics, and
thermal cycling to measure changes as a result of temperature extremes. Subsequently, the Fortune 1000
Company’s engineers advised REGI not to proceed with the fabrication and testing, which was subsequently
postponed.
We estimated that the test rig design could be completed in 4 to 6 weeks, and then commence the fabrication of the
diesel engine application for the evaluation company. We believe the testing of these important aspects of the
evaluation company’s diesel engine application will determine the final design and fabrication will be the next
important milestone.
Following completion of reviews by the evaluation company, and the COSMOS analysis, a Request for Proposals
(RFP) was issued to three pre-qualified bidders to provide a fixed-price quotation versus a formal Statement of
Work (SOW). The RFP was released 12 June 2009. We offered a 30-day period for review of drawings, and
responses to questions. After the review period, bidders will have 10 days to submit a quotation and schedule for
each line item. The closing date of the open discussion period was 10 July 2009. The closing date for receipt of the
proposals was 28 July 2009. Proposals were received, a comparative analysis was performed, and we planned a
fixed-price award. Following final review and approval by the evaluation company, we plan to make an award to the
most responsible and compliant bidder.
Based on the progress of the design, the evaluation company revised its guidance. Instead on fabricating a prototype
based on the initial design, we were directed to proceed with design of a pre-production unit. This unit incorporates
all enhancements necessary to achieve pre-production unit tests.
As directed, we are in the process of contracting with an engineering evaluation company with diverse expertise in
integration skills. We negotiated specific details of a statement of work for multiple analysis tasks. We completed
these negotiations and issued a purchase order in October 2009.
Following the analysis and design approval process, the RadMax™ Diesel Engine test program will start shortly
after receipt of the RadMax™ parts and assemblies. The tests will initially validate seal performance, vane
actuation, pressurization, and lubrication. A series of tests will verify other technology areas, already proven by
extensive analysis.
The phase 1 tests will validate the mechanical, sealing, and friction aspects of the engine design to quantify inherent
parameters and validate the results of analysis, as follows:
•
Verify Weight and Dimensions of Each Component
•
Trial Assembly and Final Assembly
•
Trial Fitment of Engine Accessories
•
Test Stand Preparation and Engine Installation on Test Stand
•
Cold Performance Motoring Tests
•
Increased RPM Performance Motoring Test. Increase RPM
•
High Speed Performance Testing
•
Repeat Steps 1 to 8 With Alternate Seal Configurations
All tests steps must result in success. Failure of any test step requires retest of that step, which might include
redesign or rework of parts and assemblies. The ultimate success of the phase 1 tests is to measure pressure and
temperature increase in the RadMax™ Diesel Engine sufficient to sustain continuous combustion.
The phase 1 test schedule is estimated at 3 months following receipt of the delivered RadMax™ Diesel Engine parts
and assemblies. The test location will be determined by competitive bid.
Following successful completion of the phase 1 tests, the phase 2 tests will validate thermodynamics and cooling
aspects of the technology. Some RadMax™ Diesel Engine parts and assemblies could require modification. We
anticipate that such modifications, if any, will be minor.
The phase 2 tests require the integration of engine accessories and sensors as follows:
•
Cooling management (radiator, hoses, fan, water pump, etc.)
•
Lubrication oil management (sump, pump, hoses, filter, etc.),
•
Fuel management (common rail injection system, fuel lines, fuel injectors, fuel tank, etc.)
•
Ignition management (control unit, sensors, wiring, etc.)
•
Starting management (starter, battery, cables, etc.)
•
Air management (plenum, hoses, filter, muffler, etc.)
The phase 2 tests are summarized by the following:
•
Hot Performance Starting Tests, with fuel
•
Hot Performance One-Minute Test, with fuel
•
Hot Performance Multiple-Minutes Test, with fuel
•
Hot Performance Starting Tests, with fuel
•
Hot Performance One-Minute Test, with fuel
•
Hot Performance Multi-Minute Test, with fuel
•
Post Engine Test, Teardown and Inspection
•
Performance Measurement (one-hour run-in)
•
Endurance Measurement (three-hour run-in)
•
Develop Horsepower vs. Torque Curves
•
24 X 7 Test
The phase 2 test schedule is estimated at 3 months following receipt successful completion of the phase 1 tests. The
test location will be determined by competitive bid. The successful bidder must have the requisite facilities,
equipment, and personnel to perform the tests, which characterize the RadMax™ Diesel Engine. The
characterization consists of performance curves for power, torque, and fuel consumption.
The objective of the new improved diesel engine design is to make significant improvement over all existing engine
designs in use today. The RadMax™ engine reduces weight, number of parts, and complexity, and will use less fuel,
and, therefore, reduce hydrocarbons.
These costs are identified as master design integrator, prototype fabrication, and labour expense, estimated
approximately as US$200,000 each, with planned expenditures over the next 6 months.
The Company was invited and attended the Clinton Global Initiative (“CGI”) Fifth Anniversary Meeting,
established by President Bill Clinton. The RadMax™ Engine Technology was approved for presentation at the CGI
Meeting in New York City from September 22 – 25, 2009. The Company is pleased to be able to support CGI’s
commitment of reducing the effects of global warming by continuing to pursue commercializing the fuel efficient
RadMax™ Engine Technology.
During the nine months ended January 31, 2010 REGI U.S., Inc. retained Belcan Engineering Services of Phoenix,
AZ (www.belcan.com) to review the Fortune 1000 diesel engine design before production of the prototype. This
thorough review will help to ensure a streamlined and timely fabrication process. Immediately following the design
review, REGI will fabricate RadMax™ parts and assemblies, validate assembly operations, and conduct component,
assembly, and system tests. Two technical meetings were held with Belcan Engineering Services. The following
results were accomplished:
•
Familiarization with the RadMax™ Diesel Engine baseline design, including mechanical operation, friction
contributors, and sealing approach.
•
Shared understanding of the vane actuation system.
•
Determination of vane loads in compressor and engine applications
•
Preliminary evaluation of thermodynamics and determination of potential hot spots
•
Evaluation of compression ratio, and recommendations for design modifications
•
Assessment of all bearings – main bearings which control all rotating components, linear bearings which
control the vane actuators, and journal bearings which facilitate wheel operations on the fixed stators.
Belcan’s technical assignment is to optimize the design of the diesel engine application which comprises the vanes,
push rods, and a lift block that interface with a stator. The estimated completion of this assessment is first quarter
of 2010.
The Company announced that Path Technologies Inc. of Painesville, Ohio, has been selected to fabricate the
prototype RadMax™ Diesel Engine. Path Technologies was the most competitive fully responsive bidder following
a process of drawing and manufacturing processes evaluation. This process is a crucial initial step to get the most
qualified supplier on board to produce unique RadMax™ Diesel Engine parts.
Path Technologies recently produced RadMax™ Pump parts for Reg Technologies Inc. That prior experience was
one of the major considerations in the evaluation and selection process.
As the next step, the Company will issue a purchase order to Path Technologies. That event will follow completion
of the engineering reviews and final approval by the Fortune 1000 company. Path Technologies will be responsible
to produce RadMax™ parts. Reg Technologies Inc. will integrate those parts, along with other commercial items
(fuel injection, for example) to produce the prototype engine.
The timetable for the prototype engine remains the same as stated in the Company’s November 13, 2009 press
release. The specific work to be performed includes:
•
Fabricate RadMax unique items from drawings and 3D computer models.
•
Deliver metrology reports for each fabricated unique item.
•
Purchase commercial items for inclusion in the RadMax end-item.
•
Deliver copies of all purchase orders and part certifications.
•
Perform trial fitment of all components, and rework as needed.
•
Purchase test related items in accordance with supplied purchase requisitions.
•
Assemble test related items as needed (table, dc motor, motor controller, etc.).
•
Provide limited test support (non combustion) at their facility.
The Company is confident that this version is very robust. The systems engineering reviews have removed
considerable length (and weight) from the engine.
Highlights Subsequent to the Quarter End
As of March 30, 2010, we are nearing the completion of a significant milestone of the Belcan Engineering review of
the prototype engine design, which was estimated at 6 months.
The actions completed are as follows:
• Retain Belcan as an independent engineering analysis organization to provide independent validation of all
RadMax™ design elements: functions, tolerances, and material selections
• Verify environmental conditions (temperatures, pressures, centrifugal forces, etc.)
Actions that are continuing include:
• Identify components that require detail stress analysis
• Perform complete integration of all components and evaluate their performance and strength under non-
operating and operating conditions.
We have conducted a technical engineering interchange meeting with Belcan for the thermodynamics analysis
portion. A final report has been jointly prepared and submitted to the Fortune 1000 company for review. A mutli-
company thermodynamics review is planned for mid April.
The thermodynamics report includes recommendations for RadMax™ Engine materials, thicknesses, tolerances, and
coatings. One specific recommendation is to fabricate the cam using lighter weight materials to take advantage of
its improved thermal conductivity.
Near-term program milestones include:
• Completion of Belcan Engineering review of mechanical components, bearings, and lubrication – approx.
3 additional months
• Review and Approval by the Fortune 1000 Company – approx. 30 days
• Fabrication of the prototype engine – approx. 3 months
• Initial prototype testing – approx. 3 months
Risks and Uncertainties
The Company is subject to a number of risk factors due to the nature of its business and the present stage of
development. The following risk factors should be considered:
General
The Company is listed on the TSX Venture Exchange and also trades on the OTC BB. We are a development stage
company engaged in the business of developing and building an improved axial vane-type rotary engine known as
the RadMax™ rotary technology (the "Technology" or the “RadMax™ Engine”), used in the design of lightweight
and high efficiency engines, compressors and pumps. Since no marketable product has yet been developed, we have
not received any revenues from operations.
During the year ended April 30, 2009 and the year to date, the Company has received US$439,000, through the sale
of approximately 8% of its interest in REGI U.S., Inc. which will be allocated to administrative operations of the
Company and the development costs of the RadMax™ engine.
The amount of the Company’s research and development and administrative expenditures are related to the level of
financing activities that are being conducted. Consequently, the Company does not conduct work on the RadMax™
Engine on a pre-determined basis and as a result there may not be predictable or observable trends in the Company’s
business activities and comparisons of financial operating results with prior years may not be meaningful.
Trends
The Company’s financial success is dependent upon the successful completion of development of the RadMax™
Engine in order to achieve a commercially feasible design. Such development could take several years to complete
and the resulting income, if any, is difficult to determine at this time, There can be no assurance that we or potential
licensees will be able to achieve and maintain end user acceptance of our engine. Other than as disclosed herein, the
Company is not aware of any trends, uncertainties, demands, commitments or events which are reasonably likely to
have a material effect on the Company’s sales or revenues, income from continuing operations, profitability,
liquidity or capital resources, or that would cause reported financial information not necessarily to be indicative of
future operating results or financial condition.
Financing
There is no assurance that we will be able to secure the financing necessary to continue our development and
operations. 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.
Commercially Feasible 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 RadMax™ 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.
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 RadMax™ Engine 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 80 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.
Our future success may be dependent on the success of our products and services. The success of our business
depends on a variety of factors, including:
• the quality and reliability of our products and services;
• our ability to develop new products and services superior to that of our competitors;
• our ability to establish licensing relationships and other strategic alliances;
• our pricing policies and the pricing policies of our competitors;
• our ability to introduce new products and services before our competitors;
• our ability to successfully advertise our products and services; and
• general economic trends.
Management and Directors
The Company is dependent on a relatively small number of directors and officers. The loss of certain members of
our management and engineering staff, could adversely affect our business and 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.
Conflicts of Interest
Several of the Company’s directors and officers are also directors, officers or shareholders of other companies.
Some of our directors and officers are engaged and will continue to be engaged in the search for additional business
opportunities on behalf of other corporations, and situations may arise where these directors and officers will be in
direct competition with the Company. Such associations may give rise to conflicts of interest from time to time The
Company’s directors are required by law to act honestly and in good faith with a view to the best interests of the
Company and to disclose any interest which they many have in any project or opportunity in respect of which the
Company is proposing to enter into a transaction.
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.
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.
New Technology
New technology or refinement of existing technology could render our RadMax 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.
Competitive Conditions
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 as 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.
Limited Operating History: Losses
The Company has experienced losses in all years of its operations. There can be no assurance that the Company will
operate profitably in the future, if at all. As at January 31, 2010 the Company’s deficit was $14,128,583.
Price Fluctuations: Share Price Volatility
In recent years, the securities markets in the United States and Canada have experienced a high level of price and
volume volatility, and the market price of securities of many development stage companies have experienced wide
fluctuations in price which have not necessarily been related to the operating performance, underlying asset values
or prospects of such companies. There can be no assurance that continual fluctuations in price will not occur.
Results of Operations
The following analysis of the Company's operating results in the most recently completed nine month period ended
January 31, 2010 includes a comparison against the same period in previously completed financial period ended
January 31, 2009.
Revenue
The Company had no revenue from operations; currently all efforts are focused on the
completion of the development, research, design, analysis and testing of the RadMax™ products.
Expenses
Nine Months Ended
January 31,
Variances
2010
2009
%
Amortization
2,935
3,016
(0.03)
Advertising and promotion
10,358
96,793
(0.89)
Consulting fees
13,965
25,126
(0.44)
Foreign exchange loss (gain)
40,556
(56,992)
(1.71)
Investor relations
51,844
9,578
4.41
Management and director fees
39,150
44,700
(0.12)
Miscellaneous office expenses
44,051
43,516
0.01
Professional fees
80,347
131,198
(0.39)
Public relations
12,263
27,250
(0.55)
Research and development
98,200
99,037
(0.01)
Rent and utilities
27,562
24,554
0.12
Stock-based compensation
31,987
31,241
0.02
Transfer agent and filing fees
15,889
33,133
(0.52)
Travel and promotion
13,516
14,573
(0.07)
Wages and benefits
21,616
23,030
(0.06)
Mineral property maintenance
8,060
8,060
-
costs
512,299
557,813
(64)
Results of Operations for the nine months ended January 31, 2010 (“2010”) as compared to the nine months
ended January 31, 2009 (“2009”)
For the nine months ended January 31, 2010, the Company realized a net loss of $341,495 or $0.013 per share, as
compared to net loss of $447,203 or $0.018 per share for 2009. Operating expenses decreased by $45,514 to
$512,299 for 2010 compared to $557,813 in 2009.
A concentrated effort has been undertaken to reduce costs in response to the downturn in the investor market.
Advertising and promotion expenditures decreased by $86,435 to $10,358 in 2010 versus $96,793 in 2009.
Consulting fees decreased by $11,161 to $13,965 in 2010 compared to $25,126 in 2009. Public relations costs
decreased by $14,987 to $12,263 in 2010 versus $27,250 in 2009. Professional fees decreased by $50,851 from
$131,198 in 2009 to $80,347 in 2010. Wages and benefits decreased by $1,414 to $21,616 in 2010 from $23,030 in
2009. There was also a significant decrease in transfer agent and filing fees of $17,244 to $15,889 in 2010 versus
$33,133 due to lower level of equity transactions in the current period. Travel expenses for promotion purposes
decreased by $1,057 from $14,573 in 2009 to $13,516 in 2010. Management and director fees decreased by $5,500
from $44,700 in 2009 to $39,150 in 2010.
The savings achieved through cost-saving measures have been offset by some increases. Investor relations
increased from $9,578 in 2009 to $51,844 in 2010 as a result of promotional costs related to the Company’s
attendance at the CGI meeting in September and increased efforts to promote the Company. Rent and utilities
increased by $3,008 from $24,554 in 2009 to $27,562 in 2010 as a result of increased rent at our research facility.
There was little change to expenses such as office and general administration, an increase of $535 from $43,516 in
2009, as the activities remained at the same level. Amortization expense decreased by $81 to $2,935 in 2010,
because no capital assets were purchased in 2010, while the net book value of the fixed assets is insignificant.
Research and development decreased by $837 from 99,037 in 2009 to $98,200 in 2010, as we have maintained at the
similar activity level to last year. This research is performed by Rand Energy Group Inc. (“Rand”), a subsidiary of
the Company. Rand and REGI U.S., Inc. have a project cost sharing agreement whereby these companies each fund
50% of the development of the technology. Stock-based compensation expense increased by $746 from $31,241 in
2009 to $31,987 in 2010 due to the periodic vesting requirements of the Company’s outstanding stock options.
Other Income items for 2010 and 2009 include gain on sale of REGI’s shares, which was decreased by $73,108 from
$92,324 in 2009 to $26,689 in 2010 due to the decease in both number of shares sold and price of shares sold at. In
2009 we settled debts and had a gain on forgiven debt of $10,813 while we did no have such gain in 2010. However,
we had unrealized gain on warrants sold for option to purchase REGI shares. Because these warrants were valued
with Black Scholes model, the values significantly reduced when majority of the warrants were nearing their
expiration dates.
Results of Operations for the three months ended January 31, 2010 (“2010”) as compared to the three months
ended January 31, 2009 (“2009”)
For the three months ended January 31, 2010, the Company realized a net loss of $105,852 or $0.004 per share, as
compared to net loss of $121,958 or $0.005 per share in 2009. Operating expenses increased by $44,837 to $185,081
for 2010 compared to $140,244 in 2009. It is mainly due to the increase of foreign exchange loss of $38,600 on
US$676,733 owed to us by REGI.
A concentrated effort has been undertaken to reduce costs in response to the downturn in the investor market.
Management and director fees were reduced by $8,750 from $21,800 in 2009 to $13,050 in 2010. Public relations
expenses were reduced by $4,087 from $8,175 to $4,088, and travel for promotion were reduced by $4,315 from
$8,856 in 2009 to $4,541 in 2010.
However, the reductions in costs were offset by increases in other expenses. Increases of consulting fees by $4,025
from $5,538 to $9,563 and investor relation/shareholder communication costs by $14,158 from $9,578 to $23,736
resulted from our increased effort to communicate with our shareholders and potential shareholders. Office and
general expenses were increased in 2010 by $7,455 from $9,151 in 2009, because we were more active in 2010
during the holiday season than in 2009. Professional fees increased by $3,186 from $10,557 in 2009 to $13,743 in
2010, because our accountants worked on during the current period.
The decrease in net loss from 2009 resulted from the significant unrealized gain of $79,229, when significant portion
of our privately sold warrants to purchase REGI shares were nearing their expiration date. In 2009 there was no such
unrealized gain. This gain was partially offset by gain on sale of REGI shares of $7,473 in 2009 and gain on debt
forgiven of $10,813 in 2009, both are $nil in 2010.
Significant Projects without Operating Revenue
The Company is developing for commercialization an improved axial vane type rotary engine known as the
RadMax™ rotary technology (the "Technology" or the RadMax™ Engine”), used in the design of lightweight and
high efficiency engines, compressors and pumps. The RadMax™ engine has only two moving parts, the vanes (up
to 12) and the rotor, compared to the 40 moving parts in a simple four-cylinder piston engine. This design makes it
possible to produce up to 24 continuous power impulses per one rotation that is vibration-free and extremely quiet.
The RadMax™ engine also has multi-fuel capabilities allowing it to operate on fuels including gasoline, natural gas,
hydrogen, propane and diesel. REGI U.S., Inc. and Reg Technologies Inc., are currently designing and testing
prototype RadMax™ Diesel Engines, compressors and pumps intended for aviation, automotive, industrial
processes and military applications.
The world-wide marketing and intellectual rights, other than the U.S., are held by Reg Technologies Inc. REGI U.S.,
Inc. owns the U.S. marketing and intellectual rights and has a project cost sharing agreement, whereby it will fund
50% of the further development of RadMax™ Engine and Reg Technologies Inc. will fund 50%.
To date, several prototypes of the RadMax™ 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 RadMax™ 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 RadMax™ 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 tested the RadMax™ technology for interested customers who want a license agreement. To date we have
granted an option for a license for certain applications for a Fortune 1000 company who are evaluating the
RadMax™ design and are currently assisting in the development at no cost to the Company.
During the nine months ended January 31, 2010, the Company’s efforts have been focused on the research,
development and design of the RadMax™ rotary technology (see also Section Period Highlights above).
Summary of Quarterly Results
The following is a summary of the Company’s financial results for each of the Company’s eight most recently
completed quarters:
Quarter Ending
Revenue
Net Earnings (Loss)
$
Per Share
Diluted per share
January 31, 2010
$nil
(105,852)
(0.00)
(0.00)
October 31, 2009
$nil
(157,669)
(0.00)
(0.00)
July 31, 2009
$nil
(77,974)
(0.00)
(0.00)
April 30, 2009
$nil
(8,887)
(0.00)
(0.00)
January 31, 2009
$nil
(121,958)
(0.00)
(0.00)
October 31, 2008
$nil
(166,446)
(0.01)
(0.01)
July 31, 2008
$nil
(158,799)
(0.01)
(0.01)
April 30, 2008
$nil
172,004
0.01
0.01
Over the past eight quarters, the Company’s expenses and net loss have varied from period to period dependant upon
the Company’s activities at the time. The most recent three quarters have remained relatively consistent due to a
focus on testing and development of the RadMax™ engine. The quarter ended April 30, 2008 shows net earnings,
however, these earnings were the result of the de-consolidation of a subsidiary. Expenses and net loss during the
second and third quarters of fiscal 2009, and the last quarter of fiscal 2008 were significantly higher than those in
2010. A decrease in expenses during fiscal 2009 relates to a concerted effort to reduce administration overhead
during the downturn in the investment market. During fiscal 2010, investor relations and advertising contracts were
not renewed, wages were reduced, and promotional travel was curtailed. The decrease in the losses for the 2010
quarters in comparison to those of 2009 also results from fact that the results of REGI U.S. Inc. were consolidated
up to April 30, 2008.
Liquidity
During the nine month period ended January 31, 2010, we financed our operations and received $298,761:
•
$26,689 from investing activities through the sale of our investee’s shares and warrants in the open market;
•
repayments of advances by the investee of $7,007;
•
advances from relate parties of $140,856; and
•
net proceeds from sale of private placements of $98,331 and subscriptions of $12,000
The Company’s cash position decreased to bank indebtedness of $13,878 at January 31, 2010 as compared to cash
balance of $1,107 at April 30, 2009.
The Company owns approximately 3.0 million (directly or indirectly) shares of REGI U.S., Inc. (“REGI”) (a U.S.
public company), and formerly controlled the Company by way of a voting trust arrangement, which was cancelled
on April 30, 2008.
Rand Energy Group Inc., a subsidiary of the Company, and REGI U.S., Inc. have a project cost sharing agreement
whereby these companies each fund 50% of the development of the technology.
As at January 31, 2010, Rand Energy Group Inc. owes Reg Technologies $1,974,121 (April 30, 2009 -$1,676,840)
which will be fully repaid prior to royalty obligations due, and prior to dividends being paid to the owners of Rand
Energy Group Inc.
During the nine month period ended January 31, 2010, the Company’s received US$26,689 through the sale of
approximately 1% of its interest in REGI which will be allocated to administrative operations of the Company and
the development costs of the RadMax™ engine.
The costs the Company has identified for the RadMax™ engine are the master design integrator, prototype
fabrication, and labour expense, estimated approximately at US$200,000 each, with planned expenditures over the
next 6 months.
Capital Resources
As at January 31, 2010, the Company had working capital of $138,845 as compared to working capital of $290,087
at April 30, 2009. Of the $138,845, $529,431 is due from REGI U.S., Inc. (“REGI”). This receivable relates mainly
to project costs as REGI owns the U.S. marketing and intellectual rights and has a project cost sharing agreement,
whereby it will fund 50% of the further development of RadMax™ Engine and Reg Technologies Inc. will fund
50%. REGI only had cash of US$583 and a US$1,303,246 working capital deficiency at its January 31, 2010 period
end.
During the nine month period ended January 31, 2010, we used cash in the amount of $299,868 on operating
activities as compared to $493,118 for the same period last year for a decrease of $193,250. This is a result of the
Company incurring less operating expenses during 2010 in comparison to 2009 as well as increased balance of
accounts payable and accrued liabilities by $160,581.
During the nine months ended January 31, 2010, the Company completed a private placement, whereby it issued
1,012,596 units at $0.15 per unit for proceeds of $151,889, of which $45,000 was received on February 3, 2010
from the shareholder’s RRSP trust account. Each private placement unit consisted of one common share and share
purchase warrant. Each warrant entitles the holder to purchase one additional share of common stock at a price of
$0.20 per share for one year. Finders’ fees of $7,050 were paid in connection with the private placement.
During the nine months ended January 31, 2010, the Company also received $12,000 for subscriptions for shares
issued subsequent to the period in March, 2010.
During the prior year ended April 30, 2009, the Company completed a private placement, whereby it issued
1,315,168 units at $0.40 per unit for proceeds of $526,067. Each unit consisted of one common share and one non-
transferable share purchase warrant, entitling the holder to acquire one additional common share for a period of one
year at $0.50 per share and at $0.60 per share in the second year. The Company incurred finders’ fees of $22,212 in
connection with the above private placement, which are included in share issuance costs.
In the past, we have derived most of our development and operating capital primarily from the issuance of our
capital stock and our former 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. The Company also indirectly and directly owns approximately 4.4
million shares of REGI U.S., Inc. with a carrying value of US $Nil as the Company’s share of past losses exceeded
the carrying value of the investment in REGI US.
The Company’s direct investment in REGI U.S. Inc., together with its 51% ownership in Rand Energy Group Inc.,
gives it control over approximately 3.0 million shares of REGI U.S. Inc., which shares had a carrying value of
approximately US $Nil as of January 31, 2010. The Company can sell, through a registered broker, up to 44,000,
shares of REGI U.S., Inc., being 1% of the issued shares, during any 90-day period. During the nine month period
ended January 31, 2010 Rand sold approximately 2.7% of its interest in REGI U.S. Inc. for US$26,689.
At January 31, 2010, the market value of the REGI shares was US$962,172.
The Company’s objectives when managing capital are to safeguard the Company’s ability to continue as a going
concern in order to pursue the development of its RadMax™ Diesel Engine and mineral properties and to maintain a
flexible capital structure for its projects for the benefit of its stakeholders. As the Company is in the development
stage, its principal source of funds is from the issuance of common shares.
The Company has 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.
In the management of capital, the Company includes the components of shareholders’ equity as well as cash,
receivables, related party receivables, advances to equity accounted investee, and short term investments balances.
The Company manages the capital structure and makes adjustments to it in light of changes in economic conditions
and the risk characteristics of the underlying assets. To maintain or adjust the capital structure, the Company may
attempt to issue new shares, acquire or dispose of assets or adjust the amount of cash and short-term investments.
The Company expects its capital resources, which include a share offering, will be sufficient to carry its research
and development plans and operations through its current operating period. The funds are raised through REGI
U.S., Inc. equity financings and through the sale of REGI U.S., Inc. shares on the open market.
Transactions with Related Parties
Pursuant to a management agreement dated May 1, 1996, the Company engaged SMR Investments Ltd. to provide
services to the Company. SMR is a private company which is controlled by Susanne Robertson, a director of the
Company and the spouse of the Company’s president. The Company’s President is also a director and officer of
SMR. SMR provides management services to the Company in consideration of a monthly fee of $2,500 plus
applicable taxes. These services include providing general management services and ongoing operations. The
agreement may be terminated by the mutual consent of the parties. During the nine month periods ended January 31,
2010 and 2009, the Company paid or accrued to SMR the sum of $22,500 in each period.
The Company shares office space, staff and service providers with a number of private and public companies with
several directors in common. On June 15, 2006, the Company entered into a lease agreement with Linux Gold Corp.
a company with common officers and directors, to lease office premises for the period of three years and the option
to renew the lease for an additional three-year term, in consideration for $16,994 per year. The Company’s current
agreement to lease office premise expired on June 30, 2009. On June 11, 2009, the Company entered into a new
lease agreement for one additional year for a total of $13,185.
During the nine month period ended January 31, 2010 rent of $11,379 (2009 -$10,890) was incurred with a company
having common officers and directors.
During the nine months ended January 31, 2010, administrative and management fees, included in miscellaneous
office expenses, of $20,250 (2009 - $21,048) and directors’ fees of $9,000 (2009 - $6,500) were paid to officers,
directors and companies controlled by officers and directors for services rendered.
These related party transactions are carried out in the normal course of operations and are measured at the exchange
amount of consideration established and agreed to by all the related parties. Amounts due from related parties are
unsecured, non-interest bearing and due on demand.
At January 31, 2010, the Company is owed an aggregate of $26,820 (April 30, 2009 - $19,537) by related parties.
The amounts owed are unsecured, non-interest bearing and due on demand. These parties are companies that the
President of the Company controls or significantly influences.
Recent Accounting Pronouncements Not Yet Adopted
International Financial Reporting Standards
In 2006, the Canadian Accounting Standards Board (“AcSB”) published a new strategic plan that will significantly
affect financial reporting requirements for Canadian companies. The AcSB strategic plan outlines the convergence
of Canadian GAAP with IFRS over an expected five year transitional period.
In February 2008 the AcSB announced that 2011 is the changeover date for publicly-listed companies to use IFRS,
replacing Canadian GAAP. This date is for interim and annual financial statements relating to fiscal years beginning
on or after January 1, 2011. The Company’s transition date of May 1, 2010 will require the restatement for
comparative purposes of amounts reported by the Company for the year ended April 30, 2011. In July 2008 AcSB
announced that early adoption will be allowed in 2009 subject to seeking exemptive relief. The Company is
currently assessing the financial reporting impact of the transition to IFRS and the changeover date.
Other accounting pronouncements issued with future effective dates are either not applicable or are not expected to
be significant to the consolidated financial statements of the Company.
Fair Value of Financial Instruments
Financial instruments carrying value and fair value
The Company’s financial instruments consist of cash, receivables, related party receivables, advances to equity
accounted investee, accounts payable and a derivative financial instrument liability.
Cash and the derivative financial instrument liability are designated as “held-for-trading” and measured at fair value.
Receivables, related party receivables, and advances to equity accounted investee are designated as “loans and
receivables”. Short term investments are designated as “available for sale”. Accounts payable is designated as
“other financial liabilities”.
The carrying value of receivables, related party receivables, advances to equity accounted investee, and accounts
payable approximate their fair values due to their immediate or short-term maturity. The derivative financial
instrument liability is recorded at fair value calculations using the Black-Scholes option pricing model.
Interest rate and credit risk
The Company has minimal cash balances and no interest-bearing debt. The Company has no significant
concentrations of credit risk arising from operations. The Company's current policy is to invest any significant
excess cash in investment-grade short-term deposit certificates issued by reputable financial institutions with
which it keeps its bank accounts and management believes the risk of loss to be remote. The Company
periodically monitors the investments it makes and is satisfied with the credit ratings of its banks.
Receivables consist of goods and services tax due from the Federal Government. Management believes that the
credit risk concentration with respect to receivables is remote.
Foreign exchange risk
The Company is primarily exposed to currency fluctuations relative to the Canadian dollar through expenditures
that are denominated in US dollars. Also, the Company is exposed to the impact of currency fluctuations on its
monetary assets and liabilities.
The operating results and the financial position of the Company are reported in Canadian dollars. Fluctuations
in exchange rates will, consequently, have an impact upon the reported operations of the Company and may
affect the value of the Company’s assets and liabilities.
The Company currently does not enter into financial instruments to manage foreign exchange risk.
The Company is exposed to foreign currency risk through the following financial assets and liabilities that are
denominated in United States dollars:
Related Party
January 31, 2010
Bank Debt
Receivables
Accounts payable
$
4,925
$
13,919
$
11,827
At January 31, 2010 with other variables unchanged, a +/-10% change in exchange rates would
increase/decrease pre-tax loss by approximately +/- $702.
Liquidity Risk
Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The
Company manages liquidity risk through the management of its capital structure and financial leverage as
outlined in Note 11.
Other MD&A Requirements
Additional Disclosure for Venture Issuers without Significant Revenue
Additional disclosures concerning the Company’s research and development costs, deferred development costs and
general and administrative expenses are provided as follows:
During the nine month period ended January 31, 2010, the Company incurred the $98,200 in research and
development compared to $99,037 for the nine month period ended January 31, 2009.
Disclosure of Outstanding Share Data:
Authorized
50,000,000 Common shares without par value
10,000,000 Preferred shares with a $1 par value, redeemable for common shares on the basis of 1 common share
for 2 preferred shares
5,000,000 Class A non-voting shares without par value. Special rights and restrictions apply.
Treasury Shares
At January 31, 2010, Rand owns 217,422 (2009 – 217,422) shares of the Company valued at $43,485 that have
been deducted from the total shares issued and outstanding. The value of these shares has been deducted from
share capital.
Commitments
a)
In connection with the acquisition of Rand, the Company has the following royalty obligations:
i)
A participating royalty is to be paid based on 5% of all net profits from sales, licenses, royalties or income
derived from the Rand Cam Technology patented technology, to a maximum amount of $10,000,000.
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.
ii)
Pursuant to a letter of understanding dated December 13, 1993, between the Company and REGI
(collectively called the grantors) and West Virginia University Research Corporation (“WVURC”), the
grantors have agreed that WVURC shall own 5% of the Rand Cam patented technology and will receive
5% of all net profits from sales, licenses, royalties or income derived from the patented technology.
iii)
A 1% net profit royalty will be payable to a director on all U.S. – based sales.
b) The Company is committed to fund 50% of the further development of the RadMax™ Engine Technology.
c)
The Company’s current agreement to lease office premise expired on June 30, 2009. On June 11, 2009, the
Company entered into a new lease agreement for one additional year for a total of $13,185.
Warrants
As at January 31, 2010, the following share purchase warrants were outstanding:
Expiry Date
Exercise
Number
price
of warrants
$
July 31, 2010
0.60
1,315,168
April 1, 2010
0.35
228,000
Warrants Outstanding
1,543,168
Options
As at January 31, 2010, the following stock options are outstanding:
Expiry Date
Exercise
Number
Remaining
price
of options
contractual life
(years)
$
October 20, 2010
0.30
750,000
0.72
August 1, 2013
0.40
400,000
3.50
April 22, 2014
0.21
375,000
4.23
Options Outstanding
1,525,000
Options Exercisable
381,250
Subsequent Events
On March 24, 2010 the Company the Company completed a private placement, whereby it issued 1,643,333
units at $0.15 per unit for gross proceeds of $246,500. Each unit consisted of one common share and share
purchase warrant. Each warrant entitles the holder to purchase one additional share of common stock at a price
of $0.20 per share for one year. Finder’s fees of $12,068 were paid in connection with the private placement.
During the years ended 2008 and 2009 Rand sold 1,304,933 warrants entitling the holder to purchase shares of
REGI from Rand. On March 12, 2010, 1,264,933 of these warrants expired, of which 894,333 warrants were
extended for one additional year, expiring March 12, 2011.
Directors and Officers
As at March 30, 2009, the Company had the following directors and officers:
John Robertson
Director , President and Secretary
Jennifer Lorette
Director
Susanne Robertson
Director
James Vandeberg
Director, Chief Financial Officer
Robert Grisar
Director
The Company is dependent on a small number of key directors and officers. Loss of any one of those persons could
have an adverse affect on the Company, however, the Company does not maintain “key-man” insurance with respect
to any of its management.
Conflicts of Interest
Officers and directors of the Company are officers and/or directors of, or are associated with other public
companies. Such associations may give rise to conflicts of interest. The directors are required by law, however, to
act honestly and in good faith with a view to the best interests of the Company and its shareholders and to disclose
any personal interest which they may have in any material transaction which is proposed to be entered into with the
Company and to abstain from voting as a director for the approval of any such transaction.
Disclosure Controls and Procedures
The Company realizes the importance of establishing and maintaining internal controls and has designed, or has
caused to be designed under its supervision, disclosure controls and procedures in order to provide reasonable
assurance that material information relating to the Company is made known to them.
The internal controls are reviewed periodically by the Audit Committee and the Board of Directors and potential
weaknesses have become apparent, namely that the Company's small size prohibits:
1. the complete separation of incompatible duties; and
2. retaining specialized staff with respect to current income tax, complex accounting matters and financial
reporting,
and therefore the Company has chosen to utilize outside assistance with respect to these matters to ensure
weaknesses are rectified as they become known. There has been no change in the Company’s disclosure controls
and procedures or in the Company’s internal control over financial reporting that occurred during the most recently
completed quarter that has materially affected, or is reasonably likely to materially affect, the Company’s disclosure
controls and procedures or internal control over financial reporting.
Caution on Forward-Looking Statements
Certain statements contained in this quarterly report on Form 51-102F1 constitute "forward-looking statements."
These statements, identified by words such as “plan,” "anticipate," "believe," "estimate," "should," "expect" and
similar expressions include our expectations and objectives regarding our future financial position, operating results
and business strategy. These statements reflect the current views of management with respect to future events and
are subject to risks, uncertainties and other factors. The Company's actual results, performance or achievements
could differ materially from those expressed in, or implied by, these forward-looking statements, including those
described in the Company's Financial Statements, Management Discussion and Analysis and Material Change
Reports filed with the Canadian Securities Administrators and available at www.sedar.com, and those described in
the Company’s Form 20-F for the fiscal year ended April 30, 2009, and other current reports, filed with the
Securities and Exchange Commission, available at www.sec.gov. Accordingly, no assurances can be given that any
of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do so, what
benefits, including the amount of proceeds, that the Company will derive therefrom.
Readers are cautioned that the list of factors is not exhaustive. All subsequent forward-looking statements, whether
written or oral, attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by
these cautionary statements. Furthermore, the forward-looking statements contained in this document are made as at
the date of this document and the Company does not undertake any obligation to update publicly or to revise any of
the included forward-looking statements, whether as a result of new information, future events or otherwise, except
as may be required by applicable securities laws.
Approval
The Board of Directors of the Company has approved the disclosure contained in this MD&A.
A copy of this MD&A will be provided to anyone who requests it.
Additional Information
Additional Information relating to the Company is on SEDAR at www.sedar.com
FORM 51-109FV2
CERTIFICATION OF INTERIM FILINGS
VENTURE ISSUER BASIC CERTIFICATE
I, James Vandeberg, Chief Financial Officer of Reg Technologies Inc., certify the following:
1.
Review: I have reviewed the interim financial statements and interim MD&A
(together the interim filings) of Reg Technologies Inc. (the issuer) for the interim
period ending January 31, 2010.
2.
No misrepresentations: Based on my knowledge, having exercised reasonable
diligence, the interim filings do not contain any untrue statement of a material fact or
omit to state a material fact required to be stated or that is necessary to make a
statement not misleading in light of the circumstances under which it was made, for
the period covered by the interim filings.
3.
Fair presentation: Based on my knowledge, having exercised reasonable diligence,
the interim financial statements together with the other financial information included
in the interim filings fairly present in all material respects the financial condition,
results of operations and cash flows of the issuer, as of the date of and for the
periods presented in the interim filings.
Date: April 1, 2010
Signature:
“James Vandeberg”
James Vandeberg
Chief Financial Officer
NOTE TO READER
In contrast to the certificate required for non-venture issuers under National Instrument 52-109
Certification of Disclosure in Issuers' Annual and Interim Filings (NI 52-109), this Venture Issuer
Basic Certificate does not include representations relating to the establishment and
maintenance of disclosure controls and procedures (DC&P) and internal control over financial
reporting (ICFR), as defined in NI 52-109. In particular, the certifying officers filing this
certificate are not making any representations relating to the establishment and maintenance of
(i)
controls and other procedures designed to provide reasonable
assurance that information required to be disclosed by the issuer in its
annual filings, interim filings or other reports filed or submitted under
securities legislation is recorded, processed, summarized and
reported within the time periods specified in securities legislation; and
(ii)
a process to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for
external purposes in accordance with the issuer’s GAAP.
The issuer's certifying officers are responsible for ensuring that processes are in place to
provide them with sufficient knowledge to support the representations they are making in this
certificate. Investors should be aware that inherent limitations on the ability of certifying officers
of a venture issuer to design and implement on a cost effective basis DC&P and ICFR as
defined in NI 52-109 may result in additional risks to the quality, reliability, transparency and
timeliness of interim and annual filings and other reports provided under securities legislation.
FORM 51-109FV2
CERTIFICATION OF INTERIM FILINGS
VENTURE ISSUER BASIC CERTIFICATE
I, John Robertson, Chief Executive Officer of Reg Technologies Inc., certify the following:
1.
Review: I have reviewed the interim financial statements and interim MD&A
(together the interim filings) of Reg Technologies Inc. (the issuer) for the interim
period ending January 31, 2010.
2.
No misrepresentations: Based on my knowledge, having exercised reasonable
diligence, the interim filings do not contain any untrue statement of a material fact or
omit to state a material fact required to be stated or that is necessary to make a
statement not misleading in light of the circumstances under which it was made, for
the period covered by the interim filings.
3.
Fair presentation: Based on my knowledge, having exercised reasonable diligence,
the interim financial statements together with the other financial information included
in the interim filings fairly present in all material respects the financial condition,
results of operations and cash flows of the issuer, as of the date of and for the
periods presented in the interim filings.
Date: April 1, 2010
Signature:
“John Robertson”
John Robertson
Chief Executive Officer
NOTE TO READER
In contrast to the certificate required for non-venture issuers under National Instrument 52-109
Certification of Disclosure in Issuers' Annual and Interim Filings (NI 52-109), this Venture Issuer
Basic Certificate does not include representations relating to the establishment and
maintenance of disclosure controls and procedures (DC&P) and internal control over financial
reporting (ICFR), as defined in NI 52-109. In particular, the certifying officers filing this
certificate are not making any representations relating to the establishment and maintenance of
(i)
controls and other procedures designed to provide reasonable
assurance that information required to be disclosed by the issuer in its
annual filings, interim filings or other reports filed or submitted under
securities legislation is recorded, processed, summarized and
reported within the time periods specified in securities legislation; and
(ii)
a process to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for
external purposes in accordance with the issuer’s GAAP.
The issuer's certifying officers are responsible for ensuring that processes are in place to
provide them with sufficient knowledge to support the representations they are making in this
certificate. Investors should be aware that inherent limitations on the ability of certifying officers
of a venture issuer to design and implement on a cost effective basis DC&P and ICFR as
defined in NI 52-109 may result in additional risks to the quality, reliability, transparency and
timeliness of interim and annual filings and other reports provided under securities legislation.
BC FORM 51-102F3
Material Change Report
Item 1. Name and Address of Company
State the full name and address of your company and the address of its principal office in Canada.
REG TECHNOLOGIES INC.
#240 – 11780 Hammersmith Way
Richmond, BC V7A 5E9
Phone: (604) 278-5996
Item 2.
Date of Material Change
State the date of the material change.
March 31, 2010
Item 3.
News Release
State the date and method(s) of dissemination of the news release issued under section 7.1 of National
Instrument 51-102.
March 31, 2010
The press release relating to this material change was distributed and filed by
Marketwire, Marketnews Publishing, Inc. and Stockwatch on March 31, 2010.
Item 4.
Summary of Material Change
Provide a brief but accurate summary of the nature and substance of the material change.
The Company released the RadMax™ Diesel Engine Design progress update. Phase 1:
Conceptual Design, and Phase 2: Preliminary Design are now complete. We are now
executing Phase 3: Detail Design.
Item 5.
Full Description of Material Change
Supplement the summary required under Item 4 with the disclosure that should be sufficient disclosure to
enable a reader to appreciate the significance and impact of the material change without having to refer to
other material. Management is in the best position to determine what facts are significant and must disclose
those facts in a meaningful manner. See also Item 7.
Some examples of significant facts relating to the material change include: dates, parties, terms and
conditions, description of any assets, liabilities or capital affected, purpose, financial or dollar values,
reasons for the change, and a general comment on the probable impact on the issuer or its subsidiaries.
Specific financial forecasts would not normally be required.
Other additional disclosure may be appropriate depending on the particular situation.
For a full description of the material change, see Schedule “A”.
Item 6.
Reliance on subsection 7.1(2) of National Instrument 51-102
If this report is being filed on a confidential basis in reliance on subsection 7.1(2) of National Instrument
51-102, state the reasons for that reliance.
Not applicable.
Instruction:
Refer to subsections 7.1(5) and (7) of National Instrument 51-102 concerning continuing obligations in
respect of reports filed under subsection 7.1(2) of National Instrument 51-102.
Item 7.
Omitted Information
State whether any information has been omitted on the basis that it is confidential information.
In a separate letter to the applicable regulator or securities regulatory authority marked “Confidential”
provide the reasons for your company’s omission of confidential significant facts in the Report in sufficient
detail to permit the applicable regulatory or securities regulatory authority to determine whether to exercise
its discretion to allow the omission of these significant facts.
Not applicable.
Instruction:
In certain circumstances where a material change has occurred and a material change report has been or is
about to be filed but section 85 of the Act will no longer or will not be relied upon, a reporting issuer may
nevertheless believe one or more significant facts otherwise required to be disclosed in the material change
report should remain confidential and not be disclosed or not be disclosed in full detail in the material
change report.
Item 8.
Executive Officer
Give the name and business telephone number of an executive officer of your company who is
knowledgeable about the material change and the Report, or an officer through whom the executive officer
may be contacted.
John G. Robertson
President
(604) 278-5996
Item 9.
Date of Report
DATED at Richmond, British Columbia this 9th day of April , 2010.
REG TECHNOLOGIES INC.
Per:
“John Robertson”
(Authorized Signatory)
John Robertson, President
(Print name and title)
SCHEDULE “A”
REGI U.S., INC.
REG TECHNOLOGIES INC.
#240 – 11780 Hammersmith Way
Richmond, BC V7A 5E9
Phone: 604-278-5996 Fax: 604-278-3409
Toll Free: 800-665-4616
www.regtech.com
N E W S R E L E A S E
REGI U.S., Inc. (“REGI” or “RGUS”)
Reg Technologies Inc. (“Reg” or “RRE.V” or “REGRF”)
REGI U.S., INC. / REG TECHNOLOGIES INC. RELEASE RADMAX™
PROGRESS UPDATE
For Immediate Release: March 31, 2010. Vancouver, BC – REGI U.S., Inc. (OTC BB: RGUS,
Frankfurt Stock Exchange: RGJ) and Reg Technologies Inc. (TSX Venture Exchange: RRE.V,
OTC BB: REGRF) are pleased to release the RadMax™ Diesel Engine Design progress
update.
Phase 1: Conceptual Design, and Phase 2: Preliminary Design are now complete. We are now
executing Phase 3: Detail Design.
As previously described in our November 13, 2009 Press Release, we are nearing the
completion of a significant milestone of the Belcan Engineering review of the prototype engine
design, which was estimated at 6 months.
The actions completed are as follows:
• Retain Belcan as an independent engineering analysis organization to provide
independent validation of all RadMax™ design elements: functions, tolerances, and
material selections
• Verify environmental conditions (temperatures, pressures, centrifugal forces, etc.)
Actions that are continuing include:
• Identify components that require detail stress analysis
• Perform complete integration of all components and evaluate their performance and
strength under non- operating and operating conditions.
We have conducted a technical engineering interchange meeting with Belcan for the
thermodynamics analysis portion. A final report has been jointly prepared and submitted to the
Fortune 1000 company for review. A mutli-company thermodynamics review is planned for mid
April.
The thermodynamics report includes recommendations for RadMax™ Engine materials,
thicknesses, tolerances, and coatings. One specific recommendation is to fabricate the cam
using lighter weight materials to take advantage of its improved thermal conductivity.
Near-term program milestones include:
• Completion of Belcan Engineering review of mechanical components, bearings, and
lubrication – approx. 3 additional months
• Review and Approval by the Fortune 1000 Company – approx. 30 days
• Fabrication of the prototype engine – approx. 3 months
• Initial prototype testing – approx. 3 months
Robert Grisar, Vice President of Engineering, reports, “The Belcan review of the RadMax®
design is progressing on schedule as planned. We are extremely pleased with the expertise that
Belcan is contributing to the robustness of the RadMax™ design.
ABOUT BELCAN ENGINEERING SERVICES
Belcan Engineering Services is a global provider of highly technical engineering services to a
wide variety of industries including aerospace and defense, energy and utilities, manufacturing,
and transportation. They specialize in design engineering, engineering analysis, computer
modeling, and advanced manufacturing techniques and have been providing these services for
over 50 years.
ABOUT REGI U.S., INC. AND REG TECHNOLOGIES INC.
Reg Technologies Inc. and REGI U.S., Inc. are developing for commercialization an improved
axial vane type rotary engine known as the Rand Cam™/RadMax™ rotary technology used in
the revolutionary design of lightweight and high efficiency engines, compressors and pumps.
The RadMax™ engine has only two unique moving parts, the vanes (up to 12) and the rotor,
compared to the 40 moving parts in a simple four-cylinder piston engine. This innovative
design makes it possible to produce up to 24 continuous power impulses per one rotation that is
vibration-free and extremely quiet. The RadMax™ engine also has multi-fuel capabilities
allowing it to operate on fuels including gasoline, natural gas, hydrogen, propane and diesel.
REGI U.S., Inc. and its parent company, Reg Technologies Inc., are currently designing and
testing prototype RadMax™ diesel engines, compressors and pumps intended for aviation,
automotive, industrial processes and military applications. For more information, please visit
www.regtech.com .
ON BEHALF OF THE BOARD OF DIRECTORS
REGI U.S., Inc.
Reg Technologies Inc.
“John Robertson”
“John Robertson”
John Robertson
John Robertson
President
President
Contacts: REGI U.S., Inc. and
Reg Technologies Inc.
John Robertson, 1-800-665-4616
READER ADVISORY
Statements in this press release regarding the business of Reg Technologies Inc. and REGI U.S, Inc. (together the “Companies’”)
which are not historical facts are "forward-looking statements" that involve risks and uncertainties, including management's
assessment of future plans and operations, and capital expenditures and the timing thereof, certain of which are beyond the
Companies' control. There can be no assurance that such statements will prove accurate, and actual results and developments are
likely to differ, in some case materially, from those expressed or implied by the forward-looking statements contained in this press
release. Readers of this press release are cautioned not to place undue reliance on any such forward-looking statements.
Forward-looking statements contained in this press release are based on a number of assumptions that may prove to be incorrect,
including, but not limited to: the impact of competitive products and pricing, the Companies' dependence on third parties and
licensing/service supply agreements, and the ability of competitors to license the same technologies as the Companies or develop
or license other functionally equivalent technologies; financing requirements; changes in laws, rules and regulations applicable to
the Companies and changes in how they are interpreted and enforced, delays resulting from or inability to obtain required
regulatory approvals and ability to access sufficient capital from internal and external sources, the impact of general economic
conditions in Canada, and the United States, industry conditions, increased competition, the lack of availability of qualified
personnel or management, fluctuations in foreign exchange, stock market volatility and market valuations of companies with respect
to announced transactions. The Companies’ actual results, performance or achievements could differ materially from those
expressed in, or implied by, these forward-looking statements, including those described in Reg Technologies’ financial statements,
management discussion and analysis and material change reports filed with the Canadian Securities Administrators and available at
www.sedar.com, and its Form 20-F filed with the United States Securities and Exchange Commission at www.sec.gov, and REGI’s
Form 10-KSB annual report filed with the United States Securities and Exchange Commission at www.sec.gov. Accordingly, no
assurances can be given that any of the events anticipated by the forward-looking statements will transpire or occur, or if any of
them do so, what benefits, including the amount of proceeds, that the Companies will derive therefrom.
Readers are cautioned that the foregoing list of factors is not exhaustive. All subsequent forward-looking statements, whether
written or oral, attributable to the Companies or persons acting on its behalf are expressly qualified in their entirety by these
cautionary statements. Furthermore, the forward-looking statements contained in this news release are made as at the date of this
news release and the Companies do not undertake any obligation to update publicly or to revise any of the included forward-looking
statements, whether as a result of new information, future events or otherwise, except as may be required by applicable securities
laws.
The TSX Venture Exchange has neither approved nor disapproved of the information contained herein.
REG TECHNOLOGIES INC.
#240 – 11780 Hammersmith Way
Richmond, BC V7A 5E9
Phone: 604-278-5996 Fax: 604-278-3409
Toll Free: 800-665-4616
www.regtech.com
NEWS RELEASE
Reg Technologies Inc. (“Reg” or “RRE.V” or “REGRF”)
REG TECHNOLOGIES INC. ANNOUNCES GRANT OF
OPTIONS
For Immediate Release: April 20, 2010, Vancouver, BC – Reg Technologies Inc. (TSX
Venture Exchange: RRE.V, OTC BB: REGRF) is pleased to announce that it has
granted incentive stock options to a consultant of the Company to purchase up to 50,000
common shares at a price of $0.21 per share, exercisable for a period of five years from
the date of granting.
The granting and amendment of the options is subject to regulatory acceptance.
Shareholder approval for the granting and exercise of incentive stock options, and
disinterested shareholder approval for decreasing the exercise price of options, was
obtained at the Company’s annual general meeting held on January 4, 2010.
ABOUT REGI U.S., INC. AND REG TECHNOLOGIES INC.
Reg Technologies Inc. and REGI U.S., Inc. are developing for commercialization an
improved axial vane type rotary engine known as the Rand Cam™/RadMax™ rotary
technology used in the revolutionary design of lightweight and high efficiency engines,
compressors and pumps. The RadMax™ engine has only two unique moving parts, the
vanes (up to 12) and the rotor, compared to the 40 moving parts in a simple four-cylinder
piston engine. This innovative design makes it possible to produce up to 24 continuous
power impulses per one rotation that is vibration-free and extremely quiet.
The
RadMax™ engine also has multi-fuel capabilities allowing it to operate on fuels including
gasoline, natural gas, hydrogen, propane and diesel. REGI U.S., Inc. and its parent
company, Reg Technologies Inc., are currently designing and testing prototype
RadMax™ diesel engines, compressors and pumps intended for aviation, automotive,
industrial processes and military applications. For more information, please visit
www.regtech.com .
ON BEHALF OF THE BOARD OF DIRECTORS
Reg Technologies Inc.
“John Robertson”
John Robertson
President
Contacts: Reg Technologies Inc.
John Robertson, 1-800-665-4616
READER ADVISORY
Statements in this press release regarding the business of Reg Technologies Inc. and REGI U.S, Inc. (together the
“Companies’”) which are not historical facts are "forward-looking statements" that involve risks and uncertainties, including
management's assessment of future plans and operations, and capital expenditures and the timing thereof, certain of
which are beyond the Companies' control. There can be no assurance that such statements will prove accurate, and
actual results and developments are likely to differ, in some case materially, from those expressed or implied by the
forward-looking statements contained in this press release. Readers of this press release are cautioned not to place
undue reliance on any such forward-looking statements.
Forward-looking statements contained in this press release are based on a number of assumptions that may prove to be
incorrect, including, but not limited to: the impact of competitive products and pricing, the Companies' dependence on third
parties and licensing/service supply agreements, and the ability of competitors to license the same technologies as the
Companies or develop or license other functionally equivalent technologies; financing requirements; changes in laws,
rules and regulations applicable to the Companies and changes in how they are interpreted and enforced, delays
resulting from or inability to obtain required regulatory approvals and ability to access sufficient capital from internal and
external sources, the impact of general economic conditions in Canada, and the United States, industry conditions,
increased competition, the lack of availability of qualified personnel or management, fluctuations in foreign exchange,
stock market volatility and market valuations of companies with respect to announced transactions. The Companies’
actual results, performance or achievements could differ materially from those expressed in, or implied by, these forward-
looking statements, including those described in Reg Technologies’ financial statements, management discussion and
analysis and material change reports filed with the Canadian Securities Administrators and available at www.sedar.com,
and its Form 20-F filed with the United States Securities and Exchange Commission at www.sec.gov, and REGI’s Form
10-KSB annual report filed with the United States Securities and Exchange Commission at www.sec.gov. Accordingly, no
assurances can be given that any of the events anticipated by the forward-looking statements will transpire or occur, or if
any of them do so, what benefits, including the amount of proceeds, that the Companies will derive therefrom.
Readers are cautioned that the foregoing list of factors is not exhaustive. All subsequent forward-looking statements,
whether written or oral, attributable to the Companies or persons acting on its behalf are expressly qualified in their
entirety by these cautionary statements. Furthermore, the forward-looking statements contained in this news release are
made as at the date of this news release and the Companies do not undertake any obligation to update publicly or to
revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise,
except as may be required by applicable securities laws.
The TSX Venture Exchange has neither approved nor disapproved of the information contained herein.
BC FORM 51-102F3
Material Change Report
Item 1. Name and Address of Company
State the full name and address of your company and the address of its principal office in Canada.
REG TECHNOLOGIES INC.
#240 – 11780 Hammersmith Way
Richmond, BC V7A 5E9
Phone: (604) 278-5996
Item 2.
Date of Material Change
State the date of the material change.
April 20, 2010
Item 3.
News Release
State the date and method(s) of dissemination of the news release issued under section 7.1 of National
Instrument 51-102.
April 20, 2010
The press release relating to this material change was distributed and filed by,
Marketnews Publishing, Inc. and Stockwatch on April 20, 2010.
Item 4.
Summary of Material Change
Provide a brief but accurate summary of the nature and substance of the material change.
The Company announced it has granted incentive stock options to a consultant to
purchase up to 50,000 common shares at a price of $0.21 per share, exercisable for a
period of five years from the date of granting.
Item 5.
Full Description of Material Change
Supplement the summary required under Item 4 with the disclosure that should be sufficient disclosure to
enable a reader to appreciate the significance and impact of the material change without having to refer to
other material. Management is in the best position to determine what facts are significant and must disclose
those facts in a meaningful manner. See also Item 7.
Some examples of significant facts relating to the material change include: dates, parties, terms and
conditions, description of any assets, liabilities or capital affected, purpose, financial or dollar values,
reasons for the change, and a general comment on the probable impact on the issuer or its subsidiaries.
Specific financial forecasts would not normally be required.
Other additional disclosure may be appropriate depending on the particular situation.
For a full description of the material change, see Schedule “A”.
Item 6.
Reliance on subsection 7.1(2) of National Instrument 51-102
If this report is being filed on a confidential basis in reliance on subsection 7.1(2) of National Instrument
51-102, state the reasons for that reliance.
Not applicable.
Instruction:
Refer to subsections 7.1(5) and (7) of National Instrument 51-102 concerning continuing obligations in
respect of reports filed under subsection 7.1(2) of National Instrument 51-102.
Item 7.
Omitted Information
State whether any information has been omitted on the basis that it is confidential information.
In a separate letter to the applicable regulator or securities regulatory authority marked “Confidential”
provide the reasons for your company’s omission of confidential significant facts in the Report in sufficient
detail to permit the applicable regulatory or securities regulatory authority to determine whether to exercise
its discretion to allow the omission of these significant facts.
Not applicable.
Instruction:
In certain circumstances where a material change has occurred and a material change report has been or is
about to be filed but section 85 of the Act will no longer or will not be relied upon, a reporting issuer may
nevertheless believe one or more significant facts otherwise required to be disclosed in the material change
report should remain confidential and not be disclosed or not be disclosed in full detail in the material
change report.
Item 8.
Executive Officer
Give the name and business telephone number of an executive officer of your company who is
knowledgeable about the material change and the Report, or an officer through whom the executive officer
may be contacted.
John G. Robertson
President
(604) 278-5996
Item 9.
Date of Report
DATED at Richmond, British Columbia this 29th day of April , 2010.
REG TECHNOLOGIES INC.
Per:
“John Robertson”
(Authorized Signatory)
John Robertson, President
(Print name and title)
SCHEDULE “A”
REG TECHNOLOGIES INC.
#240 – 11780 Hammersmith Way
Richmond, BC V7A 5E9
Phone: 604-278-5996 Fax: 604-278-3409
Toll Free: 800-665-4616
www.regtech.com
N E W S R E L E A S E
Reg Technologies Inc. (“Reg” or “RRE.V” or “REGRF”)
REG TECHNOLOGIES INC. ANNOUNCES GRANT OF
OPTIONS
For Immediate Release: April 20, 2010, Vancouver, BC – Reg Technologies Inc. (TSX Venture
Exchange: RRE.V, OTC BB: REGRF) is pleased to announce that it has granted incentive stock
options to a consultant of the Company to purchase up to 50,000 common shares at a price of
$0.21 per share, exercisable for a period of five years from the date of granting.
The granting and amendment of the options is subject to regulatory acceptance. Shareholder
approval for the granting and exercise of incentive stock options, and disinterested shareholder
approval for decreasing the exercise price of options, was obtained at the Company’s annual
general meeting held on January 4, 2010.
ABOUT REGI U.S., INC. AND REG TECHNOLOGIES INC.
Reg Technologies Inc. and REGI U.S., Inc. are developing for commercialization an improved
axial vane type rotary engine known as the Rand Cam™/RadMax™ rotary technology used in
the revolutionary design of lightweight and high efficiency engines, compressors and pumps.
The RadMax™ engine has only two unique moving parts, the vanes (up to 12) and the rotor,
compared to the 40 moving parts in a simple four-cylinder piston engine. This innovative
design makes it possible to produce up to 24 continuous power impulses per one rotation that is
vibration-free and extremely quiet. The RadMax™ engine also has multi-fuel capabilities
allowing it to operate on fuels including gasoline, natural gas, hydrogen, propane and diesel.
REGI U.S., Inc. and its parent company, Reg Technologies Inc., are currently designing and
testing prototype RadMax™ diesel engines, compressors and pumps intended for aviation,
automotive, industrial processes and military applications. For more information, please visit
www.regtech.com .
ON BEHALF OF THE BOARD OF DIRECTORS
Reg Technologies Inc.
“John Robertson”
John Robertson
President
Contacts: Reg Technologies Inc.
John Robertson, 1-800-665-4616
READER ADVISORY
Statements in this press release regarding the business of Reg Technologies Inc. and REGI U.S, Inc. (together the “Companies’”)
which are not historical facts are "forward-looking statements" that involve risks and uncertainties, including management's
assessment of future plans and operations, and capital expenditures and the timing thereof, certain of which are beyond the
Companies' control. There can be no assurance that such statements will prove accurate, and actual results and developments are
likely to differ, in some case materially, from those expressed or implied by the forward-looking statements contained in this press
release. Readers of this press release are cautioned not to place undue reliance on any such forward-looking statements.
Forward-looking statements contained in this press release are based on a number of assumptions that may prove to be incorrect,
including, but not limited to: the impact of competitive products and pricing, the Companies' dependence on third parties and
licensing/service supply agreements, and the ability of competitors to license the same technologies as the Companies or develop
or license other functionally equivalent technologies; financing requirements; changes in laws, rules and regulations applicable to
the Companies and changes in how they are interpreted and enforced, delays resulting from or inability to obtain required
regulatory approvals and ability to access sufficient capital from internal and external sources, the impact of general economic
conditions in Canada, and the United States, industry conditions, increased competition, the lack of availability of qualified
personnel or management, fluctuations in foreign exchange, stock market volatility and market valuations of companies with respect
to announced transactions. The Companies’ actual results, performance or achievements could differ materially from those
expressed in, or implied by, these forward-looking statements, including those described in Reg Technologies’ financial statements,
management discussion and analysis and material change reports filed with the Canadian Securities Administrators and available at
www.sedar.com, and its Form 20-F filed with the United States Securities and Exchange Commission at www.sec.gov, and REGI’s
Form 10-KSB annual report filed with the United States Securities and Exchange Commission at www.sec.gov. Accordingly, no
assurances can be given that any of the events anticipated by the forward-looking statements will transpire or occur, or if any of
them do so, what benefits, including the amount of proceeds, that the Companies will derive therefrom.
Readers are cautioned that the foregoing list of factors is not exhaustive. All subsequent forward-looking statements, whether
written or oral, attributable to the Companies or persons acting on its behalf are expressly qualified in their entirety by these
cautionary statements. Furthermore, the forward-looking statements contained in this news release are made as at the date of this
news release and the Companies do not undertake any obligation to update publicly or to revise any of the included forward-looking
statements, whether as a result of new information, future events or otherwise, except as may be required by applicable securities
laws.
The TSX Venture Exchange has neither approved nor disapproved of the information contained herein.
TSX-V: RRE.V
NOTICE OF CHANGE OF AUDITOR
TO:
The British Columbia Securities Commission
Alberta Securities Commission
AND TO:
ALL HOLDERS OF SHARES IN THE CAPITAL OF THE COMPANY
To:
Dale Matheson Carr-Hilton Labonte LLP "DMCL" Chartered Accountants
And To:
ACAL Group, Chartered Accountants
Reg Technologies Inc.. ("the Company") hereby give notice pursuant to National
Instrument 51-102 - Continuous Disclosure Obligations ("NI 51-102") as follows:
TAKE NOTICE THAT:
1. The Company has requested that, DMCL Chartered Accountants, resign
as auditors of the Company effective May 25, 2010 and ACAL Group,
Chartered Accountants was appointed as auditors of the Company on
May 25, 2010.
2. Both the resignation of DMCL Chartered Accountants and the
appointment of ACAL Group, Chartered Accountants were considered and
approved by the Board of Directors and the Audit Committee of the
Company;
3. The Company reports that during the period of engagement of DMCL that
there were no reservations in the reports of DMCL for the fiscal year
ending April 30, 2009 reported on by DMCL; and
4. There have been no reportable events (as defined in 7(e) of the National
Instrument 51-102) between the Company and DMCL, Chartered
Accountants.
DATED at Vancouver, British Columbia this 25th day of May, 2010.
By Order of the Board of Directors
“John Robertson”
____________________________________
John Robertson
President
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