Item 10.      Additional Information

     A.      Share capital.

     As of December 31, 2002, the Company had 141,948,050 voting common shares without par value issued and outstanding. As of March 31, 2003 the Company had 143,456,447 voting common shares without par value issued and outstanding.

     All of the issued and outstanding shares of the Company are fully paid and non-assessable.

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     The authorized capital of the Company consists of an unlimited number of common shares without par value. Only the holders of common shares are entitled to receive a notice of or attend and vote at any meetings of the shareholders of the Company.

Share Capital
for the years of 2001 and 2003 and
the first three months of 2003

     The Company does not hold any shares of its capital stock as Treasury stock.

      Warrants

     During 1999, the Company issued 12,000,000 share purchase warrants in connection with a private placement. Each share purchase warrant allows the holder to acquire one common share of the company at an exercise price of $0.10 per share. The warrants expire on February 12, 2004.

     To date, 237,500 share purchase warrants have been exercised. At December 31, 2002, there are 11,262,500 outstanding share purchase warrants that may still be exercised.

     No one has preferential subscription rights to the capital of the Company.

      Stock option plans

     The Company has established a stock option plan with the objective of advancing the interests of the Company by encouraging and enabling the acquisition of a share interests in the Company by its directors, officers, employees and consultants, in accordance with the policies and rules of the applicable regulatory authorities (the “Option Plan”). Pursuant to the Option Plan, the Board may, by resolution, grant to directors, officers, employees and consultants of the Company options to purchase common shares of the Company (the “Options”). The exercise price at which Common Shares may be purchased pursuant to an Option Plan is established by the Board at the time such Option is granted, subject to the regulatory requirements of applicable regulatory authorities. The term and vesting conditions of each Option may be fixed by the Board when the Option is granted, but the term may not exceed 10 years from the date upon which the Option is granted. The maximum number of Common Shares that may be reserved for issuance pursuant to Options granted under the Plan is presently fixed at 10,000,000 and the

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maximum number of Common Shares that may be options to any one person at any one time is 5% of the total number of Common Shares issued and outstanding on the date of the grant. Both the number of Common Shares under option and the exercise price of Options may be adjusted upon the occurrence of any one of a number of specified dilutive or anti-dilutive events.

     As of December 31, 2002, a total of 9,499,998 common shares are available for granting under the plan. Any shareholder who is an insider of the Company or an associate of an insider is not permitted to vote on such resolution. The exercise price of options granted pursuant to the plans may not be less than the market price of the common shares at the time of the grant.

     The Company has 9,320,002 options outstanding at December 31, 2002, of which approximately 3,000,000 options are held by employees and the remainder are held by the Directors and external third parties.

     A summary of the status of the Company’s stock option plans is as follows:

     A summary of the Company’s stock options which are outstanding and vested at March 31, 2003, is as follows:

	Range of		Number Outstanding at
	Exercise Prices		March 31, 2003				Expiry Dates
	$0.10			1,540,002			May 4, 2006
	$0.20			300,000			January 2, 2007
	$0.20			200,000			February 25, 2007
	$0.20			50,000			March 11, 2007
	$0.10			700,000			July 25, 2007
	$0.10			1,400,000			September 30, 2007
	$0.10			1,050,000			October 29, 2007
	$0.10			1,800,000			January 29, 2008
Total				7,040,002

     An additional 600,000 options were granted at an exercise price of $0.19 per share with an expiry date of June 30, 2006, as compensation for two Investor Relations contracts entered by the Company. 300,000 of these options vested upon the commencement of the contract and the remaining 300,000 will vest upon December 31, 2003.

     Shares issuances during the past three years

     No changes have been made to the classes of shares in the past three years. Changes relating to Stock Option Plans and Warrants are itemized previously in this section.

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     B.      Memorandum and articles of association.

     The Company resulted from the amalgamation under the Canada Business Corporations Act of Genoil Inc. and Continental Fashions Group Inc., a public company whose shares traded on the Alberta Stock Exchange. At the time of the merger CFG had no assets, no liabilities and did not carry on any business. The Company was incorporated in April of 1996 under Certificate of Incorporation no. 324649-3. In June of 1996, the Company amended and altered its Memorandum and Articles of Association. This amendment was made to facilitate a reorganization of the share capital of the Company in accordance with the amalgamation referenced above.

     The Memorandum and Articles of Association are subject to all the provisions of the Canadian Business Corporations Act (the “CBCA”). The CBCA provides that a company incorporated under that Act has all the powers and capacities of a natural person. The CBCA further stipulates that a company must not carry on a business that its articles prohibit. Thus, the Company has the power and capacity of a natural person.

     The following brief description of provisions of the CBCA, the Company’s amended and restated articles of incorporation and its by-laws does not purport to be complete and is subject in all respects to the provisions of the CBCA, the Company’s restated articles of incorporation and its by-laws.

      Directors’ Conflicts of Interest

     Section 120 of the CBCA requires every director of the Company who is, in any way, directly or indirectly, interested in a proposed material contract or transaction of the Company, to disclose the nature and extent of the director’s interest in writing or by requesting to have it entered in the minutes of the meeting of directors or of meetings of committees of directors:

     The CBCA further provides that a director or officer of the Company who is required to disclose an interest may not vote on any resolution to approve the contract or transaction unless the contract or transaction, (i) relates primarily to the director’s or officer’s remuneration as a director, officer, employee or agent of the Company or an affiliate, (ii) is for indemnity or insurance for the director against liability incurred by the director or officer acting in his or her capacity as director or officer of the Company, or (iii) is with an affiliate.

      Borrowing Powers

     Section 3.1 of the by-laws of the Company state that the board of directors has the borrowing powers provided by the law.

      Directors

     The number of directors shall be not less than one and not more than nine. The number of directors may be determined from time to time by an ordinary resolution of the shareholders passed at a duly convened general meeting. A director is not required to own any shares of the Company to be qualified to serve as a director. A director is not required to retire under any age-limit requirement.

     Upon the termination of each annual general meeting, all the directors are deemed to retire. The number of directors to be elected at any such meeting will be the number of directors then in office unless the directors or shareholders otherwise determine.

     If the shareholders remove any director before the expiration of his or her period of office and appoint another person in his or her place, that person so appointed shall hold office only during the remainder of the time that the director in whose place he or she is appointed would have held the office if he or she had not been removed. If the shareholders do not appoint another director to replace the removed director the vacancy may be filled by the directors.

     The directors, or any committee of directors, may take any action required or permitted to be taken by them and may exercise any of the authorities, powers and discretions for the time being vested in or exercisable by them by

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way of a resolution either passed at a meeting at which a quorum is present or consented to in writing under the applicable section of the CBCA.

     The directors may appoint a president, one or more vice-presidents, a secretary, a treasurer and other officers as determined by the board, including assistants to the board. The directors may specify the duties of and delegate powers to manage the business and affairs of the Company to these officers. The Company may also appoint a chairman of the board, who must also be a director, and assign the powers and duties assigned to the managing director or president, under the by-laws, or other powers and duties.

      Rights Attached to Shares

     The following is a description of the rights, preferences, and restrictions attached to each class of the Company’s shares:

     (a)  Unlimited Common shares — Each Common share carries the right to one vote at any meeting of shareholders of the Company. Dividends are payable on the Common shares in the discretion of the Board of Directors. In the event of the liquidation, dissolution or winding-up of the Company or any distribution of its assets for the purpose of winding up its affairs, the Common shares shall be entitled to receive the remaining property of the Company. The Common shares are not redeemable at the option of the Company or the holders. There are no sinking fund provisions respecting the Common shares. The holders of the Common shares are not liable for any further capital calls on such shares.

      Alteration of the Rights of Shareholders

     No rights, privileges or restrictions attached to the common shares of the Company may be altered except with the approval by resolution passed by the vote of the holders of not less than 75% of the votes in value of the voting shares then outstanding and of at least 75% in value of shares of a class or series of shares.

     There are no limitations in the Company’s charter on the rights of non-resident or foreign owners to hold Common Shares of the Company.

      Shareholders’ Meetings

     The CBCA requires the directors of the Company to call an annual general meeting of shareholders not later than fifteen months after the last annual general meeting and no later than six months after the end of the Company’s preceding financial year. The directors may, whenever they think fit, convene an special meeting.

     Notice of a meeting must specify the time and place of a meeting, and, in case of special business, the general nature of that business and the text of any resolution. The accidental omission to give notice of any meeting to, or the non-receipt of any notice by any of the shareholders entitled to receive notice do not invalidate any proceedings at that meeting.

     All business that is transacted at a special meeting, an annual meeting of shareholders, with the exception of consideration of the financial statement, auditor’s report election of directors, re-appointment of the incumbent auditor is deemed to be special business.

     The Company’s Articles stipulate that business shall be conducted at any general meeting if there is quorum present at the opening of the meeting not withstanding that there ceases to be a quorum present throughout the meeting. A quorum is shareholders entitled to vote or proxyholders thereof representing more than 10% of the outstanding shares of the Company entitled to vote at the meeting.

     The Articles stipulate that the Chairman of the Board, or in his absence, the Managing Director of the Company, or in his absence the President of the Company shall preside as chairman of every general meeting.

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     Unless the directors otherwise determine, the instrument appointing a proxyholder shall be deposited at a place specified for that purpose in the notice convening the meeting, not less than forty-eight hours before the time for holding the meeting at which the proxyholder proposes to vote.

     Notice of every general meeting should be sent to:

     (a)  each director;

     (b)  the auditor of the Company;

     (c)  every shareholder entered in the securities registrar as the holder of a share or shares carrying the right to vote at such meetings on the record date or, if no record date was established by the directors, on the date of mailing such notice; and

     (d)  every person upon whom the ownership of a share devolves by reason of his being a legal personal representative or a trustee in bankruptcy of a shareholder where the shareholder, but for his death or bankruptcy, would be entitled to vote.

     No other person is entitled to receive notice of general meetings.

     C.      Material contracts.

     The Company has entered into no material contracts in the ordinary course of business for the two years preceding this registration statement.

     D.      Exchange controls.

     There is no law or governmental decree or regulation in Canada that restricts the export or import of capital or affects the remittance of dividends, interest or other payments to a non-resident holder of Shares, other than withholding tax requirements. See “Taxation.”

     E.      Taxation.

     The following summary of the material Canadian federal and U.S. federal income tax considerations generally applicable in respect of the holding or disposing of Common Shares is provided by the Company. This summary does not address all possible tax consequences relating to an investment in the Common Shares of the Company. There may be provincial, territorial, state and local taxes applicable to a potential shareholder, depending on the shareholder’s particular circumstances, which are not addressed in this summary. The tax consequences to any particular holder, including a U.S. Holder of Common Shares (defined below) will vary according to the status of that holder as an individual, trust, corporation, or member of a partnership, the jurisdiction in which the holder is subject to taxation, the place where the holder is resident and generally, according to the holder’s particular circumstances.

      U.S. Holder of Common Shares

     References to a “U.S. Holder of Common Shares” in this section include individuals, corporations, trusts or estates who are holders of Common Shares and who:

	•		for purposes of the Income Tax Act (Canada) (the “ITA”) and the Canada-United States Income Tax Convention (1980), as amended by the protocol signed on July 29, 1997, (the “Treaty”) are residents of the U.S. and have never been residents of Canada;
	•		for purposes of the U.S. Internal Revenue Code of 1986 (the “Code”) are U.S. persons;
	•		deal at arm’s length with the Company for purposes of the ITA;

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	•		will hold the Common Shares as capital property for purposes of the ITA;
	•		will hold the Common Shares as capital assets for purposes of the Code;
	•		do not and will not hold the Common Shares in carrying on a business in Canada;
	•		will not perform independent personal services from a fixed base situated in Canada; and
	•		are not or will not be subject to special provisions of Canadian or U.S. federal income tax law, including, without limiting the generality of the foregoing, financial institutions, real estate investment trusts, shareholders that have a functional currency other than the U.S. dollar, shareholders that own shares through a partnership or other pass-through entity, shareholders that hold shares as part of a straddle, hedge or conversion transaction, tax-exempt organizations, qualified retirement plans, insurance companies, shareholders who acquired their shares through the exercise of employee stock options or otherwise as compensation and mutual fund companies.

     The following summary of Canadian federal and U.S. federal income tax considerations generally applicable to a U.S. Holder of Common Shares of the Company is based on the following, as at the time of this statement:

	•		the ITA and the Income Tax Regulations (Canada) (the “Regulations”);
	•		published proposals to amend the ITA and the Regulations;
	•		published administrative positions and practices of the Canada Customs and Revenue Agency (the “CCRA”);
	•		the Code;
	•		Treasury Regulations;
	•		published Internal Revenue Service (“IRS”) rulings;
	•		published administrative positions of the IRS;
	•		published jurisprudence that is considered applicable; and
	•		the Treaty.

     All of the foregoing are subject to material or adverse change, on a prospective or retroactive basis, at any time. The tax laws of the various provinces or territories of Canada and the tax laws of the various state and local jurisdictions of the U.S. are not considered in this summary.

     This summary is not exhaustive of all possible income tax consequences. The following discussion is for general information only and is not intended to be, nor should it be construed to be, legal or tax advice to any holder or prospective holder of Common Shares of the Company and no opinion or representation with respect to any such holder or prospective holder with respect to the income tax consequences to any such holder or prospective holder is made. Accordingly, holders and prospective holders of Common Shares of the Company should consult their own tax advisors about the Canadian federal and provincial and U.S. federal, state, local, and foreign tax consequences of purchasing, owning and disposing of Common Shares of the Company.

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      Canadian Federal Income Tax Consequences

Disposition of Common Shares

     A U.S. Holder of Common Shares will not be subject to tax in Canada under the ITA on capital gains realized on the disposition of such Common Shares unless the shares are “taxable Canadian property.” Such Common Shares will be taxable Canadian property if, in general, at any time during the sixty month period immediately preceding the disposition, 25% or more of the Company’s issued shares of any class (or an option to acquire 25% or more of the issued shares of any class) were owned by such holder, or by such holder and persons with whom such holder did not deal at arm’s length. If the Company’s shares are taxable Canadian property to a U.S. Holder of Common Shares, 50% of any resulting capital gain realized on the disposition of such shares may be subject to tax in Canada. However, the Treaty provides that gains realized by a U.S. Holder of Common Shares on the disposition of shares of a Canadian corporation will be exempt from federal tax in Canada unless the value of the Canadian corporation is derived principally from real property situated in Canada.

Dividend Distributions on Shares of the Company

     Dividends paid on the Company’s Common Shares held by a U.S. Holder of Common Shares will be subject to Canadian non-resident withholding tax. The Company is required to withhold taxes at source. Under the Treaty, a withholding rate of 5% is applicable to corporations resident in the United States and who are beneficial owners of at least 10% of the voting shares of the Company. Under the Treaty, a withholding rate of 15% is applicable in all other cases.

      United States Federal Income Tax Consequences

     The U.S. federal income tax consequences related to the disposition and ownership of Common Shares, subject to the Foreign Personal Holding Company Rules, Passive Foreign Investment Company and Controlled Foreign Corporation Rules contained in the Code, are generally as follows:

Disposition of Common Shares

     On a disposition of Common Shares, a U.S. Holder of Common Shares generally will recognize a gain or loss. The gain or loss will be equal to the difference between the amount realized on the sale and the U.S. Holder of Common Share’s adjusted tax basis in those shares. Any such gain or loss will be a long-term capital gain or loss if the shareholder has held the shares for more than one year. Otherwise the gain or loss will be a short-term capital gain or loss. However, a gain realized on the disposition of Common Shares may be treated as ordinary income if the Company was a “collapsible corporation” within the meaning of the Code. The gain or loss will generally be a U.S. source gain or loss.

Dividend Distributions on Shares of the Company

     Dividend distributions (including constructive dividends) paid by the Company will be required to be included in the income of a U.S. Holder of Common Shares to the extent of the Company’s current or accumulated earnings and profits (“E&P”) attributable to the distribution without reduction for any Canadian withholding tax withheld from such distributions. Even if such payment is in fact not converted to U.S. dollars, the amount of any cash distribution paid in Canadian dollars will be equal to the U.S. dollar value of the Canadian dollars on the date of distribution based on the exchange rate on such date. To the extent distributions paid by the Company on the Common Shares exceed the Company’s current or accumulated E&P, they will be treated first as a return of capital up to a shareholder’s adjusted tax basis in the shares and then as capital gain from the sale or exchange of the shares.

     Dividends paid by the Company on the Common Shares generally will not be eligible for the “dividends received” deduction provided to corporations receiving dividends from certain U.S. corporations. These dividends generally may be subject to backup withholding tax, unless a U.S. Holder of Common Shares furnishes the Company with a duly completed and signed Form W-9. The U.S. Holder of Common Shares will be allowed a refund or a credit equal to any amount withheld under the U.S. backup withholding tax rules against the U.S. Holder

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of Common Share’s U.S. federal income tax liability, provided the shareholder furnishes the required information to the IRS.

Foreign Tax Credit

     A U.S. Holder of Common Shares will generally be entitled to a foreign tax credit or deduction in an amount equal to the Canadian tax withheld. Dividends paid by the Company generally will constitute foreign source dividend income and “passive income” for purposes of the foreign tax credit, which could reduce the amount of foreign tax credits available to shareholders. There are significant and complex limitations that apply to the credit. The U.S. holders of common shares should consult their own tax advisors in this regard.

Foreign Personal Holding Company Rules

     Special U.S. tax rules apply to a shareholder of a foreign personal holding company (“FPHC”). The Company would be classified as a FPHC in any taxable year if both of the following tests are satisfied:

	•		at least 60% of the Company’s gross income consists of “foreign personal holding company income”, which generally includes passive income such as dividends, interest, royalties, gains from shares and commodity transactions and rents; and
	•		more than 50% of the total voting power of all classes of voting shares or the total value of outstanding shares is owned directly or indirectly by five or fewer individuals who are U.S. citizens or residents.

Passive Foreign Investment Company Rules

     Special U.S. tax rules apply to a shareholder of a Passive Foreign Investment Company (“PFIC”). The Company could be classified as a PFIC if, after the application of certain “look through” rules, for any taxable year, either:

	•		75% or more of the Company’s gross income for the taxable year is “passive income,” which includes interest, dividends and certain rents and royalties; or
	•		the average quarterly percentage, by fair market value of the Company’s assets that produce or are held for the production of “passive income” is 50% or more of the fair market value of all of the Company’s assets.

     To the extent the Company owns at least 25% by value of the shares of another corporation, the Company is treated for purposes of the PFIC tests as owning the Company’s proportionate share of the assets of such corporation, and as receiving directly the Company’s proportionate share of the income of such corporation.

     Distributions which constitute “excess distributions” from a PFIC and dispositions of Common Shares of a PFIC are subject to the following special rules:

	•		the excess distributions (generally any distributions received by a U.S. Holder of Common Shares on the shares in any taxable year that are greater than 125% of the average annual distributions received by such U.S. Holder of Common Shares in the three preceding taxable years, or the U.S. Holder of Common Share’s holding period for the shares, if shorter) or gain would be allocated on a pro rata basis over a U.S. Holder of Common Share’s holding period for the shares;
	•		the amount allocated to the current taxable year and any taxable year prior to the first taxable year in which the Company is a PFIC would be treated as ordinary income in the current taxable year; and
	•		the amount allocated to each of the other taxable years would be subject to the highest rate of tax on ordinary income in effect for that year and to an interest charge based on the value of the tax deferred during the period during which the shares are owned.

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     U.S. Holders of Common Shares who actually or constructively own shares in a PFIC may be eligible to make certain elections which require them to include income for the PFIC on an annual basis.

Controlled Foreign Corporation Rules

     Generally, if more than 50% of the voting power or total value of all classes of the Company’s shares is owned, directly or indirectly, by U.S. shareholders, who individually own 10% or more of the total combined voting power of all classes of the Company’s shares, the Company could be treated as a controlled foreign corporation (“CFC”) under Subpart F of the Code. This classification would require such 10% or greater shareholders to include in income their pro rata shares of the Company’s “Subpart F Income,” as defined in the Code. In addition, a gain from the sale or exchange of shares by a U.S. Holder of Common Shares who is or was a 10% or greater shareholder at any time during the five year period ending with the sale or exchange will be deemed ordinary dividend income to the extent that the Company’s E&P is attributable to the shares sold or exchanged.

     F.      Dividends and paying agents.

     Although there are no dividend restrictions, the Company has neither declared nor paid dividends on any of its outstanding common shares, and does not intend to do so in the foreseeable future. The Company intends to retain any future earnings to finance the expansion of its business. Any future determination to pay dividends will be at the discretion of the Board of Directors of the Company and will be dependent upon the Company’s earnings, capital requirements and financial position, as well as any other factors deemed relevant by the Board of Directors.

     G.      Statement by experts.

     Not applicable.

     H.      Documents on display.

     Upon the effectiveness of this filing, we will be subject to the informational requirements of the Securities Exchange Act of 1934, as amended, and we will thereafter file reports and other information with the SEC. You may read and copy any of the Company’s reports and other information at, and obtain copies upon payment of prescribed fees from, the Public Reference Room maintained by the SEC at 450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549. In addition, the SEC maintains a Web site that contains reports, proxy and information statements and other information regarding registrants that file electronically with the SEC at http://www.sec.gov. The public may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330.

     We are required to file reports and other information with the securities commission in all provinces of Canada. You are invited to read and copy any reports, statements or other information, other than confidential filings, that we file with the provincial securities commissions. These filings are also electronically available from the Canadian System for Electronic Document Analysis and Retrieval (SEDAR) (http://www.sedar.com), the Canadian equivalent of the SEC’s electronic document gathering and retrieval system.

     We will provide without charge to each person, including any beneficial owner, on the written or oral request of such person, a copy of any or all documents referred to above which have been or may be incorporated by reference in this report (not including exhibits to such incorporated information that are not specifically incorporated by reference into such information). Requests for such copies should be directed to the Company’s principal executive offices at 101 — 6 Avenue S.W., Suite 650, Calgary, Alberta, Canada T2P 3P4.

     I.      Subsidiary information.

     The Company does not have any subsidiaries.

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