SECURITIES AND EXCHANGE COMMISSION
                           WASHINGTON, D.C. 20549
                      -------------------------------

                                FORM 10-KSB

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

                   For the Fiscal Year Ended April 30, 2002

                         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)

                            120 - 3011 VIKING WAY
                   RICHMOND, BRITISH COLUMBIA V6V 1W1, 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

Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.
   [X] Yes  [ ]  No

Check if disclosure of delinquent filers pursuant to Item 405 of Regulation S-B
is not contained in this form, and no disclosure will be contained, to the best
of the registrant's knowledge, in definitive proxy or information statements
incorporated by reference in part III of this form 10-KSB or any amendment to
this Form 10-KSB. [ ]

<PAGE>
Page 2

State the issuer's revenues for its most recent fiscal year: nil.

The aggregate market value of the voting stock held by non-affiliates of the
registrant on July 31, 2002, computed by reference to the price at which the
stock was sold on that date: $1,240,544.

The number of shares outstanding of the registrant's Common Stock, no par value,
as of July 31, 2002 was 11,287,935.

Documents incorporated by reference: See Exhibits.

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

<PAGE>
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                               REGI U.S., INC.
                                 FORM 10-KSB
                             TABLE OF CONTENTS

PART I                                                                        5
   ITEM 1.  DESCRIPTION OF BUSINESS                                           5
      GENERAL                                                                 5
      BUSINESS OF THE COMPANY AND PRODUCTS                                    6
        Overview and History                                                  6
      PRODUCTS AND PROJECTS                                                   8
        Rand Cam Technology                                                   8
        Rand Cam Cold Turbine Engine                                          8
        Gasoline and Diesel Engine                                            8
        Motor Scooter Project                                                 9
        Compressor                                                            9
        Air Pump                                                              10
        Hydraulic Pump                                                        10
        Hydrogen Separator                                                    10
        Ceramic Rand Cam TM Engine                                            10
      MARKETING                                                               12
      COMPETITION                                                             13
      RAW MATERIALS AND PRINCIPAL SUPPLIERS                                   13
      PATENTS, TRADEMARKS, LICENCES, FRANCHISES, CONCESSIONS, ROYALTY
       AGREEMENTS, LABOR CONTRACTS, INCLUDING DURATION                        13
        Patents                                                               13
        Royalty Payments                                                      14
      RISK FACTORS                                                            14
      GOVERNMENT REGULATIONS                                                  17
      DEPENDENCE ON CERTAIN CUSTOMERS                                         17
      RESEARCH AND DEVELOPMENT                                                17
      COSTS AND EFFECTS OF COMPLIANCE WITH ENVIRONMENTAL LAWS                 18
      NUMBER OF TOTAL EMPLOYEES AND NUMBER OF FULL-TIME EMPLOYEES             18
   ITEM 2.  DESCRIPTION OF PROPERTY                                           18


   ITEM 3.  LEGAL PROCEEDINGS                                                 18
   ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS               18
PART II                                                                       19
   ITEM 5.  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS          19
      DIVIDEND POLICY                                                         19
      RECENT SALES OF UNREGISTERED SECURITIES                                 19
   ITEM 6:  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS        19
      LIQUIDITY AND CAPITAL RESOURCES                                         20
   ITEM 7.  FINANCIAL STATEMENTS                                              21
   ITEM 8.  CHANGES IN AND DISAGREEEMENTS WITH ACCOUNTANTS ON ACCOUNTING
    AND FINANCIAL DISCLOSURE                                                  21

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PART III                                                                      21
   ITEM 9.  DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
    COMPLIANCE WITH SECTION 16 (a) OF THE EXCHANGE ACT.                       21
      BUSINESS EXPERIENCE AND PRINCIPAL OCCUPATION OF DIRECTORS,
       EXECUTIVE OFFICERS AND SIGNIFICANT EMPLOYEES                           22
   ITEM 10. EXECUTIVE COMPENSATION                                            24
   ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT    25
   ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS                    27
   ITEM 13(a). EXHIBITS.                                                      28
   ITEM 13(b). REPORTS ON FORM 8-K.                                           29
   SIGNATURES                                                                 30

<PAGE>
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THIS ANNUAL REPORT ON FORM 10-KSB, INCLUDING EXHIBITS THERETO, CONTAINS
FORWARD-LOOKING STATEMENTS WITHIN THE MEANING OF SECTION 27A OF THE SECURITIES
ACT OF 1933, AS AMENDED, AND SECTION 21E OF THE SECURITIES EXCHANGE ACT OF 1934,


AS AMENDED. THESE FORWARD-LOOKING STATEMENTS ARE TYPICALLY IDENTIFIED BY THE
WORDS "ANTICIPATES", "BELIEVES", "EXPECTS", "INTENDS", "FORECASTS", "PLANS",
"FUTURE", "STRATEGY", OR WORDS OF SIMILAR MEANING. VARIOUS FACTORS COULD CAUSE
ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE EXPRESSED IN THE FORWARD-LOOKING
STATEMENTS, INCLUDING THOSE DESCRIBED IN "RISK FACTORS" IN THIS FORM 10-KSB. WE
ASSUME NO OBLIGATION TO UPDATE THESE FORWARD-LOOKING STATEMENTS TO REFLECT
ACTUAL RESULTS, CHANGES IN ASSUMPTIONS, OR CHANGES IN OTHER FACTORS, EXCEPT AS
REGULATED BY LAW.

PART I

ITEM 1.  DESCRIPTION OF BUSINESS

GENERAL

We were organized under the laws of the State of Oregon on July 27, 1992 as Sky
Technologies, Inc. On August 1, 1994, our name was officially changed by a vote
of a majority of our shareholders to REGI U.S., Inc. We are controlled by Rand
Energy Group Inc., a privately held British Columbia corporation ("RAND"),
which, in turn, is controlled 51% by Reg Technologies Inc., a publicly held
British Columbia corporation ("Reg Tech").

We are engaged in the business of developing and building an improved axial
vane-type rotary engine known as the Rand Cam/Direct Charge Engine ("RC/DC
Engine"), which is a variation of the Rand Cam Rotary Engine, an axial vane
rotary engine ("Original Engine"). The worldwide, exclusive of the United
States, intellectual and marketing rights to the RC/DC Engine are held by RAND.
We hold the rights to develop, build and market the RC/DC Engine design in the
U.S. pursuant to an agreement with RAND. Under a project cost sharing agreement
entered into with RAND effective May 1, 1993, each company funds 50% of the
continuing development cost of the RC/DC Engine.

Our principal offices are located at 3011 Viking Way, Suite 120, Richmond,
British Columbia V6V 1X1, Canada. Our telephone number is (604) 278-5996 and our
telefacsimile number is (604) 278-3409. Our website is www.regtech.com.
                                                       ---------------

We will likely need to raise additional capital in the future beyond any amount
currently on hand and which may become available as a result of the exercise of
warrants and options which are currently outstanding, in order to fully
implement our intended plan of operations.

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BUSINESS OF THE COMPANY AND PRODUCTS

Overview and History

We are engaged in the business of developing and building an improved axial
vane-type rotary engine known as the Rand Cam TM Direct Charge ("RC/DC") Engine,
which is a variation of the Original Engine. The Original Engine is an axial
vane rotary engine, the worldwide marketing rights to which are held by RAND. A
United States patent was issued for the RC/DC Engine on July 4, 1995, and
assigned to us. Since no marketable product has yet been developed, we have not
received any revenues from operations.

The RC/DC Engine is based upon the Original Engine patented in 1983. Brian
Cherry, a former officer and director of the Company, has done additional
development work on the Original Engine which resulted in significant changes
and improvements for which the U.S. patent has been issued and assigned to us.
We believe the RC/DC Engine offers important simplification from the basic
Original Engine, which will make it easier to manufacture and will also allow it
to operate more efficiently.

Pursuant to an agreement dated October 20, 1986 between Reg Tech, Rand Cam Corp.
and James McCann, Reg Tech agreed to acquire a 40% voting interest in a new
corporation to be incorporated to acquire the rights to the Original Engine. The
new corporation was RAND. Reg Tech acquired the 40% voting interest in RAND in
consideration of the payment of $250,000.

Pursuant to an agreement made as of April 27, 1993 among Reg Tech, Rand Cam
Corp., RAND and James McCann, Reg Tech acquired an additional 330,000 shares
(11%) of RAND from Rand Cam Corp. to increase its investment to 51%.

On August 20, 1992, we entered in an agreement with RAND and Brian Cherry (the
"August 1992 Agreement") under which we issued 5,700,000 shares of our Common
Stock at a deemed value of $0.01 per share to RAND in exchange for certain
valuable rights, technology, information, and other tangible and intangible
assets, including improvements, relating to the United States rights to the
Original Engine. RAND's president is also our president and its Vice President
and Secretary is also one of our directors. The terms of the agreement were
negotiated between the parties and were deemed to be mutually advantageous based
upon conditions and circumstances existing at the time.

We entered into an agreement dated April 13, 1993 with RAND, Reg Tech and Brian
Cherry (the "April 1993 Agreement") and made as an amendment to a previous
Amendment Agreement dated November 23, 1992 between RAND, Reg Tech and Brian
Cherry and an original agreement dated July 30, 1992 between RAND, Reg Tech and
Brian Cherry, Cherry agreed to: (a) sell, transfer and assign to RAND worldwide
rights, except for the United States, to all of his right, title and interest in
and to the technology related to the RC/DC Engine (the "Technology"), including
all pending and future patent applications in respect of the Technology,
together with any improvements, changes or other variations to the Technology;
(b) sell, transfer and assign to the Company United States of America rights to
all of his right, title and interest in and to the Technology, including all
pending and future patent applications in respect of the Technology, together
with any improvements, changes or other variations to the Technology. On
November 9, 1993, in consideration for this transfer of the Technology, Brian
Cherry was issued 100,000 shares of Reg Tech with a deemed value of $200,000.

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A final provision of the April 1993 Agreement assigned and transferred ownership
of any patents, inventions, copyrights, know-how, technical data, and related
types of intellectual property conceived, developed or created by RAND or its
associated companies either to us which results or derives from the direct or
indirect use of the Original Engine and/or RC/DC Engine technologies by RAND.

We entered into a letter of understanding dated December 13, 1993, with RAND
and Reg Tech, as grantors, and West Virginia University Research Corporation
("WVURC"), the grantors agreed that WVURC shall own 5% of all patented
technology relating to the Original Engine and the RC/DC Engine. WVURC performed
extensive analysis and testing on the RC/DC engine. WVURC provided support and
development of the RC/DC Engine including research, development, testing
evaluation and creation of intellectual property. In addition, WVURC introduced
us to potential customers and licensees. We are entitled to all intellectual
property developed by WVURC relating to the RC/DC Engine.

Based upon testing work performed by independent organizations on prototype
models, we believe that the RC/DC Engine holds significant potential in a number
of other applications ranging from small stationary equipment to automobiles and
aircraft. In additional to its potential use as an internal combustion engine,
the RC/DC Engine design is being employed in the development of several types of
compressors, pumps, expanders and other applications.

To date, several prototypes of the RC/DC Engine have been tested and additional
development and testing work is continuing. We believe that such development and
testing will continue until a commercially feasible design is perfected. There
is no assurance at this time, however, that such a commercially feasible design
will ever be perfected, or if it is, that it will become profitable. If a
commercially feasible design is perfected, we do, however, expect to derive
revenues from licensing the Technology relating to the RC/DC Engine regardless
of whether actual commercial production is ever achieved. There is no assurance
at this time, however, that revenues will ever be received from licensing the
Technology even if it does prove to be commercially feasible.

We believe that a large market would exist for a practical rotary engine which
could be produced at a competitive price and which could provide a good
combination of fuel efficiency, power density and exhaust emissions.

Based on the market potential, we believe the RC\DC Engine is well suited for
application to internal combustion engines, pumps, compressors and expansion
engines. The mechanism can be scaled to match virtually any size requirement.
This flexibility opens the door to large markets being developed.

We are currently testing prototypes for several products. Our strategy is to
develop engines and compressors for low to medium horsepower applications, then
apply the Technology to larger applications. We have licensed the Technology for
several projects. The licensee's have agreed to fund their projects for research
and development of the specific applications.  To date, we have completed three
license agreements with Advanced Ceramics for 10 H.P. or less for remote piloted
vehicles, a license agreement with Radian MILPARTS for greater than 10 H.P. for
military applications and to Rotary Power International for Generator
applications.

<PAGE>
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PRODUCTS AND PROJECTS


Rand Cam Technology

Rand Cam Cold Turbine Engine

On March 13, 2001, we announced that analysis has been completed on a RAND CAM
COLD TURBINE ENGINE to generate 1000 horsepower at 1800 rpm for the electrical
power generation market. Preliminary drawings of this engine have been
completed. A presentation has been prepared to visually demonstrate the
technology so that we can generate interest and obtain funding to build and test
this new engine. A dry run of the presentation was presented to a
representative of one of the largest engine manufacturers in North America and
the representative is assisting in setting up a presentation for its top
management. Two additional presentations have been made to the management of
this engine manufacturing company and the product is being reviewed by its
engineering department. This presentation will be "taken on the road" and shown
to additional major engine manufacturers and end users such as utility companies
to solicit interest. Summarizing the presentation, the RAND CAM COLD TURBINE
ENGINE compared to the best available MICROTURBINE ENGINE, has 32 percent better
efficiency and generates 91 percent more power from the same airflow while
retaining all of the emissions advantages of the MICROTURBINE ENGINE.

An analysis has been completed to show the potential of the RAND CAM COLD
TURBINE ENGINE in aircraft application at the 400 horsepower output level so
that we can work with several groups that have expressed interest in the Rand
Cam Engine at this rating for aircraft and marine markets.

On July 12, 2001 we announced that our Engineer, Patrick Badgley, has completed
a proposal to build a residential Cold Turbine Rand Cam generator.  The
self-contained residential power plant will be capable of providing 100% of the
power needs of a modern luxury residence and would run on natural gas, propane
or diesel fuel. The 25kW Rand Cam power plant would run at 3600 rpm, be
extremely quiet, only 18 inches in overall diameter and would weigh 110 lbs.
Designs have been completed for three different applications of this new engine
concept. The Cold Turbine is the use of a positive displacement RAND CAM(TM)
compressor and a positive displacement RAND CAM(TM) expander in a Brayton cycle
(gas turbine) machine. Much interest is being shown in this technology following
both our press release and a recent article in Ward's Engine Update.

Rotary Power International has been granted a license agreement for the power
generator applications.

Gasoline and Diesel Engine

Two prototype engines were built in 1993 and 1994 by the WVURC to run on
gasoline. Testing on these prototypes suggested that the concept is
fundamentally sound and that with a program of engine review, design, testing
and development, a technically successful range of engines can be developed. The
current prototype design for the diesel engine was designed by a consortium made
up of Alliant Techsystems (formerly Hercules Aerospace Company) ("Alliant"),
WVURC and us. Alliant was involved in the design and development including
drawings for the RC/DC diesel engine. In addition Alliant performed extensive

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analysis on the diesel engine including bearings, cooling, leakage, rotor,
vanes, housing, vane tip heating, geometry and combustion. This engine was
designed as a general purpose power plant for military and commercial
applications. A prototype of the diesel engine has been assembled and tested.

Motor Scooter Project

The motor scooter project was successfully tested by Paul LaMarche, our engineer
in Detroit, Michigan. Additional testing is proposed to prove the concept to
potential interested customers.

The RC\DC Scooter Engine was successfully test fired on the new ignition system
which was designed by our engineering team. The system fired in all chambers on
both sides. The positive aspect of this test is that the ignition system is
capable of operating at the demanding rate of the sixteen combustions per
revolution versus the eight combustions for two revolutions on the existing
piston engine used today.

The RC\DC Scooter engine will be a light weight, smooth and quiet running motor
and very inexpensive to maintain and manufacture. Also, the RC\DC Scooter
Engine prototype required equipment has been fabricated and acquired. The RC\DC
Scooter Engine will weigh approximately 15-20 pounds and generate 20 HP. We have
received inquiries from manufacturers regarding the possibility of including the
Motor Scooter Engine in lightweight and inexpensive vehicles. There is no
assurance, however, that we will enter into an agreement with anyone to
manufacture the Motor Scooter engine.

Compressor

We contracted Coltec, Inc., a Columbus, Indiana engineering firm, to fabricate
the Rand Cam (TM) air conditioning compressor for buses. The testing is to be
conducted by Trans/Air Manufacturing Corporation, one of the largest
manufacturers of air conditioning units for buses, which has agreed to jointly
develop and manufacture the working model compressor. The prototype compressor
was delivered to Trans/Air in January 2001 and is presently awaiting testing in
a bus.

A special 3.2 SCFM air compressor has been designed for a large fuel cell
customer. The customer has reviewed the design and his comments including type
of drive motor, inlet and outlet piping arrangements and mounting considerations
were incorporated and final drawings were prepared. This compressor is of
virtually all plastic construction.

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

On August 21, 2001 we announced that the prototype air compressor requested by a
major fuel cell manufacturer has been fabricated and is currently undergoing
additional testing at REGI U.S.'s facility in Detroit. At the completion of this
effort the compressor will be delivered to a compressor manufacturer for
evaluation and testing as a first step towards this manufacturer becoming a
licensee to manufacture compressors for our applications.

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Air Pump

On September 21, 2000 we announced that Paul LaMarche, a director and Vice
President of Engineering, completed a series of feasibility tests on the Rand
Cam air pump for the Lumbar seat application in automobiles. The Rand Cam air
pump was tested without lubrication and filled the lumbar chamber in less than
four (4) seconds, which is less than required by the specifications, at only
6,600 rpm. To date, production costs and manufacturing techniques have not been
completed.

Hydraulic Pump

A special 2.5 GPM pump has been designed and fabricated for use in a hydrostatic
transmission for the lawn and garden market. The pump includes an integrated 12
Volt drive motor. This pump incorporates the same new technologies used in the
air conditioning compressor including the winged rotor and multi-piece vanes.
The pump is designed for very low cost and is of all plastic construction.
Production pricing has been obtained and we are very competitive according to
our customer. This specific application for which this pump was designed has
been temporarily put on hold.

Hydrogen Separator

We purchased the rights to the H2O Hydrogen Separator Technology consisting of a
hydrogen separator based, which is a unique system for extracting hydrogen from
water. We own a 50% interest in the U.S. rights and Reg Technologies, Inc. owns
50% of the worldwide rights excluding the U.S. to the Hydrogen Separator
Technology.

In consideration for a 50% interest for the rights to the Hydrogen Separator
Technology Reg Technologies, Inc. ("Reg") agrees that we shall apply for a
patent in the U.S. for the Hydrogen Separator Technology at Reg's expense; and
Reg agrees to build a prototype of the Hydrogen Separator Technology as designed
by GHM, Inc. We declined the option to purchase an additional 50% interest. To
date, patent confirmation has not been received by Reg.

Ceramic Rand Cam TM Engine

On December 6, 2001 we announced that a U.S. Navy contract (SBIR No1-144) has
been awarded to Advanced Ceramics Research (prime contractor) and REGI U.S.,
Inc. to build and test a Naval 0.5 horsepower ceramic engine. The proposed
engine is a four stroke Rand Cam engine utilizing continuous injection and
combustion in a single combustion chamber. The engine will be of all ceramic
construction to permit high temperature operation, without cooling, to
effectively burn heavy oil. This new motor will be developed for powering the
U.S. Navy's new Smart War-fighter Array of Re-configurable Modules (SWARM) low
cost unmanned aerial vehicle.

On April 4, 2002 we announced that we signed an agreement to grant a license to
Advanced Ceramics Research, Inc. ("ACR") for the Rand Cam based motors for 10
H.P. or less for the SBIR No 1-144 Navy Contract for the remote piloted
applications. We agreed that a 5 year contract will also be granted to ACR for
the Rand Cam concept motors for the commercial and military rights for the
applications developed under the Navy contract for 10 H.P or less.

We will receive a royalty fee of 5% of the purchase price for the commercial and
Navy applications. We also receive 30% of the Navy phase I contract and 50% of

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the phase II contract which is typically $50,000 to $100,000 for Phase I and
$500,000 to $750,000 for Phase II. Phase I has been completed by Advanced
Ceramics.

Progress Report from May 1, 2001 to April 30, 2002

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

On August 21, 2001, we reported progress on the Rand Cam Air Conditioning
Compressor. We previously reported the air conditioning compressor for
heavy-duty bus applications was completed and delivered to the Trans Air
Manufacturing Company for testing in January of this year. Unfortunately, the
testing has not been started. Pat Badgley previously visited this company and


was assured that Trans Air is still very interested in the compressor and will
start the testing now that the busy season for their industry is coming to a
close.

On October 22, 2001 we announced that Robert D. Stoddart B.S. Chemical
Engineering, was appointed as Corporate Marketing Director for the Rand Cam(TM)
technology applications for REGI U.S., Inc. Robert Stoddart brings with him 30
years experience in the aerospace and aircraft industry, as Corporate Marketing
Director and Federal Government Affairs Director. Mr. Stoddart has been involved
as a contractor and/or consultant for the Department of Defense, Naval Sea
Systems Command; Naval Air Systems Command and Defense Advanced Research
Projects Agency (DARPA).

We also announced that Stodd International, Mr. Stoddart's company, was
appointed as agent for REGI U.S., Inc. to raise up to $6 million (U.S.) on a
non-exclusive basis. A 5% agents fee of the total funds received from contacts
introduced by Stodd International will be paid for funds raised, license fees,
royalty payments and contract fees. We believe that Mr. Stoddart's extensive
expertise in government relations and advanced technologies marketing will be a
valuable asset to marketing the Rand Cam(TM) projects and raising substantial
funds for REGI U.S., Inc.

Our Rand Cam(TM) technology was exhibited at the GSE Expo (Ground Support
Equipment Expo http://www.gseexpo.com) in Las Vegas at the Rio Hotel and
Convention Center on October 23-25, 2001. Our booth was well attended.

On December 6, 2001, we announced that a U.S. Navy contract (SBIR No1-144) has
been awarded to Advanced Ceramics Research (prime contractor) and REGI U.S.,
Inc. to build and test a Naval 0.5 horsepower ceramic engine. The proposed
engine is a four stroke Rand Cam(TM) engine utilizing continuous injection and
combustion in a single combustion chamber. The engine will be of all ceramic
construction to permit high temperature operation, without cooling, to
effectively burn heavy oil. This new motor will be developed for powering the
U.S. Navy's new Smart War-fighter Array of Re-configurable Modules (SWARM) low
cost unmanned aerial vehicle.

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Page 12

On April 4, 2002 we announced that we signed an agreement to grant a license to
Advanced Ceramics Research, Inc. ("ACR") for the Rand Cam based motors for 10
H.P. or less for the SBIR No 1-144 Navy Contract for the remote piloted
applications.

A 5 year contract will also be granted to ACR for the Rand Cam concept motors
for the commercial and military rights for the applications developed under the
Navy contract for 10 H.P or less. We will receive a royalty fee of 5% of the
purchase price for the commercial and Navy applications. REGI U.S., Inc. also
receives 30% of the Navy phase I contract and 50% of the phase II contract which
is typically $50,000 to $100,000 for Phase I and $500,000 to $750,000 for Phase
II.

MARKETING

We intend to pursue the development of the RC/DC Engine and the air pump,
compressor and other products by entering into licensing and/or joint venture
arrangements with other larger companies, which have the financial resources to
maximize the potential of the technology. At the present time no such licensing
or joint venture arrangements have been concluded and there is no assurance that
any will be in the foreseeable future. We have no current plans to become
actively involved in either manufacturing or marketing any engine or other
product which it may ultimately develop to the point of becoming a commercial
product.

Our current objective is to complete and test the various compressor, pump and
diesel engine prototypes. Based on the successful testing, the prototypes will
be used for presentation purposes to potential license and joint venture
partners. We are currently making presentations to the U.S. military which could
result in additional government funding if the diesel engine prototype meets
with its approval.

We expect revenue from license agreements with the potential end users based on
the success of the design of from the compressor, pump, Cold Turbine Engine and
diesel engine prototypes. Based on of successful testing of the Rand Cam
prototypes, we expect to have joint venture or license agreements finalized,
which would result in royalties to us. However, there is no assurance that the
tests will be successful or that we will ever receive any such royalties.

The following marketing activities are all currently underway:

AIR CONDITIONING COMPRESSOR - An agreement with Trans Air Manufacturers has been
completed to use the Rand Cam(TM) compressor in air conditioning units in bus
applications. We have delivered a compressor prototype for testing. We are
awaiting test results from Trans Air.

AIR PUMP - A prototype air pump for a Fuel Cell Application has been completed
and will be delivered to the Fuel Cell manufacturer for testing soon.

DIESEL ENGINE - Efforts are underway to obtain funding for modifications of the
existing Diesel engine to incorporate the latest winged rotor technology and
incorporate extensive thermal barrier coatings. Also several new aircraft
engine designs have been completed for aircraft applications ranging from 1 to
over 400 horsepower for interested potential customers. We have signed a
license agreement with Advanced Ceramics and Radian MILPARTS to further develop
our Rand Cam Technology for diesel engine applications.

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COMPETITION

We currently face and will continue to face competition in the future from
established companies engaged in the business of developing, manufacturing and
marketing engines and other products. While not a highly competitive business in
terms of numbers of competitors, the business of developing engines of a new
design and attempting to either license or produce them is nonetheless difficult
because most existing engine producers are large, well financed companies which
are very concerned about maintaining their market position. Such competitors are
already well established in the market and have substantially greater resources
than us. Internal combustion engines are produced by automobile manufacturers,
marine engine manufacturers, heavy equipment manufacturers and specialty
aircraft and industrial engine manufacturers. We expect that our engine would be
used mainly in industrial and marine applications.

Except for the Wankel rotary engine built by Mazda of Japan, no competitor, that
we are aware of, presently produces in a commercial quantity any rotary engine
similar to the engines we are developing. The Wankel rotary engine is similar
only in that it is a rotary engine rather than a reciprocating piston engine.
Without substantially greater financial resources than is currently available to
us, however, it is very possible that it may not be able to adequately compete
in the engine business. One competitor, Rotary Power International, is presently
producing the first production SCORE rotary (Wankel type) engines. Our RC\DC
Engine is more fuel efficient, smaller, quieter, costs less to produce and will
have fewer exhaust emissions.

We believe that if and when our engine is completely developed, in order to be
successful in meeting or overcoming competition which currently exists or may
develop in the future, our engine will need to offer superior performance and/or
cost advantages over existing engines used in various applications.

RAW MATERIALS AND PRINCIPAL SUPPLIERS

Since we are not in production and there are no plans at this time for us to
enter the actual engine manufacturing business, raw materials are not of present
concern. At this time, however, there does not appear to be any foreseeable
problem with obtaining any materials or components, which may be required in the
manufacture of its potential products.

PATENTS, TRADEMARKS, LICENCES, FRANCHISES, CONCESSIONS, ROYALTY AGREEMENTS,
LABOR CONTRACTS, INCLUDING DURATION

Patents

U.S. patent No. 5,429,084 was granted on July 4, 1995, to the inventor, Brian
Cherry, Patrick Badgley and four other individuals for various improvements
incorporated in the RC/DC Engine. The patent has been assigned to us. U.S.
Patent 4,401,070 for the Original Engine was issued on August 30, 1983, to James
McCann and RAND holds the marketing rights.

The RC/DC Engine is composed basically of a disk shaped rotor with drive shaft,
which turns, and the housing or stator, which remains stationary. The rotor has
two or more vanes that are mounted perpendicular to the direction of rotation
and slide back and forth through it. As the rotor turns, the ends of the vanes
ride along the insides of the stator housing which have wave-like depressions,

<PAGE>
Page 14

causing the vanes to slide back and forth. In the process of turning and
sliding, combustion chambers are formed between the rotor, stator walls and
vanes where the fuel/air mixture is injected, compressed, burned and exhausted.

Two additional patents have been issued for improvements to the engine
including: U.S. Patents 5,509,793 "Rotary Device with Slidable Vane Supports)
issued April 24, 1996 and 5,551,853 "Axial Vane Rotary Device and Sealing System
Therefor) issued September 3, 1996. Additional patent applications are
presently in process for the Winged Rotor, Multi-Piece Vanes and Cold Turbine.

Royalty Payments

The August 1992 Agreement calls for us to pay RAND semi-annually a royalty of 5%
of any net profits to be derived by us from revenues received as a result of its
license of the Original Engine. The August 1992 Agreement also calls for us to
pay Brian Cherry a royalty of 1% semi-annually any net profits derived by us
from revenue received as a result of our licensing the Original Engine.

Other provisions of the April 1993 Agreement call for is (a) to pay to RAND a
continuing royalty of 5% of the net profits derived from the Technology by us
and (b) to pay to Brian Cherry a continuing royalty of 1% of the net profits
derived by us from the Technology.

Pursuant to the letter of understanding dated December 13, 1993, among us, RAND,
Reg Tech and WVURC, WVURC will receive 5% of all net profits from sales,
licenses, royalties or income derived from the patented technology relating to
the Original Engine and the RC/DC Engine.

No royalties are to be paid to Alliant or Adiabatics, Inc.

Pursuant to our agreement with Weston, we agreed to pay to Weston 8.5% of net
sales derived from the AVFS together with a minimum annual royalty of $24,000
per year beginning October 1, 1997, payable quarterly. This agreement was
terminated February 4, 2002.

RISK FACTORS

You should carefully consider the following risks and the other information in
this Report and our other filings with the SEC before you decide to invest in us
or to maintain or increase your investment.

The risks and uncertainties described below are not the only ones facing us.
Additional risks and uncertainties may also adversely impact and impair our
business. If any of the following risks actually occur, our business, results of
operations, or financial condition would likely suffer. In such case, the
trading price of our common stock could decline, and you may lose all or part of
your investment.

Developmental Stage Company. We were incorporated on July 27, 1992. We are a
development stage company. In a development stage company, management devotes
most of its activities to establishing a new business. Planned principal
activities have not yet produced significant revenues and we have suffered
recurring operating losses as is normal in development stage companies. We also
have a working capital deficit of $559,000. These factors raise substantial
doubt about our ability to continue as a going concern. Our ability to emerge

<PAGE>
Page 15

from the development stage with respect to our planned principal business
activity is dependent upon our successful efforts to raise additional equity
financing, receive funding from affiliates and controlling shareholders, and
develop a market for our products.

Ability to develop product. We have no assurance at this time that a
commercially feasible design will ever be perfected, or if it is, that it will
become profitable. Our profitability and survival will depend upon our ability
to develop a technically and commercially feasible product which will be
accepted by end users. The RC/DC Engine which we are developing must be
technologically superior or at least equal to other engines that competitors
offer and must have a competitive price/performance ratio to adequately
penetrate its potential markets. If we are not able to achieve this condition or
if we do not remain technologically competitive, we may be unprofitable and our
investors could lose their entire investment. There can be no assurance that we
or potential licensees will be able to achieve and maintain end user acceptance
of our engine.

Negative Shareholders' Equity. We have a negative shareholders equity as of the
date of this 10-KSB. Our ability to continue as a going business will be
dependent upon our ability to raise additional capital and/or generate revenues
from operations.

Need for Additional Capital. We rely on our ability to raise capital through
the sale of our securities. Our the ultimate success will depend upon our
ability to raise additional capital or to have other parties bear a portion of
the required costs to further develop or exploit the potential market for our
products. REG Tech and REGI have agreed to provide the necessary funds for the
development of the RC/DC Diesel Engine prototypes and our other operations until
joint venture or license agreements can be completed.

Dependence on Consultants and Outside Manufacturing Facilities. Since our
present plans do not provide for a significant technical staff or the
establishment of manufacturing facilities, we will be primarily dependent on
others to perform these functions and to provide the requisite expertise and
quality control. There is no assurance that such persons or institutions will
be available when needed at affordable prices. It will likely cost more to
have independent companies do research and manufacturing than for us to handle
these resources.

Product/Market Acceptance. Our profitability and survival will depend upon our
ability to develop a technically and commercially feasible product which will be
accepted by end users. The RC/DC Engine and the AVFCS which we are developing
must be technologically superior or at least equal to other engines which our
competitors offer and must have a competitive price/performance ratio to
adequately penetrate our potential markets. A number of rotary engines have been
designed over the past 70 years but only one, the Wankel, has been able to
achieve mechanical practicality and any significant market acceptance. If we


are not able to achieve this condition or if we do not remain technologically
competitive, we may be unprofitable and our investors could lose their entire
investment. There can be no assurance that we or our potential licensees will
be able to achieve and maintain end user acceptance of our engine or the AFVCS.

No Formal Market Survey. We have not conducted a formal market survey but
statistics available on the aircraft, marine and industrial markets alone
indicate an annual market potential of more than one hundred million dollars.

Competition. While not a highly competitive business in terms of numbers of
competitors, the business of developing engines of a new design and attempting
to either license or produce them is nonetheless difficult because most

<PAGE>
Page 16

existing engine producers are large, well financed companies which are very
concerned about maintaining their market position. There is no assurance that
we will be successful in meeting or overcoming our current or future
competition.

Protection of Intellectual Property. Our business depends on the protection of
our intellectual property and may suffer if we are unable to adequately protect
our intellectual property. The success of our business depends on our ability to
patent our engine. Currently, we have been granted several U.S. Patents. We
cannot provide assurance that our patents will not be invalidated, circumvented
or challenged, that the rights granted under the patents will give us
competitive advantages or that our patent applications will be granted.

History of Losses. We have a history of operating losses, and an accumulated
deficit, as of April 30, 2002, of $5,308,000. Our ability to generate revenues
and profits is subject to the risks and uncertainties encountered by development
stage companies.

Our future revenues and profitability are unpredictable. We are currently have
no signed contracts that will produce revenue and we do not have an estimate as
to when we will be entering into such contracts. Furthermore, we cannot provide
assurance that management will be successful in negotiating such contracts.

Rapid Technological Changes could Adversely Affect Our Business. The market for
our engines is characterized by rapidly changing technology, evolving industry
standards and changing customer demands. Accordingly, if we are unable to adapt
to rapidly changing technologies and to adapt our product to evolving industry
standards, our business will be adversely affected.

Management and Conflicts of Interest. Our present officers and directors have
other unrelated full-time positions or part-time employment. Some officers and
directors will be available to participate in management decisions on a
part-time or as-needed basis only. Our management may devote time to other
companies or projects which may compete directly or indirectly with us.

Control by Current Insiders. 6,017,850 common shares, not including currently
exercisable options or warrants, are owned by current insiders representing
control of approximately 53.31% of the total voting power. Accordingly, the
present insiders will continue to elect all of our directors and generally
control our affairs.

Need for Additional Key Personnel. At the present, we employ no full time
employees. Our success will depend, in part, upon the ability to attract and
retain qualified employees. We believe that we will be able to attract
competent employees, but no assurance can be given that we will be successful
in this regard. If we are unable to engage and retain the necessary personnel,
our business would be materially and adversely affected.

Indemnification of Officers and Directors for Securities Liabilities. Our
Bylaws provide that we may indemnify any Director, Officer, agent and/or
employee as to those liabilities and on those terms and conditions as are
specified in the Oregon Business Corporation Act. Further, we may purchase and
maintain insurance on behalf of any such persons whether or not we would have
the power to indemnify such person against the liability insured against. This
could result in substantial expenditures by us and prevent any recovery from
such Officers, Directors, agents and employees for losses incurred by us as a
result of their actions. Further, we have been advised that in the opinion of

<PAGE>
Page 17

the Securities and Exchange Commission, indemnification is against public policy
as expressed in the 1933 Act and is therefore, unenforceable.

General Factors. Our areas of business may be affected from time to time by
such matters as changes in general economic conditions, changes in laws and
regulations, taxes, tax laws, prices and costs, and other factors of a general
nature which may have an adverse effect on our business.

Limited Public Market for the Common Stock. At present, only a limited public
market exists for the Common Stock on the over-the-counter bulletin board
maintained by the National Association of Securities Dealers and there is no
assurance that a more active trading market will develop, or, if developed, that
it will be sustained.

Estimates and Financial Statements. The information in this Form 10-KSB
consists of and relies upon evaluation and estimates made by management. Even
though management believes in good faith that such estimates are reasonable,
based upon market studies and data provided by sources knowledgeable in the
field, there can be no assurance that such estimates will ultimately be found to
be accurate or even based upon ac-curate evaluations.

No Foreseeable Dividends. We have not paid dividends on our Common Stock and
do not anticipate paying dividends on our Common Stock in the foreseeable
future.

Possible Volatility of Securities Prices. The market price for our Common Stock
traded on the over-the-counter bulletin board has been highly volatile since it
began trading and will likely to continue to behave in this manner in the
future. Factors such as our operating results and other announcements regarding
our development work and business operations may have a significant impact on
the market price of our securities. Additionally, market prices for securities
of many smaller companies have experienced wide fluctuations not necessarily
related to the operating performance of the companies themselves.

GOVERNMENT REGULATIONS

Our engine products including the spark ignited engine, Diesel engine and Cold
Turbine engine will be subject to various exhaust emissions standards depending
upon the application and the country in which it is produced and/or sold. As
each product becomes ready for sale, it will be necessary to have the engine
certified according to the standards in effort at that time.

DEPENDENCE ON CERTAIN CUSTOMERS

Although we have no key customers at the present time, we expect that if our
development work is successful, we will likely become dependent, at least
initially, upon one or very few key customers. Such dependence could prove to be
risky in the event that one or more such potential customers were to be lost and
not replaced.

RESEARCH AND DEVELOPMENT

The basic research and development work on the RC/DC Engine and other products
is being coordinated and funded by Reg Tech and funded as to 50%.

<PAGE>
Page 18

We plan to contract with outside individuals, institutions and companies to
perform most of the additional research and development work which we may
require to benefit from our rights to the RC/DC Engine and other products.

Development work on the air conditioning compressors is being completed by
Coltec Industries an engineering firm in Columbus, Indiana under contract with
us.

During the last two fiscal years, we spent $627,000 on research and development.

COSTS AND EFFECTS OF COMPLIANCE WITH ENVIRONMENTAL LAWS

At the present time there is no direct financial or competitive effect upon our
business as a result of any need to comply with any federal, state or local
provisions which have been enacted or adopted regulating the discharge of
materials into the environment, or otherwise relating to the protection of the
environment.

NUMBER OF TOTAL EMPLOYEES AND NUMBER OF FULL-TIME EMPLOYEES

We currently have two full-time contractors directly involved in technical
development work on the RC/DC Engine. We expect to hire additional employees for
those positions which we deem necessary to fill, as needs arise. Most additional
employees are expected to be in technical and licensing/marketing positions.

ITEM 2.  DESCRIPTION OF PROPERTY

We own no properties. We currently utilizes office space leased by Reg Tech in a
commercial business park building located in Richmond, British Columbia, Canada,
a suburb of Vancouver. The monthly rent for our portion of this office space is
$500.00. The present facilities are believed to be adequate for meeting our
needs for the immediate future. However we expect that we will likely acquire
separate space when the level of business activity requires us to do so. We do
not anticipate that we will have any difficulty in obtaining such additional
space at favorable rates. There are no current plans to purchase or lease any
properties in the near future. Mr. Badgley, a director and Vice President, works
out of an office in his home in Columbus, Indiana. From this office, Mr. Badgley
oversees and controls development and testing of the engine and other
prototypes. Mr. Badgley has also used the facilities of Coltec Industries which
was under contract to design and build the compressor prototype.

ITEM 3.  LEGAL PROCEEDINGS

We are not a party to any legal proceedings or litigation, nor are we aware that
any litigation is presently being threatened or contemplated against us or any
officer, director or affiliate.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

There was no matter submitted to a vote by our security holders during the
fourth quarter of our fiscal year ended April 30, 2002, through the solicitation
of proxies or otherwise.

<PAGE>
Page 19

PART II

ITEM 5.  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

There is a limited public market for our Common Stock which currently trades on
the OTC Bulletin Board under the symbol "RGUS" where it has been traded since
September 21, 1994. The Common Stock has traded between $0.09 and $6.75 per
share since that date.

The following table sets forth the high and low prices for our Common Stock as
reported on the Bulletin Board for the quarters presented. These quotations
reflect inter-dealer prices, without retail mark-up, mark-down or commissions,
and may not reflect actual transactions.

                                              Bid Price     Asked Price
                                           High $   Low $   High $   Low $
Quarter Ended July 31, 2000                .78125   .375    .96875    .5
Quarter Ended October 31, 2000             .53125   .25     .5625     .3125
Quarter Ended January 31, 2001            1.25      .375   1.28125    .5
Quarter Ended April 30, 2001               .53125   .3      .65625    .375
Quarter Ended July 31, 2001                .36      .25     .4        .26
Quarter Ended October 31, 2001             .46      .16     .47       .21
Quarter Ended January 31, 2002             .28      .15     .29       .20
Quarter Ended April 30, 2002               .22      .17     .30       .19
Quarter Ended July 31, 2002                .21      .07     .22       .11

(Information provided by The Over The Counter Bulletin Board. The quotations
reflect inter-dealer prices, without retail mark-up, markdown, or commission and
may not represent actual transactions.)

As of July 31, 2002, there were 11,287,935 shares of Common Stock outstanding,
held by 238 shareholders of record.

DIVIDEND POLICY

To date we have not paid any dividends on our Common Stock and do not expect to
declare or pay any dividends on our Common Stock in the foreseeable future.
Payment of any dividends will be dependent upon future earnings, if any, our
financial condition, and other factors as deemed relevant by our Board of
Directors.

RECENT SALES OF UNREGISTERED SECURITIES

Set forth below is information regarding the issuance and sales of our
securities without registration during the last fiscal year. No such sales
involved the use of an underwriter. See Note 5(d) to our audited financial
statements for the fiscal year ended April 30, 2002 for more information on
recent sales of unregistered securities.

ITEM 6:  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS

We are a development stage company engaged in the business of developing and
commercially exploiting an improved axial vane type rotary engine known as the
Rand Cam/Direct Charge Engine (the "RC/DC Engine").

<PAGE>
Page 20

As a development stage company, we devote most of our activities to establishing
our business. Planned principal activities have not yet produced significant
revenues and we have a working capital deficit. We have undergone mounting
losses to date totaling $5,308,000 and further losses are expected until we
complete a licensing agreement with a manufacturer and reseller. Our working
capital deficit is $559,000. Our only assets are our intangible assets, being
patents and intellectual property rights, totaling $67,000 which represents 83%
of total assets. These factors raise doubt about our ability to continue as a
going concern. Our ability to emerge from the development stage with respect to
our planned principal business activity is dependent upon our successful efforts
to raise additional equity financing, receive funding from affiliates and
controlling shareholders, and develop a market for our products.

During the year, we raised a further $194,550 in addition to the $72,000 raised
in 2001, pursuant to a private placement of 1,066,000 units issued at $0.25 per
unit. Each unit will contain one share and one warrant to acquire one additional
share at $0.30 per share if exercised in year one after receipt of funds. These
funds raised do not provide enough working capital to fund ongoing operations
for the next twelve months. We may also raise additional funds through the
exercise of warrants and stock options, if exercised. Warrants with respect to
830,767 shares and 1,066,200 shares priced at $0.50 per share and $0.30 per
share respectively may be exercised to net $735,244. Options with respect to
1,485,000 shares at prices between $0.40 and $1.50 per share may be exercised to
net $915,000.

Results of operations for the year ended April 30, 2002 ("2002") compared to the
year ended April 30, 2001 ("2001")

There were no revenues from product licensing during 2002 and 2001.

The net loss in 2002 decreased by $653,000 to $156,000 compared to $809,000 in
2001. The decrease was due to a $579,000 decrease in research and development
expenses and decrease of $74,000 in administrative expenses. The decrease in
administrative expenses was mainly due to a decrease of the investors relations
budget and accounts payable written off. All other administrative expenses were
kept to a minimum amount of $35,000 from $30,000 in 2001. Professional fees made
up $20,000 of the administrative expenses in 2002 as compared to $21,000 in 2001
which includes accounting, auditing and legal; we continue to use a consultant
to perform the majority of legal work. The decrease of $579,000 in research and
development was mainly attributed to a decrease in the write-off of our AVFS
rights to $12,000 from $309,000, prototype design and construction contracts for
outside contractors was decreased to $5,000 from $100,000, accounts payable
write-off of $94,000 from nil, and consulting as described below. The majority
of prototype construction and testing costs continues to be borne by potential
licensees and manufacturers. We paid two in house consultants for technical
prototype design consulting amounting to $37,000 compared to $97,000 in 2001,
which was mainly conducted by Paul LaMarche and Patrick Badgley, Vice President
of Research and Development. See above progress reports for research and
development activity conducted during the year.

LIQUIDITY AND CAPITAL RESOURCES

During 2002, we financed our operations mainly through subscription proceeds of
$194,550 towards a private placement of units at $0.25 per unit.

<PAGE>
Page 21

We received funding in 2002 from our affiliated companies (common directors) and
our 44.94% shareholder, Rand Energy Group, Inc. and our 51% shareholder Reg
Technologies Inc. These companies advanced, or paid expenses on behalf of,
$101,000 during 2002. These amounts owing are now $473,000 or 83% of total
current liabilities, are unsecured and repayable on demand. Our affiliated
companies have indicated that they will not be demanding repayment of these
funds during the next fiscal year and will advance, or pay expenses on behalf
of, further funds if needed.

The loss for the year of $156,000 included ($75,000) of non-cash items being
$7,000 for amortization of capital and intangible assets, $3,000 for stock based
compensation, $12,000 for the write-off of intangible assets, and ($97,000) for
accounts payable written off.

As at April 30, 2002, we had a cash deficiency of $2,000 and other current
liabilities of $97,000. We receive interim support from our ultimate parent
company and plan to raise additional funds from equity financing which is yet to
be negotiated. We also plan to raise funds through loans from a controlling
shareholder (REGI). REGI owns 5,073,200 shares and plans to sell shares as
needed to meet our ongoing funding requirements if traditional equity sources of
financing prove to be insufficient.

ITEM 7.  FINANCIAL STATEMENTS

Our consolidated 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.

ITEM 8.  CHANGES IN AND DISAGREEEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

None.

PART III

ITEM 9.  DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
COMPLIANCE WITH SECTION 16 (a) OF THE EXCHANGE ACT.

Directors and Executive Officers of the Registrant

The following table sets forth the name, age and position of each of our
Executive Officers and Directors:

Name                 Age    Position

John G. Robertson    61     Director, Chairman of the Board of Directors,
                            President and Chief Executive Officer
Jennifer Lorette     30     Director, Vice-President and Chief Financial Officer
James Vandeberg      59     Director and Chief Operating Officer
Patrick Badgley      58     Vice-President, Research and Development

<PAGE>
Page 22

BUSINESS EXPERIENCE AND PRINCIPAL OCCUPATION OF DIRECTORS, EXECUTIVE OFFICERS
AND SIGNIFICANT EMPLOYEES


Mr. Robertson has held his position since our formation in July, 1992. All
officers currently devote part-time services to our operation.

There are no family relationships between any director or executive officer and
any other director or executive officer.

The present and principal occupations of our directors and executive officers
during the last five years are set forth below:

John G. Robertson - Chairman of the Board of Directors, President, Chief
Executive Officer

Mr. Robertson has been our Chairman, President and Chief Executive Officer since
our formation. Since October 1984 Mr. Robertson has been President and a
Director of Reg Technologies Inc., a British Columbia corporation listed on the
Canadian Venture Exchange that has financed the research on the Rand Cam Engine
since 1986. REGI U.S. is controlled by Rand Energy Group, Inc., a British
Columbia corporation of which Reg Technologies Inc. is the majority shareholder.
REGI U.S. owns the U.S. rights to the Rand Cam (TM) technology and Rand Energy
Group, Inc. owns the worldwide rights exclusive of the U.S. Mr. Robertson is
President, Principal Executive Officer and a member of the Board of Directors of
IAS Communications, Inc., an Oregon corporation traded on the OTC bulletin
board, which is developing a new type of antenna system. Since June 1997 Mr.
Robertson has been President, Principal Executive Officer and a Director of
Information-Highway.com, Inc., a Florida corporation traded on the OTC bulletin
board, and its predecessor. He is also the President and Founder of Teryl
Resources Corp., a public company trading on the Canadian Venture Exchange
involved in gold, diamond, and oil and gas exploration. He is also President of
LinuxWizardry Systems, Inc., a public company trading on the OTC Bulletin Board.
Linux Wizardry's Apprentice Router allows small businesses to establish and
manage network connections without the need of a Network specialist. Since May
1977 Mr. Robertson has been President and a member of the Board of Directors of
SMR Investments Ltd., a British Columbia corporation engaged in the business of
management and investment consulting.

Jennifer Lorette - Vice President and Chief Financial Officer

Ms. Lorette became a member of the board of directors in January 2001. She has
been our Vice President since June 1994, and was also previously Chief Financial
Officer. Since April 1994 she has also been Vice President of Administration and
Secretary for Reg Technologies, Inc., a British Columbia corporation listed on
the Canadian Venture Exchange that has financed the research on the Rand Cam
Engine since 1986. REGI U.S. is controlled by Rand Energy Group, Inc., a British
Columbia corporation of which Reg Technologies Inc. is the majority shareholder.
Since February 1995 Ms. Lorette has been Secretary/Treasurer and a director of
IAS Communications Inc., an Oregon corporation traded on the OTC bulletin board.
Since June 1997 Ms. Lorette has been Executive Vice President and a Director of
Information-Highway.com, Inc., a Florida corporation traded on the OTC bulletin
board, and its predecessor. Since June 1994 Ms. Lorette has also been Vice
President and Secretary of LinuxWixardry Stystems, Inc. Since November 1997 Ms.
Lorette has been Vice President of Teryl Resources Corp., a public company
trading on the Canadian Venture Exchange involved in gold, diamond, and oil and
gas exploration. She also became a director in February 2001.

<PAGE>
Page 23

James L. Vandeberg - Chief Operating Officer and a Member of the Board of
Directors

Mr. Vandeberg became a Director and Chief Operating Officer in November 1999.
Mr. Vandeberg is a partner in the Seattle, Washington law firm of Ogden Murphy
Wallace. He has served as our legal counsel since 1996. Mr. Vandeberg's
practice focuses on the corporate finance area, with an emphasis on securities
and acquisitions. Mr. Vandeberg was previously general counsel and secretary of
two NYSE companies and is a director of Information-Highway.com, Inc., a Florida
corporation traded on the OTC bulletin board. He is also a director of IAS
Communications, Inc. an Oregon corporation traded on the OTC bulletin board
since November 1998. Mr. Vandeberg is also a director of LinuxWizardry Systems
Inc., a British Columbia company traded on the OTC bulletin board. Mr.
Vandeberg is also a director of Cyber Merchants Exchange, Inc. since May 2001.
He is a member and former director of the American Society of Corporate
Secretaries. He became a member of the Washington Bar Association in 1969 and
of the California Bar Association in 1973. Mr. Vandeberg graduated cum laude
from the University of Washington with a Bachelor of Arts degree in accounting
in 1966, and from New York University School of Law in 1969, where he was a
Root-Tilden Scholar.

Patrick R. Badgley - Vice President, Research and Development

Mr. Badgley was appointed our Vice President, Research and Development in
February 1994. He is directing and participating in the technical development of
the Rand Cam compressor, gasoline engine and diesel engine. Since July 1993 Mr.
Badgley has been a Director of Reg Technologies Inc., a British Columbia
corporation listed on the Canadian Venture Exchange that has financed the
research on the Rand Cam Engine since 1986. REGI U.S. is controlled by Rand
Energy Group, Inc., a British Columbia corporation of which Reg Technologies
Inc. is the majority shareholder. Between 1986 and 1994, Mr. Badgley was the
Director of Research and Development at Adiabatics, Inc., in Columbus, Indiana,
where he directly oversaw several government and privately sponsored research
programs involving engines. He was the Program Manager for the Gas Research
Institute project for emissions reduction of two-stoke cycle natural gas
engines. He was also Program Manger for several coal fuel diesel engine programs
for the Department of Energy and for uncooled engine programs for a Wankel
engine for NASA and for a piston type diesel engine for the U.S. Army. Mr.
Badgley's work has covered all phases of research, design, development and
manufacturing, from research on ultra-high speed solenoids and fuel sprays, to
new product conceptualization and production implementation of fuel pumps and
fuel injectors. Mr. Badgley received his Bachelor of Science degree in
Mechanical Engineering from Ohio State University. Since February 1995 Mr.
Badgley has been a director and officer of IAS Communications Inc., an Oregon
corporation traded on the OTC bulletin board.

Section 16(a) Beneficial Ownership Reporting Compliance

Based solely upon a review of Forms 3, 4 and 5 furnished to us, other than
Messrs. Badgley and Vandeberg, who furnished us with no Forms during the year,
none of our officers, directors or beneficial owners of more than ten percent of
the Common Stock failed to file on a timely basis reports required to be filed
by Section 16(a) of the Exchange Act during the most recent fiscal year.

<PAGE>
Page 24

ITEM 10. EXECUTIVE COMPENSATION

No executive officer had an annual salary and bonus in excess of $100,000 during
the past fiscal year. Mr. Robertson received no compensation from us in fiscal
year 2002. Options to purchase 700,000 shares of our common stock granted on
March 15, 2001, which replaced the 300,000 options which expired in January
2001, were repriced from $0.40 to $0.20 on May 10, 2002. No options were
granted during fiscal 2002.

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------------
                                        Annual Compensation                  Long-Term Compensation
                                                                       ----------------------------------------
                                                                                  Awards             Payouts
                                   -----------------------------------------------------------------------------------------
                                                              Other                     Securities                   All
                                                              Annual      Restricted  Underderlying                 Other
                                                             Compen-        Stock        Options/       LTIP(2)    Compen-
Name and                              Salary      Bonus      sation        Award(s)       SARs         Payouts     sation
Principal Position        Year         ($)         ($)        ($)            (#)          (#)            ($)         ($)
----------------------------------------------------------------------------------------------------------------------------
<S>                       <C>            <C>         <C>       <C>           <C>        <C>             <C>         <C>
John G. Robertson,        2002           Nil         Nil       36,000 (3)    Nil        Nil             Nil         Nil
President and CEO         2001           Nil         Nil       36,000 (3)    Nil        700,000(4)      Nil         Nil
                          2000           Nil         Nil       36,000 (3)    Nil        Nil             Nil         Nil
----------------------------------------------------------------------------------------------------------------------------
</TABLE>

(1)   "SARS" or "stock appreciation right" means a right granted by US, as
      compensation for services rendered, to receive a payment of cash or an
      issue or transfer of securities based wholly or in part on changes in the
      trading price of our publicly traded securities.

(2)   "LTIP" or "long term incentive plan" means any plan which provides
      compensation intended to serve as incentive for performance to occur over
      a period longer than one financial year, but does not include option or
      stock appreciation right plans or plans for compensation through
      restricted shares or restricted share units.

(3)   Access Information Services, Inc., a Washington corporation which is owned
      and controlled by the Robertson Family Trust, received or is to receive
      $2,500 per month from us for management services provided to us and rent
      in the sum of $6,000 per annum. Mr. Robertson is a trustee of the
      Robertson Family Trust.

(4)   These options were granted on March 15, 2001 exercisable at a price of
      US$0.40 per share until March 15, 2006. On May 10, 2002, the exercise
      price  of these options were reduced to $0.20 per share, with all other
      terms remaining the same.

On March 31, 1994, we entered into a management agreement with Access
Information Services, Inc., a Washington corporation which is owned and
controlled by the Robertson Family Trust. We retained Access at the rate of
$2,500 per month to provide certain management, administrative, and financial
services.

We may in the future create retirement, pension, profit sharing, insurance and
medical reimbursement plans covering our Officers and Directors. At the present
time, no such plans exist. No advances have been made or are contemplated by us
to any of our Officers or Directors. Directors receive no compensation for their
service as such. Compensation of officers and directors is determined by our
Board of Directors and is not subject to shareholder approval.

The following table sets forth certain information with respect to options
exercised during the fiscal year ended April 30, 2002 by our Chief Executive
Officer, and with respect to unexercised options held by our Chief Executive
Officer at the end of fiscal 2002.


<PAGE>
Page 25

AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND YEAR END OPTION VALUES

--------------------------------------------------------------------------------
                                                  Number of        Value of
                                                 unexercised      unexercised
                                                  Options at    Options at Year
                                                  Years End          End (1)
--------------------------------------------------------------------------------
                   Shares Acquired    Value      Exercisable/    Exercisable/
Name               on exercise(#)   realized($) unexercisable   unexercisable
--------------------------------------------------------------------------------
John G. Robertson      -0-             -0-           700,000           -0-
--------------------------------------------------------------------------------


(1) The calculation of the value of unexercised options is based on the
difference between the last sale price of $0.22 per share for our Common Stock
on April 30, 2002, and the exercise price of each option (then $0.40),
multiplied by the number of shares covered by the option.

We do not have any Long Term Incentive Plans.

We do not have any employment contracts, termination of employment and change of
control arrangements.

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth, as of July 31, 2002, our outstanding Class A
Common Stock owned of record or beneficially by each person who owned of record,
or was known by us to own beneficially, more than 5% of our Common Stock, and
the name and shareholdings of each Executive Officer and Director and all
Executive Officers and Directors as a group. A person is deemed to be the
beneficial owner of securities that can be acquired by such person within 60
days from the date of this report upon the exercise of warrants or options. Each
beneficial owner's percentage ownership is determined by assuming that options
that are held by such person and which are exercisable within 60 days from the
date are exercised.

<PAGE>
Page 26

<TABLE>
<CAPTION>
<S><C>
             Name                                  Class A Shares Owned         Percentage of
                                                                               Class A Shares
                                                                                    Owned
<S>                                                       <C>                      <C>
John G. Robertson, Chairman of the Board                  5,781,350                51.22%
of Directors, President and Director (1) (2)
The Watchtower Society (3)                                5,073,200                44.94%
James McCann (4)                                          5,073,200                44.94%
Rand Energy Group Inc. (5)                                5,073,200                44.94%
Jennifer Lorette, Vice President and Director                85,500                 *
(6)
James Vandeberg, Chief Operating Officer                     76,000                 *
and Director (7)
Patrick Badgley, Vice President, Research                    75,000                 *
and Development and Director (8)

ALL EXECUTIVE OFFICERS &                                  6,017,850                53.31%
DIRECTORS AS A GROUP (FOUR
INDIVIDUALS) (9)
</TABLE>

Except as noted below, all shares are held beneficially and of record and each
record shareholder has sole voting and investment power.

*Less than one percent of the issued and outstanding on July 31, 2002 which was
11,287,935

(1) These individuals may be deemed to be our "parents or founders" as that term
is defined in the Rules and Regulations promulgated under the Securities Act of
1933.

(2) Includes 5,073,200 shares registered in the name of Rand Energy Group Inc.
See Note (5) below for an explanation of the beneficial ownership of Rand Energy
Group Inc. Mr. Robertson disclaims beneficial ownership of these shares beyond
the extent of his pecuniary interest. Also includes 700,000 options that are
currently exercisable. Mr. Robertson's address is the same as the Company's.

(3) Includes 5,073,200 shares registered in the name of Rand Energy Group Inc.
See Note (5) below for an explanation of the beneficial ownership of Rand Energy
Group Inc.

(4) Includes 5,073,200 shares registered in the name of Rand Energy Group Inc.
See Note (5) below for an explanation of the beneficial ownership of Rand Energy
Group Inc.

(5) Rand Energy Group Inc. is owned 51% by Reg Technologies Inc. and 49% by
Rand Cam Engine Corp. Under Rule 13d-3 under the Securities Exchange Act of
1934, both Reg Technologies Inc. and Rand Cam Engine Corp. could be considered
the beneficial owner of the 5,073,200 shares registered in the name of Rand
Energy Group Inc.

Reg Technologies Inc. is a British Columbia corporation listed on the Canadian
Venture Exchange that has financed the research on the Rand Cam Engine since
1986. Since October 1984 Mr. Robertson has been President and a Director of Reg
Technologies Inc. SMR Investment Ltd., a British Columbia corporation, holds a
controlling interest in Reg Technologies Inc. Since May 1977 Mr. Robertson has

<PAGE>
Page 27

been President and a member of the Board of Directors of SMR Investments Ltd.
Susanne M. Robertson, Mr. Robertson's wife, owns SMR Investment Ltd.
Accordingly, in Note (2) above, beneficial ownership of the 5,073,200 shares
registered in the name of Rand Energy Group Inc. has been attributed to Mr.
Robertson. We believe it would be misleading and not provide clear disclosure to
list as beneficial owners in the table the other entities and persons discussed
in this paragraph, although a strict reading of Rule 13d-3 under the Securities
Exchange Act of 1934 might require each such entity and person to be listed in
the beneficial ownership table.

Rand Cam Engine Corp. is a privately held company whose stock is reportedly
owned 50% by The Watchtower Society, a religious organization, 34% by James
McCann and the balance by several other shareholders. Mr. McCann has indicated
that he donated the shares held by The Watchtower Society to that organization
but has retained a voting proxy for those shares. Accordingly, in Notes (3) and
(4) above, beneficial ownership of the 5,073,200 shares registered in the name
of Rand Energy Group Inc. has been attributed to The Watchtower Society and Mr.
McCann. We believe it would be misleading and not provide clear disclosure to
list as beneficial owners in the table the other entities and persons discussed
in this paragraph, although a strict reading of Rule 13d-3 under the Securities
Exchange Act of 1934 might require each such entity and person to be listed in
the beneficial ownership table.

(6) Includes 85,000 options that are currently exercisable. These 85,000 options
were cancelled on May 10, 2002 and replaced with 150,000 options expiring May
10, 2007 at a price of $0.20 per share. Ms. Lorette's address is the same as
the Company's.

(7) Includes 75,000 options that are currently exercisable. Mr. Vandeberg's
address is Ogden Murphy Wallace, P.L.L.C., 1601 Fifth Avenue, Suite 2100,
Seattle, Washington 98101-1686.

(8) Includes 75,000 options that are currently exercisable. Mr. Badgely's
address is 2815 Franklin Drive, Columbus, Indiana, 47201.
..
(9) Includes 5,073,200 shares registered in the name of Rand Energy Group Inc.
whose beneficial ownership is attributed to Mr. Robertson as set forth in Note
(2) above. See Note (5) above for an explanation of the beneficial ownership of
Rand Energy Group Inc. Mr. Robertson disclaims beneficial ownership of these
shares beyond the extent of his pecuniary interest. Also includes 935,000
options that are currently exercisable.

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Pursuant to the August 1992 Agreement we issued 5,700,000 shares of our Common
Stock at a deemed value of $0.01 per share to Rand Energy Group Inc., a
privately held British Columbia corporation ("RAND") in exchange for certain
valuable rights, technology, information, and other tangible and intangible
assets relating to the United States rights to the Original Engine. RAND is
owned 51% by Reg Technologies Inc., a British Columbia corporation listed on the
Canadian Venture Exchange ("Reg Tech"), and 49% by Rand Cam Engine Corp. Reg
Tech's President is also our President and its Vice President is also Vice
President of the Company.

We also agreed to pay semi-annually to RAND a royalty of 5% of any net profits
to be derived by us from revenues received as a result of its license of the
Original Engine.

<PAGE>
Page 28

In the April 1993 Agreement, an amendment to a previous Amendment Agreement
dated November 23, 1992, between RAND, Reg Tech and Brian Cherry (a former
officer and director) and an original agreement dated July 30, 1992, between
RAND, Reg Tech and Brian Cherry, Cherry agreed to: (a) sell, transfer and assign
to RAND all his right, title and interest in and to the technology related to
the RC/DC Engine, including all pending and future patent applications in
respect of the Technology for all countries except the United States of America,
together with any improvements, changes or other variations to the Technology;
(b) sell, transfer and assign to us (then called Sky Technologies Inc.), all his
right, title and interest in and to the Technology, including all pending and
future patent applications in respect of the Technology for the United States of
America, together with any improvements, changes or other variations to the
Technology.

Other provisions of the April 1993 Agreement call for us (a) to pay to RAND a
continuing royalty of 5% of the net profits derived from the Technology by us
and (b) to pay to Brian Cherry a continuing royalty of 1% of the net profits
derived from the Technology by us.

A final provision of the April 1993 Agreement assigns and transfers ownership to
us of any patents, inventions, copyrights, know-how, technical data, and related
types of intellectual property conceived, developed or created by RAND or its
associated companies either prior to or subsequent to the date of the agreement,
which results or derives from the direct or indirect use of the Original Engine
and/or RC/DC Engine technologies by RAND.

The terms of the agreements referenced above were negotiated by the parties in
non-arm's-length transactions but were deemed by the parties involved to be fair
and equitable under the circumstances existing at the time.

We are controlled by Rand Energy Group Inc., a privately held British Columbia
corporation ("RAND"), which, in turn, is controlled 51% by Reg Technologies
Inc., a publicly held British Columbia corporation ("Reg Tech") and 49% by Rand
Cam Engine Corp. SMR Investment Ltd., a British Columbia corporation, holds a
controlling interest in Reg Technologies Inc. Since May 1977 Mr. Robertson has
been President and a member of the Board of Directors of SMR Investments Ltd.
Susanne M. Robertson, Mr. Robertson's wife, owns SMR Investment Ltd.  Rand Cam
Engine Corp. is a privately held company whose stock is reportedly owned 50% by
The Watchtower Society, a religious organization, 34% by James McCann and the
balance by several other shareholders. Mr. McCann has indicated that he donated
the shares held by The Watchtower Society to that organization but has retained
a voting proxy for those shares.

ITEM 13(a). EXHIBITS.

Number   Description
----------------------------------------------------------------------------
3.1      Articles of Incorporation                                           (1)
3.2      Article of Amendment changing name to REGI U.S., Inc.               (2)
3.3      By-Laws                                                             (1)
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)

<PAGE>
Page 29

10.4     Agreement between REGI and Advanced Ceramics Research
           dated March 20, 2002
10.5     Agreement between Reg Technologies Inc., REGI U.S., Inc. and Rand
         Energy Group Inc. made as of April 24, 2002
23.1     Consent of Independent Auditors

(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.

Independent Auditor's Report                                                 F-1
Balance Sheets                                                               F-2
Statements of Operations                                                     F-3
Statements of Cash Flows                                                     F-4
Statement of Stockholders' Equity                                            F-5
Notes to the Financial Statements                                    F-7 to F-12

ITEM 13(b). REPORTS ON FORM 8-K.

None.

<PAGE>
Page 30

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: August 13, 2002

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            President, Chief                        8/13/02
--------------------------
(John G. Robertson)              Executive Officer and Director


/s/James Vandeberg               Chief Operating Officer and Director    8/13/02
--------------------------
(James Vandeberg)


/s/ Jennifer Lorette             Vice President and Director             8/13/02


--------------------------
(Jennifer Lorette)

<PAGE>
Page 31

                                   EXHIBIT INDEX

Number   Description                                                    Page
----------------------------------------------------------------------------
3.1      Articles of Incorporation                                           (1)
3.2      Article of Amendment changing name to REGI U.S., Inc.               (2)
3.3      By-Laws                                                             (1)
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                                         44
10.5     Agreement between Reg Technologies Inc., REGI U.S., Inc.
         and Rand Energy Group Inc. made as of April 24, 2002           46
23.1     Consent of Independent Auditors                                53


(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.


Independent Auditor's Report                                                 F-1

Balance Sheets                                                               F-2

Statements of Operations                                                     F-3

Statements of Cash Flows                                                     F-4

Statement of Stockholders' Equity                                            F-5

Notes to the Financial Statements                                    F-7 to F-12



<PAGE>
F-1

<TABLE>
<CAPTION>
<S><C>
M A N N I N G  E L L I O T T                 11th floor, 1050 West Pender Street, Vancouver, BC, Canada V6E 3S7

C H A R T E R E D  A C C O U N T A N T S     Phone: 604.714.3600  Fax: 604.714.3669  Web: manningelliott.com
</TABLE>


                         Independent Auditor's Report
                         ----------------------------


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


We have audited the accompanying balance sheets of REGI U.S., Inc. (A
Development Stage Company) as of April 30, 2002 and 2001 and the related
statements of operations, stockholders' deficit and cash flows for the period
from July 27, 1992 (Inception) to April 30, 2002 and the years ended April 30,
2002 and 2001. 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.

We conducted our audits in accordance with generally accepted auditing standards
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about 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 provides a reasonable basis for our
opinion.

In our opinion, the aforementioned financial statements present fairly, in all
material respects, the financial position of REGI U.S., Inc. (A Development
Stage Company), as of April 30, 2002 and 2001, and the results of its operations
and its cash flows for the period from July 27, 1992 (Inception) to April 30,
2002 and the years ended April 30, 2002 and 2001, in conformity with generally
accepted accounting principles used 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 or profitable operations
since inception and has a severe working capital deficit. 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. The
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.



/s/ Manning Elliott



CHARTERED ACCOUNTANTS
Vancouver, Canada
August 2, 2002

<PAGE>


Page F-2

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

                                                                April 30,
                                                            2002         2001
                                                             $            $

Assets

Current Assets

   Accounts receivable                                      13,400         -
-------------------------------------------------------------------------------
Total Current Assets                                        13,400         -

Property, Plant and Equipment (Note 3)                         664        2,479

Long-Lived Assets (Note 4)                                  66,920       81,947
-------------------------------------------------------------------------------
Total Assets                                                80,984       84,426
===============================================================================

Liabilities and Stockholders' Deficit

Current Liabilities

   Cheques issued in excess of funds on deposit              2,256        1,466
   Accounts payable                                         87,952      115,243
   Accrued liabilities                                       9,500      129,320
   Due to affiliates (Note 6)                              473,155      371,819
-------------------------------------------------------------------------------
Total Current Liabilities                                  572,863      617,848
-------------------------------------------------------------------------------

Commitments and Contingent Liabilities (Notes 1 and 7)

Stockholders' Deficit

Common Stock (Note 5), 20,000,000 shares authorized
  without par value;
   11,287,935 and 10,221,735 shares issued and
      outstanding respectively                           4,778,799    4,512,249

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

Stock Based Compensation                                    37,000       33,917

Deficit Accumulated During the Development Stage        (5,307,678)  (5,151,588)
-------------------------------------------------------------------------------
Total Stockholders' Deficit                               (491,879)    (533,422)
-------------------------------------------------------------------------------
Total Liabilities and Stockholders' Deficit                 80,984       84,426
===============================================================================

  (The accompanying notes are an integral part of the financial statements)



<PAGE>
Page F-3

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

<TABLE>
<CAPTION>
                                               Accumulated from
                                                 July 27, 1992
                                                  (Inception)
                                                  To April 30,            April 30,
                                                      2002           2002           2001
                                                       $              $              $
<S>                                             <C>           <C>           <C>
Revenues                                                -              -              -
------------------------------------------------------------------------------------------
Administrative Expenses

   Bank charges                                        9,663            907          1,236
   Foreign exchange                                    3,852            (95)          (349)
   Interest on debentures                             12,593           -               224
   Investor relations - publications                 315,929           -            11,092
   Investor relations - consulting                   776,245        111,370        164,569
   Office, rent and telephone                        155,993         11,525            847
   Professional fees                                 343,418         19,855         20,713
   Transfer agent and regulatory fees                 98,173          2,201          7,390
   Travel                                             12,722          1,048           -
   Less: interest                                    (16,788)           (33)            (8)
         accounts payable written off                (14,554)       (14,554)          -
------------------------------------------------------------------------------------------
                                                   1,697,246        132,224        205,714
------------------------------------------------------------------------------------------

Research and Development Expenses

   Intellectual property (Note 4)                    578,509         12,364        309,145
   Amortization                                      115,242          6,939         25,241
   Market development                                 92,782           -              -
   Professional fees                                  73,904           -              -
   Project management                                280,000         30,000         30,000
   Project overhead                                  209,588         17,290         15,652
   Prototype design and construction contracts     1,389,350          4,758        100,486
   Royalties                                          93,000          6,000         24,000
   Technical prototype design consulting             511,738         36,932         97,000
   Technical reports                                  24,364          2,244           -
   Technical salaries                                169,467           -              -
   Travel                                            166,886          1,737          1,443
   Less: accounts payable written off                (94,398)       (94,398)          -
------------------------------------------------------------------------------------------
                                                   3,610,432         23,866        602,967
------------------------------------------------------------------------------------------
Net Loss for the Year                              5,307,678        156,090        808,681
==========================================================================================
Loss Per Share - Basic                                                 (.02)          (.08)
==========================================================================================
Weighted Average Shares Outstanding                              10,399,000     10,218,000
==========================================================================================
</TABLE>

(Diluted loss per share has not been presented as the result is anti-dilutive)

  (The accompanying notes are an integral part of the financial statements)

<PAGE>
Page F-4

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

<TABLE>
<CAPTION>
                                                    Accumulated from
                                                      July 27, 1992
                                                       (Inception)

                                                       To April 30,            April 30,
                                                           2002           2002           2001
                                                            $              $              $
<S>                                                    <C>             <C>            <C>
Cash Flows to Operating Activities

Net loss                                               (5,307,678)     (156,090)      (808,681)

Adjustments to reconcile net loss to cash

   Amortization                                           115,242         6,939         25,241
   Intellectual property written off                      578,509        12,364        309,145
   Stock based compensation                               278,296         3,083         18,500
   Accounts payable written off                           (96,755)      (96,755)          -

Change in non-cash working capital items

   Increase in accounts receivable                        (13,400)      (13,400)          -
   Increase (decrease) in accounts payable and
     accrued liabilities                                  202,363       (67,202)       181,311
----------------------------------------------------------------------------------------------
Net Cash Used by Operating Activities                  (4,243,423)     (311,061)      (274,484)
----------------------------------------------------------------------------------------------
Cash Flows from Financing Activities

   Increase in common stock                             4,167,252       194,550         74,000
   Redemption of convertible debentures                      -             -           (50,000)
   Increase (decrease) in due to affiliates               290,001       118,182        273,415
----------------------------------------------------------------------------------------------
Net Cash Provided by Financing Activities               4,457,253       312,732        297,415
----------------------------------------------------------------------------------------------
Cash Flows to Investing Activities

   (Increase) in property, plant and equipment            (24,947)         -              -
   (Increase) in patent protection costs                 (191,139)       (2,461)       (19,544)
----------------------------------------------------------------------------------------------
Net Cash Used by Investing Activities                    (216,086)       (2,461)       (19,544)
----------------------------------------------------------------------------------------------
Increase (decrease) in cash                                (2,256)         (790)         3,387

Cash (deficiency) - beginning of period                      -           (1,466)        (4,853)
----------------------------------------------------------------------------------------------
Cash (deficiency) - end of period                          (2,256)       (2,256)        (1,466)
==============================================================================================
Non-Cash Financing Activities

   Affiliate's shares issued for intellectual property    200,000          -              -
   Shares issued for financial consulting services        241,296          -              -
   Shares issued for intellectual property                345,251          -              -
   Shares issued to settle debt                            25,000          -              -
   Stock based compensation                                37,000         3,083         18,500
----------------------------------------------------------------------------------------------
                                                          848,547         3,083         18,500
==============================================================================================
Supplemental Disclosures

   Interest paid                                           12,593          -               224
   Income tax paid                                           -             -              -
</TABLE>


  (The accompanying notes are an integral part of the financial statements)

<PAGE>
Page F-5

REGI U.S., Inc.
(A Development Stage Company)
Statements of Stockholders' Equity
From July 27, 1992 (Inception) to April 30, 2002

<TABLE>
<CAPTION>
                                                                                    Deficit
                                                                                  Accumulated
                                                                                   During the
                                                                Common Stock       Development
                                                             Shares      Amount       Stage
                                                                #           $           $
<S>                                                       <C>          <C>          <C>
Balance - July 27, 1992 (inception)                            -            -            -

   Stock issued for intellectual property                 5,700,000       57,000         -
   Stock issued for cash                                    300,000        3,000         -
   Net loss for the period                                     -            -         (23,492)
---------------------------------------------------------------------------------------------
Balance - April 30, 1993                                  6,000,000       60,000      (23,492)

   Stock issued for cash pursuant to a public offering      500,000      500,000         -
   Net loss for the year                                       -            -        (394,263)
---------------------------------------------------------------------------------------------
Balance - April 30, 1994                                  6,500,000      560,000     (417,755)

   Stock issued for cash pursuant to:
     options exercised                                       10,000        1,000         -
     a private placement                                    250,000      562,500         -
     warrants exercised                                     170,200      213,000         -
   Net loss for the year                                       -            -      (1,225,743)
---------------------------------------------------------------------------------------------
Balance - April 30, 1995                                  6,930,200    1,336,500   (1,643,498)

   Stock issued for cash pursuant to:
     options exercised                                      232,500       75,800         -
     warrants exercised                                     132,200      198,300         -
     a private offering memorandum                          341,000      682,000         -
   Net loss for the year                                       -            -        (796,905)
---------------------------------------------------------------------------------------------
Balance - April 30, 1996                                  7,635,900    2,292,600   (2,440,403)

   Stock issued for cash pursuant to:
     options exercised                                      137,000       13,700         -
     warrants exercised                                     185,400      278,100         -
     private placements                                     165,000      257,500         -
   Net loss for the year                                       -            -        (510,184)
---------------------------------------------------------------------------------------------
Balance - April 30, 1997                                  8,123,300    2,841,900   (2,950,587)

   Stock issued for cash pursuant to:
     options exercised                                       50,000        5,000         -
     a units offering                                       500,000      500,000         -
   Stock issued for acquisition of AVFS rights              400,000      288,251         -
   Stock issued for financial consulting services           125,000      170,250         -
   Stock issued to settle an accrued liability               50,000       25,000         -
   Net loss for the year                                       -            -        (580,901)
---------------------------------------------------------------------------------------------
Balance - April 30, 1998                                  9,248,300    3,830,401   (3,531,488)
---------------------------------------------------------------------------------------------
</TABLE>

<PAGE>
Page F-6

<TABLE>
<CAPTION>
                                                                                    Deficit
                                                                                  Accumulated
                                                                                   During the
                                                                Common Stock       Development
                                                             Shares      Amount       Stage
                                                                #           $           $
<S>                                                       <C>          <C>          <C>
    Stock issued for financial consulting services          100,000       71,046         -
    Net loss for the year                                      -            -        (397,924)
---------------------------------------------------------------------------------------------
Balance - April 30, 1999                                  9,348,300    3,901,447   (3,929,412)

   Stock issued for cash pursuant to:
     a private placement                                    852,101      639,075         -
     less cash commission paid                                 -         (47,607)        -
     warrants exercised                                      17,334       17,334         -
   Net loss for the year                                       -            -        (413,495)
---------------------------------------------------------------------------------------------
Balance - April 30, 2000                                 10,217,735    4,510,249   (4,342,907)

   Stock issued for cash pursuant to:
     warrants exercised                                       4,000        2,000         -
   Net loss for the year                                       -            -        (808,681)
---------------------------------------------------------------------------------------------
Balance - April 30, 2001                                 10,221,735    4,512,249   (5,151,588)

   Stock issued for cash pursuant to a private placement  1,066,200      266,550         -
   Net loss for the year                                       -            -        (156,090)
---------------------------------------------------------------------------------------------
Balance - April 30, 2002                                 11,287,935    4,778,799   (5,307,678)
=============================================================================================
</TABLE>

  (The accompanying notes are an integral part of the financial statements)

<PAGE>
Page F-7

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

1.   Development Stage Company

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

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

     In a development stage company, management devotes most of its activities
     to establishing a new business. Planned principal activities have not yet
     produced significant revenues and the Company has suffered recurring
     operating losses as is normal in development stage companies. The Company
     also has a working capital deficit of $559,463. 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.

     During fiscal 2002 the Company has raised proceeds of $266,550 through a
     completed units private placement of 1,066,200 units at $0.25 per unit.
     These units were issued March 6, 2002. Each unit consisted of one share and
     one warrant to purchase an additional share at a price of $0.30 for a
     period of one year from the date of receipt of funds. The common stock
     offered will not be registered under the Securities Act of 1933 and may not
     be offered or sold in the United States absent registration or an
     applicable exemption from registration requirements. The common stock
     issued has not been registered with or approved by any state securities
     agency or the U.S. Securities and Exchange Commission and were sold
     pursuant to exemptions from registration.

     The Company plans to raise funds through loans from a shareholder Rand
     Energy Group Inc. Rand Energy Group Inc. owns approximately 50% of shares
     of the Company, having an approximate current market value of $1,000,000,
     and plans to sell shares as needed to meet ongoing funding requirements if
     traditional equity sources of financing prove to be insufficient.

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

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

2.   Summary of Significant Accounting Policies


     (a)  Revenue Recognition

          Product sales are recognized at the time goods are shipped. System and
          project revenue are recognized utilizing the percentage of completion
          method that recognizes project revenue and profit during construction
          based on expected total profit and estimated progress towards
          completion during the reporting period. All related costs are
          recognized in the period in which they occur. Revenue from licensing
          the right for others to use the technology is recognized as earned
          over time and collection is certain.

     (b)  Property, Plant and Equipment

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

<PAGE>
Page F-8

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

2.   Summary of Significant Accounting Policies (continued)

     (c)  Long-Lived Assets

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

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

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

     (e)  Accounting for Stock Based Compensation

          The Company uses the intrinsic value based method of accounting
          prescribed by Accounting Principles Board Opinion No. 25, "Accounting
          for Stock Issued to Employees" ("APB Opinion No. 25") in accounting
          for its stock based method, compensation cost is the excess, if any,
          of the fair market value of the stock at grant date over the amount an
          employee or director must pay to acquire the stock. See Note 5(b).

     (f)  Cash and Cash Equivalents

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

     (g)  Foreign Currency Transactions/Balances


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

     (h)  Use of Estimates

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

<PAGE>
Page F-9

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

2.   Summary of Significant Accounting Policies (continued)

     (i)  Tax Accounting

          The Company has adopted Statement of Financial Accounting Standards
          No. 109 ("SFAS 109") as of its inception. The Company has incurred net
          operating losses as scheduled below:
                                         Amount                    Year of
          Year of Loss                     $                      Expiration
              1993                       23,000                      2008
              1994                      393,000                      2009
              1995                    1,007,000                      2010
              1996                      792,000                      2011
              1997                      521,000                      2012
              1998                      605,000                      2013
              1999                      417,000                      2014
              2000                      429,000                      2015
              2001                      518,000                      2016
              2002                      153,000                      2017
                                    -----------
                                      4,858,000
                                    ===========

          Pursuant to SFAS 109 the Company is required to compute tax asset
          benefits for net operating losses carried forward. Potential benefit
          of net operating losses have not been recognized in these financial
          statements because the Company cannot be assured it is more likely
          than not it will utilize the net operating losses carried forward in
          future years.

          The components of the net deferred tax asset at the end of April 30,
          2002 and 2001, and the statutory tax rate, the effective tax rate and
          the elected amount of the valuation allowance are scheduled below:

                                                   2002             2001
                                                    $                $

               Net Operating Loss                156,000          808,000
               Statutory Tax Rate             22,500 + 39%     113,900 + 34%
                                              in excess of     in excess of
                                                $100,000         $335,000
               Effective Tax Rate                   -                -
               Deferred Tax Asset                 44,000          275,000
               Valuation Allowance               (44,000)        (275,000)
                                            ------------     ------------
               Net Deferred Tax Asset               -                -
                                            ============     ============

3.   Property, Plant and Equipment

<TABLE>
<CAPTION>
                                                                             April 30,     April 30,
                                                                                2002          2001
                                                            Accumulated       Net Book      Net Book
                                                   Cost     Amortization       Value         Value
                                                    $             $              $             $
     <S>                                           <C>           <C>             <C>           <C>
     Computer equipment                            5,452         4,788           664           2,479
     ===============================================================================================
</TABLE>

<PAGE>
Page F-10

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

4.   Long-Lived Assets
<TABLE>
<CAPTION>
                                                                             April 30,     April 30,
                                                                                2002          2001
                                                            Accumulated       Net Book      Net Book
                                                   Cost     Amortization       Value         Value
                                                    $             $              $             $
     <S>                                          <C>           <C>           <C>             <C>
     Patents - RC/DC Engine                       90,721        23,801        66,920          69,241
     Patents - AVFS                                 -             -             -              5,926
     AVFS rights ((d) below)                        -             -             -                  1
     Patents/rights-Hydrogen separator              -             -             -              6,779
     -----------------------------------------------------------------------------------------------
                                                  90,721        23,801        66,920          81,947
     ===============================================================================================
</TABLE>

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

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

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

(d)   On June 22, 1997 the Company acquired the U.S. rights to an Air/Vapor Flow
      System "AVFS". The Company paid $50,000 and 200,000 shares at a fair value
      of $154,665. The Company will pay to the inventor 8.5% on net sales
      derived from the AVFS. On December 31, 1997, the Company acquired the
      world-wide rights (except Canada) to the AVFS by paying $36,500 and
      issuing a further 200,000 shares at a fair value of $133,586. The inventor
      will also receive a minimum annual royalty of $24,000 per year beginning
      October 1, 1997, payable quarterly. These rights were written down to a
      nominal value of $1 during fiscal 2001 and $309,145 was charged to
      operations as a research and development cost.

      On February 4, 2002 the Company terminated the agreement for the Air/Vapor
      Flow System "AVFS" due to the unavailability of receiving a patent on the
      technology.

(e)   In October 2000, Reg Technologies Inc. entered into an agreement with GHM
      Inc., a privately owned company located in Maryland, to acquire a 50%
      interest in the rights to the H2O hydrogen separator technology (the
      "Technology"). The Technology is based on a unique system for extracting
      hydrogen from water. The Company will own the U.S. rights and Reg
      Technologies Inc. will own the worldwide rights excluding the U.S. In
      consideration for these rights, Reg Technologies Inc. has paid US$1,000
      and has applied for a patent in the U.S. for the hydrogen separator
      technology.

      The Company has written off the patents/rights of the technology due to
      the doubtful approval of the patent.


<PAGE>
Page F-11

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

5.   Common Stock
     (a)  Warrants outstanding

          There are warrants outstanding to acquire 830,767 shares exercisable
          at $0.50 per share expiring August 31, 2001. These warrants have been
          extended. As of March 6, 2002 there are a further 1,066,200 warrants
          outstanding to purchase 1,066,200 shares at $0.30 per share expiring
          one year after receipt of funds.

     (b)  Stock Option Plan

          The Company has a Stock Option Plan to issue up to 2,500,000 shares to
          certain key directors and employees, approved April 30, 1993 and
          amended December 5, 2000. Pursuant to the Plan the Company has granted
          stock options to certain directors and employees. The options are
          granted for services provided to the Company. Statement of Financial
          Accounting Standards No. 123 ("SFAS 123") requires that an enterprise
          recognize, or at its option, disclose the impact of the fair value of
          stock options and other forms of stock based compensation in the
          determination of income. The Company has elected under SFAS 123 to
          continue to measure compensation costs on the intrinsic value basis
          set out in APB Opinion No. 25. As stock options are granted at
          exercise prices based on the market price of the Company's shares at
          the date of grant, no compensation cost is recognized. However, under
          SFAS 123, the impact on net income and income per share of the fair
          value of stock options must be measured and disclosed on a fair value
          based method on a pro forma basis. As performance stock is issued for
          services rendered the fair value of the shares issued is recorded as
          compensation expense or capitalized, at the date the conditions are
          met to issue shares. The fair value of the employee's purchase rights,
          pursuant to stock options, under SFAS 123, was estimated using the
          Black-Scholes model.

          The weighted average number of shares under option and option price
          for the year ended April 30, 2002 is as follows:

                                                    Weighted       Weighted
                                        Shares       Average        Average
                                        Under        Option        Remaining
                                        Option        Price      Life of Options
                                           #            $           (Months)
           Beginning of year          1,485,000        0.60          50
                                                                  -----
           Granted                         -            -
           Exercised                       -            -
           Cancelled                       -            -
           Lapsed                          -            -
                                      ---------
           End of year                1,485,000 *      0.60          38
                                      =========        ====       =====

          * On May 10, 2002 1,000,000 of these options were repriced at $0.20
          per share and certain options were amended to increase the original
          options granted from 150,000 to 300,000 and reduce the option price to
          $0.20 per share. Also on May 10, 2002 160,000 options were granted to
          employees at $0.20 per share expiring May 10, 2007 and 200,000 options
          were granted to a consultant for investor relations at $0.20 per share
          expiring May 10, 2007.


<PAGE>
Page F-12

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

5.   Common Stock (continued)

          If compensation expense had been determined pursuant to SFAS 123, the
          Company's net loss and net loss per share for fiscal 2002 and 2001
          would have been as follows:


                                                   2002             2001
                                                    $                $

               Net loss
                   As reported                  (156,090)        (808,681)
                   Pro forma                    (263,110)        (837,391)

               Basic net loss per share
                   As reported                      (.02)            (.08)
                   Pro forma                        (.03)            (.08)

     (c)  Performance Stock Plan

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

     (d)  Private Placement

          During fiscal 2002 the Company has raised proceeds of $266,550 through
          a completed units private placement of 1,066,200 units at $0.25 per
          unit. These units were issued March 6, 2002. Each unit consisted of
          one share and one warrant to purchase an additional share at a price
          of $0.30 for a period of one year from the date of receipt of funds.
          The common stock offered will not be registered under the Securities
          Act of 1933 and may not be offered or sold in the United States absent
          registration or an applicable exemption from registration
          requirements. The common stock issued has not been registered with or
          approved by any state securities agency or the U.S. Securities and
          Exchange Commission and were sold pursuant to exemptions from
          registration.

6.   Due to Affiliates

     Amounts owing to affiliates are unsecured, non-interest bearing and are due
     on demand. These companies are affiliated through significant ownership of
     the Company and through having common Presidents.


7.   Commitments and Contingent Liabilities

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

     (b)  See Note 1 for substantial doubt about continuing as a going concern.


8.   Subsequent Event

     On May 10, 2002 1,000,000 of the options were repriced at $0.20 per share
     and certain options were amended to increase the original options granted
     from 150,000 to 300,000 and reduce the option price to $0.20 per share.
     Also on May 10, 2002 160,000 options were granted to employees at $0.20 per
     share expiring May 10, 2007 and 200,000 options were granted to a
     consultant for investor relations at $0.20 per share expiring May 10, 2007.

<PAGE>
Exhibit 10.4

                                  AGREEMENT

l.   The parties to this agreement are Advanced Ceramics Research 3292 E.
     Hemisphere Loop, Tucson, AZ 85706-5013 ("ACR") and REGI U.S., Inc., a U.S.
     corporation located at #120 - 3011 Viking Way, Richmond, B.C. V6V 1W1,
     Canada, and having a U.S. mailing address at P.O. Box 687, Point Roberts,
     WA 98281 ("REGI"). This agreement relates to the SBIR No. 1-144 ("The Navy
     contract"). For good and valuable consideration, the parties agree as
     follows.

2.   REGI hereby grants a license to ACR for all intellectual property rights
     which relate to technology known by the parties as the RAND CAM TM concept
     for RAND CAM TM based motors of 10 HP or less for the Navy Contract for
     remote piloted applications, the term of this license as defined in section
     #4 of this agreement. For example, such intellectual property includes U.S.
     patent Nos. 4,401,070, 5,429,084, 5,551,853 and 5,509,793. The parties
     intend the license to include intellectual property rights currently
     possessed by REGI and which may be acquired by REGI during the duration of
     this agreement.

3.   ACR shall have the right to discretionarily select and engage
     subcontractors for work to be conducted under the Navy Contract on a
     confidential basis. These subcontractors must sign Non-Disclosure
     Agreements.

4.   REGI U.S., Inc. agrees that, a five (5} year license will be granted to ACR
     for the RAND CAM TM concept motors of 10 HP or less for this Navy Contract.
     The license shall thereby extend for the duration of ACR's work under all
     development phases and manufacturing resulting from the awarded Navy Phase
     I & II SBIR Programs) related to RAND CAM TM.

5.   Subject to the approval and successful completion of the Phase II SBIR
     program, REGI U.S., Inc. agrees to grant a five (5) year exclusive license
     agreement to ACR for commercial and Military rights for the Rand Cam TM
     motors for the applications developed under this Navy Contract. In turn,
     ACR will:

     a.   ACR will furnish to REGI all design information for the engine
          developed under the Navy Contract including drawings, improvements,
          manuscripts, art work, and cost and/or pricing data in order for REGI
          to fabricate components or assemblies pursuant to the Navy Contract.
          REGI agrees not to compete with ACR under this agreement and future
          agreements arising from this Navy Contract.

     b.   ACR agrees to pay REGI a royalty fee of 5% of the purchase price
          offered for each engine sold pursuant to the award of the Navy
          Contract to be paid to REGI within 30 days after ACR receives funds
          from purchaser for the said purchase and 5% from all commercial
          application sales. Royalty payments to be paid on a Quarterly basis
          within 30 days from each Quarter date to REGI.

<PAGE>

     c.   ACR agrees that REGI will receive 30% of the SBIR Phase I contracts
          (typically $50K to $ I00K) and 50% of the SBIR Phase II SBIR
          (typically $500K to $750K) contracts related to the RAND CAM TM
          concept. The funds under these contracts to be paid within 30 days
          from receipt of funds received by ACR from the Phase I & Phase II
          contracts.

6.   REGI U.S., Inc. agrees to provide the services of Patrick Badgley, an
     officer and employee of REGI U.S., Inc. as a principal subcontractor
     consultant during the Navy Contract funded program, as needed by ACR and
     at ACR's reasonable discretion for a fee of 30% of the Phase I funds and
     50% of the Phase II funds. REGI will receive 50% of any additional SBIR
     contracts that are awarded related to RAND CAM TM technology.

7.   REGI shall have a right of first refusal to seek patent protection of
     inventions arising from work under the Navy Contract. REGI shall bear all
     expenses relating to patents on inventions which it so elects to pursue,
     and REGI shall be the owner of such patents. ACR shall have an exclusive
     license under such patents as defined in section #4 of this agreement.

8.   Both parties agree that the exclusive license rights will terminate, and
     the license will convert to non-exclusive, in the event that commercial
     sales in excess of $500,000 U.S. are not made within one (1) year after
     completion of this Navy Contract. In the event that $500,000 U.S.
     commercial/military sales are not achieved in any one year, ACR may pay a
     royalty payment of $25,000 U.S. to REGI U.S., Inc, to keep the exclusive
     license rights in good standing for each additional year.

9.   This agreement will be construed according to the laws of the State of
     Washington. If any one or more of the provisions of this Agreement shall be
     held to be invalid, illegal or unenforceable, such provision(s) shall be
     enforced to the maximum extent possible consistent with applicable law and
     the remaining provisions of this Agreement shall remain in full force and
     effect.

IN WITNESS WHEREOF the parties hereto have executed this Agreement as of March
20, 2002.

ADVANCED CERAMICS RESEARCH, INC.            REGI U.S., INC.


/s/ Anthony C. Mulligan                     /s/ John Robertson
------------------------------------        ------------------------------------
Anthony C. Mulligan                         John Robertson
President and CEO                           President

<PAGE>
Exhibit 10.5
Page 1

                              UAV ENGINE LICENSE

   This License is made this 24th day of April, 2002, by Rand Energy Group,
Inc., U.S.A. an Oregon Corporation having a place of business at Point Roberts,
Washington ("REGI U.S." herein); Reg Technologies, Inc., a Canadian Company with
its principal place of business at Richmond, B.C., Canada, ("Reg" herein); Rand
Energy Group, Inc., a Canadian Company with its principal offices in Richmond,
B.C., Canada: ("Rand Energy" herein) (collectively, Reg, REGI U.S. and Rand
Energy are, unless otherwise indicated, referred to herein as "Reg") and Radian
Incorporated, a Delaware Corporation which has its primary office in Alexandria,
Virginia ("Radian" herein).

                                  WITNESSETH

   Whereas, Reg owns a fifty-one percent (51%) interest in Rand Energy which
owns know-how and patent rights in rotary engine technology referred herein as
"Rand Cam TM Direct Charge Engine Technology" and "Rand Cam TM Diesel Engine
Technology" and "Rand Cam TM Cold Turbine Engine Technology" (these three terms
are defined below); and,

   Whereas, REGI U.S. controls certain rights of ownership in the United States
to the three stated technologies; and,

   Whereas, Radian has examined certain preliminary information and technical
data provided by Reg concerning these Rand Cam TM Technologies and wishes to
investigate and otherwise define the costs of manufacture and profitability of
"Power Generation Products" using such technology; and.


   Whereas, Reg and Radian have expressed a mutual interest in negotiating a
license agreement, as hereinafter outlined, for the manufacture and sale of
Radian Products using said technology if the studies referred to in the
preceding paragraph meet the expectations of the parties hereto and if other
contingencies of each party are met;

   Now, Therefore, in consideration of the foregoing premises, the agreements
hereinafter set out and other good and valuable consideration not recited
herein, the parties hereto have agreed as follows:

I.    DEFINITIONS

As used in this Agreement, the following terms shall have the following
meanings:

     (a) "Rand Cam TM Direct Charge Engine Technology" means a positive
         displacement, electrical ignition, machine which consists of a rotor
         with multiple axial vanes forming combustion chambers as a rotor and
         vanes rotate in a cam shaped housing. This cam housing is referred to
         as a stator, which contains a toroidal trough of varying depth,
         machined into each stator.

<PAGE>
Page 2


     (b) "Rand Cam TM Diesel Engine Technology" means a positive displacement,
         compression ignition, machine, which consists of a rotor with multiple
         axial vanes forming combustion chambers as a rotor and vanes rotate in
         a cam shaped housing. This cam housing is referred to as a stator,
         which contains a toroidal trough of varying depth machined into each
         stator.

     (c) "Rand Cam TM Compressor Technology" means a positive displacement
         machine whose purpose is to compress a compressible fluid such as air
         from a lower pressure to a higher pressure, which consists of a rotor
         with multiple axial vanes forming compression chambers as a rotor and
         vanes rotate in a cam shaped housing. This cam housing is referred to
         as a stator, which contains a toroidal trough of varying depth machined
         into each stator.

     (d) "Rand Cam TM" Expander Technology" means a positive displacement
         machine whose purpose is to expand a compressible fluid such as air
         from a higher pressure to a lower pressure thus generating positive
         power, which consists of a rotor with multiple axial vanes forming
         expansion chambers as a rotor and vanes rotate in a cam shaped housing.
         This cam housing is referred to as a stator, which contains a toroidal
         trough of varying depth machined into each stator.

     (e) "Rand Cam TM Cold Turbine Technology" means a Brayton Cycle (Gas
         Turbine Cycle) machine consisting of one or more "Rand Cam TM
         Compressors" used as compressors in the Brayton Cycle and one or more
         "Rand Cam TM Expanders" used as the expanders (turbines) in the Brayton
         Cycle machine.

     (f) "Radian Products" means equipment utilizing the various Rand Cam TM
         Technologies along with other technologies which Radian will use to
         design, manufacture and market UAV engines of over 10 horsepower
         maximum engine power utilizing "Rand Cam TM Direct Charge Engine
         Technology" engines, "Rand Cam TM Diesel Engine Technology" engines and
         "Rand Cam TM Cold Turbine Technology" engines. Engines produced by
         Radian will be used exclusively for UAV equipment produced by Radian
         and replacement engines and parts for said equipment. "The
         Technology" shall mean the Rand Cam TM", Direct Charge Engine
         Technology, Rand Cam TM Diesel Engine Technology, Rand Cam TM
         Compressor Technology, Rand Cam TM Expander Technology and Rand Cam TM
         Cold Turbine Technology as embodied in know-how, formulae, processes,
         designs, sketches, photographs, plans, drawings, specifications
         samples, models, reports, studies, findings, invention and ideas and
         other means of conveying information whether any of the foregoing is
         adapted to use in manufacture or not.

     (g) "Invention" means discoveries, concepts, and ideas, whether patentable
         or not, that go beyond minor, routine modifications, including, but not
         limited to processes, methods, formulae and techniques as well as
         improvements thereto and extensions thereof.

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Page 3

     (h) "Reg's Technical Information" means Technical Information in the
         possession of Reg as of the effective date which relates to any of the
         aforementioned Rand Cam TM technologies which Reg may disclose to
         Radian and which in Reg's opinion may be useful in accomplishing the
         purposes of this Agreement.

     (i) "Reg Patent Rights" means patents and patent applications of all
         countries which contain claims which cover one or more features of Reg
         Technical Information and which are based on Inventions conceived or
         reduced to practice as of the effective date by Reg or its employees or
         by others as to those Inventions Reg has the right to make the grants
         provided by this Agreement, subject, however, to the conditions under
         which Reg acquires the right from said others to make said grants.

     (j) "Proprietary Information" shall mean (i) that written technical
         information stated in writing to be considered "Proprietary
         Information" and (ii) that orally disclosed technical information that
         is promptly reduced to writing and stated in writing to be considered
         as "Proprietary information". Such Proprietary Information shall not
         include technical or business information which:

         a. was in the possession of the receiving party prior to receiving it
            from the delivering party; or
         b. is or becomes a part of the public knowledge or literature by acts
            other than those of the receiving party after receiving it; or
         c. is or becomes available to the receiving party without restriction
            on its use or disclosure from a source other that the delivering
            party; or
         d. is or becomes available to a third party on an unrestricted basis;
            or
         e. is transmitted by the delivering party to the receiving party after
            receiving notification in writing from the receiving party that it
            does not desire to receive any further Proprietary Information

     (k) "Study Information" means the Proprietary Information produced as a
         result of undertaking the performance of the Study portion of this
         Agreement (first six (6) months) whether produced by the efforts of
         contributions of Radian or Reg, the use and ownership of which shall be
         governed by the terms and conditions of this Agreement as hereinafter
         defined and provided.

II.  Handling and Ownership of Proprietary and Study Information

     (a) Both parties agree to treat the other party's Proprietary Information
         and the Study Information as proprietary for a period of five (5) years
         from the date received and will protect such Proprietary and Study
         Information with the same degree of care it uses to protect its own
         proprietary information of like kind. There shall be no restrictions on
         the handling of information, which is not Proprietary, or Study
         Information as defined herein.

     (b) Study Information, which relates and applies only to the Technology,
         shall belong exclusively to Reg regardless of which party developed or
         was responsible for the invention of such Study Information. When

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Page 4


         requested by Reg in writing, Radian shall execute and deliver patent or
         invention assignments or such other documentation as may be reasonably
         required to allow Reg to perfect patent claims or ownership of Study
         Information, which relates or applies only to the Technology.

     (c) Where Study Information has application or use outside the Technology,
         Reg shall, upon Radian's written request, promptly grant Radian a non-
         exclusive, worldwide, royalty free License to use such Study
         Information. Such License shall not allow Radian to sub-license such
         Study Information without the prior written consent of Reg.

     (d) It shall be the responsibility of Reg to pursue and pay for the costs
         of protecting the Study Information through patent or copyright claims,
         however, when Reg has elected not to pursue formal protection of such
         Study Information and Radian desires to pursue and provide further
         protection, such as Patent or Copyright claims, it will first make
         written demand upon Reg that it provide such protection. Such written
         demand shall provide a description of the Study Information with
         sufficient specificity to reasonable allow Reg to identify and evaluate
         such Study Information. if Reg notifies Radian in writing that it does
         not chose to provide such protection within thirty (30) days of such
         notice, or if Radian receives no written assurance that Reg will pursue
         such additional protection within thirty (30) days of such written
         notice from Radian, Radian shall be free to pursue such additional
         protection at its own costs and expense. In the event, after compliance
         with the notice requirements hereof, Radian elects to pursue such
         additional protection, then the ownership of that specifically
         identified Study Information shall become the Proprietary Information
         of Radian.

     (e) Upon Reg's written request, Radian shall promptly grant Reg a non-
         exclusive, worldwide, royalty free License to use that Study
         Information which Radian has acquired ownership of under the provisions
         of the preceding paragraph.

     (f) Both Parties agree that each will require all their respective
         officers, employees or consultants who have or will be granted access
         to Proprietary and Study Information to execute mutually acceptable
         assignments of inventions agreements and mutually acceptable
         Confidentiality and Non-Circumvention Agreements prior to their being
         granted access to Proprietary or Study Information.

III. Licensing Agreement for the Manufacture and Sale of Products

     (a) Reg hereby grants an exclusive License to Radian for the Manufacture of
         Rand Cam TM Diesel Engines for application in Unmanned Autonomous
         Vehicles (UAV's) over 10 horsepower maximum engine power within the
         United States of America, including non-exclusive rights to worldwide
         sales for this application, (the "Radian License").

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Page 5

     (b) Radian hereby agrees in good faith to perform a six (6) month duration
         Study of the design, analysis, manufacturing costs, risk assessment and
         marketing analysis to validate the risk and profitability of the
         product. This study includes the fabrication and test of a prototype
         engine.

     (c) At the conclusion of the study, Radian has the option of terminating
         this agreement without penalty, or to give (at no cost) a working
         version of the prototype engine to Reg to maintain the Radian License.

     (d) Radian will pay Reg a six (6) percent royalty on the sales of engines,
         parts and service utilizing Rand Cam"M Technology used in UAV's,
         including 6% of all funding received from the Government and Military
         sources to develop and manufacture the Rand CaMTM technology.

     (e) Five (5) years from the date of this Agreement the minimum annual
         royalty payment is expected to be $100,000.00 U.S. If Reg does not
         receive this minimum royalty payment on an annual basis, Reg shall have
         the right to revoke the Radian License.

     (f) All improvements and extensions made to the Technology by Radian, other
         than the Study Information, shall be the property of Radian. It shall
         be the responsibility of Radian to pursue and pay for the costs of
         protecting such improvements and extensions through patent or copyright
         claims, however, when Radian has elected not to pursue formal
         protection of such improvements and extensions and Reg desires to
         pursue and provide further protection, such as Patent or Copyright
         claims, it will first make written demand upon Radian that it provide
         such protection. Such written demand shall provide a description of the
         subject improvement and extensions with sufficient specificity to
         reasonable allow Radian to identify and evaluate such improvement and
         extensions. If Radian notifies Reg in writing that it does not chose to
         provide such protection within thirty (30) days of such notice, or if
         Reg receives no written assurance that Radian will pursue such
         additional protection with thirty (30) days of such written notice from
         Reg, Reg shall be free to pursue such additional protection at its own
         costs and expense. In the event, after compliance with the notice
         requirements hereof, Reg elects to pursue such additional protection,
         then the ownership of these specifically identified improvements and
         extensions shall become the Proprietary Information of Reg.

     (g) Upon Radian's written request, Reg shall promptly grant Radian a non-
         exclusive, worldwide, royalty free License to use the extensions and
         improvements which Reg has acquired ownership of under the provisions
         of the preceding paragraph. Such License shall not limit Radian to sub-
         license such extensions and improvements without the prior written
         consent of Reg.

     (h) Reg will indemnify Radian from all potential patent infringement and
         other claims brought by outside parties and offers clear and
         unobstructed use of license granted herein to Radian.

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Page 6

     (j) Radian agrees to pay to REGI $150.00 per hour for Patrick Badgley's or
         REGI's similarly qualified engineer for consulting work requested by
         Radian On the Rand Cam TM technology for Radian during the term of this
         agreement, to be paid monthly. Accordingly, REGI must submit weekly
         timecards, and a written weekly report, for all hours authorized and
         performed. That submittal should be to a Radian POC.

IV.  GENERAL PROVISIONS.

     (a) Independent Contractors: The parties to this Agreement are independent
         contractors. Neither party is an agent or representative of the other
         party. Neither party shall have any right, power or authority to enter
         into any understanding for or on behalf of, or incur any obligation or
         liability of, or to otherwise bind the other party. This Agreement
         shall not be interpreted or construed to create an association, joint
         venture or partnership between the parties or to impose any partnership
         obligations or liability upon either party.

     (b) Neither party makes any warranties to each other or any other person or
         entity, whether express, implied or statutory, as to the description,
         quality, merchantability, _completeness or fitness for any purpose of
         any services or information provided hereunder or described herein, or
         as to any other matter al of which warranties are hereby excluded and
         specifically disclaimed.

     (c) Applicable Laws. The parties have agreed that the Laws of the
         Commonwealth of Virginia shall be applicable to the interpretation and
         enforcement of this Agreement, except as to matters pertaining to
         procedure and the application of the rules governing a conflict of
         Laws, in which case the laws of the forum of the Court having
         jurisdiction of any matter included in the Agreement shall be applied.

     (d) Defaults and Breaches. In the event of default hereunder or a breach
         hereof, the party asserting the default or breach shall notify the
         other party in writing of the particulars of the default or breach. The
         other party shall have a period of forty--five (45) days to correct
         such default or breach on all matters except the payment of moneys or
         funds in which case the notice period shall be ten (10) days. If the
         defaulting party corrects the items of default or breach included in
         the written notice within the grace period, the default is cured and
         may not be used as an item of default or breach hereunder again.

     (e) Proceedings in Courts or Before Regulatory Agencies. It is the
         Agreement of the parties that the submission of any legal or regulatory
         proceedings hereunder shall be instituted in the United States of
         America. If the matter is largely a matter of civil law, the matter
         will be submitted to a Court of Competent Jurisdiction in the
         Commonwealth of Virginia. The losing party in the court or regulatory
         proceeding shall pay all costs including reasonable attorney's fees,
         costs of discovery, and costs of court incurred by the prevailing
         party.

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Page 7

     (f) Notices. Any and all notices required to be given in writing hereunder
         maybe given by ordinary mail. When ordinary mail is used for delivery
         within the United States of America, the delivery thereof will be
         presumed to have been made five (5) days following the post office mark
         on the envelope thereof. Other means of delivery of notice may be
         utilized, however the burden of proof of delivery thereof rests with
         the sender of such notices. Notices will be considered properly
         addressed for delivery as follows:

         To Radian:                         To Reg.

         Mr. Robert Grisar                  Mr. John Robertson
         Director                           President
         Radian MILPARTS                    Rand Energy Group
         35353 Curtis Boulevard             3011 Viking Way, Suite 120
         Suite 591                          Richmond, BC Canada
         Eastlake, OH 44095                 V6V 1W1

         The parties may change their respective addresses for purposes of this
provision by notifying the other party in writing.

Further the parties saith not:

REGI U.S., Inc.
Reg Technologies, Inc.
Rand Energy Group, Inc.                     Radian Inc.


By:  /s/ John Robertson                     By:  /s/ Jerry Mailey
------------------------------------        ------------------------------------
John Robertson, President                   Jerry Mailey, Director of Contracts

Date    05/6/02                             Date    5/15/02
    --------------------------------            --------------------------------

<PAGE>
Exhibit 23.1




                       Consent of Independent Auditors

Board of Directors
REGI U.S., Inc.

We consent to the use of our report dated August 2, 2002 on the financial
statements of REGI U.S., Inc. as of April 30, 2002 and 2001 that are included in
the Form 10-KSB, which is included, by reference in the Company's Form S-8.

Dated this 13th day of August, 2002.

MANNING ELLIOTT
Chartered Accountants

/s/ Manning Elliott


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