<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Quarterly Report Under Section 13 or 15(d)
of
The Securities Exchange Act of 1934
FOR THE QUARTER ENDED COMMISSION FILE NO.
OCTOBER 31, 1996 0-23920
---------------- -------
REGI U.S., INC.
------------------------------------------------------
(Exact name of registrant as specified in its charter)
OREGON 91-1580146
------ ----------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
185-10751 SHELLBRIDGE WAY, RICHMOND, B.C. CANADA V6X 2W8
- ------------------------------------------------ -------------
(Address of principal executive offices) (Postal Code)
Registrant's telephone number, including area code: (604) 278-5996
Last Fiscal Year Ended April 30, 1996
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
YES X NO
----- -----
Number of shares outstanding of each class of the registrant's Common Stock as
of October 31, 1996.
Common Stock, no par value: 7,911,300
<PAGE>
INDEX
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PART I -- Financial Information
<TABLE>
<CAPTION>
Page
<S> <C>
Item 1. Financial statements................................ 2
- ------ --------------------
Balance Sheets at October 31, 1996 and 1995 (unaudited)........... 3
Statements of Operations Accumulated from
July 27, 1992 (Inception) to October 31, 1996 and the
six months ended October 31, 1996 and 1995 (unaudited)....... 4
Statement of Stockholders' Equity Accumulated from
July 27, 1992 (Inception) to October 31, 1996 (unaudited).. 5 and 6
Statements of Cash Flows Accumulated from
July 27, 1992 (Inception) to October 31, 1996 and the
six months ended October 31, 1996 and 1995 (unaudited)....... 7
Item 2. Management's Discussion and Analysis of Results of
- ------ --------------------------------------------------
Operations and Financial Condition................... 8
----------------------------------
PART II -- Other Information...................................... 9
Signatures........................................................ 10
</TABLE>
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<PAGE>
<TABLE>
<S> <C>
PART I Financial Information
Item 1. Financial statements (Unaudited)
- ------- --------------------------------
</TABLE>
-2-
<PAGE>
REGI U.S., Inc.
(A Development Stage Company)
Balance Sheets
October 31, 1996 and 1995
(Unaudited)
<TABLE>
<CAPTION>
1996 1995
$ $
<S> <C> <C>
Assets
Current Assets
Cash and cash equivalents 23,634 295,980
Due from affiliate 66,314 -
Prepaid expenses - 6,091
---------- ----------
89,948 302,071
Fixed Assets 6,009 10,567
Intangible Assets 44,787 28,933
---------- ----------
140,744 341,571
========== ==========
Liabilities And Stockholders' Equity
Current Liabilities
Accounts payable 80,456 58,485
Due to affiliate - 171,351
---------- ----------
80,456 229,836
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Stockholders' Equity
Common Stock, 20,000,000 shares
authorized without par value; 7,911,300,
and 7,530,900 shares issued and
outstanding respectively 2,631,700 2,229,550
Paid for but unissued - 88,333 shares 132,500 -
Deficit Accumulated During the Development Stage (2,703,912) (2,117,815)
---------- ----------
60,288 111,735
---------- ----------
140,744 341,571
========== ==========
</TABLE>
-3-
<PAGE>
REGI U.S., Inc.
(A Development Stage Company)
Statements of Operations
Accumulated from July 27, 1992 (Inception) to October 31, 1996 and
the six months ended October 31, 1996 and 1995
(Unaudited)
<TABLE>
<CAPTION>
May 1, May 1,
Accumulated 1996 1995
During the to to
Development October 31, October 31,
Stage 1996 1995
$ $ $
<S> <C> <C> <C>
Revenues - - -
--------- --------- ---------
Administrative Expenses
Advertising - stock 126,304 3,680 79,337
Bank charges 1,570 552 362
Foreign exchange 3,507 1,270 206
Office, courier, printing and telephone 62,088 13,249 11,791
Professional fees 178,680 52,022 26,145
Regulatory and filing fees 6,210 875 -
Stockholder and investor relations 203,097 60,623 32,270
Transfer agent 11,784 197 1,887
Travel 4,814 - -
Less interest (13,632) (553) (4,256)
--------- --------- ---------
584,422 131,915 147,742
--------- --------- ---------
Research and Development Expenses
Intellectual property 257,000 - -
Amortization 14,170 3,840 2,964
Market development 90,346 4,000 6,820
Professional fees 69,815 - 2,930
Project management 115,000 15,000 15,000
Project overhead 86,277 12,776 22,413
Prototype design and construction 1,109,419 28,792 234,564
Technical consulting 83,357 25,858 1,455
Technical reports 17,121 1,001 -
Technical salaries 143,178 25,457 24,879
Travel 133,807 14,870 15,550
--------- --------- ---------
2,119,490 131,594 326,575
--------- --------- ---------
Net Loss 2,703,912 263,509 474,317
========= ========= =========
Net Loss Per Share (.03) (.07)
========= =========
Weighted Average Shares Outstanding 7,739,700 7,181,850
========= =========
</TABLE>
-4-
<PAGE>
REGI U.S., Inc.
(A Development Stage Company)
Statement of Stockholders' Equity
From July 27, 1992 (Inception) to October 31, 1996
(Unaudited)
<TABLE>
<CAPTION>
Deficit Accumulated
Common Stock During the
Shares Amount Development Stage
# $ $
<S> <C> <C> <C>
Balance - July 27, 1992 (inception) - - -
Stock issued for intellectual property at
$0.01 per share August 20, 1992 5,700,000 57,000 -
Stock issued for cash at $0.01 per
share August 20, 1992 300,000 3,000 -
Net loss for the period from
July 27, 1992 to April 30, 1993 - - (23,492)
--------- --------- ----------
Balance - April 30, 1993 6,000,000 60,000 (23,492)
Stock issued for cash pursuant to
a public offering of shares issued at
$1.00 per share October 31, 1993 500,000 500,000 -
Net loss for the year ended April 30, 1994 - - (394,263)
--------- --------- ----------
Balance - April 30, 1994 6,500,000 560,000 (417,755)
Stock issued for cash pursuant to
options exercised July 1, 1994
at $0.10 per share 10,000 1,000 -
a private placement of shares issued at
$2.25 per share October 31, 1994 and 200,000 450,000 -
November 30, 1994 50,000 112,500 -
warrants exercised at $1.25 per share
October 31, 1994 169,200 211,500 -
warrants exercised at $1.50 per share
December 13, 1994 1,000 1,500 -
Net loss for the year ended April 30, 1995 - - (1,225,743)
--------- --------- ----------
Balance - April 30, 1995 6,930,200 1,336,500 (1,643,498)
Stock issued for cash pursuant to
options exercised at $0.10 per share
June, 1995 7,500 750 -
July, 1995 110,000 11,000 -
September, 1995 10,000 1,000 -
November, 1995 10,000 1,000 -
December, 1995 13,000 1,300 -
January, 1996 50,000 5,000 -
--------- --------- ----------
Carry forward balance 7,130,700 1,356,550 (1,643,498)
--------- --------- ----------
</TABLE>
-5-
<PAGE>
REGI U.S., Inc.
(A Development Stage Company)
Statement of Stockholders' Equity
From July 27, 1992 (Inception) to October 31, 1996
(Unaudited)
<TABLE>
<CAPTION>
Deficit Accumulated
Common Stock During the
Shares Amount Development Stage
Continued # $ $
<S> <C> <C> <C>
Balance carried forward 7,130,700 1,356,550 (1,643,498)
options exercised at $1.00 per share
January, 1996 10,000 10,000 -
February, 1996 5,000 5,000 -
March, 1996 2,000 2,000 -
options exercised at $2.75 per share in April, 1996 5,000 13,750 -
options exercised at $2.50 per share in February, 1996 10,000 25,000 -
warrants exercised at $1.50 per share in August, 1995 132,200 198,300 -
a private offering memorandum to
issue shares at $2.00 per share
May, 1995 20,000 40,000 -
June, 1995 35,000 70,000 -
July, 1995 173,500 347,000 -
August, 1995 22,500 45,000 -
September, 1995 50,000 100,000 -
October, 1995 40,000 80,000 -
Net loss for the year ended April 30, 1996 - - (796,905)
--------- --------- ------------
Balance - April 30, 1996 7,635,900 2,292,600 (2,440,403)
Stock issued for cash pursuant to
options exercised at $0.10 per share
May, 1996 30,000 3,000 -
July, 1996 30,000 3,000 -
warrants exercised at $1.50 per share
July, 1996 20,200 30,300 -
August, 1996 127,200 190,800 -
September, 1996 48,000 72,000 -
a private placement at $2.00 per share
in September, 1996 20,000 40,000 -
Net loss for the six months ended October 31, 1996 - - (263,509)
--------- --------- ------------
Balance - October 31, 1996 7,911,300 2,631,700 (2,703,912)
========= ========= ============
</TABLE>
-6-
<PAGE>
REGI U.S., Inc.
(A Development Stage Company)
Statements of Cash Flows
Accumulated from July 27, 1992 (Inception) to October 31, 1996 and
the six months ended October 31, 1996 and 1995
(Unaudited)
<TABLE>
<CAPTION>
May 1, May 1,
Accumulated 1996 1995
During the to to
Development October 31, October 31,
Stage 1996 1995
$ $ $
<S> <C> <C> <C>
Cash Flows to Operating Activities
Net loss (2,703,912) (263,509) (474,317)
Adjustments to Reconcile
Net loss to cash
Amortization 14,170 3,840 2,964
Intellectual property 257,000 - -
(Increase) in prepaid expense - - (91)
Increase in accounts payable 80,456 5,387 23,613
---------- -------- --------
Net Cash Used by Operating Activities (2,352,286) (254,282) (447,831)
---------- -------- --------
Cash Flows to Financing Activities
Increase in subscriptions received 132,500 132,500 -
Increase in common stock 2,574,700 339,100 893,050
Increase in advances from parent - - 28,436
(Decrease) in advances from affiliate (266,314) (183,064) (438,522)
---------- -------- --------
Net Cash Provided by Financing Activities 2,440,886 288,536 482,964
---------- -------- --------
Cash Flows to Investing Activities
(Increase) in computer equipment (16,048) - (3,797)
(Increase) in patents (48,918) (13,388) (1,798)
Decrease in licence - - 200,000
---------- -------- --------
Net Cash (Used) Provided by Investing Activities 64,966 (13,388) 194,405
---------- -------- --------
Increase in cash and cash equivalents 23,634 20,866 229,538
Cash and cash equivalents - beginning of period - 2,768 66,442
---------- -------- --------
Cash and cash equivalents - end of period 23,634 23,634 295,980
========== ======== ========
Non-Cash Financing Activities
Deemed value of affiliate shares issued for
intellectual property 200,000 - -
5,700,000 shares issued for intellectual
property at $0.01 per share 57,000 - -
---------- -------- --------
257,000 - -
========== ======== ========
</TABLE>
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<PAGE>
Item 2. Management's Discussion and Analysis of Results of Operations and
- ------- -----------------------------------------------------------------
Financial Condition
-------------------
During the six months ended October 31, 1996, the Company raised $339,100
through private placements of 20,000 shares at $2.00 per share and the exercise
of warrants totalling 195,400 shares at $1.50 per share and through stock
options. The Company also raised a further $132,500 by way of subscriptions
towards a private placement of 145,000 shares at $1.50 per share. The Company
paid $132,000 on administrative expenses compared to $148,000 in the six months
ended October 31 1995. The Company paid $132,000 on research and development
compared to $327,000 in the six months ended October 31, 1995. The Company
repaid all of the amount owing to Reg Technologies of $109,000 and prepaid
$66,000 towards future research and development paid for by Reg Technologies
Inc. on behalf of the Company. The Company spent $14,000 on patent protection
during the six months ended October 31, 1996.
As at October 31, 1996 the Company had $24,000 in cash resources and has
subsequently received a further $85,000 pursuant to the completion of a private
placement of 145,000 shares at $1.50 per share. The total cash resources of
$109,000 together with the amount owing from Reg Technologies Inc. totalling
$66,000 and a cash contribution from Rand Energy Group Inc. of $26,000 gives the
company $201,000 of current liquid assets to pay current accounts payable of
$80,000 for a total working capital surplus of $121,000. The working capital of
$121,000 will be used for completing the testing of the diesel engine prototype
and compressor as to $50,000, the balance of $71,000 will be used for monthly
overhead to the end of January, 1997. The Company's parent company, Rand Energy
Group, Inc. plans to sell $150,000 worth of the Company's shares it owns and
advance the proceeds to the Company during December, 1996, January, 1997 and
February, 1997 which should give the Company sufficient working capital to cover
general and administrative expenses through to December, 1997. Past December the
Company plans to enter into joint venture agreements whereby the joint venture
partner will provide all the funding for future development.
-8-
<PAGE>
PART II Other Information
Item 1. Legal Proceedings
- ------- -----------------
None
Item 2. Changes in Securities
- ------- ---------------------
None
Item 3. Defaults upon Senior Securities
- ------- -------------------------------
None
Item 4. Submission of Matters to Vote of Securities Holders
- ------- ---------------------------------------------------
a. The Annual Meeting of Shareholders of the Company was held
October 16, 1996.
b. At the Annual Meeting, John G. Robertson and Brian Cherry were
elected directors of the Company. Each director received at least
6,700,000 votes out of 6,798,170 shares represented at the
meeting.
c. Also at the meeting, an amendment to the Bylaws of the Company
was approved. At least 6,700,000 shares were voted in favour of
the amendment.
Item 5. Other Information
- ------- -----------------
None
Item 6. Exhibits and Reports on Form 8-K
- ------- --------------------------------
None
-9-
<PAGE>
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Form 10-Q to be signed on its behalf by the
undersigned thereunto duly authorized.
Dated: December 11, 1996 REGI U.S., INC.
Per: /s/ John Robertson
---------------------------------
John Robertson, President and CEO
-10-
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> APR-30-1997
<PERIOD-START> MAY-01-1996
<PERIOD-END> OCT-31-1996
<CASH> 23,634
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 89,948
<PP&E> 50,796
<DEPRECIATION> 14,170
<TOTAL-ASSETS> 140,744
<CURRENT-LIABILITIES> 80,456
<BONDS> 0
0
0
<COMMON> 2,764,200
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 140,744
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 263,509
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (263,509)
<INCOME-TAX> 0
<INCOME-CONTINUING> (263,509)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (263,509)
<EPS-PRIMARY> (.03)
<EPS-DILUTED> (.03)
</TABLE>