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UNITED STATES
  SECURITIES AND EXCHANGE COMMISSION
  WASHINGTON, D.C. 20549 
  _______________________________

FORM 10-KSB/AAmendment No. 1

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES ACT OF 1934

For the Fiscal Year Ended: April 30, 2007

COMMISSION FILE NO. 0-23920

REGI U.S., INC.(Name of
small business issuer as specified in its charter)

|OREGON                          | 91-1580146            
|------------------------------- | ----------------------
|(State or other jurisdiction of | (I.R.S. Employer      
|incorporation or organization)  | Identification Number)

240 - 11780 HAMMERSMITH WAYRICHMOND, BRITISH COLUMBIA
V7A 5E9, CANADA(Address, including postal code, of registrant's
principal executive offices)

(604) 278-5996(Telephone number including area
code)

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        | Name of each Exchange on which registered:
|-------------------------- | ------------------------------------------
|Common stock, no par value | NASD Over the Counter Bulletin Board      
|                           |                                           
|                           | Berlin Bremen Stock Exchange              
|                           | Frankfurt Stock Exchange                  

Indicate by check mark if the registrant is a well-known
seasoned issuer, as defined in Rule 405 of the Securities Act: Yes [ ] No
[x]

Indicate by check mark if the registrant 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) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports); and (2) has been subject to the
filing requirements for the past 90 days: Yes [x] No [ ]

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Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K 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 filer, or a non-accelerated filer:

|Larger accelerated filer [ ] | Accelerated filer [ ] | Non-accelerated filer [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]

The aggregate market value of the voting stock held by
non-affiliates of the registrant on July 16, 2007, computed by reference to the
price at which the stock was sold on that date: $21,010,706.40.

The number of shares outstanding of the registrant's common
stock, no par value, as of July 6, 2007 was 27,011,208.

Documents incorporated by reference: See Exhibits.

Transitional Small Business Disclosure Format (Check one): Yes
( ) No (X).

2

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REGI U.S., INC. FORM 10-KSB/A

TABLE OF CONTENTS

|EXPLANATORY NOTE                       | 4
|-------------------------------------- | -
|ITEM 7.FINANCIAL
      STATEMENTS      | 4
|ITEM 8A.CONTROLS
      AND PROCEEDURES | 4
|ITEM 13.EXHIBITS                       | 6
|SIGNATURES                             | 8

3

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EXPLANATORY NOTE

We are filing this Amendment No. 1 to our Annual Report on
10-KSB/A for the fiscal year ended April 30, 2007, originally filed on August 7,
2007, for the purpose of responding to comments made by the Securities and
Exchange Commission in a letter dated January 14, 2008.

We hereby amend our 10-KSB, filed on August 7, 2007 by this
Amendment No. 1 on Form 10-KSB/A for the following purposes:

- Item 8A, Controls and Procedures - we have revised our disclosure to more
  clearly correspond with Exchange Act Rule 13a-15(e);
- Financial Statements- we have included the audit report of our previous
  auditor in order to comply with Rule 2-05 of Regulation S-X, to cover the
  audited periods from inception to April 30, 2005, and have modified the
  disclosure in the first paragraph of Note 2(g);
- We have added a new Exhibit 23.2 - Consent of Independent Registered
  Public Accounting Firm, to comply with the addition of the former auditors
  opinion into the financial statements; and
- Exhibits 31.1 and 31.2  we have removed the certifying individuals title
  and reference to company name.

We are also updating Exhibits 31.1, 31.2, 32.1, 32.2, and
23.1.

This Amendment does not amend or restate any information
contained in our 10-KSB filed on August 7, 2007 other than as noted in this
Explanatory Note. This Amendment does not purport to update any recent events or
developments to the date of the original filing on August 7, 2007. In
particular, any forward-looking statements included in this Amendment No. 1
represent managements view as of the filing date of the original 10-KSB. Such
forward looking statements include statements about events and projections after
the date of the filing of the original 10-KSB and are identified by words such
as believes, projects, anticipates, expects, estimates, intend,
should, would, could, potentially, will, may or other words that
convey uncertainty of future events or outcomes. Such forward-looking statements
should not be assumed to be accurate as of any future date, including the date
hereof. Accordingly, this Amendment No. 1 should be read in conjunction with the
Risk Factors and the other statements contained in the original 10-KSB and the
Companys other filings made with the SEC subsequent to the filing date of the
original 10-KSB, together with any amendments to those filings.

ITEM 7. FINANCIAL STATEMENTS

Our financial statements are included and begin immediately
following the signature page to this report. See Item 13 for a list of the
financial statements and financial statement schedules included. Our auditors,
Smythe Ratcliffe LLP, have referred to another accountants report in their
audit opinion. As the Company is a development stage company, and as required in
Rule 2-05 of Regulation S-X, we have amended our filing to include the audit
report of Manning Elliott LLP, our prior auditors. Additionally, we have
modified our disclosure in the first paragraph of Note 2(g) to our financial
statements for the fiscal year ended April 30, 2007.

ITEM 8A. CONTROLS AND PROCEEDURES.

We carried out an evaluation, under the supervision and with
the participation of our management, including the President, and the Chief
Financial Officer, of the effectiveness of the design and operation of our
disclosure controls and procedures [as defined in the Exchange Act Rule
13a-15(e)] as of the end of the period covered by this report. Based upon the
evaluation of

4

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the effectiveness of the disclosure controls and procedures as
of the end of the period covered by this annual report, our Chief Executive
Officer and Chief Financial Officer have concluded that, as of such date, the
disclosure controls and procedures were effective at the reasonable assurance
level with respect to such disclosure controls and procedures being designed to
ensure that information relating to the Registrant required to be disclosed by
the Company in reports that we file or submit under the Exchange Act is
recorded, processed, summarized and reported within the time periods specified
in the rules and forms of the SEC. Additionally, our officers concluded that our
disclosure controls and procedures are effective to ensure that information
required to be disclosed in the reports that the Company files or submits under
the Exchange Act is accumulated and communicated to our management, including
our Chief Executive Officer, and our Chief Financial Officer, to allow timely
decisions regarding required disclosure.

There are inherent limitations to the effectiveness of any
system of disclosure controls and procedures, including the possibility of human
error and the circumvention or overriding of the controls and procedures.
Accordingly, even effective disclosure controls and procedures can only provide
reasonable, and not absolute assurance, of achieving the desired control
objectives, and management necessarily was required to apply its judgement in
evaluating the cost-benefit relationship of possible controls and
procedures.

There was no significant change in our internal control over
financial reporting that occurred during our most recently completed fiscal year
ended April 30, 2007 that has materially affected, or is reasonably likely to
materially affect, our internal control over financial reporting. Nor were there
any significant deficiencies or material weaknesses in our internal controls
requiring corrective actions.

Extension of Compliance Date for Managements Report on
Internal Control Over Financial Reporting

The Company is a non-accelerated filer as defined in Rule 12b-2
of the Act. On September 21, 2005, the Securities and Exchange Commission
extended the compliance dates for non-accelerated filers concerning the
provisions of Exchange Act Rule 13a-15(d) or 15d-15(d), whichever applies,
requiring an evaluation of changes to internal control over financial reporting
requirements with respect to the companys first periodic report due after the
first annual report that must include managements report on internal control
over financial reporting. A company that is a non-accelerated filer must begin
to comply with these requirements for its first fiscal year ending on or after
July 15, 2007. In addition, the compliance period was extended to the amended
portion of the introductory language in paragraph 4 of the certification
required by Exchange Act Rules 13a-14(a) and 15d-14(a) that refers to the
certifying officers responsibility for establishing and maintaining internal
control over financial reporting for the company, as well as paragraph 4(b). The
amended language must be provided in the first annual report required to contain
managements internal control report and in all periodic reports filed
thereafter. The extended compliance dates also apply to the amendments of
Exchange Act Rules 13a-15(a) and 15d-15(a) relating to the maintenance of
internal control over financial reporting.

Under the internal control reporting provisions of the Act,
Management will be responsible for establishing and maintaining adequate
internal control over financial reporting as defined in Rule 13a-15(f) under the
Exchange Act. Internal control over financial reporting is a process designed to
provide reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes in accordance
with accounting principles generally accepted in the United States of America.

The Companys internal control over financial reporting
includes those policies and procedures that (i) pertain to the maintenance of
records that, in reasonable detail, accurately and fairly

5

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reflect the transactions and dispositions of the assets of the
Company; (ii) provide reasonable assurance that transactions are recorded as
necessary to permit preparation of financial statements in accordance with
generally accepted accounting principles, and that receipts and expenditures of
the Company are being made only in accordance with authorizations of management
and directors of the Company; and (iii) provide reasonable assurance regarding
prevention or timely detection of unauthorized acquisition, use, or disposition
of the Companys assets that could have a material effect on the financial
statements.

Because of its inherent limitations, internal control over
financial reporting may not prevent or detect misstatements. Also, projections
of any evaluation of effectiveness to future periods are subject to the risk
that controls may become inadequate because of changes in conditions, or that
the degree of compliance with the policies or procedures may deteriorate.

Prior to the extended deadline in 2007, management will conduct
an evaluation of the effectiveness of internal control over financial reporting
based on the framework in Internal Control  Integrated Framework issued by the
Committee of Sponsoring Organizations of the Treadway Commission. Based on this
evaluation, management will determine whether the Companys internal control
over financial reporting is effective. Managements assessment of the
effectiveness of the Companys internal control over financial reporting will be
audited by an independent registered public accounting firm and stated in their
report which will be included in the Companys Form 10-KSB filing.

There were no changes in the Companys internal controls that
have materially affected, or are reasonably likely to materially affect these
controls subsequent to the date of their evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.

ITEM 13. EXHIBITS.

Number
      Description3.1
      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)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)21.1
      List of Subsidiaries
      (7)23.1
      Consent of Independent Auditors
        (Smythe Ratcliffe LLP)
      (8)


6

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23.2
      Consent of Independent Auditors
        (Manning Elliott LLP)
      (8)31.1
      Certification of Chief Executive
        Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
      (8)31.2
      Certification of Chief Financial
        Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
      (8)32.1
      Certification of John 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
      (8)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
      (8)


|(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 herein.                                                                        

|Independent Report of Registered Public
      Accounting Firm (Smythe Ratcliffe LLP) | F-1         
|------------------------------------------------------------------------------------ | ------------
|Independent Report of Registered Public Accounting Firm
      (Manning Elliott LLP)  | F-2         
|Balance Sheets                                                                       | F-3         
|Statements of Operations                                                             | F-4         
|Statement of Stockholders' Equity                                                    | F-5 to F-8  
|Statements of Cash Flows                                                             | F-9         
|Notes to the Financial Statements                                                    | F-10 to F-22

7

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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: February 7, 2008

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,         | February 7, 2008
|(John G. Robertson)   | President, Chief Executive     |                 
|                      | Officer and Director           |                 
|                      |                                |                 
|/s/ James Vandeberg   | Chief Operating Officer, Chief | February 7, 2008
|(James Vandeberg)     | Financial Officer and Director |                 
|                      |                                |                 
|/s/ Jennifer Lorette  | Vice President, Secretary and  | February 7, 2008
|(Jennifer Lorette)    | Director                       |                 

8

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|REGI U.S., Inc.              
|-----------------------------
|(A Development Stage Company)
|                             
|April 30, 2007               
|(Expressed in U.S. dollars)  

|                                                                | Index     
|--------------------------------------------------------------- | ----------
|Report of Independent Registered
      Public Accounting Firm   | F-1 to F-2
|Consolidated Balance Sheets                                     | F-3       
|Consolidated Statements
      of Operations                     | F-4       
|Consolidated Statements of Stockholders
      Equity (Deficit) | F-5 to F-8
|Consolidated Statements
      of Cash Flows                     | F-9       
|Notes to the Consolidated Financial Statements                  | F-10      

F-i

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**REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**

**TO THE DIRECTORS AND STOCKHOLDERS OF REGI U.S., INC.
  (A Development Stage Company)**

We have audited the accompanying consolidated balance sheets
  of REGI U.S., Inc. (A Development Stage Company) as at April 30, 2007 and 2006
  and the consolidated statements of operations, stockholders' equity (deficit)
  and cash flows for the years ended April 30, 2007 and 2006, and the period from
  July 27, 1992 (date of inception) to April 30, 2007. These financial statements
  are the responsibility of the Company's management. Our responsibility is to
  express an opinion on these financial statements based on our audits. The statements
  of operations, stockholders’ equity (deficit), and cash flows from July
  27, 1992 (date of inception) to April 30, 2005 were audited by other auditors
  whose report dated August 9, 2005 expressed an unqualified opinion, with an
  explanatory paragraph discussing the Company’s ability to continue as
  a going-concern. Our opinion on the statements of operations, stockholders’
  deficiency and cash flows from inception to April 30, 2007, insofar as it relates
  to amounts for prior periods through April 30, 2005, is solely based on the
  reports of other auditors.

We conducted our audits in accordance with the standards of
  the Public Company Accounting Oversight Board (United States of America). Those
  standards require that we plan and perform an audit to obtain reasonable assurance
  whether the financial statements are free of material misstatement. An audit
  includes examining, on a test basis, evidence supporting the amounts and disclosures
  in the financial statements. An audit also includes assessing the accounting
  principles used and significant estimates made by management, as well as evaluating
  the overall financial statement presentation. We believe that our audits provide
  a reasonable basis for our opinion.

In our opinion, based on our audits and the reports of other
  auditors, the consolidated financial statements referred to above present fairly,
  in all material respects, the financial position of the Company as at April
  30, 2007 and 2006 and the results of its operations and its cash flows for the
  years ended April 30, 2007 and 2006 and the cumulative totals from July 27,
  1992 (date of inception) through April 30, 2007 in conformity with accounting
  principles generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming
  that the Company will continue as a going-concern. As discussed in Note 1 to
  the 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 1. These
  financial statements do not include any adjustments that might result from the
  outcome of this uncertainty.

*“Smythe Ratcliffe LLP” (signed)*

Chartered Accountants

Vancouver, British Columbia
  July 20, 2007

F-1

|7th Floor,
      Marine Building
      355 Burrard Street, Vancouver, BC
      Canada V6C 2G8 | Fax: 604.688.4675
      Telephone: 604.687.1231
      Web: SmytheRatcliffe.com | 
|--------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------ | 

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Report of Independent Registered Public Accounting Firm

To the Stockholders and Board of Directors of
  REGI U.S., Inc. (A Development Stage Company)

We have audited the statements of operations, cash flows and stockholders’
  deficit of REGI U.S., Inc. (A Development Stage Company) accumulated from July
  27, 1992 (Date of Inception) to April 30, 2005. These financial statements are
  the responsibility of the Company’s management. Our responsibility is
  to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with the standards of the Public Company
  Accounting Oversight Board (United States). Those standards require that we
  plan and perform an audit to obtain reasonable assurance whether the financial
  statements are free of material misstatement. An audit includes examining, on
  a test basis, evidence supporting the amounts and disclosures in the financial
  statements. An audit also includes assessing the accounting principles used
  and significant estimates made by management as well as evaluating the overall
  financial statement presentation. We believe that our audit provide a reasonable
  basis for our opinion.

In our opinion, the financial statements referred to above present fairly,
  in all material respects, the results of the Company’s operations and
  its cash flows accumulated from July 27, 1992 (Date of Inception) to April 30,
  2005, in conformity with accounting principles generally accepted in the United
  States.

The accompanying financial statements have been prepared assuming the Company
  will continue as a going concern. As discussed in Note 1 to the financial statements,
  the Company has not generated any revenues and has accumulated operating losses
  since inception. These factors raise substantial doubt about the Company’s
  ability to continue as a going concern. Management’s plans in regard to
  these matters are also discussed in Note 1. These financial statements do not
  include any adjustments that might result from the outcome of these uncertainties.



/s/ MANNING ELLIOTT LLP

CHARTERED ACCOUNTANTS
  Vancouver, Canada
  August 9, 2005

F-2

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|REGI U.S., Inc.              
|-----------------------------
|(A Development Stage Company)
|Consolidated Balance Sheets  
|(Expressed in U.S. dollars)  

|                                                                                   |  | April 30,  |   |  | April 30,  |  
|---------------------------------------------------------------------------------- |  | ---------- | - |  | ---------- | -
|                                                                                   |  | 2007       |   |  | 2006       |  
|                                                                                   |  | $          |   |  | $          |  
|ASSETS                                                                             |  |            |   |  |            |  
|Current Assets                                                                     |  |            |   |  |            |  
|Cash                                                                               |  | 163,909    |   |  | 240,137    |  
|Prepaid
      expenses (Note 3(c))                                                 |  | 41,648     |   |  | 60,139     |  
|Total Assets                                                                       |  | 205,557    |   |  | 300,276    |  
|                                                                                   |  |            |   |  |            |  
|LIABILITIES AND STOCKHOLDERS EQUITY (DEFICIT)                                     |  |            |   |  |            |  
|Current Liabilities                                                                |  |            |   |  |            |  
|Accounts payable and accrued liabilities                                           |  | 65,449     |   |  | 56,815     |  
|Due to
      related parties (Note 4(a))                                           |  | 248,253    |   |  | 143,258    |  
|Total Liabilities                                                                  |  | 313,702    |   |  | 200,073    |  
|                                                                                   |  |            |   |  |            |  
|Stockholders Equity (Deficit)                                                     |  |            |   |  |            |  
|Common Stock (Note 3):                                                             |  |            |   |  |            |  
|50,000,000 shares authorized without
      par value; 26,919,208 shares issued and |  |            |   |  |            |  
|outstanding (April 30, 2006 - 25,839,125 shares)                                   |  | 5,892,176  |   |  | 6,915,482  |  
|Additional Paid-in Capital                                                         |  | 2,085,256  |   |  | 262,281    |  
|Subscriptions Received                                                             |  | 259,027    |   |  | 3,750      |  
|Donated Capital (Note 4)                                                           |  | 847,500    |   |  | 697,500    |  
|Deficit Accumulated
      During the Development Stage                             |  | (9,192,104 | ) |  | (7,778,810 | )
|Total Stockholders Equity (Deficit)                                               |  | (108,145   | ) |  | 100,203    |  
|Total Liabilities
      and Stockholders Equity (Deficit)                         |  | 205,557    |   |  | 300,276    |  

Commitments (Note 5)

Contingencies (Note 6)

Subsequent Events (Note 8)

|Approved by the Directors:  | 
|--------------------------- | 
|John Robertson            | 
|John Robertson - Director   | 
|Jennifer
      Lorette    | 
|Jennifer Lorette - Director | 

(The Accompanying Notes are an Integral Part of the Consolidated
  Financial Statements)

F-3

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|REGI U.S., Inc.                      
|-------------------------------------
|(A Development Stage Company)        
|Consolidated Statements of Operations
|(Expressed in U.S. dollars)          

|                                                                |  | From                |  |  |                    |   |  |            |  
|--------------------------------------------------------------- |  | ------------------- |  |  | ------------------ | - |  | ---------- | -
|                                                                |  | July 27,1992        |  |  |                    |   |  |            |  
|                                                                |  | (Date of Inception) |  |  | For the Year Ended |  
|                                                                |  | to April 30,        |  |  | April 30,          |  
|                                                                |  | 2007                |  |  | 2007               |   |  | 2006       |  
|                                                                |  | $                   |  |  | $                  |   |  | $          |  
|                                                                |  |                     |  |  |                    |   |  |            |  
|Expenses                                                        |  |                     |  |  |                    |   |  |            |  
|                                                                |  |                     |  |  |                    |   |  |            |  
|Amortization                                                    |  | 130,533             |  |  |                   |   |  |           |  
|General and administrative (Notes 2(g), and 3(a)
      and (c)) |  | 5,224,100           |  |  | 1,292,517          |   |  | 1,054,336  |  
|Impairment loss                                                 |  | 72,823              |  |  |                   |   |  |           |  
|Research
      and development                                  |  | 3,954,299           |  |  | 120,777            |   |  | 75,788     |  
|                                                                |  |                     |  |  |                    |   |  |            |  
|Operating Loss                                                  |  | 9,381,755           |  |  | 1,413,294          |   |  | 1,130,124  |  
|                                                                |  |                     |  |  |                    |   |  |            |  
|Other Income                                                    |  |                     |  |  |                    |   |  |            |  
|                                                                |  |                     |  |  |                    |   |  |            |  
|Accounts
      payable written-off (Note 6)                     |  | 189,651             |  |  |                   |   |  | 74,766     |  
|                                                                |  |                     |  |  |                    |   |  |            |  
|Net and Comprehensive
      Loss for the Period                 |  | 9,192,104           |  |  | 1,413,294          |   |  | 1,055,358  |  
|                                                                |  |                     |  |  |                    |   |  |            |  
|                                                                |  |                     |  |  |                    |   |  |            |  
|Loss Per Share                                                  |  |                     |  |  | (0.05              | ) |  | (0.04      | )
|                                                                |  |                     |  |  |                    |   |  |            |  
|Weighted Average Number of Common Shares Outstanding            |  |                     |  |  | 26,128,000         |   |  | 24,240,000 |  

(The Accompanying Notes are an Integral Part of the Consolidated
  Financial Statements)

F-4

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|REGI U.S., Inc.                                          
|---------------------------------------------------------
|(A Development Stage Company)                            
|Consolidated Statements of Stockholders Equity (Deficit)
|From July 27, 1992 (Date of Inception) to April 30, 2007 
|(expressed in U.S. dollars)                              

|                                    |           |  |           |  |         |  |            |  |         |  |              |  | Deficit     |   |               |  
|----------------------------------- | --------- |  | --------- |  | ------- |  | ---------- |  | ------- |  | ------------ |  | ----------- | - | ------------- | -
|                                    |           |  |           |  |         |  |            |  |         |  |              |  | Accumulated |   | Total         |  
|                                    |           |  |           |  |         |  | Common     |  |         |  |              |  | During the  |   | Stockholders |  
|                                    |           |  |           |  | Paid-in |  | Stock      |  | Donated |  | Deferred     |  | Development |   | Equity        |  
|                                    | Shares    |  | Amount    |  | Capital |  | Subscribed |  | Capital |  | Compensation |  | Stage       |   | (Deficit)     |  
|                                    | #         |  | $         |  | $       |  | $          |  | $       |  | $            |  | $           |   | $             |  
|Balance  July 27, 1992 (date of    |           |  |           |  |         |  |            |  |         |  |              |  |             |   |               |  
|inception)                          |          |  |          |  |        |  |           |  |        |  |             |  |            |   |              |  
|Stock issued for intellectual       |           |  |           |  |         |  |            |  |         |  |              |  |             |   |               |  
|property at $0.001 per share        | 5,700,000 |  | 57,000    |  |        |  |           |  |        |  |             |  |            |   | 57,000        |  
|Stock issued for cash               | 300,000   |  | 3,000     |  |        |  |           |  |        |  |             |  |            |   | 3,000         |  
|Net loss                            |          |  |          |  |        |  |           |  |        |  |             |  | (23,492     | ) | (23,492       | )
|Balance  April 30, 1993            | 6,000,000 |  | 60,000    |  |        |  |           |  |         |  |             |  | (23,492     | ) | 36,508        |  
|Stock issued for cash pursuant to a |           |  |           |  |         |  |            |  |         |  |              |  |             |   |               |  
|public offering                     | 500,000   |  | 500,000   |  |        |  |           |  |        |  |             |  |            |   | 500,000       |  
|Net loss                            |          |  |          |  |        |  |           |  |        |  |             |  | (394,263    | ) | (394,263      | )
|Balance  April 30, 1994            | 6,500,000 |  | 560,000   |  |        |  |           |  |         |  |             |  | (417,755    | ) | 142,245       |  
|Stock issued for cash pursuant to:  |           |  |           |  |         |  |            |  |         |  |              |  |             |   |               |  
|Options exercised                   | 10,000    |  | 1,000     |  |        |  |           |  |        |  |             |  |            |   | 1,000         |  
|Private placement                   | 250,000   |  | 562,500   |  |        |  |           |  |        |  |             |  |            |   | 562,500       |  
|Warrants exercised                  | 170,200   |  | 213,000   |  |        |  |           |  |        |  |             |  |            |   | 213,000       |  
|Net loss                            |          |  |          |  |        |  |           |  |        |  |             |  | (1,225,743  | ) | (1,225,743    | )
|Balance  April 30, 1995            | 6,930,200 |  | 1,336,500 |  |        |  |           |  |        |  |             |  | (1,643,498  | ) | (306,998      | )
|Stock issued for cash pursuant to:  |           |  |           |  |         |  |            |  |         |  |              |  |             |   |               |  
|Options exercised                   | 232,500   |  | 75,800    |  |        |  |           |  |        |  |             |  |            |   | 75,800        |  
|Warrants exercised                  | 132,200   |  | 198,300   |  |        |  |           |  |         |  |             |  |            |   | 198,300       |  
|A private offering                  | 341,000   |  | 682,000   |  |        |  |           |  |        |  |             |  |            |   | 682,000       |  
|Net loss                            |          |  |          |  |        |  |           |  |        |  |             |  | (796,905    | ) | (796,905      | )
|Balance  April 30,1996             | 7,635,900 |  | 2,292,600 |  |        |  |           |  |        |  |             |  | (2,440,403  | ) | (147,803      | )
|Stock issued for cash pursuant to:  |           |  |           |  |         |  |            |  |         |  |              |  |             |   |               |  
|Options exercised                   | 137,000   |  | 13,700    |  |        |  |           |  |        |  |             |  |            |   | 13,700        |  
|Warrants exercised                  | 185,400   |  | 278,100   |  |        |  |           |  |        |  |             |  |            |   | 278,100       |  
|Private placements                  | 165,000   |  | 257,500   |  |        |  |           |  |        |  |             |  |            |   | 257,500       |  
|Net loss                            |          |  |          |  |        |  |           |  |        |  |             |  | (510,184    | ) | (510,184      | )
|Balance  April 30, 1997            | 8,123,300 |  | 2,841,900 |  |        |  |           |  |        |  |             |  | (2,950,587  | ) | (108,687      | )
|Stock issued for cash pursuant to:  |           |  |           |  |         |  |            |  |         |  |              |  |             |   |               |  
|Options exercised                   | 50,000    |  | 5,000     |  |        |  |           |  |        |  |             |  |            |   | 5,000         |  
|A units offering                    | 500,000   |  | 500,000   |  |        |  |           |  |        |  |             |  |            |   | 500,000       |  
|Stock issued for acquisition of     |           |  |           |  |         |  |            |  |         |  |              |  |             |   |               |  
|AVFS rights                         | 400,000   |  | 288,251   |  |        |  |           |  |        |  |             |  |            |   | 288,251       |  
|Stock issued for financial          |           |  |           |  |         |  |            |  |         |  |              |  |             |   |               |  
|consulting services                 | 125,000   |  | 170,250   |  |        |  |           |  |        |  |             |  |            |   | 170,250       |  
|Stock issued to settle an accrued   |           |  |           |  |         |  |            |  |         |  |              |  |             |   |               |  
|liability                           | 50,000    |  | 25,000    |  |        |  |           |  |        |  |             |  |            |   | 25,000        |  
|Net loss                            |          |  |          |  |        |  |           |  |        |  |             |  | (580,901    | ) | (580,901      | )
|Balance  April
      30, 1998      | 9,248,300 |  | 3,830,401 |  |        |  |           |  |        |  |             |  | (3,531,488  | ) | 298,913       |  

(The Accompanying Notes are an Integral Part of the Consolidated
  Financial Statements)

F-5

---

|REGI U.S., Inc.                                          
|---------------------------------------------------------
|(A Development Stage Company)                            
|Consolidated Statements of Stockholders Equity (Deficit)
|From July 27, 1992 (Date of Inception) to April 30, 2007 
|(expressed in U.S. dollars)                              

|                                    |            |  |           |   |         |  |            |   |         |  |              |  | Deficit     |   |               |  
|----------------------------------- | ---------- |  | --------- | - | ------- |  | ---------- | - | ------- |  | ------------ |  | ----------- | - | ------------- | -
|                                    |            |  |           |   |         |  |            |   |         |  |              |  | Accumulated |   | Total         |  
|                                    |            |  |           |   |         |  | Common     |   |         |  |              |  | During the  |   | Stockholders |  
|                                    |            |  |           |   | Paid-in |  | Stock      |   | Donated |  | Deferred     |  | Development |   | Equity        |  
|                                    | Shares     |  | Amount    |   | Capital |  | Subscribed |   | Capital |  | Compensation |  | Stage       |   | (Deficit)     |  
|                                    | #          |  | $         |   | $       |  | $          |   | $       |  | $            |  | $           |   | $             |  
|Balance  April 30, 1998            | 9,248,300  |  | 3,830,401 |   |        |  |           |   |        |  |             |  | (3,531,488  | ) | 298,913       |  
|Stock issued for financial          |            |  |           |   |         |  |            |   |         |  |              |  |             |   |               |  
|consulting services                 | 100,000    |  | 71,046    |   |        |  |           |   |        |  |             |  |            |   | 71,046        |  
|Net loss                            |           |  |          |   |        |  |           |   |        |  |             |  | (397,924    | ) | (397,924      | )
|Balance  April 30, 1999            | 9,348,300  |  | 3,901,447 |   |        |  |           |   |        |  |             |  | (3,929,412  | ) | (27,965       | )
|Stock issued for cash pursuant to:  |            |  |           |   |         |  |            |   |         |  |              |  |             |   |               |  
|A private placement                 | 852,101    |  | 639,075   |   |        |  |           |   |        |  |             |  |            |   | 639,075       |  
|Cash commission paid                |           |  | (47,607   | ) |        |  |           |   |        |  |             |  |            |   | (47,607       | )
|Warrants exercised                  | 17,334     |  | 17,334    |   |        |  |           |   |        |  |             |  |            |   | 17,334        |  
|Stock-based compensation            |           |  |          |   | 15,417  |  |           |   |        |  |             |  |            |   | 15,417        |  
|Net loss                            |           |  |          |   |        |  |           |   |        |  |             |  | (413,495    | ) | (413,495      | )
|Balance  April 30, 2000            | 10,217,735 |  | 4,510,249 |   | 15,417  |  |           |   |        |  |             |  | (4,342,907  | ) | 182,759       |  
|Stock issued for cash pursuant to   |            |  |           |   |         |  |            |   |         |  |              |  |             |   |               |  
|warrants exercised                  | 4,000      |  | 2,000     |   |        |  |           |   |        |  |             |  |            |   | 2,000         |  
|Stock-based compensation            |           |  |          |   | 18,500  |  |           |   |        |  |             |  |            |   | 18,500        |  
|Stock to be issued                  |           |  |          |   |        |  | 72,000     |   |        |  |             |  |            |   | 72,000        |  
|Net loss                            |           |  |          |   |        |  |           |   |        |  |             |  | (808,681    | ) | (808,681      | )
|Balance  April 30, 2001            | 10,221,735 |  | 4,512,249 |   | 33,917  |  | 72,000     |   |        |  |             |  | (5,151,588  | ) | (533,422      | )
|Stock issued for cash pursuant to a |            |  |           |   |         |  |            |   |         |  |              |  |             |   |               |  
|private placement                   | 1,066,200  |  | 266,550   |   |        |  | (72,000    | ) |        |  |             |  |            |   | 194,550       |  
|Amount receivable                   |           |  | (3,000    | ) |        |  |           |   |        |  |             |  |            |   | (3,000        | )
|Stock-based compensation            |           |  |          |   | 3,083   |  |           |   |        |  |             |  |            |   | 3,083         |  
|Net loss                            |           |  |          |   |        |  |           |   |        |  |             |  | (156,090    | ) | (156,090      | )
|Balance - April 30, 2002            | 11,287,935 |  | 4,775,799 |   | 37,000  |  |           |   |        |  |             |  | (5,307,678  | ) | (494,879      | )
|Stock issued to settle debt         | 6,100,000  |  | 305,000   |   |        |  |           |   |        |  |             |  |            |   | 305,000       |  
|Stock issued for services           | 250,000    |  | 16,500    |   |        |  |           |   |        |  |             |  |            |   | 16,500        |  
|Stock issued for convertible        |            |  |           |   |         |  |            |   |         |  |              |  |             |   |               |  
|debenture                           | 50,000     |  | 5,000     |   |        |  |           |   |        |  |             |  |            |   | 5,000         |  
|Stock to be issued                  |           |  |          |   |        |  | 25,968     |   |        |  |             |  |            |   | 25,968        |  
|Donated consulting services         |           |  |          |   |        |  |           |   | 187,500 |  |             |  |            |   | 187,500       |  
|Net loss                            |           |  |          |   |        |  |           |   |        |  |             |  | (220,972    | ) | (220,972      | )
|Balance  April
      30, 2003      | 17,687,935 |  | 5,102,299 |   | 37,000  |  | 25,968     |   | 187,500 |  |             |  | (5,528,650  | ) | (175,883      | )

(The Accompanying Notes are an Integral Part of the Consolidated
  Financial Statements)

F-6

---

|REGI U.S., Inc.                                          
|---------------------------------------------------------
|(A Development Stage Company)                            
|Consolidated Statements of Stockholders Equity (Deficit)
|From July 27, 1992 (Date of Inception) to April 30, 2007 
|(expressed in U.S. dollars)                              

|                                    |            |  |           |  |         |   |            |   |         |  |              |   | Deficit     |   |               |  
|----------------------------------- | ---------- |  | --------- |  | ------- | - | ---------- | - | ------- |  | ------------ | - | ----------- | - | ------------- | -
|                                    |            |  |           |  |         |   |            |   |         |  |              |   | Accumulated |   | Total         |  
|                                    |            |  |           |  |         |   | Common     |   |         |  |              |   | During the  |   | Stockholders |  
|                                    |            |  |           |  | Paid-in |   | Stock      |   | Donated |  | Deferred     |   | Development |   | Equity        |  
|                                    | Shares     |  | Amount    |  | Capital |   | Subscribed |   | Capital |  | Compensation |   | Stage       |   | (Deficit)     |  
|                                    | #          |  | $         |  | $       |   | $          |   | $       |  | $            |   | $           |   | $             |  
|Balance  April 30, 2003            | 17,687,935 |  | 5,102,299 |  | 37,000  |   | 25,968     |   | 187,500 |  |             |   | (5,528,650  | ) | (175,883      | )
|Donated consulting services         |           |  |          |  |        |   |           |   | 210,000 |  |             |   |            |   | 210,000       |  
|Stock issued for cash pursuant to a |            |  |           |  |         |   |            |   |         |  |              |   |             |   |               |  
|private placement                   | 173,120    |  | 25,968    |  |        |   | (25,968    | ) |        |  |             |   |            |   |              |  
|Stock issued for cash pursuant to:  |            |  |           |  |         |   |            |   |         |  |              |   |             |   |               |  
|Warrants exercised                  | 550,000    |  | 86,000    |  |        |   |           |   |        |  |             |   |            |   | 86,000        |  
|Stock options exercised             | 100,000    |  | 20,000    |  |        |   |           |   |        |  |             |   |            |   | 20,000        |  
|Stock-based compensation            |           |  |          |  | 78,184  |   |           |   |        |  | (78,184      | ) |            |   |              |  
|Stock issued for services           | 400,000    |  | 92,000    |  |        |   |           |   |        |  | (92,000      | ) |            |   |              |  
|Stock issued to settle debt         | 3,320,000  |  | 166,000   |  |        |   |           |   |        |  |             |   |            |   | 166,000       |  
|Deferred compensation               |           |  |          |  |        |   |           |   |        |  | 142,355      |   |            |   | 142,355       |  
|Net loss                            |           |  |          |  |        |   |           |   |        |  |             |   | (609,913    | ) | (609,913      | )
|Balance  April 30, 2004            | 22,231,055 |  | 5,492,267 |  | 115,184 |   |           |   | 397,500 |  | (27,829      | ) | (6,138,563  | ) | (161,441      | )
|Stock issued for services           | 150,000    |  | 24,000    |  |        |   |           |   |        |  | (24,000      | ) |            |   |              |  
|Stock issued for cash pursuant to:  |            |  |           |  |         |   |            |   |         |  |              |   |             |   |               |  
|Options exercised                   | 133,750    |  | 29,750    |  |        |   |           |   |        |  |             |   |            |   | 29,750        |  
|Warrants exercised                  | 173,120    |  | 34,624    |  |        |   |           |   |        |  |             |   |            |   | 34,624        |  
|Private placement                   | 1,032,800  |  | 258,200   |  |        |   |           |   |        |  |             |   |            |   | 258,200       |  
|Stock-based compensation            |           |  |          |  | 23,304  |   |           |   |        |  |             |   |            |   | 23,304        |  
|Donated consulting services         |           |  |          |  |        |   |           |   | 150,000 |  |             |   |            |   | 150,000       |  
|Deferred compensation               |           |  |          |  |        |   |           |   |        |  | 38,829       |   |            |   | 38,829        |  
|Net loss                            |           |  |          |  |        |   |           |   |        |  |             |   | (584,889    | ) | (584,889      | )
|Balance - April 30, 2005            | 23,720,725 |  | 5,838,841 |  | 138,488 |   |           |   | 547,500 |  | (13,000      | ) | (6,723,452  | ) | (211,623      | )
|Re-class deferred compensation to   |            |  |           |  |         |   |            |   |         |  |              |   |             |   |               |  
|additional paid in capital          |           |  |          |  | (13,000 | ) |           |   |        |  | 13,000       |   |            |   |              |  
|Stock issued for cash pursuant to:  |            |  |           |  |         |   |            |   |         |  |              |   |             |   |               |  
|Options exercised                   | 212,000    |  | 53,313    |  |        |   |           |   |        |  |             |   |            |   | 53,313        |  
|Warrants exercised                  | 406,400    |  | 142,240   |  |        |   |           |   |        |  |             |   |            |   | 142,240       |  
|Private placement                   | 1,500,000  |  | 881,088   |  |        |   |           |   |        |  |             |   |            |   | 881,088       |  
|Common stock subscribed             |           |  |          |  |        |   | 3,750      |   |        |  |             |   |            |   | 3,750         |  
|Stock-based compensation            |           |  |          |  | 124,793 |   |           |   |        |  |             |   |            |   | 124,793       |  
|Deferred compensation               |           |  |          |  | 12,000  |   |           |   |        |  |             |   |            |   | 12,000        |  
|Donated consulting services         |           |  |          |  |        |   |           |   | 150,000 |  |             |   |            |   | 150,000       |  
|Net loss                            |           |  |          |  |        |   |           |   |        |  |             |   | (1,055,358  | ) | (1,055,358    | )
|Balance  April 30, 2006            | 25,839,125 |  | 6,915,482 |  | 262,281 |   | 3,750      |   | 697,500 |  |             |   | (7,778,810  | ) | 100,203       |  

(The Accompanying Notes are an Integral Part of the Consolidated
  Financial Statements)

F-7

---

|REGI U.S., Inc.                                          
|---------------------------------------------------------
|(A Development Stage Company)                            
|Consolidated Statements of Stockholders Equity (Deficit)
|From July 27, 1992 (Date of Inception) to April 30, 2007 
|(expressed in U.S. dollars)                              

|                                   |            |  |            |   |           |  |            |   |         |  |              |  | Deficit     |   |               |  
|---------------------------------- | ---------- |  | ---------- | - | --------- |  | ---------- | - | ------- |  | ------------ |  | ----------- | - | ------------- | -
|                                   |            |  |            |   |           |  |            |   |         |  |              |  | Accumulated |   | Total         |  
|                                   |            |  |            |   |           |  | Common     |   |         |  |              |  | During the  |   | Stockholders |  
|                                   |            |  |            |   | Paid-in   |  | Stock      |   | Donated |  | Deferred     |  | Development |   | Equity        |  
|                                   | Shares     |  | Amount     |   | Capital   |  | Subscribed |   | Capital |  | Compensation |  | Stage       |   | (Deficit)     |  
|                                   | #          |  | $          |   | $         |  | $          |   | $       |  | $            |  | $           |   | $             |  
|                                   |            |  |            |   |           |  |            |   |         |  |              |  |             |   |               |  
|Balance  April 30, 2006           | 25,839,125 |  | 6,915,482  |   | 262,281   |  | 3,750      |   | 697,500 |  |             |  | (7,778,810  | ) | 100,203       |  
|                                   |            |  |            |   |           |  |            |   |         |  |              |  |             |   |               |  
|Stock issued for cash pursuant to: |            |  |            |   |           |  |            |   |         |  |              |  |             |   |               |  
|Options exercised                  | 662,250    |  | 143,938    |   |          |  | (3,750     | ) |        |  |             |  |            |   | 140,188       |  
|Warrants exercised                 | 268,833    |  | 217,666    |   |          |  |           |   |        |  |             |  |            |   | 217,666       |  
|Private placement                  | 120,000    |  | 120,000    |   |          |  |           |   |        |  |             |  |            |   | 120,000       |  
|Private placement costs            |           |  | (3,504     | ) |          |  | (13,673    | ) |        |  |             |  |            |   | (17,177       | )
|Common stock subscribed            |           |  |           |   |          |  | 272,700    |   |        |  |             |  |            |   | 272,700       |  
|Stock issued for services          | 29,000     |  | 60,000     |   |          |  |           |   |        |  |             |  |            |   | 60,000        |  
|Warrants issued for equity line of |            |  |            |   |           |  |            |   |         |  |              |  |             |   |               |  
|credit                             |           |  | (1,561,406 | ) | 1,561,406 |  |           |   |        |  |             |  |            |   |              |  
|                                   |            |  |            |   |           |  |            |   |         |  |              |  |             |   |               |  
|Stock-based compensation           |           |  |           |   | 260,569   |  |           |   |        |  |             |  |            |   | 260,569       |  
|Deferred compensation              |           |  |           |   | 1,000     |  |           |   |        |  |             |  |            |   | 1,000         |  
|Donated consulting services        |           |  |           |   |          |  |           |   | 150,000 |  |             |  |            |   | 150,000       |  
|                                   |            |  |            |   |           |  |            |   |         |  |              |  |             |   |               |  
|Net loss                           |           |  |           |   |          |  |           |   |        |  |             |  | (1,413,294  | ) | (1,413,294    | )
|Balance  April
      30, 2007     | 26,919,208 |  | 5,892,176  |   | 2,085,256 |  | 259,027    |   | 847,500 |  |             |  | (9,192,104  | ) | (108,145      | )

(The Accompanying Notes are an Integral Part of the Consolidated
  Financial Statements)

F-8

---

|REGI U.S., Inc.                      
|-------------------------------------
|(A Development Stage Company)        
|Consolidated Statements of Cash Flows
|(Expressed in U.S. dollars)          

|                                                          |  | From          |   |  |                    |   |  |            |  
|--------------------------------------------------------- |  | ------------- | - |  | ------------------ | - |  | ---------- | -
|                                                          |  | July 27, 1992 |   |  |                    |   |  |            |  
|                                                          |  | (Date of      |   |  |                    |   |  |            |  
|                                                          |  | Inception)    |   |  | For the Year Ended |  
|                                                          |  | to April 30,  |   |  | April 30,          |  
|                                                          |  | 2007          |   |  | 2007               |   |  | 2006       |  
|                                                          |  | $             |   |  | $                  |   |  | $          |  
|                                                          |  |               |   |  |                    |   |  |            |  
|Operating Activities                                      |  |               |   |  |                    |   |  |            |  
|                                                          |  |               |   |  |                    |   |  |            |  
|Net loss                                                  |  | (9,192,104    | ) |  | (1,413,294         | ) |  | (1,055,358 | )
|                                                          |  |               |   |  |                    |   |  |            |  
|Adjustments to reconcile net loss
      to net cash used  |  |               |   |  |                    |   |  |            |  
|in operating activities                                   |  |               |   |  |                    |   |  |            |  
|Accounts
      payable written-off                        |  | (189,651      | ) |  |                   |   |  | (74,766    | )
|Amortization                                              |  | 130,533       |   |  |                   |   |  |           |  
|Impairment
      loss                                     |  | 72,823        |   |  |                   |   |  |           |  
|Stock-based compensation (Note 3)                         |  | 523,850       |   |  | 260,569            |   |  | 124,793    |  
|Amortization of
      deferred compensation               |  | 373,795       |   |  | 1,000              |   |  | 12,000     |  
|Donated services                                          |  | 847,500       |   |  | 150,000            |   |  | 150,000    |  
|Intellectual property
      written-off                   |  | 578,509       |   |  |                   |   |  |           |  
|Shares issued for services (Note
      3(c))              |  | 47,500        |   |  | 47,500             |   |  |           |  
|                                                          |  |               |   |  |                    |   |  |            |  
|Changes in operating assets and liabilities               |  |               |   |  |                    |   |  |            |  
|Accounts
      receivable                                 |  | (3,000        | ) |  |                   |   |  |           |  
|Prepaid expenses (Note 3(c))                              |  | (29,148       | ) |  | 30,991             |   |  | (42,925    | )
|Accounts payable and accrued
      liabilities            |  | 263,256       |   |  | 8,634              |   |  | 43,908     |  
|                                                          |  |               |   |  |                    |   |  |            |  
|Cash Used in Operating Activities                         |  | (6,576,137    | ) |  | (914,600           | ) |  | (842,348   | )
|                                                          |  |               |   |  |                    |   |  |            |  
|Investing Activities                                      |  |               |   |  |                    |   |  |            |  
|                                                          |  |               |   |  |                    |   |  |            |  
|Patent protection costs                                   |  | (38,197       | ) |  |                   |   |  |           |  
|Purchase
      of property, plant and equipment           |  | (198,419      | ) |  |                   |   |  |           |  
|                                                          |  |               |   |  |                    |   |  |            |  
|Cash Used in Investing
      Activities                   |  | (236,616      | ) |  |                   |   |  |           |  
|                                                          |  |               |   |  |                    |   |  |            |  
|Financing Activities                                      |  |               |   |  |                    |   |  |            |  
|                                                          |  |               |   |  |                    |   |  |            |  
|Bank indebtedness                                         |  |              |   |  |                   |   |  | (3,514     | )
|Advance from related parties                              |  | 536,100       |   |  | 104,995            |   |  | 5,608      |  
|Proceeds from convertible debenture                       |  | 5,000         |   |  |                   |   |  |           |  
|Proceeds from the sale of common
      stock              |  | 6,146,817     |   |  | 474,350            |   |  | 1,076,641  |  
|Subscriptions
      received                              |  | 288,745       |   |  | 259,027            |   |  | 3,750      |  
|                                                          |  |               |   |  |                    |   |  |            |  
|Cash Provided by Financing
      Activities               |  | 6,976,662     |   |  | 838,372            |   |  | 1,082,485  |  
|                                                          |  |               |   |  |                    |   |  |            |  
|Increase (Decrease) In Cash                               |  | 163,909       |   |  | (76,228            | ) |  | 240,137    |  
|                                                          |  |               |   |  |                    |   |  |            |  
|Cash  Beginning
      of Period                          |  |              |   |  | 240,137            |   |  |           |  
|                                                          |  |               |   |  |                    |   |  |            |  
|Cash - End of Period                                      |  | 163,909       |   |  | 163,909            |   |  | 240,137    |  
|                                                          |  |               |   |  |                    |   |  |            |  
|Non-Cash Investing and Financing Activities               |  |               |   |  |                    |   |  |            |  
|                                                          |  |               |   |  |                    |   |  |            |  
|Warrants issued for equity line of credit                 |  | 1,561,406     |   |  | 1,561,406          |   |  |           |  
|Shares issued to settle debt                              |  | 496,000       |   |  |                   |   |  |           |  
|Shares issued for convertible debenture                   |  | 5,000         |   |  |                   |   |  |           |  
|Shares issued for intellectual
      property             |  | 345,251       |   |  |                   |   |  |           |  
|Shares issued for services                                |  | 60,000        |   |  | 60,000             |   |  |           |  
|Consulting services reflected
      as donated capital    |  | 847,500       |   |  | 150,000            |   |  | 150,000    |  
|Affiliates
      shares issued for intellectual property |  | 200,000       |   |  |                   |   |  |           |  
|                                                          |  |               |   |  |                    |   |  |            |  
|Supplemental Disclosures                                  |  |               |   |  |                    |   |  |            |  
|                                                          |  |               |   |  |                    |   |  |            |  
|Interest paid                                             |  |              |   |  |                   |   |  |           |  
|Income tax paid                                           |  |              |   |  |                   |   |  |           |  

(The Accompanying Notes are an Integral Part of the Consolidated
  Financial Statements)

F-9

---

|REGI U.S., Inc.                               
|----------------------------------------------
|(A Development Stage Company)                 
|Notes to the Consolidated Financial Statements
|(Expressed in U.S. dollars)                   

|1. | NATURE OF OPERATIONS AND CONTINUANCE OF
        BUSINESS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   | The Company was incorporated in the State
        of Oregon, U.S.A., on July 27, 1992.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   | The Company is a development stage company
        engaged in the business of developing and commercially exploiting an improved
        axial vane type rotary engine known as the Rand Cam/Direct Charge Engine
        (the “RC/DC Engine”) in the U.S. The world-wide marketing
        and intellectual rights, other than in the U.S., are held by Reg Technologies,
        Inc. (“Reg”), a major shareholder, which owns 12% of the Company’s
        issued and outstanding stock, and controls the Company by way of a voting
        trust arrangement. The Company owns the U.S. marketing and intellectual
        rights and has a project cost sharing agreement, whereby it will fund
        50% of the further development of the RC/DC Engine and Reg will fund 50%.                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   | The Company formed a wholly-owned subsidiary,
        Rad Max Technologies, Inc. (Rad Max) on April 10, 2007 in
        the State of Washington. Rad Max hopes to win military contracts for custom
        versions of the RC/DC Engine. The accounts of the subsidiary are incorporated
        in the accounts of the Company as at April 30, 2007. All inter- company
        balances have been eliminated upon consolidation.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   | In a development stage company, management
        devotes most of its activities to establishing a new business. Planned
        principal activities have not yet produced any revenues and the Company
        has suffered recurring operating losses as is normal in development stage
        companies. The Company has accumulated losses of $9,192,104 since inception.
        These factors raise substantial doubt about the Companys ability
        to continue as a going-concern. The ability of the Company to emerge from
        the development stage with respect to its planned principal business activity
        is dependent upon its successful efforts to raise additional equity financing,
        receive funding from affiliates and controlling shareholders, and develop
        a market for its products.                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   | The Company plans to raise funds through loans
        from Rand Energy Group Inc. (“Rand”), a private company with
        officers and directors in common with the Company. Further, Rand owns
        approximately 11% of the shares of the Company, and may sell shares as
        needed to meet ongoing funding requirements if traditional equity sources
        of financing prove to be insufficient. The Company also receives interim
        support from affiliated companies and plans to raise additional capital
        through debt and/or equity financings. The Company has an equity line
        of credit whereby the investor agreed to purchase up to $10,000,000 of
        the Company’s common stock (See Note 3(e)). There continues to be
        insufficient funds to provide enough working capital to fund ongoing operations
        for the next twelve months. The Company may also raise additional funds
        through the exercise of warrants and stock options, if exercised.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   | (a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   | (b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   | (c)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             

F-10

---

|REGI U.S., Inc.                               
|----------------------------------------------
|(A Development Stage Company)                 
|Notes to the Consolidated Financial Statements
|(Expressed in U.S. dollars)                   

|2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(Continued)
|-- | -----------------------------------------------------
|   |                                                      
|   | (d)                                                  
|   |                                                      
|   |                                                      
|   |                                                      
|   |                                                      
|   |                                                      
|   |                                                      
|   |                                                      
|   |                                                      
|   |                                                      
|   |                                                      
|   |                                                      
|   |                                                      
|   |                                                      
|   |                                                      
|   |                                                      
|   |                                                      
|   |                                                      
|   | (e)                                                  
|   |                                                      
|   |                                                      
|   |                                                      
|   | (f)                                                  
|   |                                                      
|   |                                                      
|   |                                                      
|   | (g)                                                  
|   |                                                      
|   |                                                      

F-11

---

|REGI U.S., Inc.                               
|----------------------------------------------
|(A Development Stage Company)                 
|Notes to the Consolidated Financial Statements
|(Expressed in U.S. dollars)                   

|2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(Continued)
|-- | -----------------------------------------------------
|   |                                                      
|   | (g)                                                  
|   |                                                      
|   |                                                      
|   |                                                      
|   |                                                      

| |                                 | April 30, 2007 | April 30, 2006
| | ------------------------------- | -------------- | --------------
| |                                 |                |               
| | Expected dividend yield         | 0%             | 0%            
| | Risk-free interest rate         | 4.54%          | 3.89%         
| | Expected volatility             | 142%           | 123%          
| | Expected option life (in years) | 2.50           | 2.04          

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.

| | (h) | Basic and Diluted Income (Loss) per Share                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |     | The Company computes income (loss) per share in accordance
        with SFAS No. 128, Earnings per Share. SFAS No. 128
        requires presentation of both basic and diluted earnings per share (EPS)
        on the face of the income statement. Basic EPS is computed by dividing
        net income (loss) available to common shareholders (numerator) by the
        weighted average number of common shares outstanding (denominator) during
        the period. Diluted EPS gives effect to all dilutive potential common
        shares outstanding during the period including stock options, using the
        treasury stock method, and convertible preferred stock, using the if-
        converted method. In computing diluted EPS, the average stock price for
        the period is used in determining the number of common shares assumed
        to be purchased from the exercise of stock options or warrants. Diluted
        EPS excludes all dilutive potential common shares if their effect is anti-dilutive.                                                                                                                                                       
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | (i) | Recent Accounting Pronouncements                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |     | In February 2007, the Financial Accounting Standards
        Board (FASB) issued SFAS No. 159, The Fair Value Option for Financial
        Assets and Financial Liabilities  Including an Amendment of FASB
        Statement No. 115. This statement permits entities to choose to
        measure many financial instruments and certain other items at fair value.
        Most of the provisions of SFAS No. 159 apply only to entities that elect
        the fair value option. However, the amendment to SFAS No. 115, Accounting
        for Certain Investments in Debt and Equity Securities, applies
        to all entities with available-for-sale and trading securities. SFAS No.
        159 is effective as of the beginning of an entitys first fiscal
        year that begins after November 15, 2007. Early adoption is permitted
        as of the beginning of a fiscal year that begins on or before November
        15, 2007, provided the entity also elects to apply the provision of SFAS
        No. 157, Fair Value Measurements.The adoption of this
        statement is not expected to have a material effect on the Company's financial
        statements.
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |     | In September 2006, the Securities and Exchange Commission
        issued Staff Accounting Bulletin (SAB) No. 108, Considering
        the Effects of Prior Year Misstatements when Quantifying Misstatements
        in Current Year Financial Statements.SAB No. 108 addresses
        how the effects of prior year uncorrected misstatements should be considered
        when quantifying misstatements in current year financial statements. SAB
        No. 108 requires companies to quantify misstatements using a balance sheet
        and income statement approach and to evaluate whether either approach
        results in quantifying an error that is material in light of relevant
        quantitative and qualitative factors. SAB No. 108 is effective for fiscal
        years ending after November 15, 2006. The adoption of SAB No. 108 did
        not have a material effect on its financial statements.                                                                                                                                                                                                                                                               

F-12

---

|REGI U.S., Inc.                               
|----------------------------------------------
|(A Development Stage Company)                 
|Notes to the Consolidated Financial Statements
|(Expressed in U.S. dollars)                   

|2. | Summary of Significant Accounting Policies(Continued)
|-- | -----------------------------------------------------
|   |                                                      
|   | (i)                                                  
|   |                                                      
|   |                                                      
|   |                                                      
|   |                                                      
|   |                                                      
|   |                                                      
|   |                                                      
|   |                                                      
|   |                                                      
|   |                                                      

F-13

---

|REGI U.S., Inc.                               
|----------------------------------------------
|(A Development Stage Company)                 
|Notes to the Consolidated Financial Statements
|(Expressed in U.S. dollars)                   

|3. | COMMON STOCK
|-- | ------------
|   |             
|   | (a)         
|   |             
|   |             
|   |             
|   |             
|   |             
|   |             
|   |             
|   |             
|   |             
|   |             
|   |             
|   |             
|   |             
|   |             
|   |             
|   |             
|   |             
|   |             
|   |             
|   |             
|   |             
|   |             
|   |             
|   |             
|   |             
|   |             
|   |             
|   |             
|   |             
|   |             
|   |             
|   |             
|   |             
|   |             
|   |             
|   |             

F-14

---

|REGI U.S., Inc.                               
|----------------------------------------------
|(A Development Stage Company)                 
|Notes to the Consolidated Financial Statements
|(Expressed in U.S. dollars)                   

|3. | COMMON STOCK(Continued)
|-- | -----------------------
|   |                        
|   | (a)                    
|   |                        
|   |                        
|   |                        
|   |                        
|   |                        
|   |                        
|   |                        
|   |                        

| |                             |  |           |   |  | Weighted       | 
| | --------------------------- |  | --------- | - |  | -------------- | 
| |                             |  |           |   |  | average        | 
| |                             |  | Shares    |   |  | exercise price | 
| |                             |  | #         |   |  | $              | 
| |                             |  |           |   |  |                | 
| | Outstanding, April 30, 2005 |  | 1,612,750 |   |  | 0.26           | 
| | Granted                     |  | 770,000   |   |  | 0.44           | 
| | Expired                     |  | (645,000  | ) |  | 0.20           | 
| | Exercised                   |  | (212,000  | ) |  | 0.25           | 
| | Cancelled                   |  | (350,000  | ) |  | 0.36           | 
| |                             |  |           |   |  |                | 
| | Outstanding, April 30, 2006 |  | 1,175,750 |   |  | 0.37           | 
| | Granted                     |  | 1,375,000 |   |  | 1.32           | 
| | Exercised                   |  | (662,250  | ) |  | 0.22           | 
| |                             |  |           |   |  |                | 
| | Outstanding, April 30, 2007 |  | 1,888,500 |   |  | 1.12           | 

F-15

---

|REGI U.S., Inc.                               
|----------------------------------------------
|(A Development Stage Company)                 
|Notes to the Consolidated Financial Statements
|(Expressed in U.S. dollars)                   

|3. | COMMON STOCK(Continued)
|-- | -----------------------
|   |                        
|   | (a)                    
|   |                        
|   |                        

| | Options Outstanding | 
| | ------------------- | 
| | Expiry Date         | 
| |                     | 
| |                     | 
| |                     | 
| |                     | 
| |                     | 
| |                     | 
| | May 10, 2007        | 
| | September 10, 2008  | 
| | December 2, 2008    | 
| | May 25, 2009        | 
| | September 30, 2009  | 
| | May 27, 2010        | 
| | April 21, 2011      | 
| | June 29, 2011       | 
| | November 1, 2011    | 
| | January 30, 2012    | 
| | April 12, 2012      | 
| |                     | 
| | Options outstanding | 

| | Options Exercisable | 
| | ------------------- | 
| | Expiry Date         | 
| |                     | 
| |                     | 
| |                     | 
| |                     | 
| |                     | 
| |                     | 
| | May 10, 2007        | 
| | September 10, 2008  | 
| | December 2, 2008    | 
| | May 25, 2009        | 
| | September 30, 2009  | 
| | May 27, 2010        | 
| | April 21, 2011      | 
| | June 29, 2011       | 
| | November 1, 2011    | 
| | January 30, 2012    | 
| |                     | 
| | Options exercisable | 

F-16

---

|REGI U.S., Inc.                               
|----------------------------------------------
|(A Development Stage Company)                 
|Notes to the Consolidated Financial Statements
|(Expressed in U.S. dollars)                   

|3. | COMMON STOCK(Continued)
|-- | -----------------------
|   |                        
|   | (a)                    
|   |                        
|   |                        

| |                              |  |           |   |  | Weighted-Average | 
| | ---------------------------- |  | --------- | - |  | ---------------- | 
| |                              |  |           |   |  | Grant-Date       | 
| | Non-vested shares            |  | Shares    |   |  | Fair Value       | 
| |                              |  | #         |   |  | $                | 
| |                              |  |           |   |  |                  | 
| | Non-vested at May 1, 2006    |  | 554,500   |   |  | 0.57             | 
| | Granted                      |  | 1,375,000 |   |  | 0.87             | 
| | Vested                       |  | (546,250  | ) |  | 0.48             | 
| |                              |  |           |   |  |                  | 
| | Non-vested at April 30, 2007 |  | 1,383,250 |   |  | 0.90             | 

| | (b) | Performance Stock Plan                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |     | The Company has allotted 2,500,000 shares to be issued
        pursuant to a Performance Stock Plan approved and registered on June 27,
        1997, and amended in June 2004. On April 27, 2007, the Company further
        amended the Plan so that the term of the Plan is extended to the twentieth
        anniversary of the effective date.                                                                                                                                                                                                                                                                                                 
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | (c) | Non-Cash Consideration                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |     | Shares issued for non-cash consideration to third parties
        were valued based on the fair market value of the services provided. During
        the year ended April 2005, the Company issued a total of 150,000 shares
        of common stock for consulting services. These shares were issued at an
        aggregate fair value of $24,000 for services to be rendered over a two-year
        period. The Company charged $1,000 (2006 - $12,000) to operations for
        the pro-rata portion of services performed during the year ended April
        30, 2007.                                                                     
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |     | During the year ended April 30, 2007, the Company entered
        into a Financial Advisory Agreement valued at $120,000 for services to
        be rendered over a one-year period. Part of this agreement stated that
        $60,000 was to be paid by issuance of the Companys shares of common
        stock. At the date of this obligation, 29,000 shares were issued when
        the value of the Companys stock was $2.07 per share. The Company
        charged $47,500 (2006  $nil) to operations for the pro-rata portion
        of services performed during the year ended April 30, 2007 and $12,500
        as prepaid expenses.

F-17

---

|REGI U.S., Inc.                               
|----------------------------------------------
|(A Development Stage Company)                 
|Notes to the Consolidated Financial Statements
|(Expressed in U.S. dollars)                   

|3. | COMMON STOCK(Continued)
|-- | -----------------------
|   |                        
|   | (d)                    
|   |                        
|   |                        

| |                         |  |           |   |  | Weighted average | 
| | ----------------------- |  | --------- | - |  | ---------------- | 
| |                         |  | Number of |   |  | exercise price   | 
| |                         |  | Shares    |   |  | $                | 
| |                         |  |           |   |  |                  | 
| | Balance, April 30, 2005 |  | 516,400   |   |  | 0.35             | 
| | Issued                  |  | 750,000   |   |  | 0.80             | 
| | Exercised               |  | (406,400  | ) |  | 0.35             | 
| | Expired                 |  | (110,000  | ) |  | 0.35             | 
| | Balance, April 30, 2006 |  | 750,000   |   |  | 0.80             | 
| | Exercised               |  | (255,833  | ) |  | 0.80             | 
| | Exercised               |  | (13,000   | ) |  | 1.00             | 
| | Granted                 |  | 2,252,000 |   |  | 1.03             | 
| | Balance, April 30, 2007 |  | 2,733,167 |   |  | 1.02             | 

At April 30, 2007, the following share
  purchase warrants were outstanding:

| |                      |  | Exercise |  |  | April 30, |  |  | April 30, | 
| | -------------------- |  | -------- |  |  | --------- |  |  | --------- | 
| | Expiry Date          |  | Price    |  |  | 2007      |  |  | 2006      | 
| |                      |  | $        |  |  | #         |  |  | #         | 
| |                      |  |          |  |  |           |  |  |           | 
| | November 30, 2007    |  | 1.00     |  |  | 252,500   |  |  | 325,000   | 
| | April 26, 2008       |  | 1.00     |  |  | 241,667   |  |  | 425,000   | 
| | November 17, 2011    |  | 1.00     |  |  | 2,119,000 |  |  |          | 
| | February 21, 2012    |  | 1.50     |  |  | 120,000   |  |  |          | 
| |                      |  |          |  |  |           |  |  |           | 
| | Warrants outstanding |  |          |  |  | 2,733,167 |  |  | 750,000   | 

| | (e) | On November 17, 2006, the Company entered into a Securities
        Purchase Agreement (equity line of credit), whereby an investor
        agreed to purchase up to $10,000,000 of the Companys common stock
        over a term of 36 months at the Companys discretion. Each purchase
        will be for a minimum of $150,000 and up to a maximum of the lessor of
        $750,000, or 200% of the average weighted volume for the Companys
        common stock for the 20 trading days prior to the date of purchase. Each
        purchase will be at a 15% discount to the market price of the Companys
        common stock over the 10 trading days prior to the purchase.                                                                                                                                                                                                                                                                                                 
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |     | In connection with the equity line of credit, the Company
        issued to the investor a warrant (Investor warrant) to purchase
        1,000,000 shares of the Companys common stock at $1.30 per share
        (the Exercise Price) for five years, and to an agent a warrant
        (Placement warrant) to purchase 640,000 shares of the Companys
        common stock at $1.30 per share for five years. If the Company fails to
        register the shares issuable upon the exercise of the Investor or Placement
        warrant, the holder is entitled to exercise the warrant and receive, for
        no consideration, a certificate equal to the number of shares obtained
        by subtracting the Exercise Price of the warrant for the volume weighted
        average price on the trading day immediately preceding the date of such
        election and multiplying that amount by the number of shares issuable
        upon the exercise of the warrant.
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |     | The Company filed an SB-2 Registration Statement with
        the United States Securities and Exchange Commission that was declared
        effective February 9, 2007, to register shares of common stock potentially
        issuable under this equity line of credit (6,160,000 shares) and the related
        warrants (1,640,000 shares).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |     | Pursuant to the agreement, if the Company issues any
        common stock, or rights to acquire common stock at a price less than the
        Exercise Price, the Exercise Price will be adjusted to the lower price.
        In addition, the number of shares issuable will be increased such that
        the aggregate exercise price after adjustment is equal to the aggregate
        exercise price prior to adjustment.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |     | Subsequent to the issuance of the warrants, the Company
        completed an equity financing at $1 per share. The issuance of the Companys
        common shares lowered the Exercise Price of the Investor warrants to $1
        and increased the number of shares issuable upon exercise of the warrants
        to 2,132,000 shares, of which 13,000 have been exercised. The Company
        recognized the change in fair value of the warrants of $222,681 as share
        issuance costs.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        

F-18

---

|REGI U.S., Inc.                               
|----------------------------------------------
|(A Development Stage Company)                 
|Notes to the Consolidated Financial Statements
|(Expressed in U.S. dollars)                   

|3. | COMMON STOCK(Continued)   
|-- | --------------------------
|   |                           
|   | (e)                       
|   |                           
|   |                           
|   |                           
|   | (f)                       
|   |                           
|   | (g)                       
|   |                           
|   | (h)                       
|   |                           
|   | (i)                       
|   |                           
|   | (j)                       
|   |                           
|   | (k)                       
|   |                           
|   | (l)                       
|   |                           
|4. | RELATED PARTY TRANSACTIONS
|   |                           
|   | (a)                       
|   |                           
|   | (b)                       
|   |                           
|   | (c)                       
|   |                           
|   | (d)                       
|   |                           
|   | (e)                       
|   |                           
|   | (f)                       
|   |                           
|   | (g)                       
|   |                           
|   | (h)                       

F-19

---

|REGI U.S., Inc.                               
|----------------------------------------------
|(A Development Stage Company)                 
|Notes to the Consolidated Financial Statements
|(Expressed in U.S. dollars)                   

|4. | RELATED PARTY TRANSACTIONS(Continued)                                                                                                                                                                        
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                              
|   | (i)                                                                                                                                                                                                          
|   |                                                                                                                                                                                                              
|   | (j)                                                                                                                                                                                                          
|   |                                                                                                                                                                                                              
|   | (k)                                                                                                                                                                                                          
|   |                                                                                                                                                                                                              
|   | (l)                                                                                                                                                                                                          
|   |                                                                                                                                                                                                              
|   | (m)                                                                                                                                                                                                          
|   |                                                                                                                                                                                                              
|   | (n)                                                                                                                                                                                                          
|   |                                                                                                                                                                                                              
|5. | COMMITMENTS                                                                                                                                                                                                  
|   |                                                                                                                                                                                                              
|   | (a)                                                                                                                                                                                                          
|   |                                                                                                                                                                                                              
|   | (b)                                                                                                                                                                                                          
|   |                                                                                                                                                                                                              
|   | (c)                                                                                                                                                                                                          
|   |                                                                                                                                                                                                              
|   | (d)                                                                                                                                                                                                          
|   |                                                                                                                                                                                                              
|   | (e)                                                                                                                                                                                                          
|   |                                                                                                                                                                                                              
|   | (f)                                                                                                                                                                                                          
|   |                                                                                                                                                                                                              
|6. | CONTINGENCIES                                                                                                                                                                                                
|   |                                                                                                                                                                                                              
|   | Long outstanding accounts payable in the amount
        of $74,766 were determined to be no longer payable and were written-off
        during the 2006 year. Since inception, $189,651 has been written-off.

F-20

---

|REGI U.S., Inc.                               
|----------------------------------------------
|(A Development Stage Company)                 
|Notes to the Consolidated Financial Statements
|(Expressed in U.S. dollars)                   

|7. | INCOME TAXES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   | Potential benefits of income tax losses are not recognized
        in the accounts until realization is more likely than not. The Company
        has net operating losses of $7,745,000, which commence expiring in 2013.
        Pursuant to SFAS No. 109, the Company is required to compute tax asset
        benefits for net operating losses carried forward. The potential benefit
        of net operating losses has not been recognized in these financial statements
        because the Company cannot be assured it more likely than not will utilize
        the net operating losses carried forward in future years. For the years
        ended April 30, 2007 and 2006, the valuation allowance established against
        the deferred tax assets increased by $350,700 and $273,100, respectively.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   | The components of the net deferred tax asset at April
        30, 2007 and 2006 and the statutory tax rate, the effective tax rate and
        the elected amount of the valuation allowance are scheduled below:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       

| |                        |  | April 30,  |   |  | April 30,  |  
| | ---------------------- |  | ---------- | - |  | ---------- | -
| |                        |  | 2007       |   |  | 2006       |  
| |                        |  | $          |   |  | $          |  
| | Net Operating Losses   |  | 7,745,000  |   |  | 6,743,000  |  
| | Statutory Tax Rate     |  | 35%        |   |  | 35%        |  
| | Effective Tax Rate     |  |           |   |  |           |  
| | Deferred Tax Asset     |  | 2,710,800  |   |  | 2,236,100  |  
| | Valuation Allowance    |  | (2,710,800 | ) |  | (2,236,100 | )
| | Net Deferred Tax Asset |  |           |   |  |           |  

Pursuant to SFAS No. 109, the Company
  is required to compute tax asset benefits for non-capital losses carried forward.
  Potential benefit of non-capital losses has not been recognized in these financial
  statements because the Company cannot be assured it is more likely than not
  it will utilize the losses carried forward in future years. The reconciliation
  of income tax attributable to continuing operations computed at the statutory
  tax rates to income tax expense is:

| |                                                           |  | April 30, |   |  | April 30, |  
| | --------------------------------------------------------- |  | --------- | - |  | --------- | -
| |                                                           |  | 2007      |   |  | 2006      |  
| |                                                           |  | $         |   |  | $         |  
| | Income tax benefit computed at U.S. statutory
      rates |  | 494,653   |   |  | 369,375   |  
| | Stock-based compensation                                  |  | (91,199   | ) |  | (43,678   | )
| | Compensation recognized as donated capital                |  | (52,500   | ) |  | (52,500   | )
| | Non-deductible write-off of accounts payable              |  |          |   |  | 26,168    |  
| | Non-deductible meals and entertainment                    |  | (225      | ) |  | (354      | )
| | Unrecognized tax losses                                   |  | (350,729  | ) |  | (246,676  | )
| | Future income tax benefit                                 |  |          |   |  |          |  

F-21

---

|REGI U.S., Inc.                               
|----------------------------------------------
|(A Development Stage Company)                 
|Notes to the Consolidated Financial Statements
|(Expressed in U.S. dollars)                   

|8. | SUBSEQUENT EVENTS
|-- | -----------------
|   |                  
|   | (a)              
|   |                  
|   | (b)              
|   |                  
|   | (c)              
|   |                  
|   | (d)              
|   |                  
|   | (e)              
|   |                  
|   | (f)              

F-22

---