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Regi US Inc – ‘10QSB’ for 7/31/01

On: Monday, 9/17/01 · For: 7/31/01 · Accession #: 1015402-1-502711 · File #: 0-23920

  As Of                Filer                Filing    For·On·As Docs:Size              Issuer               Agent

 9/17/01  Regi US Inc                       10QSB       7/31/01    1:40K                                    Summit Fin’l Printing/FA

Quarterly Report — Small Business — Form 10-QSB
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 10QSB       Quarterly Report -- Small Business                    16     71K

Document Table of Contents

Page	(sequential)	\|	(alphabetic)	Top
			Alternative Formats (Word, et al.) Changes in Securities Defaults upon Senior Securities Documents Incorporated by Reference Exhibits and Reports on Form 8K Financial Statements Financial Statements Page Legal Proceedings Management's Discussion and Analysis of Financial Condition and Other Information Signatures Submissions of Matters to a Vote of Security Holders
1	1st Page - Filing Submission
"	Documents Incorporated by Reference
2	Item 1. Financial Statements Page
3	Item 1. Financial Statements
12	Item 2. Management's Discussion and Analysis of Financial Condition and
15	Item 1. Legal Proceedings
"	Item 2. Changes in Securities
"	Item 3. Defaults upon Senior Securities
"	Item 4. Submissions of Matters to a Vote of Security Holders
"	Item 5. Other Information
"	Item 6. Exhibits and Reports on Form 8K
16	Signatures

10QSB 1st Page of 16 TOC ↑Top Previous Next ↓Bottom Just 1st
 
U. S. Securities and Exchange Commission
Washington, D.C. 20549

 FORM 10-QSB
(Mark  One)                                                                     

[X]     QUARTERLY  REPORT  UNDER  SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT  OF  1934                                                   

For  the  quarter  ended  July  31,  2001                                       
---------------             

[ ]     TRANSITION  REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE 
ACT  OF  1934                                                   

For the transition period from  ____________________ to ____________________    

Commission  File  No.  0-23920                                                  
-------                           

 REGI U.S., Inc.
--------------------------------------------
(Name of Small Business Issuer 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, BC V6X 2W8 Canada
 ---------------------------------------------------------
(Address of Principal Executive Offices)

(604) 278-5996
  ----------------------------
 Issuer's Telephone Number

 N/A
----------------------------
 (Former Name or Former Address, if changed since last Report)

Check  whether  the Issuer (1) filed all reports required to be filed by Section
13  or  15(d) of the Exchange Act during the past 12 months (or for such shorter
period  that  the  Company  was required to file such reports), and (2) has been
subject  to  such  filing  requirements  for  the  past  90  days.              

   (1)  Yes  X  No         (2)  Yes  X  No
                ---    ---              ---    ---

 (ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS)
Not applicable

(APPLICABLE ONLY TO CORPORATE ISSUERS)

State the number of shares outstanding of each of the Issuer's classes of common
equity,  as  of  the  latest  practicable  date:                                

September 10, 2001

Common - 10,217,735 shares

 DOCUMENTS INCORPORATED BY REFERENCE

A  description of any "Documents Incorporated by Reference" is contained in Item
6  of  this  Report.                                                            

Transitional Small Business Issuer Format     Yes        No  X      
                                             ---       ---

10QSB 2nd Page of 16 TOC 1st Previous Next ↓Bottom Just 2nd
INDEX                                                                           

Part  I      Financial  Information                                             

Item  1.     Financial  Statements                                          Page
                                                                            ----

             Balance  Sheets. . . . . . . . . . . . . . . . . . . . . . . . .F-1

             Statements  of  Operations . . . . . . . . . . . . . . . . . . .F-2

             Statements  of  Cash  Flows. . . . . . . . . . . . . . . . . . .F-3

             Notes  to  the  Financial  Statements. . . . . . . . . . . . . .F-4

Item  2.     Management's Discussion and Analysis or Plan of Operation. . . .F-9

PART  II  -  Other  Information. . . . . . . . . . . . . . . . . . . . . . .F-12

SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .F-13

10QSB 3rd Page of 16 TOC 1st Previous Next ↓Bottom Just 3rd
PART  I  -  FINANCIAL  INFORMATION                                              

Item  1.     Financial  Statements.                                             

The  Financial  Statements  of the Company required to be filed with this 10-QSB
Quarterly Report were prepared by management and commence on the following page,
together  with  related  Notes.  In  the  opinion  of  management, the Financial
Statements  fairly  present  the  financial  condition  of  the  Company.       

REGI U.S. Inc.
 (A Development Stage Company)
Interim Financial Statements
 July 31, 2001
 (Unaudited)

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                                                        [Enlarge/Download Table]

REGI U.S., Inc.                                                                             
(A Development Stage Company)                                                               
Balance Sheets                                                                              
(expressed in U.S. dollars)                                                                 

                                                                    July 31,     April 30,  
                                                                      2001          2001    
                                                                       $             $      
                                                                  (unaudited)    (audited)  
                                                                                            
Assets                                                                                      

Fixed Assets (Note 3)                                                   2,025         2,479 

Intangible Assets (Note 4)                                             79,439        81,947 
--------------------------------------------------------------------------------------------

Total Assets                                                           81,464        84,426 
============================================================================================

Liabilities and Stockholders' Equity                                                        

Current Liabilities                                                                         

  Cheques issued in excess of funds on deposit                          1,743         1,466 
  Accounts payable                                                    121,786       115,243 
  Accrued liabilities                                                 113,003       129,320 
  Due to affiliates (Note 6)                                          407,826       371,819 
--------------------------------------------------------------------------------------------
Total Liabilities                                                     644,358       617,848 
--------------------------------------------------------------------------------------------

Contingent Liability (Note 1)                                                               

Stockholders' Equity (Deficit)                                                              

Common Stock (Note 5), 20,000,000 shares authorized without par                             
value; 10,221,735 shares issued and outstanding respectively        4,512,249     4,512,249 

Common Stock Paid For But Unissued (Note 5(d))                        157,300        72,000 

Stock Based Compensation - Stock Option                                34,688        33,917 

Deficit Accumulated During the Development Stage                   (5,267,131)   (5,151,588)
--------------------------------------------------------------------------------------------

Total Stockholders' Equity (Deficit)                                 (562,894)     (533,422)
--------------------------------------------------------------------------------------------

Total Liabilities and Stockholders' Equity                             81,464        84,426 
============================================================================================

F-1 

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                                                                [Download Table]

REGI  U.S.,  Inc.                                                              
(A  Development  Stage  Company)                                               
Statements  of  Operations                                                     
(expressed  in  U.S.  dollars)                                                 

                                     Accumulated from                          
                                      July 27, 1992                            
                                       (Inception)       Three Months Ended    
                                       to July 31,            July 31,         
                                          2001           2001          2000    
                                            $             $             $      
                                                     (unaudited)   (unaudited) 
                                                                               
Revenues                                         -             -             - 
-------------------------------------------------------------------------------

Administrative Expenses                                                        

  Bank charges and interest                  9,125           369           642 
  Foreign exchange                           3,980            33          (800)
  Interest on debentures                    12,593             -             - 
  Investor relations - advertising         315,929             -           529 
  Investor relations - consulting          725,146        60,271         7,645 
  Office, rent and telephone               147,524         3,056           317 
  Professional fees                        328,512         4,949           464 
  Transfer agent and regulatory fees        96,363           391           302 
  Travel                                    12,722         1,048             - 
  Less: interest and other income          (16,788)          (33)           (1)
-------------------------------------------------------------------------------

                                         1,635,106        70,084         9,098 
-------------------------------------------------------------------------------

Research and Development Expenses                                              

  Intellectual property written-off        566,145             -             - 
  Amortization of capital assets           110,019         1,716         6,207 
  Market development                        92,782             -             - 
  Professional fees                         73,904             -             - 
  Project management                       257,500         7,500         7,500 
  Project overhead                         201,180         8,882         4,500 
  Prototype design and construction      1,385,434           842        47,114 
  Royalties                                 93,000         6,000         6,000 
  Technical consulting                     493,588        18,782        25,000 
  Technical reports                         22,120             -             - 
  Technical salaries                       169,467             -             - 
  Travel                                   166,886         1,737           500 
-------------------------------------------------------------------------------

                                         3,632,025        45,459        96,821 
-------------------------------------------------------------------------------

Net Loss for the Period                  5,267,131       115,543       105,919 
===============================================================================

Loss Per Share - Basic                                      (.01)         (.01)
===============================================================================

Weighted Average Shares Outstanding                   10,218,000    10,218,000 
===============================================================================

F-2 

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                                                                [Download Table]

REGI  U.S.,  Inc.                                                                 
(A  Development  Stage  Company)                                                  
Statements  of  Cash  Flows                                                       
(expressed  in  U.S.  dollars)                                                    

                                                            Three Months Ended    
                                                                 July 31,         
                                                            2001          2000    
                                                             $             $      
                                                        (unaudited)   (unaudited) 
                                                                                  

Cash Flows from Operating Activities                                              

  Net loss                                                 (115,543)     (105,919)

  Adjustment to reconcile net loss to cash                                        

    Amortization                                              1,716         6,207 
    Stock based compensation                                    771             - 

  Change in non-cash working capital items                                        

    Decrease in accounts payable and accrued liabilities     (9,774)      (23,189)
----------------------------------------------------------------------------------
Net Cash Used by Operating Activities                      (122,830)     (122,901)
----------------------------------------------------------------------------------
Cash Flows from Financing Activities                                              

  Increase in common stock subscribed for                    85,300             - 
  Increase (decrease) in due to affiliates                   36,007       144,742 
  Redemption of convertible debentures                            -       (45,000)
----------------------------------------------------------------------------------
Net Cash Provided by Financing Activities                   121,307        99,742 
----------------------------------------------------------------------------------
Cash Flows to Investing Activities                                                

  Decrease (increase) in patent protection costs              1,246        (2,844)
----------------------------------------------------------------------------------
Net Cash Used by Financing Activities                         1,246        (2,844)
----------------------------------------------------------------------------------
(Decrease) in cash                                             (277)      (26,003)

Cash (deficiency) - beginning of period                      (1,466)       (4,853)
----------------------------------------------------------------------------------
Cash (deficiency) - end of period                            (1,743)      (30,856)
==================================================================================

Non-Cash Financing Activities                                     -             - 
==================================================================================

Supplemental Disclosures                                                          

  Interest paid                                                   -             - 
  Income tax paid                                                 -             - 

F-3 

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REGI U.S., Inc.                                                                 
(A Development Stage Company)                                                   
Notes to the Financial Statements                                               
(expressed in U.S. dollars)                                                     

1.   Development  Stage  Company                                                

     REGI  U.S.,  Inc.  herein  ("the Company") was incorporated in the State of
Oregon, U.S.A. on July 27, 1992.                                      

     The  Company  is  a  development  stage  company engaged in the business of
     developing  and  commercially exploiting an improved axial vane type rotary
     engine known as the Rand Cam/Direct Charge Engine ("The RC/DC Engine"). The
     world-wide marketing and intellectual rights, other than the U.S., are held
     by  Rand Energy Group Inc. ("REGI") which is the controlling shareholder of
     the  Company.  The  Company 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  the  RC/DC  Engine  and  REGI  will  fund  50%.

     The  Company  owns  the world-wide marketing and intellectual rights, other
than Canada, to the Air/Vapor Flow System ("AVFS").  See Note 4(d).   

See  Note 4(e) for acquisition of hydrogen  separator  technology.    

     In  a  development stage company, management devotes most of its activities
     to  establishing  a new business. Planned principal activities have not yet
     produced  significant  revenues  and  the  Company  has  suffered recurring
     operating  losses  as is normal in development stage companies. The Company
     also  has  a  working  capital  deficit  of  $644,358.  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.                                                   

     The  Company  receives interim support from its ultimate parent company and
     other  affiliated  companies  and plans to raise additional capital through
debt  and/or  equity  financings.                                     

     The Company plans to raise net proceeds of approximately $180,000 ($157,300
     raised  to date) through a private placement. During the quarter, we raised
     $85,300. The offering will be a best efforts no minimum offering consisting
     of 600,000 units at $0.30 per unit. Each unit consists of one share and one
     warrant to purchase an additional share at a price of $0.40 for a period of
     one  year  from  the date of issuance. The common stock offered will not be
     registered  under the Securities Act of 1933 and may not be offered or sold
     in  the  United  States absent registration or an applicable exemption from
     registration  requirements.  This  disclosure  is  not  an  offer  to  sell
     securities  and  is  not  a  solicitation of an offer to buy securities. We
     anticipate  that  sales  will  be  made  only to accredited investors or to
     persons  that  are  not  U.S. residents. No money or other consideration is
     being  solicited  or will be accepted by way of this disclosure. The common
     stock  offered  has  not  been  registered  with  or  approved by any state
     securities  agency  or the U.S. Securities and Exchange Commission and will
be  offered  and  sold  pursuant  to  exemptions  from  registration. 

     The  Company  plans  to  raise  funds  through  loans  from  a  controlling
     shareholder (Rand Energy Group Inc.). Rand Energy Group Inc. owns 5,257,900
     shares, having an approximate current market value of $1,235,000, and plans
     to  sell  shares  as  needed  to  meet  our ongoing funding requirements if
   traditional  equity  sources  of  financing  prove  to  be  insufficient.

F-4 

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REGI U.S., Inc.                                                                 
(A Development Stage Company)                                                   
Notes to the Financial Statements                                               
(expressed in U.S. dollars)                                                     

2.   Summary  of  Significant  Accounting  Policies                             

(a)  Fixed  Assets                                                    

          Computer equipment is amortized over 3 years on a straight-line basis.

(b)  Intangible  Assets                                               

          Costs  to  register  and  protect  patents  and  to acquire rights are
          capitalized as incurred. These costs are being amortized on a straight
          line  basis  over  20  years.  Intangible assets are evaluated in each
          reporting  period  to  determine if there were events or circumstances
          which  would  indicate  a  possible  inability to recover the carrying
          amount.  Such  evaluation  is  based  on  various  analyses  including
          assessing  the  Company's ability to bring the commercial applications
          to  market,  related  profitability  projections and undiscounted cash
        flows  relating  to  each  application  which  necessarily  involves
          significant  management  judgment.  Where  an impairment loss has been
          determined  the  carrying amount is written-down to fair market value.
          Fair  market  value  is  determined as the amount at which the license
          could  be  sold  in  a  current  transaction  between willing parties.

(c)  Basic  and  Diluted  Net  Income  (Loss)  per  Share             

          The  Company  computes  net income (loss) per share in accordance with
          SFAS  No.  128,  "Earnings  per  Share"  (SFAS 128). SFAS 128 requires
          presentation  of  both  basic and diluted earnings per shares (EPS) on
          the  face  of  the income statement. Basic EPS is computed by dividing
          net  income (loss) available to common shareholders (numerator) by the
          weighted  average  number  of  common shares outstanding (denominator)
          during  the period. Diluted EPS gives effect to all dilutive potential
          common  shares  outstanding during the period including stock options,
          using  the  treasury  stock  method,  and convertible preferred stock,
          using  the  if-converted method. In computing Diluted EPS, the average
          stock price for the period is used in determining the number of shares
          assumed  to  be  purchased  from  the  exercise  of  stock  options or
          warrants. Diluted EPS excludes all dilutive potential common shares if
their  effect  is  anti-dilutive.                           

          Loss  per share for the three months ended July 31, 2001 and 2000 does
          not  include the effect of the potential conversions of stock options,
or  warrants,  as  their  effect  would  be  anti-dilutive. 

(d)  Accounting  for  Stock  Based  Compensation                      

          The  Company  uses  the  intrinsic  value  based  method of accounting
          prescribed  by Accounting Principles Board Opinion No. 25, "Accounting
          for  Stock  Issued  to Employees" ("APB Opinion No. 25") in accounting
          for  its  stock based method, compensation cost is the excess, if any,
          of the fair market value of the stock at grant date over the amount an
          employee  or  director  must  pay to acquire the stock. See Note 6(b).

(e)  Cash  and  Cash  Equivalents                                     

          The Company considers all highly liquid instruments with a maturity of
          three  months  or less at the time of issuance to be cash equivalents.

(f)  Foreign  Currency  Transactions/Balances                         

          Transactions  in  currencies other than the U.S. dollar are translated
          at the rate in effect on the transaction date. Any balance sheet items
          denominated  in  foreign  currencies  are translated into U.S. dollars
using  the  rate  in  effect  on  the  balance  sheet  date.

(g)  Use  of  Estimates                                               

          The  preparation  of financial statements in conformity with generally
          accepted  accounting  principles requires management to make estimates
          and  assumptions  that  affect  the  reported  amounts  of  assets and
          liabilities and disclosure of contingent assets and liabilities at the
          date  of the financial statements and the reported amounts of revenues
          and  expenses  during  the  periods.  Actual results could differ from
those  estimates.                                           

F-5 

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REGI U.S., Inc.                                                                 
(A Development Stage Company)                                                   
Notes to the Financial Statements                                               
(expressed in U.S. dollars)                                                     

2.   Summary  of  Significant  Accounting  Policies  (continued)                

(h)  Interim  Financial  Statements                                   

          These interim unaudited financial statements have been prepared on the
          same  basis  as  the annual financial statements and in the opinion of
         management,  reflect  all  adjustments,  which  include  only  normal
          recurring  adjustments,  necessary  to  present  fairly  the Company's
          financial  position,  results  of  operations  and  cash flows for the
          periods  shown.  The  results  of  operations for such periods are not
          necessarily  indicative of the results expected for a full year or for
any  future  period.                                        

                                                        [Enlarge/Download Table]

3.   Fixed  Assets                                                                    

                                                                July 31,    April 30, 
                                                                    2001         2001 
                                               Accumulated      Net Book     Net Book 
                                      Cost    Amortization         Value        Value 
                                         $               $             $            $ 
                                                             (unaudited)    (audited) 
                                                                                      

Computer equipment                     5,452          3,427         2,025        2,479
======================================================================================

4.   Intangible  Assets                                                               

                                                                July 31,    April 30, 
                                                                    2001         2001 
                                               Accumulated      Net Book     Net Book 
                                      Cost    Amortization         Value        Value 
                                         $               $             $            $ 
                                                             (unaudited)    (audited) 

Patents - RC/DC Engine                87,361         20,458        66,903       69,241
Patents - AVFS                         6,619            776         5,843        5,926
AVFS rights ((d) below)               65,606         65,605             1            1
Patents/rights-Hydrogen separator      6,950            258         6,692        6,779
--------------------------------------------------------------------------------------

                                     166,536         87,097        79,439       81,947
======================================================================================

     (a)  On  August  20,  1992  the  Company  acquired  the  U.S. rights to the
          original  Rand  Cam-Engine  from REGI by issuing 5,700,000 shares at a
          fair  value  of  $0.01  per  share.  REGI will receive a 5% net profit
          royalty.  The  $57,000  was  expensed  as  research  and  development.

     (b)  Pursuant  to  an agreement with Brian Cherry (a former director) dated
          July  30,  1992  and amended November 23, 1992 and April 13, 1993, the
          Company  acquired  the  U.S.  rights to the improved axial vane rotary
       engine  known  as  the  RC/DC  Engine.  On  November  9,  1993,  in
          consideration  for  the  transferred technology, Mr. Cherry was issued
          100,000  shares  of  Reg  Technologies  Inc. ("REG") (a public company
          owning  51%  of  REGI) with a fair value of $200,000. The $200,000 was
          expensed  as research and development. A 1% net profit royalty will be
due  to  the  director.                                     

     (c)  Pursuant  to a letter of understanding dated December 13, 1993 between
          the  Company, REGI and REG (collectively called the grantors) and West
          Virginia  University Research Corporation ("WVURC"), the grantors have
          agreed  that  WVURC  shall  own 5% of all patented technology and will
          receive  5%  of  all  net  profits  from sales, licences, royalties or
income  derived  from  the  patented  technology.           

F-6 

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REGI U.S., Inc.                                                                 
(A Development Stage Company)                                                   
Notes to the Financial Statements                                               
(expressed in U.S. dollars)                                                     

4.   Intangible Assets (continued)                                              

     (d)  On  June 22, 1997 the Company acquired the U.S. rights to an Air/Vapor
          Flow  System  "AVFS". The Company paid $50,000 and 200,000 shares at a
          fair  value  of $154,665. The Company will pay to the inventor 8.5% on
          net  sales  derived  from  the AVFS. On December 31, 1997, the Company
          acquired  the  world-wide rights (except Canada) to the AVFS by paying
          $36,500  and  issuing  a  further  200,000  shares  at a fair value of
          $133,586.  The  inventor will also receive a minimum annual royalty of
          $24,000  per  year beginning October 1, 1997, payable quarterly. These
          rights  were written down to a nominal value of $1 during the year and
          $309,145 was charged to operations as a research and development cost.

     (e)  In  October 2000, Reg Technologies Inc. entered into an agreement with
          GHM  Inc., a privately owned company located in Maryland, to acquire a
          50%  interest  in  the rights to the H2O hydrogen separator technology
          (the  "Technology").  The  Technology  is based on a unique system for
          extracting  hydrogen  from water. The Company will own the U.S. rights
          and  Reg Technologies Inc. will own the worldwide rights excluding the
          U.S. In consideration for these rights, Reg Technologies Inc. has paid
          US$1,000  and  has  applied  for a patent in the U.S. for the hydrogen
          separator  technology.  Reg  Technologies  Inc.  is  also  building  a
          prototype of the hydrogen separator technology as designed by GHM. Reg
          Technologies Inc. has an option to purchase an additional 50% interest
        in  the  hydrogen  separator  technology  for  US$15  million  in  a
          combination  of  cash  and  shares  and  will  assign a 5% net revenue
interest  to  GHM,  Inc.                                    

5.   Common  Stock                                                              

(a)  Warrants  outstanding                                            

          There  are  warrants outstanding to acquire 830,767 shares exercisable
at  $0.50  per  share  expiring  August  31,  2001.         

(b)  Stock  Option  Plan                                              

          The Company has a Stock Option Plan to issue up to 2,500,000 shares to
          certain  key  directors  and  employees,  approved  April 30, 1993 and
          amended December 5, 2000. Pursuant to the Plan the Company has granted
stock  options  to  certain  directors  and  employees.     

          The  options  are  granted  for  services  provided  to  the  Company.
          Statement  of  Financial  Accounting  Standards  No.  123 ("SFAS 123")
          requires  that an enterprise recognize, or at its option, disclose the
          impact  of  the  fair  value of stock options and other forms of stock
          based  compensation  in  the  determination of income. The Company has
          elected  under  SFAS  123 to continue to measure compensation costs on
          the  intrinsic  value  basis  set  out in APB Opinion No. 25. As stock
          options  are  granted  at exercise prices based on the market price of
          the  Company's  shares  at  the date of grant, no compensation cost is
          recognized.  However,  under  SFAS  123,  the impact on net income and
          income  per  share of the fair value of stock options must be measured
          and  disclosed  on  a fair value based method on a pro forma basis. As
          performance  stock  is  issued for services rendered the fair value of
          the  shares issued is recorded as compensation expense or capitalized,
at  the  date  the  conditions  are  met  to  issue  shares.

          The  fair  value  of the employee's purchase rights, pursuant to stock
          options,  under SFAS 123, was estimated using the Black-Scholes model.

F-7 

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REGI U.S., Inc.                                                                 
(A Development Stage Company)                                                   
Notes to the Financial Statements                                               
(expressed in U.S. dollars)                                                     

5.   Common  Stock  (continued)                                                 

(b)  Stock  Option  Plan  (continued)                                 

          The  weighted  average  number of shares under option and option price
for the three months ended July 31, 2001 is as follows:     

                                  Weighted
                                 Average
             Shares    Weighted  Remaining
             Under    Average    Life of
            Option     Option    Options
                #      Price $    (Months)

Beginning of period  1,485,000      0.60                    
Granted                      -         -                    
Exercised                    -         -                    
Cancelled                    -         -                    
Lapsed                       -         -                    
---------         

End of period        1,485,000      0.60          47        
             =========  ========  ==========

          If  compensation expense had been determined pursuant to SFAS 123, the
          Company's  net  loss and net loss per share for the three months ended
July  31,  2001  and  2000  would  have  been  as  follows: 

              2001        2000
             $           $
Net loss                                                    
As reported              (115,543)   (105,919)          
Pro forma                (142,298)   (105,919)          

Basic net loss per share                                    
As reported               (0.01)      (0.01)        
Pro forma                 (0.01)      (0.01)        

(c)  Performance  Stock  Plan                                         

          The  Company  has allotted 1,000,000 shares to be issued pursuant to a
          Performance  Stock  Plan  approved  and  registered  on June 27, 1997.
          Compensation  is  recorded when the conditions to issue shares are met
          at  their  then  fair  market  value.  There  are no options currently
granted  pursuant  to  this  plan.                          

(d)  Private  Placement                                               

          The  Company  has  raised  $157,300 pursuant to a private placement of
          524,333  units at $0.30 per unit. Each unit will contain one share and
          one  warrant  to  acquire  one  additional share at $0.40 per share if
          exercised  during  year  one  after receipt of the subscription funds.
          These  units  have not been issued. A total of 600,000 units are being
offered.                                                    

7.   Due  to  Affiliates                                                        

     Amounts owing to affiliates are unsecured, non-interest bearing and are due
on  demand.                                                           

8.   Commitments  and  Contingent  Liabilities                                  

     (a)  See Note 4 for royalty commitments in connection with the RC/DC Engine
and  the  AVFS.                                             

(b)  See  Note  5  for  commitments  to  issue  shares.               

     (c)  The Company is committed to fund 50% of the further development of the
RC/DC  Engine.                                              

(d)  See  Note  1  for  going  concern  considerations.               

F-8 

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Item  2.     Management's  Discussion  and  Analysis  of Financial Condition and
--------------------------------------------------------------------------------
Results  of  Operations                                                         
-----------------------                                                         

Forward  Looking  Statements                                                    
----------------------------                                                    

This  report  contains  forward-looking  statements.  The  words,  "anticipate",
"believe",  "expect",  "plan",  "intend", "estimate", "project", "could", "may",
"foresee",  and  similar  expressions  are  intended to identify forward-looking
statements.  The following discussion and analysis should be read in conjunction
with the Company's Financial Statements and other financial information included
elsewhere  in this report which contains, in addition to historical information,
forward-looking  statements  that involve risks and uncertainties. The Company's
actual  results  could  differ  materially  from  the  results  discussed in the
forward-looking  statements.  Factors  that  could  cause  or contribute to such
differences  include those discussed below, as well as those discussed elsewhere
in  this  report.                                                               

Overview                                                                        
--------                                                                        

REGI  U.S.,  Inc. was incorporated in the State of Oregon, USA on July 27, 1992.

We  are  a  development  stage company engaged in the business of developing and
commercially  exploiting  an improved axial vane type rotary engine known as the
Rand Cam/Direct Charge Engine (the "RC/DC Engine"). The world-wide marketing and
intellectual  rights,  other  than  the U.S., are held by Rand Energy Group Inc.
which is our controlling shareholder. We own the U.S. marketing and intellectual
rights  and  have  a project cost sharing agreement, whereby we will fund 50% of
the further development of the RC/DC Engine and Rand Energy Group Inc. will fund
50%.                                                                            

In fiscal 1998, we acquired the U.S. and world-wide rights (except Canada) to an
Air/Vapour  Flow  System  "AVFS".  We will pay to the inventor 8.5% on net sales
derived  from  the AVFS. The inventor will also receive a minimum annual royalty
of  $24,000  per  year  beginning  October  1,  1997,  payable  quarterly.      

In  October 2000, Reg Technologies Inc. entered into an agreement with GHM Inc.,
a  privately owned company located in Maryland, to acquire a 50% interest in the
rights  to  the  H2O  hydrogen  separator  technology  (the  "Technology").  The
Technology  is  based on a unique system for extracting hydrogen from water. The
Company  will  own  the  U.S.  rights  and  Reg  Technologies  Inc. will own the
worldwide  rights  excluding  the  U.S.  In  consideration for these rights, Reg
Technologies Inc. has paid US$1,000 and has applied for a patent in the U.S. for
the  hydrogen  separator  technology.  Reg  Technologies Inc. is also building a
prototype  of  the  hydrogen  separator  technology  as  designed  by  GHM.  Reg
Technologies  Inc.  has  an option to purchase an additional 50% interest in the
hydrogen  separator  technology  for  US$15 million in a combination of cash and
shares  and  will  assign  a  5%  net  revenue  interest  to  GHM,  Inc.        

As a development stage company, we devote most of our activities to establishing
our  business.  Planned  principal  activities have not yet produced significant
revenues  and  we  have  a  working  capital deficit. We have undergone mounting
losses  to  date  totalling  $5,267,000 and further losses are expected until we
complete  a  licensing  agreement  with a manufacturer and reseller. Our working
capital  deficit  is  $644,000. Our only assets are our intangible assets, being
patents  and  intellectual  property rights, totalling $79,000, which represents
98%  of total assets. These factors raise substantial doubt about our ability to
continue  as  a  going concern. Our ability to emerge from the development stage
with  respect  to  our planned principal business activity is dependent upon our
successful  efforts  to  raise additional equity financing, receive funding from
affiliates  and controlling shareholders, and develop a market for our products.

The  Company  plans  to  raise  net proceeds of approximately $180,000 ($157,300
raised  to  date)  through  a  private  placement. During the quarter, we raised
$85,300.  The  offering will be a best efforts no minimum offering consisting of
600,000 units at $0.30 per unit. Each unit consists of one share and one warrant
to  purchase  an  additional  share at a price of $0.40 for a period of one year
from the date of issuance. The common stock offered will not be registered under
the  Securities  Act of 1933 and may not be offered or sold in the United States
absent  registration  or an applicable exemption from registration requirements.
This  disclosure is not an offer to sell securities and is not a solicitation of
an  offer  to  buy  securities.  We  anticipate  that sales will be made only to
accredited  investors  or  to  persons  that are not U.S. residents. No money or
other  consideration  is  being  solicited  or  will  be accepted by way of this
disclosure. The common stock offered has not been registered with or approved by
any  state  securities agency or the U.S. Securities and Exchange Commission and
will  be  offered  and  sold  pursuant  to  exemptions  from  registration.     

F-9 

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We  also  plan to raise funds through loans from a controlling shareholder (Rand
Energy  Group  Inc.).  Rand  Energy  Group Inc. owns 5,257,900 shares, having an
approximate  current  market  value  of  $1,235,000, and plans to sell shares as
needed to meet our ongoing funding requirements if traditional equity sources of
financing  prove  to  be  insufficient.                                         

After  completing  the offering, there will continue to be insufficient funds to
provide  enough  working  capital to fund ongoing operations for the next twelve
months.  The Company may raise additional funds through the exercise of warrants
and  stock  options,  if  exercised.                                            

Progress  Report  from  April  30,  2001  to  September  14,  2001              
------------------------------------------------------------------              

On  June  28,  2001  we  announced  that the air pump for the fuel cell had been
assembled and testing had commenced. The air pump was designed for the 1 KW fuel
cell  and is to be further tested by a potential customer at its facilities. Reg
Technologies,  Inc.  also  has agreed to build a Rand Cam compressor for several
applications  in  the  air, hydrogen and natural gas compressor requirements for
fuel  cell  applications.                                                       

On  July  12,  2001,  we  announced  that  Patrick  Badgley, a director and Vice
President,  has  completed  a  proposal to build a residential Cold Turbine Rand
Cam(TM) generator. The self-contained residential power plant will be capable of
providing  100% of the power needs of a modern luxury residence and would run on
natural gas, propane or diesel fuel. The 25kW Rand Cam(TM) power plant would run
at  3600  rpm,  be extremely quiet, only 18 inches in overall diameter and would
weigh  110  lbs.  We  are  currently  negotiating  with  potential joint venture
partners  to  finance  this  project                                            

On  August 20, 2001 we announce a progress report has been received by our Chief
Engineer,  Patrick  Badgley  regarding  the  Rand  Cam(TM)  compressors,  Diesel
engines,  Cold  Turbines,  and  pumps.  Due  to  the  sensitive  nature  of  the
discussions  with  potential  interested  licensees and with pending private and
commercial  funding  and teaming arrangements for these projects the company has
to  be  confidential  in  describing both the companies and projects in order to
protect  the  interests  and  comply with non-disclosure agreements that we have
with  these  organizations.                                                     

     RAND  CAM(TM)  FUEL  CELL  AIR  COMPRESSOR  -  The prototype air compressor
     requested  by  a  major  fuel  cell manufacturer has been fabricated and is
     currently undergoing additional testing at REGI U.S.'s facility in Detroit.
     At  the  completion  of  this  effort the compressor will be delivered to a
     compressor  manufacturer for evaluation and testing as a first step towards
     this  manufacturer  becoming  a licensee to manufacture compressors for our
     applications. The Company is currently in discussions with three additional
     fuel  cell manufacturers, both in the U.S. and abroad who are interested in
     our  compressor  technology.  Additional  prototypes  will be completed for
evaluation.                                                           

     RAND  CAM(TM)  DIESEL ENGINES - REGI has collaborated with a major ceramics
     supplier  to  bid  on  a  Government sponsored research program for a small
     ceramic  Diesel  engine.  Details of this program will be released later in
the  event  that  the  Company  is  awarded  the  contract.           

     We are currently in negotiations for the design of a slightly larger engine
     for  a  commercial customer. In regard to this project REGI will design the
     engine  and  it  will  be  manufactured  and  tested by the customer. Again
 details  cannot  be  released  due  to  the  wishes  of  the  customer.

     A  project to update the existing 125 horsepower Rand Cam(TM) Diesel engine
     to  incorporate  the  latest technology, "Winged Rotor Concept" is about to
     get  underway  with  a commercial customer for demonstration purposes. This
     project  is  planned  to  be  financed  completely  with  outside  funding.

     RAND  CAM(TM)  AIR CONDITIONING COMPRESSOR - As previously reported the air
     conditioning  compressor  for heavy-duty bus applications was completed and
     delivered  to the Trans Air Manufacturing Company for testing in January of
     this year. Unfortunately, the testing has not been started. Pat Badgley has
     recently  visited this company and was assured that Trans Air is still VERY
     interested  in  the compressor and will start the testing now that the busy
season  for  their  industry  is  coming  to  a  close.               

F-10

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     RAND  CAM(TM)  COLD TURBINE ENGINES - Designs have been completed for three
     different  applications of this new engine concept. The Cold Turbine is the
     use  of  a  positive  displacement  Rand  Cam(TM) compressor and a positive
     displacement  Rand  Cam(TM)  expander  in  a  Brayton  cycle  (gas turbine)
     machine. Much interest is being shown in this technology following both our
press  release  and  a  recent  article  in  Ward's  Engine  Update.  

     RAND  CAM(TM)  PUMPS  -  A  large end user has provided desired performance
     characteristics  for  a  300  gallon  per  minute  pump application that is
     ideally  suited  to  the  Rand  Cam(TM) design. A special pump is now being
     designed  for this large flow application. The customer and the application
     have  to  remain confidential for now. Information will be released once an
agreement  is  signed.                                                

Results of operations for the three months ended July 31, 2001 ("2001") compared
--------------------------------------------------------------------------------
to  the  three  months  ended  July  31,  2000  ("2000")                        
--------------------------------------------------------                        

There  were  no  revenues  from  product  licensing  during  the  periods.      

The  net  loss  in 2001 increased by $10,000 to $116,000 compared to $106,000 in
2000.  Administrative  expenses  increased by $60,000 to $70,000 from $10,000 in
2000.  This  increase  was a result of investor relations fees paid by shares of
the  Company  owned  by  Rand  Energy  Group  Inc.  with  a  value  of  $55,000.

Ongoing research and development activities took place during 2001. Research and
development decreased by $51,000 to $45,000 as compared to $96,000 in 2000. Paul
LaMarche  and  Patrick  Badgley undertook the majority of development activities
during  2001  and  were  paid  technical  consulting  fees  totalling $19,000 as
compared to $25,000 in 2000. A $6,000 quarterly royalty payment was made for the
AVFS  rights.                                                                   

Liquidity                                                                       
---------                                                                       

During  the  three months ended July 31, 2001, we financed our operations mainly
through  a  units  private  placement  which  resulted  in cash subscriptions of
$85,300.  The  amounts owing to affiliates increased by $36,000 to $408,000, are
unsecured  and repayable on demand. Our affiliated companies have indicated that
they  will not be demanding repayment of these funds during the next fiscal year
and  will  advance,  or  pay  expenses  on  behalf  of, further funds if needed.

As  at  July  31,  2001  we  had  a  cash deficiency of $2,000 and other current
liabilities  of  $642,000  for  a  working  capital deficit of $644,000. Working
capital  is  not  adequate to meet development costs for the next twelve months.
Unexercised  stock  options  and  warrants, if exercised could raise significant
additional  funds. The Company receives interim support from its ultimate parent
company.                                                                        

The  Company  plans  to  raise  net proceeds of approximately $180,000 ($157,300
raised  to  date)  through  a  private  placement. During the quarter, we raised
$85,300.  The  offering will be a best efforts no minimum offering consisting of
600,000 units at $0.30 per unit. Each unit consists of one share and one warrant
to  purchase  an  additional  share at a price of $0.40 for a period of one year
from the date of issuance. The common stock offered will not be registered under
the  Securities  Act of 1933 and may not be offered or sold in the United States
absent  registration  or an applicable exemption from registration requirements.
This  disclosure is not an offer to sell securities and is not a solicitation of
an  offer  to  buy  securities.  We  anticipate  that sales will be made only to
accredited  investors  or  to  persons  that are not U.S. residents. No money or
other  consideration  is  being  solicited  or  will  be accepted by way of this
disclosure. The common stock offered has not been registered with or approved by
any  state  securities agency or the U.S. Securities and Exchange Commission and
will  be  offered  and  sold  pursuant  to  exemptions  from  registration.     

We  also  plan to raise funds through loans from a controlling shareholder (Rand
Energy  Group  Inc.).  Rand  Energy  Group Inc. owns 5,257,900 shares, having an
approximate  current  market  value  of  $1,235,000, and plans to sell shares as
needed to meet our ongoing funding requirements if traditional equity sources of
financing  prove  to  be  insufficient.                                         

F-11

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PART  II     Other  Information                                                 

Item  1.     Legal  Proceedings                                                 
--------     ------------------                                                 

None                                                  

Item  2.     Changes  in  Securities                                            
--------     -----------------------                                            

None                                                  

Item  3.     Defaults  upon  Senior  Securities                                 
--------     ----------------------------------                                 

None                                                  

Item  4.     Submissions  of  Matters  to  a  Vote  of  Security  Holders       
--------     ------------------------------------------------------------       

None                                                  

Item  5.     Other  Information                                                 
--------     ------------------                                                 

None                                                  

Item  6.     Exhibits  and  Reports  on  Form  8K                               
--------     ------------------------------------                               

None                                                  

F-12

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Signatures

In  accordance  with the requirements of the Exchange Act, the Registrant caused
this  report  to  be  signed  on  its  behalf by the undersigned, thereunto duly
authorized.                                                                     

Dated: September 14, 2001          REGI  U.S.,  INC.                            

                   By:  /s/  John  G.  Robertson
                                        ----------------------------------------
                               John  G.  Robertson,  President
                               (Principal  Executive  Officer)

                By:  /s/  James  Vandeberg
                                        ----------------------------------------
                                        James Vandeberg, Chief Financial Officer
                               (Principal  Financial  Officer)

F-13

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Dates Referenced Herein and Documents Incorporated by Reference

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Filed on:	9/17/01
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	8/20/01	13
For Period End:	7/31/01	1	14
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Regi US Inc – ‘10QSB’ for 7/31/01

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Quarterly Report — Small Business — Form 10-QSBFiling Table of Contents

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Dates Referenced Herein and Documents Incorporated by Reference

Quarterly Report — Small Business — Form 10-QSB
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