-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Ttz3Z6GZBZ2mj6tWD7rdvUz2oV7M0zIU3oKn4T5G89n1In/4orA0Fht96J5sNvkD lejmgtKXGYsDaKGvN5c4jA== 0000891020-96-001097.txt : 19960917 0000891020-96-001097.hdr.sgml : 19960917 ACCESSION NUMBER: 0000891020-96-001097 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960731 FILED AS OF DATE: 19960916 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: REGI U S INC CENTRAL INDEX KEY: 0000922330 STANDARD INDUSTRIAL CLASSIFICATION: ENGINES & TURBINES [3510] IRS NUMBER: 911580146 STATE OF INCORPORATION: OR FISCAL YEAR END: 0131 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 033-96974 FILM NUMBER: 96630586 BUSINESS ADDRESS: STREET 1: #185-10751 SHELLBRIDGE WAY CITY: RICHMOND B C CANADA STATE: A1 BUSINESS PHONE: 6042414214 MAIL ADDRESS: STREET 1: #185-10751 SHELLBRIDGE WAY CITY: RICHMOND B C STATE: A1 FORMER COMPANY: FORMER CONFORMED NAME: SKY TECHNOLOGIES INC /OR/ DATE OF NAME CHANGE: 19940427 10QSB 1 REGI U.S., INC. FORM 10QSB 1 U.S. SECURITIES AND EXCHANGE COMMISSION WASHINGTON D.C. 20549 FORM 10-QSB [ X ] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended July 31, 1996 [ ] Transition Report Under Section 13 or 15(d) of the Exchange Act For the transition period from ________________ to ____________________ Commission File Number 0-23920 REGI U.S., INC. (Exact Name of Small Business Issuer as Specified in Its Charter) Oregon 91-15801446 (State or Other Jurisdiction of (I.R.S. Employer Incorporation or Organization Identification Number 185 - 10751 SHELLBRIDGE WAY RICHMOND, BRITISH COLUMBIA V6X 2W8, CANADA (Address of Principal Executive Offices) (604) 278-5996 (Issuer's Telephone Number, Including Zip Code) Check whether the issuer: (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No________ State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date: 7,716,100 shares common stock as of July 31, 1996. Transitional Small Business Disclosure Format: Yes________ No X 1 2 PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS PAGE The following Financial Statements are presented (in U.S. dollars) for the Registrant, REGI U.S., Inc. 1. Balance sheets for July 31, 1996 and 1995 (unaudited) 3 2. Statement of Operations accumulated from inception 4 (July 27, 1992) to July 31, 1996 and the nine month periods ended July 31, 1996 and 1995 3. Statement of Cash Flows from inception (July 27, 1992) 5 to July 31, 1996 and the nine month periods ended July 31, 1996 and July 31, 1995 4. Statement of Stockholders' Equity (Deficit) from inception 6 (July 27, 1992) to July 31, 1996 5. Notes to financial statements 8 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 11 PART II - OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS 12 ITEM 2. CHANGES IN SECURITIES 12 ITEM 3. DEFAULTS UPON SENIOR SECURITIES 12 ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS 12 ITEM 5. OTHER INFORMATION 12 ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K 12 SIGNATURES 12
2 3 PART I ITEM 1. FINANCIAL STATEMENTS REGI U.S., Inc. (A Development Stage Company) Balance Sheet July 31, 1996 and 1995
1996 1995 $ $ ASSETS Current Assets Cash 213 529 Cash held in trust -- 498,135 Due from parent -- 43,504 Prepaid expenses -- 6,000 ---------- ---------- 213 548,168 Fixed Assets (Note 3) 7,347 8,041 Intangible Assets (Note 3) 40,761 227,666 ---------- ---------- 48,321 783,875 ========== ========== LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) Current Liabilities Accounts payable 98,226 17,000 Loan payable - officer 12,000 -- Due to affiliate (Note 4) 208,469 689,425 ---------- ---------- 318,695 706,425 ---------- ---------- Stockholders' Equity (Deficit) Common Stock (Note 5), 20,000,000 shares authorized without par value; 7,716,100 and 7,056,700 shares issued and outstanding respectively 2,328,900 1,361,750 Paid for but unissued -- 497,000 Deficit Accumulated during the Development Stage (2,599,274) (1,781,300) ---------- ---------- (270,374) 77,450 ---------- ---------- 48,321 783,875 ========== ==========
Contingency and Commitments (Note 7) 3 4 REGI U.S., Inc. (A Development Stage Company) Statement of Operations Accumulated from July 27, 1992 (Inception) to July 31, 1996 and the Three Month Periods ended July 31, 1996 and 1995
Accumulated 1996 1995 $ $ $ Revenues -- -- -- --------- --------- --------- Administrative Expenses Advertising stock 125,869 3,245 -- Bank charges 1,173 155 148 Foreign exchange 2,148 (89) (182) Office, courier, printing and telephone 57,977 9,138 6,478 Professional fees 150,084 23,426 3,131 Regulatory and filing fees 5,335 -- 258 Stockholder and investor relations 163,320 20,846 2,196 Transfer agent 11,754 167 -- Travel 4,814 -- -- Less interest (13,079) -- (1,485) --------- --------- --------- 509,395 56,888 10,544 --------- --------- --------- Research and Development Expenses Intellectual property 257,000 -- -- Amortization of capital assets 12,221 1,891 1,322 Market development 89,596 3,250 13,983 Professional fees 69,815 -- 2,751 Project management 107,500 7,500 6,000 Project overhead 80,129 6,628 7,562 Prototype design and construction 1,119,457 38,830 73,321 Technical consulting 80,979 23,480 -- Technical reports 17,120 1,000 -- Technical salaries 129,777 12,056 12,922 Travel 126,285 7,348 9,397 --------- --------- --------- 2,089,879 101,983 127,258 --------- --------- --------- Net Loss 2,599,274 158,871 137,802 ========= ========= ========= Net Loss Per Share (.02) (.02) ========= ========= Weighted Average Shares Outstanding 7,665,900 6,950,800 ========= =========
4 5 REGI U.S., Inc. (A Development Stage Company) Statement of Stockholders' Equity (Deficit) From July 27, 1992 (Inception) to July 31, 1996
Deficit Accumulated Common Stock During the Shares Amount Development Stage # $ $ Balance - July 27, 1992 (inception) -- -- -- Stock issued for intellectual property at $0.01 per share August 20, 1992 5,700,000 57,000 -- Stock issued for cash at $0.01 per share August 20, 1992 300,000 3,000 -- Net loss for the period from July 27, 1992 to April 30, 1993 -- -- (23,492) --------- --------- ---------- Balance - April 30, 1993 6,000,000 60,000 (23,492) Stock issued for cash pursuant to a public offering of shares issued at $1.00 per share October 31, 1993 500,000 500,000 -- Net loss for the year ended April 30, 1994 -- -- (394,263) --------- --------- ---------- Balance - April 30, 1994 6,500,000 560,000 (417,755) Stock issued for cash pursuant to stock option exercised July 1, 1994 at $0.10 per share 10,000 1,000 -- a private placement of shares issued at $2.25 per share October 31, 1994 and 200,000 450,000 -- November 30, 1994 50,000 112,500 -- warrants exercised at $1.25 per share October 31, 1994 169,200 211,500 -- warrants exercised at $1.50 per share December 13, 1994 1,000 1,500 -- Net loss for the year ended April 30, 1995 -- -- (1,225,743) --------- --------- ---------- Balance - April 30, 1995 6,930,200 1,336,500 (1,643,498) Stock issued for cash pursuant to options exercised at $0.10 per share June, 1995 7,500 750 -- July, 1995 110,000 11,000 -- September, 1995 10,000 1,000 -- November, 1995 10,000 1,000 -- December, 1995 13,000 1,300 -- January, 1996 50,000 5,000 --
5 6 REGI U.S., Inc. (A Development Stage Company) Statement of Stockholders' Equity (Deficit) From July 27, 1992 (Inception) to July 31, 1996
Deficit Accumulated Common Stock During the Shares Amount Development Stage # $ $ Continued options exercised at $1.00 per share January, 1996 10,000 10,000 -- February, 1996 5,000 5,000 -- March, 1996 2,000 2,000 -- options exercised at $2.75 per share in April, 1996 5,000 13,750 -- options exercised at $2.50 per share in February, 1996 10,000 25,000 -- warrants exercised at $1.50 per share in August, 1995 132,200 198,300 -- a private offering memorandum to issue shares at $2.00 per share May, 1995 20,000 40,000 -- June, 1995 35,000 70,000 -- July, 1995 173,500 347,000 -- August, 1995 22,500 45,000 -- September, 1995 50,000 100,000 -- October, 1995 40,000 80,000 -- Net loss for the year ended April 30, 1996 -- -- (796,905) --------- --------- ---------- Balance - April 30, 1996 7,635,900 2,292,600 (2,440,403) Stock issued for cash pursuant to stock options exercised May 8, 1996 at $0.10 per share 30,000 3,000 -- stock options exercised July 31, 1996 at $0.10 per share 30,000 3,000 -- warrants exercised July 24, 1996 at $1.50 per share 20,200 30,300 -- Net loss for the three months ended July 31, 1996 -- -- (158,871) --------- --------- ---------- Balance - July 31, 1996 7,716,100 2,328,900 (2,599,274) ========= ========= ==========
6 7 REGI U.S., Inc. (A Development Stage Company) Statement of Cash Flows Accumulated from July 27, 1992 (Inception) to July 31, 1996 and the Three Month Periods ended July 31, 1996 and 1995
Accumulated 1996 1995 $ $ $ Cash Flows to Operating Activities Net loss (2,599,274) (158,871) (137,802) Adjustments to Reconcile Net Loss to Cash Amortization 12,221 1,891 1,322 Intellectual property 257,000 -- -- Change in non-cash working capital items Increase (decrease) in accounts payable 98,226 23,157 (17,872) ---------- -------- -------- Net Cash Used by Operating Activities (2,231,827) (138,823) (154,352) ---------- -------- -------- Cash Flows from (to) Financing Activities Increase in common stock 2,271,900 36,300 522,250 (Decrease) in advances from parent -- -- (15,068) Increase in advances from affiliate 8,469 91,719 79,552 Increase in loan from officer 12,000 12,000 -- ---------- -------- -------- Net Cash Provided by Financing Activities 2,292,369 140,019 586,734 ---------- -------- -------- Cash Flows to Investing Activities (Increase) in computer equipment (16,048) -- -- (Increase) in patents (44,281) (8,751) (160) ---------- -------- -------- Net Cash Used by Investing Activities (60,329) (8,751) (160) ---------- -------- -------- Increase (decrease) in cash 213 (2,555) 432,222 Cash - beginning of period -- 2,768 66,442 ---------- -------- -------- Cash - end of period 213 213 498,664 ========== ======== ======== Non-cash Financing Activity Deemed value of affiliate shares issued for intellectual property 200,000 -- -- 5,700,000 shares issued for intellectual property at $0.01 per share 57,000 -- -- ---------- -------- -------- 257,000 -- -- ========== ======== ========
7 8 REGI U.S., Inc. (A Development Stage Company) Notes to the Financial Statements July 31, 1996 (expressed in U.S. dollars) 1. Nature and Continuance of Business The Company is in the business of developing and commercially exploiting an improved axial vane type rotary engine known as the Rand Cam/Direct Charge Engine ("The Engine"), which is a variation of the original Rand-Cam Engine. The world-wide marketing and intellectual rights, other than the U.S., are held by Rand Energy Group Inc. ("REGI") which controls the Company. The Company owns the U.S. marketing and intellectual rights and has a project cost sharing agreement, effective May 1, 1993, whereby it will fund 50% of the further development of The Engine and REGI will fund 50%. These financial statements have been prepared on the basis of a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has not generated any revenues or profitable operations since inception. The Company's activities are in the development stage and additional costs for the further improvement of The Engine must be incurred. There is substantial doubt as to the Company's ability to generate revenues and to continue as a going concern, as the continuation of the Company as a going concern is dependent on its ability to obtain financing and/or the attainment of revenues and profitable operations. Management plans to raise capital with private and public offerings of stock, the conversion of warrants and the exercise of stock options. 2. Acquisition of Rights, Title and Interest (a) On August 20, 1992 the Company acquired the U.S. rights to the original Rand Cam-Engine from REGI by issuing 5,700,000 shares at a deemed value of $0.01 per share. REGI will receive a 5% net profit royalty. The $57,000 deemed value has been expensed as research and development in 1995. (b) Pursuant to an agreement with Brian Cherry (a director) dated July 30, 1992 and amended November 23, 1992 and April 13, 1993, the Company acquired the U.S. rights to the improved axial vane rotary engine known as the Rand Cam/Direct Charge Engine. On November 9, 1993, in consideration for the transferred technology, Mr. Cherry was issued 100,000 shares of Reg Technologies Inc. ("REG") (a public company owning 51% of REGI) with a deemed value of $200,000 and will receive a 1% net profit royalty. The deemed value of $200,000 was treated as an expense paid by REG on behalf of the Company and treated as an inter-company loan. The $200,000 deemed value of intellectual property has been expensed as research and development in 1995. (c) Pursuant to a letter of understanding dated December 13, 1993 between the Company, REGI and REG (collectively called the grantors) and West Virginia University Research Corporation ("WVURC"), the grantors have agreed that WVURC shall own 5% of all patented technology and will receive 5% of all net profits from sales, licences, royalties or income derived from the patented technology. 8 9 3. (a) Fixed Assets
1996 1995 Accumulated Net Book Net Book Cost Amortization Value Value $ $ $ $ Computer equipment 16,048 8,701 7,347 8,996 ====== ===== ====== ======= (b) Intangible Assets Sublicense -- -- -- 200,000 Patents 44,281 3,520 40,761 27,873 ====== ===== ====== ======= 227,873 =======
4. Due to Affiliate REG periodically pays for research and development expenses on behalf of the Company and REGI and then charges the two companies on a 50/50 basis pursuant to the research and development cost sharing agreement. The balance owing to REG, of $208,469 at July 31,1996 is unsecured, non-interest bearing and is payable on demand. 5. Common Stock (a) Public offering - October 31, 1993 - warrants outstanding A total of $500,000 was received and 500,000 units issued pursuant to a public offering of 500,000 units at $1.00 per unit. Each unit contained 1 common share, and 1 warrant to acquire an additional share at $1.25 by August 24, 1994 (extended to October 31, 1994), and $1.50 by August 24, 1995. A total of 169,200 warrants were exercised at $1.25, and 133,200 warrants were exercised at $1.50. A total of 197,600 warrants were outstanding and expire fifteen days after a registration was approved (July 9, 1996). A total of 20,200 warrants were exercised and the balance expired on July 24, 1996. (b) Private placement - October 31 and November 30, 1994 - warrants outstanding A total of $562,500 was received and 250,000 units issued in October and November, 1994 pursuant to a private placement of 250,000 units at $2.25 per unit. Each unit contained 1 common share, and 1 warrant to acquire an additional share at $2.60 by October 12, 1995 (expired), and $3.00 by October 12, 1996. All warrants issued pursuant to this private placement are outstanding as at July 31, 1996. (c) Pursuant to a Private Offering Memorandum dated April 15, 1995 and expiring October 15, 1995 the Company sold 341,000 units at $2.00 per unit for net proceeds of $682,000. Each unit contained 1 common share, and 1 warrant to acquire an additional share at $2.00 exercisable beginning April 15, 1996 and ending April 15, 1997 or at $2.50 beginning April 16, 1997 and ending April 15, 1998. All warrants issued pursuant to this offering are outstanding at July 31, 1996. (d) Stock options Certain directors and employees were granted stock options since inception as follows: April 30, 1993 to acquire 397,500 shares at $0.10 per share expiring April 30, 1998 of which 270,500 have been exercised to July 31, 1996. 9 10 5. Common Stock (continued) (d) Stock options (continued) - October 29, 1993 to acquire 195,000 shares at $1.00 per share expiring April 30, 1998 as to 50,000 shares, of which 7,000 have been exercised to April 30, 1996, and October 29, 1998 as to 145,000 shares, of which 10,000 have been exercised to July 31, 1996. - February 9, 1994 to acquire 75,000 shares at $1.00 expiring February 9, 1999. - October 20, 1994 to acquire 35,000 shares at $2.75 per share expiring October 20, 1999 of which 5,000 have been exercised to July 31, 1996. - January 15, 1995 to acquire 30,000 shares at $1.50 per share expiring January 15, 2000. - March 15, 1995 to acquire 10,000 shares at $2.50 per share expiring March 15, 2000 of which 5,000 have been exercised to July 31, 1996. - August 11, 1995 to acquire 25,000 shares at $2.50 per share expiring August 11, 2000. - September 8, 1995 to acquire 10,000 shares at $2.50 per share expiring September 8, 2000 of which 5,000 have been exercised to July 31, 1996. - January 3, 1996 to acquire 350,000 shares at $3.00 per share expiring January 3, 2001. 6. Related Party Transactions (a) A project management fee of $7,500 was paid to a company controlled by the president of the Company and is included in research and development expenses. (b) Rent and secretarial fees of $1,500 were paid to a company controlled by the president of the Company and are included in research and development expenses. (c) A technical salary of $12,056 was paid to an officer and director and is included in research and development expenses. (d) An administrative fee of $1,500 in 1996 was paid to an officer and director and is included in research and development expenses. 7. Contingency and Commitments (a) See Note 2 - royalty commitments in connection with the Rand Cam/Direct Charge Engine. (b) The Company is committed to pay project management fees and rent and secretarial fees totalling $36,000 per annum to a Company controlled by the president of the Company pursuant to a contract dated April 1, 1994 and expiring April 1, 1997. (c) The Company has reserved 591,000 shares for the conversion of warrants and 825,000 shares for the exercise of stock options. (d) The Company is committed to fund 50% of the further development of the Engine. See Note 1. (e) The Company owes REG, for unpaid invoices rendered by WVURC, totalling some $203,700 for development work performed during a project extension period. REG disputes a portion of these invoices relating to certain unauthorized capital expenditures totalling some $40,000. Should REG be successful in their dispute amounts owing to REG and prototype costs would be reduced by some $40,000. (f) See Note 1 for uncertainties. 10 11 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION Results of Operations for the Nine Months ended July 31, 1996 Compared to Nine Months Ended July 31, 1996 REGI U.S., Inc. (the "Company") continued to operate in the development stage and generated no revenues from operations during the third quarter ended July 31, 1996. The loss for the 1995 third quarter totaled $158,817 compared to $137,802 during the same period in 1995. Administration expenses rose from $10,542 in 1995 to $56,888 in 1996. The major changes were in professional fees which increased from $3,131 in 1995 to $23,426 in 1996, and stockholder and investor relations from $2,196 in 1995 to $20,896 in 1996. The net loss per share was $0.02 in both periods. Liquidity and Capital Resources As noted above, no revenue from operations was generated by the Company during the third quarter ended July 31 1996. The Company was able to meet its working capital requirements from director loans and loans from its parent company, Reg Technologies, Inc. At the end of the July 31, 1996, the amount due to Reg Technologies, Inc. was reduced substantially from $689,425 in 1995 to $208,469 in 1996. Shareholders' equity decreased from $77,450 in 1995 to $(270,374) in 1996. PLAN OF OPERATION As of July 31, 1966 the Company had no cash resources and had current accounts payable of $108,000 which included a loan from a director, and also owed Reg Technologies Inc. $220,000, for a total working capital deficiency of $328,000. The Company is raising $300,000 from the exercise of 200,000 warrants at $1.50. Of this, a total of $108,000 will be used to pay down liabilities and $50,000 to repay a portion of the amounts owing to Reg Technologies Inc. Reg Technologies Inc. will only demand payment of the balance of $170,000 if the Company is in a favorable cash position. The balance of $132,000 from the exercise of warrants, will be used for completing the testing of the diesel engine prototype and compressor as to $75,000, the balance of $57,000 will be used for monthly overhead to the end of October. Beginning in November 1996, the Company plans to enter into joint venture agreements whereby the joint venture partner will provide all the funding for future development. 11 12 PART II ITEM 1. LEGAL PROCEEDINGS None ITEM 2. CHANGES IN SECURITIES None, other than described elsewhere in this filing ITEM 3. DEFAULTS UPON SENIOR SECURITIES None ITEM 4. SUBMISSIONS OF MATTERS TO A VOTE OF SECURITY HOLDERS None ITEM 5. OTHER INFORMATION None ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K 27. Financial Data Schedule 12 13 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. REGI U.S., Inc. (Registrant) Dated September 13, 1996 /s/ John G. Robertson ------------------------- -------------------------------------- John G. Robertson, President and Chief Executive Officer Dated September 13, 1996 /s/ Jennifer Lorette ------------------------- -------------------------------------- Jennifer Lorette, Vice President, Chief Financial Officer (Principal Accounting Officer) 13 EX-27 2 FINANCIAL DATA SCHEDULE
5 3-MOS APR-30-1997 MAY-01-1996 JUL-31-1996 213 0 0 0 0 213 60,329 12,221 48,321 318,695 0 0 0 2,328,900 0 (270,374) 0 0 0 0 158,871 0 0 (158,871) 0 (158,871) 0 0 0 (158,871) (.02) (.02)
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