UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
20549
FORM 10-K /A
Amendment No. 1
(Mark One)
[X] |
ANNUAL
REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the fiscal year ended April 30, 2015
[ ] |
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.
(Exact name
of registrant in its Charter)
Oregon |
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91-1580146 |
(State
or Other Jurisdiction of |
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(I.R.S.
Employer |
incorporation
or organization) |
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Identification
No) |
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#240-11780
Hammersmith Way |
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Richmond,
BC V7A 5E9 Canada |
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(Address of Principal Executive Offices) |
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(604)
278-5996 |
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Registrant’s telephone number |
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(Former Name, former address and former
fiscal year, if changed since last report) |
Securities registered pursuant to Section 12(b)
of the Exchange Act: NONE
Securities registered pursuant to Section 12(g)
of the Exchange Act:
Title
of each class |
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Name
of each Exchange on which registered: |
Common |
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NASD Over the Counter Bulletin Board |
Common |
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Frankfurt Stock Exchange |
Indicate by check mark if the issuer is a
well-known seasoned issuer, as defined in Rule 405 of the Securities Act: Yes [ ] No [X]
Indicate by check mark if the issuer is not
required to file reports pursuant to Section 13 or 15(d) of the Act: Yes [ ] No [X]
Indicate by check mark whether the registrant
(1) 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.
(1) Yes [X] No [ ] (2) Yes [X] No
[ ]
Indicate by check mark whether the registrant
has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted
and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such
shorter period that the registrant was required to submit and post such files). Yes [X] No [ ]
Indicate by check mark if disclosure of delinquent
filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not be contained,
to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III
of this Form 10-K or any amendment to this Form 10-K Yes [ ] No [X]
Indicate by check mark whether the registrant
is a large accelerated filer, an accelerated filed, a non-accelerated filer, or a smaller reporting company.
Large accelerated filer [ ] |
Accelerated filer [ ] |
Non-accelerated filer [ ] |
Smaller reporting company [X] |
Indicate by check mark whether the registrant
is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [ ] No [X]
ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS
DURING THE PRECEDING FIVE YEARS
Not applicable
APPLICABLE ONLY TO CORPORATE ISSUERS
The number of shares outstanding of the issuer’s
common stock, no par value, as of July 29, 2015 was 32,779,298.
State the aggregate market value of the voting
and non-voting common equity computed by reference to the price at which the common equity was last sold, or the average bid and
asked price of such common equity, as of the last business day of the registrant’s most recently completed second fiscal
quarter: $3,605,723 as of October 31, 2014.
DOCUMENTS INCORPORATED BY REFERENCE
None
REGI U.S., INC.
FORM 10-K
TABLE OF CONTENTS
FORWARD LOOKING STATEMENTS
THIS ANNUAL REPORT ON FORM 10-K, INCLUDING
EXHIBITS THERETO, CONTAINS FORWARD-LOOKING STATEMENTS WITHIN THE MEANING OF SECTION 27A OF THE SECURITIES ACT OF 1933, AS AMENDED,
AND SECTION 21E OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. THESE FORWARD-LOOKING STATEMENTS ARE TYPICALLY IDENTIFIED
BY THE WORDS “ANTICIPATES”, “BELIEVES”, “EXPECTS”, “INTENDS”, “FORECASTS”,
“PLANS”, “FUTURE”, “STRATEGY”, OR WORDS OF SIMILAR MEANING. VARIOUS FACTORS COULD CAUSE ACTUAL
RESULTS TO DIFFER MATERIALLY FROM THOSE EXPRESSED IN THE FORWARD-LOOKING STATEMENTS, INCLUDING THOSE DESCRIBED IN “RISK
FACTORS” IN THIS FORM 10-K. WE ASSUME NO OBLIGATION TO UPDATE THESE FORWARD-LOOKING STATEMENTS TO REFLECT ACTUAL RESULTS,
CHANGES IN ASSUMPTIONS, OR CHANGES IN OTHER FACTORS, EXCEPT AS REGULATED BY LAW.
As used in this annual report, the terms “we”,
“us”, “our”, the “Company” and “REGI” mean REGI U.S., Inc., unless otherwise indicated.
The Company files annual reports and furnishes
other information with the SEC. You may read and copy any document that we file at the SEC’s Public Reference Room at 100
F Street, NE., Washington, DC 20549, on official business days during the hours of 10 a.m. to 3 p.m. You may obtain information
on the operation of the Public Reference Room by calling the Commission at 1-800-SEC-0330. The Commission maintains an Internet
site that contains reports, proxy and information statements, and other information regarding issuers that file electronically
with the Commission at (http://www.sec.gov). The Company also files information with the Canadian Securities Administrators via
SEDAR (www.sedar.com). The Company’s website is www.regtech.com.
PART I
ITEM 1. BUSINESS
General
We were organized under the laws of the State
of Oregon on July 27, 1992 as Sky Technologies, Inc. On August 1, 1994, our name was officially changed by a vote of a majority
of our shareholders to REGI U.S., Inc. At April 30, 2015 Rand Energy Group Inc., a privately held British Columbia corporation
(“Rand Energy”) holds approximately 1.80% of the common shares of REGI. Rand Energy is controlled 51% by Reg Technologies
Inc., a publicly held British Columbia corporation (“Reg Tech”). Reg Tech holds approximately 8.37% of the common
shares of REGI.
We are a development stage company engaged
in the business of developing and building an improved axial vane-type rotary engine known as the RadMax™ rotary technology
(the “Technology” or the “RadMax™ Engine”), used in the design of lightweight and high efficiency
engines, compressors and pumps. The Company has a project cost sharing agreement, whereby it will fund 50% of the further development
of the RadMax™ Engine and Reg Tech will fund 50%.
Our principal offices are located at 240-11780
Hammersmith Way, Richmond, British Columbia V7A 5E9, Canada. Our telephone number is (604) 278-5996 and our fax number is (604)
278-3409. Our website is www.regtech.com.
We will need to raise additional capital in
the future beyond any amount currently on hand and which may become available as a result of debt and/or equity financing, including
the exercise of warrants and options which are currently outstanding, in order to fully implement our intended plan of operations.
Business of the Company
Overview and History
We are engaged in the business of developing
and building an improved axial vane-type rotary engine used in the design of lightweight and high efficiency engines, compressors
and pumps. The worldwide intellectual and marketing rights to the RadMax™ Engine, exclusive of the United States, are held
by Reg Tech. The Company owns the U.S. marketing and intellectual rights and has a project cost sharing agreement, whereby it
funds 50% of the further development of the RadMax™ Engine and Reg Tech funds 50%.
Based upon testing work performed by independent
organizations on prototype models, we believe that the RadMax™ Engine holds significant potential in a number of other applications
ranging from small stationary equipment to automobiles and aircraft. In addition to its potential use as an internal combustion
engine, the RadMax™ Engine design is being employed in the development of several types of compressors, pumps, expanders
and other applications.
To date, several prototypes of the RadMax™
Engine have been tested and additional development and testing work is continuing. We believe that such development and testing
will continue until a commercially feasible design is perfected. There is no assurance at this time, however, that such a commercially
feasible design will ever be perfected, or if it is, that it will become profitable. If a commercially feasible design is perfected,
we do, however, expect to derive revenues from licensing the Technology relating to the RadMax™ Engine regardless of whether
actual commercial production is ever achieved. There is no assurance at this time, however, that revenues will ever be received
from licensing the Technology even if it does prove to be commercially feasible.
We believe that a large market would exist
for a practical rotary engine which could be produced at a competitive price and which could provide a good combination of fuel
efficiency, power density and exhaust emissions.
Based on the market potential, we believe
the RadMax™ Engine is well suited for application to internal combustion engines, pumps, compressors and expansion engines.
The mechanism can be scaled to match virtually any size requirement. This flexibility opens the door to large markets being developed.
Products and Projects
RadMax™
Engine
The Company is working with Reg Technologies
Inc. in developing a RadMax™ Diesel Engine application.
We believe that the RadMax™ Diesel Engine
could achieve improved fuel consumption when compared to gasoline and turbine engines. This was based on a review by our previous
thermodynamics engineer, Dr. Allen MacKnight, PhD, of published industry literature. Specifically, a given volume of diesel fuel
contains approximately 30% more energy that the same volume of gasoline and diesel engines consume approximately 0.4 pounds of
fuel for every horsepower hour. As a point of reference, all turbine engines consume approximately 0.8 pounds of fuel for every
horsepower hour.
To bring the RadMax™ Diesel Engine from
concept to reality, a number of milestones, or steps, are required for ultimate qualification. These started with concept drawings
and presentations, and lead to testing by independent agencies to validate the emissions, horsepower, and other critical metrics.
RadMax™
Pump
The Company actively pursued the development
of the RadMax™ Pump from early 2007 until March 2008. From September 2007 until March 2008, the Company worked with an industry
partner in the water pump industry. The partner evaluated the Pump as a potential new product offering as part of its fire engine
chemical dispersant product line. The evaluation and test period ended when the partner had a change in its senior management
and their leading advocate left the company. Until there is further interest established in the RadMax™ Pump by an end user,
no further work is anticipated.
The Company then focused all of its technical
resources on validating the seals for a compressor application, leading towards the technology incorporation in the RadMax™
engine.
In February 2009 the pump was set up in the
Company’s Richmond, B.C. laboratory, for demonstration to interested parties. It is a fully functional prototype capable
of pumping twice its internal volume every revolution. Future development would take the form of customization based on interest
from another industry partner. Commercialization requires tooling to significantly reduce the cost of the pump in a production
environment. Until there is further interest established in the RadMax™ Pump by an end user, no further work is anticipated.
RadMax™
Compressor
The Company actively pursued the development
of high pressure metal seals using the RadMax™ Compressor from July 2007 until September 2007. The technical concept of
high pressure metal seals was validated in a prototype compressor test bed that was fabricated from residual hardware. There was
no immediate interest by an industry partner to continue a joint development of the RadMax™ Compressor. Until there is further
interest established in the RadMax™ Compressor by an end user, no further work will be conducted.
The compressor is a fully functional prototype
design capable of 48 individual compression events every revolution, which represent twice its internal volume. Future development
would take the form of customization based on interest from another industry partner. Commercialization requires tooling to significantly
reduce the cost of the compressor in a production environment. Until there is further interest established in the RadMax™
Compressor by an end user, no further work will be conducted.
Recent Development
On May 27, 2014, we announced that the manufacturing
of the more durable seals had been completed by TrelleborgAB of Sweden, a leading supplier of sealing solutions. A test fixture
for analyzing the seal performance had been manufactured by Ebco Industries of Richmond, BC. Paul Porter, our Chief Engineer and
a director of the board, had commenced testing and installation of the new seals for the demonstration engine, prior to the comprehensive
testing for emissions, fuel consumption and wear and tear, using both diesel and natural gas.
On September 16, 2014 we announced that the
RadMax™ test fixture was completed. Mr. Paul Porter reported:
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The test fixture had been completed and assembled. |
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Several seal combinations had been tested in the
fixture. |
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The fixture would allow the Company to quickly and
inexpensively evaluate sealing combinations, vane designs and lubrication and cooling methods without risking damage or modifying
the current prototype. |
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With the test fixture, we could evaluate wear patterns,
seal life and friction created in the combustion chamber. |
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We could locate and quantify potential sealing or
wear problems rapidly and cost effectively. |
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The test chamber was a major step toward optimizing
the performance of the RadMax™ prototype and all future engine builds. |
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The test fixture could be easily modified to test
vanes for use in both smaller and larger engine builds. |
Mr. Porter stated that the test fixture would
be the key to the rapid development of future engine designs. New prototypes could as a result be designed and tested with greater
confidence, lower costs and with greater efficiency.
On January 8, 2015 we reported that the vane
seal installation tool was completed by Ebco Industries during December 2014. The vane seal installation tool had been tested
and performed perfectly, allowing for better seal placement, retention and prevention of tearing during the vane installation.
Plans for companies 350 hp RadMax™ diesel
engine were as follows:
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The new oil cooler would be tested in the test fixture, along with the
vanes. |
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Static and dynamic testing would be performed in the test fixture. |
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Upon successful completion of the static testing additional oil, coolers
would be manufactured to allow the prototype to be populated in all 24 slots. |
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Additional testing would be completed for fuel consumption, emissions
and wear and tear. |
On March 3, 2015 we reported that based on
recent successful testing of the new oil cooler design by Mr. Porter, that it had issued a purchase order to EBCO Industries for
22 additional oil coolers. This would allow up to 375 hp rotary diesel prototype to be populated in all 24 slots.
Mr Porter reported the following:
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The new oil cooler design was tested in order to
verify the new design. The first test results indicated that the vane seals were not being torn during installation and the
leakage rate appeared to be minimal. |
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The new installation tool worked perfectly and allowed
for the insertion and removal of the vanes as many times as were needed with no detrimental effects on the vane seal. |
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The seals on the oil cooler performed as desired
with no damage observed during the installation and removal of the oil cooler. |
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The seals appeared to be working properly and created
a sealed combustion chamber as needed for the engine. |
Additional
tests to commence on diesel engine working model were as follows:
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Additional static and dynamic testing would be performed
in the test fixture to determine the best configuration of all seals. This would also give indication of the expected life
of the seals. |
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Additional oil coolers were being manufactured to
allow the prototype to be populated in all 24 combustion chambers. |
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Development of facility requirements to begin dynamometer
testing of the prototype. |
On April 8, 2015 we reported that the Company
has submitted a new U.S. patent application, for approval, to the U.S. patent office. This new patent will integrate a RadMax™
generator into the RadMax™ engine, thus being able to produce electrical power for use in recharging batteries, putting
power into the electrical grid or operating any electrical device.
Paul Porter, Chief Engineer, stated that the
RadMax™ new integrated system would only need one cooling system and one lubrication system and would double as the starter
motor for the engine. This improvement would enable the hybrid car applications to be smaller, weigh less, fewer emissions, and
greatly reduce the number of required components. It would give the hybrid a greater range and add the option to allow recharging
of batteries on electrically powered automobiles.
In addition, this would allow the RadMax™
to be used as a compact and efficient generator set in remote locations, orphaned gas wells, and backup power systems for cell
towers, hospitals, marine and military applications. By using gas as a fuel for the generator, the electricity could be transported
through the electrical grid rather than the pipeline.
On June 1, 2015 we announced that Paul Porter,
our chief mechanical engineer, was preparing test facilities for the 375hp diesel engine. He would populate the engine with the
new seals and prepare it for full spin testing. This phase of testing should be the final set of tests prior to placing the engine
on a dynamometer. The dynamometer testing would allow us to document friction, fuel efficiency, net horsepower and emissions.
Competition and Alternative Technologies
We currently
face and will continue to face competition in the future from established companies engaged in the business of developing, manufacturing
and marketing engines and other products. While not a highly competitive business in terms of numbers of competitors, the business
of developing engines of a new design and attempting to either license or produce them is nonetheless difficult because most existing
engine producers are large, well financed companies which are very concerned about maintaining their market position. Such competitors
are already well established in the market and have substantially greater resources than us. Internal combustion engines are produced
by automobile manufacturers, marine engine manufacturers, heavy equipment manufacturers and specialty aircraft and industrial
engine manufacturers. We expect that our engine would be used mainly in industrial and marine applications.
Except for the Wankel rotary engine built
by Mazda of Japan, no competitor, that we are aware of, presently produces in a commercial quantity any rotary engine similar
to the engines we are developing. The Wankel rotary engine is similar only in that it is a rotary engine rather than a reciprocating
piston engine. Without substantially greater financial resources than is currently available to us, however, it is very possible
that it may not be able to adequately compete in the engine business. One competitor, Rotary Power International, is presently
producing the first production SCORE rotary (Wankel type) engines. Our RadMax™ Diesel Engine is more fuel efficient, smaller,
quieter, costs less to produce and will have fewer exhaust emissions.
We believe that if and when our engine is
completely developed, in order to be successful in meeting or overcoming competition which currently exists or may develop in
the future, our engine will need to offer superior performance and/or cost advantages over existing engines used in various applications.
We believe strong competition can be expected
in the engine market with new patents being taken out on a continuous basis and that we may have a time advantage over some of
the competitive products as far as niche markets which we may enter, however there is no way to accurately determine or predict
whether this situation is or will continue to be true.
The conventional piston type internal combustion
engine is the prime competitor of the RadMax™ Diesel Engine. Due to the substantial infrastructure built up to support the
standard combustion engine, substantial barriers to entry exist into this market.
A number of the new engine designs over the
last decade have offered advantages on the thermodynamics front (e.g. more efficient use of energy through better combustion,
better heat transfer, etc.). In the case of the RadMax™ Diesel Engine, its strong point it believed to be in its mechanism,
not in its thermodynamics. Whether or not the engine’s mechanism alone will provide the competitive edge necessary to result
in a marketable and successful product is unknown at this time.
Since we do not have management experience
in manufacturing engines, we hope to be able to follow the same strategy as that of other companies such as Orbital and Wankel,
where it would be licensing its technology and would therefore not be directly engaged in manufacturing.
An extensive
manufacturing study has not been performed to date and it could turn out that the costs to manufacture are prohibitive for one
or more reasons. However, the computer modeling done can be utilized to generate manufacturing drawings which could be used to
obtain preliminary costing estimates.
The development
of our business and its ability to maintain its competitive and technical position has depended and will depend, in part, upon
its ability to attract and retain qualified scientific, engineering, managerial and manufacturing personnel.
Significant competition exists from engine
manufacturers and engineering firms specializing in the development of internal combustion engines technology for the automotive,
marine, motorcycle and small engine industry. Such competition also exists in the pump and compressor markets which may utilize
the Rand Cam technology in their products. Many of these companies have substantially greater resources for research, development
and manufacturing than us. It is possible that our competitors may succeed in developing technologies and products that are more
effective or commercially acceptable. We believe, based on its testing of the RadMax™ Diesel Engine that the engine is a
superior overall engine package to the reciprocating piston engine. This assessment is made on the basis of the RadMax™
Diesel Engine’s potential for reduced engine weight and packaging volume, improved performance, and possibly lower manufacturing
costs.
Technology development is taking place on
many fronts and competitors may have, unknown to us, a product or products under development which may be technologically superior
to ours which may be more acceptable to the market. Competition with engines employing Rand Cam technology may also include other
lean burn engines, electric motors, gas turbine engines, solar power and hybrid vehicles, and may include concepts not yet known
to us.
Environmental Matters
Laws and regulations relating to protection
of the environment have not had a material impact on our business.
Availability of Raw Materials
Since we are not in production and there are
no plans at this time for us to enter the actual engine manufacturing business, raw materials are not of present concern. At this
time, however, there does not appear to be any foreseeable problem with obtaining any materials or components, which may be required
in the manufacture of its potential products.
Marketing Strategy
We intend to pursue the development of the
RadMax™ Diesel Engine by entering into licensing and/or joint venture arrangements with other larger companies, which have
the financial resources to maximize the potential of the technology. We have no current plans to become actively involved in either
manufacturing or marketing any engine or other product which it may ultimately develop to the point of becoming a commercial product.
Our current objective is to complete and test
the RadMax™ Diesel Engine. Based on the successful testing, the prototypes will be used for presentation purposes to potential
license and joint venture partners.
We expect
revenue from license agreements with the potential end users based on the success of the design from the compressor, pump, and
diesel engine prototypes. Based on of successful testing of the RadMax™ prototypes, we expect to have joint venture or license
agreements finalized, which would result in royalties to us. However, there is no assurance that the tests will be successful
or that we will ever receive any such royalties.
Dependence on Certain Commercial Agreements
We do not
have any material agreements upon which we are dependent.
Patents
U.S. patent 5,429,084 was granted on July
4, 1995, to James McCann, Brian Cherry, Patrick Badgley and four other individuals for various improvements incorporated in the
RC/DC Engine, This patent has been assigned to us. The patent to the original Rand Cam engine, U.S. Patent 4,401,070, was issued
on August 30, 1983 to James McCann and the marketing rights were held by Rand Energy Group, Inc. Reg Technologies Inc. has the
worldwide rights, title and interest, excluding the United States, which is owned by the Company pursuant to agreements with Rand
Energy Group, Inc.
The RC/DC Engine is composed basically of
a disk shaped rotor with drive shaft, which turns, and the housing or stator, which remains stationary. The rotor has two or more
vanes that are mounted perpendicular to the direction of rotation and slide back and forth through it. As the rotor turns, the
ends of the vanes ride along the insides of the stator housing which have wave-like depressions, causing the vanes to slide back
and forth. In the process of turning and sliding, combustion chambers are formed between the rotor, stator walls and vanes where
the fuel/air mixture is injected, compressed, burned and exhausted.
Two additional patents have been issued for
improvements to the engine including: U.S. Patents 5,509,793 “Rotary Device with Slidable Vane Supports, issued April 24,
1996 and 5,551,853 “Axial Vane Rotary Device and Sealing System” issued September 3, 1996.
The world-wide patents cover Canada and several
countries in Europe, namely, Germany, France, Great Britain, and Italy.
The U.S. Patent and Trademark office issued
patent number US7896630B2 on March 1, 2011, approving 23 claims of RadMax™ diesel engine technology. The new design claims
were far more advanced than the existing Rand Cam technology patents, and give the Company an additional 20 years of patent technology
protection.
Royalty Payments
The August
1992 Agreement calls for us to pay Rand Energy Group Inc. semi-annually a royalty of 5% of any net profits to be derived by us
from revenues received as a result of its license of the Original Engine. The August 1992 Agreement also calls for us to pay Brian
Cherry a royalty of 1% semi-annually any net profits derived by us from revenue received as a result of our licensing the Original
Engine.
Other provisions of the April 1993 Agreement
call for is (a) to pay to Rand Energy Group Inc. a continuing royalty of 5% of the net profits derived from the Technology by
us and (b) to pay to Brian Cherry a continuing royalty of 1% of the net profits derived by us from the Technology.
Pursuant to the letter of understanding dated
December 13, 1993, among us, Rand Energy Group Inc. and REGI U.S. with West Virginia University Research Corporation (WVURC),
WVURC will receive 5% of all net profits from sales, licenses, royalties or income derived from the patented technology relating
to the Original Engine and the RC/DC Engine.
Research and Development
Research and development work on the RadMax™
Engine is coordinated and funded by Reg Tech and the Company as to 50% each. We contract with individuals, institutions and companies
to perform most of the additional research and development work. We spent $48,404 and $35,612 on research and development in the
years ended April 30, 2015 and 2014, respectively.
Employees
We do not have any employees; the Company
and Reg Tech share the cost of several part-time employees. Our legal, accounting, marketing and administrative functions are
contracted out to consultants.
Item 1A. RISK FACTORS
The risks and uncertainties described below
are not the only ones facing us. Additional risks and uncertainties may also adversely impact and impair our business. If any
of the following risks actually occur, our business, results of operations, or financial condition would likely suffer. In such
case, the trading price of our common stock could decline, and you may lose all or part of your investment.
We face risks related to general domestic
and global economic conditions.
We rely on our ability to raise capital through
the sale of our securities. However, the current uncertainty arising out of domestic and global economic conditions poses a risk
to the economies in which we operate. Our ultimate success will depend upon our ability to raise additional capital or to have
other parties bear a portion of the required costs to further develop or exploit the potential market for our products. Reg Tech
and REGI have agreed to provide the necessary funds for the development of the RadMax™ Engine prototypes and our other operations
until joint venture or license agreements can be completed.
We are a development stage enterprise.
We are a development stage enterprise and
are subject to all of the attendant business risks associated with a development stage enterprise, including constraints on financial
and personnel resources, lack of established credit facilities, and uncertainties regarding product development and future revenues.
We will continue to be subject to all the risks attendant to a development stage enterprise for the foreseeable future, including
competition, complications and setbacks in the development program, and the need for additional capital.
We have reported losses in each year since
its inception. At April 30, 2015, we had an accumulated deficit of $12,727,365 in accordance with US GAAP. Our history consists
almost entirely of development of technologies funded entirely from the sale of our Common Stock or debts from related parties
in the absence of revenues. We anticipate that it will continue to incur substantial additional operating losses for at least
the next 12 months and expects cumulative losses to increase as our development efforts expand.
Although we anticipate receiving future revenues
from the sales of engines or the licensing of our technology or pursuant to a joint venture, we have received minimal revenues
in preparation for licensing or joint venture activities, and there are no assurances that significant revenues will be derived
from this activity in the future. We have received no revenues from sales of any of the products under development. There can
be no assurance as to when or if we will be able to develop significant sources of revenue or whether our operations will become
profitable, even if we are able to commercialize any product. See “Operating and Financial Review and Prospects,”
and Notes to Financial Statements.
We have no assurance that we will be able
to develop a commercially feasible product.
We have no assurance at this time that a commercially
feasible design will ever be perfected, or if it is, that it will become profitable. Our profitability and survival will depend
upon our ability to develop a technically and commercially feasible product which will be accepted by end users. The RadMax™
Engine which we are developing must be technologically superior or at least equal to other engines that competitors offer and
must have a competitive price/performance ratio to adequately penetrate its potential markets. If we are not able to achieve this
condition or if we do not remain technologically competitive, we may be unprofitable and our investors could lose their entire
investment. There can be no assurance that we or potential licensees will be able to achieve and maintain end user acceptance
of our engine.
We
will require additional financing and we may not be able to secure the financing necessary to continue our development and operations.
There
is no assurance that we will be able to secure the financing necessary to continue our development and operations. Our expectations
as to the amount of funds needed for development and the timing of the need for these funds is based on our current operating
plan, which can change as a result of many factors, and we could require additional funding sooner than anticipated. Our cash
needs may vary materially from those now planned because of results of development or changes in the focus and direction of our
development program, competitive and technological advances, results of laboratory and field testing, requirements of regulatory
agencies and other factors.
We
have no credit facility or other committed sources of capital. To the extent capital resources are insufficient to meet future
capital requirements, we will have to raise additional funds to continue our development and operations. There can be no assurance
that such funds will be available on favorable terms, or at all. To the extent that additional capital is raised through the sale
of equity or convertible debt securities, the issuance of such securities could result in dilution to our shareholders. If adequate
funds are not available, we may be required to curtail operations significantly or to obtain funds on unattractive terms. Our
inability to raise capital would have a material adverse effect on us.
We
have a history of losses and expect to incur significant losses for the foreseeable future.
We
expect to incur significant losses for the foreseeable future and cannot be certain when or if we will achieve profitability.
Failure to become and remain profitable will adversely affect the value of our Common Shares and our ability to raise capital
and continue operations.
We
have a history of operating losses, and an accumulated deficit, as of April 30, 2015, of $12,727,365. Our ability to generate
revenues and profits is subject to the risks and uncertainties encountered by development stage companies.
Our
future revenues and profitability are unpredictable. We currently have no signed contracts that will produce revenue and we do
not have an estimate as to when we will be entering into such contracts. Furthermore, we cannot provide assurance that management
will be successful in negotiating such contracts.
We
have no assurance that our products will receive market acceptance.
Our
profitability and survival will depend upon our ability to develop a technically and commercially feasible product which will
be accepted by end users. The RadMax™ Engine which we are developing must be technologically superior or at least equal
to other engines which our competitors offer and must have a competitive price/performance ratio to adequately penetrate our potential
markets. A number of rotary engines have been designed over the past 80 years but only one, the Wankel, has been able to
achieve mechanical practicality and any significant market acceptance. If we are not able to achieve this condition or if we do
not remain technologically competitive, we may be unprofitable and our investors could lose their entire investment. There can
be no assurance that we or our potential licensees will be able to achieve and maintain end user acceptance of our engine.
Our
officers lack experience to manufacture or market our products.
Assuming
we are successful in developing the RadMax™ Diesel Engine, we presently have no proven ability either to manufacture or
market the engine. There is no assurance that we will be able to profitably manufacture and market engines.
Our
auditors have indicated that our losses raise substantial doubt about our ability to continue a going concern.
The
report of our independent auditors with respect to our financial statements included in this Form 10-K includes a “going
concern” qualification, indicating that our losses and deficits in working capital and shareholders’ equity raise
substantial doubt about our ability to continue as a going concern. See Notes to Audited Financial Statements.
We
are dependent upon certain members of our staff, the loss of which could adversely affect our business.
We
are dependent on certain members of our management and engineering staff, the loss of services of one or more of whom could adversely
affect our business. The loss of any of these key individuals could hamper the successful development of the engine. Our present
officers and directors have other full-time positions or part-time employment unrelated to our business. Some officers and directors
will be available to participate in management decisions on a part-time or as-needed basis only. Our management may devote time
to other companies or projects which may compete directly or indirectly with us. We do not have “key man” life insurance
on such officers and currently have no plans to obtain such insurance. Our success also depends on our ability to attract and
retain additional skilled employees.
Certain
of the Company’s directors and officers are also directors and/or officers and/or shareholders of potential competitors
of the Company, giving rise to potential conflicts of interest.
Our
present officers and directors have other unrelated full-time positions or part-time employment. Some officers and directors will
be available to participate in management decisions on a part-time or as-needed basis only. Our management may devote time to
other companies or projects which may compete directly or indirectly with us. Major competitors for our officers and directors’
time are IAS Energy, Inc., Teryl Resources Corp., Linux Gold Corp. Reg Technologies Inc., Legend Oil and Gas Ltd., American Sierra
Gold Corp. and ASAP Expo, Inc.
Our
business administrative office is also the head office of the other four public companies listed below.
Our
present office is shared with IAS Energy, Inc., Teryl Resources Corp., Linux Gold Corp. and Reg Technologies Inc. Although the
office space is suitable to our current operations and the space is not fully occupied, in the event of our expansion or expansion
of any of these other companies, we may need to locate additional space which may cost us more.
We
are dependent upon consultants and outside manufacturing facilities.
Since
our present plans do not provide for a significant technical staff or the establishment of manufacturing facilities, we will be
primarily dependent on others to perform these functions and to provide the requisite expertise and quality control. There is
no assurance that such persons or institutions will be available when needed at affordable prices. It will likely cost more to
have independent companies do research and manufacturing than for us to handle these resources.
Our
business may suffer if we are unable to adequately protect our intellectual property.
Our
business depends on the protection of our intellectual property and may suffer if we are unable to adequately protect our intellectual
property. The success of our business depends on our ability to patent our engine. Currently, we have been granted several U.S.
Patents. We cannot provide assurance that our patents will not be invalidated, circumvented or challenged, that the rights granted
under the patents will give us competitive advantages or that our patent applications will be granted.
Our
engines and planned applications may contain product errors which could adversely affect our operations.
Engines
such as the ones proposed by us and our related planned applications may contain errors or defects, especially when first introduced,
or when new versions are released. Our products may not be free from errors after commercial release has occurred. Any errors
that are discovered after such commercial release could result in loss of revenue or delay in market acceptance, diversion of
development resources, damage to our reputation, increased service and warranty costs and liability claims. Any defects in these
products could adversely affect the operation of and market for our products, reduce revenue, increase costs and damage our reputation.
Our
competition possesses greater technical resources and market recognition than us and there is no assurance that we will be able
to compete effectively with these companies.
While
not a highly competitive business in terms of numbers of competitors, the business of developing engines of a new design and attempting
to either license or produce them is nonetheless difficult because most existing engine producers are large, well financed companies
which are very concerned about maintaining their market position. These companies possess greater technical resources and market
recognition than us, and have management, financial and other resources not yet available to us. Existing engines are likely to
be perceived by many customers as superior or more reliable than any new product until it has been in the marketplace for a period
of time. There is no assurance that we will be able to compete effectively with these companies.
Market
prices for our products may decline in the future which would have a material adverse effect on our business, financial condition
and results of operations.
We
anticipate that market prices for our main products may decline in the future due to increased competition. We expect significant
competition among local and international companies, including from new entrants, may continue to drive equipment prices lower.
We also expect that there may be increases in promotional spending by companies in our industry which would also contribute to
increasing movement of customers between competitors. Such increased competition and the resulting decline of market prices for
our products would have a material adverse effect on our business, financial condition and results of operations.
New
technology or refinement of existing technology could render our Rand Cam products less attractive or obsolete.
New
technology or refinement of existing technology could render our Rand Cam products less attractive or obsolete. Our success depends
in part upon its ability to anticipate changes in technology and industry standards and to successfully develop and introduce
new and improved engines on a timely basis. There is no assurance that we will be able to do so. Accordingly, if we are unable
to adapt to changing technologies and to adapt our product to evolving industry standards, our business will be adversely affected.
Product
liability claims asserted against us in the future could hurt our business.
Product
liability claims asserted against us in the future could hurt our business. If a customer suffers damage from our products, the
customer could sue us on product liability or related grounds, claim damages for data loss or make other claims. We currently
do not carry product liability insurance. While we have not been sued on product liability grounds to date, a successful product
liability or related claim brought against us could harm our business.
Our
success may be dependent on the timing of new product introductions and lack of market acceptance for our new products.
Our
future success may be dependent on the success of our products and services. The success of our business depends on a variety
of factors, including:
|
● |
the
quality and reliability of our products and services; |
|
|
|
|
● |
our
ability to develop new products and services superior to that of our competitors; |
|
|
|
|
● |
our
ability to establish licensing relationships and other strategic alliances; |
|
|
|
|
● |
our
pricing policies and the pricing policies of our competitors; |
|
|
|
|
● |
our
ability to introduce new products and services before our competitors; |
|
|
|
|
● |
our
ability to successfully advertise our products and services; and |
|
|
|
|
● |
general
economic trends. |
We
may be affected by other factors which may have an adverse effect on our business.
Our
areas of business may be affected from time to time by such matters as changes in general economic conditions, changes in laws
and regulations, taxes, tax laws, prices and costs, and other factors of a general nature which may have an adverse effect on
our business.
There
is only a limited public market for our common shares on the OTC Bulletin and those markets are extremely volatile.
There
is only a limited public market for our common shares on the OTC Bulletin Board and there is a risk that a broader or more active
public trading market for our common shares will never develop, or be sustained, or that current trading levels will not be sustained.
The
market price for our common shares on the OTC Bulletin Board has been and we anticipate will continue to be extremely volatile
and subject to significant price and volume fluctuations in response to a variety of external and internal factors. This is especially
true with respect to emerging companies such as ours. Examples of external factors, which can generally be described as factors
that are unrelated to the operating performance or financial condition of any particular company, include changes in interest
rates and worldwide economic and market conditions, as well as changes in industry conditions, such as regulatory and environment
rules, and announcements of technology innovations or new products by other companies. Examples of internal factors, which can
generally be described as factors that are directly related to our consolidated financial condition or results of operations,
would include release of reports by securities analysts and announcements we may make from time-to-time relative to our operating
performance, advances in technology or other business developments.
Because
we have a limited operating history and no profits to date, the market price for the common shares is more volatile than that
of a seasoned issuer. Changes in the market price of the common shares, for example, may have no connection with our operating
results or prospects. No predictions or projections can be made as to what the prevailing market price for the common shares will
be at any time, or as to what effect, if any, that the sale of shares or the availability of common shares for sale at any time
will have on the prevailing market price.
You
will be subject to the penny stock rules to the extent our stock price on the OTC Bulletin Board is less than $5.00.
Since
the common shares are not listed on a national stock exchange or quoted on the NASDAQ Market within the United States, trading
in the common shares on the OTC Electronic Bulletin Board is subject, to the extent the market price for the common shares is
less than $5.00 per share, to a number of regulations known as the “penny stock rules”. The penny stock rules require
a broker-dealer to deliver a standardized risk disclosure document prepared by the SEC, to provide the customer with additional
information including current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson
in the transaction, monthly account statements showing the market value of each penny stock held in the customer’s account,
and to make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s
written agreement to the transaction. To the extent these requirements may be applicable they will reduce the level of trading
activity in the secondary market for the common shares and may severely and adversely affect the ability of broker-dealers to
sell the common shares.
You
should not expect to receive dividends in the foreseeable future.
We
intend to retain any future earnings to finance our business and operations and any future growth. Therefore, we do not anticipate
paying any cash dividends in the foreseeable future.
ITEM
1B. UNRESOLVED STAFF COMMENTS
None.
ITEM
2. PROPERTIES
We
own no properties. We currently utilize office space in a commercial business park building located in Richmond, British Columbia,
Canada, a suburb of Vancouver, shared by several companies with common officers and directors. We currently do not pay rent for
this office space.
ITEM
3. LEGAL PROCEEDINGS
We
are not a party to any legal proceedings or litigation, nor are we aware that any litigation is presently being threatened or
contemplated against us or any officer, director or affiliate.
ITEM
4. MINE SAFETY DISCLOSURES
Not
Applicable.
PART
II
ITEM
5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
Market
Information
There
is a limited public market for our common stock which currently trades on the OTC Bulletin Board under the symbol “RGUS.OB”
where it has been traded since September 21, 1994. The common stock has traded between $0.035 and $6.75 per share since that date.
There
is also a limited public market for our common stock which began trading on May 1, 2006, on the Frankfurt Stock Exchange under
the symbol (RGJ). International Security Identification Number (ISIN/CUSIP) number is US7589431045.
The
following table sets forth the high and low closing prices for our common stock as reported on the Bulletin Board for the quarters
presented. These quotations reflect inter-dealer prices, without retail mark-up, mark-down or commissions, and may not reflect
actual transactions.
| | |
High
$ | | |
Low
$ | |
Quarter ended July 31, 2013 | | |
| 0.39 | | |
| 0.19 | |
Quarter ended October 31, 2013 | | |
| 0.19 | | |
| 0.13 | |
Quarter ended January 31, 2014 | | |
| 0.21 | | |
| 0.10 | |
Quarter ended April 30, 2014 | | |
| 0.20 | | |
| 0.13 | |
Quarter ended July 31, 2014 | | |
| 0.17 | | |
| 0.08 | |
Quarter ended October 31, 2014 | | |
| 0.15 | | |
| 0.09 | |
Quarter ended January 31, 2015 | | |
| 0.12 | | |
| 0.07 | |
Quarter ended April 30, 2015 | | |
| 0.08 | | |
| 0.06 | |
The
following table shows the high and low closing prices of our stock traded on the OTC Bulletin Board during the most recent six
months, for each month as follows:
| | |
High
$ | | |
Low
$ | |
January 2015 | | |
| 0.12 | | |
| 0.07 | |
February 2015 | | |
| 0.08 | | |
| 0.06 | |
March 2015 | | |
| 0.08 | | |
| 0.07 | |
April 2015 | | |
| 0.08 | | |
| 0.08 | |
May 2015 | | |
| 0.08 | | |
| 0.08 | |
June 2015 | | |
| 0.11 | | |
| 0.07 | |
Holders
As
of July 29, 2015, there were 32,779,298 shares of common stock outstanding, held by 277 shareholders of record.
Transfer
Agent
Our
transfer agent is Nevada Agency and Transfer Company, 50 West Liberty Street, Suite 880 Reno, Nevada 89501; Phone: 775-322-0626;
Fax: 775-322-5623.
Dividends
To
date we have not paid any dividends on our common stock and do not expect to declare or pay any dividends on our common stock
in the foreseeable future. Payment of any dividends will be dependent upon future earnings, if any, our financial condition, and
other factors as deemed relevant by our Board of Directors.
Securities
authorized for issuance under equity compensation plans.
The
Company is authorized to issue up to 100,000,000 shares of common stock, without par value. As of July 29, 2015, there were 32,779,298
shares of common stock issued and outstanding. Each share of Common Stock is entitled to one vote on all matters submitted for
shareholder approval.
Recent
Sales of Unregistered Securities
During
the year ended April 30, 2015, the Company sold an aggregate of 139,000 units in a private placement for cash proceeds of $12,306,
net of issuance costs of $1,194, at $0.10 per unit. Each unit consists of one common share and one common stock purchase warrant,
with one warrant exercisable at $0.15 per share for one year into the Company’s common stock from the closing date of the
private placement. The private placement was closed on August 13, 2014.
ITEM
6. SELECTED FINANCIAL DATA.
We
are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide
the information under this item.
ITEM
7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
Overview
The
following discussion should be read in conjunction with audited financial statements of the Company and unaudited consolidated
financial statements of our company and the related notes that appear elsewhere in this annual report.
The
following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could
differ materially from those discussed in the forward looking statements. Factors that could cause or contribute to such differences
include, but are not limited to, those discussed below and elsewhere in this annual report, particularly in the section entitled
“Risk Factors”.
The
audited financial statements of the Company are stated in U.S. dollars and are prepared in accordance with United States generally
accepted accounting principles.
Plan
of Operations
We
are a company engaged in the business of developing and commercially exploiting an improved axial vane type rotary engine known
as the RadMax™ Engine.
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 incurred net losses to April 30, 2015 totaling $12,727,365 and further losses are
expected until we complete a licensing agreement with a manufacturer and reseller. At April 30, 2015, we had working capital deficiency
of $1,976,419. Our only asset was cash of $491 as of April 30, 2015. 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.
Results
of Operations
Results
of operations for the year ended April 30, 2015 compared to the year ended April 30, 2014
There
were no revenues from product licensing during the year ended April 30, 2015 or 2014.
Net
loss decreased from $587,548 in 2014 to $411,246 in 2015. The decrease in loss of $176,302 was mainly due to the decrease in warrants
repricing and extension as financing costs valued at $292,890 in 2014 and $68,285 in 2015.
During
each of 2015 and 2014, the Company incurred interest expense of $1,440 on promissory note of $24,000 from Teryl Resources Corp.,
a company with common officer and director.
During
2015 we incurred gain on foreign exchange of $2,262, a slight decrease from a gain on foreign exchange of $2,296 in 2014.
Changes
in cash-based expenses from 2014 to 2015 are as follows:
|
● |
Research
and development expenses increased from $35,612 in 2014 to $48,404 in 2015, as the expenses were incurred on an as-needed
basis. |
|
|
|
|
● |
Consulting
and management fees decreased slightly from $152,563 in 2014 to $150,000 in 2015, as we incurred one time consulting fee of
$2,563 in 2014, $120,000 donated services in both years and $30,000 accrued but unpaid management fees in both years. |
|
|
|
|
● |
Professional
fees including legal, accounting, audit and auditors’ review expenses decreased from $33,459 in 2014 to $30,906 in 2015. |
|
|
|
|
● |
Wages
and benefits and office administrative expenses increased from $55,713 in 2014 to $98,128 in 2015. |
|
|
|
|
● |
Shareholder
communication and investor relations expenses increased from $nil to $2,050 in 2015. |
|
|
|
|
● |
Transfer
agent and filing fees decreased from $14,580 in 2014 to $12,236 in 2015 due to our decreased equity transactions in 2014. |
Our
basic and diluted loss per share was $0.01 for 2015 and $0.02 for 2014.
LIQUIDITY
AND CAPITAL RESOURCES
During
the year ended April 30, 2015, we financed our operations mainly through proceeds of $12,306 from sale of our private placement
units.
During
the year ended April 30, 2015 we received net advances of $260,574 from our related parties. The total amount owing to related
parties is $1,791,680 representing 90.63% of our total liabilities as of April 30, 2015. This funding was necessary with a downturn
in the financial market to complete the RadMax™ engine and place the Company in a position to attain profit.
During
the year ended April 30, 2012 we issued a promissory note for outstanding balance of $24,000 to Teryl Resources Corp, which bears
simple interest rate of 6% per annum and is unsecured and repayable upon demand.
The
remaining balances owing to related parties are non-interest bearing, 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 the Company if further funds are needed.
As
of April 30, 2015, we had a working capital deficiency of $1,976,419. We receive interim support from our related parties and
will raise additional funds from equity financing. We also plan to raise funds through loans from Reg Tech and Rand Energy.
The
audited consolidated financial statements have been prepared assuming that the Company will continue as a going-concern. As discussed
in Note 2 to the consolidated financial statements, the Company has no revenues and limited capital, which together raise substantial
doubt about its ability to continue as a going-concern. Management plans in regard to these matters are also described in Note
2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
We
have been successful in the past in acquiring capital through the issuance of shares of our Common Stock, and through advances
from related parties.
We
anticipate that our cash requirements for the fiscal year ending April 30, 2016 will remain consistent with those for the fiscal
year ended April 30, 2015.
These
research and development costs are identified as master design integrator, prototype fabrication, and labour expense, and are
estimated to be at $50,000 over the next 6 months.
Off-Balance
Sheet Arrangements
As
of April 30, 2015 and the date of this report, we have had no off-balance sheet arrangements, including any outstanding derivative
financial statements, off-balance sheet guarantees, interest rate swap transactions or foreign currency contracts. We do not engage
in trading activities involving non-exchange traded contracts.
ITEM
7A. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK.
Pursuant
to Item 305(e) of Regulation S-K (§ 229.305(e)), the Company is not required to provide the information required by this
Item as it is a “smaller reporting company,” as defined by Rule 229.10(f)(1).
ITEM
8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Our
consolidated financial statements are stated in United States dollars and are prepared in accordance with United States Generally
Accepted Accounting Principles.
The
following consolidated financial statements are filed as part of this annual report:
REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board
of Directors and Shareholders of
REGI U.S.,
Inc.
Richmond,
BC, Canada
We
have audited the accompanying consolidated balance sheets of REGI U.S., Inc. and subsidiary (collectively, the “Company”)
as of April 30, 2015 and 2014 and the related consolidated statements of expenses, changes in stockholders’ deficit and
cash flows for each of the years then ended. These consolidated financial statements are the responsibility of the Company’s
management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.
We
conducted our audits in accordance with standards of the Public Company Accounting Oversight Board (United States). Those standards
require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements
are free of material misstatements. The Company is not required to have, nor were we engaged to perform, an audit of its internal
control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for
designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit
includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements.
An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating
the overall consolidated financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In
our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated
financial position of REGI U.S., Inc. and subsidiary as of April 30, 2015 and 2014 and the consolidated results of their operations
and their cash flows for each of the years then ended in conformity with accounting principles generally accepted in the United
States of America.
The
accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern.
As discussed in Note 2 to the consolidated financial statements, the Company has negative working capital and suffered recurring
losses from operations, which raises substantial doubt about its ability to continue as a going concern. Management’s plans
regarding those matters are described in Note 2. The consolidated financial statements do not include any adjustments that might
result from the outcome of this uncertainty.
/s/
MaloneBailey, LLP |
|
|
|
www.malonebailey.com |
|
Houston, Texas |
|
July
28, 2015 |
|
REGI
U.S., Inc.
Consolidated
Balance Sheets
| |
April
30, | |
| |
2015 | | |
2014 | |
ASSETS | |
| | | |
| | |
Current Assets: | |
| | | |
| | |
Cash and
cash equivalents | |
$ | 491 | | |
$ | 1,876 | |
| |
| | | |
| | |
Total Assets | |
$ | 491 | | |
$ | 1,876 | |
| |
| | | |
| | |
LIABILITIES AND STOCKHOLDERS’
DEFICIT | |
| | | |
| | |
Current Liabilities: | |
| | | |
| | |
Accounts payable and
accrued liabilities | |
$ | 185,230 | | |
$ | 236,534 | |
Due to related parties | |
| 1,791,680 | | |
| 1,531,106 | |
Total Current Liabilities | |
| 1,976,910 | | |
| 1,767,640 | |
| |
| | | |
| | |
Stockholders’ Deficit: | |
| | | |
| | |
Common stock, 100,000,000 shares authorized,
no par value, 32,779,298 and 32,640,298 shares issued and outstanding, respectively | |
| 10,750,946 | | |
| 10,550,355 | |
Accumulated deficit | |
| (12,727,365 | ) | |
| (12,316,119 | ) |
Total Stockholders’
Deficit | |
| (1,976,419 | ) | |
| (1,765,764 | ) |
| |
| | | |
| | |
Total Liabilities and Stockholders’
Deficit | |
$ | 491 | | |
$ | 1,876 | |
The
accompanying notes are an integral part of these consolidated financial statements.
REGI
U.S., Inc.
Consolidated
Statements of Expenses
| |
Years Ended | |
| |
April
30, | |
| |
2015 | | |
2014 | |
| |
| | |
| |
Operating Expenses: | |
| | | |
| | |
General and administrative | |
$ | 361,402 | | |
$ | 550,496 | |
Research and development | |
| 48,404 | | |
| 35,612 | |
| |
| | | |
| | |
Loss from operations | |
| (409,806 | ) | |
| (586,108 | ) |
| |
| | | |
| | |
Other Expense | |
| | | |
| | |
Interest expense | |
| (1,440 | ) | |
| (1,440 | ) |
| |
| | | |
| | |
Net loss | |
$ | (411,246 | ) | |
$ | (587,548 | ) |
| |
| | | |
| | |
Net loss per share – basic and diluted | |
$ | (0.01 | ) | |
$ | (0.02 | ) |
| |
| | | |
| | |
Weighted average shares outstanding – basic and diluted | |
| 32,214,000 | | |
| 32,078,000 | |
The
accompanying notes are an integral part of these consolidated financial statements.
REGI
U.S., Inc.
Consolidated
Statements of Changes in Stockholders’ Deficit
Years
Ended April 30, 2015 and 2014
| |
| | |
| | |
| | |
Total | |
| |
Common Stock | | |
Accumulated | | |
Stockholders’ | |
| |
Shares | | |
Amount | | |
Deficit | | |
(Deficit) | |
| |
| | |
| | |
| | |
| |
Balances – April 30, 2013 | |
| 31,675,965 | | |
$ | 10,019,361 | | |
$ | (11,728,571 | ) | |
$ | (1,709,210 | ) |
Shares issued for private placements, net of share issuance costs | |
| 964,333 | | |
| 118,104 | | |
| - | | |
| 118,104 | |
Option and warrant compensation | |
| - | | |
| 292,890 | | |
| - | | |
| 292,890 | |
Donated consulting services | |
| - | | |
| 120,000 | | |
| - | | |
| 120,000 | |
Net loss | |
| - | | |
| - | | |
| (587,548 | ) | |
| (587,548 | ) |
Balances – April 30, 2014 | |
| 32,640,298 | | |
| 10,550,355 | | |
| (12,316,119 | ) | |
| (1,765,764 | ) |
Shares issued for private placements, net of share issuance costs | |
| 139,000 | | |
| 12,306 | | |
| - | | |
| 12,306 | |
Option and warrant compensation | |
| - | | |
| 68,285 | | |
| - | | |
| 68,285 | |
Donated consulting services | |
| - | | |
| 120,000 | | |
| - | | |
| 120,000 | |
Net loss | |
| - | | |
| - | | |
| (411,246 | ) | |
| (411,246 | ) |
Balances – April 30, 2015 | |
| 32,779,298 | | |
$ | 10,750,946 | | |
$ | (12,727,365 | ) | |
$ | (1,976,419 | ) |
The
accompanying notes are an integral part of these consolidated financial statements.
REGI
U.S., Inc.
Consolidated
Statements of Cash Flows
| |
Years Ended | |
| |
April
30, | |
| |
2015 | | |
2014 | |
| |
| | |
| |
Cash flows from operating activities: | |
| | | |
| | |
Net loss | |
$ | (411,246 | ) | |
$ | (587,548 | ) |
Adjustments to reconcile net loss to net cash used in operating activities: | |
| | | |
| | |
Donated services | |
| 120,000 | | |
| 120,000 | |
Options and warrants issued for services | |
| 68,285 | | |
| 292,890 | |
Changes in operating assets and liabilities: | |
| | | |
| | |
Due to related parties | |
| 1,440 | | |
| 1,440 | |
Accounts payable and accrued liabilities | |
| (51,304 | ) | |
| 10,247 | |
Net cash used in operating activities | |
| (272,825 | ) | |
| (162,971 | ) |
| |
| | | |
| | |
Cash flows from financing activities | |
| | | |
| | |
Proceeds from the sale of common stock | |
| 12,306 | | |
| 30,366 | |
Advances from related parties | |
| 259,134 | | |
| 118,104 | |
Net cash provided by financing activities | |
| 271,440 | | |
| 148,470 | |
| |
| | | |
| | |
Net decrease in cash and cash equivalents | |
| (1,385 | ) | |
| (14,501 | ) |
Cash and cash equivalents, beginning of period | |
| 1,876 | | |
| 16,377 | |
Cash and cash equivalents, end of period | |
$ | 491 | | |
$ | 1,876 | |
| |
| | | |
| | |
Supplemental Disclosures of Cash Flow Information: | |
| | | |
| | |
Interest paid | |
$ | - | | |
$ | - | |
Income tax paid | |
| - | | |
| - | |
The
accompanying notes are an integral part of these consolidated financial statements.
REGI
U.S., Inc.
Notes
to Consolidated Financial Statements
Years
Ended April 30, 2015 and 2014
NOTE
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
Nature
of business
REGI
U.S., Inc. (“REGI”) is 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”) in the U.S. The worldwide marketing
and intellectual rights, other than in the U.S., are held by Reg Technologies, Inc. (“Reg”), a major shareholder,
which together with its 51% owned subsidiary, Rand Energy Group Inc. owned 10.17% of REGI’s issued and outstanding stock
at April 30, 2015. REGI owns the U.S. marketing and intellectual rights and has a project cost sharing agreement, whereby it will
fund 50% of the further development of the RC/DC Engine and Reg will fund 50%. No revenue has been derived to date and REGI’s
planned principal operations have not commenced.
REGI
formed a wholly-owned subsidiary, Rad Max Technologies, Inc., on April 10, 2007 in the State of Washington.
Principles
of consolidation
These
consolidated financial statements include the accounts of REGI, and its wholly owned subsidiary, Rad Max. All inter-company balances
and transactions have been eliminated on consolidation.
Reclassifications
Certain
prior period amounts have been reclassified to conform to current period presentation.
Risks
and uncertainties
REGI
operates in an emerging industry that is subject to market acceptance and technological change. REGI’s operations are subject
to significant risks and uncertainties, including financial, operational, technological and other risks associated with operating
an emerging business, including the potential risk of business failure.
Cash
and cash equivalents
Cash
and cash equivalents include highly liquid investments with original maturities of three months or less.
Financial
instruments
Fair
Value
The
carrying values of cash and cash equivalents, amounts due to related parties, bank indebtedness, accounts payable and accrued
liabilities approximate their fair values because of the short-term maturity of these financial instruments.
Interest
Rate Risk
REGI
is not exposed to significant interest rate risk due to the short-term maturity of its monetary assets and liabilities.
Credit
Risk
REGI’s
financial asset that is exposed to credit risk consists primarily of cash. To manage the risk, cash is placed with major financial
institutions.
Currency
Risk
REGI’s
functional and reporting currency is the U.S. dollar. Monetary assets and liabilities denominated in foreign currencies are translated
using the exchange rate prevailing at the balance sheet date. Gains and losses arising on translation or settlement of foreign
currency denominated transactions or balances are included in the determination of income. Foreign currency transactions are primarily
undertaken in Canadian dollars. REGI has not, to the date of these consolidated financial statements, entered into derivative
instruments to offset the impact of foreign currency fluctuations.
Income
taxes
Deferred
income taxes are reported for timing differences between items of income or expense reported in the financial statements and those
reported for income tax purposes. REGI uses the asset/liability method of accounting for income taxes. Deferred income taxes and
tax benefits are recognized for the future tax consequences attributable to differences between the financial statement carrying
amounts of existing assets and liabilities and their respective tax bases, and for tax losses and credit carry-forwards. Deferred
tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those
temporary differences are expected to be recovered or settled. REGI provides for deferred taxes for the estimated future tax effects
attributable to temporary differences and carry-forwards when realization is more likely than not.
Basic
and diluted net loss per share
Basic
EPS is computed by dividing net income (loss) available to common shareholders (numerator) by the weighted average number of shares
outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during
the period 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 shares if their effect is anti-dilutive.
Stock-based
compensation
REGI
accounts for stock based compensation in accordance with FASB ASC 718 which establishes the accounting treatment for transactions
in which an entity exchanges its equity instruments for goods or services. Under the provisions of FASB ASC 718, share-based payment
compensation is measured at the grant date, based on the fair value of the award, and is recognized as an expense over the requisite
service period (generally the vesting period). REGI accounts for share-based payments to non-employees in accordance with FASB
ASC 505-50.
Use
of estimates
The
preparation of financial statements in conformity with accounting principles generally accepted in the United States of America
requires management to make estimates and assumptions that affect the amounts of assets and liabilities and disclosures of contingent
assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenditures during the
reporting period. Actual results could differ from these estimates. REGI regularly evaluates estimates and assumptions related
to useful life and recoverability of long-lived assets, stock-based compensation and deferred income tax asset valuation allowances.
REGI bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to
be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets
and liabilities, and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced
by REGI may differ materially and adversely from REGI’s estimates. To the extent there are material differences between
the estimates and the actual results, future results of operations will be affected.
Research
and development costs
Research
and development costs are expensed as incurred. REGI expensed development costs totaling $48,404 and $35,612 during the years
ended April 30, 2015 and 2014, respectively.
Recent
accounting pronouncements
On
June 10, 2014, FASB issued Accounting Standards Update No. 2014-10, Development Stage Entities. The update removes the
definition of a development stage entity from FASB ASC 915 and eliminates the requirement for development stage entities to present
inception-to-date information on the statements of operations, cash flows and stockholders’ deficit. The Company early adopted
this standard for the periods covered by the report herein.
NOTE
2. GOING CONCERN
REGI
incurred net losses of $411,246 for the year ended April 30, 2015 and has a working capital deficit of $1,976,419 and an accumulated
deficit of $12,727,365 at April 30, 2015. These factors raise substantial doubt about the ability of REGI to continue as a going
concern. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
As a result, REGI’s consolidated financial statements as of April 30, 2014 and for the year ended have been prepared on
a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal
course of business.
REGI
also receives interim support from affiliated companies and plans to raise additional capital through debt and/or equity financings.
There continues to be insufficient funds to provide enough working capital to fund ongoing operations for the next twelve months.
REGI may also raise additional funds through the exercise of warrants and stock options, if exercised. There is no assurance that
any of these activities will be successful.
NOTE
3. RELATED PARTIES
Amounts
due from related parties are unsecured, non-interest bearing and due on demand. Related parties consist of the President of REGI
and companies controlled or significantly influenced by the President of REGI. As of April 30, 2015, there was $1,791,680 due
to related parties. As of April 30, 2014, there was $1,531,106 due to related parties.
During
the year ended April 30, 2015, the President and CEO of REGI provided consulting services to REGI. These services were valued
at $90,000, which was accounted for as donated capital and charged to expense during the year ended April 30, 2015. The same amount
was recorded in the year ended April 30, 2014.
During
the year ended April 30, 2015, the CFO of REGI provided consulting services to REGI. These services were valued at $30,000, which
was accounted for as donated capital and charged to expense during the year ended April 30, 2015. The same amount was recorded
in the year ended April 30, 2014.
During
each of the years ended April 30, 2015 and 2014, management fees of $30,000 were accrued to a company having a common director
as REGI without being paid.
During
the years ended April 30, 2015 and 2014, research and development services of $39,242 and $24,054 were provided by a company having
a common director.
During
the year ended April 30, 2012, the Company issued a promissory note of $24,000 for amounts previously accrued and owed to a company
with common director with the Company. The promissory note bears interest rate of 6% per annum, is unsecured and due on demand.
During the years ended April 30, 2015 and 2014, there was no change to the principal amount of the promissory note and interest
expense of $1,440 was recorded each year. The principal balance of the note is included as due to related parties in the consolidated
balance sheet.
REGI
currently utilizes office space in a commercial business park building located in Richmond, British Columbia, Canada, a suburb
of Vancouver, shared by several companies related by common officers and directors. REGI does not pay rent for this office space.
NOTE
4. STOCKHOLDERS’ EQUITY
a)
Common Stock Options and Warrants
REGI
has a 2000 Stock Option Plan to issue up to 2,500,000 shares to certain key directors and employees.
All
transactions in which goods or services are the consideration received for the issuance of equity instruments are accounted for
based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably
measurable. Equity instruments issued to employees and the cost of the services received as consideration are measured and recognized
based on the fair value of the equity instruments issued.
All
options granted by REGI under the 2000 plan have the following vesting schedule:
i) |
Up
to 25% of the option may be exercised at any time during the term of the option; such initial exercise is referred to as the
“First Exercise”. |
|
|
ii) |
The
second 25% of the option may be exercised at any time after 90 days from the date of First Exercise; such second exercise
is referred to as the “Second Exercise”. |
|
|
iii) |
The
third 25% of the option may be exercised at any time after 90 days from the date of Second Exercise; such third exercise is
referred to as the “Third Exercise”. |
|
|
iv) |
The
fourth and final 25% of the option may be exercised at any time after 90 days from the date of the Third Exercise. |
|
|
v) |
The
options expire 60 months from the date of grant. |
On
April 12, 2007, REGI adopted its 2007 Stock Option Plan to issue up to 2,000,000 shares to certain key directors and employees.
Pursuant to the 2007 plan, REGI has granted stock options to certain directors and employees.
All
options granted under the 2007 plan have the following vesting schedule:
i) |
Up
to 25% of the option may be exercised 90 days after the grant of the option. |
|
|
ii) |
The
second 25% of the option may be exercised at any time after 1 year and 90 days after the grant of the option. |
|
|
iii) |
The
third 25% of the option may be exercised at any time after 2 years and 90 days after the grant of the option. |
|
|
iv) |
The
fourth and final 25% of the option may be exercised at any time after 3 years and 90 days after the grant of the option. |
|
|
v) |
The
options expire 60 months from the date of grant. |
During
the years ended April 30, 2015 and 2014, REGI recorded stock-based compensation related to options and warrants of $68,285 and
$292,890, respectively. At April 30, 2015 and 2014, REGI had $369,875 and $401,072, of total unrecognized compensation cost related
to non-vested stock options and warrants, which will be recognized over future periods.
The
fair value of each option and warrant granted or modified was determined using the Black-Scholes option pricing model and the
following assumptions:
|
|
April
30, |
|
|
|
2015 |
|
|
2014 |
|
|
|
|
|
|
|
|
Risk
free interest rate |
|
0.01%
- 0.05 |
% |
|
0.11
- 0.36 |
% |
Expected
life |
|
0.06-0.57 |
|
|
0.09
– 1.64 years |
|
Annualized
volatility |
|
140%
- 182 |
% |
|
191
- 300 |
% |
Expected
dividends |
|
- |
|
|
- |
|
Option
pricing models require the input of highly subjective assumptions including the expected price volatility. The subjective input
assumptions can materially affect the fair value estimate.
A summary
of REGI’s stock option activity for the years ended April 30, 2015 and 2014 is as follows:
| |
April 30, 2015 | | |
April 30, 2014 | |
| |
| | |
Weighted | | |
| | |
Weighted | |
| |
| | |
Average | | |
| | |
Average | |
| |
| | |
Exercise | | |
| | |
Exercise | |
| |
Options | | |
Price | | |
Options | | |
Price | |
Outstanding at beginning of
period | |
| 2,638,000 | | |
$ | 0.15 | | |
| 2,638,000 | | |
$ | 0.15 | |
Granted | |
| - | | |
| - | | |
| - | | |
| - | |
Exercised | |
| - | | |
| - | | |
| - | | |
| - | |
Expired | |
| (100,000 | ) | |
| 0.10 | | |
| - | | |
| - | |
Forfeited | |
| (50,000 | ) | |
| 0.15 | | |
| - | | |
| - | |
Outstanding at end of period | |
| 2,488,000 | | |
| 0.15 | | |
| 2,638,000 | | |
| 0.15 | |
Exercisable at end of period | |
| 622,000 | | |
$ | 0.15 | | |
| 659,500 | | |
$ | 0.15 | |
Weighted average fair value of options
granted | |
| | | |
$ | - | | |
| | | |
$ | - | |
At
April 30, 2015, the range of exercise prices and the weighted average remaining contractual life of the outstanding options.
was
$0.10 to $0.20 per share and 2.48 years, respectively. The intrinsic value of “in the money” exercisable options at
April 30, 2014 was $Nil.
At
April 30, 2014, the range of exercise prices and the weighted average remaining contractual life of the outstanding options was
$0.10 to $0.20 per share and 3.38 years, respectively. The intrinsic value of “in the money” exercisable options at
April 30, 2014 was $9,810.
On
May 5, 2014, the Company extended the expiration date of 830,000 outstanding common stock warrants from May 27, 2014 to November
27, 2014. On October 31, 2014, the expiration date of these warrants was further extended to May 27, 2015. The warrants are exercisable
at $0.15 per share. The incremental increase in the fair value of the warrants for each extension was determined to be $34,236
and $34,049, respectively, which were expensed in the year ended April 30, 2015.
On
November 27, 2013, the Company extended the expiration date of 1,816,200 outstanding common stock warrants from December 12, 2013
to December 12, 2014. REGI calculated the incremental increase in the fair value using the Black-Scholes option pricing model
and determined it to be $156,569 which was expensed in year ended April 30, 2014.
On
July 27, 2013, the Company extended the expiration date of 833,950 outstanding common stock warrants with expiration dates between
July 30, 2012 and December 17, 2013 by one year and reduced their exercise price from $0.50 to $0.25. REGI calculated the incremental
increase in the fair value using the Black-Scholes option pricing model and determined it to be $136,321 which was expensed in
the year ended April 30, 2014.
A
summary of REGI’s common stock warrant activity for the years ended April 30, 2015 and 2014 is as follows:
| |
April 30, 2015 | | |
April 30, 2014 | |
| |
| | |
Weighted | | |
| | |
Weighted | |
| |
| | |
Average | | |
| | |
Average | |
| |
| | |
Exercise | | |
| | |
Exercise | |
| |
Warrants | | |
Price | | |
Warrants | | |
Price | |
Outstanding at beginning of
period | |
| 5,128,816 | | |
$ | 0.18 | | |
| 3,730,150 | | |
$ | 0.18 | |
Issued | |
| 139,000 | | |
| 0.15 | | |
| 1,398,666 | | |
| 0.22 | |
Exercised | |
| - | | |
| - | | |
| - | | |
| - | |
Expired | |
| (3,558,483 | ) | |
| 0.18 | | |
| - | | |
| - | |
Outstanding at end of period | |
| 1,709,333 | | |
| 0.19 | | |
| 5,128,816 | | |
| 0.18 | |
Exercisable at end of period | |
| 1,709,333 | | |
$ | 0.19 | | |
| 5,091,316 | | |
$ | 0.19 | |
At
April 30, 2015, the range of exercise prices and the weighted average remaining contractual life of the outstanding warrants was
$0.15 to $0.25 per share and 0.42 year, respectively. The intrinsic value of “in the money” exercisable warrants at
April 30, 2014 was $Nil.
At
April 30, 2014, the range of exercise prices and the weighted average remaining contractual life of the outstanding warrants was
$0.10 to $0.25 per share and 0.68 year, respectively. The intrinsic value of “in the money” exercisable warrants at
April 30, 2014 was $375.
b)
Performance Stock Plan
REGI
has allotted 2,500,000 shares to be issued pursuant to a performance stock plan adopted on June 27, 1997, and amended in June
2004. On April 27, 2007, REGI further amended the plan so that the term of the plan is extended to the twentieth anniversary of
the effective date. As of April 30, 2015, 775,000 shares have been issued under this plan and 1,725,000 remain unissued and issuable.
c)
Cash Consideration
During
the year ended April 30, 2015, the Company sold an aggregate of 139,000 units in a private placement for cash proceeds of $12,306,
net of issuance costs of $1,194, at $0.10 per unit. Each unit consists of one common share and one common stock purchase warrant
exercisable at $0.15 per share for one year into the Company’s common stock from the closing date of the private placement.
During
the year ended April 30, 2014, the Company sold an aggregate of 434,333 units in a private placement for cash proceeds of $64,704,
net of issuance costs of $446, at $0.15 per unit. Each unit consists of one common share and two common stock purchase warrants,
with one warrant exercisable at $0.20 per share for one year and one warrant exercisable at $0.25 per share for two years into
the Company’s common stock from the closing date of the private placement.
During
the year ended April 30, 2014, the Company sold an aggregate of 530,000 units in a private placement for cash proceeds of $53,400,
at $0.10 per unit. Each unit consists of one common share and one common stock purchase warrant exercisable at $0.15 per share
for one year into the Company’s common stock from the closing date of the private placement.
NOTE
5. COMMITMENTS
Pursuant
to a letter of understanding dated December 13, 1993 between REGI, Rand 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
with regards to RC/DC Engine technology and will receive 5% of all net profits from sales, licenses, royalties or income derived
from the patented technology. To date, no sales have been accrued and no royalties have been accrued or paid.
Pursuant
to an agreement dated August 20, 1992, REGI acquired the U.S. rights to the original RC/DC Engine from Rand. REGI will pay Rand
and the original owner a net profit royalty of 5% and 1%, respectively. To date no sales have been accrued and no royalties have
been accrued or paid.
NOTE
6. INCOME TAXES
REGI
accounts for income taxes using the asset and liability method of accounting for income taxes. Deferred income taxes are recognized
for the tax consequences of “temporary differences” by applying enacted statutory tax rate applicable to future years
to differences between the financial statement carrying amounts and the tax basis of existing assets and liabilities and result
primarily form differences in methods used to amortize intangible assets. A valuation allowance is provided when management cannot
determine whether it is more likely than not that the deferred tax asset will be realized. The effect on deferred income taxes
of the change in tax rates is recognized in income in the period that includes the enactment date.
REGI
has losses carried forward for income tax purposes to April 30, 2015, however, the related deferred tax asset has been fully reserved
due to management’s determination that the realization of the deferred tax assets is less than likely. The difference between
the statutory tax rate and the effective tax rate is the valuation allowance.
The
composition of REGI’s deferred tax assets at April 30, 2015 and 2014 is as follows:
| |
April
30, | |
| |
2015 | | |
2014 | |
| |
| | |
| |
Net operating loss carry forward | |
$ | 10,710,655 | | |
$ | 10,487,694 | |
| |
| | | |
| | |
Deferred tax asset | |
$ | 3,748,729 | | |
$ | 3,670,693 | |
Less: Valuation allowance | |
| (3,748,729 | ) | |
| (3,670,693 | ) |
| |
| | | |
| | |
Net deferred tax asset | |
$ | - | | |
$ | - | |
The
unused net operating loss carry forward balance will expire in the years 2015 through 2034.
NOTE
7. SUBSEQUENT EVENTS
During
May, 2015, 50,000 options exercisable into the Company’s common stock at $0.10 per share expired without being exercised.
During
May and June, 2015, 965,000 warrants exercisable into the Company’s common stock at $0.15 per share expired without being
exercised.
ITEM
9: CHANGES IN AND DISAGREEMENTS WITH ACCOUTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.
ITEM
9A: CONTROLS AND PROCEDURES
(a)
Disclosure Controls and Procedures
We
maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in the reports
that we file with the SEC under the Exchange Act is recorded, processed, summarized and reported within the time periods specified
in the SEC’s rules and forms and that such information is accumulated and communicated to our management, including our
principal executive and financial officers, as appropriate, to allow for timely decisions regarding required disclosure. As required
by SEC Rule 15d-15(b), we carried out an evaluation, under the supervision and with the participation of our management, including
our Chief Executive Officer and our Chief Financial Officer, of the effectiveness of the design and operation of our disclosure
controls and procedures as of the end of the period covered by this report.
Based
upon that evaluation, management has concluded that our current disclosure controls and procedures were not effective as of April
30, 2015. The conclusion that our disclosure controls and procedures were not effective was due to the presence of material weaknesses
in internal control over financial reporting as identified below. Management anticipates that disclosure controls and procedures
will not be effective until the material weaknesses are remediated. Our Company intends to remediate the weaknesses as set out
below:
|
● | There
is a lack of sufficient accounting staff due to the size of the Company which results
in a lack of segregation of duties necessary for a good system of internal control. |
|
| |
| ● | There
is a lack of control processes which provide for multiple levels of supervision and review. |
(b)
Management’s Annual Report on Internal Control over Financial Reporting
Internal
control over financial reporting refers to the process designed by, or under the supervision of, our Chief Executive Officer and
Chief Financial Officer, and effected by our board of directors, management and other personnel, to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of consolidated financial statements for external purposes
in accordance with generally accepted accounting principles, and includes those policies and procedures that:
| (1) | Pertain
to the maintenance of records that in reasonable detail accurately and fairly reflect
the transactions and dispositions of our assets; |
| | |
| (2) | Provide
reasonable assurance that transactions are recorded as necessary to permit preparation
of financial statements in accordance with generally accepted accounting principles,
and that our receipts and expenditures are being made only in accordance with authorization
of our management and directors; and |
| | |
| (3) | Provide
reasonable assurance regarding prevention or timely detection of unauthorized acquisitions,
use or disposition of our assets that could have a material effect on the financial statements. |
Internal
control over financial reporting cannot provide absolute assurance of achieving financial reporting objectives because of its
inherent limitations. Internal control over financial reporting is a process that involves human diligence and compliance and
is subject to lapses in judgment and breakdowns resulting from human failures. Internal control over financial reporting also
can be circumvented by collusion or improper management override. Because of such limitations, there is a risk that material misstatements
may not be prevented or detected on a timely basis by internal control over financial reporting. However, these inherent limitations
are known features of the financial reporting process. Therefore, it is possible to design into the process safeguards to reduce,
though not eliminate, this risk. Management is responsible for establishing and maintaining adequate internal control over financial
reporting for the Company.
Management
has used the framework set forth in the report entitled Internal Control-Integrated Framework published by the Committee
of Sponsoring Organizations of the Treadway Commission, known as COSO, to evaluate the effectiveness of our internal control over
financial reporting.
Based
on this assessment the management concludes that our internal control system is ineffective due to lack of segregation of duties
in minor areas. However, the impact of inadequate segregation of duties over our financial reporting is immaterial due to the
fact that we have a small operation with limited transactions, all transactions are approved by the management and all material
transactions are approved by the board of directors. There is also a lack of control processes in place which provide for multiple
levels of supervision and review in key areas.
(c)
Changes in Internal Control over Financial Reporting
During
the period covered by this annual report, there were no changes in the Company’s internal control over financial reporting
that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial
reporting.
ITEM
9B. OTHER INFORMATION.
None.
PART
III
ITEM
10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Directors
and Executive Officers
The following
table sets forth the name, age and position of each of our Executive Officers and Directors:
Name |
|
Age |
|
Position |
|
|
|
|
|
John G. Robertson |
|
74 |
|
Director, Chairman
of the Board of Directors, President and Chief Executive Officer |
James Foley |
|
72 |
|
Director |
James Vandeberg |
|
71 |
|
Director |
Paul Porter |
|
59 |
|
Director |
Thomas Robertson |
|
56 |
|
Director |
Susanne Robertson |
|
69 |
|
Chief Financial Officer |
Business
Experience, Principal Occupation of Directors and Family Relationships
Mr.
John Robertson is the father of Mr. Thomas Robertson. There are no other family relationships between directors and/or executive
officers.
The
following individuals served as directors and executive officers of our company during the year ended April 30, 2015 and as of
the date of this report.
John
G. Robertson – Director, Chairman of the Board of Directors, President and Chief Executive Officer
Mr.
Robertson has been our Chairman, President and Chief Executive Officer since our formation in July, 1992. He was appointed as
a director of the Company due to his extended experiences with the regulatory requirements and operations of public companies
and his extended experiences with the capital market. Since October 1984 Mr. Robertson has been President and a Director of Reg
Technologies Inc., a British Columbia corporation listed on the TSX Venture Exchange that has financed the research on the RadMax™
Engine since 1986. REGI U.S. is controlled by Rand Energy Group, Inc., a British Columbia corporation of which Reg Technologies
Inc. is the majority shareholder. REGI U.S. owns the U.S. rights to the RadMax™ Engine technology and Reg Technologies Inc.
owns the worldwide rights exclusive of the U.S. Mr. Robertson is a Director and President and Secretary of Rand Energy Group Inc.
Mr. Robertson is President, Principal Executive Officer and a member of the Board of Directors of IAS Energy, Inc., an Oregon
corporation traded on the PinkSheets. Since June 1997 Mr. Robertson has been President, Principal Executive Officer and a Director
of Information-Highway.com, Inc., a Florida corporation which is currently inactive, and its predecessor. He is also the President
of Teryl Resources Corp., a public company trading on the TSX Venture Exchange involved in gold, oil and gas exploration. He is
also President of Linux Gold Corp., a public company trading on the OTC Bulletin Board. Since May 1977 Mr. Robertson has been
President and a member of the Board of Directors of SMR Investments Ltd., a British Columbia corporation engaged in the business
of management and investment consulting. Mr. Robertson devotes approximately 20% of his time to our operations.
James
L. Vandeberg – Director
Mr.
Vandeberg became a Director of the Company in November 1998 and was its Chief Operating Officer in August 1999 and its Chief Financial
Officer on January 9, 2006. He resigned as the Company’s Chief Financial Officer on November 11, 2014. He was appointed
as a director of the Company due to his extended experiences with the security laws, regulatory requirements and operations of
public companies. Mr. Vandeberg is an attorney in Seattle, Washington. He has served as our legal counsel since 1996. Mr. Vandeberg’s
practice focuses on the corporate finance area, with an emphasis on securities and acquisitions. Mr. Vandeberg was previously
general counsel and secretary of two NYSE companies Carter Hawley Stores, Inc. from 1978 to 1993, and Denny’s Inc. from
1973 to 1978. He is a director of Information-Highway.com, Inc., a Florida corporation traded on the Pink Sheets. He is also a
director of IAS Energy, Inc. an Oregon corporation traded on the PinkSheets. Mr. Vandeberg is also a director of Reg Technologies
Inc. which is traded on the TSX Venture Exchange and the OTC BB. Mr. Vandeberg is currently also vice president, corporate secretary
and a director of Legend Oil & Gas Ltd. and a director of American Sierra Gold Corp. and ASAP Expo, Inc., all three companies
trading on the OTCBB. He is a member and former director of the American Society of Corporate
Secretaries. He became a member of the Washington Bar Association in 1969 and of the California Bar Association in 1973. Mr. Vandeberg
graduated cum laude from the University of Washington with a Bachelor of Arts degree in accounting in 1966, and from New York
University School of Law in 1969, where he was a Root-Tilden Scholar. Mr. Vandeberg devotes approximately 10% of his time to our
operations.
Thomas
Robertson – Director
Mr.
Robertson was appointed a director in January 2010 due to his extended experiences with the operations of public companies and
his extended experiences with the capital market. He has served as a director of private and public companies since 1980, serving
as director of Teryl Resources Corp. from 1986 to 1989 and January 2010 to present. In this capacity, he has been active in raising
seed capital and public capital. He has also been involved in corporate and public relations since 1978.
James
Foley – Director
Mr.
Robertson was appointed a director in February, 2013 due to his successful business experiences especially in the field of new
technologies. Mr. Foley served as a director of Reg Technologies Inc. from February, 2013 to March, 2014. Mr. Foley has a bachelor’s
degree in business from University of Maryland and is a self-employed businessman in Los Angeles, California.
Paul
Porter – Director
Mr.
Porter was appointed a director in August, 2013. Mr. Porter had served as our Chief Engineer prior to his appointment. Mr. Porter
has extensive experience as an expert mechanical engineer in the manufacturing and designing of seals. Mr. Porter was the founder
and President of JetSeal, Inc., a manufacturing engineering tool and producing design firm. JetSeal, Inc. was sold to Heico Corp.
(HEI) an aerospace company in the late 1990’s when the company was under Porter’s ownership. Prior, he was a manufacturing
manager for Parker Seal Group, a Fortune 500 Company.
Involvement
in certain legal proceedings
Our
directors, executive officers and control persons have not been involved in any of the following events during the past ten years:
(1) | filed
a petition under the federal bankruptcy laws or any state insolvency law, nor had a receiver,
fiscal agent or similar officer appointed by a court for the business or present of such
a person, or any partnership in which he was a general partner at or within two years
before the time of such filing, or any corporation or business association of which he
was an executive officer within two years before the time of such filing; |
| |
(2) | was
convicted in a criminal proceeding or named subject of a pending criminal proceeding
(excluding traffic violations and other minor offenses); |
| |
(3) | was
the subject of any order, judgment or decree, not subsequently reversed, suspended or
vacated, of any court of competent jurisdiction, permanently or temporarily enjoining
him from or otherwise limiting the following activities: (i) acting as a futures commission
merchant, introducing broker, commodity trading advisor, commodity pool operator, floor
broker, leverage transaction merchant, associated person of any of the foregoing, or
as an investment advisor, underwriter, broker or dealer in securities, or as an affiliated
person, director of any investment company, or engaging in or continuing any conduct
or practice in connection with such activity; (ii) engaging in any type of business practice;
(iii) engaging in any activity in connection with the purchase or sale of any security
or commodity or in connection with any violation of federal or state securities laws
or federal commodity laws; |
| |
(4) | was
the subject of any order, judgment or decree, not subsequently reversed, suspended or
vacated, of any federal or state authority barring, suspending or otherwise limiting
for more than 60 days the right of such person to engage in any activity described above
under this Item, or to be associated with persons engaged in any such activity; |
| (5) | was
found by a court of competent jurisdiction in a civil action or by the Securities and
Exchange Commission to have violated any federal or state securities law and the judgment
in subsequently reversed, suspended or vacate; |
| | |
| (6) | was
found by a court of competent jurisdiction in a civil action or by the Commodity Futures
Trading Commission to have violated any federal commodities law, and the judgment in
such civil action or finding by the Commodity Futures Trading Commission has not been
subsequently reversed, suspended or vacated; |
| | |
| (7) | was
the subject of, or a party to, any Federal or State judicial or administrative order,
judgment, decree, or finding, not subsequently reversed, suspended or vacated, relating
to an alleged violation of: (i) any Federal or State securities or commodities law or
regulation; or (ii) any law or regulation respecting financial institutions or insurance
companies including, but not limited to, a temporary or permanent injunction, order of
disgorgement or restitution, civil money penalty or temporary or permanent cease-and-desist
order, or removal or prohibition order; or (iii) Any law or regulation prohibiting mail
or wire fraud or fraud in connection with any business entity; |
| | |
| (8) | was
the subject of, or a party to, any sanction or order, not subsequently reversed, suspended
or vacated, of any self-regulatory organization (as defined in Section 3(a)(26) of the
Exchange Act (15 U.S.C. 78c(a)(26))), any registered entity (as defined in Section 1(a)(29)
of the Commodity Exchange Act (7 U.S.C. 1(a)(29))), or any equivalent exchange, association,
entity or organization that has disciplinary authority over its members or persons associated
with a member. |
Term
of Office
The
term of office of the current directors shall continue until new directors are elected or appointed at an annual meeting of shareholders.
Committees
of the Board and Financial Expert
Audit
Committee
The
Company’s audit committee is comprised of three directors of the Company – James Foley, John Robertson and James Vandeberg,
with Mr. Foley being the independent audit committee member. We are not listed on a national securities exchange and, as such,
are not subject to any director independence standards. All of the audit
committee members are financially literate.
The
Company does not have nominating, compensation committees or committees performing similar functions, nor does our Company have
a written nominating, compensation or audit committee charter. Our Board of Directors believes that due to our small size it is
not necessary to have such committees as the functions of such committees are performed by the Board of Directors.
Code
of Ethics
The
Company’s board of directors is committed to encouraging and promoting a culture of ethical business conduct and integrity
throughout the Company. In order to achieve this objective, efforts are made to the implementation, monitoring and enforcement
of the Company’s Code of Business Conduct and Ethics (“Code”). This is accomplished by: (a) taking prompt action
against violations of the Code; ensuring employees and consultants are aware that they may discuss their concerns with their supervisor
or directly to the Compliance Officer; the Compliance Officer reporting suspected fraud or securities law violations for review
by the Audit Committee and reporting same to the Board of Directors. The Company distributes to each new director, officer, employee
and consultant the Company’s Code.
No
waivers of any provision of this Code of Business Conduct and Ethics may be made except by the Board of Directors. Any waiver
or amendment shall be reported as required by law or regulation. There have been no waivers of the Code since its implementation.
A
copy of the Code is available from the Company on written request, and the text of the code of business conduct and ethics was
filed as an exhibit to our form 10-K for the year ended April 30, 2011 and posted on the Company’s website at www.regtech.com.
Assessments
The
board of directors is ultimately responsible for the stewardship of the Company, which means that it oversees the day-to-day management
delegated to the President and Chief Executive Officer and the other officers of the Company. The board is charged with the responsibility
of assessing the effectiveness of itself, its committee(s) and the contributions of individual directors.
The
Corporate Governance Policy was constituted by the board of directors to assist the Board and its officers, employees, and consultants
to fulfill fundamental issues including: (a) the regular assessment of the Company’s approach to corporate governance issues;
(b) ensuring that such approach supports the effective functioning of the Company with a view to the best interests of the Company’s
shareholders and effective communication between the board of directors and management of the Company; and (c) the process, structure
and effective system of accountability by management to the board of directors and by the board to the shareholders, in accordance
with applicable laws, regulations and industry standards for good governance practices. A copy of the Corporate Governance Policy
is available on our website at www.regtech.com.
Compliance
with Section 16(a) of the Securities Exchange Act of 1934
Section
16(a) of the Exchange Act requires our executive officers and directors and persons who own more than 10% of a registered class
of our equity securities to file with the SEC initial statements of beneficial ownership, reports of changes in ownership and
annual reports concerning their ownership of our common stock and other equity securities, on Forms 3, 4 and 5 respectively. Executive
officers, directors and greater than 10% shareholders are required by the SEC regulations to furnish us with copies of all Section
16(a) reports that they file.
Based
solely on our review of the copies of such forms received by us, or written representations from certain reporting persons, we
believe that all filing requirements applicable to our officers, directors and greater than 10% beneficial owners were complied
with.
STATEMENT
OF EXECUTIVE COMPENSATION
The
Company is required, under applicable securities legislation in Canada, to disclose to its Shareholders details of compensation
paid to its directors and officers. The following fairly reflects all material information regarding compensation paid by the
Company to its directors and officers, which information has been disclosed to the Company’s Shareholders in accordance
with applicable Canadian law.
ITEM
11. EXECUTIVE COMPENSATION
Compensation
Discussion and Analysis
The
Company’s executive officers make recommendations to the board of directors regarding compensation policies and the compensation
of senior officers. The Company does not have a Compensation Committee. The compensation of the senior executives comprises two
components; namely, a base salary or consulting fees and the grant of stock options pursuant to the Company’s stock option
plan which is more particularly outlined below under the Option-based Awards section. These forms of compensation are chosen
to attract, retain and motivate the performance of selected directors, officers, employees or consultants of the Company of high
caliber and potential. Each senior executive is employed for his or her skills to perform specific tasks and the base salary and
number of options is fixed accordingly.
Summary
Compensation Table
Named
Executive Officer mean the Chief Executive Officer (“CEO”), the Chief Financial Officer (“CFO”) or any
individual acting in a similar capacity or function, regardless of the amount of compensation of that individual and each of the
Company’s two most highly compensated executive officers, other than the CEO and CFO, or three two highly compensated individuals
acting in similar capacities, who were serving as executive officers, or in a similar capacity, at the end of the most recent
financial year and whose compensation exceeds $100,000, and such individuals who would be an NEO but for the fact that they were
not serving as an executive officer or in a similar capacity at the end of that financial year.
During
the Company’s last completed financial year ended April 30, 2015, the Company had two Named Executive Officers: Mr. John
Robertson, President and CEO and Ms. Susanne Robertson, CFO.
The
following table (presented in accordance with Item 402 of Regulation S-K – Executive Compensation) sets forth all annual,
long term and other compensation for services in all capacities to the Company and its subsidiaries payable to the NEOs for the
three financial years ended April 30, 2015, 2014 and 2013 (to the extent required by the Regulations) in respect of the Named
Executive Officers:
|
|
|
|
|
|
|
|
|
|
|
|
Non-equity
incentive plan compensation |
|
|
|
|
|
|
Name
and
Principal
Position
|
|
Year
Ended
April
30
|
|
Salary
($) |
|
Bonus
($) |
|
Share-
based Awards
($) |
|
Option-
Based Awards
($)(7) |
|
Annual
incen
tive
plans
($) |
|
Long-term
incentive plans
($) |
|
Pension
value
($) |
|
All
other
Compensation
($)(2) |
|
Total
compensation
($) |
John
G.
Robertson,
CEO(1)(2)(3) |
|
2015
2014
2013 |
|
Nil
Nil
Nil |
|
Nil
Nil
Nil |
|
Nil
Nil
Nil |
|
Nil
Nil
45,831 |
|
Nil
Nil
Nil |
|
Nil
Nil
Nil |
|
Nil
Nil
Nil |
|
30,000
30,000
30,000 |
|
30,000
30,000
75,831 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
James
Vandeberg,
CFO(4)(5) |
|
2015
2014
2013 |
|
Nil
Nil
Nil |
|
Nil
Nil
Nil |
|
Nil
Nil
Nil |
|
Nil
Nil
18,332
|
|
Nil
Nil
Nil |
|
Nil
Nil
Nil |
|
Nil
Nil
Nil |
|
Nil
Nil
Nil |
|
Nil
Nil
18,332 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Susanne
Robertson,
CEO(7) |
|
2015
2014
2013
|
|
Nil
NA
NA |
|
Nil
NA
NA |
|
Nil
NA
NA |
|
Nil
NA
NA
|
|
Nil
NA
NA |
|
Nil
NA
NA
|
|
Nil
NA
NA |
|
Nil
NA
NA |
|
Nil
NA
NA
|
| (1) | Mr.
Robertson is also a director and does not receive compensation in that capacity. See
“Director Compensation – Narrative Discussion”. |
| | |
| (2) | Access
Information Services, Inc., a Washington corporation which is owned and controlled by
the Robertson Family Trust, accrues $2,500 per month for management services. Mr. Robertson
is a trustee of the Robertson Family Trust. The amounts for fiscals 2013, 2014
and 2015 are accrued but not paid. |
| | |
| (3) | Mr.
Robertson’s option-based awards granted during 2013 consisted of 500,000 stock
options granted on May 15, 2013 at an exercise price of $0.10 with the vested options
fair valued at $0.04 per option, and 500,000 stock options granted on April 11, 2013
at an exercise price of $0.20 and vested options fair valued at $0.05 per option. |
| | |
| (4) | Mr.
Vandeberg resigned as the CFO of the Company on November 11, 2014. He is also a director
and does not receive compensation in that capacity. See “Director Compensation
– Narrative Discussion” |
| | |
| (5) | Mr.
Vandeberg’s option-based awards granted during 2013 consisted of 200,000 stock
options granted on May 15, 2013 at an exercise price of $0.10 with the vested options
fair valued at $0.04 per option, and 200,000 stock options granted on April 11, 2013
at an exercise price of $0.20 with the vested options fair valued at $0.05 per option.
|
| | |
| (6) | Mrs.
Robertson was appointed as the CFO of the Company on November 11, 2014. |
| | |
| (7) | The
valuation of the fair value of the options at the time of the grant is based on the Black
Scholes model and includes the following assumptions; weighted average risk free rate,
weighted average expected life, expected volatility and dividend yield. |
Narrative
Discussion
The
Company does not have a share-based award plan other than the stock option plan referred to above. The Company also does not have
a pension plan or a long term incentive plan. Other than John Robertson, as described below in the Narrative Description –
Directors reported in the Directors’ Compensation table below, no directors, who were not NEO’s of the
Company were compensated during the financial year ended April 30, 2015 for services in their capacity as directors.
A
management fee was payable, but accrued to Access Information Inc., a company controlled by Mr. Robertson. Other than as herein
set forth, the Company did not pay any compensation to its directors or Named Executive Officers.
Employment
Contracts and Termination of Employment
There
are no employment agreements or other compensating plans or arrangements with regard to any of the Named Executive Officers which
provide for specific compensation in the event of resignation, retirement, other termination of employment or from a change of
control of the Issuer or from a change in a Named Executive Officer’s responsibilities following a change in control.
Pursuant
to the Company’s stock option plan, in the event the optionee’s employment by or engagement with (as a director or
otherwise) the Company is terminated by the Company for any reason other than death before exercise of the options granted hereunder,
the stock option granted to the Participant shall immediately expire and all rights to purchase shares thereunder shall immediately
cease and expire and be of no further force or effect.
In
the event the Participant resigns as an employee, the stock option granted to the Participant shall immediately expire and all
rights to purchase shares thereunder shall immediately cease and expire and be of no further force or effect.
Refer also
to the Compensation Discussion and Analysis section above.
Incentive
Plan Awards
Narrative
Discussion
As
reported above under the Summary Compensation Table, the Company does not have a share-based award plan or a long term
incentive plan. Information with respect to the grant of stock options is more particularly described above in the Option-based
Awards and Compensation Discussion and Analysis sections.
Outstanding
Option-Based Awards and Share-Based Awards
The
grant of option-based awards to the senior executives is determined by the recommendation of executive officers to the board of
directors pursuant to the terms of the stock option plan referred to below. Previous grants of option-based awards are taken into
account when considering new grants.
The
options are always granted at or above market price. The valuation of the fair value of the options at the time of the grant is
based on the Black Scholes model and includes the following assumptions: weighted average risk free rate, weighted average expected
life, expected volatility and dividend yield.
The
following table sets out the option-based awards that were outstanding as at April 30, 2015:
|
|
Option-based
Awards |
|
Stock-based
Awards |
Name
|
|
Number
of
securities
underlying unexercised options
(#) |
|
Option
exercise
price
($) |
|
Option
expiration date
|
|
Value
of unexercised in-the-money options
($) |
|
Number
of shares or units of shares that have not vested
(#) |
|
Market
or payout value of share-based awards that have not vested
($) |
John
Robertson |
|
500,000
500,000 |
|
0.10
0.20 |
|
May
15, 2017
April
11, 2018 |
|
Nil
Nil |
|
375,000
375,000 |
|
Nil
Nil |
James
Vandeberg |
|
200,000
200,000 |
|
0.10
0.20 |
|
May
15, 2017
April
11, 2018 |
|
Nil
Nil |
|
150,000
150,000 |
|
Nil
Nil |
Incentive
Plan Awards – value vested or earned during the year
Pension
Plan Benefits
As
reported under the Summary Compensation Table, the Company does not maintain a Pension Plan for its employees and therefore
no benefits were received.
Termination
of Employment or Change of Control
Other
than as described in the Narrative Discussion section under the Summary Compensation Table, the Company has no plans
or arrangements with respect to remuneration received or that may be received by the Named Executive Officers during the Company’s
most recently completed financial year or current financial year in view of compensating such officers in the event of termination
of employment (as a result of resignation, retirement, change of control, etc.) or a change in responsibilities following a change
of control, where the value of such compensation exceeds $100,000 per executive officer.
DIRECTOR
COMPENSATION
Director
Compensation Table
The
following table sets forth all compensation provided to the directors for the year ended April 30, 2015.
The
Company does not have a share-based award plan for the directors other than the stock option plan, details of which are provided
below under Outstanding Option-Based Awards, Share- Based Awards and Non-equity Incentive Plan Compensation. The Company
also does not have a pension plan or a non-equity incentive plan for its directors.
No
directors, who were not NEO’s of the Company were compensated during the financial year ended April 30, 2015 for services
in their capacity as directors.
|
|
|
|
|
|
|
|
|
|
Non-equity
incentive plan compensation ($) |
|
|
|
|
|
|
Name
and
Principal
Position
|
|
Year
Ended
April
30
|
|
Salary
($) |
|
Share-
based Awards
($) |
|
Option-
Based Awards
($)
(7) |
|
Annual
incentive plans
($) |
|
Long-term
incentive plans
|
|
Pension
value
($) |
|
All
other
Compensation
($) |
|
Total
compensation
($) |
John
G.
Robertson,
CEO(1)(2) |
|
2015
2014
2013 |
|
Nil
Nil
Nil |
|
Nil
Nil
Nil |
|
Nil
Nil
Nil |
|
Nil
Nil
Nil |
|
Nil
Nil
Nil |
|
Nil
Nil
Nil |
|
Nil
Nil
Nil |
|
Nil
Nil
Nil |
James
Vandeberg,
CFO(3) |
|
2015
2014
2013 |
|
Nil
Nil
Nil |
|
Nil
Nil
Nil |
|
Nil
Nil
Nil |
|
Nil
Nil
Nil |
|
Nil
Nil
Nil |
|
Nil
Nil
Nil |
|
Nil
Nil
Nil |
|
Nil
Nil
Nil |
Paul
Porter
(5) (6) |
|
2015
2014
2013 |
|
Nil
NA
NA |
|
Nil
NA
NA |
|
Nil
NA
NA |
|
Nil
NA
NA |
|
Nil
NA
NA |
|
Nil
NA
NA |
|
Nil
NA
NA |
|
Nil
NA
NA |
James
Foley
(4) |
|
2015
2014
2013 |
|
Nil
Nil
NA |
|
Nil
Nil
NA |
|
Nil
Nil
313 |
|
Nil
Nil
NA |
|
Nil
Nil
NA |
|
Nil
Nil
NA |
|
Nil
Nil
NA |
|
Nil
Nil
313 |
Thomas
Robertson |
|
2015
2014
2013 |
|
Nil
Nil
Nil |
|
Nil
Nil
Nil |
|
Nil
Nil
625 |
|
Nil
Nil
Nil |
|
Nil
Nil
Nil |
|
Nil
Nil
Nil |
|
Nil
Nil
Nil |
|
Nil
Nil
625 |
| (1) | Mr.
Robertson is also an NEO and indirectly receives or accrues compensation in that capacity.
See “Executive Compensation – Narrative Discussion”. |
| | |
| (2) | Mr.
Robertson did not receive option-based awards in his capacity as a director. |
| | |
| (3) | Mr.
Vandeberg does not receive any compensation in his capacity as a director, nor any option-based
awards in his capacity as a director. |
| | |
| (4) | Mr.
Foley was appointed to the Board of Directors during fiscal 2013. |
| | |
| (5) | Mr.
Porter was appointed to the Board of Directors in August, 2013. |
| | |
| (6) | Mr.
Porter provides research and development services for the Company and receives consulting
fees in that capacity. See related party transactions below. |
| | |
| (7) | The
valuation of the fair value of the options at the time of the grant is based on the Black
Scholes model and includes the following assumptions; weighted average risk free rate,
weighted average expected life, expected volatility and dividend yield. |
Narrative
Description
Directors
of the Company who are also NEOs are not compensated for their services in their capacity as directors, although directors of
the Company are reimbursed for their expenses incurred in connection with their services as directors.
Information
with respect to grants of options to the directors is reported below under the Narrative Description in the section below
entitled Outstanding Option-Based Awards, Share-Based Awards and Non-equity Incentive Plan Compensation.
Other
than as described above, no directors of the Company were compensated by the Company during the financial year ended April 30,
2015 for services as consultants or experts.
Option-Based
Awards, Share-Based Awards and Non-equity Incentive Plan Compensation for Directors
As
disclosed under the Director Compensation Table, the Company does not have a share-based award plan, a pension plan or
a non-equity incentive plan for its directors.
Option-based
awards to the directors are granted pursuant to the terms of the Company’s stock option plan. The options are always granted
at market price. The valuation of the fair value of the options at the time of the grant is based on the Black Scholes model and
includes the following assumptions; weighted average risk free rate, weighted average expected life, expected volatility and dividend
yield.
Directors
generally receive a grant of stock options upon their appointment.
The
following table shows the options held by the directors and former directors at April 30, 2015:
|
|
Option-based
Awards |
|
Stock-based
Awards |
Name |
|
Number
of securities underlying unexercised options
(#) |
|
Option
exercise price
($) |
|
Option
expiration date |
|
Value
of unexercised in-the-money options
($) |
|
Number
of shares or units of shares that have not vested
(#) |
|
Market
or payout value of share-based awards that have not vested**
($) |
John G.
Robertson |
|
500,000
500,000 |
|
0.10
0.20
|
|
May
15, 2017
April
11, 2018 |
|
Nil
Nil |
|
375,000
375,000 |
|
Nil
Nil |
James Foley |
|
25,000 |
|
0.20 |
|
April
11, 2018 |
|
Nil |
|
18,750 |
|
Nil
|
James
Vandeberg |
|
200,000
200,000 |
|
0.10
0.20
|
|
May
15, 2017
April
11, 2018 |
|
Nil
Nil |
|
150,000
150,000 |
|
Nil
Nil |
Pau
Porter |
|
55,000
55,000 |
|
0.10
0.10 |
|
May
15, 2017
April
11, 2018 |
|
Nil
Nil |
|
41,250
41,250 |
|
Nil
Nil |
Thomas Robertson |
|
50,000 |
|
0.20 |
|
April
11, 2018 |
|
Nil |
|
37,500 |
|
Nil
|
ITEM
12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
Securities
Authorized for Issuance under Equity Compensation Plans
EQUITY
COMPENSATION PLAN INFORMATION
The following
table sets forth information about our common stock that may be issued upon the exercise of options, warrants and rights under
all of our equity compensation plans as of April 30, 2015.
Plan
Category | |
Number
of securities to be issued upon exercise of outstanding options, warrants and rights (3) | | |
Weighted-average
exercise price of outstanding options(4) | | |
Number
of securities remaining available for future issuance under equity compensation plans | |
Equity compensation plans approved by security holders: | |
| | | |
| | | |
| | |
1993 Stock Option Plan (as amended December 5, 2000) (1) and 2007 Stock Option Plan
(2) | |
| 2,488,000 | | |
$ | 0.15 | | |
| 2,012,000 | |
Equity compensation plans not approved by security holders | |
| N/A | | |
| N/A | | |
| N/A | |
| (1) | 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, consultants and employees. |
| | |
| (2) | The
Company has a Stock Option Plan to issue up to 2,000,000 shares to certain key directors
and employees, approved April 12, 2007. Pursuant to the Plan, the Company has granted
stock options to certain directors, consultants and employees. |
| | |
| (3) | 622,000
of the 2,488,000 are vested and exercisable on April 30, 2015. |
| | |
| (4) | The
price reflects the weighted average exercise price of those options which were outstanding. |
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. On April 12, 2007 the Company approved the 2007 Stock Option Plan to issue up to 2,000,000 shares
to certain key directors and employees. Pursuant to the Plans, the Company has granted stock options to certain directors, consultants
and employees.
All
options granted by the Company under the 2000 Plan have the following exercise schedule:
| (i) | Up
to 25% of the option may be exercised at any time during the term of the option, such
initial exercise is referred to as the “First Exercise”. |
| | |
| (ii) | The
second 25% of the option may be exercised at any time after 90 days from the date of
First Exercise, such second exercise is referred to as the “Second Exercise”. |
| | |
| (iii) | The
third 25% of the option may be exercised at any time after 90 days from the date of Second
Exercise, such third exercise is referred to as the “Third Exercise”. |
| | |
| (iv) | The
fourth and final 25% of the option may be exercised at any time after 90 days from the
date of the Third Exercise. |
| | |
| (v) | The
options expire sixty months from the date of grant. |
All
options granted to April 30, 2011 by the Company under the 2007 Plan have the following exercise schedule:
| (i) | Up
to 25% of the option may be exercised 90 days after the grant of the option. |
| | |
| (ii) | The
second 25% of the option may be exercised at any time after 1 year and 90 days after
the grant of the option. |
| | |
| (iii) | The
third 25% of the option may be exercised at any time after 2 years and 90 days after
the grant of the option. |
| | |
| (iv) | The
fourth and final 25% of the option may be exercised at any time after 3 years and 90
days after the grant of the option. |
| | |
| (v) | The
options expire 60 months from the date of grant. |
Security
Ownership of Certain Beneficial Owners and Management
The
following table sets forth, as of August 14, 2013, our outstanding common stock owned of record or beneficially by each person
who owned of record, or was known by us to own beneficially, more than 5% of our common stock and the name and shareholdings of
each Executive Officer and Director and all Executive Officers and Directors as a group. A person is deemed to be the beneficial
owner of securities that can be acquired by such person within 60 days from the date of this report upon the exercise of warrants
or options. Each beneficial owner’s percentage ownership is determined by assuming that options that are held by such person
and which are exercisable within 60 days from the date are exercised.
Name | |
Shares Owned | | |
Percentage of Shares Owned | |
John G. Robertson, Chairman of the Board of Directors, President, Chief Executive
Officer and Director (1) (2) | |
| 4,093,849 | | |
| 12.49 | % |
Rand Energy Group Inc. (3) | |
| 588,567 | | |
| 1.80 | % |
Reg Technologies Inc. | |
| 2,744,700 | | |
| 8.37 | % |
ALL EXECUTIVE OFFICERS & DIRECTORS AS A GROUP | |
| 7,427,116 | | |
| 22.66 | % |
*Less than
one percent of the total issued and outstanding on July 29, 2015, which is 32,779,298.
Except
as noted below, all shares are held beneficially and of record and each record shareholder has sole voting and investment power.
(1)
This individual may be deemed to be a “parent or founder” of REGI as that term is defined in the Rules and Regulations
promulgated under the Securities Act of 1933.
(2)
Includes 634,889 common shares owned by JGR Petroleum, Inc. of which Mr. Robertson is a sole director, 2,747,720 common shares
owed by Access Information Services, of which Mr. Robertson is a sole director, 86,160 common shares owned by SMR Investment Ltd,
of which Mr. Robertson is a sole director.
(3)
Rand Energy Group Inc. is owned 51% by Reg Tech and 49% by Rand Cam-Engine Corp. Under Rule 13d-3 under the Securities Exchange
Act of 1934, both Reg Tech and Rand Cam-Engine Corp. could be considered the beneficial owner of the 588,567 shares registered
in the name of Rand Energy Group Inc.
ITEM 13. CERTAIN RELATIONSHIPS
AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
Transactions
with related persons
Pursuant
to an agreement dated October 20, 1986 between Reg Tech, Rand Cam-Engine Corp. and James McCann, Reg Tech agreed to acquire a
40% voting interest in a new corporation to be incorporated to acquire the rights to the Original Engine. The new corporation
was Rand Energy Group Inc. (“Rand Energy”). Pursuant to an agreement made as of April 27, 1993 among Reg Tech, Rand
Cam-Engine Corp., Rand Energy and James McCann, Reg Tech acquired an additional 330,000 shares (11%) of Rand Energy from Rand
Cam-Engine Corp. to increase its investment to 51%.
Pursuant
to the August 1992 Agreement we issued 5,700,000 shares of our common stock at a deemed value of $0.01 per share to Rand Energy
Group Inc., a privately held British Columbia corporation in exchange for certain valuable rights, technology, information, and
other tangible and intangible assets relating to the United States rights to the Original Engine. Rand Energy is owned 51% by
Reg Technologies Inc., a British Columbia corporation listed on the TSX Venture Exchange (“Reg Tech”), and 49% by
Rand Cam-Engine Corp. Reg Tech’s President is also our President and its Vice President is also Vice President of the Company.
We
also agreed to pay semi-annually to Rand Energy a royalty of 5% of any net profits to be derived by us from revenues received
as a result of its license of the Original Engine.
In
the April 1993 Agreement, an amendment to a previous Amendment Agreement dated November 23, 1992, between Rand Energy, Reg Tech
and Brian Cherry (a former officer and director) and an original agreement dated July 30, 1992, between Rand Energy, Reg Tech
and Brian Cherry, Cherry agreed to: (a) sell, transfer and assign to Rand Energy all his right, title and interest in and to the
technology related to the RadMax™ Engine, including all pending and future patent applications in respect of the Technology
for all countries except the United States of America, together with any improvements, changes or other variations to the Technology;
(b) sell, transfer and assign to us (then called Sky Technologies Inc.), all his right, title and interest in and to the Technology,
including all pending and future patent applications in respect of the Technology for the United States of America, together with
any improvements, changes or other variations to the Technology.
Other
provisions of the April 1993 Agreement call for us (a) to pay to Rand Energy a continuing royalty of 5% of the net profits derived
from the Technology by us and (b) to pay to Brian Cherry a continuing royalty of 1% of the net profits derived from the Technology
by us.
A
final provision of the April 1993 Agreement assigns and transfers ownership to us of any patents, inventions, copyrights, know-how,
technical data, and related types of intellectual property conceived, developed or created by Rand Energy or its associated companies
either prior to or subsequent to the date of the agreement, which results or derives from the direct or indirect use of the Original
Engine and/or RadMax™ Engine technologies by Rand Energy.
The
terms of the agreements referenced above were negotiated by the parties in non-arm’s-length transactions but were deemed
by the parties involved to be fair and equitable under the circumstances existing at the time.
Rand
Cam-Engine Corp. is a privately held company whose stock is reportedly majority-owned and controlled by James McCann and the balance
by several other shareholders.
In
April, 2007 a wholly-owned US subsidiary, RadMax Technologies, Inc, a Washington corporation, was formed with the initial focus
on winning U.S. military contracts for custom versions of RadMax™ products, as well as research and development funding
to tailor RadMax™ products to meet specific requirements defined by the U.S. military services. RadMax™ products include
RadMax™ internal and external combustion diesel engines, RadMax™ pumps, and RadMax™ compressors. James Vandeberg,
a director of the Company is the president and sole director of RadMax™ Technologies, Inc. The headquarters for the corporation
is located at 601 Union Street, Suite 4500, Seattle, WA 98101.
The
world-wide marketing and intellectual rights, other than in the U.S., are held by Reg Technologies, Inc. which together with Rand
Energy Group Inc. owns 10.17% of the Company’s issued, and outstanding, stock, and has related directors and officers.
Related
Party Transactions for the Year Ended April 30, 2015
We
entered into the following contracts with related parties. Related parties consist of companies controlled or significantly influenced
by the Officers of the Company.
On
March 31, 1994, we entered into a management agreement with Access Information Services, Inc., a Washington corporation, which
is owned and controlled by the Robertson Family Trust. A management fee of $2,500 per month is accrued for the provision of certain
management, administrative, and financial services. There is no termination or change of control provision. The fees for the years
ended April 2015 and 2014 are accrued and not paid.
During
the year ended April 30, 2015 in addition to the above:
| ● | During
year ended April 30, 2015, Mr. John Robertson, the President, CEO and director of REGI
provided consulting services to REGI. These services were valued at $90,000, which was
accounted for as donated capital and charged to expense during the period. The same amount
was recorded in the year ended April 30, 2014. |
| | |
| ● | During
year ended April 30, 2015, Mr. James Vandeberg and Mrs. Susanne Robertson, in their capacity
as the CFO before and after November 11, 2014 respectively provided consulting services
to REGI. These services were valued at $30,000 in total, which was accounted for as donated
capital and charged to expense during the period. The same amount was recorded for Mr.
Vandeberg’s services in the year ended April 30, 2014. |
| | |
| ● | During
the years ended April 30, 2015 and 2014, research and development consulting services
of $39,242 and $24,054 respectively were provided by a company controlled by Mr. Paul
Porter, a director. |
| | |
| ● | REGI
currently utilizes office space in a commercial business park building located in Richmond,
British Columbia, Canada, a suburb of Vancouver, shared by several companies related
by common officers and directors. REGI does not pay rent for this office space. |
Related
party transactions incurred during the normal course of the Company’s operations and are measured at the exchange amount,
which is the amount agreed between the related parties.
As
During the year ended April 30, 2015 changes to the amounts owed to/by related parties are as follows:
| |
April 30, 2014 $ | | |
(Repayment)/ Loan in Year $ | | |
April 30, 2015 $ | |
Due to Minewest | |
| 1,077 | | |
| - | | |
| 1,077 | |
Due to Linux Gold Corp. | |
| (91 | ) | |
| (100 | ) | |
| (191 | ) |
Due to IAS Energy, Inc. | |
| 7,431 | | |
| - | | |
| 7,431 | |
Due to Reg Technologies and its subsidiary Rand Energy Group Inc. | |
| 900,634 | | |
| 219,241 | | |
| 1,119,875 | |
Due to SMR Investments Ltd. | |
| 58,637 | | |
| - | | |
| 58,637 | |
Due to John Robertson | |
| 64,957 | | |
| (4,858 | ) | |
| 60,099 | |
Due to Information Highway Inc. | |
| 18,792 | | |
| - | | |
| 18,792 | |
Due to JGR Petroleum | |
| 101,172 | | |
| 4,775 | | |
| 105,947 | |
Due to KLR Petroleum Inc. | |
| 20,879 | | |
| (9,168 | ) | |
| 11,711 | |
Due to Teryl Resources Corp. | |
| 27,890 | | |
| (1,440 | ) | |
| 26,450 | |
Due to Access Information Inc. | |
| 238,828 | | |
| 30,000 | | |
| 268,828 | |
Due to Rainbow Networks | |
| 21,000 | | |
| - | | |
| 21,000 | |
Due to Imaging Tech | |
| 69,900 | | |
| - | | |
| 69,900 | |
Due to Paul Porter | |
| - | | |
| 22,124 | | |
| 22,124 | |
| |
| 1,531,106 | | |
| 260,574 | | |
| 1,791,680 | |
Related
parties are the officers of the Company, companies with common directors or owners, and companies indirectly controlled by Mr.
John Robertson.
We
do not have written agreements relating to related party advances. The balances are non-interest bearing, unsecured and due on
demand per verbal agreements with these related parties.
Director
Independence
Our
common stock is not listed on any stock exchange or inter-dealer quotation system and we do not have an independent director on
our board. For the purposes of determining director independence, we have applied the definitions set out in NASDAQ Rule 4200(a)(15)
(the “Rule”). Under the Rule, a director is not considered to be independent if he or she is also an executive officer
or employee of the company. The majority of the members of our board of directors also act as executive officers.
ITEM
14. PRINCIPAL ACCOUNTING FEES AND SERVICES.
The
following table discloses accounting fees and services which we paid to our auditor, MaloneBailHey LLP, Certified Public Accountants
during fiscal 2015 and 2014:
Type of Services Rendered | |
2015 | | |
2014 | |
| |
| | |
| |
(a) Audit Fees | |
$ | 16,910 | | |
$ | 15,400 | |
| |
| | | |
| | |
(b) Audit-Related Fees | |
$ | - | | |
$ | - | |
| |
| | | |
| | |
(c) Tax Fees | |
$ | - | | |
$ | - | |
In
the table above, and the disclosure below, “audit fees” are fees billed by the Company’s external auditor MaloneBailey
LLP, Certified Public Accountants for services provided in auditing the Company’s annual financial statements for the subject
year. “Audit-related fees” are fees not included in audit fees that are billed by the auditor for assurance and related
services that are reasonably related to the performance of the audit or review of the Company’s financial statements. “Tax
fees” are fees billed by the auditor for professional services rendered for tax compliance, tax advice and tax planning.
“All other fees” are fees billed by the auditor for products and services not included in the foregoing categories.
Audit
Fees
The
aggregate fees billed by MaloneBailey LLP, Certified Public Accountants for professional services rendered for the audit of our
annual financial statements and review of financial statements included in our Form 10-Qs or services that are normally provided
by the accountant in connection with statutory and regulatory filings or engagements for the fiscal years ended April 30, 2015
and 2014 were $16,910 and $15,400, respectively.
All
Other Fees
For
the fiscal years ended April 30, 2015 and 2014, the aggregate fees billed by MaloneBailey LLP, Certified Public Accountants, as
applicable, for products and services other than the services set out above, were $Nil and $Nil, respectively.
Pre-Approval
Policies and Procedures
The
Audit Committee pre-approves all engagements with the Company’s auditors prior to performance of services by them.
PART
IV
ITEM
15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES.
Number |
|
Description |
|
|
3.1 |
|
Articles
of Incorporation |
|
(1) |
3.2 |
|
Article
of Amendment changing name to REGI U.S., Inc. |
|
(2) |
3.3 |
|
By-laws |
|
(1) |
3.4 |
|
Articles
of Amendment Increasing Authorized Capital to 50,000,000 December
2003 |
|
(7) |
3.5 |
|
Articles
of Amendment Increasing Authorized Capital to 100,000,000 May
2007 |
|
(8) |
4.1 |
|
Specimen
Share Certificate |
|
(1) |
4.2 |
|
Specimen
Warrant Certificate |
|
(1) |
10.1 |
|
Consulting
Agreement, dated December 1, 1999, between REGI U.S., Inc. and Patrick Badgley |
|
(3) |
10.2 |
|
Special
Service Proposal, dated December 21, 1999, between REGI U.S. and ColTec, Inc. |
|
(3) |
10.3 |
|
Agreement
between ColTec and REGI dated October 2000 |
|
(4) |
10.4 |
|
Agreement
between REGI and Advanced Ceramics Research dated March 20, 2002 |
|
(5) |
10.5 |
|
License
Agreement between Rand Energy Group, Inc., and Reg Technologies, Inc. REGI U.S., Inc. and Radian Incorporated made as of April
24, 2002 |
|
(5) |
10.6 |
|
Agreement
between REGI U.S., Inc. and Rotary Power Generation, Incorporated made as of April 22, 2002 |
|
(6) |
10.7 |
|
Amendment
to Agreement between REGI U.S., Inc. and Rotary Power Generation, Incorporated made as of April 2, 2003 |
|
(6) |
10.8 |
|
Management
Agreement with Access Information Services, Inc., dated January 2, 1993 in the name of Sky Technologies, Inc. (the Company’s
previous name) |
|
(9) |
10.9 |
|
Engagement
Letter with The Otto Law Group, dated August 4, 2004 |
|
(9) |
10.10 |
|
Project
Cost Sharing Agreement with Reg Technologies Inc. |
|
(9) |
14.1 |
|
Code
of Business Conduct and Ethics |
|
(10) |
21.1 |
|
List
of Subsidiaries |
|
(7) |
23.1 |
|
Consent
of Independent Auditors (Malone Bailey LLP) |
|
(11) |
31.1 |
|
Certification
of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
|
(11) |
31.2 |
|
Certification
of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
|
(11) |
32.1 |
|
Certification
of John G. Robertson, President and Chief Executive Officer (Principal Executive Officer), pursuant to 18 U.S.C. Section 1350,
as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
|
(11) |
32.2 |
|
Certification
of James Vandeberg, Chief Operating Officer and Chief Financial Officer (Principal Financial Officer), pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
|
(11) |
(1) | Incorporated
by reference from Form 10-SB Registration Statement filed April 26, 1994. |
(2) | Incorporated
by reference from 10-Q Report for the quarter ended 7-30-94. |
(3) | Incorporated
by reference from our 10-KSB for the fiscal year ended April 30, 2000. |
(4) | Incorporated
by reference from our 10-KSB for the fiscal year ended April 30, 2001 |
(5) | Incorporated
by reference from our 10-KSB for the fiscal year ended April 30, 2002 |
(6) | Incorporated
by reference from our 10-KSB for the fiscal year ended April 30, 2003 |
(7) | Incorporated
by reference from our 10-KSB for the fiscal year ended April 30, 2007 |
(8) | Incorporated
by reference from our 10-KSB for the fiscal year ended April 30, 2008 |
(9) | Incorporated
by reference from our Form 10-K Amendment for the fiscal year ended April 30, 2010 filed
on May 13, 2011 |
(10) | Incorporated
by reference from our Form 10-K for the fiscal year ended April 30, 2011 filed on August
15, 2011 |
(11) | Incorporated
herein |
SIGNATURES
In
accordance with Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report or amendment
to be signed on its behalf by the undersigned, thereunto duly authorized.
REGI U.S., INC. |
|
|
|
|
By: |
/s/ “John
G. Robertson” |
|
|
John
G. Robertson, President |
|
|
Chief
Executive Officer and Director |
|
Dated: July
30 , 2015
In
accordance with the Securities Exchange Act of 1934, this report has been signed by the following persons on behalf of the Registrant
and in the capacities and on the dates indicated below.
Signature |
|
Title |
|
Date |
|
|
|
|
|
/s/
John G. Robertson |
|
Chairman of the
Board, President, Chief Executive Officer and Director |
|
July 30 ,
2015 |
(John
G. Robertson) |
|
(Principal Executive
Officer and Director) |
|
|
|
|
|
|
|
/s/
James Vandeberg |
|
Director |
|
July 30 ,
2015 |
(James Vandeberg) |
|
|
|
|
|
|
|
|
|
/s/
Thomas Robertson |
|
Director |
|
July 30 ,
2015 |
(Thomas Robertson) |
|
|
|
|
|
|
|
|
|
/s/
James Foley |
|
Director |
|
July 30 ,
2015 |
(James Foley) |
|
|
|
|
|
|
|
|
|
/s/
Paul Porter |
|
Director |
|
July 30 ,
2015 |
(Paul Porter) |
|
|
|
|
|
|
|
|
|
/s/
Susanne Robertson |
|
Chief Financial
Officer |
|
July 30 ,
2015 |
(Susanne Robertson) |
|
(Principal Financial
and Accounting Officer) |
|
|
EXHIBIT
23.1
CONSENT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To
the Board of Directors and Shareholders of
REGI
U.S., Inc.
We
consent to the incorporation by reference in the Registration Statement on Form S-8 filed with the Securities and Exchange Commission
on May 11, 2007 (File No. 333-142865); the Registration Statement on Form S-8 filed with the Securities and Exchange Commission
on June 14, 2004 (File No. 333-116459); the Registration Statement on Form S-8 filed with the Securities and Exchange Commission
on December 3, 2003 (File No. 333-110879); the Registration Statement on Form S-8 filed with the Securities and Exchange Commission
on August 26, 2003 (File No. 333-108205); the Registration Statement on Form S-8 filed with the Securities and Exchange Commission
on July 1, 1997 (File No. 333-30495), of our report dated July 28, 2015, relating to the consolidated financial statements for
the years ended April 30, 2015 and 2014.
/s/
MaloneBailey, LLP |
|
|
|
www.malonebailey.com |
|
Houston,
Texas |
|
July
28, 2015 |
|
EXHIBIT
31.1
Certification
of Chief Executive Officer pursuant to
Section
302 of the Sarbanes-Oxley Act of 2002
I,
John Robertson, certify that:
1. |
I
have reviewed this annual report on Form 10-K/A for the fiscal year ended April 30, 2015 of REGI U.S., INC. (the “company”); |
|
|
2. |
Based on my knowledge,
this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period
covered by this report; |
|
|
3. |
Based on my knowledge,
the financial statements, and other financial information included in this report, fairly present in all material respects
the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this
report; |
|
|
4. |
The company’s other
certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules
13a-15(f) and 15d-15(f)) for the company and have: |
|
|
|
(a) |
Designed such disclosure controls and
procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material
information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities,
particularly during the period in which this report is being prepared; |
|
|
|
|
(b) |
Designed such internal control over
financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide
reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting principles; |
|
|
|
|
(c) |
Evaluated the effectiveness of the
company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of
the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
|
|
|
|
(d) |
Disclosed in this report any change
in the company’s internal control over financial reporting that occurred during the company’s most recent fiscal
quarter (the company’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably
likely to materially affect, the company’s internal control over financial reporting; and |
|
|
5. |
The company’s other
certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting,
to the company’s auditors and the audit committee of the company’s board of directors (or persons performing the
equivalent functions): |
|
|
|
(a) |
All significant deficiencies and material
weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely
affect the company’s ability to record, process, summarize and report financial information; and |
|
|
|
|
(b) |
Any fraud, whether or not material,
that involves management or other employees who have a significant role in the company’s internal control over financial
reporting. |
Date:
July 30 , 2015 |
|
|
|
/s/
“John Robertson” |
|
John
Robertson, Chief Executive Officer |
|
EXHIBIT 31.2
Certification
of Chief Financial Officer pursuant to
Section
302 of the Sarbanes-Oxley Act of 2002
I,
Susanne Robertson, certify that:
1. |
I
have reviewed this annual report on Form 10-K/A for the fiscal year ended April 30, 2015 of REGI U.S., INC. (the “company”); |
|
|
2. |
Based on my knowledge, this report does not contain
any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of
the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
|
|
3. |
Based on my knowledge, the financial statements, and
other financial information included in this report, fairly present in all material respects the financial condition, results
of operations and cash flows of the company as of, and for, the periods presented in this report; |
|
|
4. |
The company’s other certifying officer(s) and
I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e)
and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for
the company and have: |
|
|
|
(a) |
Designed such disclosure
controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure
that material information relating to the company, including its consolidated subsidiaries, is made known to us by others
within those entities, particularly during the period in which this report is being prepared; |
|
|
|
(b) |
Designed such internal control over
financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide
reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting principles; |
|
|
|
(c) |
Evaluated the effectiveness of the
company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of
the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
|
|
|
(d) |
Disclosed in this report any change
in the company’s internal control over financial reporting that occurred during the company’s most recent fiscal
quarter (the company’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably
likely to materially affect, the company’s internal control over financial reporting; and |
|
|
5. |
The company’s other certifying officer(s) and
I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company’s
auditors and the audit committee of the company’s board of directors (or persons performing the equivalent functions): |
|
|
|
(a) |
All significant deficiencies and material
weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely
affect the company’s ability to record, process, summarize and report financial information; and |
|
|
|
(b) |
Any fraud, whether or not material,
that involves management or other employees who have a significant role in the company’s internal control over financial
reporting. |
Date:
July 30 , 2015 |
|
|
|
/s/
“Susanne Robertson” |
|
Susanne
Robertson, Chief Financial Officer |
|
EXHIBIT
32.1
Certification
of Chief Executive Officer pursuant to
Title
18, United States Code, Section 1350, as adopted pursuant to
Section
906 of the Sarbanes-Oxley Act of 2002
I,
John G. Robertson, Chief Executive Officer of REGI U.S., Inc., certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002,
18 U.S.C. Section 1350, that, to the best of my knowledge:
1. |
The
Annual Report on Form 10-K/A of REGI U.S., Inc., for the year ended April 30, 2015 (the “Report”) fully
complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
|
|
2. |
The
information contained in the Report fairly presents, in all material respects, the financial condition and results of operations
of REGI U.S., Inc. |
Richmond,
BC, Canada |
|
|
|
|
|
July
30 , 2015 |
by: |
/s/
“John G. Robertson” |
|
|
John
G. Robertson |
|
|
Chief
Executive Officer |
EXHIBIT
32.2
Certification
of Chief Financial Officer pursuant to
Title
18, United States Code, Section 1350, as adopted pursuant to
Section
906 of the Sarbanes-Oxley Act of 2002
I,
Susanne Robertson , Chief Financial Officer of REGI U.S., Inc., certify, pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002, 18 U.S.C. Section 1350, that, to the best of my knowledge:
1. |
The
Annual Report on Form 10-K/A of REGI U.S., Inc., for the year ended April 30, 2015 (the “Report”) fully
complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
|
|
2. |
The
information contained in the Report fairly presents, in all material respects, the financial condition and results of operations
of REGI U.S., Inc. |
Richmond,
BC, Canada |
|
|
|
|
|
July
30 , 2015 |
by: |
/s/
“Susanne Robertson” |
|
|
Susanne
Robertson |
|
|
Chief
Financial Officer |
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