REG TECHNOLOGIES INC.
240 - 11780 Hammersmith Way
Richmond, BC V7A 5E9
May 13, 2014
United States Securities and Exchange Commission
Washington, D.C. 20549
Dear Sirs:
Re: | Reg Technologies Inc. (the “Company”) | |
Form 20-F for the Fiscal Year Ended | ||
April 30, 2013 Filed August 29, 2013 | ||
File No. 000-24342 |
We are writing in response to your letter dated February 3, 2014.
Form 20-F for the Fiscal Year Ended April 30, 2013
Investment inassociates,pageF-7
1. | Please provide uswith thefollowinginformationrelated toyourinvestments inassociates,and in future filings,reviseyour disclosuretoinclude the following: |
● | Summarizedfinancialinformation ofassociates, includingtheaggregated amounts ofassets,liabilities,revenues, and profit or loss; |
Minewest Silver and Gold Inc. (in CAD$) | ||||||||
April 30, | ||||||||
2013 | 2012 | |||||||
$ | $ | |||||||
Current Asset | 162,615 | 191,698 | ||||||
Non-current Asset | 305,196 | 251,203 | ||||||
Total Current Assets and Total Assets | 467,811 | 442,901 | ||||||
Total Current Liabilities and Total Liabilities | 129,669 | 84,569 | ||||||
Years Ended April 30, | ||||||||
2013 | 2012 | |||||||
$ | $ | |||||||
Revenue | - | - | ||||||
Operating Expenses | (117,616 | ) | (83,550 | ) | ||||
Net Operating Loss and Net Loss | (117,616 | ) | (83,550 | ) |
● Foranyinvestments inwhichyou holddirectly,orthroughsubsidiaries, less than 20%oftheactualorpotential votingpowerofan investeebut concludethatyounevertheless have“significant influence,”thereasonswhythepresumption thatyoudo not havesignificantinfluencehasbeenovercome;and
Although at April 30, 2013 the Company and its subsidiary Rand Energy Group Inc. jointly owned 3,378,183 shares, or 10.66% of REGI US’ issued and outstanding common shares, the Company was owed $1,011,748 by REGI US, which was repayable upon demand. Conversion of this debt into REGI’s common shares would result in the Company owning 20% of the REGI US’ issued and outstanding shares at April 30, 2013.
JohnRobertson
RegTechnologiesInc.February3, 2014
Page2
● Foranyinvestments whereyouhavediscontinuedrecognitionofyour shareoflossesof anassociate, the amounts ofsuchunrecognizedshareoflosses, both for theperiod andcumulatively.
REGI U.S., Inc. (in $US) | ||||||||
April 30, | ||||||||
2013 | 2012 | |||||||
$ | $ | |||||||
Total Current Assets and Total Assets | 16,377 | 44 | ||||||
Total Current Liabilities and Total Liabilities | 1,725,587 | 1,746,708 | ||||||
Years Ended April 30, | ||||||||
2013 | 2012 | |||||||
$ | $ | |||||||
Revenue | - | - | ||||||
Loss from operations | (556,452 | ) | (460,207 | ) | ||||
Other Income (Expense) | (1,440 | ) | 72,005 | |||||
Net loss | (557,892 | ) | (388,202 | ) |
Refer toIAS 28 andIFRS 12.
The requirement for disclosures under IAS 28 and IFRS 12 is noted for future filings.
EquityAccountedInvestees andRelated PartyTransactions, pageF-23
2. | Wenotethatyou haveareceivablebalanceduefrom REGIUS ofapproximately$1million as of April 30, 2013. We also notethat as ofthatdate, REGIUS hasassets ofapproximately$16,000 andliabilities of approximately$1.7 million.Pleasetell us howyou have determined thisreceivable is fullycollectibleas of the balancesheetdate. |
The Management determined that the receivable is fully collectible as at April 30, 2013 for the following reasons:
● REGI US has successfully raised funds with the issuances of equity instruments, so is capable of raising funds to pay off the amounts owed to the Company. During 2013, REGI was able to partially repay some of the balance. The Company recently raised substantial funds from a private placement thanks to investors’ belief in the Company’s RadMax™ Engine Technology. REGI US has the right to the same technology in the United States, has received similar positive responses from its potential investors and has informed us of its upcoming substantial financing plans.
● REGI US and the Company have jointly funded the research and development of the technology that has significant potential. REGI US is a going concern.
● Currently Mr. John Robertson is a director and the CEO of both Companies. The Company is well aware of REGI US’ willingness to repay the loan, which was confirmed during the 2013 year end audit.
JohnRobertson
RegTechnologiesInc.February3, 2014
Page3
● The amounts owed by REGI US to the Company are repayable upon demand. In the event that the Company demands repayment, REGI US will be able to issue common shares as settlement for the outstanding debt in addition to making cash payments from other sources of financing. And
● In the event REGI US generates royalty revenue, the Company will request REGI US to repay the loan as the first use of its royalty proceeds.
Minewest,pageF-23
3. | Pleasetell us howyou have determined the valueofthesharesofMinewest to bedistributed toyourshareholders is $471,200.Additionally, pleasetell uswhyyou havenotrecorded aliabilityfor thedividendpayable.Refer toIFRICInterpretation 17:Distributions ofNon-cashAssets toOwners. |
On July 6, 2010 the Company incorporated its wholly owned subsidiary Minewest.
Pursuant to a Plan of Arrangement, the Company signed an asset transfer agreement on August 5, 2010 with Minewest to transfer the Company’s undivided 45% interest in the Silverknife mineral claims in northern British Columbia to Minewest for consideration of cash payment of $25,000 and 8,000,000 common shares of Minewest which were issued on January 17, 2011.
On December 8, 2011, Minewest issued 2,147,000 common shares for gross proceeds of $214,700 at $0.10 per share.
On December 14, 2011, Reg Tech declared approximately 4,712,263 Minewest shares to be distributed as dividend to Reg Tech shareholders on the record date of December 21, 2011, whereby one Minewest share was to be distributed for seven Reg Tech shares.
Minewest’s common shares were not publicly traded, thus a fair value of $0.10 was assigned to the 4,712,263 common shares based on the December 8, 2011 private placement price of $0.10 for a total of approximately $471,200.
The 4,712,263 Minewest shares are distributable upon the Company’s completion of its share reorganization under the Plan of Arrangement mentioned above and will be distributed subject to the Company’s listing on the Canadian Stock Exchange. As at April 30, 2013 because the share reorganization was not completed, the dividend was not payable.
The Company hereby acknowledges that:
● | the company is responsible for the adequacy and accuracy of the disclosure in the filing; |
● | staff comments or changes to disclosure in response to staff comments do not foreclose the Commission from taking any action with respect to the filing; and |
● | the company may not assert staff comments as a defense in any proceeding initiated by the Commissionorany person under the federal securities laws of the United States. |
Yours truly,
REG TECHNOLOGIES INC.
/s/ John G. Robertson | |
John G. Robertson, | |
President and CEO |